Pioneering Regional Integration for African Trade and Development

Pioneering Regional Integration for African Trade and Development

In the vast landscape of African regional integration, Tutwa has garnered a solid reputation for its contributions to policy formulation on African regional integration, economic growth, and trade facilitation[1]. At the heart of Tutwa’s mission is to assist clients in overcoming trade barriers and investment constraints, thereby fostering regional trade. One of the ways it has sought to achieve this is by creating the Regional Trade Network (TradeNetwork), a platform aimed at cooperative research, advice, and knowledge sharing in the realm of international trade and investment. This blog explores the journey of Tutwa and the TradeNetwork, highlighting its pivotal role in shaping the African economic landscape.

TradeNetwork: A Catalyst for African Advancement

Launched in October 2022, TradeNetwork can potentially become a transformative force in regional integration. TradeNetwork is cementing itself as a vital partner in numerous regional integration initiatives. Its primary objective is to identify and implement trade and investment solutions while addressing barriers to regional trade, making it an indispensable tool for driving economic development.

TradeNetwork focuses on key Regional Economic Communities (RECs) such as the Southern African Development Community (SADC), the Intergovernmental Authority on Development (IGAD), the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC), and Economic Community of West African States (ECOWAS), acknowledging the building-blocks approach to continental integration adopted by the AFCFTA Secretariat.

Webinars and Training Sessions: Empowering Knowledge and Collaboration

Tutwa has organized a series of webinars and training sessions that explore critical aspects of international trade, investment, intellectual property, and trade dispute resolution. These sessions serve as platforms for political, economic, and legal discourse on emerging trade and investment developments in Africa, with a special focus on aligning the network with the AfCFTA. TradeNetwork’s inaugural webinar, “Current and Future Prospects of the AfCFTA,” gathered Africa’s foremost policy thinkers to discuss the practical and legal implications of the AfCFTA for intra-African trade. This engaging event set the stage for further exploration of the AfCFTA’s potential.

In a subsequent webinar, titled “Integrating National, Regional, and Continental Industrial Strategy to Execute Development under the AfCFTA,” the TradeNetwork turned its attention to industrialization policies within the African Union (AU) and RECs. By analysing ongoing policies and initiatives, the webinar shed light on the mechanisms driving development and provided insights into supporting the agenda effectively.

Building a Solid Foundation: Harnessing the AfCFTA’s Full Potential

A key objective of the network is to bring together academics, practitioners, and consultants to contribute to economic integration and enhance collaboration around African development. TradeNetwork also organized a series of successful training sessions to empower participants in understanding the opportunities and challenges posed by the AfCFTA.

The first training session, held in collaboration with Development Alternatives Incorporated (DAI) and the United States Agency for International Development (USAID) under the Africa Trade and Investment (ATI) programme, sought to unlock the complexities of regulatory convergence. This session, titled “Unlocking the complexities of regulatory convergence under the AfCFTA,” laid a robust foundation for the subsequent training on the AfCFTA’s Phase II Protocols, hosted in Mauritius. In line with the AfCFTA’s focus on inclusivity, the training emphasised the role of women, youth, and Small, Medium, and Micro Enterprises (SMMEs) in trade. It also provided an in-depth understanding of the rapidly evolving regulatory environments under the AfCFTA Agreement.

The second training session focused on “Harnessing the AfCFTA: Empowering Trade and Investment through Digital Trade, Intellectual Property, and Competition”. Organized as part of the ATI programme and facilitated by Tutwa, this session focused on the background, context, opportunities, and challenges of the AfCFTA.

Transforming African Trade for Agricultural Development

An upcoming webinar titled “Transforming African Trade: Unleashing the Power of AfCFTA for Agricultural Development” will be hosted in the coming weeks. Focused on the commitments made by global leaders at the 2023 Dakar 2 Summit, which emphasised food sovereignty and resilience, this webinar aims to build momentum in the field of food security. By exploring innovative approaches to agricultural development and promoting sustainable practices, TradeNetwork continues to spearhead initiatives that contribute to the upliftment of African economies.

TradeNetwork Advisory Board

In the future, the TradeNetwork aims to establish the TradeNetwork Advisory Board as a central pillar of its work. The board will provide strategic advice, recommendations, and support to the TradeNetwork. Its primary objective will be to facilitate well-informed decision-making and policy development on African international trade and investment matters, utilizing evidence-based approaches.

