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Developing original agricultural financing, providing better assistance to small farmers, taking advantage of innovative technologies…. Six experts present solutions that will enable the sector to flourish.

In 2016, the cost of African food imports was $65.8 billion (€62.4 billion). If nothing is done to change the state of competitiveness, this figure could reach $110 billion by 2025.

Private investments may have grown in Africa, but the sector still faces international competition.

By only contributing less than a quarter of the continent’s GDP, it is far from having reached its full potential. Difficulties in obtaining financing, a failure to take small farmers into account, the price of inputs…. Most African countries struggle to find the model that will enable them to increase their productivity and, ultimately, transform agriculture into a commercial activity that meets international standards.

According to Alassane Doumbia, executive chairman of the board of the Ivorian agro-industrial group Sifca, the first problem to overcome is that of private financing.

“No bank is ready to finance a planter alone. In many cases, we have had no choice but to handle it ourselves.” Two complementary solutions have been put forward to resolve this problem. The first, suggested by Sérgio Pimenta, Vice President Middle East and Africa of the IFC (International Finance Corporation, World Bank Group), consists in developing innovative agricultural financing. Blended finance combining public and private players will be specifically adapted to meet the needs of small farmers, who represent 80% of the continent’s farmers.

Help producers to increase their outputs

In this configuration, the public stakeholder assists the private investor so that they do not have to single-handedly assume the risks in case of failure. This system is the key to the success of the Nigerian private equity firm Sahel Capital, according to Yana Kakar, Global Managing Partner of Dalberg Advisors. Founded in 2010, Sahel Capital succeeded in raising over $30 million from the Nigerian and German governments for technical assistance for SME in the Nigerian agricultural sector. According to the African Development Bank (ADB), identifying new sources of financing could generate $110-125 billion in income by 2025.

The second solution consists in international donors setting up technical assistance programs in order to help producers to increase their outputs—because the continent is lagging behind. “If we look at the example of grain production over the past 50 years, South America and Asia have increased their respective outputs by 50% and 40%, while Africa has not exceeded 25%,” says Yana Kakar.

But what methods should be used to improve productivity? According to Karim Senhadji, CEO of OCP Africa, “There is a very strong correlation between the rate of fertilizer use and the rate of agricultural output.” And yet, the African farmer, for reasons relating to distance, the cost of transportation, communication, or financing, has limited access to fertilizers.”

“To overcome these difficulties, the only solution is to build an ecosystem around the farmer,” insists Karim Senhadji.

That’s what was achieved in Guinea, where all the stakeholders came together to form task forces with the aim of delivering around 15 different kinds of fertilizer on schedule, thereby lowering their transportation costs by 40%.

Once this point has been settled, “the farmer must be taught to use the technologies available to him as efficiently as possible,” continues Karim Senhadji.

The training aspect also matters a great deal to Alassane Doumbia: “In Côte d’Ivoire, we manage an oil palm tree farm of over 120,000 hectares cultivated by small growers. The output of these farms is around 5-7 tons per hectare as opposed to 18 tons for industrialists. With better-trained teams, it could grow exponentially.”

But these are not the only possibilities. Sérgio Pimenta has chosen to promote what is known as “smart farming,” a notion that has already been developed by OCP in Ethiopia, where the world leader in the phosphate sector collaborated with local agricultural institutions to develop a “fertility map” enabling the components of fertilizer to be adjusted to suit the nature of the soil.

In order to achieve this, an immense satellite data collection initiative had to be organized on-site. “Thanks to this effort, Ethiopia increased its corn production by 37% by using a new, more cost-effective and more efficient fertilizer,” says Karim Senhadji.

A sufficient number of reliable logistics infrastructures

And technology has other virtues still. “The new agricultural data collection tools foster improved anticipation of outputs,” highlights Venkataramani Srivathsan, Regional Director of Africa and the Middle East at Olam.

Several countries are on the right path. In Ethiopia, strong governmental support has enabled floriculture to develop considerably: in less than 20 years, flower exports have generated $550 million in income.

Likewise, in Nigeria, the transformation of the input distribution system achieved over the course of the past 10 years has enabled cassava production to triple while saving around $100 million in imports per year.

Be that as it may, the fact remains that if the challenge of competitiveness is to truly be met, improving production is not enough. There is still a need for “a sufficient number of reliable logistics infrastructures, such as railways, ports or roads, to compete with the rest of the world,” cautions Karim Senhadji. However, implementing those tools will inevitably take some time.

