A new World Bank report says Africa is hindered from fuller participation in the global economy by a ”standards divide”.
It describes this as a combination of inadequate capacity to meet world trade standards for goods, and limited opportunities to help shape these standards to ensure that they are consistent and fair.
Increased attention to standards by African governments and firms, together with international efforts to design standards that protect consumers without imposing unfair burdens on low-income producers, would greatly increase Africa’s exports, creating jobs and speeding poverty reduction, the report says.
”Africa can and must bridge the standards divide,” says Callisto Madavo, World Bank vice president for Sub-Saharan Africa.
”Public-private co-operation to improve compliance with trade standards can improve and demonstrate the value and quality of our goods, making us more competitive. Experience in Africa and in other regions has shown that rising exports can help to create new jobs, increase growth and speed poverty reduction,” he said.
The report, Standards and Global Trade: A Voice for Africa, says that firms must upgrade their facilities to meet global standards.
This in turn will require that African governments continue to improve the climate for investment, by ensuring the provision of critical infrastructure, such as power, telecommunications and farm-to-market roads, reducing corruption, and cutting red tape.
”Non-compliance with international standards deprives African farmers access to key international markets and may lead to a further reduction in global market share,” the report warns.
It argues that improved compliance is critical for Africa to take advantage of recent market-opening initiatives, such as the US African Growth and Opportunity Act (Agoa) and the European Union’s Everything But Arms (EBA) initiative.
The report includes five country case studies — Kenya, Mozambique, Nigeria, South Africa, and Uganda — each of which proposes a country action plan.
The studies were prepared by African authors who have extensive first-hand knowledge of the challenges their countries face, and identifies three broad areas for action;
enhancing production practices and access to information
improving quality assurance
better monitoring, evaluation, product testing and packing to respond to market demands and trading partners’ changing technical requirements.
In the past five years the World Bank has provided $612-million in trade-related assistance to African countries, for programmes ranging from standards compliance to better customs and ports administration.
Last year the Bank provided almost $2,9-billion in loans and grants to Africa.
”Because improved compliance with trade standards will require public as well as private investment, continued African efforts to improve the investment climate are critical,” says Nicholas Stern, World Bank chief economist and senior vice president for Development Economics.
”Africa’s investment in complying with standards will be more beneficial if its trading partners, particularly the rich countries, remove obstructive non-tariff barriers and further open their markets,” he says.
Steps that the high-income countries can take to help boost Africa exports include cutting agricultural subsidies and simplifying the rules of origin governing Agoa and EBA.
The study further proposes increased regional co-operation among African countries and donors to help bridge the African standards divide.
”By adopting international standards, streamlining technical regulations, and supporting improved local and regional supply and quality management capacity in Africa, African governments and their development partners could greatly increase income opportunities for African producers,” says John S Wilson, co-editor of the report.
The volume offers a concrete action plan for each of the five countries:
Kenya:
Of an estimated 200 licensed fresh fruit exporters, only 50 operate consistently. Four companies dominate export markets. Improvements in standards infrastructure, quality control, and other actions could aid small and poor farmers in accessing international markets.
Mozambique:
Institutional capacity for programmes and research has increased with the establishment of a Ministry of Science and Technology. However, there is limited capacity to enforce existing technical regulations and laboratories are poorly equipped. Reform of legal and regulatory frameworks would be particularly valuable.
Nigeria:
Three recommendations are set forth:
The need for a ‘Standards Campaign’ to create awareness among consumers and producers, especially small scale producers.
The value of strengthening the national Codex Committee to participate in international standards setting work.
Procurement of new equipment to support risk analysis and conformity assessment.
South Africa:
An ongoing shift from primary exports to processed and manufactured exports is making standards compliance increasingly important. The government provides significant assistance to small and medium industries in standards, quality assurance, and accreditation. However, interaction between government departments to discuss issues of common interest is limited, and industry is often unaware of draft regulations in other countries.
Uganda:
Honey producers have procured airtight containers to preserve quality, laboratory facilities for testing are under construction, and new quality control training is under way. With upgraded facilities for storage, transport, and other improvements real progress can be made. About 65% of those employed in this sector in Uganda are women — and jobs opportunities could be expanded through increased exports. – I-Net Bridge