To achieve this, the TradeNetwork Advisory Board will actively cultivate a strong network of stakeholders, including representatives from the private sector, academia, practitioners, and consultants. By fostering collaboration and integration with the African AfCFTA, the Board will recognize the importance of leveraging the resources of institutions like the African Export-Import Bank (Afreximbank) and other entities operating under the African Union (AU). This collaborative effort will culminate in the formulation of a comprehensive African economic growth strategy, propelling the continent towards unprecedented levels of economic prosperity and fostering robust intracontinental cooperation.

[1] https://tutwaconsulting.com/

From Beggars to Partners: Redefining Africa’s Role on the Global Stage

From Beggars to Partners: Redefining Africa’s Role on the Global Stage

In a powerful speech delivered at the New Global Financial Pact Summit in Paris, President Cyril Ramaphosa addressed the challenges faced by African countries and the disappointment arising from their interactions with the West[1]. The speech shed light on the urgent need for an intra-African approach to tackle these challenges, emphasising the significance of the African Continental Free Trade Area (AfCFTA) and its role in transforming the continent’s fortunes. While not explicitly stated by Ramaphosa, it becomes apparent that the AfCFTA’s intra-African focus holds immense potential for Africa’s development while acknowledging Western assistance’s importance. This blog explores the key takeaways from the President’s speech and demonstrates why an intra-African approach is crucial for Africa’s growth.

A Historic Call for Change: The Birth of a New Era

President Ramaphosa, in his closing remarks, highlighted the negative experiences of African nations at the hands of the West. One pressing issue was the unequal access to vaccines during the COVID-19 pandemic. Acknowledging the efforts of countries like Germany and the United States, Ramaphosa expressed Africa’s sentiment of being treated as mere recipients, or even beggars, when accessing life-saving vaccines. This disparity raised resentment among African nations, as they found themselves at the mercy of those in the global North[2].

Against this backdrop of discontent and disappointment, it becomes evident that an intra-African approach is needed to overcome such challenges. Remarkably, the third period from 2010 onwards has witnessed the emergence of Southern-led development banks, both regional and inter-governmental, acting as game-changers in the African landscape. South Africa (SA) plays a crucial role as a founding member of two vital institutions: the New Development Bank and the Asian Infrastructure Investment Bank. These institutions symbolise the shift towards Africa taking charge of its destiny, independently driving economic growth and development[3].

Africa’s Voice on the Global Stage: Empowering the Global South

In pursuit of greater equality and inclusivity, Ramaphosa and other African leaders have been advocating for the inclusion of African nations as permanent members of the United Nations Security Council (UNSC)[4]. SA has emerged as a strong advocate for the global South, leveraging its position in multilateral forums to advance its African agenda. This commitment is exemplified by SA’s active engagement within the BRICS bloc, where it has consistently promoted the inclusion of African interests to advance economic growth and development on the continent. The country’s foreign policy stance has not been without its challenges. SA’s position on the war in Ukraine is a case in point.[5].

Critiques of SA’s engagement in Ukraine often stem from prejudices and misunderstandings about Africa’s role in global affairs. Assumptions that Africa lacks the capacity to understand or contribute to international conflicts reveal underlying biases. However, the ability to mediate conflicts is not solely determined by skills but also by the perceived power and relevance of the mediator[6]. While African states may lack global power, their engagement in resolving conflicts that affect their economies demonstrates their legitimate concerns and interests.

The SA-led delegation to Ukraine and Russia cannot be dismissed as a mere publicity stunt. Africa has a genuine stake in resolving the conflict due to its impact on fuel and food prices, which exert economic pressure on African nations. By participating in peace initiatives, African leaders aim to ensure that their voices are heard, and their concerns addressed, challenging the notion that Africa lacks power or influence in international affairs.

The Promise of the AfCFTA: Empowering Africa

Amidst these efforts, President Ramaphosa’s speech highlights the immense potential of the global South and the importance of empowering the AfCFTA. Spanning 55 nations, this intra-African trade agreement envisions a unified market that fosters economic integration, drives industrialization, and enhances Africa’s position in global trade. The AfCFTA opens avenues for greater self-sufficiency, reduced dependence on external aid, and the development of regional value chains through increased trade among African countries. It empowers African economies to leverage their abundant resources, exchange knowledge and expertise, and establish a thriving ecosystem that benefits all member states.

Emphasizing an intra-African approach does not mean disregarding Western assistance. Instead, the AfCFTA presents an opportunity for African nations to engage with the global community on an equal footing. It signifies a paradigm shift where Africa’s voice is heard, recognized, and respected. By harnessing the potential of the AfCFTA, African countries can collaboratively address healthcare, technology transfer, climate action, and other critical issues. This approach fosters a mutually beneficial relationship between Africa and the West, transforming Africa from a passive recipient into an active participant and contributor to global progress.

