May Issue 2 2012

Heavy rains causes havoc in different part of the country

In the last two months Kenya has experienced heavy rains which have caused severe damages to roads to the tune of about 10.6 billion shillings according to reports by the Minister of Roads Hon. Franklin Bett, with the Rift Valley as well as the western part of Kenya getting the most damages.

The rains experienced in moist parts of the country have caused the rivers’ water to rise between 2.8 and 3.2 meter raising fear among the residents of the flood prone regions that further swells in the water levels might overwhelm the dikes built by the government as the protective measures.

For the flower industry, the impacts of the rains especially in terms of logistics have been felt.  There has been severe loss of quality of flowers due to increased fungal infections namely botrytis cinerea and downey mildew. There are also Mechanical damages on petals and foliage. One of the farms in Nairobi and environs region the greenhouse roof plastics (about 10000 m2) were blown off by the strong wind and storm.

Frequent power black outs have also been experienced at times causing loss of electric appliances. Terrible traffic jams have also resulted to massive loss of working hours.

In Naivasha the rains have flooded North Lake areas. Currently the road towards Kongoni which joins South Lake road is cut off near Crater Lake. Meanwhile, growers have been forced to use alternative Green Park Naivasha route which is rugged driving costs upwards.

Around Mt. Elgon region, the net effect on the production is 30% below expected levels. The employees have not been left out whereby they are facing difficulties getting to work. Recently, the River at Chepchoina flooded and workers of one of the flower farms who were supposed to report for the afternoon shift were unable to report for several hours. Some of the roads in the area are almost impassable, so often forced to send smaller trucks that can be pulled by Lorries.

In Athi River region, heavy rains and strong winds have damaged expensive greenhouse structures in some of the farms.  Due to wetness and dampness flower companies have been forced to purchase more of preventive chemicals to fight botrytis thus increasing the cost of production.  Transport was and still is a serious issue in some part of the region. Some areas have no passable roads with some reportedly cut-off. Some employees are unable to report to work due to flood situation and some have lost their belongings.  In one of the flower farms, the flooding water entered twice inside the greenhouses and also damaged the rain water collection system. At one time the farm was at a standstill since the workers could not report. There was no harvesting, processing of flowers and exports loosing the days production of about 60,000 stems.

In limuru region, it has rained 321.3 mm in April almost every day, according to Mr. Nirzar Jundre of Black Petals.  Some disease problems have been noticed in the area for example downey mildew problem.  Some of their roads on the farm were also damaged by the rains. Due to the area topography there is well drainage hence no major crises have been experienced.

To counter the menace some farms are currently making more trenches to ease drainage. Currently many growers have adjusted time during shipping days.

However, in some areas the flower growers have not been affected badly by the heavy rains for example in some part of Naivasha and Mt. Kenya region.

On the positive side the improvement of some roads by the Government has played a big role especially because of the bypasses for example growers around Thika do not go to town anymore and instead they use the bypass reducing the travel time by about one  and half hours.

Meanwhile flower growers are currently harvesting water in their dams/reservoirs and underground reserves. Elsewhere, KenGen, Kenya’s main power generator said Kamburu, Gitaru, Kiambere and Kindaruma dams are full to capacity while the main one Masinga Dam is expected to spill this week if the rains pounding its catchment area continue. By Tuesday, the water level was at 1,056.07 metres against the spilling level of 1,056.5 metres. (Source:http://www.businessdailyafrica.com/Corporate+News/Heavy+rains+gift+consumers+Sh300m+power+bill+respite+/-/539550/1402896/-/item/0/-/9f4rxkz/-/index.html)

In addition the electricity costs are hopefully expected to go down since the rains have risen electricity generation from dams to full capacity, reducing the production of energy from expensive diesel plants hence the cost of production will go down. Kenya Power says it will this month charge consumers Sh6.97 per kilowatt hour for fuel costs — a variable component determined by the amount of diesel used to generate electricity — down from Sh7.42 in April and Sh7.58 in March. The reduction announced by Kenya Power is equivalent to six per cent. (Source:http://www.businessdailyafrica.com/Corporate+News/Heavy+rains+gift+consumers+Sh300m+power+bill+respite+/-/539550/1402896/-/item/0/-/9f4rxkz/-/index.html)

Floriculture Sector Joins Forces Towards Mainstream Sustainability

The Floriculture sector has teamed up to mainstream sustainability through the Floriculture Sustainability Initiative (FSI). This is a unique international public private sector initiative that will be officially launched during the Floriade 2012. With the support of a growing number of international organizations the initiative is currently being shaped with the aim to mainstream sustainability in the sector.

