• Thursday, March 28, 2024
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‘Trade Hub is co-investing $14.4m to help Nigerian businesses overcome COVID-19 impact’

Micah Mendie-headshot

Micah Mendie is the team lead of Public-Private Partnerships Nigeria for the West Africa Trade & Investment Hub. In this interview with JOSEPHINE OKOJIE, he spoke about the organisation’s contributions to solving food insecurity in the region.

Can you tell us about the West Africa Trade & Investment Hub and the work it has done in the region?

The USAID-funded West Africa Trade & Investment Hub (Trade Hub) project is a five-year, $140 million trade and investment facilitation activity that seeks to improve private sector competitiveness in West Africa through a market-based approach. By working in partnership with the private sector and fostering co-investments, the project aims to generate new private-sector investment into key sectors to create jobs and increase trade between the United States and West Africa, including through increased utilization of the African Growth and Opportunity Act (AGOA). The Trade Hub encourages additional private-sector investment and growth in strategic sectors, including agriculture, services, water/sanitation, clean renewable energy, and light manufacturing. Since its inception in October 2019, the Trade Hub, through this Co-Investment Fund and technical assistance, has improved companies’ abilities to expand business operations, increase productivity, and create jobs that build on the talents and aspirations of West Africa’s growing population. The Trade Hub has collaborated on specific commercial opportunities with firms, service providers, research organizations, as well as other business network actors to access private capital that will contribute to large-scale jobs, exports, and investment, particularly with strong demonstrated or potential links to the U.S. companies and investors.

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Africa trade hub

To what extent would you say the West Africa Trade & Investment Hub has contributed towards solving food security problems in the region?

In less than 2 years of its operation, the Trade Hub has contributed immensely towards solving food security problems in the region through a $96 million co-investment fund. This fund aims to increase the value of exports and/or sales, the value of new private-sector capital investment, create new private-sector jobs, increase access to financing for firms and farmers, and improve technologies and management practices.

In Nigeria for example, the Trade Hub has already invested about $5 million to fund the Argungu Rice Outgrower Expansion Project in Kebbi State; optimize grain cleaning and storage capacity to facilitate the supply of quality maize, soybeans, and sorghum grains to Nigeria’s growing population; and strengthen the capacity of 50,000 smallholder farmers in Nigeria’s Kaduna, Kebbi, and Kano states to produce maize, rice, and soybean for domestic and global markets.

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How has your organisation supported SMEs in the West African region affected by the Covid-19 pandemic?

A current priority of the Trade Hub is supporting West African small and medium-sized enterprises (SMEs) vulnerable to the coronavirus pandemic (COVID-19)—a public health crisis projected to have the largest economic impact since the Great Depression. The pandemic has severely affected all social and economic sectors, including the agricultural sector. In Nigeria for example, the impact of COVID-19 has been very devastating to many SMEs in the region and most of them have had to resort to various negative coping strategies such as cutting down on the number of workers and scaling down on their production capacity. The negative impact has also resulted in loss in revenues and sales contracts, including stalling planned business expansion programs.

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Supporting the agriculture sector during COVID-19 is, therefore, a priority for the Trade Hub in Nigeria. Through its co-investment grant facility, the Trade Hub is co-investing a total of $14.4 million with the private sector to support projects that mitigate the financial and economic impacts of the pandemic. Such projects will provide companies in Nigeria, including SMEs, access to funding opportunities that help them stabilize their business and ensure continued growth during and after the pandemic. So far, the Trade hub has awarded $500, 000 to Pyxera Global to fund the West Africa Agricultural Resilience Program (WAFARP) in Nigeria’s Cross River, Kebbi, and Benue states. This program aims to increase the resiliency, inclusiveness, quality, and efficiency in the food value chains supporting SHF livelihoods in the rice, maize, and soybean value chains.

In addition, the Trade Hub awarded a $500,000 co-investment grant to Partners for Development to stabilize employment in the aquaculture (particularly catfish) value chain and improve trade, while building fish farmers’ resilience to COVID-19 and other stressors in Delta State. An Ebonyi State-based agribusiness firm, REMIF REMS Nigeria Limited, equally received $500,000 for the production and supply of clean paddy rice in the wet and dry seasons during COVID-19 in Ebonyi and Cross River States, respectively.

How much grant has Trade Hub channeled in private investment to a portfolio of agribusiness?

So far, the Trade Hub has awarded a total of 22 grants worth about $25 million.

How has your organization improved trade between West Africa and the United States?

The Trade Hub is making a significant contribution towards improving trade between West Africa and the United States. For example, in June, we awarded $3 million to Red River Foods Ghana Limited, a cashew processing company. Our grant will be used to fund the company towards establishing sustainable exports of cashew kernels, sourced from West African farmers, processors, and suppliers, to their value-addition facility in the USA. This Trade Hub investment shall generate large-scale direct trade, investment, processing technology transfers, and smallholder incomes between West African and U.S. markets. Red River Foods Ghana Limited expects to use the grant to help generate $27 million in smallholder sales and $32 million in total exports of processed cashew kernels and raw cashew nut; train over 10,000 cashew farmers, suppliers, and processors in good agricultural practices (GAP) and food safety; create 482 new jobs in Ghana, Benin, Cote d’Ivoire, and the USA; and leverage $47 million in private sector investment.

Some of the products manufactured in the region are rejected in the United States due to standards and quality issues. What are you doing to help West Africa change this trajectory?

The Trade Hub is addressing poor export standards and quality issues in the United States through its AGOA initiatives. For example, we have hosted several webinars on how to participate in the American market to trade associations and business groups, including women across the region. Furthermore, guidelines and booklets have been produced and disseminated on AGOA. These can be accessed via the Trade Hub’s website on https://westafricatradehub.com/wp-content/uploads/2020/03/AGOA-booklet-Eng.pdf

Many West African investors would be willing to invest in the United States. Why is it so difficult to have many private sector investors from the region invest in the United States?

The paperwork and bureaucracy involved in getting goods into the U.S. can be formidable, and the interfacing with customs is complicated. There are several reasons why West African investors find it difficult to invest in the United States. These include limited knowledge on how to prepare to export to the United States and how to identify U.S. buyers. In addition, most investors do not understand the process of making deals with U.S.-based firms, including key steps in the sales process and steps in setting up and finalizing the deal. Arranging the shipment of goods to the United States is another area of challenge that most West African investors struggle with. This is an aspect that deals with the marking, packaging, and labelling of goods to ensure they are not delayed in U.S. Customs. There is also the aspect that deals with understanding the U.S. Customs procedures and various other regulatory issues related to getting goods into the United States that is less understood by investors. Lastly, there is the issue of getting paid, which involves different methods for exporters to the United States.