Acu­men that holds up half the African sky

China Daily (Canada) - - PEOPLE - By LU­CIE MORANGI lucy­morangi@chi­nadaily.com.cn

China is work­ing with the In­ter­na­tional Trade Cen­tre, a 50-year-old Geneva-based or­ga­ni­za­tion, to build the com­pet­i­tive­ness of smaller African busi­nesses and link them to the global value chain.

This move, in­clud­ing a fo­cus on fe­male-owned en­ter­prises, is lift­ing mil­lions of fam­i­lies from poverty, as jobs are cre­ated and higher wages earned, of­fi­cials said.

ITC, a joint man­date of the World Trade Or­ga­ni­za­tion and the United Na­tions, bills it­self as “the only mul­ti­lat­eral agency fully ded­i­cated to sup­port­ing the in­ter­na­tion­al­iza­tion” of small and medium-sized en­ter­prises.

“We im­ple­ment the ben­e­fits found in mul­ti­lat­eral agree­ments made pos­si­ble by the WTO and em­ploy it in fight­ing poverty, a man­date of the UN,” said Aran­cha Gon­za­lez, ex­ec­u­tive di­rec­tor of the ITC.

Gon­za­lez, speak­ing on the side­lines of the 10th WTO Min­is­te­rial Meet­ing in Nairobi in De­cem­ber, said China’s sup­port had boosted ITC’s pro­grams in sub-Sa­ha­ran Africa, where pock­ets of poverty re­main. The agency aims to en­able a mil­lion more women en­trepreneurs to en­ter global mar­kets by 2020.

“We be­lieve that trade is the so­lu­tion to fight­ing poverty, and by sup­port­ing busi­nesses in th­ese coun­tries a greater im­pact is achieved,” said Gon­za­lez, who pre­vi­ously served as chief of staff to for­mer WTO di­rec­tor-gen­eral

Aran­cha Gon­za­lez, Pas­cal Lamy, who served from 2005 to 2013.

In Novem­ber, ITC launched a pro­gram link­ing Chi­nese busi­nesses to Africa, and African busi­nesses to China, with the sup­port of the China-Africa De­vel­op­ment Fund, a Chi­nese govern­ment-con­trolled equity fund, and the Depart­ment for In­ter­na­tional De­vel­op­ment, the Bri­tish govern­ment’s de­vel­op­ment arm. The pro­gram cov­ers Kenya, Ethiopia, Zam­bia and Mozam­bique.

“We are try­ing to build value-chain growth in en­ter­prises found along the north­ern cor­ri­dor. Es­sen­tially at this stage we are iden­ti­fy­ing value chains be­fore cre­at­ing link­ages be­tween busi­nesses found along the cor­ri­dor,” Gon­za­lez said.

The cor­ri­dor is a trans­port route that con­nects the port of Mom­basa in Kenya to coun­tries in the in­te­rior of East and Cen­tral Africa. Th­ese in­clude Uganda, Rwanda, Bu­rundi and the Demo­cratic Re­pub­lic of Congo. The route also in­cludes Ethiopia, where ef­forts are be­ing made to sup­port the leather in­dus­try, a sec­tor in which Chi­nese com­pa­nies have a huge stake.

The pro­gram’s tar­get is mi­cro, small and medium en­ter­prises. Gon­za­lez said she is en­cour­aged by the planned re­lo­ca­tion of some Chi­nese in­dus­tries into the re­gion. They of­fer op­por­tu­ni­ties for Africa to in­crease its par­tic­i­pa­tion in global trade, she said.

The firms are sub­sidiaries of Chi­nese par­ent com­pa­nies that have ex­pe­ri­ence en­gag­ing in ex­ist­ing so­phis­ti­cated pro­duc­tion pro­cesses and al­ready have a hold in global trade chains. They are well-pre­pared to help Africa in­crease its ex­ports of fin­ished goods.

Al­though in­dus­tri­al­iza­tion is Africa’s strong­est am­bi­tion, Gon­za­lez said the fo­cus should be broad­ened to eco­nomic trans­for­ma­tion. That means broader and deeper par­tic­i­pa­tion by a va­ri­ety of en­ter­prises, and the in­clu­sion of groups such as women and youths.

“This con­cept means im­prov­ing the pro­duc­tiv­ity of all fac­tors of pro­duc­tion. Im­prov­ing agri­cul­tural pro­cess­ing, pack­ag­ing, brand­ing and mar­ket­ing ser­vices, which en­com­passes two-thirds of some African coun­tries’ economies, such as in Nige­ria, Ghana and Kenya.”

