Africans Want Open Borders, But Can They Overcome Stumbling Blocks?

The Katuna border crossing between Uganda and Rwanda - a dispute between the two countries has resulted in border closures lasting several months. Image via Deutsch Welle

BY STELLA ONEKO


Africa's new free trade deal is a building block in its plan to achieve prosperity and unity. Yet stumbling blocks in the form of border and trade disputes make a borderless continent seem decades away.

"The continental free trade area symbolizes our progress toward the ideal of African unity," Rwanda's President Paul Kagame said over a year ago as he welcomed African leaders to Kigali to a special African Union summit in March 2018.

Signed by 54 out of 55 African countries and ratified by 28, the African Continental Free Trade Agreement (AfCFTA), is the much anticipated deal, which many hope will enable a single market economy and therefore cross border trade between African countries. Trading under the agreement is due to begin rolling out in July 2020. If all goes well, African countries hope to increase intra-African trade by 53% through a blend of consumer spending, investments and a reduction of import duties.

Is the continent — minus Eritrea — ready to open up its borders and cut down the tariffs though? Under the current political climate of security concerns, for instance between Kenya and Somalia, or in the Sahel region, fears of uncontrolled migration or the smuggling of substandard goods as is the case with South Africa and Nigeria respectively and border spats, as is the case with Rwanda and Uganda, a vibrant and yet controlled trading environment seems a long way off. Corruption and poor infrastructure in great parts of the continent only enhance the problem.

Checks and balances
In 2017, only up to 17% of all trade on the continent occurred between African countries, while Africa still relies greatly on imports from abroad. And as it currently stands, African businesses face over 6% higher tariffs if they trade within Africa than when they do their business outside the continent. Only two African countries, the Seychelles and Benin, require no visas at all, while almost half the countries require visa applications in the country of residence and only a quarter of all Africans can get a visa on arrival in other African countries. Additionally air travel within the continent is often more expensive than traveling abroad.


State sovereignty still trumps unity and ease of traveling or doing business — a far cry from the early pan-African visions of solidarity and self-reliance, without the artificial borders that colonial forces drew up in a Berlin boardroom.

It is understandable that the concerns of the 54 AfCFTA signatories about border security and market protection are legitimate, says Kenyan economic analyst Aly Khan Satchu. "We need to have some kind of support mechanism or mediation scheme," he said, referring to a body or oversight authority that would mediate in the case of disputes. "They also have the ability to bite and make things happen."

Actions must follow words

What is important, Satchu argued, is that countries don't only pay lip service to the idea of a "borderless" Africa. Rwanda, for instance, has been on the forefront in the push for both intra-African trade and the free movement of people. Rwanda is ranked second in sub-Saharan Africa for the ease of doing business after Mauritius — it is followed by Kenya and South Africa. Yet Rwanda itself has closed its border to Uganda for what analysts say is a long-standing spat between presidents Yoweri Museveni and Kagame. The closure of the borders has crippled bilateral trade and also created a barrier between communities where people have deep cross-border trade and family ties.

"In Rwanda's case their model is to be the Singapore of Africa," Satchu said. "If you want to be a Singapore of Africa you need free trade."

Protectionism

Another trade dispute currently lies on the border between Nigeria and Benin. Nigeria, Africa's largest and most populated economy with a record of protectionist trade policies, was last to ratify the AfCFTA.

In August 2019, Nigeria banned the import of over 40 items ranging from meat, to rice and cement. "Nigeria's central concern is that its market will be flooded by goods from other African countries, which will undermine local manufacturing and agricultural enterprises, many of which are performing well below their potential and may not survive competition," said Dianne Games, of Africa at Work, a Johannesburg-based business consultancy.

To date, Nigeria still relies largely on crude oil exports. The African giant doesn't have its own oil refineries and crude oil makes up to 90% of its foreign exchange earnings. And despite the success of businesses like the Dangote empire, which initially specialised in cement and sugar, its manufacturing and agriculture sector have failed to keep up with the demands of its growing population. Thus Nigerian consumers largely rely on imports.

