Kenyan Crude Oil Headed to the EU?

Despite the oversupply of oil, low prices and high transport costs, Kenyan crude oil from the Turkana region is apparently headed for the EU. Civil Society is apparently calling first for the construction of a pipeline to transport the oil but seems the oil will be transported by trucks and trains which is costly.

Read more here.

Kenya's Sugar Sector and COMESA Safeguards

According to sources, Kenya’s sugar sector faces a gloomy future as the end of the COMESA safeguards beckons.

In March 2004, the government requested a four-year cover that was granted with conditions from the Common Market for Eastern and Southern Africa (COMESA) council of ministers. However, Kenya is yet to meet any of the conditions, and the government now indicates it will be seeking another extension when the current one ends March 2014.

Agriculture secretary Felix Koskei says the government is keen on an extension of the protection. “We will explain to COMESA why we need an extension; we understand that we have exhausted our limits, but we still have the reasons to be given one more extension,” says Mr Koskei.

Kenya has exhausted the required allowance for the extensions as put in place by the COMESA treaty, and it is not clear whether the window will be extended.  The cover came into effect in 2003 and Kenya was given a four-year waiver that would see the importation of duty-free sugar from the COMESA market regulated. Kenya got extensions in 2007 and in 2011. Initially, the treaty would provide for a maximum of eight years, however, the waiver in December 2007 was amended to avoid contravening COMESA Trade Remedy Regulation which provide for a maximum eight years for the application of safeguards under the bloc’s terms.  COMESA reviewed the regulations to be in tandem with the World Trade Organisation’s agreement on safeguards which provides for a total of 10 years for developing economies.

A former chairman with the Kenya Sugar Board (KSB) and currently a director at the agency says political will shall override the COMESA treaty on the protection.  “At the end of the day, political will shall prevail over the treaty; each member country has own interest of protecting their sugar sectors which provides a source of livelihood for more than a million people,” says Mr Saulo Busolo.  Kenya is considered a large-scale consumer of industrial sugar, used in making cakes, sweets and pharmaceutical products, which are later sold within COMESA.  Mr Busolo says Kenyan consumers are paying exorbitant prices for sugar as a result of shielding the local manufacturers from increased competition from neighboring African nations.  “Consumers are parting with high prices in buying sugar compared to other African countries such as Mauritius,” he said, adding that Kenyans were paying more than two times the world average. Mauritius exports all the locally produced sugar and imports cheap sugar from the COMESA market to sell it to its citizens cheaply, he said. 

A World Bank report on Kenya released last week says the protection measures have contributed to making Kenya a high-cost sugar producer, hurting the consumer.The high cost of producing sugar in Kenya is attributed to high cost of farm inputs. Kenya’s average production cost stands at $950 per metric tonne compared to regional countries like Malawi where the cost is as low as $350 per metric tonne.  When the safeguards were granted Kenya was asked to, among other conditions, come up with a formula for paying farmers and sell the State-owned millers. Some of the State millers are Miwani, Muhoroni, Awendo-based Sony, Nzoia, and Chemelil. Currently, the payment is based on a farmer’s supplies and the industry average. According to the COMESA safeguards, the payment would be quality-based judged by sucrose content, not the bulk. The KSB, the industry watchdog, says a pilot is running in Sony and Nzoia. The impending sale of the millers has been delayed for years, the Cabinet having given it a nod in 2010. But it could not take off, partly because there was no law and having the Privatization Commission in place also took a while.

Critics and reviewers, however, have voted overwhelmingly for the sale of the former giants to inject efficiency backed by new investment, talent, and limited political interference.  Before the window closed in the first four years of the first extension, all these millers had a combined debt of Sh50 billion, one of the factors that delayed their sale.  The minister has blamed the delay in privatization on the last Parliament, that, he says, did not give the government the go-ahead. “Parliament did not give the Treasury the privatization go-ahead that would have started early this year,” said Mr Koskei. 

