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What will it take to foster inclusive trade in Africa?

29 September 2016

 

In a lively high-level debate discussing what it would take to foster inclusive trade in Africa, it was acknowledged that trade could play an important part in creating prosperity for all by increasing opportunities for income generation. Fostering inclusive trade was also accentuated as part of the implementation of the Sustainable Development Goals to address poverty reduction, the trading challenges and inequalities as well as the untapped opportunities in Africa.

 

In his opening remarks, H.E. Dr Mukhisa Kituyi, UNCTAD's Secretary-General, stressed the need to formalize the informal sector and emphasized that inclusive trade required linking investment and trade policy as well as innovations and investment. Highlighting some of the major challenges, he also noted: "In Africa, building infrastructure, productive capacity, smart partnerships linked to innovation, investment facilitation and trade are key to fostering inclusive trade".   

 

His argument was further underscored by H.E. Mr Alioune Sarr, Senegal's Minister of Trade, who noted the need for robust policies and investments to foster inclusive trade in Africa. "Promoting regional value chains and intra-regional trade is important in fostering inclusive trade," Minister Sarr said, while highlighting that trade without industrialization was not a successful sustainable development approach in Africa. "Structural transformation, improved access to services and reinforcement of governance and security in Africa will help to promote inclusive trade," Minister Sarr added.

 

The role of Small- and Medium-sized Enterprises (SMEs) in fostering inclusive trade in Africa and in Least Developed Countries (LDCs) was emphasized by H.E. Mr Joshua Setipa, Lesotho's Minister of Trade, who called on innovative ways to mobilize domestic finance for the SMEs. "Innovative solutions to access trade finance for SMEs is key for economic growth in Africa", he said. Minister Setipa also stressed the need for measures that are supportive of investment in Africa, adding that "There is a need for boosted value of content and productivity to gain inclusive trade."

 

H.E. Ms Yvette Stevens, Ambassador and Permanent Representative of the Republic of Sierra Leone in Geneva, noted that trade was needed in Africa to boost development, economic diversification and value addition. "Africa needs to develop trade, and it must be done inclusively, especially with women and SMEs involved," Ambassador Stevens said. As EIF Board Chair, Ambassador Stevens also added that "The EIF provides a vehicle to analyze trade constraints and provides catalytic support in African LDCs," while urging all African countries to work together for inclusive development as well as to take steps to include SMEs and women in trade.

 

Supporting the African LDCs' perspective, Mr Ratnakar Adhikari, the Executive Director of the Executive Secretariat for the EIF, highlighted how trade was working as a development enabler in EIF‑funded projects in African LDCs, such as in Lesotho, Mali and Rwanda, which have provided pathways in fostering inclusive trade. "Our tools including the analytical studies show the key constraints and export potential of LDCs, which works to support inclusive trade," Mr Adhikari noted, adding that these analytical tools provided the base to lead sectoral support in the LDCs, including support to women's economic empowerment, which led to inclusive trade.

 

Recognizing that a path supporting pro-inclusive trade for development in Africa required filling knowledge gaps to inform best policy and intervention, Mr Peter Kiuluku, the Executive Director of the Trade Policy and Training Centre of Africa (TRAPCA) highlighted the need to design curricula grounded in change for inclusive trade. "Research hubs and networks as well as human resource capacity are key to supporting avenues to inclusive trade in Africa," he added.

 

Mr Belete Beyene, Founder and Director-General of Hilina Enriched Foods Private Limited Company, also provided the Ethiopian private sector perspective, calling for supportive enabling environments for private sector growth and for inclusive trade. "Trade policy is the 'software' that makes the 'hardware' (infrastructure) work for economic development," Mr Beyene said, while also emphasizing the importance of infrastructure and the need for a strong private sector to influence government policy for inclusive trade and economic transformation.  

 

The lively debate moderated by BBC's Mr Alan Kasujja ended with an active exchange with the audience. The session noted that promoting inclusive trade in Africa required going beyond targeting vulnerable groups. It required addressing fundamental enablers so that women, men and youth could benefit from entrepreneurial activity and from trade's impact on their communities. Central to this was investment in productive capacities, such as infrastructure, finance, energy, skills, policies, laws and regulations, and investment in people.