The African continent has taken a major step towards advancing the free exchange of goods and services under rules that facilitate interaction between the parties. This should foster prosperity and development directly for the parties involved, and even for third parties indirectly, as all this is the result of the profits generated by these transactions.

May 30, 2019 was the launch of the major agreement of Africa Continental Free Trade Area (AFCTA). 52 countries signed the agreement, and are currently ratifying their adherence to it. This means that the weaker economies of the continent can do more business with their African neighbours, and increasingly compete with countries that are already major players in the global economy.

Africa has a very great potential for the production of goods, especially perishable goods and diverse manufactures, because they have an impressive diversity of natural resources; the continent’s other great resource is its people.

The potential to generate significant economic activity

According to the last article published by the World Economic Forum, this agreement will allow the area to generate about $4 trillion USD for investments and commercial transactions of goods and services. This already makes this market more appetizing, for large, medium, small and micro entrepreneurs. The latter are those that can benefit the most, by the removal of the tariff and non-tariff barriers to intra-regional trade, which would now be better called intra-continental. The harmonization of tariff rates is important, since a Free Trade Agreement between two or three countries is not the same as one with 52, and each with different visions and interests.

This is where the political will must assert itself and leave behind the particular interests of rulers who dictatorially determined the commercial, financial and social policy of their respective countries. Their actions unleashed many socio-political problems that always maintained an image of instability and high risk regarding doing business in Africa.

Times have changed in Africa

Now times have changed. There are more democratic governments, and there is more investment and development. True, that has not always been exponential, but has been well directed and has stimulated emerging economies with good attractions such as South Africa (host of a World Cup of Soccer, and being the first African country to participate). Kenya follows, impelling the formalization of its micro and small entrepreneurs, You can also include Equatorial Guinea in the scenario, the hidden oil reserve of Spain and perhaps a good part of Europe.

All this indicates that the horizon looks very promising. There will be growth platforms for the local businessmen of each of the signatory countries, and with that, real wealth increasing through the free exchange of goods and services and investments. However, there are also great challenges to make order and harmony prevail.

Challenges remain

Among these challenges are establishing the minimum and necessary legal frameworks so that resolutions of conflicts and disputes can be carried out efficiently.

Another significant challenge for all governments will be to modernize and improve the road infrastructure of all the countries involved. When talking about road infrastructure, I refer to all forms of transport that are part of the channels of supply chains used in commerce. The network of roads and highways are best to start with, as this should dramatically reduce the transit times of heavy transport and people throughout the treaty regions.

It will be important to accentuate the efficiency of infrastructure and customs personnel within borders, so that there is free transit of merchandise according to the bases of the treaty, combined with the internal laws of the country where it is only transited or is the end point of destination of the goods or people. More investment should also be made in the rail network, as well as in ports and airports.

These last three types of road infrastructures are critical for commercial development, since supply chains that have efficient multi-modal forms bring reduced costs, increasing the competitiveness of all the countries involved in this agreement.

E-commerce is also an important part of the future of this vision, which will be supported by clear rules, together with a modern regulatory framework. It could create the conditions to generate the sale of millions of products, following the major global trends of retail and business to business (B2B).

Another critical and major challenge is financial control, due to the high flow of transactions that will result from the opening of investment markets and the exchange of goods and services, as well as the mobility of people.

This control should be aimed at monitoring monetary flows and their origins. The scourge of money laundering is a global problem, and is also an issue within Africa. It may not be easy to apply more efficient controls and policies adapted to the reality of the way in which criminal structures operate. However, the support of countries with more development in establishing and enforcing financial controls could help Africa, supporting economic growth through trade and investment, and bringing development and prosperity for its inhabitants.

Beyond just sending humanitarian aid (which has been vital in most cases), it is extremely important to support the African continent so that they can make full use of their potential and thereby also enter more markets globally. Being more efficient as a block will also bring improvements at the individual level of each country, since together they can improve their negotiations with other large economies, which otherwise would be impossible.

This treaty is the best example of what looks to be a trend in world trade: an economy of blocks. I firmly believe that Africa is reinventing itself.  We can already see a new Africa, open and determined to compete strongly in the global conglomerate.

The post Can Africa reinvent itself through the Africa Continental Free Trade Area (AFCTA)? appeared first on Trade Ready.

Karmesh Patel first became interested in international trade during childhood. His interest was twofold, as he was fascinated by trade’s importance to both the global economy and international development.

