Regional trade: the reality
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Regional trade: the reality

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Objective Capital's West Africa Investment Conference 2012

Objective Capital's West Africa Investment Conference 2012
Moevenpick Ambassador Hotel in Accra, Ghana
7-9 May 2012
Speaker: Vanessa Adams, USAID West Africa Trade Hub

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  • Leveraging resources: sponsorship covered 90% of the total conference costs (background logos). Photos from top left, clockwise: Almost all shea nuts are collected by women – the conference connected stakeholders for more business. Advance promotion on Ghana’s largest TV network. The conference launched the Global Shea Alliance – with an executive committee composed mainly of women (4 of 7 slots). Communications materials advance the theme – planet, people, profit (sustainability; triple bottom line). High-level VIPs emphasize the importance of the conference. Grafting shea trees just one of dozens of training opportunities for participants.
  • 77 (77%) including 20 (40%) women financial professionals trained9 (26%) loans made by allied banks to client ERCsMore than $2 million (100+%) loans disbursed in 4 sectors Lessons LearnedNew productsNot adapted type and level of guarantees required for lendingNeed to source the creation of guarantee facilities in support of lendingNeed to develop new products like crop insurance, warehouse financing, etc.ERCsNeed assistance in debt restructuring as well as operations financingNeed to dramatically improve accounting systemsCommercial BanksLack of knowledge and interest in the nontraditional export sectorsNeed for better knowledge transfer and internal communicationPartnershipsIFC, Root Capital, Greylock Capital, Grassroots Business Fund and Makeda Fund in the USAICCO (Dutch NGO) and Oikocredit in The NetherlandsMaking Finance Work for Africa (MFW4A) Secretariat and Funds for Africa Group of AfDB in TunisiaWest African Development Bank (BOAD), ECOWAS Bank for Investment and Development (EBID), Ecobank, BanqueAtlantique, Bank Of Africa (BOA), Attijari/ Compagniebancaire de l'Afriqueoccidentale (CBAO) in West AfricaBank of Industry and United Bank for Africa in Nigeria
  • 77 (77%) including 20 (40%) women financial professionals trained9 (26%) loans made by allied banks to client ERCsMore than $2 million (100+%) loans disbursed in 4 sectors Lessons LearnedNew productsNot adapted type and level of guarantees required for lendingNeed to source the creation of guarantee facilities in support of lendingNeed to develop new products like crop insurance, warehouse financing, etc.ERCsNeed assistance in debt restructuring as well as operations financingNeed to dramatically improve accounting systemsCommercial BanksLack of knowledge and interest in the nontraditional export sectorsNeed for better knowledge transfer and internal communicationPartnershipsIFC, Root Capital, Greylock Capital, Grassroots Business Fund and Makeda Fund in the USAICCO (Dutch NGO) and Oikocredit in The NetherlandsMaking Finance Work for Africa (MFW4A) Secretariat and Funds for Africa Group of AfDB in TunisiaWest African Development Bank (BOAD), ECOWAS Bank for Investment and Development (EBID), Ecobank, BanqueAtlantique, Bank Of Africa (BOA), Attijari/ Compagniebancaire de l'Afriqueoccidentale (CBAO) in West AfricaBank of Industry and United Bank for Africa in Nigeria
  • 77 (77%) including 20 (40%) women financial professionals trained9 (26%) loans made by allied banks to client ERCsMore than $2 million (100+%) loans disbursed in 4 sectors Lessons LearnedNew productsNot adapted type and level of guarantees required for lendingNeed to source the creation of guarantee facilities in support of lendingNeed to develop new products like crop insurance, warehouse financing, etc.ERCsNeed assistance in debt restructuring as well as operations financingNeed to dramatically improve accounting systemsCommercial BanksLack of knowledge and interest in the nontraditional export sectorsNeed for better knowledge transfer and internal communicationPartnershipsIFC, Root Capital, Greylock Capital, Grassroots Business Fund and Makeda Fund in the USAICCO (Dutch NGO) and Oikocredit in The NetherlandsMaking Finance Work for Africa (MFW4A) Secretariat and Funds for Africa Group of AfDB in TunisiaWest African Development Bank (BOAD), ECOWAS Bank for Investment and Development (EBID), Ecobank, BanqueAtlantique, Bank Of Africa (BOA), Attijari/ Compagniebancaire de l'Afriqueoccidentale (CBAO) in West AfricaBank of Industry and United Bank for Africa in Nigeria
