The second edition of the Central African Republic (CAR) Economic Update, which was published today by the World Bank, examines evolving economic trends in the country and proposes options to boost domestic revenue by improving tax and customs policy and administration.
Titled “Strengthening Domestic Revenue Mobilization
to Sustain Growth in a Fragile State,” the report notes that the
improved security situation is leading to brighter economic prospects, with the
real GDP growth rate estimated at 4.8% for 2019. The authors indicate that
although the country’s growth rate has outpaced that of countries in the Central
African Economic and Monetary Community (CEMAC) and Sub-Saharan Africa, it
continues to lag behind peer countries such as Burkina Faso, Malawi, Mali,
Niger, and Uganda.
“CAR has not experienced sustained growth since gaining independence in 1960. With the signing of the Political Agreement for Peace and Reconciliation in February 2019, the economic outlook is, however, positive,” states Wilfried A. Kouamé, World Bank economist and lead author of the report. “The successful implementation of the peace agreement is critical for jumpstarting growth. By implementing this agreement in the run-up to the elections, we are expecting growth of around 5% in the medium term.”
The report also reveals that
while CAR is still at high risk for debt distress, its efforts to streamline
public expenditure and clear domestic arrears are driving down the public debt
level to below CEMAC and Sub-Saharan Africa averages and bringing it closer to
the debt levels of its peers.
Han Fraeters, World Bank Country Manager for the Central African Republic, explains that “this report aims to help the government and its development partners identify opportunities and address challenges in order to move forward on combating extreme poverty. Domestic resources will therefore have to be mobilized to boost public revenue and enhance delivery of basic public services, which are pivotal to guiding the country into a virtuous cycle of peace and security. The upcoming elections will require sound fiscal discipline and provide a unique opportunity to place the country on a path of sustained growth.”
The report presents a number of options to address the growing needs of Central Africans:
Strengthen the social contract: The social contract between the State and its citizens, which is vital to mobilizing tax revenue, was undermined by the recent crisis. To strengthen the social contract, the State must undertake to improve the efficiency and quality of goods and social services, while restoring the trust of taxpayers to encourage them to move out of the informal sector and pay their taxes.
Broaden the tax base: CAR’s tax revenue currently accounts for approximately 8% of GDP, which is below its potential and among the lowest in Sub-Saharan Africa. CAR could consider increasing the tax rates on alcohol and tobacco products in the short term, and reducing the number of tax brackets that hinder business creation and development in the long term.
Improve property tax collection: Legislation on property taxation has not been updated to reflect recent economic developments. Current revenue collection is inefficient and is based on a declarative system that narrows the tax base. New legislation could generate close to CFAF 12 billion (roughly $22 million).
Limit tax exemptions: In 2016, tax exemptions were a major source of lost tax revenue for the country (almost CFAF 2.4 billion or roughly $4 million). A significant share of these exemptions were granted to the private sector and related primarily to VAT. The adoption of the new investment charter in 2017 and the implementation of reforms aimed at curbing tax exemptions and improving the business environment to attract private investment require the firm commitment of the authorities and a formal legal system to institute legal proceedings in the event of abuse.
Modernize the tax system: Strengthening tax administration capacity is critical to improving the tax system. This requires heavy investment in the computerization of public administrations and the purchase of the equipment and software needed to improve revenue collection. Computerization will help curb abuse and corruption, trace transactions related to taxes and duties, facilitate the sharing of information between tax and customs authorities, and enhance the efficiency of financial boards.
Over 1.9 billion people in Asia-Pacific unable to afford a healthy diet
The economic impact of the coronavirus pandemic and surging food prices are keeping almost two billion people in Asia and the Pacific from healthy diets, United Nations agencies said on Wednesday.
According to the 2020 Regional Overview of Food Security and Nutrition, the region’s poor have been worst affected, forced to choose cheaper and less nutritious foods. The report is jointly produced by the Food and Agriculture Organization (FAO), the UN Children’s Fund (UNICEF), the World Food Programme (WFP) and the World Health Organization (WHO).
“The outbreak of COVID-19 and a lack of decent work opportunities in many parts of the region, alongside significant uncertainty of food systems and markets, has led to a worsening of inequality, as poorer families with dwindling incomes further alter their diets to choose cheaper, less nutritious foods,” the agencies said.
“Due to higher prices for fruits, vegetables and dairy products, it has become nearly impossible for poor people in Asia and the Pacific to achieve healthy diets, the affordability of which is critical to ensure food security and nutrition for all – and for mothers and children in particular.”
As a result, progress is also slowing on improving nutrition, a key target for the Sustainable Development Goals (SDGs). As of 2019, over 350 million people in the region are estimated to have been undernourished, with an about 74.5 million children under five stunted (too short for their age) and 31.5 million suffering from wasting (too thin for height).
‘Impact most severe in first 1,000 days’
The UN agencies went on to note that while nutrition is vitally important throughout a person’s life, the impact of a poor diet is most severe in the first 1,000 days, from pregnancy to when a child reaches the age of two.