“Growing up, I was always passionate to learn about importing and exporting and how the world economy relies on international trade. I also strongly believe that before the rapid development of technology that we see today, it was the international movement of goods and people that helped spread international culture and language. When you look into history, many civilizations were developed near oceans and international borders, since they were able to capitalize on transportation of goods and people.”

To pursue this interest as a career path, he earned his Bachelors of Commerce from Ryerson University, with a specialization in global management studies. During his studies, he worked on projects that gave him his first experience of what exporting companies have to deal with on a daily basis, and won a Global Citizen award from the school for his accomplishments both in the classroom and the community. After finishing his degree, he then also earned a post-graduate certificate in international development from Humber College.

Moving halfway around the world to pursue his career goals

Once he completed his studies, Karmesh wanted to improve his knowledge of international business and cultures, and decided the best way to do so would be to gain international experience. To do so, he accepted a position as Program Manager with the TATU Project, based on Moshi, Tanzania.

The organization’s focus is sustainable development in rural communities in northern Tanzania. His responsibilities mainly involved managing project finances, social business projects and the transport of goods to the rural communities he worked with. The final of these responsibilities led to one of the most memorable stories of his career to date.

“One of the major bridges we crossed on a regular basis was under construction and we were faced with a big challenge, because we needed to transport bulk goods to the community. Given that we were not provided with a concrete time frame for when the bridge would be repaired, and that we couldn’t purchase too much food in bulk, because of spoilage, we had to make some critical decisions.”

“Luckily, during the construction of the main bridge, the local administrative government built a small temporary bridge for the purpose of walking or driving via motorcycle only. When we spoke to local officials about our dilemma, local youth overheard and offered to help transport bulk bags of goods via motorcycle, since the overall goal was to help keep the local community and its businesses operating. Due to our bridge dilemma, we decided to work with the local youth to transport goods to our community stakeholders.”

“I really like this story because it shows you how community support and collaboration and help overcome any obstacle.”

Learning online at his own pace to further his career in international trade

Still passionate about international trade, he began taking the FITTskills online courses to continue learning about the industry, earn his FITT Diploma and expand his career options.

“I had a wonderful experience taking the FITTskills courses. The FITTskills courses all provided highly detailed information and really helped me further understand each area of international trade. They are perfect for anyone who is interested in gaining a broad-spectrum perspective about international trade and business. I found the material in the Global Value Chain and International Sales and Marketing courses really helped me excel in my Program Manager role with the TATU Project.”

His favourite course, International Market Entry Strategies, was also helpful for his current work and in helping him plan to make a career dream come true.

“I found learning about the research and analysis required to choose the most advantageous market entry strategy to be very fascinating. This course demonstrated the reality of what international businesses have to go through to be prepared for a new business venture.”

“Another key reason why this was my favourite course is that it has always been my goal to be part of a foreign direct investment team/organization implementing a greenfield investment in a foreign market. This course provided detailed information and helped me gain knowledge on how I can make this dream come true one day.”

Joining the Livingston team and the CITP community

Early in 2018, shortly before earning his FITT Diploma, Karmesh began his current job as a Cross Border Agent with Livingston International, one of North America’s biggest customs broker and freight forwarding companies. His responsibilities include processing electronic manifests, resolving shipment issues with CBSA (Canadian Border Services Agency) and CPB (U.S. Customs Border Protection), and ensuring shipments are in compliance with all relevant rules and regulations.

He says his role has helped him develop a better understanding of North America’s international trade traffic. His FITTskills training has also been helpful in settling into the role.

“I found that the Feasibility of International Trade course really helped me, as the course provide in-depth knowledge of creating an export plan and clearly explained import/export procedures.”

Wanting to prove himself to his clients and employer, Karmesh also successfully applied for the CITP®|FIBP® designation. He is optimistic it will help him stand out from the crowd, as well as learn from and connect with others.

“I chose to apply for the CITP designation because I wanted to join the CITP community, meet fellow designation holders and learn from some of the industry’s elite. As a young international trade professional, the designation also provides me with a further level of credibility for my employers and clients. I foresee my CITP designation playing a major role in assuring employers and clients of my credibility in international trade and business.”

With the credibility the CITP designation provides, I know I am one step closer of achieving my long term goal to implement a greenfield investment in a foreign market. I also foresee the CITP designation helping me start my own international business to help small agriculture business owners in developing countries.

The post Karmesh Patel, CITP|FIBP – Cross Border Agent appeared first on Trade Ready.

My number one piece of advice is that before visiting another country, it’s crucial to do enough research about the cultural differences, customs, logistics, transportation, and the legal aspects.

My second tip? Don’t pack your itinerary too tight either. When traveling abroad, especially in developing countries, you are likely to come upon unexpected situations requiring the flexibility to adapt.

