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Women-founded enterprise invests in new technologies and shares benefits with customers

Published on 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 Countries

Published on December 13, 2018

WTO___WB.JPGTrade 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.

New on Our Knowledge Center: World Development Report 2019

Published on 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.

Capital injection encourages cross-border trade in high-quality plastics

Published on 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.

New on Our Knowledge Center: East Africa Economic Outlook

Published on December 06, 2018

The East Africa Economic Outlook 2018 reviews economic performance in 2017 and forecasts the next two years by highlighting the region’s key drivers of growth, opportunities, and challenges. It covers major macroeconomic developments in the region’s 13 countries and discusses structural issues affecting future growth, poverty, and inequality. It also presents a synopsis of manufacturing activity in the region, drawing on a previous study of seven of the region’s countries. The outlook selects manufacturing as the sector to cover due to its potential to drive future growth and employment in the region.

Women cross-border traders highlight regional food commodities trade potential

Published on December 06, 2018

Women_B2B.jpgSmall-scale women traders signed commitments worth $1,565,212 for 5,269 metric tons (MT) of staple food commodities during USAID Hub-facilitated business-to-business (B2B) trade forums. The USAID Hub, in partnership with the Agribusiness Focused Partnership Organization (AGRIFOP), organized forums at the Rusumo, Nemba/Bugesera and Kagitumba/Mirama Hills borders to build trade ties and spur new business relationships among women traders from Tanzania, Uganda, Burundi and Rwanda. These deals demonstrate the traders’ potential contributions to regional food commodities trade when business connections are fostered.

“We are thankful for such an engaging platform and an opportunity to meet traders from Rwanda. We hope these linkages will last and enable us to find new markets for our food commodities,” said Ms. Caritas, Chairlady of the Women Cross-border Traders Association from Kirundo, Burundi.

Over the last few months, the Hub ran a training program with AGRIFOP that built 112 women’s knowledge of enterprise management, structured trade, East African Community (EAC) grain standards, cross-border trade regulations, access to market information and financing. The business linkages made during the B2B forums reinforced these lessons. The women interacted with financial institutions who provided more information on accessing financing for trade and will use their training to execute the deals made during the B2Bs.

 

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New on Our Knowledge Center: African Trade Statistics Yearbook

Published on December 06, 2018

This fall, the African Union Commission (AUC), in collaboration with Eurostat, published for the first time a Time Series of Annual Trade Data for the period from 2010 to 2016 in the African Trade Statistics Yearbook. AUSTAT, the Statistics Division at the AUC, compiled data provided by the national statistics offices of Member States or other institutions responsible for the production and dissemination of trade statistics in Africa and estimated the data when it was not possible to collect data directly from Member States. The compilation of trade aggregates for the whole of the AU is a first step towards harmonizing practices and methodologies for trade statistics across Member States. The harmonized and high-quality trade statistics will also play an important role for trade negotiations and constitute an essential source of information for balance of payments statistics, national accounts and economic studies.

Regional livestock traders make record trade commitments in Garissa

Published on December 05, 2018

44331489500_80709fa1dd_k.jpgLivestock traders made over $5 million in trade commitments last week in Garissa, Kenya – the largest total yet for a livestock trade facilitation forum organized by the USAID Hub in partnership with the International Livestock Research Institute (ILRI) and Partnership for Resilience and Economic Growth (PREG) members. The Garissa livestock market extends over 5.38 acres, making it one of the largest markets in East and Central Africa. Hundreds of livestock traders from Kenya, Ethiopia and Somalia stream into the market each morning with their cattle to trade over 5,000 animals daily. The animals flow to feeder markets like Bambala, Modogashe and Ijara and other terminal markets including Nairobi, Thika, Mombasa, Kirinyaga and Mwea.

“I have just bought sixty-six bulls from an Ethiopian seller and I plan to transport them back to my farm by the end of the day,” said an excited livestock trader from Kirinyaga County, Kenya.

More than eighty participants attended the Garissa Livestock Trade Facilitation Forum on November 29, whereby buyers and sellers made 88 trade deals worth $5,100,824 for 14,815 animals comprised of cattle (72 percent), shoats (27 percent) and camels (1 percent). This forum brings the total value of commitments facilitated by the USAID Hub livestock B2Bs to over $7 million. 

 

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Benchmarking across East Africa to boost Tanzania’s Agricultural Commodity Exchange

Published on November 30, 2018

The USAID Hub organized a study tour for a delegation of seven staff from the Tanzania Mercantile Exchange (TMX) to the Ethiopia Commodity Exchange (ECX) in Addis Ababa, Ethiopia. The study tour provided TMX staff with first-hand experience and training on best practices in managing an agricultural commodity exchange to build their capacity on exchange operations. By enhancing staff capacity, the newly formed TMX will be better positioned to introduce a more efficient trading system for staple foods in Tanzania.

ECX senior staff led training sessions over the five-day visit. They shared their experiences managing $1.5 billion in annual trades and discussed specific challenges raised by TMX staff members. Specifically, they addressed trading rules and agreements formulation; exchange structure and technology; commodity contracts approval process; commodity exchange trading and surveillance; commodity exchange clearing and settlement arrangement, including strategies to mitigate default risk.

“The visit enabled the management and staff of the TMX to acquaint themselves with successful experiences and challenges in operationalizing the commodity exchange. The team garnered experiences and was exposed to challenges of running and operationalizing the commodities market,” said Godfrey Malekano, Chief Executive Officer, TMX.

TMX was incorporated on August 25, 2014, under the Companies Act, 2002, and licensed in accordance with the Commodity Exchange Act, 2015, and Commodity Exchange Regulations, 2016. Since then, TMX has completed all the necessary preparations to enable agricultural commodity trading by open public outcry. TMX listed seven commodity contracts, registered six members and empanelled six settlement banks. The exchange also acquired all needed technology. The study tour to ECX complemented these preparations by focusing on the skilled human capital that is also required to manage the exchange’s complex operations.

The study tour contributed to the USAID Hub’s efforts to promote structured trade in staples food to enhance food security in the EAC region. TMX has the potential to modernize the trading of staples foods in Tanzania by offering a platform for competitively matching a broad range of buyers and sellers in agricultural markets. A more professional structured trade in staples food in Tanzania will improve the region's food security outlook and reduce dependence on food aid, and thereby contribute to Feed the Future objectives.

New on Our Knowledge Center: Reinvigorating Trade and Inclusive Growth

Published on November 29, 2018

trade_imf.JPGReinvigorating Trade and Inclusive Growth is a publication by the International Monetary Fund, the World Bank and the World Trade Organization.

The publication reinforces the importance of trade in the global economy and emphasizes that trade policies should aim to build greater, more durable openness and encourage countries to reinvest in open, rules-based global trade. Today’s global trade system has fostered unprecedented economic growth, boosted shared prosperity, and lowered poverty. This system currently faces challenges. Reinvigorating trade integration should be a key component of the global policy agenda to boost economic growth.

The publication offers insights into how trade benefits the poor, people in rural areas, micro, small, and medium-sized enterprises, and women. It also highlights that greater openness in key areas such as services trade and e-commerce can promote competition, lift productivity, and raise living standards.