Trade promotion capacity building - Denmark

The Programme for Economic Growth in the Agricultural Sector 2013-2018 (likely to be extended to 2020 within the framework of the original budget of DKK 380 million), supports the development of five value chains with a growth potential: cowpeas, maize, beef, gum Arabic and shea nuts. All have an export potential or is already being exported to regional and/or the international market e.g. beef is the second largest export earner for Burkina Faso. The programme aims at improving the access of SME’s (operating within the five value chains) to advisory and financial services as well as improving the framework conditions for the development of the agricultural sector in general and the five selected value chains specifically. With respect to the framework conditions, the programme is supporting relevant legislation (including norms and standards, and traceability of products from the selected value chains) as well as financing of the infrastructure of a public goods nature the underpins the growth of the value chains (e.g. storage facilities, cattle markets, etc.).

The Programme (BSPS IV) has three components with a total of 6 engagements:

• Agricultural Markets Development under which a Trust (AMDT) will engage in a number of value chains and thereby facilitate the equivalent of 100,000 full-time jobs and increase income for 300,000 farmers. The immediate objective is defined: The incomes and employment opportunities of poor women, men, and young people are increased in agricultural value chains in Tanzania. Contributors are DANIDA, SIDA, Irish Aid and Swiss SDC;

• Improved Business Climate has the immediate objective: (i) Improved business climate for the private sector, inducing businesses to grow and create employment opportunities; (ii) Local Investment Climate-focused on critical constraints to business growth and economic development at the district level by helping the local authorities and business communities to identify and prioritizes the constraints. Dodoma and Kigoma Regions are the focus areas; (iii) BEST-Dialogue will work with business organizations and government to improve business environment through regulatory reform, improved implementation and effective and efficient enforcement; and (iii) CTI/DI Twinning arrangement will strengthen the institutional capacity of CTI as a key private sector organization vis-à-vis the Government of Tanzania.

• Access to finance has the immediate objective: (i) Farmers, enterprises, and employees increase their access to quality financial services; (ii) Financial Sector Deepening Trust (FSDT) has since 2004 financed the development of pro-poor financial services and new financial products for MSMEs; and (iii) Private Agricultural Sector Support (PASS) operates on commercial terms offering a combination of credit guarantees and business development services to Tanzanian farmers and agribusinesses. The present upscaling of PASS businesses are based on new financial products with a significant potential for increasing the number of beneficiaries.

Danish Aid for Trade has supported several projects by TradeMark East Africa (TMEA) that promote cross-border and regional trade in East Africa. Development assistance from Denmark has co-funded TMEA since 2011 both on a regional basis across the whole EAC, and also bilaterally to Kenya and Uganda.

Denmark’s trade facilitation support through TMEA is multi-faceted. It covers a variety of complementary activities to make trade easier, more efficient, and less costly. This work is consistent with international efforts led by the WTO to facilitate trade, and hence to increase economic growth, job creation and household incomes in developing countries.

The TMEA programmes and projects specifically concern Denmark’s support for women cross-border traders; harmonization of product standards; one-stop border posts; automation to modernize trade procedures; and a new Trade Logistics Information Pipeline initiative carried out in partnership with the Danish shipping company, Maersk.

Contemporary supply chains in international trade are becoming more complex, more fragmented, less transparent, and more unpredictable, and consequently only reachable to large and well-networked business, at the expense of SMEs. In cooperation with the Danish-owned shipping company Maersk Line, TMEA is therefore designing a Trade Logistics Information Pipeline. The goal of this project is to establish a supply chain visibility platform that permits the publication of information as goods are sourced, ordered, loaded, transited, cleared and offloaded at different locations in the world. East African traders are faced with multiple challenges when using these trade supply chains to move goods across borders.

By partnering with Maersk Line in implementing this project, TMEA will have access to the largest shipping company in the world, which accounts for over 70% of the movement of containerized cargo in and out of East Africa. This brings potential to operationalise a platform that will impact the EAC and beyond.

TLIP aims to provide a shared data infrastructure, end-to-end supply chain visibility, and inter-agency coordination and collaboration. This programme is expected to reduce barriers to trade by promoting more efficient and effective movement of goods across borders. At the operational level, the programme will support EAC governments to manage risk, enhance cargo traceability, and promote a global marketplace less burdened by complex and long-winded import and export processes.