 

source: theafricaceoforum.com

Deals valued at $32.6 billion dollars were recorded at the inaugural Intra-African Trade Fair (IATF) which ended in Cairo on Monday, according to preliminary figures released by the African Export-Import Bank (Afreximbank).

Afreximbank, which organised the trade fair in collaboration with the African Union, said that the amount represented the value of 100 deals concluded during the fair.

“That number might rise as it did not include some bilateral deals among exhibitors which had not been recorded,” reads part of the statement from Afreximbank.

The Bank said that the majority of the deals were in sectors of industrialization/export manufacturing ($6.2 billion), power ($6 billion), and financial services ($1.86 billion).

Other key sectors included oil and gas, transport and logistics, heavy industry, mining, infrastructure, healthcare and SME promotion.

The preliminary report also showed that there was a total of 1,086 exhibitors at the fair, with 45 countries having country pavilions.

Some 584 companies were accommodated in country pavilions while 375 were in private sector stands. The creative industries had 36 participating exhibitors.

The IATF2018 Conference, which ran alongside the trade fair, featured 42 sessions with 152 speakers.

According to the Bank, the Virtual Trade Fair platform, which operated during the fair, attracted 700 total registrations, with the rooms being accessed more than 7,000 times and product information and market resources on the platform accessed or downloaded about 2,000 times.

About 300 booths have been built on the platform, which will remain active after the IATF.

The IATF2018, which ran from December 11 to 17, was aimed at promoting trade among African countries and at supporting the implementation of the African Continental Free Trade Agreement.

Rwanda has been selected to host the IATF2020.

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Deals valued at $32.6 billion dollars were recorded at the inaugural Intra-African Trade Fair (IATF) which ended in Cairo on Monday, according to preliminary figures released by the African Export-Import Bank (Afreximbank).

Afreximbank, which organised the trade fair in collaboration with the African Union, said that the amount represented the value of 100 deals concluded during the fair.

“That number might rise as it did not include some bilateral deals among exhibitors which had not been recorded,” reads part of the statement from Afreximbank.

The Bank said that the majority of the deals were in sectors of industrialization/export manufacturing ($6.2 billion), power ($6 billion), and financial services ($1.86 billion).

Other key sectors included oil and gas, transport and logistics, heavy industry, mining, infrastructure, healthcare and SME promotion.

The preliminary report also showed that there was a total of 1,086 exhibitors at the fair, with 45 countries having country pavilions.

Some 584 companies were accommodated in country pavilions while 375 were in private sector stands. The creative industries had 36 participating exhibitors.

The IATF2018 Conference, which ran alongside the trade fair, featured 42 sessions with 152 speakers.

According to the Bank, the Virtual Trade Fair platform, which operated during the fair, attracted 700 total registrations, with the rooms being accessed more than 7,000 times and product information and market resources on the platform accessed or downloaded about 2,000 times.

About 300 booths have been built on the platform, which will remain active after the IATF.

The IATF2018, which ran from December 11 to 17, was aimed at promoting trade among African countries and at supporting the implementation of the African Continental Free Trade Agreement.

Rwanda has been selected to host the IATF2020.

This email address is being protected from spambots. You need JavaScript enabled to view it.

The African Export-Import Bank (Afreximbank) and the Export Credit Insurance Corporation of South Africa SOC Limited (ECIC), yesterday, Johannesburg, unveiled a $1billion financing programme to promote and expand trade and investments between the country and the rest of Africa.

The financing, under the South African-Africa Trade and Investment Promotion Programme (SATIPP), Afreximbank and ECIC will work together to identify, prepare and appraise trade transactions and projects.They will also explore co-financing and risk-sharing opportunities, as well as share knowledge, with particular emphasis on intra-African trade matters, through technical cooperation, staff exchange, research and joint events.

This is coming few weeks after the continent's largest trade bank, reiterated its cooperation with Nigeria's quest for development and offered to arrange financing of up to $1 billion to support investments in trade enabling infrastructure.The pan-African multilateral lender said that its facilities had made major impact on critical sectors of the Nigerian economy, while the institution now has loans outstanding of about $3.5 billion in the country as at 31 December 2017.

The bank identified the benefiting sectors of its to include financial institutions, transport, hospitality, manufacturing, agro-allied, oil and gas, power, and telecommunications.But addressing the business community, media and stakeholders from the public and private sectors, the President of Afreximbank, Dr. Benedict Oramah, said that the joint initiative would support businesses through capacity building and market information initiatives and would help small and medium-sized entrepreneurs to join regional supply chains.