Overall, Ramaphosa’s impassioned speech at the New Global Financial Pact Summit highlighted the need to embrace an intra-African approach to confront the challenges faced by the continent while acknowledging the importance of Western assistance. The AfCFTA emerges as a transformative force, providing African countries with the means to showcase their potential.

[1] Business Day, 2023. Cyril Ramaphosa lays into the West in Paris for vaccine inequality. https://www.businesslive.co.za/bd/national/2023-06-26-cyril-ramaphosa-lays-into-the-west-in-paris-for-vaccine-inequality/

[2] Cape Talk, 2023. Ramaphosa says resentment at West still lingers overs COVID. https://www.capetalk.co.za/articles/477214/ramaphosa-says-resentment-at-west-still-lingers-overs-covid

[3] Institute for Economic Justice, 2023. International financial Institutions’ Covid-19 Lending in South Africa:

Context, contentions, and policy implications. https://www.iej.org.za/wp-content/uploads/2023/06/IEJ-IFI-report-May2023-web.pdf

[4] EWN, 2023. Ramaphosa: SA’s Non-aligned Stance on Russia-Ukraine war not the same as neutral. https://ewn.co.za/0001/01/01/ramaphosa-sa-s-non-aligned-stance-on-russia-ukraine-war-not-the-same-as-neutral

[5] Aljazeera, 2023. Africa’s Russia, Ukraine peace mission criticised in South Africa. https://www.aljazeera.com/features/2023/6/22/ego-trip-african-peace-mission-criticised-in-south-africa

[6] Friedman, S. 2023. What Matters Is Not What You Know – It Is Who You Scare. https://againstthetide.co.za/

Photo credit: GovernmentZA on VisualHunt.com

Overcoming Challenges: Unlocking South Africa’s Poultry Industry Potential

Overcoming Challenges: Unlocking South Africa’s Poultry Industry Potential

Expanding domestic production and access to lucrative export destinations is a key goal of South Africa’s Poultry Sector Master Plan.[1] However, the domestic industry faces a number of challenges that lead to production shortfalls and hinder its export potential. This blog aims to shed light on the challenges faced by the domestic poultry sector and provides actionable recommendations to overcome these obstacles.

Importance of Poultry

South Africa boasts a significant poultry meat consumption rate, ranking 9th globally according to OECD data from 2022.[2] South Africans have a strong preference for poultry, consuming nearly 40kg per capita in the 2020/21 period.[3] This is more than double the amount of beef and veal, the second-most consumed meat category. Chicken meat is the topmost food expenditure item for most South Africans, and one of only two meat protein sources included the top 10 food expenditure items for the poorest socioeconomic group.[4] Despite the substantial demand for poultry meat in South Africa, a consistent gap exists between production and consumption levels.[5] Over the years, local poultry production has fallen short of meeting consumption demands, resulting in a reliance on imports – South Africa is a net importer of chicken meat by a vast margin. To make matters worse, projections indicate a widening gap between the growth of domestic production and consumption.[6]  This gap will likely be filled by imports until a robust domestic poultry industry is developed.

Constraints facing the growth of domestic production

The inability to meet local demand, boost exports, and grow the domestic industry is due to multifaceted challenges.[7] High feed expenses, accounting for a significant portion of total costs, impose a considerable burden on local poultry producers.[8] The industry’s relatively small-scale production makes it vulnerable to competition from exporting nations that benefit from economies of scale. Additionally, regulatory limitations on brining have sparked concerns about increasing prices, reducing the industry’s size, and affecting the poultry value chain.[9] Most recently, the South African poultry sector has had to contend with outbreaks of avian influenza, persistent load-shedding, and the situation in Ukraine – contributing to higher input costs, and constrained production.[10]

Barriers to exports

Even when production does occur, South African exporters face significant difficulty in accessing lucrative markets. For example, the country’s exports cannot enter the EU due to its non-compliance with the health and safety standards. As a result, South Africa has strategically redirected its exports into Africa.[11] However, persistent Non-Tariff Barriers (NTBs) remain a major source of frustration for exporters.[12] These erode competitiveness and impose exorbitant costs. Among the NTBs faced by exporters are mandatory inspections, distinct national standards, overlapping regulatory responsibilities, and discriminatory enforcement of technical regulations targeting imported goods. Within the country, poor transport infrastructure has hindered the global competitiveness of domestic agriculture.[13]

Conclusion and recommendations

The growth of domestic production and expansion into lucrative export markets are constrained by high feed costs, limited economies of scale, poor infrastructure, and barriers to accessing international markets. Decisive action is needed to unlock the potential of South Africa’s poultry industry and overcome its impediments.

