UN Division for Sustainable Development

Case Study Detail Record

Organization type:	Government

Name of Ministry/Agency:	Department of State

Country:	United States of America

Name of Focal Point:	Hiram Larew

Initiative Title:	Strengthening Africa’s Export Competitiveness

Internet links:	http://www.watradehub.com/index.php?option=com_frontpage&Itemid=1 -- West Africa (Accra & Dakar) http://www.satradehub.org -- Southern Africa http://www.ecatradehub.com/home/index.asp -- East and Central Africa

Scope:	Regional: - Africa

Status:	Ongoing

Timeframe:	Start: End:

Lead Institution:	U.S. Agency for International Development

Stakeholders/Partners:	Small and medium sized African enterprises.

Relevent issues:	- Poverty reduction strategies and policies - Reducing rural poverty - Empowering the poor, including women and indigenous people

Objectives/Challenges:

The African Global Competitiveness Initiative (AGCI) is a $200 million, five-year Presidential Initiative that promotes the export competitiveness of enterprises in sub-Saharan Africa. The goal is to expand African trade with the U.S., other international trading partners and regionally within sub-Saharan Africa. Launched in 2006, AGCI builds on the African Growth and Opportunity Act (AGOA). AGCI supports efforts that improve the policy, regulatory, and enforcement environment for private sector-led trade and investment. It also supports activities to improve the market knowledge, skills, and abilities of private sector enterprises, to increase access to financial services for trade and investment, and to facilitate investments in infrastructure.

The Initiative works with African regional economic organizations, national governments, and the private sector, and actively seeks collaboration and coordination with other donors as well as international and regional financial institutions, commercial banks, private investors, and stock exchanges in global capital markets. Regional AGCI programs are implemented through a network of four USAID African Global Competitiveness Hubs located in Botswana, Kenya, Ghana, and Senegal.

Lessons Learned:

• Inefficient energy supplies and the high cost of electricity and telecommunications hinder export competitiveness, as do high transportation costs. Investment in electricity, in particular, is critical to promoting export competitiveness.

• American consumer preferences are not well understood by small African businesses. They need training on American consumer preferences, good business practices, and quality control.

Summary:

Key Results: AGCI has:

• Increased African exports of apparel, cut flowers, seafood, and specialty foods -- For example, exports to the U.S. by East and Central Africa Hub-supported companies in the region (many of them first-time entrants in the U.S. market) have totaled over $21 million since 2004.

• Reduced transit times for commercial goods through customs and transportation reforms -- At the Malaba border crossing between Kenya and Uganda, for example, clearance time per train has been reduced by an estimated 2½ days per train and one day per truck. Reduced trucking time alone is saving about $40 million per year in transit costs.

• Strengthened market linkages -- In 2007, the Southern Africa Hub cultivated more than 300 new business relationships with food and apparel companies in the U.S., resulting in new exports; assisted more than 100 companies with requests for export logistics; trained more than 500 firms exporting products into the United States; and facilitated and responded to more than 400 requests from the private sector for information on AGOA.

Next Steps: AGCI will continue working to create conditions needed to allow small and medium-sized enterprises (SMEs) to flourish. This includes improving the cost and availability of energy, streamlining customs procedures and production practices, and training SMEs in U.S. consumer preferences and marketing. AGCI will also continue to increase the visibility of SMEs through trade shows.