Current founding participants include ANCEF, BGI, BRO, EPHEA, Dutch Flower Group, Fair Flowers Fair Plants, FleuraMetz, FloraHolland, Florint, Hivos, LTO Noord Glaskracht, MPS, Pfitzer B.V., Rainforest Rescue International, UnionFleurs, VGB, Vereinigung des Schweizerischen Blumengrosshandels and WWF Kenya.

FSI is an international coalition of major players in the flower sector, civil society organizations and other relevant stakeholders. By joint commitments and pre-competitive cooperation the FSI aims to contribute to greater sustainability in the sector and to create a more level playing field for producers, wholesalers and retail.

FSI will develop a tool to increase the transparency and comparability of existing floriculture sustainability standards. Such a tool will increase efficiency, flexibility in buying, decrease costs and reduce the overlap of criteria. This will create a starting point for mainstreaming the implementation and demand of sustainability criteria in the sector by building on existing standards and initiatives.

In the coming months the governance and financial model will be developed. FSI will be financially independent and linked to existing structures to create a cost effective and sector embedded initiative. The start-up of the FSI is financed by the founding members and co-funded by the Dutch Horticulture Board (PT) and the Sustainable Trade Initiative (IDH).

“To accelerate sustainability in the sector we should cooperate and create tools on an international level”, states Herman de Boon, chairman of the FSI steering group a.i. “It is of great importance that this initiative is supported by a large group of stakeholders”.

What will the FSI do?

  • Develop a sector wide vision on sustainability;
  • Develop an equivalency tool to create transparency, comparability and incentives for improvements of the existing sustainability standards;
  • Develop the FSI governance and funding model as well as a housing plan;
  • Initiate joint impact projects on specific challenges in the sector (e.g. water, carbon footprint);
  • Start joint communications on sector wide sustainability activities and developments.

FSI is inviting profit and non-profit organizations that are stakeholders in the international floriculture sector and endorse FSI’s objectives to become a founding member.

For more information visit www.floriculturesustainabilityinitiative.com

Climate Change – Vulnerability Assessment for Lake Naivasha Basin

WWF held a workshop on 8th and 9th May 2012 to assess the vulnerability of the Lake Naivasha basin to climate change. The workshop was attended by stakeholders such Riparian Association chairmen of all rivers in the basin, Community based organisations within the basin, LNGG, Kenya Flower Council , Ministry of Water, Ministry of Forestry, representatives  of the pastoral community, representatives  of the farmers in the basin, Imarisha Naivasha project, among others.

The objective of the meeting was to assess the vulnerability of the basin to climate change and prepare a strategy of how the impacts can be mitigated.

The assessment was done using the Data that had been collected from target groups like households, Focus groups e.g. Riparian Association members and Institutions within the basin.

They identified the target areas and assessed the capacity to cope with stress (vulnerability) by measuring the following factors;

  • Connectivity
  • Ability to respond to climate variability
  • Refugia
  • Functional redundancy
  • Natural productivity
  • Biological or biodiversity / genetic diversity.

The workshop projected the climate change and development trends in the target areas and defined the period of projections e.g. what might happen in the basin in the next 20 years.

They evaluated Government policies to see how much they have with regard to climate change mitigation measures e.g. the National Climate Change Strategy  2010 (122 pages)

The information generated will be used to prepare a strategy that will be used to provide climate change adaption options or projects. The strategy will define how the stakeholders, individuals, community, government can address the challenges associated with climate change.