Lastly, and most importantly, in all situations remember to keep your calm, and don’t forget to rest a bit and enjoy your journey!

Here are a few of my favourite stories from my experiences that will illustrate how I came up with the above advice.

Flat tire forced us to think on our feet

While I was in Kinshasa in the Democratic Republic of Congo, we had rented the service of a driver with a car, an old classic Mercedes-Benz. Unfortunately, we got a flat tire in the middle of rush hour traffic.

While the driver had a spare tire in the trunk, it was buried underneath our luggage. In order for our driver to access it, we had to get out of the car and empty all of our belongings from the trunk in the middle of a public place, close to an industrial area. Within a few minutes, we were surrounded by people, staring at us and approaching.

We did not feel safe at that moment, especially because the Government of Canada had advised Canadians to avoid traveling within the region at that time due to political instability. No insurance companies wanted to provide any protection.

It was a very stressful situation. Instinct told us not to wait, and we took the first available taxi to avoid the potential risks.

An unexpected meet and greet turns into a televised event

In Lubumbashi in DRC, population 2 million, close to the border with Zambia, we had the unexpected opportunity to meet with the mayor. I had been using contacts from the trade commissioner and members from the Chamber of Commerce to meet potential customers or partners for our business venture.

One of these contacts informed us that he could arrange a meeting with the mayor, and that such a meeting could help us open doors to meet important business figures. So, even though it was not part of our initial plan, I accepted, thinking that it was going to be an informal meet and greet and to be quickly directed to some key contacts.

But, when we arrived at the city hall, we were greeted by the local media. Newspapers, TV and radio reporters were there, taking pictures, filming and taking notes throughout the meeting with the mayor.

I was with the president of the company I was working for and another local associate; we never expected to receive so much public attention. Fortunately, my background in communications and public relations was very helpful in managing this unexpected situation.

The next time I receive an offer to meet an important politician, I know I will ask for more details about the type of meeting planned, to ensure I am properly prepared.

One small administrative error cost us 3 days in New York

I was with a convoy of truck drivers en route to deliver a large amount of equipment from Canada to an international ocean carrier in Staten Island, NY to be shipped to South America.

When we arrived, however, entrance to the port was delayed. The wire transfer payment had not gone through because of an error made by the export department. We would have to come back the next day and try again. In the meantime, we had to move all the equipment out of there and find a place to stay overnight.

To complicate matters more, some of the drivers we had contracted had to leave, because they were expected back in Montreal. Only three of us were able to stay to manage the delivery.

When we arrived at the port the next day, they informed the three of us that we needed to deliver all the goods to another terminal, by ourselves, because of the change in the date of arrival. In addition, when trying to load a big crane on the vessel, the engine did refused to start.

We had to spend an extra day there to find a mechanic to fix the crane and to finalize the delivery. What an adventure!

In the end, if the export department hadn’t made an error with the payment, none of the rest of it would have happened. The moral of the story is to make sure you work diligently to reduce the possibility of errors – you never know how they might affect other people further down the line and come back to haunt you.

Being a gracious host had a big impact on our bottom line

I was very happy when I convinced a West African delegation of businesspeople to come to visit a company I was working at in a suburb of Montreal. My plan was for this delegation to meet the management team and some key employees, and to show them the large inventory of products ready to export.

I decided to rent a minibus and drove them through the city to the meeting, taking on the role of travel guide at the same time. I was thrilled that they were impressed and had a great experience.

It turns out that I had created demand for my impromptu tours. The day after the visit, some of the visitors wanted to return to the company, and new people were also interested. Happily, I played the travel guide once again. Afterwards, they purchased containers of our products!

By adding some extra fun to their travel experience and accommodating their request, I was able to ensure their trip was a great success for all parties involved.

After the success of this visit, we decided to pay them a reciprocal visit to their country in Africa, to continue developing the relationships and the business.

These experiences have all taught me valuable lessons, so I hope you found them useful. And I hope you’ll pass on your own stories as well.

The post My favourite international business travel stories, and what I learned from them appeared first on Trade Ready.

It’s true, Africa is ripe with opportunities, but they go largely untapped by North American firms, which have been hesitant to enter markets where their European and Asian competitors are already doing business – and profiting from it.

The World Bank estimates that real GDP in Sub-Saharan Africa (SSA) will grow by 4.5%, whereas the U.S. economy is forecast to grow 2.7% this year, and the Euro area is expected to expand at around 1.5%.