To address these challenges, the following recommendations are offered:

  • Provide support for local producers by addressing high feed costs through subsidies or other incentives.
  • Enhance efficiency through innovative technologies, as well as training and support.
  • Invest in infrastructure, particularly transport and electricity.
  • Address export barriers through constructive dialogues with trading partners.
  • Strengthen disease control measures.
  • Address non-compliance issues to gain access to lucrative export markets, such as the EU.

By implementing these recommendations, South Africa can unlock the potential of its poultry industry, improve domestic production, and expand into international markets. This will contribute to economic development, job creation, and a stable and secure poultry supply that meets domestic consumption requirements.

[1] The South African Poultry Sector Master Plan, 2019.

[2] OECD Data, Meat consumption, https://data.oecd.org/agroutput/meat-consumption.htm.

[3] Department of Agriculture, Land Reform and Rural Development (DALRRD), Abstract of Agricultural Statistics 2022.

[4] Living Conditions Survey by Stats SA, cited in Bureau for Food and Agricultural Policy (BFAP) COVID-19 Brief 2 – How South Africans spend their food budgets.

[5] Op. Cit. DALRRD, Abstract.

[6] BFAP, Baseline: Agricultural Outlook (2022-2031), https://baseline.bfap.co.za/wp-content/uploads/2022/08/BFAP-BASELINE-2022-ONLINE-Final.pdf.

[7] Op. Cit. Poultry Sector Master Plan.

[8] Portfolio Committee on Trade and Industry Engagement with stakeholders, Implementation of the South African Poultry Master Plan, Tuesday, 29 November 2022,  http://www.thedtic.gov.za/wp-content/uploads/Poultry-Master-Plan.pdf.

[9] News24, Chicken brining rules will devastate SA, poultry body warns, 4 May 2016, https://www.news24.com/fin24/chicken-brining-rules-will-devastate-sa-poultry-body-warns-20160504.

[10] Nicole McCain, Avian flu detected at five Western Cape poultry farms, News24, 31 May 2023, https://www.news24.com/news24/southafrica/news/avian-flu-detected-at-five-western-cape-poultry-arms-20230531; Karl Gernetzky, Quantum had to kill 420 000 chickens due to bird flu, warns of egg crunch in WCape, News24, 9 May 2023, https://www.news24.com/fin24/companies/quantum-had-to-kill-420-000-chickens-due-to-bird-flu-warns-of-egg-crunch-20230509; Given Majola, This is how fat chickens and load shedding is putting SA’s poultry value chain under pressure, IOL, 17 March 2023, https://www.iol.co.za/business-report/economy/this-is-how-fat-chickens-and-load-shedding-is-putting-sas-poultry-value-chain-under-pressure-4f205feb-12cd-42de-b1ab-20e21189c7e4#:~:text=%E2%80%9CLoad%20shedding%20is%20a%20factor,and%20not%20in%20the%20marketplace; Yogashen Pillay, Global affairs affect prices of poultry products in South Africa, IOL, 4 March 2022, https://www.iol.co.za/mercury/news/global-affairs-affect-prices-of-poultry-products-in-south-africa-dd74705b-f040-4212-adad-662e2009e468#:~:text=DURBAN%20%2D%20THE%20SA%20Poultry%20Association,higher%20prices%20for%20poultry%20products.

[11] Thabile Nkunjana, Phathisisa Thobindlala and Khodani Madula, Exploring opportunities of various agricultural commodities in the recently signed African Continental Free Trade Area (AfCFTA) agreement: An analysis of South Africa’s poultry export market, NAMC, Trade Probe Issue 90, August 2022, https://www.namc.co.za/wp-content/uploads/2022/11/Trade-Probe-Issue-90.pdf. 

[12] Willemien Viljoen, Non-tariff barriers frustrating South African agricultural exports, TRALAC, 2015, https://www.tralac.org/discussions/article/8224-non-tariff-barriers-frustrating-south-african-agricultural-exports.html.

[13] Fair Play, Poor transport infrastructure holds agriculture back, 20 October 2022, https://fairplaymovement.org/poor-transport-infrastructure-holds-agriculture-back/.

 

Asset Recycling; A New Cure for Old Infrastructure Ills?

Asset Recycling; A New Cure for Old Infrastructure Ills?

