Business

 

Economic Growth, Job Creation Focus of Mozambique Conference Participants from the government, central bank, civil society, private sector, academia, and development partners discussed economic growth.  Creating jobs and reducing poverty were top of the agenda at a conference to discuss economic growth in Mozambique. The Government of Mozambique, in close coordination with the World Bank, the International Monetary Fund, the African Development Bank, and United Kingdom DFID, organized the high-level conference in Maputo to reflect on the country’s economy and the potential for growth.  Over the last 15 years, Mozambique has reached macroeconomic stability and experienced impressive economic growth. Access to public services increased significantly and social indicators improved steadily, particularly in the areas of health and education. There were also important investments in infrastructure and institutional and legal reforms. However, the results of the latest survey on the living conditions of the Mozambican population suggest that poverty reduction has stagnated and job creation has remained below expectations.  The conference provided a unique opportunity for an exchange of views on Mozambique’s economic performance to date, with special attention to the issues of job creation and poverty reduction. Participants debated ways to work on both issues by accelerating and sustaining economic growth in an inclusive manner. The discussions focused on the necessary structural transformation of the economy to foster a competitive, diversified and productive export base and the need to boost production and productivity in labor-intensive sectors, with a special focus on agriculture.  Over 100 participants from the government, central bank, civil society, private sector, academia, and development partners met from February 9-11, 2011. The conclusions of the conference were discussed in a ministerial meeting on February 11, 2011, chaired by Prime Minister Aires Ali. The World Bank and IMF staffs were invited to join the policymakers’ discussions. Maintaining macroeconomic stability Regarding the economic transformation of productive sectors and job creation, participants stressed the importance of preserving macroeconomic stability—one of Mozambique’s key assets—and discussed the need for the state to provide an enabling playing field for the private sector. The discussion focused on issues pertaining to the creation of technical and vocational skills, the potential of public works schemes in creating jobs and developing skills, and the facilitation of productive activities through passive and active policies, improvements in the business environment, integrated spatial development planning (including development poles), public investment and infrastructure development, improvements in the management of mineral resources, and the importance of social protection systems. One of the conference’s key themes was the possible role of smallholder and commercial agriculture in poverty reduction. Given the large proportion of subsistence agriculture, the country needs to invest in policies that ensure a sustainable increase in agricultural productivity and rural income. Among other issues, participants discussed the importance of technology, strengthening agriculture’s value chain, improvements in land use, and the promotion of rural development for more inclusive growth. A key message was that the increase in the production of commercial agriculture should be accompanied by policies to strengthen social protection systems and food security. Learning from successes in other countries The conference included a total of 24 presentations on a number of areas by specialists from Mozambique and other countries. Presenters discussed the successful experiences from different countries such as Brazil, Botswana, China, and Malaysia, and their potential of being replicated under Mozambique’s special conditions.  Presentations illustrated different models of rural development in Brazil and China. The Brazilian experience on the implementation of conditional cash transfer, along with experiences of other African countries on public work schemes, was well received, and their feasibility should be considered with the support of development partners. Botswana was used as reference on how to appropriately capture and allocate mineral revenues on a transparent, efficient, and inclusive manner.  In the concluding session, development partners reaffirmed their commitment to work with the government to help it realize its vision of achieving inclusive growth.

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New Strategy to Strengthen World Bank Partnership with Tanzania

DAR ES SALAAM, February 22, 2011 As the World Bank prepares a new Country Assistance Strategy (CAS) for Tanzania, stakeholders have had the opportunity to share their input on the country’s development needs at a series of consultations. 

This feedback will help shape the new CAS and ensures that the Bank’s new strategy reflects the perspectives and recommendations of key stakeholders, including the government, civil society organizations and representatives from the private sector. These consultations, which began in June 2010, started a discussion on the critical development challenges in Tanzania and the policy options and programs that the Bank should pursue. 

“Consultations with various tiers of government, civil society, donors and the private sector have been an integral part of the CAS formulation process. It is an opportunity to discuss issues affecting the Bank’s ongoing program and offer suggestions for improvement,” said John Murray McIntire, World Bank country director for Tanzania, Uganda, and Burundi. “It also enables the Bank to reengage with stakeholders, renew dialogue and take the pulse of external perceptions of our work. That is why the guiding principle of the consultative process is that of active listening.”

Defining World Bank strategy

The CAS, which is typically prepared every three to four years, describes the Bank’s strategy for a country based on an assessment of that country’s priorities, and indicates the level and composition of assistance the Bank will provide. The new three-year CAS will begin in 2012 and will succeed the Joint Assistance Strategy for Tanzania (JAST), which was prepared in coordination with other Development Partners in 2007. The foundation of the CAS is the country’s own vision for its development as defined in the second phase of the National Strategy for Growth and Reduction of Poverty (NSGRP II).

