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Direct flights to facilitate increased AGOA exports to the U.S.

Published on October 18, 2018

On October 16, the USAID Hub sponsored the U.S-Africa Trade Promotion Event organized by the Export Promotion Council  in Nairobi to mark the launch of direct flights between Nairobi and New York and raise awareness of business opportunities in the U.S. for Kenyan exporters that will result from improvements in trade logistics.

“We are committed to grow our investments and trade between Kenya and the USA. The Kenya Airways direct flight is one such example. Kenyan businesses need to innovate and dare to be great,” said U.S Ambassador to Kenya Robert Godec.

The direct flights will enable greater exchanges between Kenya and U.S. by removing two barriers that have hindered Kenya’s competitiveness in the U.S. market: high cargo freight costs and extended delivery times. This will facilitate trade and investment and bring people, businesses and governments closer together for deeper relations and shared benefits.

In 2017, Kenya and the U.S. traded over $1 billion in goods, making Kenya the largest U.S. trading partner in East Africa. The top U.S. imports were woven apparel and knit apparel, both of which gained significant competitive advantages through the African Growth and Opportunity Act (AGOA). In fact, over 70 percent of Kenyan exports to the U.S. entered under AGOA. The direct flights are expected to create opportunities for several sectors, including those highlighted in Kenya’s National AGOA Strategy and Action Plan, 2018-2023, which aims to double the value of Kenyan exports to the U.S. by 2023.

“We need to realize that we have a huge market opportunity in the USA. Let’s work to meet the requirements of this market. Knowledge and compliance are paramount,” said Export Promotion Council Chairman, Jas Bedi.

The USAID Hub supports Kenyan firms to access the U.S. market, especially though AGOA. The Hub provides firm-level technical assistance to help firms meet U.S. market requirements, such as Worldwide Responsible Accredited Production (WRAP) and Hazard Analysis Critical Control Point (HACCP) certification, and facilitates linkages with U.S. businesses through trade shows and buyer missions. The Hub also produced an AGOA 101 Guide that provides a step-by-step process on how to leverage AGOA’s duty-free access to the U.S.

“The U.S. market and AGOA provide good opportunities to attract investors to strengthen market linkages, transfer technology and provide capital and know-how to Kenya,” said Kenya Private Sector Alliance Chief Executive Officer Carole Kariuki.

New on our Knowledge Center: Livestock Trade Facilitation Brief

Published on October 18, 2018

Livestock_brief.JPGUSAID Hub Livestock Trade Facilitation Brief outlines how the Hub is partnering with the International Livestock Research Institute (ILRI) and collaborating with Partnership for Resilience and Economic Growth (PREG) partners to hold livestock trade facilitation (business-to-business) forums in five Kenyan counties to promote more efficient trade between livestock buyers and sellers. The forums provide an accessible platform for producers and traders who source livestock from various counties and regional countries, such as Ethiopia, Somalia and Uganda, to exchange market information and make business connections that will facilitate trade.

Grain trade facilitation forum links women cross-border traders at Rusumo Border to buyers

Published on October 18, 2018

IMG_8379.JPGSmall-scale women cross-border traders at the Rusumo border of Rwanda and Tanzania were excited to participate in a grain trade facilitation forum on October 10. By close of business, participating grain buyers and sellers signed agreements for a total of 662 metric tons (MT) at a value of $411,484. The USAID Hub, in partnership with the Agribusiness Focused Partnership Organization (AGRIFOP), organized the grain trading platform as a means to efficiently draw traders together from the two border regions and make market linkages.  The B2Bs are designed to increase familiarization and spur new business relationships between women traders at the border which will in turn increase grain trade. This was the first in a series of business-to-business (B2B) activities with other facilitation forums scheduled for the Nemba border between Rwanda and Burundi and Kagitumba/Mirama border between Rwanda and Uganda.

“I am so happy to attend such a forum for the first time. I have finally met the millers who buy grain in this area face to face!” said Christina Radisausi, a cross-border grain trader in Rusumo, Tanzania.

