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Inequality is detrimental to Africa’s growth – Oxfam

The World Economic Forum on Africa (WEFA) taking place in Durban till Friday shows that South Africa continues to be a gateway to the rest of Africa, says Finance Minister Malusi Gigaba.

During a roundtable discussion on “blue economies” South Africa’s Environmental Affairs Minister Edna Molewa shared lessons on how African nations can utilize water resources, such as rivers and oceans, as pathways to reach markets and also use them to create more economic opportunities.

Several films have been confirmed including International Emmy Award Winning Director Rehad Desai’s The Giant is Falling, which will premiere in Durban at the People’s Economic Forum.

Unlocking industrial activity and intra-Africa trade, as well as growing Africa’s share of global trade is crucial for continental development, in his view.

The South African President noted many African youths lack rare skills which makes them unemployable.

Dozens of activists are demanding that delegates who are now attending the World Economic Forum on Africa be sent home in the same manner that President Jacob Zuma was during Monday’s May Day rally. These thoughts lead into this year’s theme of responsive and responsible leadership.

President Edgar Lungu will be accompanied Minister of Commerce and Industry Margaret Mwanakatwe, Minister of Energy, David Mabumba and Presidential Affairs Minister, Freedom Sikazwe.

The Africa Competitiveness Report combines data from the Forum’s Global Competitiveness Index (GCI) with studies on employment policies and city competitiveness.

Mr Mwamba said the President is among regional leaders that include President Jacob Zuma as host; SADC chairperson, King Mswati III of the Kingdom of Swaziland; President of Mozambique Filipe Jacinto Nyusi; President of Uganda Yoweri Museveni; and President of Namibia Hage Geingbo, among others. The forum met in Pretoria on 3 May 2017 where the circular economy was also discussed amongst other issues of mutual interest.

Past year the focus was on how Africa can benefit from the massive technological changes happening in the world – termed The Fourth Industrial Revolution.

The meeting has on its agenda initiatives for economic growth and social inclusion, digital economy and society, education gender and work, food security and agriculture, environment and natural resource security, health and healthcare and long-term investing and infrastructure.

Source: clicklancashire

Low commodity prices a wake-up call for Africa to boost manufacturing

The slowdown of China’s economy and its declining demand for commodities is a “good wake-up call” for African economies, according to Geoffrey Qhena, CEO of South Africa’s Industrial Development Corporation (IDC).

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Speaking at the recent World Economic Forum on Africa, Qhena said this situation presents an opportunity for the continent to figure out how to grow in the face of lower commodity prices.

Despite having vast resources, most African economies rely on imports for everything from food to clothing to electronics due to an under-developed manufacturing industry that faces many hurdles.

Johan Aurik, managing partner and chairman of consulting firm A.T. Kearney, said local manufacturing is an enormous “missed opportunity”. Aurik observed Africa’s shortcoming in manufacturing has to do with inefficiencies across the value chain, such as the sourcing of raw materials, distribution and innovation.

“When people think about production or about manufacturing they see a factory… and that’s the wrong image because it is often the least important part of what [we] are talking about.”

“If one part of the chain does not work well or is not optimal then the final product… often doesn’t even reach the final customer. These are very complex systems and that is why it is so hard to do. In Europe and in North America they had 200 years – or even longer – to grow the systems over time slowly. Africa needs to move faster,” noted Aurik.

Supply chain gaps one key hurdle

Namibian entrepreneur Ally Angula said she faces several hurdles operating manufacturing businesses. She is co-founder and managing director of Leap Namibia, a diversified group of companies involved in the agro-processing and fashion industries.

One of Leap’s divisions manufactures garments that are retailed through its network of My Republik branded outlets. She cited gaps in the supply chain and labour market as key hurdles. For instance, her company imports print labels for clothing from South Africa because they are not available locally.

“There are a lot of links within the supply chain [that] as a manufacturer you have to either fill those links yourself – or you pay double the price to fill those links,” Angula said.

“In some of our manufacturing industries that we are going into it is industries that we are creating from scratch.”