"Tariffs and import bans have long been used by Nigeria as part of its industrialization strategy,” said Games. "But smuggling of goods from neighbouring states undermines this strategy." According to the World Bank, up to 80% of Benin's imports are said to be destined for the Nigerian market. The closure of the border in August 2019 has not only had a major effect on Benin, which relies heavily on transit trade with Nigeria, but also Ghana, where trade unions have complained about trucks being stuck at the Nigerian border.

Nigeria has reasons to be concerned about the opening of its borders, the experts agree. Yet whether continued protectionist policies will provide the needed development for its market and its people is another question.

"I think if we really want to advance all our economies we should not be scared of competition," Satchu told DW. Unfair competition, like selling imports or dumping prices, such as the US chicken that flooded South African and Ghanaian markets, or selling sub-standard goods is of course a different matter, he added. "I think we have to differentiate between other African countries who are brothers and sisters and exports out of China, Asia, or even the United States and Europe." Countries such as South Africa or Kenya, to some extent, belong to the bigger competitors who stand to gain from the AfCFTA. But all in all, Satchu said, it's about putting proper oversight mechanisms in place in order to make the deal beneficial to the continent as a whole.

Not a silver bullet

"(AfCFTA) is not a silver bullet for the kinds of economic problems that many countries experience,” Games said. "A lot more work needs to be done nationally to get countries ready to participate meaningfully in the initiative."

While similar initiatives have failed to take off, the AfCFTA might stand a chance, Games said. "The political will behind the continental initiative and the publicity it has received may keep the process on course this time," she said.

While there are concerns that major African players such as Nigeria might not play along, there also still seems to be a good deal of enthusiasm about the implementation of the deal. Ghana's President Nana Akufo-Addo, this week urged African trade ministers to conclude all outstanding issues before trading is due to start in July 2020. Ghana has been selected as the host of the AfCFTA secretariat.

At the same time, Mukhisa Kituyi UN Secretary-General of the UNCTAD (United Nations Conference on Trade and Development) expressed his views on the deal. "It has taken Africa almost 30 years since the signing of the Abuja Treaty in 1991 to reach this stage," Kituyi wrote in the Kenyan media outlet The East African. "The Continent," he wrote, "cannot afford to wait another 30 years to translate the AfCFTA."

SOURCE: DEUTSCH WELLE

Digital Currency Company Accused Of Being Underworld’s Bank Of Choice

TPM

Talking Points Memo

Tuesday, May 28, 2013

In 2011, Arthur Budovsky, also known as Arthur Belanchuk, also known as Eric Paltz, decided to renounce his U.S. citizenship and become a citizen of Costa Rica. His company was developing software, Budovsky told U.S. immigration officials at the time, and he was concerned the software would open him up to liability in the U.S.

But Budovsky’s move to Costa Rica now looks futile. On Tuesday, authorities in New York announced federal charges against him, his company, and six associates and former associates, and accused them of operating what was, in effect, “the bank of choice for the criminal underworld.”

The amount of dirty money Liberty Reserve is accused of handling is remarkable. Since its founding in 2006, Liberty Reserve allegedly processed 55 million illegal transactions for at least 1 million users, and laundered more than $6 billion in suspected proceeds of crimes including identity theft, computer hacking, child pornography, and drug trafficking. The investigation and takedown of the company reached across 17 countries, and was touted by the U.S. Attorney’s Office for the Southern District of New York as possibly the largest international money laundering prosecution in history.

“As alleged, the only liberty that Liberty Reserve gave many of its users was the freedom to commit crimes — the coin of its realm was anonymity, and it became a popular hub for fraudsters, hackers, and traffickers,” U.S. Attorney Preet Bharara said in a statement. “The global enforcement action we announce today is an important step towards reining in the ‘Wild West’ of illicit Internet banking. As crime goes increasingly global, the long arm of the law has to get even longer, and in this case, it encircled the earth.”

The federal indictment filed against Liberty Reserve offers a glimpse of the company’s inner workings. According to prosecutors, Liberty Reserve made its money by charging a one-percent fee every time a user transferred the company’s digital currency, called “LR,” to another user. An additional 75 cent “privacy fee” would be charged if a user wanted to hide his account number from making a transfer, making the transaction practically untraceable.