In the last few months, the Hub concluded a two-month training program with partner AGRIFOP that aimed at building the capacity of rural cross-border traders, with an emphasis on female traders. A total of 112 women participated in the program, which strengthened their skills in enterprise management, structured trade, East African Community (EAC) grain standards, cross-border trade regulations, market information and access to finance. Improving traders' capacities and helping them embrace formal trade mechanisms reduces the transaction costs of staple foods trade in the region and supports more effective agricultural markets. The Hub’s support to cross-border trade efficiency contributes to economic growth and the attainment of the U.S. government's Global Hunger and Food Security Initiative, Feed the Future, objectives.

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EAC takes step forward in harmonizing grain standards

Published on October 18, 2018

In September and October, the Hub partnered with the Eastern African Grain Council (EAGC) to host regional meetings in Entebbe and Zanzibar to discuss harmonizing East African Standards (EASC/TC/014) for cereals and pulses. These meetings facilitated the review and revision of existing East African Community (EAC) standards for sorghum grains, finger millet, green grams, composite flour and soy flour by the EAC Secretariat and members of national technical committees. The meetings are the first activities under a Hub grant to EAGC which is also set to support the development of an EAC Guideline for sampling and testing aflatoxin levels. The adoption of the revised standards and guidelines are expected to reduce trade failures and ease the movement of grains from surplus to deficit regions in the EAC.

In 2016, the Hub partnered with the EAGC and the EAC Secretariat on the revision of the nine staple grain standards (wheat flour, maize flour, milled maize, dry beans, wheat grains, millet flour, sorghum flour, milled rice and dry soybean). This process was completed in December 2017 with the gazettement of the nine revised standards under EAC Legal Notice Number EAC/149/2017. Two sampling and testing standards and guidelines were also developed as part of the previous grant. 

Despite attempts to improve the enabling environment for cross-border trade, challenges persist, making continued efforts to improve grain standards and food safety testing protocols necessary. One area ripe for improvement is the sampling and testing process for aflatoxin levels in staple grains. Inefficient aflatoxin testing delays border crossing times and leads to double testing and lack of transparency in the quality of produce being traded in the region. Harmonizing aflatoxin sampling and testing processes in the EAC will enable regulation of the levels of Aflatoxin in grain.

Harmonization of these East African Standards will increase the flow of quality grain commodities from surplus to deficit areas, eliminate unnecessary barriers to trade in the region and promote confidence among regional trading partners of the quality standards in staple foods.

 

New on our Knowledge Center: USAID Hub AGOA video roundup

Published on October 11, 2018

The USAID Hub creates videos to showcase East African firm capabilities and development outcomes, with a focus on African Growth and Opportunity Act (AGOA) sourcing opportunities. For a roundup of our apparel and coffee sourcing videos, click here.

Save the Date: 18th Annual Organization of Women in International Trade (OWIT) Conference

Published on October 11, 2018

From October 24 – 25, representatives from over 20 worldwide chapters of OWIT (Organization of Women in International Trade) will converge in Nairobi, Kenya for the 18th Annual OWIT Conference. The theme of the conference is “Bridging the Gap – Empowering Businesses to go Global”. The conference targets key influencers and actors who are instrumental in expanding the space for women enterprises in global markets and increasing the capacity of women entrepreneurs to participate in international trade. The USAID Hub will deliver presentations on how to access finance and how to go global with a focus on the African Growth and Opportunity Act (AGOA) opportunities.

One of the key constraints/challenges identified in the Kenya AGOA Strategy was the lack of AGOA awareness by companies, leading to under-utilization of AGOA benefits by both sellers and potential buyers. This event will provide the Hub with the opportunity to raise awareness of AGOA opportunities.

OWIT membership has identified some of the core constraints that make it difficult for women entrepreneurs to access new opportunities and markets through trade. The conference is structured to address four main challenges that hinder the up-scaling of women-owned enterprises in the global trading arena:

  1. Lack of access to credit
  2. Lack of access to trade-related information
  3. Limited capacity in terms of knowledge and skills
  4. Limited participation (and representation) in trade policy-related positions

The conference will provide suggestions and insights to address these challenges. Find out more here.

USAID Hub supports East African apparel firms to become more competitive through social compliance

Published on October 11, 2018

U.S. textile and apparel buyers want to source from ethical, socially compliant companies. One way to demonstrate social compliance is by obtaining a Worldwide Responsible Accredited Production (WRAP) certification. The USAID Hub is helping East African companies become more competitive for export by obtaining the WRAP certification.

