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Grain traders strike $196.5M in deals at the largest Hub-facilitated B2B forum to date

Published on June 24, 2019

Regional traders made 113 trade commitments for 454,532 metric tons (MT) of commodities valued at $196,478,900 at the fifth – and largest – B2B forum hosted by the USAID Hub in partnership with the USAID Southern Africa Trade and Investment Hub and Eastern Africa Grain Council (EAGC). Of these deals, 105,394 MT valued at $96,789,300 were staple foods (maize, mixed beans, rice, sorghum and green grams). Other traded commodities included pigeon peas, sesame seeds and sunflower seeds. To date, Hub-sponsored B2B forums have facilitated regional trade commitments for over 1.86 million MT of grains and pulses.

The forum took place on June 19 in Dar es Salaam, Tanzania, where there is a surplus of grain. It brought together 127 participants from nine countries across Eastern and Southern Africa, providing a platform to move staple foods to deficit areas for food insecurity alleviation. Andy Karas, the Mission Director from USAID/Tanzania participated in the forum, as did Godfrey Malekano from Tanzania Merchantile Exchange and Prof. Damian Gabagambi from the National Development Corporation. Other participating organizations included TradeMark East Africa, the Clinton Foundation and Aga Khan Foundation. Financial institutions such as First National Bank, National Microfinance bank, Commercial Bank of Africa (CBA) and Maendeleo Bank were also represented.

Food insecurity remains a significant challenge in Eastern and Southern Africa. Millions of people require emergency food assistance and many more are food insecure. Measures to stop trade exasperate the effects of climate change and political instability on people’s ability to secure sufficient food. Despite these challenges, the two regions have the potential to feed themselves and achieve food security within a generation.

The B2Bs seek to increase the access, availability and utilization of staple foods across the regions by bringing together actors who don’t traditionally do business with one another. This creates an opportunity to address impediments to trade and improve the flow of staple foods from areas with excess production to those in need. Ultimately, this provides a sustainable, private sector-led alternative to emergency food assistance and advances countries’ journeys to self-reliance.

To learn more about the Hub’s B2Bs, read our compendium here.

New on Our Knowledge Center: Driving Investment in East Africa

Published on June 20, 2019

USAID trade and investment programs, like the USAID East Africa Trade and Investment Hub, mobilize new investors and private capital to under-served sectors and geographies, and they support investment closure. For instance, the USAID Hub provides investment facilitation services – due diligence, market intelligence, and regulatory know-how – that can speed up a transaction and prevent investor frustration. The investment closures then serve as positive examples for other investors who may need a nudge to enter the East Africa market. The Hub then steps aside and lets the private sector take over. USAID's support helps U.S. and international companies broaden their markets and it helps East African companies access the capital they need for sustained, economically impactful growth -- driving job creation and enhancing access to and quality of services for local communities.

Driving Investment in East Africa looks at four case studies that illustrate what these funds can achieve.

Read or watch to learn more.

Kenya prepares for export growth under AGOA

Published on June 17, 2019

The USAID Hub provided technical support at a training on AGOA organized by Kenya’s Ministry of Industry, Trade and Cooperatives, which raised early career trade officers’ understanding of the trade preference program. One of the 54 participants remarked, "The most valuable things I learned from the workshop were what AGOA really is and how I can build the capacity of others in my office and in the counties."

Mr. Peter Njoroge, Director, External Trade in the State Department for Trade officially opened the workshop on June 13 on behalf of the Principal Secretary, Dr. Chris Kiptoo. He set the stage for the next two days by highlighting the importance of the U.S. as a trade partner for Kenya and the need to make full use of AGOA benefits.

The training’s 14 modules covered areas that would build participants’ capacity to help the country fully leverage its duty-free access to the U.S. market for almost 7,000 tariff lines. Topics included an overview of AGOA, an assessment of the U.S. market, Kenya’s National AGOA Strategy, the delivery of trade promotion technical support services, the export processing zones scheme, U.S. sanitary and phytosanitary requirements, the Food Safety Modernization Act and customs and logistics processes for exporters to the U.S. under AGOA. These sessions were complemented by lessons shared by successful AGOA exporters, NewWide Garments EPZ and Jungle Macs EPZ Ltd., and a discussion on likely scenarios following the end of AGOA in 2025.