The government negotiated for the COMESA lifeline to allow the importation of 200,000 tonnes to meet the country’s deficit, whose total annual consumption stands at 700,000 tonnes against the local production of 500,000 tonnes.This comes even as the regulator has warned that it will cancel the licences of the sugar factories that would not comply with the sugar policy that requires all the millers to have more than one income generating project. The policy, to be implemented in the next 24 months by the KSB is aimed at protecting the local sugar industry from collapsing in the weight of cheap sugar once the COMESA window closes. KSB chief executive officer Rosemary M’kok says that the 24-month window period is enough time for all the sugar factories to have complied with the requirement. “The factories that would not have complied with our policy will definitely have their licences cancelled as KSB will not renew them,” Ms M’kok said. It would be mandatory for all the millers to produce sugar, ethanol and electricity as a different source of generating income, instead of relying on sugar alone.

Can Africa Feed Africa?

A new World Bank report Africa Can Help Feed Africa: Removing barriers to regional trade in food staples ―says that Africa’s farmers can potentially grow enough food to feed the continent and avert future food crises if countries remove cross-border restrictions on the food trade within the region. According to the Bank, the continent would also generate an extra US$20 billion in yearly earnings if African leaders can agree to dismantle trade barriers that blunt more regional dynamism. The report was released on the eve of an African Union (AU) ministerial summit in Addis Ababa on agriculture and trade.

According to the report “Africa has the ability to grow and deliver good quality food to put on the dinner tables of the continent’s families, however, this potential is not being realized because farmers face more trade barriers in getting their food to market than anywhere else in the world. Too often borders get in the way of getting food to homes and communities which are struggling with too little to eat.”

With many African farmers effectively cut off from the high-yield seeds, and the affordable fertilizers and pesticides needed to expand their crop production, including unpredictable weather patterns, the continent has turned to foreign imports to meet its growing needs in staple foods.

See full report here for some policy considerations.

Geographical Indications Bill Kenya

Business Daily reports that Kenya's Industrialization Ministry along with the Kenya Industrial Property Institute (KIPI) are currently reviewing the Geographical Indications Bill (GI) which will provide a legal framework for safeguarding products like tea, coffee, and handicraft by expressly attributing them a sign or appellation of origin.

A geographical indication is a sign used on goods that have a specific geographical origin and possess qualities, reputation or characteristics that are essentially attributable to that place of origin. Most commonly, geographical indications include the name of the place of origin of the goods such as agricultural products which typically have qualities that derive from their place of growth/production and are also influenced by specific local factors, such as climate and soil. Geographical indications may be used for a wide variety of products, whether natural, agricultural or manufactured.

Meanwhile an appellation of origin is a special kind of geographical indication. It generally consists of a geographical name or a traditional designation used on products which have a specific quality or characteristics that are essentially due to the geographical environment in which they are produced.  The concept of a geographical indication encompasses appellations of origin.

Whether a sign is recognized as a geographical indication is a matter of national law and as such geographical indications are protected in accordance with international treaties and national laws under a wide range of concepts, including trademark laws in the form of collective marks or certification marks, laws against unfair competition, consumer protection laws, or specific laws or decrees that recognize individual GIs.

The GI Bill is expected to help certify Kenyan products and market them exclusively in the speciality market, a strategy that will help distinguish Kenyan goods from those of other countries.  The likely scenarios once the Bill is enacted include marketing of origin-specific Kenyan exports such as Kericho tea, Mt Kenya coffee, Maasai jewellery, and Kisii soapstone carvings.

The draft GI Bill also proposes that producers and regulatory firms can apply to be custodians of a location specific trademark. Thus, the Kenya Tea Development Agency may apply to register tea variety trademarks.  Certification trademark of Kenyan products will avoid situations where foreign parties attempt to register such goods in other countries.

GI's are protected at the international level through a number of treaties mostly administered by World Intellectual Property Organization WIPO which provides for the protection of geographical indications, most notably the Paris Convention for the Protection of Industrial Property of 1883, and the Lisbon Agreement for the Protection of Appellations of Origin and Their International Registration. In addition, Articles 22 to 24 of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) deals with the international protection of geographical indications within the framework of the World Trade Organization (WTO).