The consultation process began June 2010 and is expected to run until February 2011. It comprises several elements including face-to-face meetings and a client survey, which is a tool the Bank uses to assess the views of its critical stakeholders. With this understanding, the World Bank hopes to develop more effective strategies, outreach and programs that support development in Tanzania. Three regional workshops were held recently with stakeholders in Zanzibar and in Mbeya and Mwanza regions.

During the meetings, stakeholders are briefed on the role of the CAS, on-going programs, achievements to date, and issues and challenges for the future. The floor is then opened for discussion, during which Bank staff ask participants for feedback on the Bank’s programs and performance, their views on development priorities, and suggestions on how the Bank can help address them.

The expected result of the consultations is a change or adaptation in the focus of the CAS. For example, consultations could lead to a greater emphasis of Bank support to a particular sector or greater recognition of constraints in an area relevant to the country’s economic development. But the consultative process is not binding, meaning some suggestions put forward during the consultations might not be included in the CAS.

The new country assistance strategy builds on the World Bank’s current portfolio of 26 active projects with a net commitment of US$2.85 billion. These projects support a range of sectors including agriculture, transport, energy, urban infrastructure, environment, water and sanitation, public sector reform, financial and private sector development, health, education and community development.

The present CAS will conclude with a completion report (CASCR), a self-assessment – validated by the Bank’s Independent Evaluation Group. The purpose of the CASCR is to assess overall performance of the CAS measured against development outcomes in the CAS results matrix and in relation to Tanzania's higher development objectives impacted by the CAS.

Successes and challenges of the current CAS

Preliminary findings show that most Bank-financed interventions in Tanzania are making a good contribution to the country’s development agenda. However, the country still has much work to do, particularly across the areas of poverty reduction, service delivery and governance. 

Under the current CAS, Tanzania’s many accomplishments include a reduction in infant and under-five mortality rates; significant increase in primary and secondary enrollment rates; improved conditions of trunk road network; a broadened tax base and increased domestic revenues. Gains were also made in providing basic services through safety nets to the vulnerable, community participation and enhanced social accountability.

However, positive developments in certain areas have been offset by slow, reversed, and uneven progress elsewhere. Isolated development gains have not created adequate momentum for broad-based growth and poverty reduction. Progress has been particularly disappointing in areas vital to sustainable economic growth, such as improvement of the business environment, reduction of poverty, improvement of the management of strategic infrastructure including utilities, ports, and railroads; the quality of basic education and quality of public financial management.

In addition, progress has been marginal or even reversed for the core reform areas including Public Service Reform Program (PSRP), Local Government Reform Program (LGRP) and the National Anti-Corruption Strategy (NACSAP) which only led to a low number of convictions in grand corruption cases. 

A rapid population growth could also undermine the impact of economic growth on poverty reduction. Tanzania’s population growth, around three percent annually, is among the highest in the world. In addition, the rapid influx of people increases the stress on institutions already struggling to cope with delivery of basic services such as sewerage, clean water, schools, and health care. This is especially true for the urban areas where population growth is at a much faster rate than in rural areas.

It is expected that the new CAS will be discussed by the Bank Group’s Board of Executive Directors in April 2011.
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World Bank begins Fellows Program to bring specialized expertise to countries

The World Bank has announced the launch of a new global fellowship program to tap new expertise into its development work and strengthen its knowledge network.

The Fellowship program will enable the Bank to attract global technical and policy experts for three months to a year to provide new perspectives on policy, performance and implementation. Fellows will also contribute to policy analysis, advise governments, promote knowledge sharing, and bring cutting-edge solutions to countries.

The first fellow under the program, Michael Joseph, will advise the Bank and governments on spreading the use of mobile phone banking, drawing on his knowledge and experience at the helm of Kenya’s largest telecommunications service provider.

“I am really deeply honored to have been selected as the first fellow by the World Bank to share my knowledge and experience in mobile innovations,” said Michael Joseph, former Chief Executive Officer of Safaricom.  “I am delighted to work with the leading development institution and be part of the global effort to fight poverty.”

Joseph, who remains on the Board of Safaricom, has been credited with the success of the internationally renowned M-pesa, the mobile money platform that enables subscribers to make payments and move cash at a low cost, cutting out intermediaries. M-pesa has become a key asset for people without access to banks.

As a World Bank Fellow, Joseph will provide strategic advice to the World Bank and governments beyond Africa on policy and regulatory issues to promote development of mobile banking and mobile payments.