China’s en­gage­ment with Africa has bro­ken the yoke of aid de­pen­dency, which was nei­ther sus­tain­able nor prac­ti­cal, she said. “What we are work­ing on at the mo­ment, to­gether with China, is con­verg­ing de­vel­op­ment aid, the pri­vate sec­tor and trad­ing. This is a pow­er­ful recipe.”

ITC has been able to con­vince Chi­nese in­vestors to in­vest in Africa by pro­vid­ing mar­ket in­tel­li­gence. It is also help­ing African busi­nesses nav­i­gate the Chi­nese mar­ket.

“We are a bridge in the knowl­edge gap ex­ist­ing be­tween Chi­nese and African busi­nesses. Busi­nesses in Africa and Europe have known each other for cen­turies. But Chi­naAfrica busi­nesses are new, so it is about get­ting to know each other a lit­tle bit bet­ter.”

Trade is break­ing down bar­ri­ers be­tween the two part­ners, she said, and the re­lo­ca­tion of Chi­nese busi­nesses to Africa is a strong in­di­ca­tion of that.

“This is hap­pen­ing. In the long run, it buoys ef­forts to re­duce poverty by us­ing mar­ket mech­a­nisms so that en­ter­prises be­come sus­tain­able and even­tu­ally makes aid re­dun­dant.”

Present pro­grams are in honey pro­duc­tion in Zam­bia, the leather in­dus­try in Ethiopia, the spices value chain in Tan­za­nia and Zanzibar, fruit and tea pro­cess­ing in Kenya and cot­ton pro­duc­tion in Malawi.

Gon­za­lez be­lieves that a big­ger mar­ket, sta­ble political en­vi­ron­ment and at­trac­tive laws and reg­u­la­tions will make Africa an at­trac­tive in­vest­ment desti­na­tion for Chi­nese firms. “They also need funds to sus­tain them through the dif­fi­cult in­fancy pe­riod,” she said.

Africa also needs mod­ern in­fra­struc­ture and re­li­able en­ergy sources to op­er­ate seam­lessly and com­pet­i­tively, a com­mon chal­lenge for African gov­ern­ments.

Re­cently, China has be­come more in­volved in nar­row­ing the gap. Some in­fra­struc­ture projects are cross-bor­der and help ful­fill Africa’s am­bi­tion to in­te­grate, cre­at­ing a big­ger mar­ket of con­sumers.

That not only means im­prove­ments in skills and em­ploy­ment for the bulging, youth­ful pop­u­la­tions of sub-Sa­ha­ran Africa, but also a rise in for­eign di­rect in­vest­ment.

Still, Gon­za­lez said she thinks there should be de­lib­er­ate de­vel­op­ment of poli­cies sup­port­ing the par­tic­i­pa­tion of women and youths.

“It should start from so­cially and cul­tur­ally pro­mot­ing women-led en­trepreneur­ship. Se­cond is pro­vid­ing equal op­por­tu­ni­ties for women to par­tic­i­pate in trad­ing such as ac­cess to fi­nance since they have no col­lat­eral.”

In 2013 Pres­i­dent Uhuru Keny­atta of Kenya set in mo­tion the amend­ment of govern­ment pro­cure­ment rules to al­low 30 per­cent of con­tracts to be given to youth, women and those with dis­abil­ity with­out com­pe­ti­tion from es­tab­lished firms.

“An­nual global pro­cure­ment is worth $15 tril­lion a year,” Gon­za­lez said. “Only 1 per­cent is ser­viced by women-led en­ter­prises. We need to ad­dress this mar­ket fail­ure, and that is why we hosted a women’s busi­ness fo­rum here in Nairobi to high­light this is­sue.”

The im­pact of the fourth World Con­fer­ence on Women, held in Bei­jing 20 years ago, is still be­ing felt to­day, she said.

“It was about set­ting the agenda to high­light the glar­ing gen­der gap. Twenty years later, it is not a ques­tion of whether or not we need to tackle the gen­der gap, be­cause the Bei­jing con­fer­ence high­lighted the use­ful­ness of in­clud­ing women in economies, political sys­tems, gov­ern­ments and busi­nesses. The next 20 years will be about ac­cel­er­at­ing the clo­sure of the gen­der gap.”

We be­lieve that trade is the so­lu­tion to fight­ing poverty, and by sup­port­ing busi­nesses in th­ese coun­tries a greater im­pact is achieved.”

ITC ex­ec­u­tive di­rec­tor

LU­CIE MORANGI / CHINA DAILY

Aran­cha Gon­za­lez, In­ter­na­tional Trade Cen­tre ex­ec­u­tive di­rec­tor, said China’s sup­port has boosted ITC’s pro­grams in sub-Sa­ha­ran Africa, where pock­ets of poverty re­main.

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