KFC attends a meeting on the Kenya National Climate Change Response Strategy Action Plan

The Government, in conjunction with other stakeholders, is putting in place mechanisms to enhance the implementation of the National Climate Change Response Strategy (NCCRS) through the development of a comprehensive Climate Change Action Plan to guide it and non-state actors. One of the activities in focus is how the “Private Sector can be Effectively Engaged in Climate Change Adaptation”, calling for consultations between the Government and the private sector, to identify optimal points of engagement. The Ministry of Environment and Mineral Resources invited the private sector to a meeting on the above captioned heading on 9th May 2012, where the Kenya Flower Council was represented.

It is undeniable that climate change is currently affecting Kenya. Droughts and floods have become frequent and intense and the country has also seen an increase in average temperatures, hotter days, colder nights, successive crop failures and the spread of vector-borne, diseases such as malaria to places where the disease is not known to be endemic.

The impacts of climate change threaten to roll back the gains Kenya is making in the socioeconomic front. Kenya is acutely vulnerable to the ravages of climate change as all its drivers of the economy are climate sensitive. These include forestry, agriculture, industry, tourism, and fisheries, among others. In order to enhance investment that aims to reduce vulnerability and build resilience of the society, and in line with the provisions of the United Nations Framework Convention on Climate Change (UNFCCC) and its implementing instrument – the Kyoto Protocol, the Government of Kenya launched the National Climate Change Response Strategy (NCCRS) in 2010.  The main objective of the NCCRS is to put in place robust measures needed to address most, if not all, of the challenges posed by climate change variability and change.

As global GHG emissions continue unabated, climate change impacts are likely to intensify an already precarious situation into the future. If no action is taken to reduce or minimize expected impacts from climate change, the costs to society and the economy will be immense. The Climate Change Response Strategy identified the sectors that are most vulnerable to climate change impacts and proposed interventions to reduce or mitigate these impacts, while promoting a low-carbon economy and climate change-resilient production systems.

Kenya’s ability to cope with the impacts of climate change is compounded by many factors including poverty, weak institutions, poor infrastructure, inadequate information, poor access to financial resources, low management capabilities, armed conflicts due to a scramble for diminishing environmental resources and high interest rates. It is vital that policies and measures for adaptation to and mitigation against climate change are put in place across all the sectors in order to minimize the impending climate change catastrophe.

The National Climate Change Response Strategy (NCCRS) is divided into ten chapters. The Strategy has outlined the evidence of climate change (in terms of temperature and rainfall variation) in Kenya, climate change impacts on the country and recommended actions that the country needs to take to reduce these impacts as well as take advantage of the beneficial effects of climate change. These actions range from adaptation and mitigation measures in key sectors, to necessary policy, legislative and institutional adjustments, to ways of enhancing climate change awareness, education and communication in the country, to necessary capacity building requirements, and to ways of enhancing research and development as well as technology development and transfer in areas that respond to climate change, among many others.

Adaptation measures suggested by the Strategy include the prevention, tolerance or sharing of losses, changes in land use or activities, changes of location, and restoration. Adaptation measures that have been proposed in Agriculture and water sectors include:

Agriculture:

Provision of downscaled weather information and farm inputs; water harvesting e.g. building of sand dams for irrigation; protection of natural resource base (soil and water conservation techniques); and research and dissemination of superior (drought tolerant, salt-tolerant, pest and disease resistant) crops.

Water:

construction of dams and water pans; protection of water towers, river banks, and water bodies; de-silting of riverbeds and dams; municipal water recycling facilities; building capacity for water quality improvement, and awareness campaign to promote water efficiency measures. Interventions in the water sector will have to adapt the integrated approach to water resource management and utilization. In Kenya, this is imbedded in the Integrated River Basin and Large-Water Bodies-based Natural Resource Management Programme of the six regional basin-based institutions, e.g. the Tana & Athi River Development Authority (TARDA) and the Lake Basin Development Authority (LBDA), etc.

