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Market access vital for Africa
2005-07-20 09:23:43
By Editor
Recently, G8 members granted an immediate 100 percent debt cancellation to 14 African countries. The funds which would have been used to service external debts to multilateral donors will now be used to fund poverty eradication programmes.
These include health, education, feeder roads, agriculture and the fight against HIV/Aids.
It is not the first time that African countries have had their debts cancelled because some of them have qualified for debt relief under the Highly Indebted Poor Countries (HIPC) initiative.
However, debt cancellation will not in itself lead to higher economic growth and poverty reduction by creating income generating opportunities.
It is against this backdrop that Tanzania is striving to create a favourable investment climate and is now attracting foreign direct investment to the tune of $250m per annum.
It is also putting in place export processing zones in order to attract export-oriented investment.
Tanzania and other African countries need access to markets in developed countries, especially the European Union and United States, which are traditional markets. However, there are a number of factors which make it difficult for most African countries\’ exports to penetrate these markets.
The EU and US have big budgets to subsidise their farmers and this substantially lowers the cost of production and hence prices.
Products like processed food find a ready market in African countries and this has adverse effects on small-scale farmers as well as domestic food processors.
The World Trade Organisation (WTO) Doha Round, which will be held in Hong Kong next month, is expected to convince the EU and US to remove the price distorting subsidies in developed countries.
EU is opening its markets to products from least developed countries under the Everything but Arms (EBA) and Economic Partnership Agreements (EPAs).
The US has come up with the Africa Equal Opportunity Act (Agoa) under which African countries can export to the US duty-free about 4,000 items.
Tanzania, however, has not taken advantage of Agoa like other African countries such as South Africa, Swaziland, Kenya, Nigeria and Mauritius. This is because we did not have the infrastructure to have EPZs established earlier to shelter export-oriented industries.
For traditional exports there are technical barriers to exporting to European markets because of failure to meet international standards and also health and sanitary conditions required by the EU in order to penetrate those markets.
The quality of packaging is poor both in terms of protecting the product and increasing its market appeal.
It is therefore time that Tanzania Bureau of Standards (TBS) benchmarks are harmonized with ISO standards so that Tanzanian products can get a ready market abroad.
The Danish International Development Agency (Danida) and United Nations Industrial Development Organisation (Unido) should be thanked for taking measures to upgrade TBS facilities and train small-scale entrepreneurs specializing in food processing.
We believe that this will go a long way in increase market access to EU countries.
It is therefore pertinent that the government gives priority to tackling all issues which limit market access for our products in global markets.
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