She explained how her company set up a manufacturing plant in a village in Namibia that employed locals. But when the rainy season started, the village did not have power for three weeks. While this was a fate the locals were used to, it was distressing for her business.

“Unfortunately for a manufacturing entity you can’t be without power for three weeks.”

Technology vs employment

Technology could help address some of the challenges in Africa’s manufacturing sector, however, the panelists argued there should be a multifaceted approach that involves both new technologies and employment. Innovation that excludes human labour, the IDC’s Qhena warned, would leave behind millions who desperately need jobs.

“The important [thing] is to create real jobs, sustainable work. Yes, it is true that technology if it is introduced too quickly often has a negative effect on unemployment. You see that in many places around the world – for instance, online retail is replacing many retail jobs. But over the long run they tend to be replaced with other types of work.”

Need to highlight manufacturing success stories

Although it involves various elements – from product design to production to retail – manufacturing is not as hard as people make it seem, said Angula. Once the process is broken into digestible parts, people become more inspired to go into industry.

“What we have experienced is exposure plays such a big role. We have had many people come through to our company to see what it is that we are doing. Once you have had the conversation the person will say to you: ‘But I didn’t know it was so easy to make clothes’ or ‘I didn’t know it was so easy to dehydrate an onion product and get that on the shelves’.”

“We need to be showcasing a lot more in terms of the success stories on the continent when it comes to manufacturing… That will motivate people to get into the different industries,” she added.

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Source: howwemadeitinafrica


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Africans Urged to Support Tourism

Durban — It was a fusion of originality and creativity complemented by global marketing skills from across the world to showcase their tourism attractions or destinations at the just ended Indaba 2016, Africa’s largest tourism trade show.

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The top African trade show – which was held from May 7 to 9 – at the Inkosi Albert Luthuli Convention Centre (Durban ICC), exploded with originality and creativity of the Africa’s wealth of cultural appeal, tourism natural attractions, services and products.

In the media talk facilitated by the CNN New York based news anchor Richard Quest, African tourism ministers acknowledged the need to consult and engage one another to work on the bulk of issues which hinder tourism penetration.

African ministers led by Hanekom added a strong voice on how Africa countries can come together to position themselves as tourism business collaborators and promote inbound tourism in which huge opportunities have largely not been exploited.

“If one quarter of African countries were to implement the open skies for Africa decision and facilitate great air connectivity between our countries – additional jobs (job creation) and an added GDP that could be generated with obvious numerous benefits for tourism in many countries, said Derek Hanekom, South African’s tourism minister.

Hanekom said that many major airlines fly to Africa from North America, Europe, Asia and other parts of the world. However, once visitors reach this continent they encounter difficulties in connectivity as well as exorbitant air fares from country to country. He said that air transport services in Africa remained a critical constraint.

Hanekom, who was one of the three panelist’ tourism experts who attended the media talk including ministers from Zambia, Zimbabwe, Namibia, Lesotho, Seychelles, Swaziland, Burkina Faso and Ghana. “Africa’s is a continent of unparalleled opportunity, and tourism is where the greatest untapped opportunity lies”, he said..

In addition, the minister said: “Africa is a vibrant melting pot for tourism: the diverse cultures, customs and traditions of our people, merged with the endless variety of our landscapes, blended with unique biodiversity, tempered by our historical legacy, and fired by the spirit of freedom and equality”.

The opening of the Indaba 2016 was addressed by minister Derek Hanekom , the Mayor of Durban, Mr James Nxumalo, and the MEC for KwaZulu-Natal Department of Economic Development, Tourism and Environmental Affairs, Mr Michael Mabuyakhulu.

The South African government, according to the minister, has earmarked the sector as a growth industry of national priority because of its potential to bring about economic growth and create employment.

During his opening address the Minister stated that by standing together the public and private sectors in the industry would be stronger and able to contribute to the upliftment of the nation. He spoke about INDABA and how it has evolved into Africa’s largest and most successful tourism trade show that creates a platform to showcase the best of the African tourism products and services.

