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    Buying from Africa for Africa


    Interview by Jean Milligan
    © International Trade Centre, International Trade Forum - Issue 4/2001

    Hendrik Roelofsen, new Director of ITC's Division of Technical Cooperation Coordination, speaks about the organization's programme "Increasing Africa's participation in development aid procurement".

    Q Why is ITC bringing African business and international aid communities together?

    A ITC's involvement in promoting local aid procurement evolved from our intra-African trade promotion programme. This programme reflects a commitment by the organization to make a major effort to change the business community's attitude, both within Africa and outside the continent, towards African producers and consumers.

    There is considerable potential for trade expansion in Africa that is not being exploited. ITC identified several barriers against this expansion: a faulty but widespread perception that Africa is an exporter or producer of only a few primary commodities; a lack of transparency and information within the trade environment throughout the region; and lastly, a credibility gap or an anti-African bias that was sceptical of the capacity of African producers to supply quality materials at competitive prices.

    The experience we gained from ITC's intra-African trade promotion programme led us to believe that there would be merit in bringing international aid agencies closer to African suppliers. Currently, African suppliers are not tuned in to the needs of the aid agencies and there is a credibility gap on the part of the agencies vis-à-vis the capacity of Africa to supply. There is a general belief that African producers cannot supply the same quality materials at competitive prices.

    ITC is confident that if participants take this opportunity seriously, attitudes about doing business in Africa will change.

    Q What is ITC's approach to supporting procurement from Africa?

    A ITC's research showed a significant potential for African enterprises to supply the aid procurement market. To foster this potential, ITC is implementing a specific technical cooperation programme, with the participation of a number of international aid agencies.

    The ITC initiative aims to enable African enterprises to meet the procurement requirements of international aid agencies. This initiative involves the participation of export-ready African businesses in three product sectors (food, shelter and household items; water-supply and sanitation materials; and educational and recreational items) together with international, governmental and non-governmental organizations providing development and humanitarian assistance to Africa.

    Q Who are the project donors?

    A The Government of Norway is financing the project, with cost-sharing contributions from Denmark and the Netherlands.

    Q Who are the project partners?

    A Partners include international aid agencies, both United Nations (UN) organizations and non-governmental organizations (NGOs), which foresee a number of genuine advantages in local sourcing. These include: contributing to strengthening local business capacities; creating an expanded and more equitable geographical distribution of procurement; but also improving their procurement costs and response capacity in Africa. These agencies have made it clear that they are willing to procure from African suppliers, providing they still achieve the best possible value at reasonable cost.

    To date, seven international organizations have agreed to participate: Inter-Agency Procurement Service Office (IAPSO); Office of the UN High Commissioner for Refugees (UNHCR); UN Children's Fund (UNICEF); World Health Organization (WHO); World Food Programme (WFP); International Committee of the Red Cross (ICRC); and International Federation of Red Cross and Red Crescent Societies (IFRC). ITC has compiled, in collaboration with the different organizations, an inventory of the major requirements of each institution and the specific qualitative and quantitative requirements to be met by potential suppliers.

    The project's other partners include national trade promotion organizations, such as chambers of commerce and manufacturing associations. These organizations analyse the local specificities of their supply markets for the ITC. They have an important role to play in this initiative since they are the ones selecting the enterprises to be invited to attend the various buyers-sellers meetings. They will also be the ones who, at the end of the project, will advise enterprises from their country of procurement opportunities with international aid agencies.

    Q What are the long-term objectives of this programme?

    A In general, the long-term objective fits with ITC's overall objective, which is to increase the participation of developing countries in the world economy.

    More specifically, we have various objectives for this initiative: to further expose international aid agencies to the capacity of African firms to competitively produce relief items; to familiarize African enterprises with the quantitative and qualitative requirements of international aid agencies and with the procedures under which products should be offered and marketed to those agencies; to contribute to private-sector development in the African region; and to identify specific constraints to regional sourcing, which will be addressed subsequently.

    Q What has the ITC programme achieved?

    A So far, ITC has completed a trade-flow analysis on two key product sectors for the aid market (shelter and household items) and identified 19 potential African supplier countries for them. Enterprises have been identified and audited in those 19 countries. The organization is working on bringing together representatives from the participating agencies with the enterprises of the countries concerned. The value of these meetings is that by sitting people face to face in the same room at the same table over a certain period of time, confidence building can take off.

    Q How do you foresee the programme evolving?

    A This is a three-year programme, and currently we are in the initial phase. The first buyers-sellers meeting took place in November 2001 in Nairobi, Kenya. Following this event, ITC will organize additional meetings covering the same two product sectors - shelter and household items - in South Africa, North Africa and Western Africa. Subsequently, the programme will identify at least one other product sector and organize similar buyers-sellers meetings throughout Africa.

    Over time, we hope to see an increasing number of African enterprises participating in international aid agency procurement opportunities. We expect international aid agencies to have a better understanding of the potentials and weaknesses of some African enterprises. And finally, we believe trade promotion organizations will be in a better position to advise national enterprises on how to win bids and supply international aid agencies.

    By the end of the project in 2003, 300 African enterprises will have been identified, audited and trained to meet both technical and commercial requirements of agencies. Simultaneously, a network is planned between enterprises, international agencies and local trade promotion organizations, for the exchange of information on business opportunities on a continuous basis.

    We hope that our efforts will counter the prevailing belief within the international aid community that only "foreign" goods can meet Africa's demand, and advocate that it might be worthwhile to re-examine Africa's supply potential and capacity.