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#AGOAForum2018 why it matters #LULEA

Published on June 20, 2018

The AGOA Forum is coming up in Washington, D.C. on July 11. Until then, look to our blog for stories of how different East African companies are utilizing the African Growth and Opportunity Act (AGOA) to reach the U.S. market and expand their businesses.

Read the LULEA success story here.

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USAID Hub releases study on effects of rules of origin on EAC trade

Published on June 20, 2018

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Rules of Origin (RoO) affect market access opportunities and can act as a Non-Tariff Barrier (NTB) in terms of the rules defining specific processing requirements. They also influence the ability of firms to fully exploit available preferences under the EAC Common Market Protocol and the EAC Customs Union Protocol as they impact on the cost of producing goods and in turn affect firm competitiveness and trade opportunities.

The Hub recently concluded a motor vehicle assembly case study to illustrate the costs to business when Rules of Origin are not properly implemented. You can read here. It shows that despite the revised RoO requiring that locally assembled motor vehicles be given preferential treatment in other Partner States, this has not been a reality.

The study recommends effective implementation and enforcement of RoO to improve the market opportunities through reduction in operational costs and to enable market players to optimize their assembly capacity and create jobs. It also suggests intervention by EAC Organs including sensitization on the crucial role the RoO have in the realization of a common market and the EAC Industrialization Policy. Read more about the study here.

The USAID Hub promotes a more predictable, transparent and enabling business environment in East Africa, conducive to trade competitiveness and accelerated investment.

From June 2016 to May 2017 the USAID Hub partnered with the Federation of East African Freight Forwarders Associations (FEAFFA) to build the capacity of shippers and Customs Clearing and Forwarding Agents (CFAs) on how to effectively use the revised East African Community (EAC) RoO which went into effect in November 2015.  The EAC Partner States revised the RoO to simplify them for the business community, to harmonize them with other preferential trade regimes and to provide clarity on the implementation of criteria such as change in tariff heading. The FEAFFA and USAID Hub partnership helped CFAs and shippers, through greater understanding of the revised RoO, harness the opportunities that a preferential trade regime provides.

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Save the Date: International Floriculture Expo

Published on June 20, 2018

On June 25 – 27, the Hub is supporting four members of the Kenya Flower Council and four members of the Ethiopian Horticulture Producer Exporters Association to exhibit at the International Floriculture Expo (IFE) in Chicago, U.S.A. The Expo will provide the Ethiopian and Kenya companies an opportunity to showcase their flowers to U.S buyers and develop trade linkages for potential exports. Both countries now have direct flights to the U.S. and are keen to expand the market for their flowers.

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The cut flowers industry is an important sector for several countries in East Africa. In Kenya, cut flowers comprise the largest volume of agricultural exports and contribute to 33% of the sector’s gross domestic product (GDP). In Ethiopia, floriculture has contributed to 80% of the foreign revenue earned in horticulture. The countries have made significant inroads into the European market, with Kenya as its top exporter of roses, but both are now eyeing expansion into the U.S. By participating in the IFE, Kenyan and Ethiopian producers can make connections with U.S. buyers to advance this aim.

New on our Knowledge Center: Impact of Non-implementation of Revised EAC rules of origin 2015- The Case of Motor Vehicle Assemblers in Kenya

Published on June 20, 2018

Motor_Vehicle_Case_Study.JPGImpact of Non-Implementation of Revised EAC Rules of Origin 2015: The Case of Motor Vehicle Assemblers in Kenya is a study by the USAID East Africa Trade and Investment Hub. This study reviews the impact that non-implementation of the East African Community (EAC) Revised Rules of Origin (RoO) 2015 by other EAC Partner States has had on the Kenyan Motor Vehicle Assembly Sector. Rules of origin are the criteria needed to determine the national source of a product. Their importance is derived from the fact that duties and restrictions in several cases depend upon the source of imports.

New on our Knowledge Center: Supporting Small-Scale Cross-Border Traders across Africa

Published on June 14, 2018

Bridges_Africa_June_2018.JPGSupporting Small-Scale Cross-Border Traders across Africa is the theme topic in this month’s Bridges Africa issue, published by the International Centre for Trade and Sustainable Development (ICTSD).

This issue focuses on small-scale cross-border trade and its tremendous potential despite challenges posed by its informal nature. It emphasizes that ongoing trade facilitation interventions need to cater for the needs of small-scale traders, especially women. Governments and development partners are currently making concerted efforts to facilitate trade, increase productivity in export-oriented sectors, and improve competitiveness. However, these need to be better targeted to ensure that small-scale cross-border traders are reached by these interventions and that it is not just large traders who benefit.

USAID Hub supports access to working capital for SMEs at Ignite My SME seminar

Published on June 14, 2018

The USAID Hub participated in the latest Ignite My SME seminar organized by FACTS Africa in Dar es Salaam, Tanzania. The seminar is the last of ten seminars to train small and medium-sized enterprise (SME) owners on how to access working capital for their businesses, with a focus on agribusinesses. Over 100 delegates attended, including agriculture and agribusiness SME owners, representatives from USAID Tanzania’s ENGINE project, representatives from the USAID Tanzania mission, and eight Hub-sponsored women who trade along the border of Rusumo, Tanzania. 