Granted, it is easier for developing countries to deliver larger growth rates, since they’re starting from a lower economic base, but SSA is simultaneously experiencing:

• rapid economic growth,
• unprecedented political stability,
• regulatory and legal reforms; and
• a rising middle-class population.

All of these factors are leading to greater levels of transparency and accountability. And investors are taking notice.

In 2013, the OECD reported that foreign direct investment (FDI) into SSA increased by 4.7%. Private equity firms are scanning the continent for opportunities. In fact, Helios Investment Partners, a London-based firm, boasts the first ever billion dollar fund for Africa.

Yet only 1% of global private equity goes to SSA and .3% of the average investment portfolio in the United States – that’s just $3 out of every $1,000 – is invested in Africa.

In terms of trade, the potential for growth is enormous. In particular, Africa offers tremendous opportunities for companies that provide goods or services related to consumer products, infrastructure development and public services.

Meet the growing demand for consumer products

Historically, investors have focused on the extraction industries in Africa, so economies rich in natural resources (Angola, Nigeria and Mozambique) received the bulk of FDI.

However, there has been a shift away from extractive industries towards consumer-related sectors as demand and purchasing power increase alongside a growing middle-class.

As a matter of fact, in 2014, mining and minerals exited the top 10 sectors for investment in SSA.

The top three – technology, retail and financial services – demonstrate the changing nature of investment in Africa.

Consumer demand for new products and services across a wide range of sectors is the leading cause of economic diversification. Rising demand for products – from laundry detergent to champagne to mobile phones – presents significant opportunities for manufacturers of consumer goods.

Look at Kenya, where nearly three quarters of the population own cell phones, and almost 60% of Kenyans use cell phones for mobile payment and banking, making it the mobile-payment capital of the world.

Look to partners for the best opportunities in infrastructure development

The World Bank estimates that SSA needs $90 billion in infrastructure investment alone. That’s not $90 billion to add or repair things either; it’s the amount needed to build greenfield projects each year.

Infrastructure is critical to the effective functioning of an economy, from ports that bring cargo in and out to electricity grids that power manufacturing, and financial markets that keep the entire system moving.

African markets are investing heavily in capital improvement projects to meet the forecasted growth in electricity demand, water supply, transportation networks, and telecommunications services.

Many of these projects are funded by multilateral development institutions such as the World Bank, United Nations, and African Development Bank, as well as the U.S. Agency for International Development, U.S. Trade and Development Agency and the Canadian Department of Foreign Affairs, Trade and Development.

Tenders are posted on their websites, so firms can directly respond to opportunities to support the development of infrastructure projects throughout Africa.

International trade can involve public services too

There is also a huge need for public services, particularly healthcare and education, throughout Africa.

With its high population growth, SSA is much more open to private investment in these areas, whereas most industrialized economies consider them to be public goods that should be provided by the state, and tend to be suspicious of private sector involvement in them.

According to a recent report by the International Finance Corporation (the private sector arm of the World Bank Group), spending on health in SSA is expected to double over the next 10 years.

Investments of $25-30 billion will be needed to meet the demand, with the private sector playing a key role.

Interestingly, companies and investors that are already in Africa have a much more favorable view of the opportunities there and the ease of doing business, while firms that aren’t there are far more skeptical.

To build your business in Africa, there are three things to consider.

1. Think global, act local

Africa is big. However, Africa is not a single, monolithic place. It’s composed of 54 different countries (48 below the Sahara) that have their own unique economies, governments, cultures and every other independent system you would expect a sovereign nation to have.

They are also distinct from a geographic and economic perspective, so each county requires an independent approach.

To be successful in SSA, you have to know your Mali from Malawi and Mauritania from Mauritius.

You need to explore each individual market and develop an appropriate strategy. That requires a local presence.

Although distributors and agents can help you enter a market, developing a sustainable strategy requires feet on the ground in your priority countries.

Companies with representatives in country can gather local market intelligence, cultivate and maintain key relationships with government officials, oversee distributors and agents and quickly respond to changing market dynamics.

2. Play the long game

Building business in Africa is not a short-term proposition. It is a long-term strategy based on relationship building, technology transfer, skills training and a demonstrated dedication to the markets where you want to work.

Having a local representative will help position you for success, but patience is key.

Despite the high-growth rates in the region, African economies are still small, so big returns and volumes are often not feasible at the beginning.  Firms that are hoping to weather the slowdown in the EU and China by making quick returns in Africa will need to revise their expectations.

Additionally, navigating the complex regulatory and legal environments will take time and access to trusted advisors who can shepherd you through the process.

