• home

    ITC Training - Helping Developing Country Enterprises Enter the Aid Market


    © International Trade Centre, International Trade Forum - Issue 4/2001

    Increasing the regional and international trade potential of developing countries is vital for their future growth and prosperity. But often a country's enterprises do not know how to access markets beyond their borders.

    In Africa, for example, although trade between countries (an estimated US$25billion in 1998 or 10% of the region's total) has increased slightly in recent years, its performance is in strong contrast with the upsurge in the growth of intra-regional trade in other developing areas.

    The humanitarian aid market represents a huge opportunity for African businesses. If they can sell their products and services to the aid procurement programmes of the international aid agencies operating on the continent, firstly, they benefit their own interests and, at the same time, they make an important contribution to promoting intra-African trade. While the idea sounds fairly straightforward, African businesses have some obstacles to overcome.

    Complex agency procedures

    For the uninitiated, the various procedures can be daunting. For example, before even being able to bid for a contract, companies may have to register with the United Nations Common Supply Database (UNCSD). However, agencies may duly offer contracts for goods worth certain amounts through their field offices. Comparing just the Office of the UN High Commissioner for Refugees (UNHCR) and the International Committee of the Red Cross (ICRC): for goods worth more than US$20,000, UNHCR issues an invitation to bid and awards the contract on price-related factors only. ICRC uses a threshold of US$12,500 for bid purposes, but limits competition to validated suppliers only unless they are competing openly for framework contracts to cover future orders.

    The good news is that recent trends and actions at international level are pushing the agencies towards committing themselves to acquire more goods and services from the region where the aid is being dispensed. This is where ITC can help. With funding from the Governments of Norway, Denmark and the Netherlands, it has undertaken a technical cooperation initiative called "Increasing Africa's Participation in Development Aid Procurement". The initiative has two main goals: to increase aid agency awareness that African enterprises can supply the needed food-related, medical and other products they regularly procure; and to assist businesses in harnessing the potential this particular market offers.

    Buyers-sellers meetings

    One of the key components of the ITC initiative is bringing developing country businesses together with international aid agencies at a series of "buyers-sellers" meetings, so they can learn about each other's needs, priorities and requirements. The first meeting in November in Nairobi, Kenya, focused on the procurement of shelter, protection and domestic items, such as tents and mosquito netting, pots and pans and other household goods.

    However, given the intricacies of the humanitarian aid market, it is important for African enterprises to begin to come to grips with aid agency rules and procedures. Therefore, in advance of the actual buyer-seller meetings, ITC is holding one-day training seminars designed to acquaint companies with the basic requirements of successfully bidding for humanitarian aid contracts. This will assist them when they actually meet with aid agency representatives in the days following the seminar.

    Building trust

    ITC representatives stress that a key to the whole process is for enterprises to understand the entire aid procurement process and to be aware that it can involve hurdles that do not exist in commercial transactions, but which must be overcome. Another key factor is the issue of trust. Agencies are willing to consider new suppliers, but they need to have confidence that their suppliers can be trusted to deliver quality products on time because people's lives may be at stake.

    The training seminars are designed to draw out these characteristics and to prepare companies for successful bidding for aid contracts. Each seminar consists of five different modules. The first discusses the differences between public and private buying, outlining the general characteristics of public procurement. It also provides detailed information on the different aid agencies operating in the region. The second module deals with aid agency procurement methods including bid solicitation, specifications, evaluation and contracts; in other words, how the process works from beginning to end.

    African success stories

    Module three presents several success stories of African enterprises currently holding contracts with large aid agencies to supply goods and services. It demonstrates the methods used and problems encountered, showcasing the innovative business acumen involved in being a successful aid agency contractor. In module four, participants focus on practical exercises; among other things, assessing invitations to bid and sample contracts.

    Module five is particularly important. It spells out the crucial aspect of how to maintain the "trust" relationship between the supplier and the agency after the contract is won. It also includes practical tips from agencies on bidding for and performing the contract.

    Once the training is completed, enterprises will have a solid foundation to ask questions and to pursue business potential for their subsequent buyers-sellers meetings with aid agency representatives.

    After their launch in Africa, the ITC training seminars and buyer-seller meetings may be repeated at regular intervals in other developing countries around the world.

    Along with its other regular technical cooperation and trade promotion activities, ITC believes that this initiative will play a key role in redressing the trade imbalance of developing countries and regions around the world.

    This article is based on an interview with Wayne Wittig, ITC's Senior Advisor on Public Sector Procurement, International Purchasing and Supply Management Section, Division of Trade Support Services. He can be reached at wittig@intracen.org