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04 Jun 2019

Impact via exports: a selection of export-oriented value chains in five African countries

Trade fosters economic growth and creates employment. Export increase and diversification is, therefore, an important strategy for various African countries to create sustainable and inclusive economic development (UNCTAD, 2018). CBI, the center for the promotion of imports from developing countries, supports small and medium enterprises (SMEs) in these countries to expand their exports to Europe.

CBI implements programs in sectors and value chains that have the potential for more exports and meet European market demand. They do not only look at opportunities in the European market, but also at opportunities for reducing Corporate Social Responsibility (CSR) risks.

CBI:

  • offers export coaching programs to make SMEs in developing countries export ready;
  • provides technical support to business support organizations in developing countries to increase the added value for their exporting members;
  • develops market information on potential export sectors in Europe;
  • informs and influence policymakers;
  • involves importers in Europe in the development and implementation of our programs.

 

As a consulting firm with a lot of experience in value chain selection, analysis and development, Fair & Sustainable was hired by CBI to conduct a value chain selection in five African countries: Egypt, Uganda, Kenya, Sierra Leone and Guinea.

Leading in this assignment was exploring a series of value chains with potential for more exports to Europe; linking products produced in the five African countries to the European market demand. This focus brings extra opportunities to make the selected value chains more inclusive and fair as a growing number of consumers in Europe, Africa’s main trade partner, buy organic and/or fair trade products.

Value chain selection

Our value chain selection approach comprised of two phases. First, a long list of 5-7 value chains per country was made by exploring matches between promising value chains with potential European market demand. This list was based on desk research (e.g. statistics, reports, policy papers) and interviews with (CBI) experts. Inclusion criteria for value chains were the development of European demand, export potential, current production and exports, and whether the value chain is mentioned as a priority in the National Export Strategy. Moreover, as CBI only works with SME exporters, it was checked whether these were present in the selected value chains.

Second, the five countries were visited for one week each to gather additional information. In interviews and focus group discussions with private and public actors, obstacles and opportunities in the value chain, CSR risks and potential cooperation partners (e.g. other donors, export promotion agencies, the Netherlands Embassy) were discussed. Cooperation partners are important for CBI. As they work with SMEs at the end of the value chain (export), they can add value to programs of other donors who often focus on the supply chain.

Based on the above results, F&S filled CBI’s scoring tool, an Excel file with 30 weighted items ranging from European demand, export potential, and competitive advantages, to possible cooperation partners for CBI, CSR opportunities, and CSR risks. This generated the following shortlist of 1-3 value chains per country:

  • Egypt: apparel, home textiles, sustainable tourism
  • Uganda: tourism
  • Kenya: fresh fruit and vegetables (avocado), macadamia nuts, aquaculture (tilapia)
  • Sierra Leone: coffee, cashew nuts, tourism
  • Guinea: Fonio, coffee, cashew nuts

 

Business case development

Based on the value chain selection, Fair & Sustainable developed eight initial business cases ideas (iBCI) for a CBI program. For the selected value chains in Egypt, Uganda and Kenya.

In one meeting per value chain, Fair & Sustainable and CBI staff formulated ambitions and possible results for a CBI program in that chain. Again, finding the right product-market combinations for exports to the European market and opportunities to remove (CSR) obstacles were leading. In addition, external experts were interviewed to provide input as well.

CBI is currently in the process to decide which iBCIs proceed to the next stage. In this phase, an in-depth value chain analysis will be done on the value chain itself and the European market demand to revise the business case and find partners for the implementation of the proposed CBI program.

More information? Contact Annelien Meerts via annelien.meerts@fairandsustainable.org

UNCTAD. (2018). Exports Diversification and Employment in Africa. UNCTAD. Retrieved from https://unctad.org/en/PublicationsLibrary/aldc2018d3_en.pdf

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