Following a continent-wide recession and the shift of external partners towards focusing on their domestic needs after COVID-19, Africa’s policymakers need to look inward. The continent needs a recovery plan that is financed largely by Africans. Also, considering the heightened risks of climate change and extreme weather, as well as the need for post-pandemic economic recovery, development priorities have shifted towards sustainable development. This means that infrastructure development must be transformed to focus more on low-carbon and green infrastructure – consistent with the international climate protocols, such as the Paris Agreement and nationally determined contributions (NDCs). It should focus on rural development, regional connectivity, and risk mitigation for climate change.

Achieving the Sustainable Development Goals (SDGs) requires concerted efforts to develop economic and social infrastructure. Tutwa recently conducted a study focused on the economic (or physical) infrastructure sectors while acknowledging the heavy dependency of the social infrastructure sectors on improvements in the energy, transport, water, and digital sectors. The study presented Asset Recycling as an alternative to infrastructure financing mechanisms in African countries.

What is Asset Recycling?

Infrastructure asset recycling is the monetisation of existing public assets through sale or lease to the private sector, with all funds received being reinvested in new infrastructure projects. Asset recycling provides the opportunity to develop new infrastructure without adding to public debt, all while maintaining or potentially improving existing infrastructure service delivery.

Figure 1: Infrastructure asset recycling process

Asset recycling allows governments to bring private sector innovation, investment, and efficiency to an asset without handing over the ownership of the asset to the private sector. It is a partnership between the public and private sectors to manage, maintain and operate an asset for a specific period. The government retains control over the construction, design, and outputs while leveraging private sector methodologies and innovation to upgrade and operate those assets efficiently over a set time. Asset recycling allows governments to release the value of their existing assets by bringing forward future revenues. A virtuous circle is created when the proceeds are invested back into new, more efficient, and more sustainable infrastructure.

While asset recycling is a new concept in Africa, countries like Australia have used it to generate over AUD25 billion ($18 billion) in three years by recycling just 12 state-owned assets. African governments could emulate this approach to help close the infrastructure-financing gap, which the African Development Bank (AfDB) estimates at USD68-108 billion annually. Aside from the immediate benefits, asset recycling in Africa could attract a new class of infrastructure investors, as has been the case in Australia. Here, sovereign wealth, pension, and private investment funds have participated in asset recycling projects.

African governments can limit their dependence on donors and development finance institutions by working to attract these types of institutional investors. The continent has 30 sovereign wealth funds (SWFs) or sub-funds, mostly relatively small, with a combined wealth of around USD100 billion.[1] In December 2022, Africa50, the pan-African infrastructure investment platform, signed a Memorandum of Understanding with the government of Zimbabwe to establish a framework of cooperation to manage and operate three of the country’s international airports under the Africa50 Asset Recycling Programme.[2] This marks the beginning of innovation in infrastructure financing in the continent.

Private investors are often reluctant to take on project development risk for infrastructure in emerging markets and developing economies. However, they are interested in the returns the investments can provide once the projects are operational and demand is proven. Asset recycling is a potential mechanism to capitalise on this interest. Its strategies present a viable means for African governments to contribute significantly to self-financing the investments that their countries so urgently need.

 

[1] Global SWF, 2022. African SWFs: The Art of Patience, 23 August 2022. https://globalswf.com/news/african-swfs-the-art-of-patience.

[2] Africa 50, December 2022, https://www.africa50.com/news-insights/news/africa50-signs-mou-with-the-government-of-zimbabwe-for-the-management-and-operation-of-three-international-airports-under-the-africa50-asset-recycling-programme/.

Pioneering Regional Integration for African Trade and Development

Another milestone for the AfCFTA, so what’s next?

Rafia Akram and Thabelo Muleya

The Phase II Protocols have been assented to by the African Union (AU) Summit in Addis Ababa, Ethiopia, on 19-20 February 2023 and will now undergo a national ratification process. Unlike the Phase I Protocols, such as the ones on Goods and Services, the tangible benefits and opportunities may seem less evident.

The Phase II Protocols on Investment, Intellectual Property Rights, and Competition Policy move beyond the focus on tariffs on goods and services. These so-called ‘beyond the border’ measures require the creation of regulatory systems at both regional and national levels. Member States are called upon to put in place relevant processes and institutions to facilitate the objectives of the AfCFTA. The Protocols harmonise norms, and create rules and procedures to which Member States must comply based on various policy flexibilities that accommodate national development objectives. The relationships between the various RECs and the AfCFTA and instruments are also clarified to ensure that no duplication exists.

The Protocol on Investment is relatively low impact, with several best endeavour cooperation clauses on issues like investment promotion and facilitation, and the introduction of the standard language to ensure foreign investors receive equal treatment to local investors. Most clauses include substantial limitations that allow states to avoid these restrictions in cases where it is important to national development or to help designated groups, among other conditions.[1] This places a duty on states to facilitate investment but to allow for the differentiated development levels and needs in African states.