It would also provide advisory services and guarantees to South African investors seeking trade and investment opportunities in Afreximbank's regional member countries.According to him, the initiative provides a platform for the realisation of Afreximbank's strategic objectives in line with its strategy- Impact 2021: Africa Transformed, which prioritises intra-African trade, industrialisation and export manufacturing.

The Chief Executive Officer of ECIC, Kutoane Kutoane, said: "We realise that one of the best ways to enhance our exporting capabilities as a country is by intensifying mutually beneficial trade with the rest of the continent." Today, Afreximbank commenced its yearly general meetings in Abuja, slated for July 11 to 14, while it also has the Intra-African Trade Fair in Cairo slated for December 11 to 17, in efforts to promote trade among African countries.

Oramah said the trade fair, being promoted in collaboration with the African Union and the Egyptian government, would be the continent's single largest trade fair and the first of its kind.It will feature a seven-day trade show where Nigerian businesses could join others to showcase their capital goods and service offerings to a large market, including private sector corporates and government institutions from up to 55 African countries.

Read the original article on Guardian.
A landmark forum, co-organized by UNCTAD, focuses efforts by African countries seeking ways to ease interregional and international trade. African countries seeking to reduce the cost, time and complexity of interregional and international trade in goods will gather for the First African Forum for National Trade Facilitation Committees in Addis Ababa, Ethiopia, on 27–29 November. The landmark event, organized by UNCTAD and seven partner organizations, comes as Africa scales up its trade easing efforts after the World Trade Organization’s Trade Facilitation Agreement entered into force in February 2017 and as it prepares to implement the Africa Continental Free Trade Agreement (AfCFTA) signed in March 2018. “The World Trade Organization calculates that current trade costs for developing countries are equivalent to applying a staggering 219% tariff on international trade, and this hurts Africa,” UNCTAD Secretary-General Mukhisa Kituyi said. “UNCTAD has supported Africa’s work on trade facilitation for decades, including with our ASYCUDA automated customs systems, and capacity building programmes. The culmination of this work is to support the institutions that can make trade work for all, and National Trade Facilitation Committees must become the agents of change to boost international trade for developing countries.” A central cog of the Trade Facilitation Agreement is the obligation of each country to set up a National Trade Facilitation Committee (NTFC) with public and private sector stakeholders “to facilitate both domestic coordination and implementation of the provisions of this agreement”. With well-functioning NTFCs, countries will be able to make trade easier, faster and cheaper. For developing countries, and especially least developed countries – the majority of which are in sub-Saharan Africa – full implementation of the Trade Facilitation Agreement could lead to a reduction in trade costs of up to 15%. Win-win for all Correctly implemented trade facilitation measures not only boost trade but also improve revenue collection, safety and security compliance controls (for example, improving food safety) and can help to streamline government agencies. Such reforms help small cross-border traders, often women, enter the formal sector, make economic activities more transparent and accountable, promote good governance, generate better quality employment, strengthen information technology capabilities and generally modernize societies by bringing about benefits related to administrative efficiency. These reforms are a prerequisite for developing countries to join global value chains and start trading out of poverty. Trade facilitation reforms are also positive steps towards human, enterprise and institutional development, and link to achieving the 2030 Agenda for Sustainable Development, making their enactment a win-win for all. But for these benefits to be realized it is essential that the Trade Facilitation Agreement is implemented as foreseen. According to the WTO, the rate of implemented commitments under the agreement as of October 2018 stood at 60% – but broken down by level of development a new picture emerges, with developed countries having achieved 100% of commitments, developing countries having achieved 60% of commitments and least developed countries just 22% of commitments. Anticipating this, the Trade Facilitation Agreement contains important and novel provisions on so-called special and differential treatment that allow developing countries to choose their own implementation schedules – and get implementation assistance if needed. Make trade work “By coming together to share experience, learn lessons on common challenges, and meet with development partners, participants at this event will be equipped to redouble their trade facilitation efforts,” Shamika N. Sirimanne, director of UNCTAD’s division on technology and logistics, said. “The forum is the result of close collaboration between multilateral and international organizations and is supported by several bilateral donors. The alliance showcases the collaborative effort of these institutions and donors to assist in moving forward opportunities for developing and least developed countries to integrate into globalized trade,” she added. Topics covered during the three-day event include the role of African regional organizations, the role of NTFCs in the implementation of trade facilitation provisions in the AfCFTA, paperless initiatives at entry points, the involvement of the private sector in NTFCs, how to coordinate border agencies, and the role of transit corridors. There will also be sessions on the gender dimension in cross-border trade, and the application of digital technologies in future modes of trading at a time when e-commerce becomes ever more important in international trade. The forum is co-organized by: UNCTAD United Nations Economic Commission for Africa United Nations Economic Commission for Europe / Centre for Trade Facilitation and Electronic Business International Trade Centre World Bank Group World Trade Organization World Customs Organization Global Alliance for Trade Facilitation The event was made possible with the support of: The Commonwealth European Union Danida – Ministry of Foreign Affairs of Denmark Government of Finland Islamic Development Bank The First African Forum for National Trade Facilitation Committees will take place in the UNECA Conference Centre and follows a similar global event organized by UNCTAD in Geneva, Switzerland, in January 2017. Source: https://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=1934
PRESIDENT UHURU KENYATTA ACCEPTED TO BECOME A GOODWILL AMBASSADOR OF AFRICAN CHAMBERS OF COMMERCE The Pan African Chamber of Commerce and Industry (PACCI) held its first of a series of business forum 2018 -2019 entitled “What the African Continental Free Trade Agreement (Afcfta) Means For Your Business” at Weston Hotel in Nairobi on 23rd and 24th October, 2018. Chairman of the Kenyan National Chamber of Commerce and Industry (KNCCI), Kiprono Kittoni, and Executive Director of PACCI, Kebour Ghenna, welcomed the attendees and made introductory remarks regarding the current state of trade and the benefits and challenges of the Continental Free Trade Agreement for countries and firms. President Uhuru Kenyatta, who received the African chambers of commerce presidents at State House, called for expeditious implementation of the African Continental Free Trade Area (AfCFTA) treaty that was signed in Kigali, Rwanda. He urged all African chambers of commerce leaders to lobby their governments that have not yet signed the agreement, to do so and ratify the new agreement so that the continent can move together towards the realization of the Pan African vision of an “integrated, prosperous and peaceful Africa”. At the State House meeting President Kenyatta accepted the request lodged by Olive Kigongo, Uganda National Chamber of Commerce and Industry President, to become a Goodwill Ambassador of African Chamber of Commerce. In all some 200 business leaders from Africa discussed the difficulties small and medium-sized companies face to their development and commercial expansion, and said they felt isolated due to the great amount of work and hence lose touch with innovative ways to develop and expand. The Forum featured speeches by Mr. Peter Mihok, Chairman of the International Chambers of Commerce, Peter Biwott , Kenya’s Export Commissioner, Christopher John Forster, President of the Sierra Leone Chamber of Commerce, and others , who gave tips on how to promote industrial development through diversification, regional value chain development, the issuance of certificate of origin, the use of ATA carnets The Forum made over 15 recommendations including for chambers of commerce to be involved in the development of the TVET Curriculum as a way to improve skilled manpower for enterprise growth and to anchor chambers of commerce as global trade facilitation agencies to ensure that the issuance of CoO and ATA Carnet become primary mandate of all African Chambers.

