The business community in the Common Market for Eastern and Southern Africa (COMESA) is set to benefit from a Euro10 million kitty from the European Union to ensure that competitiveness and market access of small and medium enterprise are sustainably enhanced.
This follows the signing in Lusaka, Zambia, on Monday of a financing agreement between the EU and COMESA, a free trade area with 21 member states, to implement the Regional Enterprise Competitiveness and Access to Markets Programme (RECAMP).
The Secretary General of COMESA, Chileshe Kapwepwe, and the Head of the EU delegation to Zambia and COMESA, Amb. Alessandro Mariani, signed for their respective organisations.
Amb. Mariani said: “In recent years, the value chain development has become a key element of inclusive economic growth and export strategies in many countries of the region.”
“This programme will contribute to increased inter-dependence amongst countries and people by enhancing production networks and, down the line, improving access to affordable products for citizens of the region.”
According to the EU envoy, there is no better example than his political and economic union of 28 member states to showcase the importance of global or regional value chains development and how this can trigger economic development.
In the EU, he said, there are companies which have their production and supply chains spread over 10 countries accumulating best practices and synergies.
“The three value chains that will be targeted under this project, horticulture, leather and leather product and agro processing were carefully selected in close consultation with COMESA.”
The five-year programme will facilitate networking, access to knowledge, vital market information and support formal business linkages between SMEs, key regional suppliers and lead firms.
It will also support more formalized governance structures in the value chains and enhance capacities of SMEs and other actors in adhering to sanitary and phytosanitary measures (SPS) – measures to protect humans, animals, and plants from diseases, pests, or contaminants – and technical standards (TBT) to comply with regional markets requirements.
The second result area will focus on improving the business environment for SMEs and other firms in the selected value chains by complementing current national strategies developed by member states for economic transformation through industrialization. Activities include supporting peer learning with the front-runner countries sharing experiences.
Among others, Kapwepwe said the programme is consistent with the objectives of COMESA’s integration agenda.
She cited supply side constraints as a major contributor to low competitiveness and productivity of industries in the region, as well as inability of MSMEs especially women and youth owned enterprises to participate in regional production networks.
“According to the findings of a profiling exercise of SMEs in the footwear, garments and cassava processing that was undertaken by the COMESA Secretariat, it was noted that at least 65 percent of SMEs operating in the region are facing most of these constraints,” Kapwepwe said.
Amb. Mariani said the targeted value chains were selected for having high demand both in the region and international markets.
“We believe that these present the biggest opportunities for participation of women and youth-led small and medium enterprises through development of strong partnerships with large corporations in the upstream of the value chains,” Amb. Mariani said.
Under the program, lead firms within the selected value chains that have both backward and forward linkages with SMEs and other intermediary firms will be identified to enhance effect coordination reduce coordination failures and improve competitiveness.