The Saana Institute partnered with the Trade Out of Poverty All Party Parliamentary Group (APPG) to organise a seminar on trade, development and poverty reduction in East Africa on the 11th of February at the House of Commons. The event featured Frank Matsaert, Chief Executive Office of TradeMark East Africa (TMEA), Patrick Obath, Board Director for TMEA and Director of the Kenya Private Sector Alliance (KEPSA), and Lisa Karanja, Senior Director, Business Competitiveness at TMEA. The debate was chaired by Robin Walker, Member of Parliament and the Trade Out of Poverty APPG.
TMEA is a pioneering $600 million Aid for Trade initiative, focused on increasing physical access to markets, enhancing the trade environment, and improving business competitiveness in the region. Funded by the Belgium, Canada, Denmark, Sweden, Finland, Netherlands, the United Kingdom and the United States, TMEA works on reforms to improve border management, product standards, transport and distribution that will bring about vast benefits for East African economies by significantly lowering trade costs.
In his presentation, Frank Matsaert highlighted some of the structural transport and trade issues hindering the growth of East African economies – poor road and port infrastructure, delays at border posts, low capacity of customs agencies, corruption and roadblocks. It can cost more than $5000 to import and export a container to and from Rwanda, in comparison to $300 for inland China.
As showcased by Mr Matsaert, TMEA’s approach has been to focus on the main trade arteries of the region, the North and Central Corridors. It has invested significantly in hard infrastructure, building seven One Stop Border Posts at major regional border-crossings, as well working on rehabilitation of the Mombasa and Dar Salaam ports. Mr Matsaert explained that one of its major successes in this area has been the Mombasa Ports Charter – signed by 25 government and port agency officials, committing them to double port productivity. TMEA also supports work on soft infrastructure, providing national revenue authorities with IT-based customs solutions, such as electronic single window and electronic cargo-tracking systems, and training of customs officials. Through its work with the Burundi Revenue Authority, the agency has been able to double its tax revenue, meaning that 40,000 Burundians can now access healthcare that didn’t before, said Mr Matsaert.
Beyond infrastructure, TMEA has been working on enhancing the regional trade environment through its support to the East African Community (EAC), particularly the implementation of EAC Customs Union and improving standards harmonisation, mutual recognition and testing. Mr Matsaert also described how TMEA has been working closely with private sector and civil society organisations through national and regional advocacy platforms. Using software developed by the Kenyan Ushahidi platform, TMEA has set up an award-winning SMS system that allows East African businesses to report non-tariff barriers (NTBs) via their mobile phones, explained Mr Matsaert. He argued that initiatives such as these have strengthened private sector capacity to engage in private-public dialogue.
TMEA’s flexible and demand-led approach emphasising national and regional buy-in has meant a $34 return for every $1 invested by the programme, argued Mr Matsaert. As the programme looks forward to its next phase its future focus will be on transformative development of East Africa’s trade corridors to better support inclusive growth and job creation, working more closely with both regional and international private sector. It will also look to support the implementation of the WTO Trade Facilitation Agreement. The programme will try to maximise its poverty reduction impact, by focusing more on informal traders and women, said Mr Matsaert.
Mr Matsaert argued that beyond East Africa, donors should look at replicating TMEA’s approach in other regions, based on dissemination of lessons learned from the programme’s initial phase. Patrick Obath, Board Director for TMEA, also lauded TMEA’s success so far, and advocated for similar vehicles to be set up in other regions as imperative to boosting intra-African trade and industrialisation.