This Trade Hot Topic explores the possibility of incorporating gender issues into multilateral trade negotiations at the WTO, as well as discussing the likely implications for least developed countries (LDCs), small, vulnerable economies (SVEs) and sub-Saharan African (SSA) countries. 

Read on at the source: https://read.thecommonwealth-ilibrary.org/commonwealth/trade/women-s-economic-empowerment-and-wto-trade-negotiations_8136ff7d-en#page1

 

Representatives of West African countries are gathering in Burkina Faso to consider their e-commerce future and what needs to be done to realise it.

Burkina Faso, Senegal and Togo need far-reaching reforms of their infrastructure and legal systems to benefit from e-commerce, new studies of the West African countries by UNCTAD have revealed.

The reports will be presented at a regional e-commerce workshop organized by UNCTAD and the Economic Community of West African States (ECOWAS) in Ouagadougou, Burkina Faso, on 9-10 October.

“Studies carried out by UNCTAD show that vast reform projects are needed for Burkina Faso, Senegal and Togo to seize fully the development opportunities offered by e-commerce, and that they will require ambitious actions on the part of governments. UNCTAD is here to help them,” UNCTAD Deputy Secretary-General Isabelle Durant said.

“This is a win-win strategy, which must be pursued because e-commerce is now a key gateway to foreign markets.”

The workshop, the first step in the preparation of a regional plan, will be inaugurated by Ms. Durant in the presence of the ECOWAS agriculture, water resources and the environment commissioner Jonas Gbian and Daouda Ouedraogo, a representative of Burkina Faso’s commerce, industry and handicrafts ministry.