Adaptation measures have also been suggested for other key sectors including: Health, Fisheries, Tourism/Wildlife, Livestock/pastoralism, Physical Infrastructure including transportation and telecommunication networks, Social Amenities including human settlements.

Mitigation refers to efforts that seek to prevent or slow down the increase of atmospheric GHG concentrations by limiting current and future emissions and enhancing potential sinks for GHGs. In Kenya, the sectors associated with high emissions include forestry (due to forests logging and land use change), energy, agriculture and transport. Proposed mitigation interventions include projects of the Kenya Forest Service’s Forestry Development Plan (FDP); Energy Ministry’s Green Energy Development; as well as other interventions in the transport and agricultural sectors.

Some of the Adaptation and Mitigation measures being suggested by the Flower industry include:

ü  In support of the rain water harvesting adaptation for the agricultural sector, rain water harvesting should be more emphasized for all in the flower industry to participate.  The government to give tax incentives on water reservoirs construction material.  This could also support diversification of land use where water and relevant infrastructure are in place.

ü  Wide advocacy on installation of constructed wetlands and other efficient waste water pre-treatment facilities at the farms, with the treated water re-used to supplement abstracted irrigation water.  Better and efficient methods to be sought, and especially for the smallholders who have land restriction for constructed wetlands – and also with minimal waste water generation.

ü  Water Catchment Restoration Programmes and Payment of Ecological Services (PES) – e.g. as by WWF, CARE, and  the “Imarisha Naivasha” projects around Lake Naivasha, to be rolled out in other affected areas through the Water Resource Users Associations,  for better managed and high yielding water catchment areas for sustained community needs, ecological balances, e.t.c.

ü  Where viability is confirmed from the current feasibility study by the Ministry of Energy on use of organic waste from flowers to generate energy, this could be rolled out to large scale, by farms pooling together organic waste.  The ongoing feasibility study is involving two flower farms.

ü  This should also be pegged on encouraging farmers to explore and adapt other sources of green / re-newable energy where viable e.g. solar and wind; and to conduct regular energy audits for energy saving gaps.

ü  Capacity building of farm personnel on climate change issues; and more empowerment of the smallholder farmers on G.A.P, and environment protection and preservation.  The linkage between good business rewards and environmental sustainability should be emphasized.

ü  Involve KARI and the Breeders to focus research on varieties adapted to the rainfall pattern changes.

ü  Farms consolidating their forest areas to benefit from carbon credits – It has been stated that the classical mitigation options in the agricultural sector at large include forest-related measures of reducing deforestation and forest degradation, and increasing afforestation and reforestation, along with forest management interventions to maintain or increase forest carbon density.

ü  Technology transfer from other parts of the world with better practices on management of resources.

ü  The flower industry could benefit more through tax regimes by the Government, i.e. a revision on the business licence costs e.g. on NEMA licences that are punitive (on waste water pre-treatment facilities and organic waste composting), scrapping of Local Government council levies/cess on flowers, e.t.c.

ü  While farms could invest in technologies to boost sustainability and ensure they remain in business, lack of timely and relevant intervention by the Government could counteract this gain; with investors looking for other countries with better incentives.  These could include tax incentives, timely payment of VAT Refunds, reduce costs on business licenses (especially those required by NEMA), waste composting), local authority levies e.t.c

ü  Intervene in the limited access to funds by the financing institutions due to the increased risks in production activities as a result of climate change.

ü  The Government should speer head positive publicity for the industry (responsibly produced and grown under the sun) at the international level to counter the ever negative reports on the industry.  This should be through continuous reporting on the gains and the good practices realized by the industry.

ü  Although the government is now involved in the industry promotions at the world market e.g. Russia, Holland, USA, and Dubai, the country representation at these promotions, forums and trade fairs is not commensurate to the importance of the industry in contribution to the country economy.  The flower industry in Colombia is a good case study on how the industry can flourish more with good government support.