  • 77 (77%) including 20 (40%) women financial professionals trained9 (26%) loans made by allied banks to client ERCsMore than $2 million (100+%) loans disbursed in 4 sectors Lessons LearnedNew productsNot adapted type and level of guarantees required for lendingNeed to source the creation of guarantee facilities in support of lendingNeed to develop new products like crop insurance, warehouse financing, etc.ERCsNeed assistance in debt restructuring as well as operations financingNeed to dramatically improve accounting systemsCommercial BanksLack of knowledge and interest in the nontraditional export sectorsNeed for better knowledge transfer and internal communicationPartnershipsIFC, Root Capital, Greylock Capital, Grassroots Business Fund and Makeda Fund in the USAICCO (Dutch NGO) and Oikocredit in The NetherlandsMaking Finance Work for Africa (MFW4A) Secretariat and Funds for Africa Group of AfDB in TunisiaWest African Development Bank (BOAD), ECOWAS Bank for Investment and Development (EBID), Ecobank, BanqueAtlantique, Bank Of Africa (BOA), Attijari/ Compagniebancaire de l'Afriqueoccidentale (CBAO) in West AfricaBank of Industry and United Bank for Africa in Nigeria
  • Achievements(100%) ECOWAS capacity building activity completed6(40%) trade and investment enabling environment diagnostics conducted8 (53%) consultative processes with private sector engagementValidation of 6 country reports with both private and public sectorKey actors responsible for the facilitation of regional integration and implementation of the ETLS identified in each countryDevelopment of searchable web-based tool to make rules on national customs and transport procedures accessibleGap analysis credibility in regional trade issues which will be used as momentum for reformECOWAS has requested assistance to apply Trade Hub gap analysis methodology to evaluate ETLS implementation in remaining countriesActivitiesSurveyed the implementation of the ECOWAS Trade Liberalization Scheme (ETLS) from the viewpoint of the public and private sector in 9 countries: Benin, Burkina Faso, Cote d’Ivoire, Ghana, Mali, Niger, Nigeria, Senegal and Togo Organized Gap Analysis workshop with ECOWAS representatives and members from the private sector to discuss ETLS implementation strategies and confirm Trade Hub findings and recommendationValidated and disseminated key findings through meetings with senior officials from six of nine Member StatesLessons LearnedThe need for high-level buy-in to gap analysis recommendations at the ECOWAS and Member State level - to be sought at the next ECOWAS ministerial meetingNeed to complement high-level discussions with corridor level stakeholders initiatives ; training of border officials and information dissemination via information centersValidation exercise in countries revealed surprising level of stakeholder interest in ETLS implementation in member states and effect on interregional tradeGap analysis has highlighted various trade and transport issue to both national and international community.Need to develop pa way of achieving regional improvements without relying on overextended ECOWAS personnel
  • For example, knowledge in Nigeria due to presence of ECOWAS, the UEMOA member states not so much because they follow UEMOA customs proceduresMore knowledge in Free movement of Persons – Immigration and visa free travel. Movement of Transportation – especially road transport, since rail and sea are not in extensive use. Brown card, vehicle inspection, license plates are in effect in Benin, Togo and Cote d’Ivoire but not Nigeria. Brown Card should act as insurance for trucks but it can take up to a year for a claim to be processed in many of these countries
  • ECOWAS , UEMOA & USAIDPublic institutionsUniformed ServicesCivil SocietiesMedia/JournalistsAssociations and Unions
  • BORDERLESS Alliance is a partnership of public and private sector stakeholders across West Africa Region.In May 2011, the Alliance was estalished as a private sector led advocacy initiative.MembershipThe Alliance includes:Transport companies(Tarzan Enterprise)Freight forwarders( Bollore, DAMCO)Financial Institution(ECOBANK)Producers and Exporters(Unilever, Blue Skies)Aggregate and leverage corporate capacities and expertise to achieve free movement of capital, goods and people in West Africa.A- 7 member Interim Executive Committee has been set upTwo executive committee meeting heldSecretariat established at the Trade HubParticipated in Border Information Centre Launch.Featured on GTV programme: Business Advocate (GTV) Talk Show