While taking account of each country’s specific circumstances, the UNCTAD evaluations highlighted the common obstacles they face.

Although each is committed to building a digital ecosystem, none currently have a dedicated e-commerce strategy. And low-levels of internet accessibility and service quality, due to a lack of competition in the telecommunications sector, is a significant obstacle to the digital growth.

Weak and costly hard infrastructure, and logistics services that are not well integrated by operators, make deliveries of consumer good bought or sold online to “the last mile” often impossible.

Despite increased dynamism in the development of electronic payment systems, competition remains limited and online payments remain marginal. Cash payments on delivery are standard.

Although legal frameworks comply with ECOWAS regulations, their implementation remains insufficient and takes little account of the emerging aspects of the digital ecosystem.

Meanwhile, a significant gap remains between the needs of businesses and the knowledge of students, with schooling oriented towards traditional commerce.

Finally, Burkina Faso, Senegal and Togo share difficulties accessing finance to support e-commerce ventures.

Burkina Faso: starting start-ups

The assessment found that e-commerce expansion is taking place mainly in the informal economy, through private classifieds sites and social networks, while a small number of professional operators have developed platforms covering sectors such as agribusiness, clothing, IT and household appliances.

“Burkina Faso must capitalize on the strengths identified by the study: the process towards the digitalization of public services, a competitive telecommunications sector, the development of broadband internet infrastructure, a science park and dynamic start-ups. The proposed roadmap will enable us to accelerate the country’s digitization,” said Burkina Faso’s commerce, industry and handicrafts minister Harouna Kabore.

Under the aegis of Burkina Faso’s Plan National de Développement Économique et Social, the “Burkina Start-Ups” programme financially supports start-ups. But their growth and structuring as companies often remain uncertain.

Senegal: relatively dynamic

Dakar has become a laboratory of tech start-ups. Fintech players are already trying to penetrate the local market by forming strategic partnerships.

The e-commerce sector in Senegal is relatively dynamic, compared to many of its West African neighbours. Internationally renowned firms, such as Jumia, have established a strong presence by relying on the local market and the Senegalese diaspora abroad. Others, on a smaller scale, are trying to find a place in a market destined to grow.

However, apart from a small number of operators, e-commerce is developing mainly in the informal economy, through private classified sites, aggregator sites and social networks.

“The impact of the development of e-commerce in the structural transformation of the Senegalese economy is well established. This is why, thanks to UNCTAD’s assessment of Senegal’s readiness for e-trade, efforts will be more focused on mobilizing stakeholders, the state, the private sector and eTrade for all partners to remove obstacles, identify and implement its flagship recommendations,” Senegal’s investment, partnerships and teleservices minister Khoudia Mbaye said.

Several factors have contributed to the development of e-commerce: broadband internet (mainly in the big cities), a legal framework set up in 2008, electronic means of payment via mobile telephony, and people trained in information and communications technologies. However, there are several logistical and financial challenges to overcome before these favourable conditions can be exploited.

Togo: powerful potential

The potential for the development of e-commerce in Togo is limited: there is a weak internet infrastructure, few online payments, and it is difficult to make or receive deliveries outside of the capital Lomé. However, tech start-ups are bursting with innovative solutions that make it possible to work around existing problems.

“My ministry is strongly committed to making e-commerce a powerful engine for economic growth, inclusive trade and job creation in Togo. This new assessment has identified the development of e-commerce as one of the strategic sectors that should promote trade and remove barriers to trade,” said Togo’s commerce minister Essossimna Legzim-Balouki.

eTrade for all

The German government funded the Rapid eTrade Readiness Assessments as part of its support to UNCTAD’s eTrade for all initiative.

This initiative provides countries with capacity-building solutions for e-commerce and optimizing synergies between different partners.

It has 29 partners, seven of whom will participate in the Ouagadougou workshop: the World Bank Group, the African Development Bank, the United Nations Economic Commission for Africa, the International Trade Centre, the World Trade Organization, Universal Postal Union, and the Africa Civil Society for the Information Society.

UNCTAD has conducted e-commerce assessments for developing countries since 2016, recognizing that policymaking will need to move quickly if least developed countries are to capitalize on rapidly changing economics.

 

Source: UNCTAD

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The Pan African Chamber of Commerce and Industry was established in 2009 by 35 founding national business chambers to influence government policy and create a better operating environment for business.

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