Meanwhile Article 43 of the EAC Common Market Protocol has provisions on co-operation in Intellectual Property Rights of which geographical indications are included (Art 43.2(f)).

China and EAC Sign Trade and Investment Framework Agreement

The Framework Agreement between EAC and China focuses on the promotion of commodity trade, exchange of visits by business people from EAC and China, co-operation in investment, infrastructure development, human resource development and training. The two sides also created a Joint Committee on Economy, Trade, Investment and Technical Cooperation (JCET) as the implementation framework for the Agreement. 

This is a different type agreement from the EPAs. It focuses on market enabling assistance in areas such as infrastructure development, skills development and private sector engagement. In fact, China has indicated she will provide funding for feasibility studies on roads and infrastructure. The focus on commodity trade also signals willingness to expand agricultural production and processing of agricultural commodities and thereby enhancement of the value chain.

BRICS’ to Discuss Economic Coordination

and some politics as well....

Leaders from five of the world’s top emerging economies will discuss a coordinated stance on economic issues such as commodity price fluctuation (however, the yuan’s exchange rate is off the agenda).

The mid-April ‘BRICS’ summit will gather leaders from China, Russia, India, Brazil and South Africa in the southern Chinese beach resort of Sanya.  The summit will give the world’s big rising economies a venue to coordinate views on global financial reforms, commodity prices and other shared concerns since the BRICS countries have similar concerns on important questions like the global economy, international finance and development, reform of the international currency system, commodity price fluctuations, climate change and sustainable development. 

See full report here.

Why Export Bans Fail to Spur Local Value Addition

Exports of raw cashews nuts by Kenyan farmers were banned last year in a bid to revive the local cashew nut industry. The ban provided that only Government and the National Cereals and Produce Board would be authorized to buy raw nuts from farmers. The purpose of the ban was to attract investors to set up cashew nut processing units in the country, however, the low volumes of nuts produced meant that a year later, no factory of viable capacity has been established.

There could have been some implementation weaknesses. The national task force that recommended the ban, also proposed that the National Cereals and Produce Board (NCBP) should become the buyer of last resort and market regulator, as is the case with maize and wheat. However since  no funds were channeled to NCPB for the task, this gave middlemen a field day as they bought the nuts at about a third of the price prevailing before the ban. As a result, farmers are now bracing themselves for substantial losses following cashew nut harvests and government delays in providing alternative marketing channels. 

If I may think out loud- I wonder if the authorities made specific efforts to increase production of local cashew nuts, identify investors, provide incentives and jointly venture with them, to help establish cashew processing plants in the country. 

See recent article here.

Trade in Natural Resources: A look at Norway

The WTO World Trade 2010 Report on Trade in Natural Resources illustrates that Russia, Saudi Arabia, Canada, United States and Norway are the top five global exporters of natural resources, with Algeria and Nigeria (ranked globally at 13th and 15th respectively) included in the top 15 in the world (data includes intra EU trade).

This is a focus on Norway, an EFTA Member but not part of the European Community EC.  Norway is the fifth highest exporter of natural resources globally and a European country whose exports display some similarities with Africa’s overall export profile. Like many African economies, Norway is particularly rich in commodities and energy resources (oil, natural gas and water for hydro power production).  Commodities include fish, timber, and some minerals, including thorium as a potential resource base for new technologies of nuclear power generation. Norway however has not suffered many of the curses that plague some resource-rich countries, such as corruption, inequitable benefit sharing, capital flight or the “Dutch disease”. Norway has consistently been ranked by the UN Human Development Index as the best country in the world to live in, and the World Economic Forum has ranked Norway as one of the top 15 most competitive countries globally. The small size of the country (population 4.8 million), its geographic location on the outskirts of Europe, makes its development trajectory which is based on sustainable natural resource management, an interesting case study for Africa.

