USAID West Africa Trade Hub Roger Brou Business & Finance Director March 2013
West Africa Trade HubIn 21 countries, with UEMOA, ECOWAS, & CEMAC Offices in Accra, Dakar, & Arlington; Virtual team in Ouaga, Abuja, & 18 ARCs •+/-300 million inhabitants •GDP est. $500 billion USD
Value Chain Approach Informs TradePolicy & Infrastructure Improvements
People, Planet and Profit:The triple bottom line – a marketdriven approach to development
The ProblemIn West Africa, 75% of the population live on less than US$2 per day. The Question IS: How to create jobs and lift incomes in a sustainable fashion?
• Traditional crop• Millions rural Production to women Market• Weeks of work DISCONNECTED…• April to September• Kernel quality Limited defined transparency!• Price takers• Commence selling • < 10 major buyers @ < $150 per ton • Export, process & kernel• 1,000s of nut formulate traders • Erratic price @ $250 -• Consolidate & $800 per ton kernel finance • Quality variation high• Commence selling • Zero traceability @ > $250 per ton kernel• Quality deteriorates• Limited value added
The Global Shea Alliance annual conference connects anindustry, leveraging resources to drive businessopportunities
Shea 2013GSA conference offers training and opportunity on:•Access to Finance•Transportation•Cosmetic formulation•PackagingBusiness to BusinessConference and presentationsExhibitionField trips
Exporters’ #1 Hurdle: Access to Competitive Financing Partnering with international financial institutions, regional banks and investors to improve lending and investing opportunities for exporters. Product & Process Development: Innovative approaches to trade finance for commercial banks. Promoting Best Practices and Training: Bringing banks and companies together to develop relationships that are mutually beneficial. Hosting annual Financing Trade Regional Conference. Technical Assistance: Helping bankers develop products/processes. Facilitating exporters to apply for loans, develop financial projections and business plans.
Financial Services ApproachBased on Value Chain approach the Trade Hub:Facilitates dialogue with regulatory authoritiesLeverages partnerships: Commercial Banks Multi- and Bi-lateral Institutions Investors BuyersProvides industry-specific financial trainingAssists with company-specific technical needs Trade Hub LCs, Purchase Orders Commercial ERC Banks New products & services Increased Jobs and Wealth Creation Government & Multi-lateral Investors 10 Institutions
Performance-based FinancialService Providers Business Plans Investment Promotion Financial Structuring Negotiations Management Coaching Product costing and Pricing
MSMEs Type of Financial Needs Short-Term (1 year max) – Procurement financing – Working Capital Financing – Trade Financing/ Term loan Medium to Long-Term (more than 1 year) – CAPEX financing for expansion, acquisition of new equipment (leasing or direct purchase) or new factory construction
Long Term Financing EBID-USAID-ACA MoU BOAD-USAID-ACA MoU Private Equity Funds for medium/ long-term Strategic partnership (JV, M&A, etc)