The USAID East Africa Trade and Investment Hub (the Hub) boosts trade and investment with - and within - East Africa. It does this by promoting two-way trade with the United States (U.S.) under the African Growth and Opportunity Act (AGOA), facilitating investment, deepening regional integration and increasing the competitiveness of select agricultural value chains. The Hub is funded by the U.S. Agency for International Development (USAID). Read more under our ABOUT tab and please subscribe to our newsletter by clicking below.Subscribe to our newsletter
December 13, 2018
Sophy Nantongo's goal is the same now as when she started African Queen in 1993 with $3,000 in her pocket – distribute consumer goods, such as food and beverages, personal care (hair and skin), stationery and home care to an underserved but expansive consumer market. Now, in 2018, thanks to her ingenuity and hard work, and a capital infusion supported by the USAID Hub, Ms. Nantongo is delivering globally recognized brands using sales force automation technology, a new fleet of trucks, and a 235-person logistics team.
In 2014, Ms. Nantongo began exploring ways to transform her import and distribution company from a small, local operation in Uganda to a national and eventually regional player. To acquire the capital needed to support her vision, the USAID Hub provided due diligence support. The Hub’s investment team completed an analysis of African Queen’s internal processes and growth strategy. These analyses included recommendations for restructuring the company’s operating procedures and management and governance structures to support the company’s transition. With this roadmap, African Queen’s investor agreed to the deal, and the transaction closed in 2016.
Ms. Nantongo has since invested in new technologies to improve African Queen’s operations. One new technology, sales force automation, has allowed the company to map distribution routes with customer locations, demographics and purchasing behavior. This data is used to determine efficient distribution schedules and to analyze retail trends to target customers for cross-selling. African Queen attracts new customers by sharing its market data and using its efficiency gains to offer better prices for its customers.
The company has also started offering credit to reliable retail customers through its new use of mobile payments. Not only do mobile payments make their transactions more secure, but they allow the company to use its digital transaction history to identify customers who are suitable for credit-line offers. By transferring its benefits from new technologies to its customers, African Queen is enabling East African businesses of all sizes to grow and thrive.
“[The USAID Hub] made recommendations on how the company could leverage ICT and automation in inbound and outbound logistics to increase efficiency and thereby improve overall profitability. Most of the recommendations made have been implemented and we have seen better margins through improved operational efficiency. We are also able to reach a broader set of customers in rural and underserved areas,” said the managing director of the investing company.
Since receiving the investment, African Queen has added over 20 employees and almost doubled its fleet of vehicles. The quality of life for rural employees has improved through the use of new electronic tools that capture orders remotely, eliminating the need for employees to commute to headquarters or depots on a daily basis.
African Queen represents one of the 38 transactions that the USAID Hub has helped close over the past four years. These deals have generated $143.2 million in new private sector investment and 1,522 new jobs, including employment for 1,131 women and youth. To read more about the Hub’s investment facilitation and its effects on access to finance, food security, stronger value chains and intra-regional trade, visit our photo story here.
New on Our Knowledge Center: Trade and Poverty Reduction - New Evidence of Impacts in Developing CountriesPublished on December 13, 2018
Trade and Poverty Reduction: New Evidence of Impacts in Developing Countries is a report by the World Trade Organization in collaboration with the World Bank Group. The report details the challenges and opportunities in maximizing the impact of trade openness for the poor. It shows the need to continue to focus on reducing high trade transaction costs faced by poor workers and consumers in developing countries, and it explains how the benefits of trade can vary between rural and urban families, and between women and men. The papers in this collection also demonstrate the value of different research methods to understand links between trade and poverty, while also highlighting areas for further research and for testing new analytical methods.December 11, 2018
The World Development Report 2019: The Changing Nature of Work studies how the nature of work is changing as a result of advances in technology today. Fears that robots will take away jobs from people have dominated the discussion over the future of work, but the World Development Report 2019 finds that on balance this appears to be unfounded.
Work is constantly reshaped by technological progress. Firms adopt new ways of production, markets expand, and societies evolve. Overall, technology brings opportunity, paving the way to create new jobs, increase productivity, and deliver effective public services. Firms can grow rapidly thanks to digital transformation, expanding their boundaries and reshaping traditional production patterns. The rise of the digital platform firm means that technological effects reach more people faster than ever before. Technology is changing the skills that employers seek. Workers need to be better at complex problem-solving, teamwork and adaptability. Digital technology is also changing how people work and the terms on which they work. Even in advanced economies, short-term work, often found through online platforms, is posing similar challenges to those faced by the world’s informal workers.
The report analyzes these changes and considers how governments can best respond. Investing in human capital must be a priority for governments in order for workers to build the skills in demand in the labor market. In addition, governments need to enhance social protection and extend it to all people in society, irrespective of the terms on which they work. To fund these investments in human capital and social protection, the report offers some suggestions as to how governments can mobilize additional revenues by increasing the tax base.December 11, 2018
Organizations working in East Africa can now choose from less expensive and more diverse packaging solutions to support their operations thanks to a new investment into Blowplast, a leader in the African packaging sector. The company’s plastics products serve businesses in the petrochemicals, lubricants, edible oils, cosmetics, pain, pharmaceuticals, juice and dairy industries, just to name a few. With the investment Blowplast received in 2017, the company has expanded its manufacturing centers, diversified into new export markets and created 170 jobs to better serve regional markets.
Blowplast is another example of the 38 transactions the USAID East Africa Trade and Investment Hub has supported over the last four years (read about Bio Foods here). The Hub provided due diligence support to Blowplast’s investor by conducting two analyses: one of the plastics packaging industry and one of the company’s market positioning. The Hub also developed a growth strategy to map out Blowplast’s expansion plans. This enhanced the investor’s understanding of Blowplast’s place in the market, enabling both sides to close the deal.
Blowplast used the Hub’s recommendations to build a larger regional presence. The company invested in new technology, machinery and process improvements to optimize its operations, increase profitability and effectively compete. These innovations allowed Blowplast to produce lighter, cheaper and more durable packaging solutions at lower operating costs. Customers, in turn, can now choose from less expensive and more diverse packaging products.
“We have completely turned around the business using technology and Kaizen [a continuous improvement approach]; now, our factories run on auto-pilot. This frees up management time to be more strategic in searching for new growth and expansion opportunities,” said Sanjay Brahmbhatt, Blowplast’s managing director.
The company also refocused it business operations to expand regionally. Blowplast used the private capital to open new production facilities in Uganda and Madagascar, which gave them an entry point into target markets across eastern, central and southern Africa. Their expansion contributes to regional economic development through job creation, direct investment, taxes and duties paid. Further, it fosters knowledge sharing and technology transfer within the countries’ plastics industries, building up the sector’s skills and expertise.
In the past four years, the USAID Hub has helped close $143.2 million of investment transactions, enabling firms to create 1,522 new jobs, including employment for 1,131 women and youth. In addition to new employment, these transactions support greater access to finance, food security, stronger value chains and intra-regional trade, contributing to the region’s economic development.