The core substantive portions of the Protocol on Investment exist in four areas. First, expropriation[2] is allowed under terms considered in line with international standards. Second, the transfers of funds creates a more robust protection for investors. Third, the Protocol allows only for a State-to-State dispute settlement system,[4] which may impact the parity between African and non-African investors. This inequality is further compounded by the final important provision that sets out an automatic ending of current African bilateral investment treaties.[5]

In complete contrast to Investment, the Competition Protocol is extremely ambitious. The Protocol effectively establishes a continental Competition Authority, with similar powers to regional or domestic authority that adjudicates over mergers, combatting anti-competitive practices and setting out prohibited business practices.[6] This would be a substantially empowered institution, with the capacity to issue large fines and penalties as well as legally restrict mergers, even when the domestic authority approves them.[7]

The establishment of such an institution creates a dilemma, as Article 12 stipulates that state parties who do not have a competition law or enforcement shall enact the Protocol upon entry, and those state parties that do must endeavour to harmonise their laws to the Protocol.[8] In addition, Article 20 of the Protocol sets out that the competition authorities of RECs will maintain their jurisdictions as building blocks for an integrated competition regime.[9] This may be intended to create a transitional process, to ensure there is time to harmonise the competition laws and enforcement.

In fact, it will be interesting to see what regulations the Council of Ministers for the authority set out for this Protocol.[10] The negotiations for such regulation should focus on proposing not only a prescriptive but an integrative approach to rules and their interpretation, allowing for recognition of the legal developments in national and regional decision-making bodies.

To the best of available knowledge, the Intellectual Property Rights (IPR) Protocol appears to be relatively low ambition.[11] It reaffirms largely pre-existing commitments to safeguard patents, marks, copyrights, and other forms of Intellectual Property (IP); but offers few restrictions on the ways in which this is achieved.

The specifics of IPR implementation are largely left to national authorities, and while the agreement may offer another lever to pressure some states to enforce IPR, it seems likely that enforcement will remain as strong as national capabilities.[12]

The Protocol does, however, make provisions for geographic indicators, which may be important for some African export products. Traditional knowledge and Traditional Cultural Expression are accepted as IP. These are currently being proposed at the World Intellectual Property Organisation as IP that warrants protection by African states.[13]

The Protocol also makes provision for flexibility in patents for pharmaceutical patents that are in conflict with human well-being, such as empowering states to produce products under compulsory licenses via the WTO’s TRIPS agreement.[14] The provisions on pharmaceuticals seem entirely in line with global standards and norms and seem very reasonable given the significant healthcare needs of many countries on the continent.[15]

The IPR Protocol is less interventionist. In light of overlapping membership to the two continental organisations, the African Regional Intellectual Property Organization (ARIPO) and the Organisation Africaine de la Propriété Intellectuelle (OAPI), and the divergent approaches across various IPR regimes, member states are permitted to consider how best to achieve policy coherence within this context.[16] The process of developing the AfCFTA IPR Protocol can also be used to develop mechanisms to facilitate better coordination at multilateral negotiations for all.[17] There are also other institutions, such as the Pan-African Intellectual Property Office, as well as policies outlined in the COMESA IP policy framework and the East African Community’s Regional Intellectual Property Policy, which create a network of IPR rules and policies that must be compatible with the AfCFTA.

Throughout the three Protocols, exceptions are created for developmental needs. The IPR Protocol, for example, provides exceptions for purposes of education, including distance/online learning and for research and collaborations.[18] There is also a specific reference to the Marrakesh Treaty,[19] highlighting an understanding of the constraints faced by students and researchers across the continent.

The AfCFTA negotiations for Phase II Protocols have also been extended to include both Digital Trade as well as Women and Youth. Steady progress has been made on both fronts. The Digital Trade zero draft has been shared with states, and the Inaugural AfCFTA Women and Youth in Trade Conference took place in September 2022.[20]

The Protocol on Women and Youth is a particularly important step to ensuring that these demographics can effectively participate in the AfCFTA. In the SMME sector, women are the majority due to a patriarchal culture that restricts their access to financial resources, leading to greater gender inequality[21]. Similarly, young people, who constitute the majority of the population, face significant barriers to accessing formal employment opportunities, which compels them to pursue entrepreneurship in the SMME sector[22]. By addressing these issues, the Protocol seeks to empower women and youth to become active participants in the AfCFTA, thereby promoting economic growth and reducing inequality across the continent.

