Magazine article International Trade Forum

ITC Training: Helping Developing Country Enterprises Enter the Aid Market

Magazine article International Trade Forum

ITC Training: Helping Developing Country Enterprises Enter the Aid Market

Article excerpt

Increasing the regional and international trade potential of developing countries is vital for their future growth and prosperity. But often a country's enterprises do not know how to access markets beyond their borders.

In Africa, for example, although trade between countries (an estimated US$ 25 billion in 1998 or 10% of the region's total) has increased slightly in recent years, its performance is in strong contrast with the upsurge in the growth of intra-regional trade in other developing areas.

The humanitarian aid market represents a huge opportunity for African businesses. If they can sell their products and services to the aid procurement programmes of the international aid agencies operating on the continent, firstly, they benefit their own interests and, at the same time, they make an important contribution to promoting intra-African trade. While the idea sounds fairly straightforward, African businesses have some obstacles to overcome.

Complex agency

procedures

For the uninitiated, the various procedures can be daunting. For example, before even being able to bid for a contract, companies may have to register with the United Nations Common Supply Database (UNCSD). However, agencies may duly offer contracts for goods worth certain amounts through their field offices. Comparing just the Office of the UN High Commissioner for Refugees (UNHCR) and the International Committee of the Red Cross (ICRC): for goods worth more than US$ 20,000, UNHCR issues an invitation to bid and awards the contract on price-related factors only. ICRC uses a threshold of US$ 12,500 for bid purposes, but limits competition to validated suppliers only unless they are competing openly for framework contracts to cover future orders.

The good news is that recent trends and actions at international level are pushing the agencies towards committing themselves to acquire more goods and services from the region where the aid is being dispensed. This is where ITC can help. With funding from the Governments of Norway, Denmark and the Netherlands, it has undertaken a technical cooperation initiative called "Increasing Africa's Participation in Development Aid Procurement". The initiative has two main goals: to increase aid agency awareness that African enterprises can supply the needed food-related, medical and other products they regularly procure; and to assist businesses in harnessing the potential this particular market offers.

Buyers-sellers meetings

One of the key components of the ITC initiative is bringing developing country businesses together with international aid agencies at a series of "buyers-sellers" meetings, so they can learn about each other's needs, priorities and requirements. The first meeting in November in Nairobi, Kenya, focused on the procurement of shelter, protection and domestic items, such as tents and mosquito netting, pots and pans and other household goods.

However, given the intricacies of the humanitarian aid market, it is important for African enterprises to begin to come to grips with aid agency rules and procedures. …

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