The USAID Hub’s Director of Trade Promotion and AGOA and Market Linkages Specialist led workshop sessions and shared USAID Hub resources, including the Kenya AGOA 101 primer and U.S. end market reports for select sectors. The USAID Hub’s Deputy Chief of Party encouraged participants to use and share the materials to effectively implement the Kenyan National AGOA Strategy, 2018-2023, supporting Kenya to meet its goal to double exports to the U.S. by 2023.

To learn more about AGOA and Kenya’s strategies to maximize exports, please see materials on the USAID Hub’s website, including the Kenya National AGOA Strategy, 2018-2023, the Kenya AGOA 101 and the end market reports for coffee, tea, textiles and apparel, home décor and fashion accessories, and cut flowers.

New on our Knowledge Center: World Investment Report 2019

Published on June 17, 2019

The World Investment Report supports policymakers by monitoring global and regional foreign direct investment (FDI) trends and documenting national and international investment policy developments. The report finds that after a significant contraction for two years, FDI flows to sub-Saharan Africa increased by 13 percent to $32 billion in 2018. This increase can largely be attributed to an uptick in resource-seeking FDI and to recovering inflows to South Africa, the second largest economy in the continent. This more than outweighed the substantial decline in inward FDI registered in a number of countries in the subregion, which was due in part to political uncertainty and unfavourable economic fundamentals. FDI flows to East Africa were largely unchanged at $9 billion in 2018. Inflows to Ethiopia contracted by 18 percent to $3.3 billion. Yet the country continued to be the biggest FDI recipient in East Africa, with investments in petroleum refining, mineral extraction, real estate, manufacturing and renewable energy. FDI to the country was diversified in terms of both sectors and countries of origin. Prospects remain positive due to economic liberalization, investment facilitation measures and the presence of investment-ready special economic zones.

Uganda to increase participation in international standards making with ISOlution system

Published on June 13, 2019

On June 13, the Uganda National Bureau of Standards (UNBS) formally adopted the ISOlution system and accompanying videoconference facility which were installed through a grant from the USAID Hub. ISOlution is a web-based global system used by International Standards Organization (ISO) members to develop standards that facilitate international trade. With access to the system and a videoconference facility, Uganda will be able to comment remotely on international standards that are up for revision or creation, saving the country money from travel expenses and increasing the ease and efficiency of its participation.

Eng. Dr. Ben Manyindo, Executive Director of UNBS, and Marc Shiman, Chief of Party of the USAID Hub, signed the paperwork to hand over the system and videoconference facility. “It adds a lot of value when it comes to the operations of this organization,” said Eng. Dr. Manyindo. “We can do even more with this facility than just sending one or two people from the region. Now we can get the private sector also on board and participate in some of the critical areas of standards harmonization.”

Since February 2015, with the signing of the U.S.-EAC Cooperation Agreement, the USAID Hub has worked hand-in-hand with EAC Partner States to build their capacity to meet international commitments on technical barriers to trade (TBTs) and sanitary and phytosanitary measures (SPS) in an effort to promote safe and transparent regional and international trade. The USAID Hub’s partnership with UNBS, in particular, has been successful. Following a USAID Hub training in 2017 where UNBS staff learned how to use ISOlutions, UNBS made a commitment to implement ISOlutions in the country. The handover ceremony marked the achievement of this commitment.

In addition, Uganda’s adoption of ISOlution opens the possibility of introducing a regional ISOlution platform. Uganda is the second EAC Partner State to use the system, following Kenya, and Rwanda is set to follow. With three countries using the system, the EAC can explore the benefits of establishing a regional platform that will encourage other Partner States to participate in international standards development and allow the submission of regional positions.

Speaking on behalf of USAID/Uganda, Patricia Habu, Trade Specialist, said, “We are proud to have supported UNBS to reduce technical barriers to trade and facilitate safe and transparent international trade. We look forward to seeing the benefits from ISOlution translate into greater trade for Ugandan businesses and, if other countries follow your example, greater trade for the entire EAC region.”

