Speech by ITC Executive Director at the Arab Africa Trade Bridges

22 February 2017
ITC News
Speech delivered by ITC Executive Director Arancha González at the Arab Africa Trade Bridges
Rabat - Morocco
22 February 2017
Your Excellency, Mr. Hani SONBOL, Chief Executive Officer of the International Islamic Trade Finance Corporation (ITFC),
Your Excellency, Dr. Bandar M.H. HAJJAR, President of the Islamic Development Bank Group (IDB Group),
Honorable Ministers,
Members of the Diplomatic Corps and Representatives of International and Regional Organizations,
Distinguished Delegates,
Ladies and Gentlemen,

It is a pleasure for me to be back in Rabat and I want to thank the Kingdom of Morocco, the Islamic Development Bank Group and the International Islamic Trade Finance Corporation, for inviting ITC to participate in the launch of this important initiative.

Fostering greater economic ties between the Arab States and Sub-Saharan African countries members of the Organisation of Islamic Conference is politically expedient but more importantly, makes smart economic sense.

Africa is the market of the future. It is a hub of untapped innovation. Merging this with the expertise, demand and market opportunities in the Arab region can create a powerful new economic force going forward.

This initiative, in part, will revitalize the historic trade routes that linked the Arab countries to what are now Niger, Mali, Ghana, Tanzania, Kenya and of course, Morocco. The caravans that traversed the Sahara did not just carry goods like gold, salt, and ivory. They brought with them powerful ideas, a religion, a language, and legal codes that facilitated long-distance trust and financing that made even more trade possible.

Today, interregional trade volumes are relatively low. But a recent research by ITC entitled “Export Opportunities for the Arab-Africa Trade Bridge” has identified an untapped trade potential of over US$ 20 billion as a low hanging fruit.

Opportunities are in sectors ranging from agriculture, food and agri-business, to chemicals, and services. These opportunities are there to be seized, but companies, governments, and the Aid for Trade community each have a role to play in converting them into real business transactions.

There are also huge opportunities for investment across the two sub-regions. Foreign Direct Investment (FDI) can come with access to international supply chains, technology and know-how, and even infrastructure, with spillover benefits for local businesses.

We need to change the narrative. When the trans-Saharan routes do make the news, it tends to be in the context of regional insecurity, or irregular migrants risking their lives to get to Europe. The Arab-Africa Trade Bridge has the potential to change this as increasing trade and investment across these regions would unleash growth and job creation, broadening economic aspirations for young and growing populations from Mauritania to the Gulf.

An Afro-Arab trade renaissance would complement the ongoing revival of another ancient trade route: the Silk Roads linking China to the Middle East, Europe, and Africa. As part of Beijing’s ‘One Belt, One Road’ initiative, new rail links as well as road and energy infrastructure have already been constructed through Central Asia, and are extending into South Asia and the Middle East. They are being complemented with investments in maritime infrastructure from Eastern Africa to South East Asia.

The Arab-Africa Trade Bridge seeks to address the challenges preventing businesses in the region from taking full advantage of existing trade potential.

According to the ITFC, some of these challenges spring from a lack of information: about market opportunities, about trade laws and regulations, and about companies that could be trading partners. An additional challenge it identifies is insufficient cooperation among trade-related institutions.

These needs align well with ITC’s mandate to help SME’s in developing countries participate in trade, which is why we are so keen to support the implementation of this initiative, starting with a Memorandum of Understanding (MOU) with ITFC.

SMEs employ the vast majority of people and since firms that trade tend to be more productive and pay higher wages, an internationally integrated SME sector translates into inclusive growth.

Many barriers stand between SMEs and international markets, starting with difficulties in accessing trade and market intelligence, which is an area where ITC’s suite of free online tools can help businesses access markets.

But SMEs need more than information. They need a favourable policy environment and institutional support. This is why supporting governments in building a pro-trade business climate – including reforms to improve trade facilitation, and working with a wide network of trade and investment support institutions to help them better serve their clients must be a priority.

Finally, SMEs must also be supported in improving their competitiveness and connecting to value chains. This is what ITC is doing here in Morocco in the agro-business, fisheries and leather sectors, in Tunisia in textiles and clothing companies, in Western Africa in mangoes and in Eastern Africa in IT, to name a few. And later this week in Istanbul, at our flagship annual international event on women’s economic empowerment, we will organize B2B sessions where women-owned businesses in the tech, tourism, and textile and clothing sectors will be carefully matched with potential big buyers such as Microsoft and General Electric.

Before closing, I would like to thank the IDB Group and ITFC for their continued cooperation with ITC. Together we are working to deliver trade impact for good on the ground.

Allow me once again to congratulate you for embarking on this initiative. At the International Trade Centre, we stand ready to accompany you in any way we can to maximize the Arab-Africa Trade Bridge’s contribution to inclusive and sustainable growth.

I look forward to your discussions.