FACTS Africa specializes in the provision of working capital for agribusiness SMEs in Kenya and Uganda, and is planning to expand its services to Tanzania. Despite having a simpler application process and more lenient terms than banks, Facts Africa noticed low success rates of loan applications with 90% of them being turned away due to falling short of requirements. As a result, they developed day-long seminars to provide a platform for SMEs to gain knowledge on how to access finances as well as interact with stakeholders from financial institutions and development partners running various financial access and Business Development Support projects.

Previously, the Hub supported eight women cross-border traders from Kenya to attend the Nairobi league of the seminar in November 2017 and ten Ugandan traders who participated in the Kampala seminar held in March 2018. The women received useful information on working capital solutions, financial management, operations, and essentials of credit worthiness and the use of technology to scale their business.

The eight Tanzanian women cross-border traders are also engaged with the USAID Hub through a grant with the Agribusiness Focused Partnership Organization (AGRIFOP), which aims to drive formal trade in the East African Community (EAC) through the empowerment of women cross-border traders in the staple foods and horticulture sectors.

Save the Date: Source Africa

Published on June 14, 2018

On June 20 – 21, the Hub is supporting three textile and apparel companies from Tanzania, Mauritius and Madagascar to exhibit at Source Africa in Cape Town, South Africa. The event brings together suppliers, manufacturers, service providers and buyers all under one roof to promote African made apparel, textiles and footwear. Participating companies, including the three Hub-sponsored firms, will have the opportunity to make connections with attendees from around the world and explore potential sourcing deals. Through these interactions and their resulting business, Source Africa aims to boost investment into the region and ensure sustainable job creation. The event also contributes to the Hub’s efforts to promote two-way trade with the U.S under the African Growth and Opportunity Act (AGOA) and regional markets.

USAID and Ugandan government launch roadmap for science, technology and innovation

Published on June 12, 2018

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This past week, science, technology and innovation took center stage as catalysts for economic growth in Uganda. On June 8, the Government of Uganda, USAID and the Hub kicked off the process to design Uganda’s first Sector Development Plan (SDP), which will serve as the backbone of the recently established Ministry of Science, Technology and Innovation (MOSTI). The SDP will ensure that plans, policies and programs in the sector align with Uganda’s national development frameworks of Vision 2040 and National Development Plan (NDP II) and contribute to MOSTI’s mission to enable greater industrialization, competitiveness and employment.

The Hub will support the SDP’s development in close collaboration with the Government of Uganda. Hon. Dr. Elioda Tumwesigye, Minister of Science, Technology and Innovation; David Obong, Permanent Secretary; and Emmanuel Freddy Mugunga, Undersecretary, provided remarks during the launch and engaged with participants to review and validate the objectives, methodology and milestones that will guide the SDP’s development.

Laura Gonzalez, USAID/Uganda’s Acting Deputy Mission Director, stated, “Like Uganda, the U.S. government places great value on the role that science and technology play in spurring economic development. Looking at our own history in America, investment in research and development has been critical to the expansion of our own country’s economy.”

Through the new SDP, MOSTI will provide policy direction, set national standards and coordinate all matters related to scientific research, technology and innovation activities, paving the way for transformative bold new ideas in Uganda.

Video: Tanzania Gender Lens Investment Showcase at a Glance

Published on June 11, 2018

Three budding women entrepreneurs won funding to advance their businesses through the Gender Lens Investment Showcase held by New Faces New Voices in collaboration with the USAID Hub in Dar es Salaam, Tanzania.

Salome, who emerged top, hopes to scale up her butchery production and increase her market share from the current 32 percent to 55 percent. Installing new modern machinery, increasing hiring additional staff and purchasing two refrigerated distribution vans are among the plans that she has to scale up.

USAID Hub has identified access to finance as a major constraint for micro, small, medium and even large female-owned and/or -led businesses in its three years of operation. This can be attributed to the investment community’s low level of awareness of high-potential, scalable and profitable female-owned and/or -led business that are ready for investment. Additionally, a number of promising female entrepreneurs and/or business leaders lack the opportunity to engage with the investor community, especially those focused on investing in female-owned and/or -led businesses.

Gender lens investing is the practice of funding women-owned businesses that have a proven track record of employing women and/or help to improve the lives of women and girls with their services and products. The Gender Lens Showcase contributed significantly to the USAID Hub’s work in promoting investments for female-owned and/or -led businesses in Tanzania.

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New on our Knowledge Center: Ethiopia Economic Update

Published on June 07, 2018

Ethiopia_Economic_Update.JPGThe Ethiopia Economic Update is a publication by the World Bank. It discusses Ethiopia’s growth strategy, emphasizing the sustainability of the country’s investment-focused and export-led growth model.

The publication also looks at the interlinkages between manufacturing and services, with a special focus on the role of distribution services in promoting Ethiopia’s export competitiveness and eventually its structural transformation.