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Welcome to the South-South Global Thinkers e-discussion focusing on " The Role of South-South Cooperation in Promoting and Deepening Trade and Investment in Africa " to be held from 23 October to 8 November 2019.
The African Continental Free Trade Agreement (AfCFTA) which entered into force on 30 May 2019, represents a milestone achievement in Africa’s rich history of regional integration, continental unity, and deepening of economic ties. Additionally, the AfCFTA has been touted as a catalyst for the region’s industrial development, as it will provide business opportunities in line with the African Union’s Agenda 2063.
The promotion of South-South Cooperation (SSC), especially South-South investments and trade, appears critical for countries in Africa and other developing countries of the Global South to seize the opportunities laid out in the AfCFTA. If effectively implemented, the AfCFTA could increase intra-African trade by 52 percent by 2022, thereby ensuring better harmonization and trade liberalization across the region. With that, Africa should be more competitive internationally. However, there will be anticipated constraints and challenges to its implementation. For instance, there are fears that the benefits will not be evenly distributed as stronger economies will benefit more than weaker counterparts.
Against this backdrop, the United Nations Office for South-South Cooperation (UNOSSC) in partnership with the African Union Commission are organizing a workshop entitled “The Role of South-South Cooperation in Promoting and Deepening Trade and Investment in Africa- Promoting Conducive Policy and Legal Environments in Africa” on 5 November 2019, ahead of the 11th African Private Sector Forum in Antananarivo, Madagascar. Please access thefull background note below.
The outcomes of the workshop aims to engage discussions on the relevance, the need for the adaptation of the existing instruments for investment in the context of AfCFTA; scope the contributions of South-South investments in the SDGs in the region; identify the opportunities and challenges of the AfCFTA and other regional policy and legal frameworks that can facilitate greater South-South investments in Africa; and identify funding mechanisms and frameworks that can facilitate better South-South investments for the achievement of the SDGs. The outcome of the workshop would feed into the development of a research report that aims to inform better policy-making to promote and strengthen trade and investment policies, specifically South-South investments.
This e-discussion, seeks to engage, ahead of the workshop, Southern-based think tanks to contribute with insights and expertise and help shape the discussions of the workshop. The initial outcomes of the e-discussion will be presented during the workshop through a background paper. The e-Discussion will remain open during and shortly after the workshop, so that participants have the opportunity to share their experiences and recommend follow-up actions which will eventually feed into a comprehensive research study which UNOSSC aims to develop by September 2020.
The e-discussion will focus on the following questions:
1. What are some of the policy, regulatory and legal issues that are enabling or hindering South-South Cooperation within the region?
2. Africa just signed the largest (outside the World Trade Organization) and most ambitious regional trade agreement in the world. It is aimed at the structural transformation of the continent’s consumer market of 1.2 billion people. How can South-South Cooperation contribute to the achievement of the lofty objectives of the AfCFTA?
3. How can the private sector in the Global South be mobilized and leveraged to effectively contribute towards the growth of the digital economy, within the AfCFTA, for broad-based sustainable socio-economic development on the African continent?
The e-discussion will be moderated by Hany Besada, Senior Research and Programme Advisor, UNOSSC / NY. The facilitation will be coordinated by UNOSSC.
We look forward to your active participation and contribution to the e-discussion!
Dear Caihong, many thanks for your very insightful contributions. Much appreciated. I have the following input to make.
With regards to public sector involvement in private sector growth and development, its critical to maintain resilient and sustainable infrastructure. This requires massive structural organizations that support the effective implementation and maintenance of such infrastructures. Effective PPPs maximize on the collaboration of private finance for public infrastructure, generating cost-effective and less time-consuming services available to the public. This efficient partnership reinforces the strengths of each sector and supports the economy through the development of competition and advanced technology. There are multiple concerns that follow the complex responsibilities that come with the implementation of PPPs, yet successful ones are thriving. One such example is the effect of PPPs in bridging the gap between private financing and healthcare services on the continent. There is significant potential to increase access to affordable healthcare across Africa, and setting up the proper innovative methods of delivering this service is crucial. The opportunity allows businesses to improve corporate core competencies and contribute to the healthcare sector through improved and innovative investments. For example, A PPP between the Abbott Fund and the Government of Tanzania launched in 2001 helped to reshape and facilities the improvement of the hospital and patient management in over 90 varying facilities across rural Tanzania. Along with an investment of over 50 million USD, the Fund has provided access to technical training and expertise for a lasting influence on hospital staff conduct.[1] The collaboration of domestic governments and the private sector has many benefits to the accessibility of public sector services. In terms of potential problems PPPs can face, there is a concern that government interference may come with the political pressures placed on private company projects. At times the public sector will assume a greater position in infrastructure project agreements and attempt to control activities in a way that prevents the profit-driven agenda of the private sector[2]. To an extent, it is important that the government monitor the outcomes of PPPs to ensure their success and financial backing however, a balance is required to compliment the process.
A component of the AfCFTA that requires consideration to succeed is the dispute settlement agreement. According to varying sources, the dispute settlement process is modeled after the WTO’s institutional organization in order to constitute a strong system. However, there are some concerns that the legal constitutions won’t translate into the African economic and political scene as smoothly. For instance, Article 23 of the DS Protocol provides: Where the Panel or the AB concludes that a measure is inconsistent with the Agreement, it shall recommend that the State Party concerned to bring the measure into conformity with the Agreement. In addition to its recommendations, the Panel or the AB may suggest ways in which the State Party concerned could implement the recommendations. This means that only State Parties have access to dispute settlement under the protocol.[3] However, within Africa most trade will be facilitated by private parties which requires that their state effectively protect their rights. In the international scope, this is not as big of a challenge as governments protect their private industries, this must, however, be replicated in Africa. Therefore, effective and transparent governance is key to implementing efficient dispute settlement safeguards that prevent allow for countries and parties to trade successfully. Shifts in the culture and imagery around court proceedings within African countries are crucial to creating a cohesive legal institution that stands for and protects the interests of regional actors. Furthermore, it is inevitable that a handful of countries will dominate the playing field in the AfCFTA and this could cause further regional instability. However, with proper policies and procedures that support the equality of all countries in the eyes of the law, dispute settlement procedures can be gradually overcome. The key is to refrain from depending on the WTO’s structure as an effective example to replicate regionally. The WTO has a consistent critique with regards to the representation and support of developing countries in international disputes. If the AfCFTA does not build institutional safeguards that appeal to the cultural and political sphere of the continent, it will create and institutionalize inequality within the region.
[1] Matthews, Ian. “Healthcare and Economic Growth in Africa: Public-Private Partnerships.” GBC Health, 8 Aug. 2019, http://www.gbchealth.org/healthcare-and-economic-growth-in-africa-publi….
[2] Yescombe, E.R. (2017), Public-Private Partnerships in Sub-Saharan Africa: Case Studies for Policymakers, Dar es Salaam: UONGOZI Institute, Mkuki na Nyota Publishers.
[3] Centre, Tralac Trade Law. “Dispute Settlement in the African Continental Free Trade Area.” Tralac, 11 July 2019, https://www.tralac.org/blog/article/14150-dispute-settlement-in-the-afr….