[1]  https://www.un.org/africarenewal/magazine/february-2023/afcfta-reaping-benefits-world%E2%80%99s-most-youth-and-women-friendly-trade-agreement

[2] https://www.un.org/africarenewal/magazine/february-2023/afcfta-reaping-benefits-world%E2%80%99s-most-youth-and-women-friendly-trade-agreement

However, to be truly inclusive women and youth should be the target of protection of the rules still to be negotiated on the E-commerce Protocol in addition to the Protocol on Women and Youth. Further women and youth should be prioritised in the policies and the implementation processes of the Protocols already in place.[23]

[1] Article 6 read with 7 and 8 and chapter 4 which set out the sustainable development-related rules.

[2]  Article 19.

[3]  Article 22.

[4] Article 44.

[5] Article 49.

[6] Part II Anti-Competitive Business practices and conduct read with Part IV institutional arrangements.

[7] Article 17.

[8] Article 12(3) and Article 12(4), the proviso in Article 12(7) is that state particles must ensure the adherence to the principles of transparency, independence, and procedural fairness.

[9] Article 20(1).

[10] Article 13.

[11] Can African trade integration be a game changer? M E Pangestu Feb 02, 2023 (Available at https://blogs.worldbank.org/voices/can-african-trade-integration-be-game-changer accessed 10 March 2023)

[12] Article 26

[13]WO/GA/55/11 ORIGINAL: ENGLISH DATE: JULY 20, 2022 (accessed 10 March 2023 at https://www.wipo.int/edocs/mdocs/govbody/en/wo_ga_55/wo_ga_55_11.pdf)

[14] The TRIPS Waiver Compromise Draft: A promising or compromising text?  Thabelo Muleya | Apr 1, 2022 (Available at: https://tutwaconsulting.com/the-trips-waiver-compromise-draft-a-promising-or-compromising-text/ accessed 10 March 2023).

[15] Article 21.

[16] Nkomo, M., Mthombeni, J., and Lehong, T. (2020). The African Continental Free Trade Area: a significant role for IP. World Intellectual Property Organization (WIPO) Magazine. December 2020. (Available at: https://www.wipo.int/wipo_magazine/en/2020/04/article_0005.html accessed 9 March 2023).

[17] Ibid.

[18] Article 8(3), ((3), 10(3), 11(3),11(4),11(5), 12(3), 13(3),14(3), 15(2) an d16(2).

[19] The Marrakesh VIP Treaty (formally the Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind, Visually Impaired or Otherwise Print Disabled 27 June 2013.

[20] https://au-afcfta.org/2022/09/day-1-afcfta-conference-on-women-and-youth-in-trade/

[21] https://www.un.org/africarenewal/magazine/february-2023/afcfta-reaping-benefits-world%E2%80%99s-most-youth-and-women-friendly-trade-agreement

[22] https://www.un.org/africarenewal/magazine/february-2023/afcfta-reaping-benefits-world%E2%80%99s-most-youth-and-women-friendly-trade-agreement

[23] National Experts meet to discuss the AfCFTA Protocol on Women and Youth | Economic Community of West African States (ECOWAS) 02 March 2023 Abuja, Nigeria, 16 February 2023.

Eskom Plans for a Dark Future

Eskom Plans for a Dark Future

Kane Jules

It is time to face the harsh reality: South Africa’s power crisis is spiraling out of control. Eskom’s proposed Stage 16 load-shedding framework is a grim indication of the bleak future ahead. Frequent and prolonged load-shedding has significantly impacted the daily lives of citizens and the country’s economy. Eskom’s coal-fired power generation fleet has deteriorated to a level that necessitates higher load-shedding levels, which is a direct result of years of neglect and mismanagement. While Eskom’s plans to develop a contingency framework for Stage 16 load-shedding may appear to be a prudent course of action, it is merely a band-aid solution to a problem that requires a more comprehensive approach.

Eskom’s primary focus should be ending load-shedding rather than pre-empting more cuts and electricity demand. The potential implementation of Stage 16 load-shedding, with its catastrophic impact on the country’s economy and daily life, clearly indicates that Eskom’s current strategy is not working.

Meanwhile, the power utility remains plagued by scandals across all quarters and recently revealed draft plans for more drastic degrees of load-shedding will do little to calm the nervous sentiment of businesses suffering under the current regime of rolling blackouts.

South Africa’s electricity woes have been well-documented, much to the chagrin of its populace and politicians in the face of massive internal and external scrutiny. At every stage of load-shedding, Eskom rations the country by a further 1,000 megawatts (MW) of power.[1] Up to this point, the highest level of load-shedding implemented has been Stage 6, with up to 6,000 MW removed from the grid. In real terms, this means that South Africans could be affected approximately 18 times for four days for up to four-and-a-half hours at a time, with a devastating economic impact. Stage 8 – the highest level previously planned for – has yet to be implemented.

