Speech

Remarks to East Africa Agribusiness Trade and Investment Mission

by Cheryl Anderson, Mission Director, USAID/EAST AFRICA

Nairobi, Kenya  | Monday, February 19, 2007

Good afternoon.

I’m very pleased to have this chance to give you a brief overview of some of the regional programs and activities of USAID, the U.S. Agency for International Development, in Eastern and Central Africa.   Our regional mission, USAID/East Africa (formerly known to many of you as REDSO) complements the work of USAID country programs in the region, focusing on areas where a regional approach is needed to deal with serious constraints to development or to take advantage of opportunities to significantly enhance our country-focused efforts.  We run regional programs in the areas of Health, Conflict Mitigation and Governance, but it is our programs in the area of Trade & Investment and Agriculture that will be of most interest to you today.

One of our primary objectives is to promote economic growth in the region, with specific concentration in Trade & Investment, Agriculture, and Private Sector Competitiveness. Fundamental to achieving an improved quality of life for the people in the region is sustained, equitable economic growth.  In this region, this (economic growth) is most likely to be achieved through increased trade, efficient service delivery and increased agricultural productivity. 

Our program directly supports and advances several important U.S. Foreign Assistance Priorities and Presidential Initiatives including the African Global Competitiveness Initiative, the Initiative to End Hunger in Africa, and the African Growth and Opportunity Act (AGOA).

Let me start by discussing the African Growth and Competitiveness Initiative.  Supporting regional African trade institutions to increase their effectiveness will enable them to facilitate the growth of African economies, through enhanced efficiency and competitiveness.  The premier regional trade and integration institution here of course is COMESA, whose Secretary General, Erastus Mwencha, spoke to you this morning.  In a region where the economies of nation states are mostly very small, regional economic integration is essential.  As more countries are assisted to join and improve their participation in regional economic communities, regional markets are expanded.   We are also providing assistance to stimulate private sector involvement within the frameworks of the Common Market for Eastern and Southern Africa (COMESA) and the East African Community.

Now the Initiative to End Hunger in Africa.  Another key element of USAID’s strategy in Africa is increasing the productivity of smallholder agriculture to raise rural incomes. The tools of science – including biotechnology and improved natural resources management practices – are fundamental to sustainable agriculture and to spur agricultural growth and income. USAID/EA continues to build on a long-standing partnership with ASARECA (the Association for Strengthening Agricultural Research in Eastern and Central Africa) and the many African regional organizations linked with it to increase the regional availability of science and technology for agriculture and natural resource management.

Finally, expanding intra-Africa trade and exports of products and services from Africa to the U.S. and globally under AGOA (the African Growth and Opportunities Act) is an ongoing priority and we intend to expand the number of product lines that will be supported.  Our programs aim at expanding access to U.S. and global markets for agricultural commodities by continued attention to policy harmonization as well as improving grades and standards to meet global demands. 

In this context it is our support of the East & Central Africa (ECA) Trade Hub in advancing AGOA that I think will be of special interest to this group.  The ECA Hub is concentrating its AGOA efforts in four major areas: 

1)  The direct training of private and public sectors on AGOA legislation and the opportunities for export to the U.S. under the preference program;

2) Assisting countries in developing National AGOA Export Strategies that analyze competitive/comparative advantages, then recommend policy initiatives necessary to overcome obstacles, and help develop action plans to capitalize on AGOA opportunities;

3) Providing technical assistance and firm-level support in assisting companies to effectively export to the U.S. under AGOA, including things like marketing, packaging, labelling, pricing, market positioning, and buyer negotiations; and

4) Establishing trade linkages by facilitating attendance to U.S. trade shows and providing assistance to companies through the use of sector experts.  Every firm that attends a U.S. trade show receives several layers of specialized support, both before and after, so that companies are provided a full range of services to ensure the best possible chance for success in the U.S. market. 

By providing this type of assistance the three-year total of ECA Trade Hub-supported exports so far is over $12.9 million.  This is very significant because most of the companies are small.  Every $1 spent by the ECA Hub in direct technical assistance and trade show support has resulted in $76 of exports to the U.S. under AGOA. 

We are proud of this record in advancing the opportunities that the AGOA affords – but the efforts of the Trade Hub do not end there. Let me quickly mention two or three additional highlights:

The ECA Trade Hub has another important objective: increasing transport and trade efficiency throughout the region.

In this area one of our “centrepiece” accomplishments has been the establishment of the One-Stop Border Post at Malaba (the major Kenya-Uganda border crossing on the Northern Transportation Corridor).  The aim of the one-stop border post initiative is to significantly reduce transaction costs by improving the efficiency of border post operations and reducing the time it takes to move goods throughout the region.  With ECA Hub support, the time it takes to clear customs at Malaba has been reduced from three to five days to between 20 minutes and three hours (depending on whether an inspection is required).  Let me mention here that we are also active in the fight against HIV and AIDS and you can imagine how the reduced time at border crossings reduces the risk of HIV transmission.  From this one pilot project, commitments have been made by the World Bank to extend this model to nine other border posts in the region.

Another important initiative is the Regional Customs Bond Guarantee Scheme. The objective of this program is to eliminate the requirement to get a customs bond for each country through which goods pass.  Currently, there is over $1 billion tied up unnecessarily to back customs bonds in the region.  COMESA studies show that a minimum of $300 million will be saved, money which can be used to invest in trade.  With the support of the ECA Hub, COMESA has now ratified the scheme and is preparing to implement it.

Finally, another interesting initiative being led by the ECA Trade Hub involves customs harmonization and IT communications throughout the Northern Corridor.  Through this project activity the harmonization of the Customs IT systems will enhance data transfer by creating an IT Corridor initially from the Port of Mombasa to Rwanda. This will further facilitate Risk Management and Bond clearance. Currently the paper acquittal of bonds takes between one to two months, but by using electronic transfer, this acquittal can be made within two to three days.  Again, reducing the costs of trade and increasing economic growth and opportunities. 

These are but a few of USAID’s current East Africa regional programs in trade and investment.  I hope that I have been able to provide you a glimpse and understanding of what we’re doing.  I should mention again that these programs complement USAID bilateral country programs in trade and investment.  And I am very pleased that I will be followed by Barry Fischer of our Regional Agricultural Trade Expansion Program, who can give you details of their work.  I welcome the opportunity for further discussions and questions throughout the day.

And I wish our visitors a fruitful mission to the East Africa region.  

Thank you.