“Young children, especially when they start eating their ‘first foods’ at six months, have high nutritional requirements to grow well and every bite counts,” they said.
The agencies called for an integrated systems approach – bringing together food, water and sanitation, health, social protection and education systems – to address underlying factors and achieve healthy diets for all mothers and children.
‘Changing face of malnutrition’
They also highlighted the “changing face” of malnutrition, with highly processed and inexpensive foods, readily available throughout Asia and the Pacific. Often packed with sugar and unhealthy fats, such food items lack the vitamins and minerals required for growth and development and also increase the risk of obesity, diabetes and cardiovascular disease.
The report urged governments to invest more in nutrition and food safety to promote healthy diets, as well as regulate sales and marketing of food for consumers, especially children. It also highlighted the need for action within the private sector, given the sector’s important role in the food system and its value chains for achieving healthy diets.
Priorities for improving diversity and inclusion in the energy sector
Prominent energy figures from around the world took part in a virtual dialogue last month on ways to accelerate progress on diversity and inclusion in energy. The event was co-hosted by Dr Fatih Birol, the IEA Executive Director; Ambassador Madeleine Chenette, the Permanent Representative of Canada to the Organisation for Economic Co-operation and Development (OECD); and the Clean Energy, Education and Empowerment International Initiative (C3E International).
The C3E International Initiative, under the IEA Technology Collaboration Programme and the Clean Energy Ministerial, aims to enable greater gender diversity in clean energy professions, recognising that transitions to a clean energy future will need to harness all possible talent to succeed.
Participants from across the energy sector took part in the event on 2 December 2020 to share perspectives and insights on what really matters in the industry. Dr Birol emphasised that diversity and inclusion were priorities for his modernisation agenda for the IEA because “decision-making benefits from the strength of diverse perspectives.” He noted that the share of women in leadership positions at the IEA had grown from 16% in 2015 to 38% today. Dr Birol said he was “delighted that the virtual dialogue represented voices from across the IEA family, reflecting the ‘all fuels and all technologies’ approach of the Agency.”
Highlighting that women’s participation and representation in the energy sector is far below those in other comparable sectors, Ambassador Chenette set out the moral, political and strategic imperatives for accelerating progress. She emphasised that both high-level and personal leadership are critical for overcoming slow progress, and thanked Dr Birol for his leadership in emphasising the need to make economic recoveries from the Covid-19 crisis sustainable.
Empowering women in clean energy transitions is one way to help achieve sustainable recoveries, Ambassador Chenette said, calling for greater efforts to embrace the principle of “what gets meseaured, gets done.” She noted that “it is crucial that we all recognise the economic, environmental and social benefits that gender equality delivers.”
Elbia Gannoum, CEO of ABEEólica, the Brazilian wind energy association, said that “across the energy sector in Brazil, there is an urgency building – companies are searching for solutions on how to make the shift” to harness the benefits of diversity and inclusion. Due to the growing demand for resources and tools, Ms Gannoum announced the creation of the Energia da Transformação platform, which plans to boost inclusion and diversity through the Brazilian energy sector based on collaboration, knowledge sharing and raising awareness.
A data-driven approach is essential for accelerating progress across industry. Laura McGee, founder and CEO of Diversio, a Canada-based company that provides an intelligence platform to measure, track and improve diversity and inclusion, said that the “energy sector is in the middle of the pack compared to some sectors, and could achieve rapid progress by learning from other industries.” Data-driven diagnostics are critical for avoiding missteps and allocating resources to targeted pain points, she added.
Lyu Fang, a senior engineer at the Electrical Engineering Institute at the China Academy of Sciences, shared her personal journey from the start of her career in remote solar PV stations in China to eventually holding leadership positions in the country’s huge renewables industry. Today, Ms Fang is Secretary General for the PV Committee of the China Green Supply Chain Alliance and C3E International China Global Ambassador. She highlighted that China’s climate ambitions offer many growth opportunities in clean energy through “rising sun industries.” She said these should be harnessed to accelerate women’s participation and representation in energy.
Strengthening gender diversity in the energy industry requires unrelenting long-term efforts to boost inclusion. Joel Couse, Special Advisor to the IEA, highlighted that the energy industry faces challenges in finding and retaining talented staff in a competitive global market, including to seize the opportunities of clean energy transitions. On the supply side, boosting the number of women entering STEM programmes remains a priority for achieving gender-balanced recruitment. However, getting women into energy careers is not enough, he said, adding that the industry needs to be actively supporting women to progress past the experience hump before caring responsibilities limit their opportunities for certain types of operational jobs. A key challenge is shifting mind-sets and addressing harmful stereotypes about job roles and advancement opportunities that unnecessarily hold women and men back across the talent pipeline, Mr Couse said. Setting quantitative objectives and dates helps focus efforts to make progress.