 “Sharing knowledge on telecommunications innovations, including mobile money, can make an important contribution to Africa’s reform and development,” said Johannes Zutt, World Bank Country Director for Kenya. “Michael Joseph’s participation in the World Bank Fellows program will leverage the Bank’s interventions in technology and financial services in new frontiers in line with our new Africa Strategy.”

The global sharing of knowledge and innovation will boost growth opportunities for African countries, contributing to better equity and poverty reduction. 

Mobile phones are now the leading means of voice communications and internet access, connecting communities and expanding opportunities for economic development. In 2010, the world reached 5.3 billion mobile subscriptions, with more than three billion of them in developing countries. These include 450 million in Africa, representing a penetration of 43 percent.

In Kenya, mobile connectivity has increased rapidly, creating opportunities for financial transfers and information exchange. The World Bank’s December 2010 Kenya Economic Update estimated that more than 21 million Kenyans have access to phones, with 15 million using mobile money services. In December 2010, mobile money services in Kenya reached a new record of almost US$1 billion in transactions.

About the World Bank Fellows Program

The World Bank Fellows Program has been established to encourage the flow of knowledge and innovative ideas between high-level experts who are globally recognized practitioners in their field.  These individuals may be located within academia, government or the private sector, and interested to come on short-term assignments to the World Bank.

Fellows provide the World Bank with expert consultation and contribute key technical knowledge and professional experience to issues related to investments in education, health, public administration, infrastructure, financial and private sector development, agriculture, environmental and natural resource management, to name a few. 

The World Bank Fellows will open up dialogue on new development issues and lend their expertise and enhance the World Bank’s advice. The program taps the expertise of these highly qualified professionals to meet critical intellectual and analytical needs in the World Bank's priority programs and represent a variety of professions.

 

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INVESTOUR: Seizing Tourism Investment Opportunities in Africa

Jan 25, 2011

 

For the second year running, the Tourism Investment Forum for Africa [INVESTOUR], held at the international tourism trade fair FITUR 2011, will increase the visibility of Africa as a tourism destination and mobilize investment as a tool for sustainable tourism development.

 Following the success of the first edition in January 2010, INVESTOUR will once again set the stage for African destinations to highlight tourism business and investment opportunities.  
The Forum allows potential investors to better grasp the continent’s tourism potential and support its socio-economic development. As a consequence of increased investment, tourism growth will have a significant positive impact across Africa, given its capacity to generate employment, foreign exchange earnings, national income and development. Investment in tourism will also have direct positive effects on other sectors of the economy.
Tourism is one of Africa’s greatest assets; its abundance of tourism resources, natural landscapes and rich history and culture suggest that the African inbound tourism market has great potential for development.
 Indeed, Africa was one of the fastest growing tourism regions of the last decade and the only region to show positive tourism growth in 2009, which it maintained  during 2010, buoyed by increasing economic dynamism and the hosting of the FIFA World Football Cup in South Africa.
INVESTOUR is co-organized by UNWTO, Casa Africa and FITUR and will feature the Southern African Development Community [SADC] as a specially invited region.
To date, 39 African countries will be represented at the Forum, including 22 African Ministers responsible for tourism. The morning session of the Forum will consist of a series of presentations and debates, while the afternoon is set aside for 300 one-on-one meetings between African tourism authorities and Spanish private sector representatives.
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Cocoa Price Soars on Ivorian Export Ban

Mon Jan 24, 2011 

LONDON/ABIDJAN (Reuters) - Cocoa surged to near its highest price in 30 years on Monday as top producer Ivory Coast's Alassane Ouattara declared a month-long export ban to stop revenues reaching his rival for the country's presidency.

In a signal the market was taking Ouattara's call seriously, U.S. agribusiness giant Cargill, which typically buys about 15 percent of Ivory Coast's cocoa crop, temporarily suspended cocoa bean purchases from the West African country.

Dealers said the market was confused over the potential impact of Sunday's call by Ouattara -- internationally recognised as the victor of a November 28 election -- given that incumbent Laurent Gbagbo controls cocoa flows out of the country.

Ouattara, who is in a hotel guarded by U.N. troops, said anyone contravening the ban, as well as other deals with Gbagbo's government, would be subject to sanctions.

But his power to enforce them was in question as Gbagbo, who has appointed his own administration and rejected pressure to step down, was likely to do everything possible to facilitate exports to generate cash to pay the military and state workers.

A Reuters reporter in Abidjan saw trucks laden with cocoa beans entering the port, where it was unloaded at warehouses.

Some exporters said business was continuing as usual on Monday, while others said they were unloading beans that had been previously bought but would not register them in the system for export, and would be winding down new purchases.

"We are going to buy and stock until the situation is clearer," said an Abidjan-based exporter.