To help keep their customers anonymous, Liberty Reserve allegedly did not accept or issue direct transfers of money. Instead, users had to make deposits and withdrawals of LR through third-parties known as “exchangers.” Liberty Reserve recommended a number of “pre-approved” exchangers to its customers, many of which operated in Malaysia, Russia, Nigeria, and Vietnam.

Liberty Reserve allegedly did not require users to verify any personal information, and users regularly set up accounts under false names — the indictment provides examples of usernames including “Russia Hackers” and “Hacker Account.” A senior law enforcement official who spoke to The New York Times said that one undercover agent working on the case was able to register accounts under names like “Joe Bogus” and listing “for cocaine” as the purpose for an account.

According to the Times, the take down of Liberty Reserve appeared to have a “chilling effect” on cyber criminals, who took to online forums to express anxiety about how to access seized funds.

Liberty Reserve and the seven individuals named in the indictment were charged with money laundering and operating an unlicensed money transmitting business. Five of the defendants, including Budovsky, were arrested on Friday in Spain, New York, and Costa Rica. Two of the defendants, Ahmed Yassine Abdelghani and Allan Esteban Hidalgo Jimenez, remain at large in Costa Rica.

Nigeria’s capital market in 2012: Still below average

WorldStage Newsonline (EXCLUSIVE)-- As 2012 draws to an end, experts believed that the Nigerian Capital market did not do enough to meet investors’ expectation. NKECHI NAECHE reports.

 

The Nigerian capital market is something of an enigma. The year 2012, to many investors has not yielded good result due to the problems of insecurity, lack of infrastructure, the clash between tha National Assemble and Securities and Exchange Commission (SEC), among others.

 

The President of the Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie said, the capital market in the last one year did not perform better when compared with what happened under the leadership of the former DG of SEC , adding that Director General of SEC, Arunma Oteh knew next to nothing about the market and until she is removed, the market confidence will continue to be eroded.

 

He added that the call by the National Assembly that the SEC DG should be sacked is one of the ways to boost the market.

 

He also identified lack of infrastructure such as quality roads, power, and insecurity as some of the challenges that affect the performance of the capital market.

 

He however called on the Federal Government to take the issue of infrastructure more serious especially the ongoing reforms in the power sector, adding that for effectiveness of the capital market more needed to be done in the area of power.

 

He noted that most capital markets all over the world were in a state of recovering but that of Nigeria cannot be said to be so due to these challenges.

 

Mr Nona Awo an outspoken shareholder was of the opinion that the nation's capital market performed below average in 2012, adding that most of the Central Bank of Nigeria (CBN) and SEC reforms did not help matters, instead eroded the confidence of an average investors at home and abroad.

 

He called on investors not to lose hope on the market, adding that next year will be better than this year.

In his view, Mr. Tunde Oyediran, a market analyst with Deloy Consulting was of the opinion that the consistent raising of Monetary Policy Rate (MPR) by CBN culminated into uncertainty and lack of confidence in the market.

 

On stocks performance, he noted that the market is yet to come out of recession, adding that by next year the market will do better especially in the area of dividend payment to shareholders. He however disagreed with Mr Okezie that the DG should be sack, according him the DG should be allowed to continue what she is doing, adding her removal will only bring about apathy in the market.

 

Also the Chief Executive Office of Lambert Trust & Investment Company Limited, David Imafidon Adonri was of the view that although minor improvement was recorded, investors were expecting more from the market.

He explained that the year started out on bearish note with NSE All-Share Index (ASI) depreciating by 32.63 points or 0.15 per cent and market capitalisation dropping to N6.533 trillion, but at the close of trading last week NSE All-Share Index appreciated by 1.69 per cent to close at 27,866.51, while Market Capitalization of the listed equities appreciated by 1.73 per cent to close at N8.907 trillion.

 

He noted that it’s a slight improvement for the market when looking at the challenges confronting the market in 2012, adding that 2013 will be better if these challenges are fixed by the government. However, the Director General of SEC, Arunma Oteh was of the view that the capital market was not just fantastic by global standard, but that it experienced a growth of 30 per cent of the All Share Index.

 

According to her, it is not just one sector that is driving it, “ We also hope that the oil and gas sector, particularly the downstream sector, which has not done very well, will start to do well. We feel that what the government has done to tackle some of the issues in that sector is very important. We really hope that the Petroleum Industry Bill is promulgated.