While industrial products typically make up 85 per cent of OECD countries’ total merchandise exports, the OECD figure for Norway is around 28 per cent. Norway’s reputation as raw materials supplier however, should be understood in light of the fact that major segments of its raw materials industry are highly knowledge- and technology-intensive, even though the end products are not considered to be processed industrial goods. A good example is the petroleum industry, in which technology and know-how have in themselves become an increasingly important business sector. In fact, the increase in oil and gas revenues has resulted in a reduction in the share of export revenues attributable to services, from around 28 per cent in 1991 to around 24 per cent in 2004. While services typically account for a growing share of world trade, the opposite trend in Norway is due to the fact that its petroleum exports are growing even more strongly than its services exports.

Norway’s direction of trade is unlike that of most African countries. For geographical and historical reasons Norwegian trade largely takes place with its European neighbors while African countries trade primarily with other continents. Crude petroleum and natural gas remain Norway's most important export products which together account for about 56.8% of the exports, 25.8% of Norway's GDP and 65.1% of the total value of merchandise exports (however Norway is not an OPEC Member). Within the food sector, Norway is the tenth biggest fishing nation in the world in terms of quantity produced, and the world's second largest exporter of seafood in terms of value. Forests cover 38% of Norway's land area, and are mainly privately owned (88%) and export financing in the forestry sector is subject to local content requirements. In addition, Norway is the largest producer of hydropower in Europe; about 96% of electricity generation in Norway is hydroelectric. 

The manufacturing sector is relatively small and is concentrated on industries associated with the production of equipment used in the extraction and processing of natural resources such as aluminium, machinery and transport equipment, followed by chemicals.  However 80% of Norway's imports are manufactured goods.

The Norwegian economy is generally characterized as a mixed economy - a capitalist market economy with a clear component of state influence.  For example, revenues from Norwegian oil and gas activity are invested in the Government Pension Fund, ensuring that the country’s petroleum wealth will benefit future generations. The fund serves as a resource as it makes long-term investments in solid companies throughout the world, with ethical considerations as cornerstones in the fund’s investment strategy. The “oil fund”, as it is known to the general public, is often cited by the IMF as an exemplary sovereign wealth fund which has an average ownership stake of one per cent in the global stock markets, thus securing its right to a considerable share of future profits in listed companies throughout the world. 

What seems to make the difference is the participation of the Norwegian State and her effective management of natural resources in the economy. For instance it is estimated that in 2008, the State owned around one-third of the Oslo Stock Exchange capitalisation and is a major shareholder in several of the larger commercial listed companies.  The State’s ownership contributes to safeguarding the public interest in Norway’s natural resources and the revenues flowing there from.  For instance, the Petroleum Act establishes that the property rights over Norway's petroleum and gas resources are vested in the State. In the same vein, revenue management and taxation in this sector are directly linked to the States responsibility to its citizens which historically is proven to be an important driving force to strengthen accountability- because of the social fiscal contract created between citizens and the government.

Along these lines, we should recall a previous post which highlighted the importance of local content as a basis for sustainable development in Africa. This is relevant since natural resource exports as a share of Africa’s total merchandise exports, are second highest globally at 73%, after the Middle East which holds the highest concentration at 74%. This is according to the WTO Report on Trade in Natural Resources, which also reveals that export taxes on natural resources appear twice as often as export taxes in other sectors. Hence it appears that there is a global fiscal practice where the State intervenes to provide for effective natural resource management, sustainable development and the advancement of comparative advantage in an economy. Despite this, WTO and EPA negotiations continue to push for the elimination of export taxes in Africa’s resource based sectors.  Export taxes could be used to fund research, technology and innovation in resource sectors just like Norway does in the fish and seafood sector. Exporters of fish and fish products have been subject to a levy that varies between 0.2% and 1.05% of the export value depending on the species and the stage of processing.  The levy is used to finance the activities of the Norwegian Seafood Export Council (NSEC) and the Fishery and Aquaculture Industry Research Fund.  The elimination of export restrictions for the sole benefit of importers can also be detrimental to the environment and the development of African resource economies.

