Trade information hub to help exporters

A clearing house of trade information for southern African entrepreneurs is to be launched to aid poverty reduction in the region, United States and African business and government leaders promised on Thursday at a dedication ceremony in Botswana. "There is a direct link between the Southern Africa Global Competitiveness Hub and poverty alleviation. Trade leads to employment, and jobs create the ability for people to earn a decent living," US Assistant Secretary of State for African Affairs Walter Kansteiner said in response to a question from IRIN. His view was endorsed by business leaders from the 14 member states of the Southern Africa Development Community (SADC) who were present for the dedication of the clearing house. Many aspiring African exporters have encountered problems with quality control and other information that has inhibited their products from achieving inroads into lucrative developed world markets. The Botswana trade hub is intended as a "fix it" shop to identify and alleviate trade problems. The US government has established trade facilitating hubs in Ghana and Nairobi to promote the competitiveness of African goods and services worldwide, as an outgrowth of President George Bush's two-year-old Trade for African Development and Enterprise Initiative. Botswana's trade minister, Jacob Nkate, said the latest regional trade facilitator hub located in his country is intended to boost exports to the United States through the African Growth and Opportunities Act, but also to the European Union and Asia. "We've needed a place to go for information because global trading has strict rules which, if you break, your goods are excluded from markets. This can be heartbreaking for a small enterprise that is struggling to get their exports into the European market," Sophia Mohapi, chief executive of the Lesotho National development Corporation, told IRIN. Lesotho's entire industrial output is geared to exports, Mohapi said. Large garment manufacturers currently dominate exports, but the government is trying to promote small and medium enterprises to bring the benefits of trade to rural cooperatives and urban handicrafts guilds. These projects currently offer informal sector employment, with uncertain profits and non-standard working conditions. Securing contracts in foreign markets will advance these operations into the economic mainstream, Mohapi said. "The hub explains how trade gets done. We also provide business linkages between exporters and importers; between financers and producers. We will help people find each other. We're going to get technical, and get into the nitty-gritty to get African products ready for the global market," said Kansteiner. "Food products have to conform to safety standards. This is a red-light/green-light matter: if standards are not met, it's over. It isn't enough to have 90 percent compliance, you need total compliance," William Hargraves of the Southern Africa Global Competitiveness Hub explained. For inexperienced small-scale farmers, the leap from producing locally to exporting for demanding North American and European markets with their exact standards can be daunting, but not insurmountable. In Swaziland, subsistence farmers are already exporting baby vegetables abroad. Debbie Cutting, projects coordinator for Swaziland's National Agricultural Marketing Board, told IRIN: "We have about 20 farmers successfully exporting, so it can be done. But it is about more than food safety standards. Important trading partners like the EU are also looking at working conditions, ecological concerns and workplace safety, and these standards have to be met by this December or no licenses for export to Europe will be granted." "It is not just a lone farmer who may not know key information that will determine the success or failure of his export goals, but government trade officials can be overwhelmed by a plethora of trade rules. That is why the Southern Africa Global Competitiveness Hub is an important development, so ignorance won't be a barrier to trade," said Harry Gonteb, director of Guru Investments in Windhoek, Namibia. "We have the evidence from experience that poverty alleviation and increased national exports go hand in hand. Trade and investment are a catalyst to poverty reduction," Gonteb said. One of Gonteb's clients, an American investor, financed a large-scale agricultural production that processes cotton into lint for export, creating 15,000 jobs in rural Namibia where widespread poverty had resisted earlier governmental development efforts. Clement Thindwa, chief executive of the Association of SADC Chambers of Commerce and Industry, said poverty alleviation in his home country of Malawi was being targeted through "non-traditional exports". "Malawi's traditional exports are agricultural – tobacco, sugar and tea. But we are already exporting textiles to the US. Growth in garment manufacturing is reflected in a drop in unemployment," Thindwa noted. However, the creation of jobs as a remedy to poverty reduction is not enough if the jobs are poorly paying and unpleasant, in the view of the region's chambers of commerce and industry. "We used to sell Malawi on the basis of cheap available labour. But we are revising that point of view. We are now stressing the productivity of the Malawian worker, and the profit potential resulting, which should be reflected in workers' wages," said Thindwa.