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    Project Spotlight: Buying from Africa for Africa

     

     
     
    © International Trade Centre, International Trade Forum - Issue 4/2002

    A year ago, Trade Forum reported on an ITC programme to increase procurement from African suppliers by international aid agencies working in Africa (issue 4/2001). Using market research, training and face-to-face meetings between buyers and sellers, the initiative has generated new business for Af

    rican firms. Increasing African enterprises' access to the procurement programmes of development aid agencies working in Africa can contribute to intra-African trade and help these companies gain skills and revenue.

    To pursue these aims, ITC, in February 2001, launched "Buying from Africa for Africa", an initiative that introduces international aid agencies (UN agencies, programmes and funds, and non-governmental organizations and institutions) to the potential of African suppliers of relief and development materials. In parallel, the initiative helps African companies to take advantage of business opportunities in the aid procurement market in Africa.

    Since then, three buyers/sellers meetings (in Dakar, Johannesburg and Nairobi), focusing on three product sectors, made 170 carefully selected African entrepreneurs aware of opportunities for selling their products to aid agencies working in Africa. Participants also learned appropriate methods for bidding and selling products. As a result of the meetings, companies have begun to do business in this new market, and a large number have been registered on agencies' supplier databases.

    Aid agencies also welcomed the meetings. They attended - at their own cost - in high numbers, making technical presentations and contributing reference materials and advice. On several occasions, the agencies emerged with both a stronger commitment to sourcing supplies locally and a recognition that the buyers/sellers meetings are a cost-effective means for doing so. Over 80% of participating agencies reported that the meetings contributed towards changing their perception of Africa's supply potential.

    An African success story

    Chandu Dodhia of Spinners and Spinners, a Kenyan blanket manufacturer, reports US$ 906,440 worth of new business orders to international aid agencies and business enquiries for nearly US$ 2.8 million, following an ITC buyers/sellers meeting on procurement of humanitarian assistance items (Nairobi, November 2001). Mr. Dodhia and 76 other African exporters initially reported over US$ 2 million of new business in the first month following this event; he and others have subsequently registered additional orders, and all buyers of aid agencies discovered new sources of supply.

    "There is an erroneous but widespread belief that Africa is an exporter or producer of only a few primary commodities," notes Hendrik Roelofsen, Director of ITC's Division of Technical Cooperation Coordination. "There is also an anti-African bias that is sceptical of the capacity of African producers to supply quality ma-terials at competitive prices. The other side of the coin is that African suppliers are not currently tuned in to the needs of international buyers. We hope to make a contribution in overcoming these prejudices and lack of information."

    The buyers participating in the Nairobi event were international aid agencies that procure goods and services for development and disaster relief operations in the region. With 400 bilateral meetings, the event matched 32 procurement professionals with 77 entrepreneurs from nine eastern and southern African countries exporting tents, blankets, pots, mosquito nets and other emergency response supplies.

    Through these meetings, the entrepreneurs better understood the requirements of aid agencies, and international aid agencies found confirmation of competitive, export-ready African firms that can meet stringent procurement requirements.






    Reprinted from the Financial Times, 25 October 2002-11-08

    "Local Supplies Urged in Southern Africa
    by James Lamont

    International aid agencies were told yesterday that they should seek supplies to alleviate the humanitarian crisis in southern Africa from the region itself.

    During a two-day meeting in Johannesburg, ITC, an arm of WTO and UNCTAD, appealed to United Nations agencies and non-governmental organizations, such as the World Food Programme and the International Red Cross, to buy more food and shelter materials from local suppliers.

    UN agencies have traditionally sourced emergency relief supplies from close to their international headquarters.

    The supply of tents for UN operations is dominated by Pakistan, while heavy-duty tarpaulins are manufactured in Europe. Emergency maize supplies are being imported into southern Africa from the United States and Latin America.

    "Demand is very high," said Catherine Taupiac, ITC's regional trade adviser. "Supply from local sources [in southern Africa] could double. South African companies, in particular, have strong global potential with food items.

    This week's meeting has promoted the local supply of cereals, beans, vegetable oil and nutritional foods needed as emergency food relief to drought-stricken southern Africa. Aid agencies have also sought to secure locally made tents, blankets, mattresses, mosquito nets and cardboard coffins.

    About 14 million people in the region face severe food shortages as a result of a regionwide drought and economic mismanagement. The worst affected countries are Zimbabwe, Malawi, Zambia, Mozambique, Swaziland and Lesotho.

    HIV/Aids has worsened the effects of the drought. The Geneva-based World Health Organization estimates that about 200,000 people will have died from a lethal combination of disease and hunger in the six months to February.

    ITC expects South African companies to soak up 90% of the regional emergency relief supply business.

    South African companies supplied US$ 29 million worth of emergency supplies to the UN last year. The UN's total annial procurement budget is US$ 850 million so there is plenty of room for African companies to expand.
    ITC believes contracts struck in support of this humanitarian effort may serve for disaster management elsewhere in the world."





    For the future

    Encouraged by the meetings' positive outcomes, and at participants' request, ITC is envisaging similar buyers/sellers meetings in all regions of Africa. In summer 2003, ITC will organize a meeting on food, shelter, and agricultural tools in eastern Africa. It will also organize an event in Almaty, Kazakhstan, to explore whether the initiative is adaptable to the central Asian Commonwealth of Independent States countries for supplying aid and relief material to the region, including for reconstruction efforts in Afghanistan.

    For more information about the programme, contact Catherine Taupiac, ITC Regional Trade Adviser, at taupiac@intracen.org