South-South trade risks reinforcing Africa's commodity dependence

This is Africa By Peter Guest | Published: 18 June, 2010

The United Nations Conference on Trade and Development has warned that trade flows between Africa and industrialising players in the “Global South” are currently reinforcing the longstanding trend that sees Africa export unprocessed commodities and import manufactured goods.

In its annual 2010 Economic Development in Africa Report, UNCTAD says that this trend needs to be reversed while the South-South relationship remains in its early stages. Companies and sovereign investors from China, India and Brazil are all investing heavily into Africa across a variety of sectors, but minerals, hydrocarbons and agricultural products continue to attract the most interest. These relationships need to be managed in order that they result in economic diversification in African countries, the report recommends.

Africa’s total merchandise trade with non-African developing countries rose from $97bn in 2004 to $283bn in 2008, the report says. For the first time, trade with this group of countries outstripped trade with the European Union. The number of greenfield foreign investment projects by investors from non-African developing countries was 184 in 2008, compared to 52 in 2004.

Chinese total merchandise trade with Africa increased from $25bn in 2004 to $93bn in 2008, according to the report. Over the same period, the continent’s trade with India increased from $9bn to $31bn and with Brazil from $8bm to $23bn.Aside from the BRIC countries – Brazil, Russia, India and China – relationships between other emerging nations, including South Korea and Turkey, and Africa, look likely to take on greater prominence.

While trade is taking on traditional patterns, foreign direct investment from the rest of the developing world into Africa is, to some extent, having a more positive effect on diversification, according to the report’s author, Charles Gore.

“What you see from the trade flows is that that is reinforcing commodity dependence. What you see from the FDI is a more mixed picture. Some of it is going into extractive industries, but a lot of the new Chinese investment, small and medium enterprises, is actually market-seeking,” Mr Gore says. “That’s tended to have a pattern where they first go in as traders but then they start producing there locally, and now they’re starting to cluster to get the benefits of being located closer to each other.”

Official finance is also following new patterns. The majority of developing world official development assistance is directed to infrastructure, with some, notably that of Brazil, also being used for technology transfer.

China is also becoming the most significant bilateral source of support to African infrastructure and production, rising from $470m in 2001 to $4.5bn in 2007. With a slowdown in growth in the developed world prompting concerns of reductions in Western ODA, these relationships are likely to increase in importance.

The report recommends that African governments play a more active role in managing the support and investment that they are receiving from the Global South. This means that their focus should not be on simply attracting FDI from other developing countries, but on directing investment into sectors which will promote development. “What we emphasise is developmental leadership. I think the approach of the new Southern partners is encouraging this more developmental approach to governance.”

China Reduces Tariffs on Imports from Kenya and Other States

According to the Africa Report, Kenya has now been included in the list of 41 countries enjoying reduced tariffs into China.  Other recipients are largely LDCs as agreed in the 4th Ministerial Conference of the Forum on China-Africa Cooperation- Sharm El Sheikh Action Plan (2010-2012).

BEIJING (Reuters) - China is adding 33 states to the list of developing countries whose goods are largely exempt from import tariffs, the Ministry of Finance said on Wednesday. It said that from July 1 it would scrap tariffs on about 60 percent of imports from countries on the list, which include Ethiopia, Kenya, Liberia, Mali, Madagascar, the Comoros and the Democratic Republic of Congo. Burundi, Malawi, Mozambique, Benin, Togo, Uganda, Zambia, Central African Republic are also on the list. In Asia-Pacific, beneficiaries include Afghanistan, Bangladesh, Nepal, Samoa and Vanuatu. Since 2001, China has had 41 countries on the zero-tariff list.

This is especially interesting especially because Kenya is not an LDC.

Further reports show that China would grant zero tariffs status to 4,762 categories of commodities.  China imports scrap metal, fruits, nuts sisal fibre, row hides and skins, fish, black tea, coffee, and leather wares from Kenya and scrapping tariffs on these produce means their cost will fall in China by between three to 30 per cent — the current range of the Asian country’s external tariffs.