3. Manage risks

Like most emerging markets, SSA presents a complex operating environment that is prone to risks.  Companies need to navigate volatility and develop appropriate mitigation strategies, but oftentimes, firms overprice the risk exposure in SSA and abandon operations altogether.

Companies need to thoughtfully evaluate situations to determine if a change in strategy is required, or if a short-term contingency plan will suffice, such as selling products on-line rather than in-store during security threats so customers can avoid public places.

Doing business in Africa isn’t going to be easy, but it will be rewarding if you dedicate the time and resources necessary to develop and implement a thoughtful approach.

But act fast! European and Asian firms are actively engaged in Africa – and thriving- so don’t be the last one to arrive at the party.

As they say, if you’re not at the table, you’re on the menu.

What steps does your business take to identify and take advantage of business opportunities in Africa?

The post Africa is open for business, but is your business open in Africa? appeared first on Trade Ready.

This might sound familiar if you’ve ever brought a great idea into the office and heard, “Excellent idea! But there is no one in the office to do it.”

Suddenly your moment of great inspiration has turned into a lot of extra work you had not anticipated.

Stepping up to help other businesses

This is exactly what happened to me a few weeks ago. My organization (World Trade Centre Winnipeg) had been working for months on securing an international trade project to deliver some education modules on behalf of a government organization. The project concept continued to evolve from the time it was initialized to its final stages.

The end product was a two-day workshop for a group of Canadian small and medium-sized companies (SMEs) specializing in the IT sector.

Companies, it turns out, that were in different stages of seeking Research & Development project partnerships in the European Union (EU), and with widely diverse levels of international experience.

To make matters more complex, what had started off as an international boot camp for 6-8 companies eventually attracted 17 companies from across Canada.

Each company was very eager to make the event a worthwhile experience, since they were taking time off to attend the workshop, on top of the travel time to get to Winnipeg.

My organization’s role was to deliver the second day of the workshop, focused on how to do business in the European Union.

Preparing for the challenge with FITT courses and a lot of practice

At the time I presented the project concept to my organization months before, it had never dawned on me that the person tasked with delivering the workshop would be me.

This meant I would not only be responsible for delivering the presentation material on the day of the workshop, but also for developing and preparing the material.

There was no one else available in our office for the task.

Two weeks before the workshop I was handed a draft PowerPoint presentation covering five hours of teaching modules that I needed to prepare. My first instinct was that this was not possible. Fortunately, I soon discovered a silver lining.

As I flipped through the pages for the first time, I realized that I already knew most of the information to be covered. The FITT courses that I had recently completed covered a lot of the content I had to teach, and with a bit of ingenuity, I could probably get by.

But time was of the essence. As my workdays were packed with my other workload, I found myself preparing in the evenings and on the weekends.

Two weeks later, the deadline arrived.

We all know the feeling. Regardless of how many times you have given presentations, it is always a daunting task to speak in front of a large group of eager people; people expecting to absorb some knowledge from you.

About a minute before my first words to the group, while I was nervously getting ready, a little piece of magic happened. One of the participants came up to me, and after exchanging the usual morning greetings and admitting I felt a little nervous, he looked me straight in the eye and said:

“Just tell your story.”

Use your experiences and what you know to accomplish your goals

Well, that’s exactly what I did. As the five different modules were presented over the course of the day, I found I wove more and more of my personal experience into the content.

I realized that having gone to seven different schools in three different continents before my 20th birthday, speaking four languages, and starting my own international career in the Democratic Republic of Congo, Zimbabwe and Uganda, I had a wealth of interesting experiences I could share with the group.

From the international financing of a coffee processing plant in Africa, to the complexities of transporting its cargo through jungle and war zones to reach chaotic ports and pirate infested seas, I was able to weave my experiences in memorable lessons as part of the module teachings.

I quickly realized that I did have a story to tell and many experiences to share.

I have lived and been educated in such diversity, and amongst so many different cultures. What seems completely natural to me, I found, is not always so obvious to others.

I talked about giving greetings and gifts, learning proper business etiquette and cultural protocol while developing an international business alliance. These are all important skills to master in order to develop a successful partnership.

I have had the opportunity to experience all of these in my previous career roles.

When my portion of the workshop was complete, I have to admit it turns out that being told “You will have to do it!” was a blessing in disguise. It led me down the road to what turned out to be a truly great experience. I ended up enjoying my teaching day and my colleagues now knew that I could deliver.

What opportunities do you have to “have to do something” new and exciting in your international trade career?

The post How I used storytelling to liven up a daunting international trade project appeared first on Trade Ready.