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Ethiopia: Sustainable Partnerships to Strengthen Quality Management Systems for EnterprisesThursday, September 08, 2016 > 08:56:41
By Zelalem Girma
Harnessing sustainable partnerships strengthens management systems
Recently, the COMESA Business Council in partnership with the Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA) held Training Workshop to promote local suppliers engaged in the agro-processing sector thereby building the capacity of local small growth enterprises.
Council CEO Sandra Uwera explained that the training has been provided in the international food safety management system for about 480 SMEs in six countries earlier this year. Currently, the Council has 45 companies ready to supply the 20 buyers.
The Council has entered dialogue between buyers and suppliers on the challenges they face and core solutions that can be addressed through private and public-private cooperation mechanisms.
Regarding the growth of import and export trade, Sandra noted that the Common Market for Eastern and Southern Africa (COMESA) region carries a large market of the African continent, with a population of more than 480 million customers and total trade of 307 billion USD recorded in 2014. Intra-COMESA trade represents 23 billion USD during the same year.
COMESA's total exports were about 105 billion USD in 2014, while the total imports were 202 billion USD in the same year. According to COMESA statistics, the percentage of intra-COMESA trade to total COMESA trade has continued to grow from 5 percent in 2005 to the current 6.4 per cent in 2014.
As a result of the growing demand to scarce food supplies, both local and foreign food manufacturers are interested in African Agricultural products. The main reason is the growing demand for food. The world's population is growing, but Africa's population will rise from 13.4 per cent to almost 22 per cent of the world population. Africa has the opportunity to position itself as the food basket of the world.
In this regard, Ethiopia's potential to export in Africa includes coffee, oil seeds, vegetables, cut flowers. Thus, Ethiopia's coffee exports are accounted to 843 million USD to key markets of Germany Saudi Arabia, Japan, France and USA. Ethiopia also exported oil seeds worth of 725 million USD to markets of China, Israel, Turkey and Jordan.
Moreover, Ethiopia exported vegetables worth of 569 million USD to Somalia and Djibouti. Its cut flower accounted to 407 million USD are exported to Netherlands, Belgium, and Saudi Arabia. Dried legumes worth of 270 million USD are exported to Pakistan, India, Sudan, Kenya and Yemen. In sum, Ethiopia exported agricultural products worth of 3.06 billion USD to African markets and beyond.
On the other hand, Ethiopia's export value of animal products reached at 414 million USD. These included the exports of bovine, sheep and goat meat, and other animals worth of 210 million, 84 million and 84.2 million USD respectively. Most of the markets for such animal products are Somali, Djibouti, Yemen, United Arab emirates, Libya, Lebanon and Saudi Arabia, among others.
According to Sandra, these products are demanded within African markets since the Council encourage Ethiopia to build strong trading ties with more African countries. In addition, the Council has entered into partnership with a number of key buyers in the country such as Showa Supermarket and Intercontinental Hotel to facilitate market linkages between local small growth enterprises and the international buyer companies in the COMESA region.
Many private companies are now seeking to diversify their sources of supply and are increasingly approaching small scale farmers. Sustainable local sourcing offers a significant opportunity to improve the livelihoods of small scale producers in Africa. It is a business model that forces all actors in the supply chain to collaborate and create attractive win-win situations for all.
In the workshop, about 20 buyers could test the samples of products on the tables, discuss specifications and pricing, and see the purchasing requirements of the supplier companies.
Sandra stressed that building stronger supply chains is a public-private effort. It is therefore important to have the good will of government to support the local buyer and supplier agenda through facilitating a strong regulatory framework to promote local enterprise development and sustainability. This has to be done through adopting policies to promote procurement from SMEs, women and youth and further encouraged a strong focus on quality local production.
Sandra emphasized that as the council recommended the Kenyan government to support medium enterprise development and competitiveness, it also encourages the spirit of private-private partnerships in Ethiopia that have enabled businesses to achieve more in integrating various corporate, small and medium enterprises in the agro-value chains.
"Apart from seeking to do business, it is also essential to resolve impediments in businesses with a strong focus on promoting the quality of products and services, and positioning industries as competitive players in the global market," Sandra says.
ECCSA Trade and Investment Promotion Director Beniam Mesgina explained that the workshop was organized in the quest to build the capacity of SMEs for better value chain linkage with corporate companies thereby to beef up sustainable development of the country.
It is also possible to improve operational efficiency of micro and small enterprises through enhancing competitiveness among the business community and cultivating business cooperation to market demand.
Among participant suppliers, FAFFA Food Share Company is a pioneer in the food processing industry in Ethiopia. The Company processed food with low cost, and high protein food for children that can reduce the risk of malnutrition. In almost 50 years ago, FAFFA had an initial capacity of 400 metric tons per year, currently, it has grown to 22, 000 metric tons per year.
Nowadays, the company produces and sells various kinds of pre-cooked baby food, semi-cooked supplementary food, protein enriched fortified flours and other related products. So that, the company requested buyers to look into quality of products rather than focusing on the lowest price ranges.
Likewise, SAFU Trading PLC engaged mainly in spices and coffee roasting processes. As a medium level of processing, the company has experienced exporting roasted coffee to markets in South Africa. SAFU Marketing Manager Getu Wolde lauded that the workshop helps his company to build strong trading relation with potential buyers and able to see the interests of his company's counter trading partners.
In sum, having an open dialogue between buyers and suppliers, it is possible to solve challenges SMEs face that can be addressed through private-public cooperation. Though buyers prioritize on the lowest price to purchase products, they should also focus on quality products certified with national and international standards.
ECCSA has to strengthen working with partners on the design and implementation of promoting trade and investment, improving business climate, and building SMEs capacities.
Local sourcing partnerships have to be conducted on continuous basis to strengthen the capacity of SMEs and to create an enabling environment for foreign, cross border and domestic investment.