New on Our Knowledge Center: Trade Integration and Growth - Evidence from Sub-Saharan Africa

Published on June 11, 2019

Trade Integration and Growth: Evidence from Sub-Saharan Africa, a World Bank paper, examines the growth effects of different dimensions of international trade integration—notably, volume, diversification, and natural resource dependence—in Sub-Saharan Africa. First, the paper documents the recent trends in these foreign trade dimensions for the region and the traditional sources of growth. Second, it empirically estimates the impact of trade integration on growth per worker and the sources of growth; that is, growth of capital per worker and total factor productivity growth. To accomplish this task, the analysis uses a sample of non-overlapping five-year period observations for 173 countries from 1975 to 2014. The econometric evidence shows that increased trade openness, greater export production diversification, and reduced export dependence from natural resources will have a positive causal impact on economic growth. These effects will be mainly transmitted through faster capital accumulation or enhanced total factor productivity growth. Finally, the paper finds that, despite the progress exhibited in trade openness and diversification over the past decade, there are still potential benefits that can be accrued if countries were to deepen their integration to world trade.

Enhancing youth’s skills for employment

Published on June 06, 2019

By the end of May 2019, the USAID Hub’s grant to Generation Kenya prepared 1,724 young Kenyans to gain employment as sewing machine operators (SMOs). Of this total, 1,372 already have jobs at apparel factories, using their newfound skills to earn wages and boost growth in Kenya’s apparel manufacturing industry, a critical economic sector. The program has empowered young women in particular, who represent 75 percent of graduates and 73 percent of hired graduates.

Kenya’s apparel manufacturing industry employs over 40,000 workers. Yet, there remains a shortage of 10,000 to 15,000 skilled workers, 60 percent of whom are SMOs. While vocational training programs exist to help fill this gap, they have been ad hoc and have not fully met employers’ needs. In response, some companies have established in-house training units. Their trainees, however, are often unsuited to garment operations, leading companies to feel they are wasting resources and effort. As a result, Kenya’s apparel sector continues to lack a skilled workforce that can maximize the industry’s potential to drive economic growth and trade.

To address this gap, Generation Kenya, with support from the USAID Hub, developed a SMO training program. The program is designed to address both soft skills, such as positive and reinforcing mindsets, behavioral skills and technical sewing skills. The program is also selective. Generation Kenya screens applications and chooses trainees to reduce the number of trained graduates who fail to meet industry expectations. Across seven training centers, the selected students receive eight weeks of training. The trainings mimic real life experience so that trainees develop the technical and soft skills needed to perform in the workplace. Following their completion of the program, graduates are assigned to available jobs in willing and committed companies.

Watch here to see what trainees have to say about the program.

The pilot training program’s success has generated additional support, allowing the program to scale up in Kenya. The Swedish International Development Agency’s $4.5 million grant for five years and IKEA Foundation’s $2.38 million grant for three years will enable the program to reach 32,500 youth distributed across at least 50 percent of Kenya’s counties and to improve program quality to achieve a goal of 90 percent placement.

By building a stronger workforce, Kenya will have more efficient and productive factories that can meet buyers’ needs and compete in the U.S. market. At the same time, Kenyans – particularly women and youth – will now have the skills needed to gain employment that will boost their incomes, livelihoods and self-sufficiency.

New on Our Knowledge Center: A Single Digital Market for East Africa

Published on June 03, 2019

This World Bank report outlines the impetus for creating a single digital market (SDM) in East Africa, which would drive deeper integration and spur increased dynamism of the digital economies of six East African countries: Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda. It argues that East African countries simply do not have the size and resources to meet all these needs on their own nor the luxury of time to address these challenges gradually without falling further behind. The East Africa SDM initiative is designed to help the region’s citizens, businesses, and governments rise to the challenge and seize opportunities at hand. It aims to bring together the region’s digital leaders and stakeholders to rally around a common vision for the region’s digital aspirations and a coordinated blueprint that can turn this vision into reality. By working together, East African countries and their development partners can maximize the impact of their investments and reforms to enhance their economic competitiveness and achieve digital transformation far greater than the sum of its parts.

The Hub Facilitates Trade through SPS Technical Training Programs in Tanzania

Published on May 23, 2019

The Hub has been supporting technical capacity building programs for consistent implementation of science-based sanitary and phytosanitary (SPS) measures in the East African Community (EAC) to facilitate intra-regional trade among partner states as well as international trade. As part of the continued work in facilitating increased trade in the EAC, the Hub is conducting three technical training programs in risk analysis for regulators in Plant Health, Animal Health, and Food Safety on May 21 – 23 in Dar es Salaam, Tanzania.

