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Enhancing trade between Arab and African countries Troisième Réunion des Chambres de Commerce et dIndustrie dAfrique et du Monde Arabe,Rabat – Maroc, 29-30.

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Presentation on theme: "Enhancing trade between Arab and African countries Troisième Réunion des Chambres de Commerce et dIndustrie dAfrique et du Monde Arabe,Rabat – Maroc, 29-30."— Presentation transcript:

1 Enhancing trade between Arab and African countries Troisième Réunion des Chambres de Commerce et dIndustrie dAfrique et du Monde Arabe,Rabat – Maroc, Novembre 2012 Dr. Azza Morssy, Chief of Middle East &Arab Programme, UNIDO (Vienna)

2 UNIDO & Global Trade UNIDO is enhancing the capacity of developing countries and countries with economies in transition to participate in global trade and integrate them into global value chains through effective participation in the based- rules of global trading system 2

3 Aid for Trade and UNIDO The UNIDO trade capacity approach and the Aid for Trade Initiative are complementary endeavors along the same holistic line of thought Kandeh Yumkella, Director-General, UNIDO 3 Source: UNIDO 2009

4 Trade & Poverty reduction Reduction of trade costs Increases competitiveness of firms Improved export performance More trade creates jobs and income opportunities Economic growth 4 Source: World Bank 2012

5 Africa: Economic Profile The near-term outlook remains positive in the post-crisis period Africa will have the worlds largest workforce by 2040 (approximately 1.2 billion) and will need to create a sufficient number of jobs 5 Source: UNIDO 2009

6 Africas main exports Fossil fuels (petroleum, hard coal, and natural gas) are main exports Fossil fuels - total exports increased from 72% in 1980 to 75% in 2008, ( above the global average of 50%) In physical terms, all African countries account for about 10.5% of fossil fuels supply to the world market 6 Source: UNCTAD 2012

7 1. Africas share of global international trade , (%) 7 Source: UNECA 2012

8 Industrial Challenges for SSA and MENA Several countries in SSA are affected by deindustrialization Several countries in the MENA are affected by the middle-income trap 8

9 Exports by Product (MENA) 9 Source: WTO 2012

10 Common Growth Prospects Both regions are expected to continue their economic recovery to pre-crisis levels The MENA region is expected to accelerate its economic growth to 5.1% in 2012 In Sub-Saharan Africa (SSA) growth is projected to grow at over 5% in 2012 as well Source WTO

11 The middle-income trap It affects countries unable to compete with low-income, low-wage economies in manufactured exports and with advanced economies in high-skill innovations … such countries cannot make a timely transition from resource-driven growth, with low cost labor and capital, to productivity-driven growth. 11 Source: ADB 2012

12 Source: ILO 2010

13 13

14 14 No.14 Global Trade Challenges SUPPLY SIDE: LDCs have neither the surplus of capacity of exportable products nor the production capacity to take immediate advantage of new trade opportunities Kofi Annan - UN SG, Financial Times, 5 Mar CONFORMITY: Countries that can not meet standards and regulations in developed country markets are effectively barred from trading with those markets. International Development Research Centre (IDRC), Canada Trade facilitation/infrastructure: For the majority of African countries, tariffs amounted to less than 2%, while transport cost often exceeded 10%. World bank trade note 15; may 10, 2004

15 15 No.15 Countries must have COMPETITIVITY of productive capacities Products must conform to requirements of clients and markets CONFORMITY with standards Rules for trade must be equitable and customs procedures harmonized CONNECTIVITY to markets PRODUCTIVITY (enterprise) COST OF EXPORTING (support services) CompeteConformConnect Challenges for Trade : The 3 Cs

16 The Arab World: Economic Profile Economic growth in the Arab world slowed significantly with the global financial crisis Urgent need to create 2.8 million jobs every year 16 Source: Arab Competitiveness Report

17 Africa and world trade African countries are net suppliers of resources to the world In 2008, net exports of materials by the region were 409 million tons, compared to 284 million tons in 1980 Since 2000: significant increase in demand for Africas resources by developing countries such as Brazil, China and India 17 Source: UNCTAD 2012

18 Rapid GPD Growth MENA countries as a whole grew by 5.2%from 2000 to 2008, whereas OECD economies grew by only 2.4% 18 Source: Arab Competitiveness Report

19 19 Source: World Bank 2012

20 Industrial challenges As Justin Lin (2012) suggests, income growth in developing countries depends on upgrading industrial structures Whereas Arab and African countries are major exporters of fuels and mining products, other Regions are major exporters of manufactured goods 20