Farms are encouraged to pass to KFC more areas of engagement on adaptation initiatives to inform way forward

How EU EPAs could affect Africa’s industrialization process

In September 2011, the European Commission proposed to amend the European Union’s (EU) Regulation 1528/2007. Regulation 1528 currently provides preferences to African, Caribbean and Pacific (ACP) countries, so that they have duty-free and quota-free market access to the EU market.
It gives cover to ACP exporters as these countries are in the process of negotiating the Economic Partnership Agreements (EPAs) with Europe. The EPAs are effectively free trade agreements. The September proposal calls for the removal of ACP countries from having such preferential access to the EU if the ACP countries not have ratified the EPAs by January 1, 2014.

African countries are feeling the effects of this proposed amendment to Regulation 1528. The EU has been telling them that to retain their preferences in 2014, they have to sign or ratify the EPAs by June this year (2012).

If they do not, the European Commission has said that the proposed amendment entailing the removal of preferences would take effect on January 1, 2014 and the following countries – Kenya in East Africa; Namibia, Botswana and Swaziland in Southern Africa; Ghana and Cote d’Ivoire in West Africa; and Cameroon in Central Africa will see their flowers, beef, sugar, cocoa, bananas, amongst other products face higher tariffs when entering Europe. This could make their products much less competitive vis-à-vis other suppliers.

According to Benjamin Mkapa former president of Tanzania, the EPAs as they stand contain many problematic elements that will have an impact on African countries’ ability to develop and industrialize. The local and regional markets will be opened up even more than is currently the case to EU products.

Mkapa says the EPA could end up damaging the local industries, stymieing their growth, and remaining as raw materials and primary commodities exporters.

Discussions are taking place within relevant organs of the European Parliament regarding the EU’s removal of preferences if EPAs are not signed and votes will be taken in the next weeks.

In addition, putting pressure on countries to sign a trade agreement which includes certain unacceptable provisions not only limits the space for domestic economic policy-making, but could also damage their emerging economic sectors.

As the machinery of the European Union debates this issue African countries can make the following demands according to Mkapa:
i)    Reiterate the ACP Council of Ministers’ and  ACP Ambassadors’ call that the European Commission should maintain EC Regulation 1528 i.e. preferences should be retained until the EPA negotiations have been concluded.

ii)    In the meantime, African countries must explore the option proposed by the African Union and endorsed by African Heads of States in January 2012 that the EU should provide duty-free and quota-free preferences not only to Least Developed Countries (LDCs), but also to non-LDCs in LDC regions

EPAs negatively impact on regional integration as they will displace intra-regional trade.
EPAs are also tearing apart customs unions because they lead to different trading arrangements for different countries within a customs union (LDCs enjoy duty-free market access to the EU but non-LDCs have to give EU reciprocal market access).
The European Union will be a key beneficiary when Africa develops and prospers. He trusts that the EU will heed ACP countries’ and Africa’s proposals for a mutually-beneficial partnership ahead.

To access the complete article follow link: http://www.daily-mail.co.zm/?p=3945

Ambassador Visits Ota Floriculture Auction

The Kenyan Ambassador in Japan His Excellency Benson Ogutu toured the leading Flower Auction House in Tokyo, Japan end of April. During the tour, Ambassador Ogutu noted that in Japan’s 150 Flower auctions, the Ota Floriculture Auction is the largest in terms of scope and volume, and the world’s third largest after the Flora Holland and Landgard auction in Germany. The auction avails cut flowers, potted plants, seedlings, turf, etc for wholesale buyers in the Japan market strictly in accordance with Japanese regulations.
Ota Floriculture Auction coordinates shipping and handling of merchandise from the producers, organizes auctions and facilitates trans-shipments to the purchasers at a commission payable by the suppliers. In a field where product freshness and quality are key, Ota has created a highly efficient logistics network utilizing state-of-the-art computerized auction and information processing systems.

During the visit Mr. Ueda and Mr. Namba briefed His Excellency the Ambassador on import statistics regarding Japan’s flower import from Kenya. According to them, Kenya’s top 5 export items to Japan include roses, hypericaceae, caryophyllaceae, eryngium, and gypsophila. In 2011, Kenya was the biggest rose exporter in Japan (20,057,578 stems) with the Ota auction receiving 1,689,109 stems of Kenyan roses at a cost of JPY 117,470,536.00

According to a report written by the embassy, the Japanese flower market is quite stable although local flower supplies are shrinking. This means that the potential is high for increasing flower import from overseas. The Kenyan rose has particularly enjoyed a high reputation in the Japanese market due to its long life and large head flowers.