However, he noted that if we are to be successful, everyone needs to pay more attention to the image and reputation of Africa. “Not only through effective marketing, but by putting on a really great show when tourists arrive. Their word of mouth will do our marketing for us and using social media begins the minute they arrive on our shores.”

The Minister adds that the Indaba provides the ideal platform for African countries to work together. “A successful Indaba contributes to the success of tourism in all our countries.”

Tourism is a key contributor to our economy as well as job creation, says MEC Mabuyakhulu .It is critical for the African continent to develop policies that are integrated to reflect positively on what the continent can offer together. Diverse products that define Africa should be tailor made to suit tourists to visit many African countries and not just one. Intra African trade needs to be a key focus in this regard”.

Durban is honoured and privileged to host the Continent’s biggest tourism event in Africa says Mayor Nxumalo.

He added that one of the City’s key focuses, in line with Indaba, is on SMMEs and therefore it has put in place various initiatives around these enterprises.

INDABA hosted nearly 14,000 business meetings, about 1050 exhibitors, 1856 buyers and 724 media. Owned by South African Tourism, INDABA is one of the largest tourism marketing events on the African calendar and showcases the widest variety of Africa’s best tourism products and services. The event attracts quality buyers from across South Africa, the African continent and the world.

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Source: allafrica


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Building a Capable State – Hellen Zille, Premier of Western Cape

Building a Capable State – Hellen Zille, Premier of Western Cape

Interview with Helen Zille, Premier of Western Cape

“The Western Cape is number one on every single indicator, including economic growth, and including employment… and it’s because we’ve put an enormous effort into building a capable state.”

 

Can agriculture in Africa sustain a nourishing rural non-farm economy?

After being out of fashion for a long period, agriculture has been coming back into the spotlight again as part of development policy. Amid rising concerns about food insecurity and high expectations from agribusiness, policymakers have started to emphasise the importance of agriculture as a source of employment.

Across Africa interest in agricultural investment as a source of employment growth and profit is growing. In South Africa, the National Development Plan identifies agriculture as the potential basis of one million new jobs.

But how realistic are these hopes? In our globalised and competitive world, agricultural development is not a great direct generator of jobs. In fact, increases in the intensity, efficiency or competitiveness of agriculture often push large numbers of people off the land. Farm workers, less efficient small farmers, and women often get the short end of the stick.

Policymakers often assume that this is an inevitable part of progress. In the past, displaced rural labour has often found alternative employment in the cities. But in many parts of the world, including sub-Saharan Africa, the prospects for this are slender. Agricultural development may enrich a few – but it can also swell the numbers of the urban poor.

Agricultural development can only serve inclusive growth if it contributes to an inclusive and diverse rural non-farm economy. Unfortunately, policymakers tend to ignore this issue. Agricultural policy is not much concerned with labour markets, while industry and trade ministers tend to concentrate on urban issues.

This is an important gap. Policymakers need to ask how different pathways of agricultural development affect non-farm employment.

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A DIFFERENT APPROACH

A recent multi-country research project funded by DfID and the ESRC suggests that the right kind agricultural development can indeed stimulate rural non-farm job creation. But the links are neither simple nor direct.

The study by the Institute for Poverty, Land and Agrarian Studies (PLAAS) at the University of the Western Cape investigated linkages between agriculture and the non-farm economy. It focused on three rural districts: Weenen in South Africa, Mchinji in Malawi, and Mazowe and Masvingo in Zimbabwe.

Rather than the social accounting matrices usually used for this kind of research, PLAAS and its partners took a qualitative approach. They carefully mapped the flows of money and resources that connect local agricultural enterprises to upstream and downstream markets.

What has emerged is a complex picture. What is good for the farmer is not necessarily good for the non-farm economy. Farmers with deeper pockets may not always spend their gains in ways that benefit their neighbours. Rather, beneficial effects depend on the local political economy.

Three factors are particularly important:

  1. the scale and ownership of agriculture itself;
  2. the pattern and design of upstream and downstream linkages between farmers and the rest of the economy; and
  3. the nature of local social dynamics and power relations.