Leading energy figures call for action
Mechthild Wörsdörfer, IEA Director of Sustainability, Technology and Outlooks who leads the Agency’s Gender Diversity Task Force, concluded the virtual dialogue, thanking the participants for driving change and reiterating that the IEA Gender Initiative is focussed on bringing data-driven solutions to the table.
In 2020, the IEA Gender Initiative started work on delivering the mandate set by Ministers from IEA Member Countries on equal opportunities in the energy sector. The Agency began by collecting better disaggregated data on gender and energy.
Strengthening collaboration is key, with the IEA and OECD working together to collect data on women in employment, entrepreneurship and decision‑making roles in the energy sector, and developing indicators on the gender of inventors of energy technologies, which will be published in 2021.
The initiative has determined that there is a lack of good and comparable data on gender trends in the energy sector, and also a strong need to improve methodologies, which is why the IEA accepted the role of Coordinator for C3E International’s knowledge and data collection work stream.
The IEA will also conduct a survey of members of the IEA Energy Business Council to develop a baseline on existing corporate practices. The findings and analysis from the survey will be shared in the coming months.
The Agency is also exploring how to integrate gender diversity into its regular analytical work, such as the World Energy Outlook, the measuring of energy efficiency, and through the Clean Energy Transitions Programme, which supports key partner countries in developing and implementing policies. This includes planning a policy package on implementing energy efficiency measures in India, which will impact a predominantly female workforce. The IEA is also prioritising new work on people-centred clean energy transitions, which will also include analysis on gender dimensions.
To share these learnings and insights, and to develop a mutual understanding of the evidence base and what works, the IEA will keep bringing together government, industry and civil society stakeholders to review data and analysis, and to identify priority actions.
Looking ahead, with the help of partners and governments within the IEA family and C3E International, the IEA Gender Initiative can help to mainstream diversity and inclusion in energy policy-making. The IEA Gender Initiative aims to develop a stronger understanding of gender balances throughout the energy sector and to shape the priorities for policy action in future decision-making. The initiative will deliver its first progress report in 2021.
‘Swift action’ needed in Tigray to save thousands at risk
Two months after conflict forced humanitarian workers to withdraw from the Tigray region of Ethiopia, the UN refugee agency (UNHCR), on Tuesday, stressed the need for “swift action” to restore safe access to “save thousands of lives at risk”.
Granted one-time admittance by the Ethiopian authorities to conduct a needs assessment, UNHCR led the first humanitarian mission to Mai Aini and Adi Harush refugee camps since the start of the conflict in November and found Eritrean refugees in “desperate need” of supplies and services, agency spokesperson Babar Baloch told journalists at a regular press briefing in Geneva.
“The assessment, which concluded last week, found help is urgently needed for the tens of thousands of Eritrean refugees in northern Ethiopia”, he said.
Cut off from supplies and services for more than two months, Mr. Baloch explained that the refugees had run out of fuel for their water pumps, leaving them to fetch water from a nearby creek for washing, cooking and drinking – “resulting in diarrhea like illnesses”.
While the only assistance they had received since the start of the conflict was a one-time food distribution conducted by the World Food Programme (WFP) almost a month ago, he said that “plans are underway for a second distribution”.
Threat from ‘armed gangs’
The UN teams “thankfully” found that in both Mai Aini and Adi Harush camps, buildings and structures remain intact, including refugee homes, schools and clinics, “with little damage observed”, according to the UNHCR spokesperson.
However, refugees told UNHCR staff that while they were not impacted directly by the fighting, they were threatened and harassed by various armed groups.
“The refugees told us they continue to have safety concerns, reporting that armed gangs roam the camps at night stealing and looting”, Mr. Baloch said.
“UNHCR is working with the Government and partners to re-establish a regular presence at the camps and launch a response based on the information collected”, he said, adding that the UN agency has also called on the Government to strengthen security in both camps.
Further north in Tigray, the UN refugee agency has not, since November, been able to access the Shimelba and Hitsats refugee camps.
As highlighted in High Commissioner Filippo Grandi’s statement last week, UNHCR continues to receive a number of reports of significant damage to those camps and indications that many refugees have fled in search of safety and food.
“We remain deeply concerned about them”, said Mr. Baloch.
‘Restore safe access’
Meanwhile, some 5,000 Eritrean refugees have made their way to the town of Shire where they are living in “dire conditions”, said Mr. Baloch, painting a picture of many sleeping in an open field on the outskirts of the town, ‘with no water and no food”.
“UNHCR reiterates the UN wide call for full and unimpeded access to all refugees in the Tigray region and remains committed to work with the Ethiopian government to seek solutions together”, he stated.
The conflict between the Ethiopian Government and regional forces of the Tigray People’s Liberation Front (TPLF) began in early November, when the Prime Minister ordered a military offensive after rebels attacked a federal army base.
Government forces reported that the region had been secured at the end of November, but TPLF resistance has continued amid accusations of extrajudicial killings and rights abuses.
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