Unfortunately, Kenya is unable to reduce the cost of its flower exports to Japan due to lack of direct flights to Nairobi and Narita. Despite the handicap many Japanese importers import fresh flowers directly from Kenya via Dubai and other international Hubs. Traditionally, Japanese importers used to purchase their Kenyan flowers from the Dutch auction. But as a result of the success from Kenya and the country’s No. 1 ranking in 2011, imports of other types of flowers from Kenya are expected to increase in the local market.

Authorities must, however, liaise with officials in Japan to stump out regulatory hitches that continue to hinder trade.

According to Horticultural Crops Development Authority, Kenyan exports to Japan faced stringent quality standards which include a requirement that suppliers fumigate their produce — an expensive exercise that lowers quality even as it raises produce prices. In this regard, a middle ground ought to be found and local produce allowed into Japan under more agreeable conditions.

Left to right, Mr. Toshimasa Namba, Senior Manager, Classic Japan Ltd; Kenya’s Ambassador in Tokyo, H.E. Benson H.O. Ogutu; Mr. Jun Ueda, Director, Ota Floriculture Auction Co., Ltd. and Mr. Mamoru Hirai,

Ethiopia: New President Buds At Flower Association

Tsegaye Abebe closes out 10 years of formation leadership at the Association

Ethiopian Horticulture Producers & Exporters Association (EHPEA) has elected Zelalem Mesele, owner of ZK Flowers, to replace Tsegaye Abebe, the president under whom the sector has experienced major ups and downs, including a scuffle with the government, which felt cheated by the businesses in the sector.

Export revenues from flower exports have grown from 27.9 million dollars in 2002/03, when the Association was formed, to 178.3 million dollars in 2010/11, making flowers the third largest export earner in the economy, after coffee and khat.

Encouraged by a sector that had been growing by leaps and bounds, the government had targeted to reap 288 million dollars from the export of a mere three billion stems in 2010/11. The country’s flower farms, however, exported a whopping 41.6 billion stems, nearly 1,400pc of the plan, but reported a mere 62pc of the targeted revenue.

There was some kind of scam among industry players, the government concluded, after its own investigation, and changed its measuring rod from units of stems to kilogrammes for easier measurement accountability.

Tsegaye and his friends originally got together and formed the Ethiopian Horticulture Producers & Exporters Association (EHPEA) in 2002. Ten years on, the EHPEA boasts 83 members, out of the total 98 farms in the country. Among them, many do not attend the meetings that the Association calls, and only 42 pay their membership fees.

The latest election, which replaced Tsegaye with Zelalem was meant to take place a year ago but did not because 51 of the paying members did not attend, according to Tilaye Bekele, Executive Director of the Association, leading to Tsegaye staying on the job one more year, despite restrictions in the articles of association. This time, 50 members attended the meeting, only 34 of which had paid their fees. The voting took place, Tilaye said, because the 34 were more than 51pc of the 42 paying members.

Members are expected to pay 10,000 Br, annually. Among the reasons some do not pay is that the time to effect the payment is very short, according to Tilaye.

Tsegaye has been at the helm for a whole decade. The first three years did not count, for they were considered formative years, and Tsegaye was elected for the maximum three terms of two years each, afterwards.

Tsegaye was one of the first to join the horticulture industry, 20 years ago. He has three farms in Ziway, Koka, and Sebeta. The Ziway farm produces flowers, and the other two vegetables.

The new president and the board members, including Yasin Legese, who has a flower farm in Bishoftu (Debre Zeit); Mark Derisson of AQ Roses in Ziway; Tesfalidet Hagos, owner of Lula Plc; and Frank Amerdan, owner of Maranque Plants Plc, will assume responsibility at the beginning of the 2012/13 fiscal year in July 2012. All of these people ran for the top position. Zelalem won with 33 votes, followed by Tesfalidet, who got 32.