21 Exports by Product (Africa) 21 Source: WTO 2012

22 22 The Triangle Trade capital profits aid Raw materials Loans Multinational Africa Developed countries Payement of débats and interests WB IMF

23 23 No.23 Strategic Partnerships for Trade Capacity-Building

24 24 No.24 Potential in Agro-Food area WTO- TBT & SPS agreements compliance Products sourced from areas free of pests & diseases Fruits/vegetables - minimum pesticide residue standard Meats/fish meet minimum antibiotic residue requirement Standards of hygiene applied in manufacturing HACCP/ISO ) /lack of implementation capacity the above issues by developing countries Pre-conditions for Exports : Regulatory Environment for Compliance WTO -TBT /SPS Agreements (Jan 1995 )

25 25 No.25 Fair Trade for All: lack the ability to meet quality Standards Requirements,UNIDO recommends the following priority areas for assistance : 1. A national/regional standards/standardization body 2. A national/regional metrology system 3. A certification/conformity assessment 4. An accreditation system Source: J. Stiglitz & A. Charlton, Fair Trade for All – How Trade can promote Development, Oxford University Press, 2005

26 Africa Aid 26 Increased Aid to Africa More funds for Investment and Trade and build capacity in several sectors that will boost production, marketing of products and service Proper transparency and accountability of the donor and recipient governments Proper planning, monitoring and implementing projects that will result in a positive multiplier effect for general development

27 UNIDO inputs/ Africa Support to the National Prevention Programme of Ochratoxin in Coffee and Cocoa in Côte dIvoire 27 No.27 Objective: help the supply-chain actors to secure their incomes and exportations Outputs: - studies in coffee and cocoa supply-chains (determination of contamination levels, identification of critical contamination points, and determination of adequate sampling methods); - national OTA analytical laboratory upgrading for ISO/IEC accreditation - promotion of good practices during production and post-harvest stages - Lobbying activities to draw the attention of the EC on adequate OTA maximum levels. * The OTA is a mycotoxin considered as a genotoxic human carcinogen and the European Commission (EC) is examining the opportunity to raise new maximum contamination levels for green and roasted coffee, cocoa and cocoa based products

28 28 No.28 Barrier to Trade Survey : Study on SPS Compliance for Exports Standards ( PSQCA ) Standards development /Certification Body (Systems) Consumer affairs/ Product certification Metrology (NPSL) Lab upgrading, international accreditation Product Testing (MFD, PCSIR, etc): Fisheries, Food, Leather, Textile Lab upgrading, PT participation International accreditation Accreditation (PNAC) Organizational strengthening, international recognition National accreditation scheme /Training of auditors Setting-up of PT schemes Quality/Hygiene (Private sector, FPCCI, etc.) Fish/food Management systems/Good practices /Compliance with market requirements Pilot certifications HACCP, ISO 9001, 14001, SA 8000) Pilot traceability systems Boat hygiene Icing Landing Sites Inspection Auction Hall Processors Traceability Trade related technical assistance programme UNIDO Aid-for-Trade type Programmes (Supply-side & Conformity)

29 29 No.29 UNIDO TCB - LDCs Coverage (36 countries) Regional Programmes SAARC Afghanistan Bangladesh Cambodia Ethiopia Mozambique Nepal Senegal Tanzania UEMOA/ ECOWAS MEKONG Country Programmes EAC Madagascar Mauritania Source: OECD DAC List EAC Uganda Tanzania Burundi (2007) Rwanda (2007) SAARC Bangladesh Bhutan Maldives Nepal MEKONG Delta Countries Cambodia Lao PDR CARICOM Haiti CARICOM Haiti SADC UEMOA/ECOWAS Benin Burkina Faso Cape Verde Gambia Guinea Guinea Bissau Liberia Mali Niger Senegal Sierra Leone Togo SADC Angola Congo Lesotho Madagascar Malawi Mozambique Tanzania Zambia CEMAC Central African Rep. Chad Congo Equatorial Guinea CEMAC On-going and planned

30 GDP Growth by Region (percent change, constant prices) 30 Source: Arab Competitiveness Report

31 UNIDO &Supply Side 1/2 31 Identifying sectors and products that have competitive potential and are suitable for local value additio n Analyzing and assessing trends in industrial performance at national, regional and global level, and Formulating strategies and policies designed to improve industrial competitiveness and to overcome technical barriers to trade (TBT) and comply with sanitary and phyto-sanitary measures (SPS). Assisting in upgrading manufacturing processes in sectors with high- export potential to internationally acceptable levels. UNIDO will continue to support enterprises in their efforts to offer competitive, safe, reliable and cost-effective products in world markets, this requires:

