African
nations need to mobilize their continent’s resources to finance
development, and ease the way for small business to trade, UNCTAD
Secretary-General Mukhisa Kituyi has said.
nations need to mobilize their continent’s resources to finance
development, and ease the way for small business to trade, UNCTAD
Secretary-General Mukhisa Kituyi has said.
Speaking at the African Leadership Forum 2018
alongside host nation Rwanda’s President Paul Kagame and the former
head of state of Somalia, Hassan Sheikh Mohamud, Dr. Kituyi, took stock
of the steep challenges posed by the current climate in international
trade.
alongside host nation Rwanda’s President Paul Kagame and the former
head of state of Somalia, Hassan Sheikh Mohamud, Dr. Kituyi, took stock
of the steep challenges posed by the current climate in international
trade.
“Today, we’re living in a very hostile environment, with rising
levels of protectionism,” he said at the two-day forum in the Rwandan
capital Kigali, the focus of which is how to finance Africa’s
transformation to sustainable development.
levels of protectionism,” he said at the two-day forum in the Rwandan
capital Kigali, the focus of which is how to finance Africa’s
transformation to sustainable development.
“Projected sources of development finance are drying up,” he warned.
The annual forum is organized by former Tanzanian president Benjamin
Mkapa’s office and the Institute of African Leadership for Sustainable
Development, also known as the UONGOZI Institute.
Mkapa’s office and the Institute of African Leadership for Sustainable
Development, also known as the UONGOZI Institute.
Finance is a key issue for
the delivery of the 2030 Agenda for Sustainable Development, the core of
which are 17 global goals that seek to alleviate poverty and rein in
inequalities while protecting the planet and its people. Achieving the
targets means going beyond international assistance, trade and
investment to leverage resources within national boundaries.
the delivery of the 2030 Agenda for Sustainable Development, the core of
which are 17 global goals that seek to alleviate poverty and rein in
inequalities while protecting the planet and its people. Achieving the
targets means going beyond international assistance, trade and
investment to leverage resources within national boundaries.
“The global dynamics are such that every region of the world will
have to dig inside itself to find the resourcefulness to adjust, to
grow. Nobody’s going to grow Africa other than Africans,” Dr. Kituyi
said.
have to dig inside itself to find the resourcefulness to adjust, to
grow. Nobody’s going to grow Africa other than Africans,” Dr. Kituyi
said.
Illicit financial flows
He highlighted the continent’s “collective responsibility” to
mobilize its own resources, including by tackling illicit financial
flows – a catch-all term for tax evasion, capital flight, trade
mispricing, drug trafficking, money laundering and other manoeuvres that
rob the continent of billions each year.
mobilize its own resources, including by tackling illicit financial
flows – a catch-all term for tax evasion, capital flight, trade
mispricing, drug trafficking, money laundering and other manoeuvres that
rob the continent of billions each year.
The money drained out of Africa through illicit financial flows has
become a matter of major concern because of the scale and negative
effects on social and economic development on the continent, where the
majority of the world’s least developed countries are located.
become a matter of major concern because of the scale and negative
effects on social and economic development on the continent, where the
majority of the world’s least developed countries are located.
UN estimates put the annual loss at around $50 billion. To put this
amount in perspective, it’s roughly double the official development
assistance that Africa receives, and also outweighs the $42 billion that
the continent received in foreign direct investment in 2017, according
to the latest edition of UNCTAD’s World Investment Report.
amount in perspective, it’s roughly double the official development
assistance that Africa receives, and also outweighs the $42 billion that
the continent received in foreign direct investment in 2017, according
to the latest edition of UNCTAD’s World Investment Report.
The estimate may well fall short of reality because accurate data
doesn’t exist for all transactions and for all African countries,
leading UNCTAD and its partner organizations to launch the “Better Data, Better Lives” statistics project earlier this year.
doesn’t exist for all transactions and for all African countries,
leading UNCTAD and its partner organizations to launch the “Better Data, Better Lives” statistics project earlier this year.
Rules made for big business
Dr. Kituyi also said it was vital for African nations to do more for
the small businesses that are the foundation of the continent’s economy,
particularly the small-scale operations in border zones.
the small businesses that are the foundation of the continent’s economy,
particularly the small-scale operations in border zones.
He cited his own experience working on the nexus between politics and
economics in Kenya, where he was first elected to parliament in 1992
and served as minister of trade and industry from 2002 to 2007.
economics in Kenya, where he was first elected to parliament in 1992
and served as minister of trade and industry from 2002 to 2007.
“A man from Nairobi with a container drives through and takes
merchandise to Uganda or Rwanda and it’s called regional trade. A woman
at the border between Uganda and Kenya with 20 kilograms of maize,
trying to sell on the other side of the border, is called a smuggler,”
he recalled.
merchandise to Uganda or Rwanda and it’s called regional trade. A woman
at the border between Uganda and Kenya with 20 kilograms of maize,
trying to sell on the other side of the border, is called a smuggler,”
he recalled.
“And it is still the case today,” he said.
“The rules are made for the convenience of big business. The
small-scale border communities […] are not seen as part of the equation
of regional trade. They’re smugglers. They are an inconvenience. I am
not asking for anybody to organize the informal sector. I am saying they
are the main drivers of our enterprise. Give them an address to so that
they receive electricity. Give them the physical convenience and
security so that they can absorb technology and innovate their
production processes.”
small-scale border communities […] are not seen as part of the equation
of regional trade. They’re smugglers. They are an inconvenience. I am
not asking for anybody to organize the informal sector. I am saying they
are the main drivers of our enterprise. Give them an address to so that
they receive electricity. Give them the physical convenience and
security so that they can absorb technology and innovate their
production processes.”
UNCTAD spotlighted the role of women cross-border traders in Africa earlier this year in its “Borderline” project.
The power of e-commerce
Dr. Kituyi also highlighted the burgeoning importance of e-commerce
for Africa, saying, “If we are talking about financing sustainable
development we cannot wish away the critical role of the digital
economy.”
for Africa, saying, “If we are talking about financing sustainable
development we cannot wish away the critical role of the digital
economy.”
Last month, Dr. Kituyi took part in African Union talks on crafting
an e-commerce strategy for the continent, which came after the landmark
adoption in March of the African Continental Free Trade Agreement.
an e-commerce strategy for the continent, which came after the landmark
adoption in March of the African Continental Free Trade Agreement.
E-commerce will be in focus at a high-level event
next week in South Africa, where Dr. Kituyi will join President Cyril
Ramaphosa and Jack Ma, the founder and head of China-based e-commerce
giant Alibaba, who serves as a special adviser to UNCTAD on young
entrepreneurs and small business.
next week in South Africa, where Dr. Kituyi will join President Cyril
Ramaphosa and Jack Ma, the founder and head of China-based e-commerce
giant Alibaba, who serves as a special adviser to UNCTAD on young
entrepreneurs and small business.
In December, UNCTAD will organize its first-ever Africa E-Commerce
Week in December in the Kenyan capital, Nairobi, building on the success
of its global editions in Geneva.
Week in December in the Kenyan capital, Nairobi, building on the success
of its global editions in Geneva.
