Opening the door to Africa’s markets: Promoting exports helps SMEs form new business relations

Project description

Title: Promotion of employment-intensive export activities in new markets in Africa
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Tunisia
Lead executing agency: Ministry of Commerce
Overall term: 2017 to 2019

Context

Tunisia needs stability and growth to maintain social peace in its young democracy and to stem refugee flows. The country therefore faces the challenge of having to create more employment and competitive businesses. Because of its small domestic market, exporting goods and services is crucial to the growth of the economy. Three quarters of all exporters stem from just three sectors, namely textiles and leather goods, food and electronics. Most of the main export products have not changed in over 20 years. One reason for this is the country’s strong focus on the European market.

Although many sub-Saharan countries boast the world’s highest economic growth rates, only around five per cent of Tunisia’s exports go to the African continent. The Tunisian Government has recognised the market potential of its southern neighbours and wants to increase exports and investment in other African countries.

In order for small and medium-sized enterprises to begin exporting, they need to have knowledge of the markets, skilled workers, networks and local contacts to help them build business and supply relationships.

Objective

Selected small and medium-sized Tunisian enterprises have better access to new export markets in Africa, resulting in more employment.

Approach

The project team works primarily with small and medium-sized enterprises in the manufacturing and service sector that have little or no representation in African markets.

In order to help these enterprises enter foreign markets, the state export agency CEPEX plans to open branches in Cameroon and the Democratic Republic of the Congo in late 2017. The project team is supporting CEPEX in this endeavour, training its representatives for their new tasks and accompanying them in expanding their local support services.

The partners are also setting up a platform of public and private sector promotional institutions – the ‘Think Africa’ export platform. Participants include CEPEX, chambers of commerce, business associations and specialised consulting firms. The platform aims to show businesses the market opportunities available to them in sub-Saharan Africa. It will improve coordination between the information, advisory and support services of its members and develop recommendations for improving the enabling conditions in areas such as trade agreements and infrastructure upgrades.

The project trains advisors and supports the institutionalisation of an advisory network so that even small enterprises can find professional and specialised private advisory services that can help them tap into African markets.

The project team helps enterprises offering complementary products and services to form export consortia or networks and to jointly develop strategies for exporting to individual sub-Saharan markets. Experienced exporters that sell a key product or service can take the lead here while newcomers can learn from them and benefit from their economies of scale.

The project also explicitly targets German enterprises that are looking to enter the sub-Saharan African market but require partners on the continent in order to do so. It therefore cooperates with the German Tunisian Chamber of Industry and Commerce in Tunis, the Association of German Chambers of Commerce and Industry, and other German associations. Businesses can make contacts and harness potential for partnerships at specialist events, on business trips and during visits to trade fairs in Germany, Tunisia and other African countries. This allows win-win partnerships to develop that combine technology and finance with market insight, geographic proximity and technical expertise.