32 strengthen the capacity of countries, productive sectors and suppliers to produce goods that meet requirements set by foreign buyers and markets; build up the national and regional quality infrastructure needed to provide internationally recognized quality assurance services, standards, product testing facilities and calibration laboratories, 32 UNIDO is continuing to offer the following activities :2/2 Creation of quality management systems and product traceability management system certification, inspection and accreditation mechanisms

33 A New Vision for Trade Facilitation Competitiveness Physical Infrastructures Logistics and Transport Services Customs-Border- Transit- Management Export Promotion Meeting int. standards Roads, ports, etc. Telecommunicatio ns Promoting competition 33 Traditional focus of trade facilitation

34 The Aid for Trade Agenda Trade policy and regulations Trade-related technical assistance and capacity building Trade-related infrastructure Building productive capacity Macroeconomic and microeconomic adjustment 34 Source: OECD 2012

35 35 Conclusions Developing Compliance Infrastructure is complex – tailor programmes Regional cooperation programmes are needed for developing Regional Capacity building on complying with standards Compliance Infrastructure 3 pronged: Competitive supply – Compliance services - Connectivity

36 Recommendations 1.Improving cross-border trade: border procedures, traders associations, flow of information 2.Removing a range of non-tariff barriers to trade: import and export bans, costly licensing procedures, restrictive rules of origin 3.Reforming regulations and immigration rules: limits to the potential for cross-border trade and investment in services 36 Source: World Bank 2012

37 Trade-related opportunities for Africa and the Middle East Regional cooperation can contribute to closer integration beyond trade More open trade in food staples can reduce food insecurity Additional trade can increase competitiveness in regional value chains Grant access to the increasingly global value chain production Achieve common positions and represent these interests in the international arena 37

38 Thank you for your esteemed attention ! Azza Morssy, PhD Chief, Middle East and Arab Programme Bureau for Regional Programmes Programme Development and Technical Cooperation Division United Nations Industrial Development Organization (UNIDO) Vienna International Centre P.O. Box Vienna, Austria Tel: Fax:


40 Exports of all goods, non-petroleum and non-natural goods 40 Source: World Bank 2011

41 World Exports by Product 41 Source: WTO 2012

42 Value Added in Selected Regions (2009) 42 Source: OECD 2011

43 Value added in the MENA region (2009) 43 Source: OECD 2011

44 Oil production and the MENA World crude oil production increased by 60% from 1971 to 2010 The MENA region holds about 65% of the worlds proven conventional oil reserves (at the end of 2010) In 2010, the Middle East regions share of oil production was 30% of the world total 44 Source: OECD 2011

45 Production of Crude Oil by Region (million tonnes) 45 Source: OECD 2011

46 Oil revenues continue to mount through 2014 (billions US$) 46 Source: World Bank 2012

47 Oil exporters in the MENA (current account balances, billions of US$) 47 Source: IMF 2012

48 Oil importers in the MENA (current account balances, billions of US$) 48 Source: IMF 2012

49 Africas material imports Fossil fuels are the dominant material imports, with a share between 33 and 37% of total imports The world average share of 50 to 55% of fossil fuels in total imports All African countries together import about 100 million tons of fossil fuels, (2% of global imports of fossil fuels Africa is a net importer of renewable resources 49 Source: UNCTAD 2012

50 Physical trade volume in Africa and the world, Source: UNCTAD 2012

51 Material extraction in Africa, by category, Source: UNCTAD 2012

52 Material extraction in selected African countries, by material category, 2008 (millions of tons) 52 Source: UNCTAD 2012

53 Africas share of global production and reserves of selected minerals 53 Source: UNCTAD 2012

54 2. Industrial development and per capita resource use in Africa (2008) 54 Source: UNCTAD 2012

55 Population, output and carbon emissions, across regions, in Source: International Energy Agency 2011

56 GDP and GDP per capita growth (2009/2010) 56 Source: Arab Competitiveness Report

57 MENA Exports as a Share of GDP 57 Source: Arab Competitiveness Report

58 Goods exports destinations (individual countries) 58 Source: Arab Competitiveness Report

59 FDI Inflows in the MENA (as a percentage of the total) 59 Source: Arab Competitiveness Report

60 FDI Inflows as a Share of GDP 60 Source: Arab Competitiveness Report

61 FDI by Economic Sector (cumulative ) 61 Source: Arab Competitiveness Report

62 World Proven Oil Reserves by Region (2010) 62 Source: Arab Competitiveness Report

63 MENA proven crude oil reserves by country (2010) 63 Source: Arab Competitiveness Report

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