NGOs urged to source local produce

A group of small businesses, service providers and manufacturers from Africa want aid agencies to consider sourcing products locally to maximise budgets and boost their impact in the face of disasters and crises.

A group of small businesses, service providers and manufacturers from Africa want aid agencies to consider sourcing products locally to maximise budgets and boost their impact in the face of disasters and crises.

In a joint statement issued in Nairobi to mark the World Humanitarian Day, on Monday, the group said by using local businesses in Africa, aid agencies can lower transaction costs, shorten delivery times and reduce trade deficits on the continent.

“Through our strategic location to the Port of Mombasa, we can easily access raw materials, and re-export finished goods through supply chain routes across East Africa. This has led to reduced transportation times and decreased environmental impact for humanitarian aid deliveries,” said Simon Lucas, the Reltex Kenya chief executive.

“When looking at purchasing products from Africa, I urge procurement managers to look further than just the price and take into account the social benefits and economic input to the region.”

The group is participating in the AidEx Developing World Supplier Zone, a platform designed to help businesses from developing regions reach an international buying audience.

‘Untying’ aid

Statistics from Eurodad, a European network of nongovernmental organisations, shows that about $69 billion per year are spent on procuring goods and services from external providers by development agencies–more than 50 per cent of total official development assistance (ODA).

Chiabiz-Uganda Managing Director Charles Mugasa said aid agencies must prioritise local companies that have grassroots connections with the community if they are to realise their goals, otherwise the bureaucratic nature of governments can get in the way.

“We chose Uganda for our base to distribute agricultural products as it is Africa's malnutrition hot spot, and there is significant demand from both farmer groups and initiatives led by nearby UNHCR refugee camps,” Mugasa said.

Despite international agreements to untie aid, about 20 per cent of bilateral aid remains ‘tied,’ meaning that purchases are made from donor firms–resulting in project expenses increasing up to 40 per cent.

Procurement policies

Global Hand director Ben Solanky said Africa is a great example of empowerment through business, notably due to their embracing of mobile technology to facilitate financial transactions.

“Dialogue, openness and connectivity between for-profits and non-profits is crucial in Africa – to see the idea of ‘doing well’ become an economic reality,” Solanky said.

The members recommended that aid agencies carry out procurement policy reviews to compare the cost, delivery time, and social benefits of obtaining goods and services through local providers and remove ‘tying’ conditions by donors.

“It’s vital for aid organisations to seriously consider locally developed solutions in their procurement as these companies’ offerings have already been tried and tested on the ground,” said Grant Gibbs, the project manager of Hippo Water Roller from South Africa.

Superimposing ‘first world’ business models can underestimate differences in African infrastructure, particularly at the rural level and lead to inefficiencies.

“I also encourage aid agencies to review their tender processes, as often these do not take into account local benefits, and show little regard for the investment and development costs endured by the original suppliers,” he said.

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