DIFFERENT LANDSCAPES

Each case study revealed a very different scenario. In Mchinji small-scale farmers on communal land accessed local fresh produce markets by venturing into horticulture. Many new local livelihood opportunities were created – but these were small and vulnerable.

In Mazowe, small-scale tobacco growers who benefited from Fast-Track Land Reform made good money from distant markets, particularly China. This in turn created many opportunities for specialised local entrepreneurs.

In Weenen, large-scale agriculture turned out to be disconnected from the local economy. It had upstream and downstream links to distant markets but contributed little to employment in the area.

WHAT WORKS?

An analysis of the spatial patterns revealed by these case studies suggested some important insights. Simply being connected to distant markets is not enough to guarantee that agricultural development benefits the local non-farm economy.

Access to distant markets can support local employment. But this only happens if such farms are located in dense local networks that are socially embedded and not characterised by highly unequal power relations.

Where there are such networks, the local economy can benefit from trade and income flows. These benefits accrue through the purchase of intermediate inputs, and from local consumption and investment expenditure. They also come about through local retail, processing and transport of agricultural produce.

The scale of agriculture is an important factor too. In the South African case study, large-scale commercial farmers gained good incomes from highly efficient farms that served distant markets. But they also bought their inputs from distant suppliers. They provided little employment locally, and most of their spending on goods and services took place elsewhere. In Malawi, the same tended to be true of large estate farms.

This contrasted strongly with Zimbabwe where, for instance, the opportunities linked to small livestock farming and to small tobacco farmers’ windfalls from trade with China circulated in the local economy.

In all these cases, a common pattern emerges. Where large-scale agriculture is owned by distant players or by a farming elite with few local political or social commitments, the economic networks they create are unlikely to stimulate local opportunities.

Similarly, some kinds of economic integration can actually worsen marginalisation and unemployment. The positive spin-offs of agricultural development in Zimbabwe and Malawi, for instance, seem to be strongly linked to the absence of powerful, vertically integrated and internationally owned corporate food retail chains and supermarkets.

When big supermarkets enter, they create some formal sector jobs. But they also marginalise local farmers, compete with local traders, and suck money out of the local economy. In contrast, small and locally owned retail enterprises and markets are a key element of the agrarian structure. While often modest and not very glamorous, they are crucial for circulating money and economic opportunities.

In all three countries, the research suggests that ensuring an inclusive rural economy is about much more than growth in agricultural trade. Aside from exporting agricultural produce, rural economies tap into national and urban economies via social grants and public service salaries.

Links are also developed through the expansion of the non-agricultural urban economy into rural areas. The existence of migrant networks and “stretched” households that straddle the urban-rural divide also helps.

Additionally, many agricultural entrepreneurs also depend on other, non-agricultural service industries. These include tourism, hospitality, the building trade and small town services.

So, while agriculture can contribute to local employment, it is better able to do so when there is a diverse, rural non-agricultural economy. This diverse economy can ensure that more money is circulating in the local markets, benefiting farmers and other entrepreneurs dependent on agriculture.

IMPLICATIONS

These findings have important implications for agricultural and economic policy.

First, they suggest that agricultural policy should promote smallholder agriculture – not simply as a contribution to food security, but also as a source of employment, and as a powerful hub for forward and backward linkages into the local economy.

In South Africa, while there has been lots of pro-small farmer rhetoric, agricultural and land reform policy is in practice still biased towards large scale farming. The time is overdue for genuine pro-small farmer land reform.

Where rainfall and markets allow, this kind of land reform can make an important contribution to the rural economy and the survival and welfare strategies of poor South Africans. Such a policy would also enable beleaguered medium-scale white farmers – who contribute little to food security anyway – to exit the market.

Elsewhere in Africa, land and investment deals that create large-scale farming enterprises, externally owned and plugged into distant export markets, are unlikely to contribute to local employment. They should not be supported in the mistaken belief that they do.

Maximising the economic benefit from agricultural development and smallholder farming requires better support for local retail and informal markets often disregarded by urban planners. These markets include those for livestock and fresh produce.

