ITC to play central role in UK-China initiative to boost African trade, investment and jobs

27 October 2015
ITC News
Project seeks to boost export-oriented manufacturing and food processing in sub-Saharan Africa

The United Kingdom and China are joining hands to reduce poverty while promoting job creation and income growth in Africa. The International Trade Centre is set to be a key partner in these efforts, working to develop export-oriented manufacturing on the continent by helping companies overcome constraints on export success.

The Partnership for Investment and Growth in Africa (PIGA) initiative was officially launched on 22 October in London, on the sidelines of Chinese President Xi Jinping’s state visit to the UK. The project seeks to increase exports and sustainable incomes for poor people in Africa through greater integration into international value chains in agro-processing and manufacturing. For China and the UK, the underlying idea is that enabling sub-Saharan African countries to capture more than their current sliver of global manufacturing would reduce poverty by creating productive jobs and stable growth. As a by-product of the project, the two governments hope to strengthen bilateral cooperation and generate useful learning on trade-related investment and development assistance, with a particular focus on small and medium-sized enterprises.

As the official implementing partner on the project, ITC will work with the UK Department for International Development (DFID) and the China-Africa Development Fund (CADFund), a Beijing-backed entity that seeks to stimulate investment in Africa by Chinese companies, to spur export-oriented manufacturing in promising African locations. Important aspects of this work will be to identify and tackle constraints facing would-be exporters such as inadequate market information, weak supply-side capacity, trouble overcoming regulatory barriers within the region and overseas, and obtaining access to finance, both for investment capital and to underwrite trade.

A preliminary ‘scoping’ phase of the project will focus on Ethiopia, Kenya, Mozambique and Zambia, for a year from November 2015. This work will serve to identify high-impact project activities that will subsequently be implemented and expanded across the rest of the region. Interventions will focus on SMEs in the four countries, with the aim of increasing employment and incomes through enhanced trade and investment. Project activities being considered include research into local development priorities, supply capacity, market opportunities, and policy barriers; developing links between African firms and investors as well as with UK and other EU retailers; building producer capacity and ability to meet market requirements including environmental standards; and facilitating equity investments from the CADFund and other investors. Where feasible, the project will seek to partner with existing programmes, such as DFID’s work on SME capacity building, to avoid duplication. Also likely to feature in the project will be regular high-level dialogue between DFID and the CADFund to share experiences and cutting-edge analysis of economic trends in sub-Saharan Africa.

“DFID and CADFund have chosen ITC to implement the Partnership for Investment and Growth in Africa project,” said Ashish Shah, who directs ITC’s Division of Country Programmes. “ITC is very pleased to work jointly with African, Chinese and British entrepreneurs to increase suitable investments in productive sectors with high potential for export promotion and job creation in Africa.”

“The UK-China partnership will leverage on ITC’s more than fifty years’ experience in delivering trade related technical assistance, capacity building and trade and investment market intelligence to SMEs and to policy makers,” he added.

The project launch was part of a broader event on UK-China-Africa Collaboration for Investment and Growth, at which participants explored how the UK and Chinese governments, as well as each country’s financial and business sectors, could best combine forces to stimulate investment and inclusive growth in Africa. Prominent speakers at the event included Justine Greening, UK Secretary of State for DfID; Hu Huaibang, Chairman of the China Development Bank; Nkosazana Dlamini-Zuma, Chairperson of the African Union Commission; and Tedros Adhanom Ghebreyesus, Foreign Minister of Ethiopia.