Lifting people out of poverty

30 September 2013
ITC News
Supporting African countries to achieve economic development and growth through trade and job creation.

Since 2003, a fragile peace has been in place in Liberia, and the country is slowly recovering from decades of civil war and violence. An important aspect of the country’s reconstruction is the development of private companies to create jobs and growth. Sida has supported several reforms to facilitate this. Between 2008 and 2010, approximately 20,000 new jobs were created. Steve Davies (dressed in orange) is managing a flourishing cement company after the cement import monopoly was broken, creating a better life for himself and his family. © Yudawhere Jacobs / Sida

Abroad smile spreads across Joseph Mwangi Migwi's face when he looks over the ten acres of farmland that surround him. Joseph Mwangi Migwi has a passion for Kenyan cotton.

‘Cotton is the crop with the potential to wipe out poverty in this country. Firstly, because it is grown in marginalized areas where many poor people live. Secondly, because it is grown by small farmers, who constitute the majority of the population,’ he says.

With support from Sida, the Swedish International Development Cooperation Agency, Mwangi Migwi had the opportunity to travel to Thailand to participate in a course arranged by the International Trade Centre (ITC) as part of its Promoting African Cotton & Increasing Transparency in the Cotton Value Chain cotton training programme. This programme is geared towards providing producers in least developed countries (LDCs) with the conditions needed to become competitive and to increase their production of various goods. One of the programme’s aims is to provide African cotton farmers with greater knowledge and to allow them to create a network of contacts on the world market. With the help of knowledge, information and facts, farmers like Mwangi Migwi have been able to get a much better price for cotton. Better pay also means better food, better education and better health for the families whose livelihoods are in and around the cotton trade.

‘I think that more children will get to see the inside of colleges in the future,’ says Mwangi Migwi.

All of us who are committed to poverty reduction know that complex problems require solutions at many levels. That is why Aid for Trade contributes to lifting people out of poverty and gives them the opportunities to create a better life for themselves and their families. Sweden and Sida support economic development and growth by strengthened regional economic integration because we believe in the power of trade to create development, not least by contributing to the creation of more jobs, which will benefit society as a whole.

With the 2015 deadline for the Millennium Development Goals approaching rapidly – there are fewer than 1,000 days left – we are all worried about the fact that sub-Saharan Africa is lagging behind in the fulfilment of the objectives agreed upon by world leaders in 2000. This is one of the reasons why Sweden has a special focus on African countries and supports initiatives with different focuses and aims – all of which create more opportunities for people living on the continent.

We work at different levels to support our partner countries on their way to achieving economic development and growth through trade and job creation. It is a chain of actions.

At an individual level, we support people such as Mwangi Migwi and other local farmers and small businesses as they improve their knowledge of markets to allow them to get a better price for their products and to be a part of local and international trade.

Victoria Joram runs a small mobile phone shop in Dar es Salaam in Tanzania. To expand her business, she was granted a loan from a commercial bank that collaborates with Financial Sector Deepening Trust (FSDT), a programme that works to provide more people living in poverty with access to finance. © Goodluck Mushi / Sida

At a national level, we contribute to the countries' work to improve the business climate, not only by developing harmonized structures and regulatory frameworks, but also by finding ways of matching the skills of young professionals to the needs of the private sector. In Uganda, for example, Sida supports A Working Future, an organization that seeks to combat youth unemployment by creating partnerships between young people, the private sector and the government.

At the regional and international levels, we stress the importance of international standardization, including in the climate area, mutual approval of products, consumer protection and trade in food. For example, we support international and regional initiatives connected to trade, such as the World Customs Organization and TradeMark East Africa.

Sweden emphasizes the importance of continued capacity development, for example through international training programmes utilized to build up skills and capacity, as well as regional networks. This is why we contribute to improving African countries’ abilities to make their voices heard at the World Trade Organization (WTO) and in other trade forums. Sweden is a strong supporter of, for example, the Trade Policy Training Centre in Africa in Arusha, Tanzania, where negotiators from African countries get the opportunity to increase competences within the areas of trade policy and negotiation techniques. We also support countries such as Liberia in improving their investment climate, access to financial services and small entrepreneurs’ capacity, as well as providing assistance in the WTO accession process.

But public aid is far from the only major player in the vibrant and emerging markets of sub-Saharan Africa. Private capital is flowing into Africa, and many international companies are waiting in line to invest in and trade with the continent. Given our long experience cooperating with these countries, Swedish development cooperation can serve as a catalyst in helping to create business relations that are environmentally sustainable and socially inclusive. One example of how we do this is our support to the Africa Enterprise Challenge Fund (AECF), which encourages companies in the private sector to compete for investment in new and innovative business ideas within agribusiness, renewable energy and climate change technologies. Founded by the Green Revolution in Africa, the US$ 200 million dollar private-sector fund is partially funded by Sida. AECF is structured to match the commercial interests of private companies with the agricultural needs of a particular country, while also emphasizing sustainable corporate engagement. By 2011, 3 million people had benefited from the programme, and by the end of this year, the number of business projects supported by the fund is forecast to increase to about 170 in 22 countries across Africa.

We believe that a holistic approach is needed to improve conditions for people living in poverty. Increased trade is one piece of the puzzle, and we are proud to be one of the players, together with governments and authorities in the countries in which we work, as well as with regional and global organizations and local and international businesses and corporations. It is our aim to continue to create possibilities for sustainable markets and fair trade, but never lose our focus on our most important achievements – to help people like Joseph Mwangi Migwi to change his own life.