However, the prognosis may have worsened with Eskom acknowledging its preparations for load-shedding beyond Stage 8. Load-shedding is governed by a South African Bureau of Standards document called NRS048–9:2019, a collection of specifications governing the quality of South Africa’s electricity supply. When pressed on whether a working group comprised of Eskom, its System Operator, and industry stakeholders would extend the load-shedding protocol beyond Stage 8, Eskom’s acting head of generation, Thomas Conradie, stopped short of admitting the schedule would go up to Stage 16. He replied, “The responsible thing is to make sure that this document caters for higher stages of load-shedding and that those schedules are being developed upfront [so] we have a more systematic approach if we require it.”[2]

If Stage 16 load-shedding were to be implemented, and Eskom continues with linear increases in electricity rationing, it would mean that up to 16,000 MW would be cut from the grid. This figure would equate to roughly half the total demand in South Africa. This would severely impact the country’s economy and effectively guarantee entry into a prolonged recession, as many businesses and industries would be forced to shut down during the extended blackouts.

The news arrives amidst a series of scandals surrounding Eskom, with one of the most recent coming in the form of criticism from the Council for Scientific and Industrial Research (CSIR), who alleged that the SOE was “not being honest about the extent of the generation units removed from the grid”[3] – implying that Eskom has been clandestinely moving to Stage 8 without permission of the National Energy Regulator of South Africa (NERSA).

The intensification of load-shedding last year led to the 25 July announcement by President Cyril Ramaphosa of a series of interventions to address the problem, including the establishment of a National Energy Crisis Committee. During his 2023 State of the Nation Address (SONA), Ramaphosa followed this by announcing a National State of Disaster that would remove regulatory red tape on energy procurement – a move that was met with a chorus of criticism from those pointing to the government’s murky track record in similar scenarios, such as the emergency procurements made by the Department of Health during the pandemic.

The energy crisis was the main theme of the 2023 SONA, which spoke to the government’s R1.5 trillion Just Energy Transition Investment Plan (JET-IP), the president’s plans to appoint a Minister of Electricity in the Presidency, Kgosientsho Ramokgopa, and a commitment to improving the performance of Eskom, with Treasury having subsequently finalised a solution to the SOE’s R400 billion debt burden and secured additional funding to purchase diesel for the rest of the financial year.

Despite efforts to provide some calm and reassurance to business and the electorate, Eskom’s recent boardroom-level public furor threatens serious political damage for senior officials of the ruling party and Eskom itself. The controversial tell-all interview with then-outgoing CEO Andre De Ruyter brought his turbulent tenure to an abrupt end as he cast accusations of systemic corruption and warned of troubled waters ahead. Responsibility for appointing his successor now looks likely to fall to Ramokgopa, whose tasks will include ending rolling blackouts by overseeing urgent repairs and bringing new energy to the grid.

Although well-constructed multi-stakeholder contingency plans, in and of themselves, are indicative of institutional strength and clever foresight, in South Africa’s case, this conclusion is unlikely to sit comfortably in the minds of the population. Recent events suggest that the energy crisis will remain a longer-term issue. While the probability of experiencing Stage 16 load-shedding appears low, and it is important to note that Stage 16 remains a hypothetical scenario, its implications cannot be underplayed. Stages 5 and 6 are becoming more and more commonplace as 2023 progresses, and it is not difficult to imagine winter’s onset being the darkest in some time.

To prevent the realisation of higher stages of load-shedding, government must prioritise the urgent repairs and new energy sources needed to bring Eskom’s infrastructure up to standard. The energy crisis is a long-term issue that requires a long-term solution, not a Band-Aid fix that will exacerbate the problem by destroying confidence.

[1] Kahla, C. (2021), ‘Load shedding stages explained: Here’s what you need to know’, The Citizen [Online], https://www.citizen.co.za/news/eskom-load-shedding-stages-explained/

[2] Vermeulen, J. (2023), ‘Stage 16 load-shedding schedules for South Africa — Eskom responds’, My Broadband [Online], https://mybroadband.co.za/news/energy/482007-stage-16-load-shedding-schedules-for-south-africa-eskom-responds.html

[3] Nyathi, M. (2023), ‘Eskom is not being honest about load-shedding’, Mail & Guardian [Online], https://mg.co.za/environment/2023-03-03-eskom-is-not-being-honest-about-load-shedding/