 

“We feel that it is very important for the take-off of the upstream sector, particularly the indigenous sector, to complement some of what we have seen with respect to the rule around the local content. We feel that a number of indigenous companies would want to participate actively in that sector and the PIB, moving forward, will help that.”

 

According to her, their achievements had ranged from supporting products and business development, as well as the bond market, thus ensuring that the issues that were important to investors were considered.

She noted that additional projects, including the dematerialisation of share certificates, were being executed, stressing that they would all further strengthen the capital market.

 

“Compliance and rules are very critical for us and we are hoping that at the end of this year we will be able issue consolidated rules. The industries committee has already completed its work. It is now left to the SEC to review the work it has done and hopefully before the end of this year we would be able to issue the consolidated rules,” she said.

 

To boost investor confidence, she added, the SEC was working on an investor complaint management framework. She said once the investor confidence sub-committee, along with the capital market solicitors’ trade group, conclude a final review of the framework, SEC would issue a complaint management guideline.

Although, she agreed that some sector such as the insurance sector had not done so well despite National Insurance Commission (NAICOM) and the SEC efforts, but believed that 2013 would be better for the sector.

Scientists at Children's Hospital Los Angeles Identify Mechanism Critical to Lung Formation and Regeneration

PRESS RELEASE

Eya1 phosphatase acts to maintain barrier integrity in the lung

(LOS ANGELES, Jul 02, 2012 BUSINESS WIRE) -- Scientists have provided the first evidence that an enzyme called Eya1 protein phosphatase is a critical regulator of lung function and that this may have broad implications for sufferers of a variety of pulmonary diseases. "Identification of the role of Eya1 in establishing pulmonary tight junction and barrier integrity could have a significant impact on asthma, chronic obstructive pulmonary disease, and acute respiratory distress syndrome, all diseases characterized with disruptions in permeability," said Ahmed El-Hashash, PhD, investigator at The Saban Research Institute of Children's Hospital Los Angeles and assistant professor at the Keck School of Medicine.

Proper formation of lung epithelium is essential to life. The normal growth and functioning of the lung depends on the formation of tight junctions between adjacent cells making up the alveolar epithelial sheet, a thin layer of tissue separating neighboring alveoli. Alveoli are the site of gas exchange between the lung and blood vessels. Loss of these tight junctions alters the exchange of oxygen and carbon dioxide. Permeability dysfunction has been implicated in both acute lung injury and acute respiratory distress syndrome, a life-threatening lung condition that prevents adequate oxygen from getting from the lungs and into the blood.

Until now, very little has been known about the basic regulatory mechanisms underlying permeability barrier formation and integrity of the lung epithelium. David Warburton, MD, director of Developmental Biology and Regenerative Medicine at The Saban Research Institute, and El-Hashash provided the first evidence that the enzyme Eya1 protein phosphatase controls tight junction and permeability barrier formation in the lung epithelium. They have also provided the first evidence that Eya1 enzyme coordinates a complex network of other cellular proteins and molecules that are essential for epithelial barrier integrity, and are therefore critical to optimal lung function. Both in vivo and in vitro experiments showed that interfering with Eya1 phosphatase function resulted in defective formation of tight junctions and the permeability barrier.

"These findings identify a novel therapeutic option for lung diseases like COPD and ARDS," said Warburton. "Our discovery of Eya1 enzyme control of pulmonary barrier integrity suggests that influencing alveolar epithelial junction formation by manipulating the activity of enzymes has the potential to identify future targets for the treatment of lung injury and may provide solutions to the problems concerning regeneration of lung tissue for restoration of functional alveoli."

Results of the study will be published in the Journal of Cell Science.

About Children's Hospital Los Angeles

Children's Hospital Los Angeles has been named the best children's hospital in California and among the top five in the nation for clinical excellence with its selection to the prestigious US News & World Report Honor Roll. Children's Hospital is home to The Saban Research Institute, one of the largest and most productive pediatric research facilities in the United States, is one of America's premier teaching hospitals and has been affiliated with the Keck School of Medicine of the University of Southern California since 1932.

SOURCE: Children's Hospital of Los Angeles.