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Brussels Briefing 47: Argent Chuula "New opportunities in regional trade"

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The Brussels Development Briefing n.47 on the subject of “Regional Trade in Africa: Drivers, Trends and Opportunities” took place on 3rd February 2017 in Brussels at the ACP Secretariat (Avenue Georges Henri 451, 1200 Brussels) from 09:00 to 13:00. This Briefing was organised by the ACP-EU Technical Centre for Agricultural and Rural Cooperation (CTA), in collaboration with IFPRI, the European Commission / DEVCO, the ACP Secretariat, and CONCORD .

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Brussels Briefing 47: Argent Chuula "New opportunities in regional trade"

  1. 1. Argent Chuula Chief Executive Officer-COMESA/ACTESA 1
  2. 2. THE CHALLENGE COMESA-ACTESA
  3. 3. 3 0 1 2 3 4 5 6 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Yield(t/ha) Eastern Africa Southern Africa Western Africa Eastern Asia Southern Asia South-Eastern Asia Poor Soils, Seed & Farm Management - Low productivity
  4. 4. THE 1/3 DIMENSION/PRINCIPLE 1 4 Food Security Seed Trade System Fertilizer Trade System Agronomic/Technical Practices
  5. 5. Challenges/Opportunities  The Circular relationship between Poverty, low crop production and productivity, Food Insecurity and hunger is increasingly being understood Poverty leads to Low investment in agriculture, leading to low production/productivity which leads Food insecurity leading to hunger History shows that no country or region in the world achieved Food Security without a functioning seed and Fertilizer Trade regimes  Effective and efficient use of quality Seed, fertilizers and technology is necessity to trigger an African Green Revolution where  TRADE IS THE DRIVER 5
  6. 6. PRODUCT- VERY LOW PROMOTE- NOTHING TO PROMOTE PRICE- NOTHING TO COST PLACE/LOGISTIC- NOTHING TO MOVE COMESA-ACTESA
  7. 7. Fertilizer/Seed Distribution Channels in Africa 1 7
  8. 8. Fertilizer and Seed deficits in COMESA Countries: Opportunity 8 Country Required (Tons) Actual/Current (Tons) Market Opportunity (Tons) SEED Congo DR 2,500,000 500,000 2,000,000+ FERTILIZER 12,000,000 5,000,000 7,000,000+
  9. 9. HARDWARE PILLARS 9  TRADE FACILITATION: Policy, regulatory and legal frameworks • Seed Policy and implementation plan: Regulations Gazetted • Fertilizer Policy and implementation Plan • Biotechnology policy and implementation Plan  RELEVANT INFRASTRUCTURE: logistical, operational, communication etc.  INDUSTRIALISATION –Agro Allied Industrialization to add value to agro produce. Thus create pulling demand for agro production
  10. 10. Role of the Public Sector in cross boarder initiatives?  Provide public goods for which there are limited profit incentives for the private sector:  Roads, rails, and port  Research, development, and extension  Security  Rule of law  Public/PPP Financing: through taxes, government borrowing, etc…  Remove TBs/NTBs: Trade restrictions can cost countries substantial foreign exchange and tax revenue 10
  11. 11. Role of Public sector 
  12. 12. AFAP & ESAF TRADE “A–TRADE” AFAP regional & national policy initiatives/programmes design and implementation A-Trade: For agri-business hubs, dealers and fertilizer manufacturers to trade fertilizer • Design a mechanism to allow agri-business hubs and dealers access to information about reputable suppliers/guarantees • Allow these agri-business hubs and dealers to place orders through collective mechanisms (bulking orders) AFAP will perform verification exercises which are recorded and reported on the platform. Guarantees and APCs are also negotiated by AFAP • Large farmer associations or groups (e.g. KTDA) can place RFPs and allow global and regional players to respond • Global fertilizer companies can access the market for fertilizer (tightening illegal and illicit trade) Reaching consensus, creating agreements and finding policy congruency in order for regional and national bodies to implement the same agreed policy & regulations in their own countries WHAT AFAP IS CURRENTLY FOCUSED ON THROUGH ESAF? “A-TRADE” AS A MARKET MECHANISM TO GROW FERTILIZER TRADE IN EAST AND SOUTHERN AFRICA? 3 to 5 Years to success 1 to 2 How does A-Trade fit in with AFAP & ESAF?
  13. 13. AFAP/ESAF Fertiliser manufacturer Banking institution Platform users place their orders Order (already bulked) is confirmed by A- Trade for banks to pay winning manufacturer providing the consignment Banks make single payment or provides LCs A-Trade bulks orders and tenders (only to A-Trade manufacturers) to achieve best price Order is fulfilled and delivered, in the process tracked by A-Trade Quality assurance exercise Quality assurance reports A-Trade management Trading commission (0.25%) • Quality fertiliser delivered • Training 1 2 3 4 5 6 A A A A Ongoing and continuous process # Step by step processes Trade Platform (“A-Trade”) (Platform crowds orders, looks for cheapest but quality assured suppliers) Fertilizer hub agro-dealer wholesalers and importers How A-Trade works?
  14. 14. COMESA SEED PROGRAM: COMSHIP CURRENT STATUS 1 • COMSHIP launched in 13 COMESA Member States, now remaining with Comoros, Seychelles, Eritrea, Mauritius, Djibouti, South Sudan • Rwanda was first country to align to COMESA Seed System in March, 2016 with aligned regulations ready awaiting approval for DR Congo, Burundi, Uganda, Kenya, Malawi, Zambia and Zimbabwe. • On awareness creation, over 10,000 COMESA Seed Trade Harmonisation Regulations and 3,000 printed and distributed
  15. 15. COMESA SEED PROGRAM: CURRENT STATUS 2 • A comprehensive COMESA Seed Training programme developed and to be implemented soon • COMESA Variety Catalogue on-line, seed companies are requested to register their regional varieties and ACTESA is looking forward to testing the COMESA Seed System • Three COMSHIP committees in place and operational, namely Seed Advisory Committee, COMESA Seed Committee and Seed Technical Working Group • First COMSHIP Mutual Accountability Meeting held in February, 2016, now aiming to develop the mutual accountability framework in close collaboration with Africa Lead COMESA Seed Committee
  16. 16. OVERALL GOAL END HUNGER
  17. 17. “Lets unblock these trade bottle necks to allow Africa to do Business freely“
  18. 18. Thank You! Merci!

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