Economic Growth and Trade

Speeches Shim

Fruit sorters at Blue Skies, a Trade Hub partner,  inside the production facility in Ghana.
Fruit sorters at Blue Skies, a Trade Hub partner, inside the production facility in Ghana.
Photo Credit: Blue Skies

As West Africa’s population booms and its economy continues to expand, the opportunities for businesses to trade across the region are vast.  Despite this, economic growth rates in most of the countries are lagging and poverty remains high. Essentially, West Africa’s farmers and firms produce and trade in highly localized markets and do not achieve the sufficient economies of scale required to attract broad-based investments that could accelerate growth and reduce poverty. This is due to a number of constraints including inefficient transportation and trade barriers along corridors and at borders, a heavy reliance on family and informal sources of financing, and an insufficient supply of reliable and affordable power. These factors result in West African products being uncompetitive in the international market place.

USAID/West Africa’s strategy is to work through regional organizations and private sector associations to address critical constraints to competitiveness and demonstrate West Africa’s productive potential in order to trigger greater regional investment.

TRADE FACILITATION WEST AFRICA (TFWA)

A fruit terminal at the Abidjan port, Côte d'Ivoire.
A fruit terminal at the Abidjan port, Côte d'Ivoire.
Photo credit: Trade Facilitation West Africa Program

West African countries have long-standing, thriving business connections. Over the years, these existing trade relationships have been formalized and enhanced into important cross border trade along key corridors, and serve as the main source of livelihoods for many traders, notably women, transport operators, and businesses connected  to trade such as hotels and restaurants. 

Unfortunately, West Africa also has some of the longest road transportation times for travel between countries and some of the highest travel costs per kilometer of any region in the world. The region’s corridors are laden with administrative barriers such as cumbersome border and customs clearance processes, as well as formal and informal checkpoints and roadblocks that keep trucks stationary for extended periods of time. These are serious impediments to the region’s economic growth and development. In addition, implementation of trade facilitation related policies such as the Trade Facilitation Agreement (TFA), the adoption and implementation of the ECOWAS Customs Code, and the enforcement of the existing regional measures (like Common External Tariff and ECOWAS Trade Liberalization Scheme) are not yet fully enforced. 

In response to these challenges, USAID/West Africa partnered with the Economic Community of West African States (ECOWAS), the West African Economic and Monetary Union (UEMOA), the European Commission (EU), the World Bank (WB), Germany (GTZ) and the Netherlands to develop the Trade Facilitation West Africa (TFWA) program. Since 2018, TFWA has strived to advance ECOWAS’s regional agenda to support the free movement of goods, support countries to implement the World Trade Organization Trade Facilitation Agreement, decrease the time and cost of goods to move along key regional corridors, and increase engagement of the private sector and civil society in trade facilitation reforms, with a particular focus on women and small-scale traders.

WEST AFRICA TRADE and INVESTMENT HUB (WATIH)

A field officer with Thrive Agric, a Nigeria-based Trade Hub partner, shows farmers how to use apps that allow them to easily send, receive, save, and borrow money.
A field officer with Thrive Agric, a Nigeria-based Trade Hub partner, shows farmers how to use apps that allow them to easily send, receive, save, and borrow money.
Photo credit: Thrive Agric

West Africa is ripe for doing business. Agriculture is the main economic driver and the region has one of the fastest growing uses of mobile phones and digital technology. Women also play important roles that contribute to economic growth. Harnessing the above factors to catalyze sustainable business ventures will improve the lot of the larger population. A few challenges, however, prevent West African businesses from reaching their full potential. Notable among these are: 1) inadequate access to business friendly financial support mechanisms; 2) modern business development services; 3) networking and linkages to larger markets; 4) enabling policies that foster adequate participation of vulnerable groups.

The West Africa Trade and Investment Hub (WATIH) is a one-stop shop that partners with banks/financial institutions to provide financial support and business development services, capacity building, and best practices with the aim of making businesses viable and export ready, especially for the U.S. markets through the African Growth Opportunity Act (AGOA).

Over a five year period and $96 million worth of funds, the Trade Hub is working with bilateral missions to co-create and co-manage support to various sectors in order to boost trade and exports, create about 6,000 jobs, and empower women economically with a strong gender target of 50 percent women.

CORDAID

Workers at Capitol Foods’ factory  in Sierra Leone bottle fruit drinks in a 3-tonnes-per-hour fruit processing plant.
Workers at Capitol Foods’ factory in Sierra Leone bottle fruit drinks in a 3-tonnes-per-hour fruit processing plant.
Photo credit: Cordaid Investment Management (CIM)

The potential for private sector growth in West Africa is enormous. With improving economies and a youthful workforce hungry for success, the stage is set for economic growth. However, access to finance that is competitive and sustainable remains a major setback, and is even more pronounced among the smaller economies.

The CORDAID project is a four year activity led by the West Africa Trade and Investment Hub in partnership with the U.S. International Development Finance Corporation (DFC) and Stichting Cordaid, managed by Cordaid Investment Management B.V. (CIM), to increase the access to finance for small and medium sized enterprises and microfinance institutions in Burkina Faso, Guinea, Mali and Sierra-Leone. Due to this public-private partnership, this program will generate up to $37 million of new private investments into these countries to support local economies, create over 20,000 direct and indirect jobs, and increase the value of exports over the duration of the activity.  

Covid-19 Pivot (DTRT Apparel, Ethical Apparel Africa, and Blue Skies)

Global Mamas, young women have retained their livelihoods and are producing face masks to help fight the spread of COVID-19.
Global Mamas, young women have retained their livelihoods and are producing face masks to help fight the spread of COVID-19.
Photo Credit: EAA

With the COVID-19 pandemic upending the global economy, USAID is helping companies stay in business and respond quickly to the unexpected demands brought on by the pandemic. Through a Rapid COVID-19 Response initiative, USAID provided swift technical assistance of $2 million to two apparel manufacturers in Ghana: Do the Right Thing (DTRT) Do the Right Thing (DTRT) Apparel and Ethical Apparel Africa (EAA). The initiative enabled DTRT to repurpose its production lines to produce face masks and other Personal Protective Equipment (PPE), and EAA to repurpose its factories for the production of medical scrubs and surgical masks. EAA is now on its way to launching Ghana’s first ISO-7 certified surgical mask production facility, breaking new ground in manufacturing capability. 

Overall, this initiative helped curb the spread of COVID-19 with locally produced face masks, surgical masks and medical scrubs; sustained over 3,200 jobs, mainly for youth; increased trade valuing over $42 million; and leveraged over $4 million in private investment. It also complimented government efforts to combat COVID-19 with a number of donations made to the Ministries of Health in Ghana and Benin.

USAID also supported Blue Skies, an export-oriented fruit juice producer, to overcome production and trade barriers during the pandemic. Blue Skies exported over 5,400 MT of fresh cut fruits to Europe valuing more than $35 million; assisted 4.1K farmers through its farmer credit program; provided agronomic support to the eradication of bacterial blight spot disease; and supported the Blue Skies Academy aimed at encouraging the youth to take up employment in the agricultural sector.

USAID assisted these companies through the Analytical Support Services and Evaluations for Sustainable Systems (ASSESS). ASSESS remains an innovative and flexible mechanism for the Agency’s rapid response to unexpected emergencies to advance economic growth and sustainable development in West Africa and beyond. 

Last updated: December 06, 2021

Share This Page