Speech

AID-FOR-TRADE Meeting in Dar es Salaam, Tanzania - October 2007

Remarks by Cheryl Anderson, USAID/East Africa Mission Director

Dar es Salaam, Tanzania  | Tuesday, October 02, 2007

Introduction

USAID is an enthusiastic participant in the Aid for Trade initiative -- with good reason.   

By now the link between economic growth and trade is indisputable. Trade is good for growth, but to benefit fully, countries need to be able to take advantage of the fast moving world of international commerce, investment, and trade. 

The United States is committed to working in partnership with developing countries to help them gain the capacity to participate actively in the global market.  We have also committed substantial resources to this effort.  At the Hong Kong Ministerial in December 2005, the U.S. government committed to increase trade capacity building support to $2.7 billion annually by 2010.  We stand by this commitment.

How are we doing? Africa is a significant recipient of US Aid for Trade. In the Africa region, U.S. Trade Capacity Building totaled over $442 million last year, nearly twice the amount that was spent in 2005, and over $1.6 billion cumulatively since 2000.  And it is growing.

US Delivery of Aid-for-Trade

A number of U.S. Agencies contribute to US Trade Capacity Building activities.  The two largest are USAID and the Millennium Challenge Corporation.

We are working as a government to ensure that our trade and development agencies are coordinated. The intra-agency coordination process is broad and very active.

At this meeting our delegation includes the United States Trade Representative, USAID, the Millennium Challenge Corporation and the United States Department of Agriculture.

Millennium Challenge Corporation

The Millennium Challenge Corporation invests in countries that are performing well and continue to perform well during the life of their program. The Millennium Challenge Corporation has signed 14 compacts and recently approved two more, worth a total of $5.5 million.

We have discussed the importance of countries prioritizing trade in their development plans.  One pillar of the Millennium Challenge Corporation is that countries choose the program’s Millennium Challenge Corporation funds. In these Compacts, countries have prioritized trade – 62% of the resources in the Millennium Challenge Corporation Compact to date are Aid-for-Trade. Nine of the compacts, worth $3.8 billion, are in Africa and $2 billion of this amount is dedicated to supporting Aid-for-Trade activities.

For example, the Millennium Challenge Corporation and Ghana agreed on a $547 million compact providing support to increase agricultural productivity and trade-related infrastructure. In Mali, the $460 million compact supports infrastructure investments, including airport improvements.  Here in Tanzania, the Millennium Challenge Corporation has just developed a $698 million compact.  The majority of the investment will be dedicated to rehabilitating transportation infrastructure and increasing power generation. 

USAID

USAID implements its Aid-for-Trade assistance in partnership with national level governments, African Regional Organizations (including the Common Market for Eastern and Southern Africa, the East Africa Community, the Southern African Development Community, and the Economic Community Of West African States), and the private sector.

The Africa Global Competitiveness Initiative is a $200 million, five-year effort to expand trade regionally within Africa and overseas.

The US also emphasizes agricultural trade.  This is aligned with the African Union’s Comprehensive African Agriculture Development Program. 

USAID implements Aid-for-Trade programs regionally and in 16 African countries, which are showing very good success. For example, through the South African International Business Linkages program, trade deals worth more than $141 million have been facilitated in South Africa. In East Africa, we have worked with private sector-led regional trade associations resulting in an increase of exports of coffee, cotton and textiles, dairy, and maize by 57% in the last five years.

Projects that are increasing transit efficiency along many of the region’s most important corridors, dramatically reduce the time and cost of trading goods in the region. In West, Central and East Africa, USAID is also helping to connect electricity grids to a common power pool, which will attract major investments in large-scale energy generation. In Central Africa, this assistance has helped them to obtain $500 million in infrastructure investments from the World Bank and the African Development Bank.

United States Department of Agriculture

The United States Department of Agriculture and USAID are working together to help producers meet sanitary and phytosanitary requirements for export to the United States. USDA is also implementing an expedited clearance process for African entrepreneurs who wish to export their agricultural products to the US.

Other United States Government

The US government provides additional Aid-for-Trade support through Overseas Private Investment Corporation and Treasury to increase the ability of African firms to access equity finance and to develop local capital markets.

Conclusion

These are just highlights but I’d like to reiterate, in conclusion, that the US Government stands by and is meeting its commitment to Aid-for-Trade in African and the world.