Unlocking the trade potential of SMEs through South-South cooperation (en)
Emerging economies represent promising markets for sub-Saharan exporters. African countries can better capitalize on growing South-South trade, according to panellists at the World Export Development Forum (WEDF) in Kigali on 17 September.
Trade between developing countries accounted for a quarter of world trade, reaching US$ 4.7 billion in 2013. At a plenary session on ‘Benefiting from South-South trade opportunities’, speakers discussed ways that African exporters can attract more investment in sectors such as agro-processing, manufacturing and services, and how small and medium-sized enterprises (SMEs) can benefit as suppliers in those value chains.
Cooperation among developing nations has mainly focused on government-to-government relationships between member countries thus far. Speakers said private-sector players, and in particular SMEs, should establish partnerships to grow their businesses.
‘We are removing trade barriers, addressing infrastructure, developing trade policies, to ensure that the business environment between countries is conducive for our people,’ said Ambassador John Mwangemi of Kenya.
Boosting intra-African trade
The speakers focused on increasing intra-African trade, as it accounts for just 11% of African trade globally. They said that SMEs need assistance in gaining access to trade finance and markets. To achieve this, banks will have to find innovative trade-finance solutions for SMEs that are unable to provide collateral. Countries such as India have shown that guaranteed trust funds, for example, can deliver the desired effects. In addition, chambers of commerce around the world have demonstrated that they can help SMEs to navigate international trade.
Participants at the session said that the potential benefits of South-South cooperation are immense, as the comparatively lower transaction and logistical costs make it easier for developing countries to do trade.
Read the full summary of the plenary session on ‘Benefiting from South-South trade opportunities’.
WEDF is organized by ITC, the only United Nations organization with an exclusive focus on assisting SMEs. The event is hosted by the Rwanda Development Board.