Regional trade: the reality Regional trade: the reality Presentation Transcript

  • WEST AFRICAINVESTMENT CONFERENCE Best Practices in Export Promotion Programming Vanessa Adams – Project Director, USAID West Africa Trade Hub MOEVENPICK AMBASSADOR HOTEL IN ACCRA, GHANA ● MONDAY-WEDNESDAY, 7-9 MAY 2012 www.ObjectiveCapitalConferences.com
  • USAID West Africa Trade HubBest Practices in Export Promotion Programming Vanessa Adams March 6, 2012
  • Unprecedented Growth• Between 2000 – 2010, Africa’s GDP grew by 4.7% p.a. - twice the pace of its growth in the 1980s and 1990s.• Africa’s collective GDP stands today at $1.6 trillion, or roughly equal to those of Brazil and Russia.• Africa’s Population: 1 billion; SSA: 840 million. ECOWAS 300 million. SSA to hit 2 billion by mid-century.• By 2030, SSA’s total food and beverage markets to reach $1,000 billion, up from $313 billion, currently.• The increase in food consumption and Fast Moving Consumer Goods (FMCG) will mainly occur in cities.• 40% of Africans live in cities today. By 2030, Africa will have 50 cities with a population over 1 million. Urban markets will expand 4-X in 20 years.• 600 million Africans have cell phones.• FDI - $55 B: 5X a decade ago and much more than donor aid.
  • Africa – the “New Frontier”• Africa, the “New Frontier”, growth rate over the past 10 years exceeds every region, except Emerging Asia.• BRICS today make up 20% of Africas trade vs 1% a generation ago. Expected to be 50% in 2030.• A growing and aspiring middle class will reach 50 million households by 2020, seeking improved selection and quality of consumer goods and food.• Similar growth will occur in the industrial sectors for inputs, intermediate goods and outputs. WILL THESE GOODS BE PRODUCED IN AFRICA OR IMPORTED?
  • ECOWAS Regional Trade Pales• ECOWAS’ exports continue to be dominated by minerals, petroleum and primary agriculture.• Biggest markets are USA (35.6%) and EU (28.2%) with China and Asia gaining.• 2000 - 2007 Intra-ECOWAS trade accounted for only 9.3% of ECOWAS’ total trade. Rest of Africa a scant 3.5%.• This is much less than elsewhere. For example:  NAFTA – 40%  Western European – 63%  MERCUSOR - 20%• On average, Intra-ECOWAS exports account for only 4% of countries’ GDPs.• "The East African Community, which launched a common market in 2010, is doing well; ECOWAS less so." Source: Economist• Argument goes that a country & region cannot grow sustainably without intra-regional trade.
  • What’s Holding Intra-Trade Back?• High costs of doing business and trade• Non-complementarity, non-harmonization• Few differentiated goods & services.• Multiple national currencies with limited convertibility• Different currencies, languages, legal and banking systems• Unfulfilled performance of ETLS and ECOWAS Compensation Scheme• Resistance to change (governments & companies)• Dominance of Informal Cross Border Trade• Red tape, in/formal fees, delays at border crossings
  • People, the Planet and Profit:The triple bottom line – a marketdriven approach to development
  • Choosing high-potential sectors
  • Choosing high-potential sectors
  • Choosing high-potential sectors
  • Choosing high-potential sectors
  • Alliance Operates Independently: The ACA was conceived in 2005, and now operates independently. International Marketing Launched: Shea companies exhibit under the GlobalBuilding Membership: An interim Shea banner at internationalExecutive Committee was elected to trade showsrun the Borderless Alliance, and builda membership base. Preliminary network: A feasibility study on the AfricaNow! alliance was conducted, and the Hub is working with international and regional partners on building a network.
  • Case Study: Global Shea Alliance annual conference connectsindustry, leverages resources to drive business opportunities
  • Success Story – Kadijatou Lah, Mali
  • Success Story – Homefoods, Ghana
  • Success Story – Clarisse Djionne, Senegal
  • Case Study: New jobs in Apparel, GhanaTechnical assistance to apparelmanufacturers and links to investorshave led to the creation of more than500 jobs in the last six months.Key Factors• AGOA – increasingawareness, technical assistance onutilization• Connecting stakeholders to leverageopportunities “I’m learning a lot of things at• Identifying international buyers at trade this job – particularly how toshows supervise employees…. I feel• Making the case for doing business in like the sky is the limit.”West Africa Helinda Tetteh, Quality Control Supervisor, 1888LuckyMills, Tema,
  • The market drives the connections• Collect, analyze and operationalize market intelligence International Trade Shows: Key source of market intelligence, market linkages Industry Alliances: Market intelligence, analysis of opportunities, market linkages International Brands: High visibility
  • International Trade Shows• Cashews: AFI, ANUGA, CENTA, INC, PTNPA• Fish & Seafood: Sustainable Seafood Summit• Handcrafts: Ambiente, NYIGF, SIAO• Shea: InCosmetics , NYSCC, Sustainable Cosmetics Summit
  • International Conferences
  • Communications14,000-member distribution list for: • Newsletters (Tradewinds, ACA, GSA) • Brochures • Directories & Reports
  • Communications WebsitesNine websitesto market productsand disseminateinformation
  • Performance-based Financial Service Providers• Business Plans• Investment Promotion• Financial Structuring• Negotiations• Management Coaching• Product costing and Pricing
  • Case Study: Nigeria Cashew Cluster Financing Scheme
  • Why so many road barriers in West Africa?
  • BORDERLESS CampaignLaunched March 2010 for:• Credible, Visible, Versatile Communication• Evidence-based Advocacy
  • Building regional partnerships... Together We Build
  • …and leveraging the private sector
  • Top Priority Issues for the Borderless Currency AllianceImplement AxleConvertibility load 9% Stakeholder Online Survey 11% Total Responses = 106, including Transport & Logistics Companies, ManufacturersImplement single Reduce and Donor Partners bond & ISRT Checkpoints 12% 52% Covering respondents from 21 countries, including West Simplify & Central Africa Cargo Clearance 16%
  • What the Trade Hub does……. Collect, analyze information Communicate Mobilize Facilitate Support Advocacy Evolution of IRTG indicators per trip - Ghana 21 19 19 Bribes (GHC) 15 15 15 13 Number of 14 controls 121 Delays (min) 107 103 84 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10
  • Parking area identified by Ghana Opening Ceremony of Border Customs for Express Lane Information CenterGhana-Togo officials meet on Express Lane Pilot
  • Borderless Alliance Secretariat USAID West Africa Trade Hub Accra, Ghana www.borderlesswa.comwww.facebook.com/borderlesswa