According to other sources, the balance of trade between Kenya and China has worsened over the last five years in favour of the Asian countries. Official statistics indicate that while Kenya’s exports to China only grew at a snail pace from Sh1.2 billion in 2005 to Sh2.5 billion in 2009, imports have risen phenomenally to Sh74.5 billion from Sh19.4 billion in 2005.

Climate Change and Africa’s Food Deficit

"Africa is now facing the same type of long-term food deficit problem that India faced in the early 1960s". This is according to a Study by the International Food Policy Research Institute (IFPRI) which recommends that Africa should spend more on Agriculture in order to avert a possible crisis. Sub-Saharan Africa’s (SSA) food deficit is also increasingly compounded by climate change. In fact, one-third of the African population lives in drought-prone areas while two-thirds of SSA’s surface area is desert or dry land. The major impact of climate change on food security includes changes in precipitation and insulation, changes in the length of growing seasons and changes in carbon uptake. Additionally there are declines in agricultural yields, decline in the quality of pasture and livestock production, and reduced vegetation cover which place local people at risk of famine.

Climate change also affects rain-fed agriculture which is the main safety net of poor people in rural areas where agriculture employs about 70 percent of the population. The rain related challenges can either cause drought or floods and the maps shown (Source: World Bank Development Report 2010) indicates the countries likely to be affected by either.

Despite the fact that most people in SSA are engaged in agriculture, its productivity has stagnated for several years across the whole sub-region making the region a net food importer. In fact, according to the Food and Agriculture Organization’s (FAO) list for 2010 of Low-Income Food-Deficit Countries (LIFDC) - 44 of the 77 low income food deficit countries in the world are in Africa.

An example is the disappearance of Lake Chad over a 40 year period as shown in the image (source: GRID Arendal UNEP). Lake Chad is shared by Nigeria, Chad, Cameroon and Niger and its disappearance is a grim reminder of the dramatic ecological challenges and food shortages that lie ahead. The lake's area has decreased by 80 per cent over the last four decades, with catastrophic impacts on those reliant on its resources. Lake Victoria is receding as well and projected reductions in the rivers in the Nile region signal difficult times ahead. 

Another dimension is that of water, storage and infrastructure. Most rivers cross more than one country, necessitating effective cooperation across borders. Africa’s 63 transboundary river basins together account for 90 percent of its surface water resources necessitating regional water control systems.  Armed conflict further complicates agriculture and climate change risk management. For poor people living in weak or unstable states, climate change will deepen hunger, suffering, and intensify the risks of food insecurity, mass migration, violent conflict, and further fragility.

According to a World Bank Publication, by 2050, Sub-Saharan Africa will need to feed more people in a harsher climate. Agriculture will simply have to become more productive, getting more crop per drop while protecting ecosystems. Water resources need to be managed better by scaling up existing infrastructure to manage watersheds, rainfed agriculture and protecting forests. Improved planning for storage, power transmission, and irrigation including screening investments for climate risks will also be necessary. Countries will need to develop mechanisms for collaboration across sectors and countries.

There is a role for innovation and academic research institutions as well. This could be done by adopting simple technologies suitable for small farmers such as low-cost drip irrigation and storage of rainwater. African farmers should also be helped to work with new crop varieties. One example is "New Rice for Africa" (Nerica), an Asian-African hybrid developed in Africa with support from the Japanese International Cooperation Agency (JICA), that combines drought resistance with high yields and high protein content. 

NERICA, the new rice variety was the result of years of work by a team of plant breeders and particularly Sierra Leonean molecular scientist Monty Jones at the West Africa Rice Development Association (WARDA – now the Africa Rice Center). When Dr. Jones (a 2004 winner of the WFP) set up the biotechnology research program in 1991, some 240 million people in West Africa were dependant on rice as their primary source of food energy and protein, but the majority of Africa’s rice was imported, at an annual cost of US$1 billion. According to WIPO, the most popular Nerica rice takes only three months to ripen, as opposed to six months for the parent species, thus allowing African farmers to “double crop” it in a single growing season with nutritionally rich vegetables or high-value fiber crops. 