“Since all of the groundwork has been done by Tsegaye and the board,” Zelalem told Fortune. “I and the new board will continue the good work in an efficient manner.”

Over the 10 years that Tsegaye presided over the Association, the EHPEA has been involved in a lot of policy discussions with the government as well as several talks with financial institutions and donors, according to Tilaye.

“He is a symbol of the industry,” Tilaye said of Tsegaye, commenting that no particular achievement could be attributed to Tsegaye alone but to the board in general.

The Association negotiated successfully for the introduction of a five-year tax holiday for new entrants, which is to be reduced if a new investment bill presented to the Council of Ministers is ratified. The sector has also been granted duty-free privileges for the import of machinery.

Five farms, including Menagesha Flower Farm, have fallen under and are foreclosed on by the banks that they had borrowed from. The Development Bank of Ethiopia (DBE) is still struggling to dispose of Menagesha, for which the starting bid price is 12.3 million Br.

Tsegaye Source: By Mahlet Mesfin,> All Africa

In September 2011, the European Commission proposed to amend the European Union’s (EU) Regulation 1528/2007. Regulation 1528 currently provides preferences to African, Caribbean and Pacific (ACP) countries, so that they have duty-free and quota-free market access to the EU market.
It gives cover to ACP exporters as these countries are in the process of negotiating the Economic Partnership Agreements (EPAs) with Europe. The EPAs are effectively free trade agreements. The September proposal calls for the removal of ACP countries from having such preferential access to the EU if the ACP countries not have ratified the EPAs by January 1, 2014.African countries are feeling the effects of this proposed amendment to Regulation 1528. The EU has been telling them that to retain their preferences in 2014, they have to sign or ratify the EPAs by June this year (2012).

If they do not, the European Commission has said that the proposed amendment entailing the removal of preferences would take effect on January 1, 2014 and the following countries – Kenya in East Africa; Namibia, Botswana and Swaziland in Southern Africa; Ghana and Cote d’Ivoire in West Africa; and Cameroon in Central Africa will see their flowers, beef, sugar, cocoa, bananas, amongst other products face higher tariffs when entering Europe. This could make their products much less competitive vis-à-vis other suppliers.

According to Benjamin Mkapa former president of Tanzania, the EPAs as they stand contain many problematic elements that will have an impact on African countries’ ability to develop and industrialize. The local and regional markets will be opened up even more than is currently the case to EU products.

Mkapa says the EPA could end up damaging the local industries, stymieing their growth, and remaining as raw materials and primary commodities exporters.

Discussions are taking place within relevant organs of the European Parliament regarding the EU’s removal of preferences if EPAs are not signed and votes will be taken in the next weeks.

In addition, putting pressure on countries to sign a trade agreement which includes certain unacceptable provisions not only limits the space for domestic economic policy-making, but could also damage their emerging economic sectors.

As the machinery of the European Union debates this issue African countries can make the following demands according to Mkapa:
i)    Reiterate the ACP Council of Ministers’ and  ACP Ambassadors’ call that the European Commission should maintain EC Regulation 1528 i.e. preferences should be retained until the EPA negotiations have been concluded.

ii)    In the meantime, African countries must explore the option proposed by the African Union and endorsed by African Heads of States in January 2012 that the EU should provide duty-free and quota-free preferences not only to Least Developed Countries (LDCs), but also to non-LDCs in LDC regions

EPAs negatively impact on regional integration as they will displace intra-regional trade.
EPAs are also tearing apart customs unions because they lead to different trading arrangements for different countries within a customs union (LDCs enjoy duty-free market access to the EU but non-LDCs have to give EU reciprocal market access).
The European Union will be a key beneficiary when Africa develops and prospers. He trusts that the EU will heed ACP countries’ and Africa’s proposals for a mutually-beneficial partnership ahead.

To access the complete article follow link: http://www.daily-mail.co.zm/?p=3945

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