Finally, local planning, land use, zoning and anti-trust law and policy should be geared to protecting small informal growers, markets and retailers from being swamped by large-scale agriculture and the intrusion of powerful corporate retailers into rural markets.

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Travel and tourism leaders welcome the global Sustainable Development Goals

Leaders of major global travel and tourism associations on Monday have welcomed the adoption of the Sustainable Development Goals (SDGs).

The Global Travel Association Coalition (GTAC), which represents the leading public and private bodies in the Travel and Tourism sector, attests to the global importance of the SDGs and the role of the travel & tourism sectors in their realisation.

Speaking on behalf of GTAC, David Scowsill, President of the World Travel & Tourism Council (WTTC), said:

“Travel & Tourism is a sector which collectively contributes nearly 10 per cent of the world’s GDP and one in eleven of all jobs on the planet. Over one billion people cross international borders each year, a number expected to reach 1.8 billion by 2030, while at the same time, billions more travel domestically. This is a sector which will play a very significant role in making progress towards the Sustainable Development Goals.

“Like the Sustainable Development Goals themselves, the Travel & Tourism sector is global and action-oriented. It consists of millions of com panies – from the smallest hostel to the largest airline – which together forge an industry which encourages sustainable economic growth, creates jobs, promotes opportunities across society and alleviates poverty.

“Travel & Tourism has the potential to contribute directly or indirectly to all of the goals. In particular, as one of the largest and fastest growing economic sectors in the world, Travel & Tourism is well-positioned to foster economic growth and create jobs throughout the world to meet Goal #1 “End poverty in all its forms everywhere”.

Tourism has been included as a specific target in Goals #8, #12 and #14 on inclusive and sustainable economic growth, sustainable consumption and production and the sustainable use of oceans and marine resources.

“The Sustainable Development Goals will play a major role in framing our world for the next generation. The Global Travel Association Coalition, representing the major public and private bodies in the Travel & Tourism sector, welcomes their adoption and commits to contribute to making them a reality.”

Goals 8, 12 and 14 specifically mention the role of tourism:

  • Goal 8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all includes as Target 8.9 “By 2030, devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products”.
  • Goal 12. Ensure sustainable consumption and production patterns includes as Target 12.b to “Develop and implement tool s to monitor sustainable development impacts for sustainable tourism which creates jobs, promotes local culture and products”. The Sustainable Tourism Programme (STP) of the 10-Year Framework of Programmes on Sustainable Consumption and Production Patterns (10YFP) aims at developing such SCP practices, including resource efficient initiatives that result in enhanced economic, social and environmental outcomes.
  • Goal 14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development includes as target 14.7 “by 2030 increase the economic benefits of SIDS and LCDs from the sustainable use of marine resources, including through sustainable management of fisheries, aquaculture and tourism”.

Source: eco-business


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Mpumalanga invests in infrastructure

Mpumalanga has set aside R2.065-billion for its infrastructure development programme for 2015/16.”Our infrastructure development programme continues to prioritise socio-economic infrastructure such as roads, hospitals and schools,” Premier David Mabuza said in his the State of the Province Address on 27 February.He said the province was making progress in the rehabilitation and maintenance of the coal haulage network to mitigate the degradation of roads in its mining areas.”The construction of the 68km Majuba railway is progressing well and the completion of this project will alleviate pressure on our coal haulage network, as it will change the transportation mode of coal to a number of power stations, especially Majuba Power Station, from road to rail.”The first coal-loaded train is scheduled to begin operating on 31 May 2016. “Once completed, this corridor will have cost in the region of R5.2-billion.”

Transport

In the provincial capital, Mbombela, phase one of the implementation of the Integrated Public Transport Network had been completed. Construction of the infrastructure, which involves widening some parts of the central business district road network, was under way. The project was aimed at incorporating all modes of transport.Further, Mabuza said the Moloto rail corridor development programme had been approved. “The Moloto Development Corridor will be a catalyst for stimulating economic growth and job creation that will benefit the province, especially Thembisile Hani and Dr JS Moroka local municipalities.”It will attract private sector investment along the corridor, thereby increasing prospects for employment and local enterprise development,” he said.The national Department of Transport had signed and handed over the project to the Passenger Rail Agency of South Africa for implementation.