Meanwhile in 2009, Dr. Gebisa Ejeta of Ethiopia, was the recipient of the World Food Prize for his sorghum hybrids which are resistant to drought and the devastating Striga weed and which has dramatically increased the production and availability of one of the world’s five principal grains and enhanced the food supply of hundreds of millions of people in sub-Saharan Africa.

Overall, a Climate Strategy for Africa and food security should also include: sustainable land and forest management; increased knowledge and analytical capacity, improved weather forecasting, research, extension services, market infrastructure and renewal energy generation systems. Farmers will also need to benefit from integrating biodiversity into the landscape and reducing carbon emissions from soil and deforestation.

Has the Financial Crisis Revealed the Limits of an Export Led Strategy?

The global economic crisis is making it painfully evident to the developing world, the limitations of over-dependence on a narrow set of exports and markets. Many countries are rightly worried about the merits of a growth process built on export-led growth. In the case of successful export-led growth strategies, the global economic crisis is revealing an additional limitation: the large exposure of exporting countries to financial vulnerability. 

For these reasons, countries should: strengthen their diversification and avoid agricultural or natural resource export vulnerability; emphasise the development of the domestic market; develop industrial policies rather than narrowly defined export led strategies only; increase regional trade and integration; enhance infrastructure development and other private sector development tools.

For instance, China's dependence on export-led growth, particularly as a global platform for exports of manufactured products, left it vulnerable to the effects of the global economic recession that began in late 2008. In 2009, China's exports fell by 16% and its imports fell by 11%, reflecting the high import-intensity of its manufactured export sector. Real GDP growth declined from 9.6% in 2008 to a year-on-year rate of 6.2% in the first quarter of 2009, the lowest rate in more than a decade. If China can be vulnerable to the downside of export-led growth, African countries are no exception.

Has the Financial Crisis Revealed the Limits of an Export Led Strategy? other views here.

Technology and Innovation in Agriculture

The Technology and Innovation Report 2010: Enhancing Food Security in Africa Through Science and Technology and Innovation  looks at the current trend towards declining agricultural productivity in many developing countries, especially in Africa.  


1. The Report identifies key challenges in the growth of agricultural capacity. These include: 
(a) declining investment; 
(b) a lack of guaranteed land tenure and access to credit;
(c) isolation of small holder farmers; 
(d) inadequate adaptation to climate change; 
(e) lack of  high technology bio-energy solutions; 
(f) previous structural adjustment policies and 
(g) a lack of regionally relevant innovation priorities in agricultural research and innovation.  


2. To address these impediments, the key recommendations include to:
(a) Place smallholder farmers at the centre of policy;
(b) Strengthen policy maker capabilities;
(c) Target agricultural investment;
(d) Reinforce agricultural innovation systems by focusing on the enabling environment;
(e) Take into account local agro-ecological conditions;
(f) Explore the potential of global networks and value chains;
(g) Link national, regional and international agriculture research to innovation;
(h) Revitalize funding and strategies for research and development;
(i) Promote Linkages Within and Outside of the Agriculture Innovation System
(j) Engage in capacity building;
(k) International cooperation on technology transfer & technology sharing and
(l) Multilateral rule-making and policy space


The Report can be accessed here. 

Africa's Growth and Exports Spurred by Commodity Prices

According to the IMF Regional Economic Outlook for Sub Saharan Africa 2009, the strong average economic
growth of 6 per cent that Africa experienced in the five years, leading up to the 2008 economic crisis was underpinned by a spectacular increase in the continent’s trade in commodities whose prices increased significantly over the period 2007-8. 


The commodity prices which showed the highest increase are oil followed by metals. There was a less dramatic increase in the prices of cocoa, coffee, sugar, tea and wood..