Exporters estimated arrivals at ports had reached around 843,000 tonnes by January 23, up about 11 percent on last year.

But, citing real time data from the port, the Ivorian cocoa sector body said on Monday the figure was higher, with 700,000 already exported and another 300,000 tonnes registered, and therefore ready for export.

Buyers swooped on the commodity as a precaution, at one point driving the key ICE second month futures contract, currently May, up to a one-year peak of $3,340 a tonne before it settled at $3,282, 3.4 percent up.

ICE second-month cocoa was within sight of its December 16, 2009, peak of $3,514, the highest level in more than 30 years.

"The larger players are taking measures to secure themselves. People have bought cocoa and cocoa products to mitigate their risks," a big European cocoa trader said.

"Everybody is in the dark," the trader added.

A European Union embargo on Ivory Coast cocoa trade is unlikely for now because of the potential cost to the country's population, a spokeswoman for the EU's foreign policy chief Catherine Ashton said on Monday.

"DISRUPTION WOULD BE HUGE"

Dealers said that if exporters respect Ouattara's call for a ban, there will be less availability of cocoa on the international market, which could send cocoa prices rocketing.

"If it's enforced prices of cocoa will go through the roof," Gary Mead, analyst with the VM Group in London, said of Ouattara's call. "If he's serious, if they can enforce such a trade embargo, the disruption would be huge."

West African regional body ECOWAS has threatened to oust Gbagbo militarily, and the bloc's chair Nigeria said on Monday it wanted U.N. backing for military intervention to keep the Ivorian crisis from destabilising the region.

Analysts say any such move is some time off and the priority now is squeezing Gbagbo's finances, including cocoa, which provides about $1 billion in revenues per year.

In a sign of concern, Gbagbo's government met exporters on Monday and instructed them to continue operations as usual.

Some 260 people have been killed in the crisis.

While Cargill's decision lent weight to Ouattara's call, some commentators were sanguine as they expected that beans would continue to flow despite the political standoff.

Romain Lathiere, a fund manager with Swiss-based Diapason Commodities Management, said: "In the end, the exporters are still going to be able to export. Cocoa will transit to Ghana, or other countries, and will still get out."

Two European cocoa industry associations said on Monday they were still seeking clarification of the export ban call.

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Business- South Africa

The South African new truck, bus and van market (which includes all vehicles bigger than 3,5 t) ended 2010 at 22 022 units, 16,3% more than the 2009 market. This means that sales have recovered to a level better than the twenty-two years between 1983 and 2005, and has moved significantly above the 18 934 unit total recorded in the recession-hit 2009. It is, however, far from 2007’s record-breaking 37 069 units.

The good news is that the local truck market may show further gains in 2011.
Nedbank’s group economic unit says that commercial vehicle sales will this year benefit from the gradual recovery in fixed investment activity in South Africa.
In his forecast, McCarthy Group CEO Brand Pretorius expects the sale of medium-commercial vehicles to grow by 5,9% in 2011, and heavy trucks and buses by 17,5%.

Hino South Africa vice-president Dr Casper Kruger says that the truck seller views the 2010 truck market result as highly pleasing, “both in its own right, and as an indicator of activity in the broader local business environment.”
“In the aftermath of 2009, the commercial vehicle supply industry was looking to re-establish a firm platform from which to grow its future sales volumes, and this manifested during the second half of last year.”

While the global financial picture still remains uncertain, it is now clear that South Africa is generating much of its own economic momentum, based on increasing trade with other developing economies, including its neighbours, for which road haulage is an economic necessity, notes Kruger. He says that positive factors supporting the market include good demand for export commodities, increased global interest in African commodity resources, a strong rand to support the importation of capital equipment, plans for a considerable level of national infrastructure development, and the fact that interest rates are at historic lows.

While the levels of “spectacular growth in truck sales” experienced before the recession are not likely to be repeated in the immediate future, the “industry can look forward to sustained growth in 2011”, says Kruger.
“Prospects for truck sales are likely to remain positive for several years thereafter.”

HEAVIES MAKE A COMEBACK

Kruger notes that the revival in the fortunes of the heaviest trucks is fully reflected in the market breakdown for 2010. The extra-heavy commercial vehicle segment has regained its former market leadership position with a more than 38% share, compared with 34% in 2009. Combined sales of medium-sized trucks and vans finished the year with a market penetration of 34,3%, down from just more than 38% one year earlier, while the distribution-rich heavy truck segment maintained its 20% market share.

Bus sales, which include the luxury coaches specially imported to support the movement of the 2010 FIFA World Cup teams, officials and spectators, ended the year with a market share of just more than 7%.

Edited by: Creamer Media Reporter
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