Negotiators applauded on Friday, July 22, 2016 after reaching agreement on the Nairobi consensus, the Maafikiano, setting UNCTAD’s work programme for the next four years after long discussions including two sleepless nights.
Final agreement came at 10:20 following long days of negotiations in which negotiators had used caffeine pills, candies, and soft drinks to keep themselves alert while scrutinizing the draft documents being projected onto screens in an underground room.
“I’m delighted that our 194 member states have been able to reach this consensus, giving a central role to UNCTAD in delivering the sustainable development goals,” UNCTAD Secretary-General, Mukhisa Kituyi, said.
“With this document, we can get on with the business of cutting edge analysis, building political consensus, and providing the necessary technical assistance that will make globalization and trade work for billions of people in the global south,” he said.UNCTAD14 President, Amina Mohamed, expressed delight while negotiators laughed when the agreement was finally reached.
“As the President of this conference, I cannot begin to tell you how I feel right now,” she told negotiators sitting in the tightly packed room at rows of tables, littered with empty water bottles and cups of takeaway coffee.
“It’s a good day for Kenya, a good day for UNCTAD, and a big win for multilateralism,” she said.
Prepared under the responsibility of the Kenyan government, the first document agreed by negotiators, the political declaration, known by its Swahili translation, the Azimio, represents a broad expression of the social and economic state of the world.
Negotiators had been negotiating the second document, the Nairobi Consensus document, to be known as the Maafikiano.
Most delegates expressed the need for African nations to work together in promoting trade despite existence of competing interests.
AfricanQuarters in Nairobi spoke with Benjamin Chinhengo, Assistant Director Competition and Tariff Commission of Zimbabwe. “ yes, we have these good agreements but the major challenge for African nations is the culture of not honouring them unlike the developed world. It is one thing passing the agreements and another thing enforcing or implementing them.
Having presented his country’s trade policies in one of the forums, Chinhengo says the conference provided an avenue for developing nations to exchange ideas and network for the growth of the continent. He however called on developing nations to cooperate and mutually support one another.
“The conference is an eye opener and we have learnt a lot but what is required to succeed in eradicating challenges facing our nations is cooperation in implementing these good trade policies.’’ Explained Mr. Chinhengo
The conference was opened on Sunday by UN Secretary-General Ban Ki-moon in the presence of Kenya’s President Uhuru Kenyatta and the vice-President of Uganda, Edward Kiwanuka Ssekandi, before running for five days in Nairobi from 17 to 22 July. More than 5,000 delegates from 149 countries also attended.
The conference took place as analysts remain gloomy about the outlook for the world economy. In the global north, many people have grown skeptical about the benefits of globalization, while poverty and inequality remain pervasive in the south.
For many at UNCTAD, their work remains more important than ever, supporting populations to seize the opportunities of globalization and protecting the same people from the downsides, by working on the inter-connected issues of trade, investment, technology, and finance.
The conference saw concrete progress including the launch of a new e-trade initiative, the first UN statistical report on the SDG indicators, the launch of a multi-donor trust fund on trade and productive capacity, and the commitment of more than 90 countries for a roadmap on fisheries subsidies.
The conference also saw a fashion show, highlighting the creative and commercial potential of Kenya’s fashion industry, the launch of this year’s Economic Development in Africa Report, and the highlighting of issues around non-tariff measures, debt, and illicit financial flows.
Africa records significant progress in managing external debt
Africa’s external debt ratios appear manageable, but African governments must take action to prevent rapid debt growth from becoming a crisis, as experienced in the late 1980s and 1990s. This is according to UNCTAD Economic Development in Africa Report 2016.
“Borrowing can be an important part of improving the lives of African citizens,” UNCTAD Secretary-General Mukhisa Kituyi said. “But we must find a balance between the present and the future, because debt is dangerous when unsustainable.”
At least $600 billion will be needed each year to meet the Sustainable Development Goals in Africa, according to the report which is subtitled Debt Dynamics and Development Finance in Africa. This amount equates to roughly a third of countries’ gross national income. Official development aid and external debt are unlikely to cover these needs, the report finds.
A decade or so of strong growth has provided many countries with the opportunity to access international financial markets. Between 2006 and 2009, the average African country saw its external debt stock grow 7.8 percent per year, a figure that accelerates to 10 percent per year in the years 2011–2013 to reach $443 billion or 22 per cent of gross national income by 2013.
African countries with heavy domestic debts
Several African countries have also borrowed heavily on domestic markets, the report finds. It provides specific examples and analyses of domestic debt in Ghana, Kenya, Nigeria, Tanzania, and Zambia. In some countries, domestic debt rose from an average 11 percent of GDP in 1995 to around 19 percent at the end of 2013, almost doubling in two decades.
“Many African countries have begun the move away from a dependence on official development aid, looking to achieve the Sustainable Development Goals with new and innovative sources of finance,” Dr. Kituyi said.
The report argues that African countries should look for complementary sources of revenue, including remittances, which have been growing rapidly, reaching $63.8 billion to Africa in2014. The report discusses how remittances and Diaspora savings can contribute to public and development finance.
Together with the global community, Africa must also tackle illicit financial flows; which can be as high as $50 billion per year. Between 1970 and 2008, Africa lost an estimated $854 billion in illicit financial flows, roughly equal to all official development assistance received by the continent in that time.
And while governments should be vigilant of the borrowing risks, public-private partnerships have also started to play a more prominent role in financing development. In Africa, public-private partnerships are being used especially to finance infrastructure. Of the 52 countries considered during the period 1990-2014, Nigeria tops the list with $37.9 billion of investment, followed by Morocco and South Africa.
By Wamoyi M.M., AfricanQuarters, Kenya