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    Buying from Africa for Africa

     

     
     
    © International Trade Centre, International Trade Forum - Issue 1/2002

    International aid agencies including United Nations agencies and non-governmental organizations (NGOs) spend large amounts on procuring goods and services for development and disaster relief operations. Most of this aid goes to Africa, but supplies for it rarely come from African sellers.

    ITC is working to change this situation. From 27 to 30 November 2001, it organ-ized a buyers-sellers meeting in Nairobi, Kenya, for eastern and southern Africa with the goal of increasing Africa's participation in development aid procurement. During the meeting, buyers from international aid agencies met with enterprises from nine African countries.

    Participants included 32 procurement professionals from UN agencies such as the UN Children's Fund (UNICEF), the UN High Commissioner for Refugees (UNHCR), the World Food Programme (WFP), NGOs like the International Committee of the Red Cross (ICRC), the International Federation of Red Cross and Red Crescent Societies (IFRC), Médecins sans Frontières (MSF), Oxfam and many others. Business interests included 77 entrepreneurs from nine African countries producing and exporting shelter, personal protection and household items including tents, blankets, pots and pans, among other items.

    The event had three main sections: an "awareness workshop" for enterprises which focused on identifying and responding to contract opportunities; a business session which examined regional supply-and-demand trends; and over 400 one-to-one business negotiations between enterprises and procuring aid agencies with matching interests. These negotiations led to several encouraging results:

    • Expanded regional trade development. All buyers discovered new sources of supply. One month after the meeting, orders had been placed with participating enterprises. One-to-one negotiations allowed the buyers to identify new sources of supply. With two exceptions, the enterprises reported that they had been asked by agencies to register as suppliers. One Tanzanian enterprise was asked by ten different agencies to register on their rosters of suppliers. A month after the meeting, the agencies were already reporting US$ 2 million worth of orders placed with enterprises they had met in Nairobi.

    • Generation of cross-border business-to-business links. In addition to the meetings scheduled by ITC, participants arranged more meetings with agencies and with fellow businessmen. These led to negotiations on cross-border business-to-business links such as distribution arrangements, technol-ogy transfer and joint bidding operations; all of which aim to maximize access to the international aid market.

    • Exploration of business development options. The meetings prompted enterprises to explore options for product diversification and business improvement, thus enhancing their access to the aid procurement market. A foam mattress manufacturer reported that he intended to invest in vacuum-pack machinery to reduce shipping costs and to export products more efficiently.

    • Producers of plastic kitchenware are now considering diversifying into semi-collapsible jerrycans which are procured by most aid agencies.

    • Changed perception of the region's supply potential. The meeting dispelled misconceptions about the export readiness of African enterprises. It confirmed that African enterprises can export items other than a few primary commodities, which not only meet the stringent requirements of international aid agencies, but can also be commercialized under competitive conditions.

    • A better understanding by enter-prises of aid agency issues and requirements. While international aid agencies are often unaware of the potential of African sources of supply, African companies are not always familiar with the requirements and the procedures under which their products could be offered to the agencies. The amount of information exchanged during the meeting on the agencies' qualitative and quantitative requirements contributed to bridging the information gap, thereby enhancing participating enterprises' ability to compete in the international aid procurement market.

    • Ongoing benefits. Six enterprises which participated in the Nairobi buyers-sellers meeting gained sponsored participation at the aid and trade conference held in Geneva. On that occasion, suppliers also reported new deals with agencies for relief materials bound for the Nyiragongo region. Encouraged by this positive feedback, ITC is organizing similar buyers-sellers meetings in other parts of Africa.