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Impact via exports: a selection of export-oriented value chains in five African countries

Trade fosters economic growth and creates employment. Export increase and diversification is, therefore, an important strategy for various African countries to create sustainable and inclusive economic development (UNCTAD, 2018). CBI, the center for the promotion of imports from developing countries, supports small and medium enterprises (SMEs) in these countries to expand their exports to Europe.

CBI implements programs in sectors and value chains that have the potential for more exports and meet European market demand. They do not only look at opportunities in the European market but also at opportunities for reducing Corporate Social Responsibility (CSR) risks. CBI:

  • offers export coaching programs to make SMEs in developing countries export ready;
  • provides technical support to business support organizations in developing countries to increase the added value for their exporting members;
  • develops market information on potential export sectors in Europe;
  • informs and influence policymakers;
  • involves importers in Europe in the development and implementation of our programs.

As a consulting firm with a lot of experience in value chain selection, analysis and development, Fair & Sustainable was hired by CBI to conduct a value chain selection in five African countries: Egypt, Uganda, Kenya, Sierra Leone and Guinea.

Leading in this assignment was exploring a series of value chains with potential for more exports to Europe; linking products produced in the five African countries to the European market demand. This focus brings extra opportunities to make the selected value chains more inclusive and fair as a growing number of consumers in Europe, Africa’s main trade partner, buy organic and/or fair trade products.

Value chain selection

Our value chain selection approach comprised of two phases. First, a long list of 5-7 value chains per country was made by exploring matches between promising value chains with potential European market demand. This list was based on desk research (e.g. statistics, reports, policy papers) and interviews with (CBI) experts. Inclusion criteria for value chains were the development of European demand, export potential, current production and exports, whether the value chain is mentioned as a priority in the National Export Strategy. Moreover, as CBI only works with SME exporters, it was checked whether these were present in the selected value chains.

Second, the five countries were visited for one week each to gather additional information. In interviews and focus group discussions with private and public actors obstacles and opportunities in the value chain, CSR risks and potential cooperation partners (e.g. other donors, export promotion agencies, the Netherlands Embassy) were discussed. Cooperation partners are important for CBI. As they work with SMEs at the end of the value chain (export), they can add value to programs of other donors who often focus on the supply chain.

Based on the above results, Fair & Sustainable filled CBI’s scoring tool, an Excel file with 30 weighted items ranging from European demand, export potential, competitive advantages to possible cooperation partners for CBI, CSR opportunities and CSR risks. This generated the following shortlist of 1-3 value chains per country:

Egypt: apparel, home textiles, sustainable tourism

Uganda: tourism

Kenya: fresh fruit and vegetables (avocado), macadamia nuts, aquaculture (tilapia)

Sierra Leone: coffee, cashew nuts, tourism

Guinea: Fonio, coffee, cashew nuts

Business case development

Based on the value chain selection, Fair & Sustainable developed eight initial business cases ideas (iBCI) for a CBI program. For the selected value chains in Egypt, Uganda and Kenya.

In one meeting per value chain, Fair & Sustainable and CBI staff formulated ambitions and possible results for a CBI program in that chain. Again, finding the right product-market combinations for exports to the European market and opportunities to remove (CSR) obstacles were leading. In addition, external experts were interviewed to provide input as well.

CBI is currently in the process to decide which iBCIs proceed to the next stage. In this phase, an in-depth value chain analysis will be done on the value chain itself and the European market demand to revise the business case and find partners for the implementation of the proposed CBI program.

More information? Contact Annelien Meerts via annelien.meerts@fairandsustainable.nl

UNCTAD. (2018). Exports Diversification and Employment in Africa. UNCTAD. Retrieved from https://unctad.org/en/PublicationsLibrary/aldc2018d3_en.pdf

Cashews as a snack from Africa

Cashew nuts in bowl

Cashew nuts are very popular in western diets today, with everybody crazy about nuts. Cashews are sold in almost every supermarket in Europe and the USA: salted or non-salted, roasted or raw, as whole nuts, split nuts, or broken nuts. It is consumed as a stand-alone snack, mixed with dried fruits and nuts, as part of fruit and nut bars, as cashew paste, or as part of Asian dishes.

West Africa plays a key role in cashew nut production but is not currently visible in the consumer market. Only a minor fraction of the raw cashew nuts are processed where they are harvested. About 90% of production is exported, mainly to Vietnam and India, for cracking, peeling, conditioning, and packaging. From there, the cashew travels to consumer markets for further processing according to specific market and consumer needs.

What possibilities are there for cashew processing in West Africa to expand? Fair & Sustainable Consulting analyzed the value chain for cashew processing in West Africa, on behalf of the Centre for the Promotion of Imports from developing countries (CBI). CBI intends to develop a support programme for local processing companies, especially in Côte d’Ivoire and Benin. You can find the entire report here.

For more information, please contact Peter Ton at peter.ton@fairandsustainable.nl.

Why a gender approach is good for workers, business and the sector: case from the Ethiopian Flower sector

Conducted by Fair & Sustainable Consulting, funded by IDH and ICCO, and supported by FSI, BSR and EHPEA

At global level there is ample and increasing evidence that investing in the female workforce aligns well with business priorities, such as meeting productivity targets, maintaining a strong and stable workforce, increasing labor productivity, compliance with health and safety requirements, and improved worker engagement.

The question was whether such evidence could also be found in the Ethiopian floriculture sector, where gender interventions took place since 2014 by the Ethiopian Horticulture Producers and Exporters Association (EHPEA) and the Business for Social Responsibility (BSR), supported by IDH, The Sustainable Trade Initiative and the Floriculture Sustainability Initiative (FSI). Read more

How online tools can help a practitioner in collecting data for value chain development

At Fair and Sustainable we often need to collect data for a value chain analysis or value chain development monitoring. For the general picture of a value chain (or sub-sector) we can use big data such as data from World Bank, FAO, UNDP and the like. For data collection of more specific nature we have to collect own data. Other value chain practitioners will recognize the following type of questions: What  share of produce is supplied by male and what percentage by female producers to a producer organization? How much does a producer organization sell to processors? What are the main opportunities or constraints in this value chain? Are there specific gender based constraints? Etc. For this purpose we traditionally use paper based surveys or lists of guiding questions for group discussions. However, processing the data is laborious. Read more