Participants have appreciated risk assessment in plant health, animal health and food safety and the statuses in the country. They have agreed to be champions of change towards the building of risk assessment capacity, including personal commitments to take specific actions. Some of the participants’ remarks on the benefits of the training programs in risk analysis are as follows:

“The training workshops are very useful.  Training topics are very relevant to our daily duties and the content is well presented. Delivery of the course content in plant health risk analysis is superb. The participants have opportunities to ask questions for clarification. The trainer also gives good responses and provides further information where it is requested. Tanzania will benefit more from such trainings as they help cover the knowledge gaps in the system,” said Jubilant J. Mwangi, Principal Agricultural Officer - Ministry of Agriculture.

The technical experts from the government ministries and institutions responsible for SPS issues ensure protection of human safety as well as animal and plant health against risks that may accompany imported animal, plant or food products. The inspectors also ensure exports follow importing countries’ requirements. However, inadequacy of skills and technical capacity is one of the major impediments for the public agencies to effectively deliver on their mandate.

“The Pest Risk Analysis (PRA) training is very useful for my daily activities at the port. Having a wide knowledge on PRA, as an Agricultural Inspector, I will be able to prevent and control the introduction of a new pests and protect our crop industry as a whole,” said Lilian Henry Muyaga, Agricultural Inspector - Dar es Salaam Port.

“I look forward to new exposure on hazard identification, risk assessment, risk mitigation and risk communication on imports and exports among countries”, said Mr Richard Ngowi, a veterinary officer from the Kagera region.

“I can now understand how to identify hazards in trade of animals and animal products”, said Mr. Kagoma Safan from Longido.

“This training is very important because it will upgrade our knowledge which makes it easier to tackle the problem of new pest invasions worldwide. The training has helped us to share our knowledge and to come up with solutions and also to recognize and understand the usefulness of the kits, lab equipment and other materials during inspections”,” said Kisamo Samji, Principal Agricultural Field Officer.

The SPS risk analysis training workshops are part of a series of technical training programs that will be delivered in Tanzania by the Hub in collaboration with the Centre for Agriculture and Biosciences International (CABI). Subsequent training workshops in June/July 2019 will cover official controls and inspections covering plant health, animal health and food safety in Tanzania as well pest diagnosis training workshops that will cover plant health and animal health. The SPS technical training programs are instrumental in enhancing SPS knowledge, skills and practice which is considered a key requisite for effective enforcement of SPS requirements thereby enhancing safe intra-regional and international trade.

The Hub Supports the Development of the Ethiopia National AGOA Strategy

Published on May 22, 2019

To facilitate the continued increase of AGOA exports from Ethiopia, the Ministry of Trade and Industry reached out to the Hub in 2018 to provide technical support in the development of the Ethiopia National AGOA Strategy. The AGOA strategy identifies challenges and interventions to facilitate the increase in exports of coffee, flowers, textile and apparel, footwear and leather goods, and specialty foods (including oil seeds, herbs and spices, and edible oil extracts). Coffee, though not an AGOA eligible product, is an important export from Ethiopia and is duty free into the U.S.

To achieve consensus among high level technical officers of the Ethiopian government on the draft strategy and action plan, the Hub conducted a final AGOA Validation Workshop on May 9 in Addis Ababa.

Ethiopian exports to the U.S. under AGOA have been steadily growing since 2010. AGOA/GSP exports were $158.6 million in 2018, up 71.0% from the $92.8 million in 2017. The main contributors to AGOA exports were apparel ($110.0 million), footwear ($34.6 million), home décor and fashion accessories including leather articles ($6.9 million), and cut flowers ($5.3 million). A number of large apparel and footwear companies have set up operations in the country and these investments have contributed to the steady growth experienced. AGOA/GSP goods comprise 32% of Ethiopia’s total merchandise exports to the U.S.

“This is a very important intervention for Ethiopia to explore AGOA opportunities more in the coming years. We look forward to an effective implementation of the strategy, and Ethiopia Investment Authority will shoulder all the bestowed responsibilities,” said Temesgen Tilahun, Deputy Commissioner of the Ethiopia Investment Commission.

Ethiopia has positioned itself as a low-cost, light industry investment destination and has attracted significant investment in export-oriented production.

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