Statement by the ITC's Executive Director, at the 8th ordinary session of the conference of African Union Ministers of Trade (en)
Delivered on 24 October 2013 at the 8th ordinary session, Conference of African Union Ministers of Trade 2013
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Ladies and Gentlemen of the 8th Ordinary Session of the Conference of African Union Ministers of Trade
It is a great honour for me to address you in my new role as Executive Director of the International Trade Centre. I have assumed this role in the 50th year of the formation of the Organisation of African Union and at the cusp of ITC’s 50th anniversary which will be held in 2014. It is significant period for both of our organisations. For Africa, however, the significance goes far beyond an annual celebration. This is a period of African vibrancy.
I say this will full acknowledgement of the challenges that remain but with confidence that the path towards sustained growth and development is clearer now than at any other time in Africa’s history. In your hands you have the resources that will help transform Africa. Here I am not just speaking of the oft-mentioned mineral resources but rather of the people of Africa; the untapped innovative and entrepreneurial spirit, which drives progress and growth, and which I believe can carry the continent to another paradigm of development.
A substantial part of that story will be that of Small and Medium Sized Enterprises. SMEs are the growth platform of the future. And Africa is made up of a vast network of SMEs- both formal and informal- and a number of them women-led or made up of a majority of female workers. The preparatory discussions on the post 2015 UN development agenda make two facts clear: the major global challenge in the future will be addressing employment; and SMEs are a substantial source of untapped growth potential and employment in the future.
ITC has a very particular role to play in this regard given its comparative advantage in working with SMEs and its global recognition as the ‘one stop shop’ for SMEs, trade promotion offices and trade and investment support institutions in developing countries. Africa is a priority for the ITC. In 2012, over 50% of ITC's technical assistance at country and regional level went to sub-Saharan Africa, and 60% of ITC's work is focused on Least Developed Countries, Landlocked countries and SIDS. But if we are to respond to the growing needs of SMEs in Africa what is needed is collective ambition and a cohesive approach. My standing together with the representatives of UNCTAD and WTO clearly speaks of our determination to make trade work for growth, jobs, development and ultimately for poverty reduction in Africa.
For ITC and for Africa the key words have to be ‘scaling-up’. For ITC this will entail expanding the reach of our initiatives on the ground to connect a large population of small businesses to regional and global buyers and investors; expand the strategic partnerships with multilateral agencies like UNECA, UNCTAD, and the WTO; with initiatives such as the Enhanced Integrated Framework; with our dynamic network of national trade support institutions; but increasingly with the private sector in developing and developed economies as both users and providers of the products and services that ITC delivers.
Scaling up, looking for new funding streams and innovative ways of providing for our clients is a matter of necessity if we are to be responsive to the growing needs of SMEs and trade support institutions in Africa.
Let me share with you how we can together Today substantially scale up our operations in Africa.
You may already be familiar with ITC’s flagship Programme for Building African Capacity for Trade (PACTII). The programme was launched in 2008 with the aim of strengthening regional integration, trade development and export promotion in Africa. This programme was implemented in close partnership with three Regional Economic Communities (RECs) in Africa – the Common Market for Eastern and Southern Africa (COMESA), the Economic Community of Central African States (ECCAS) and the Economic Community of West African States (ECOWAS).
The operational strategy of the programme was:
First, identify and promote sector competitiveness with high potential for increasing intra-regional trade. In this the ITC targeted Mango in ECOWAS, Leather in COMESA, and Coffee in ECCAS.
Second, the programme sought to determine gaps and address them through focused institutional development by providing region wide services. In this the target areas were market intelligence, compliance with standards and trade law services.
Third, to support regional public-private dialogue on trade policy, the focus was on strengthening the COMESA business council for advocacy in support of regional integration, and building awareness of the business benefits of regional integration in ECOWAS and ECCAS.
And fourth, an important component of the programme was the need to strengthen women-owned businesses through export development services.
These priorities were very much defined by African governments and SMEs and clearly showcased the growing need for building the capacity of business to be a driver of growth and to create sustainable sectoral value chains that had the potential for backward and forward linkages.
We have seen some positive results from PACT II but there is still much more that we can do and in line with the Africa Union’s Action Plan on Boosting intra-African trade. The ITC is ready to support this Plan with a new programme focusing on 6 objectives:
- Retain a regional approach and enlarge its spectrum to cover the Southern African Development Community (SADC) and the East African Community (EAC) in addition to COMESA, ECOWAS and ECCAS;
- Support the AU Commission in capacity building of the African Business Council and in setting up an African Trade Observatory;
- Create pools of African networks of experts supporting TSIs’ service delivery;
- Promote regional business advocacy on trade policy and regulatory reforms for facilitating regional integration agenda;
- Enhance export competitiveness of high potential sector value chains covering agriculture, manufacturing and services sectors
- Continue supporting businesswomen’s empowerment through export development services.
I see this programme as a new era in ITC collaboration with Africa, responding to your regional integration needs through the Action Plan but also the individual country and SMEs needs.
Let me also mention three areas where I believe there is scope for working together:
First is the area of trade in services. Services represent a game-changer for Africa providing an alternative engine of growth, and enabling some “latecomers” to leapfrog over a traditional manufacturing route to development. The recent publication on Tourism in Africa by the World Bank clearly outlines the role that increased investment in tourism services can have. In 2012 tourism contributed US 33.5 billion to Sub-Saharan Africa but this only accounts for 2.7% of the region’s GDP. If measured against the exponential growth in tourist arrivals- from 6.4 million in 1990 to 33.1 million in 2011- the potential is tremendous. The aim will be to ensure that tourism is firmly fixed into the national and regional value chains and that this increase in arrivals leads to a concomitant increase in income. But in addition to tourism there are other importance sectors such as logistics, finance and e-commerce.
Second is the issue of trade facilitation. ITC approaches trade facilitation from a ‘whole of value chain’ perspective. Effective trade facilitating procedures are critical for exporting SMEs allowing them to connect to and operate value chains. This is why many of you are taking important steps in cutting the cost of trading for your SMEs. This is why the WTO Agreement on trade facilitation currently being negotiated is important to facilitate expanded business opportunities for SMEs. And this is why the ITC aligns with the WTO in calling for the WTO Ministerial in Bali to deliver a deal on trade facilitation. This deal has to be an 'inclusive deal' with the recognition that capacity building for the weakest will be available. It would defeat the very purpose of the Agreement to think in terms of 'opt outs'.
ITC has a specific role to play in providing the necessary technical assistance and capacity building to policy makers, institutions and exporting SMEs in developing countries as they seek to design and implement trade-related changes to reduce exporting bottlenecks and comply with WTO-negotiated rules. We stand ready to be a 'confidence builder'. We stand ready to play our part to support you and your SMEs.
Third, our clients demand pragmatic solutions to better understand and address non-tariff measures (NTMs) which limit the ability of SMEs to connect to or move up value chains. ITC has been at the forefront of identifying specific NTM-related trade barriers and providing tools to address them. This is a growing concern for our clients and this is why we will pay specific attention to NTMs.
But beyond these three areas lie key efforts in many other fields such as support related to WTO accession, investment, value chains, women and trade, youth and the environment. All of these pillars are critical to supporting sustained and sustainable trade-led growth in our client countries.
In this my first official visit as ITC Executive Director I want to tell you that Africa will be a priority of the ITC under my tenure. And this is why next year, as ITC celebrates it's 50th anniversary, I intend to host our annual flagship event- the World Economic Development Forum (WEDF) for the first time ever, in Africa. It is a signal of a vibrant entrepreneurship in Africa.
I thank you for your attention.