Employment

Mpumalanga was making a significant contribution to enterprise development and supporting businesses to create employment opportunities, he said. The province and the Department of Trade and Industry had prioritised the establishment of the special economic zone (SEZ) in Nkomazi to attract investment that would unlock growth and create employment.”It will attract investment in a variety of industries, including the production of agri- chemicals and agro-processing initiatives… To support the proposed infrastructure investment, Nkomazi municipality has made land available for the establishment of the SEZ.”Mabuza said the process for the acquisition and registration of land for the Mpumalanga International Fresh Produce Market had been concluded. “All the necessary statutory compliance matters such as the environmental impact assessments have been finalised.”The fresh produce market was a major infrastructure initiative to support agricultural production and create a logistics platform for the export of fresh produce to international markets. This market would create the required infrastructure and logistics platform to assist vegetable, fruit, citrus and meat production farmers and remove the current barriers to market.Construction of the market would begin in the next financial year, Mabuza said.

Source: SouthAfrica.info


 

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SA looks at pension for low-income earners

The Department of Labour was looking into the introduction of a national retirement mechanism for low-income earners in South Africa, Compensation Fund Commissioner Shadrack Mkhonto told a departmental workshop in Irene, in Tshwane on 16 January.

A discussion paper would soon be tabled at the National Economic Development and Labour Council (Nedlac), once it had been approved by the Cabinet. The department’s two-day mid-term review workshop was held to evaluate its achievements against targets set, as well as its Strategic Plan and Annual Performance Plan in the financial year under review. It also looked at crafting a future strategic direction. The workshop was attended by Labour Minister Mildred Oliphant; Deputy Minister Nkosi Phathekile Holomisa; and Director-General Thobile Lamati, as well as heads of branches and various public entities such as the Unemployment Insurance Fund; the Compensation Fund; Productivity SA; the Commission for Conciliation Mediation and Arbitration, the Sheltered Employment Factories and Nedlac. During its investigation of the retirement mechanism, the department will turn to the International Labour Organization for information on international best practice, according to spokesperson Mokgadi Pela.

The initiative is part of the government’s efforts to reform South Africa’s broader social security system. Another process under consideration is the inclusion of government employees in the Unemployment Insurance Fund and the Compensation for Occupational Injuries and Diseases Act benefits.The reform of social security policies is to be aligned with labour market initiatives, Pela says.

Statistics South Africa’s most recent General Household Survey, released on 18 June 2014, reported that the number of people receiving a social grant from the state grew from 12.7% in 2003 to 30.2% in 2013, while the number of households receiving at least one social grant increased from 29.9% to 45.5% over the same period. Meanwhile, the September 2014 Quarterly Employment Statistics report, released by Statistics South Africa on 11 December 2014, reported that total formal non- agricultural employment decreased by 129 000 jobs from 8.67 million in June 2014 to 8.54 million in September.

A total of 132 000 jobs were lost in the government sector, mainly at the Independent Electoral Commission, which shed a large number of jobs following the general elections in May 2014. During the September quarter, 9 000 jobs were lost in the manufacturing industry, while 3 000 jobs were lost in both the construction and transport industries.

However, quarter-on-quarter increases were reported by the mining (8 000), finance (6 000) and trade (4 000) industries. Year-on-year, an additional 83 000 formal jobs were created between September 2013 and September 2014, an annual increase of 1%.

The largest increase was recorded by the community services industry (73 000), followed by the trade and finance industries, with 21 000 and 20 000 jobs, respectively. Gross earnings paid to employees increased by R18.9-billion (+4,6%) from R409-billion in June 2014 to R428-billion in September 2014. The mining industry recorded the largest quarterly percentage increase of 20.9% in earnings, signalling the return of mine workers after the lengthy strike in the platinum belt.

Source: SouthAfrica.info


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