“WRAP certification encompasses almost all the SDGS that the manufacturing sector in Kenya is aiming implement through Global Compact. Hence this accreditation is integral to promote sustainable manufacturing in a globalized society. Wrap will increasingly benefit Kenya manufacturing not only through accreditation to access world market through compliance, but also create a B2B platform for the compliant manufacturers and customers,” said Simon Wanjohi, Head of Policy Research and Advocacy, Kenya Association of Manufacturers.

The Hub’s Trade Promotion and AGOA team conducted three sensitization seminars from October 8-11 for East African apparel firms from Nairobi, Kenya, Addis Ababa, Ethiopia, and Antananarivo, Madagascar. The workshops provided participants with the benefits, procedures and cost for obtaining WRAP certification. From November 2018 to March 2019, the Hub will provide direct support in the audit and WRAP certification process.

“This is a great initiative and an eye opener to the fact that it is possible to request and complete various certifications as a new factory. This has provided me with the opportunity to grow as Shona tapping into export potential professionally through getting certified and developing proper systems, policies and procedures at an early stage” said Isaac Maluki, Director, Shona EPZ limited
WRAP is a U.S.-based non-profit organization whose certification is generally accepted as a minimum standard for social compliance. WRAP certification is obtained through a process of (i)application to WRAP and payment of a registration fee, (ii) training of internal audit staff lead by a trained internal lead auditor, (iii)implementation of the required procedures and checks, (iv) conducting internal audits and finally (v) within six months of initial application, seeking a WRAP audit for certification. The audit is conducted by 3rd party audit firms accredited by WRAP, such as Intertek, VJN, and SGS.

 

PHOTO STORY: Attracting Investment to East Africa

Published on October 10, 2018

Across East Africa, socially and environmentally impactful companies have gained access to capital through USAID support. That capital has been transformative in helping them to innovate, grow and ultimately sell their products locally, regionally and internationally.

View our photo story to learn more.

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Hub-assisted firms top East African tech startups list

Published on October 03, 2018

Two firms that received the USAID Hub’s investment advisory support made I-DEV Insights’ list of the Top 10 Tech Startups to Watch in East Africa. Twiga Foods and Lori Systems are two of the almost 100 firms that have benefited from Hub support, which has led to $136.9 million in closed deals and $211.8 million in potential investments across East Africa.

Twiga Foods offers a mobile-based platform that retail vendors use to order fresh produce to sell in urban areas. The company works with thousands of farmers to source and deliver the produce. After successfully piloting its system, Twiga wanted to scale its business. The Hub supported the company to attract capital by developing a strategic plan based on Twiga’s financial model. Having a solid business strategy increased investors’ confidence in the company, which led Twiga to secure funding. The new capital enabled Twiga to add collection centers and routes, expand and modernize its fleet, upgrade its storage and warehousing facilities and develop tools to monitor and analyze data, trends and customer behavior.

Lori Systems developed a logistics coordination platform for cargo owners. It built a marketplace for haulage, introducing transparency and flexibility into the region’s cargo-transport value chain. The Hub assisted in creating a venture capitalist-focused investor pitch deck that outlined the company’s market potential and intended use of capital. The Hub also conducted a market validation analysis for the company and reviewed the regional cargo logistics industry to inform the firm’s expansion plans.

The Hub’s investment facilitation service offers tailored assistance to firms across East Africa to support their capital raise. By strengthening the companies’ investment readiness and linking them to investors, the Hub is supporting firms like Twiga Foods and Lori Systems to innovate, grow and expand their markets.

New on our Knowledge Center: The Potential of Manufacturing and Industrialization in Africa by 2030

Published on October 03, 2018

Manufacturing_KM_Piece.JPGThe potential of manufacturing and industrialization in Africa by 2030 is a report by the Brookings Institute. It discusses the evolution and prospects of manufacturing and industrialization in Africa and ultimately offers business leaders an overview of Africa’s biggest opportunities in the manufacturing sector, discussing trends, drivers, perspectives, and strategies for effective investment by 2030. The report also provides policymakers with some options likely to attract private investors, accelerate manufacturing and industrial development, and contribute to growth and poverty alleviation, facilitating the fulfillment of the Sustainable Development Goals and the African Union’s Agenda 2063.