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Promemoria
2008-12-05
Utrikesdepartementet
Afrikaenheten

Updated 5 December 2008

Action plan for promoting trade with sub-Saharan Africa

Memorandum
5 December 2008

Updated 5 December 2008

1. Priority activities:

A modern picture of Africa in Sweden and increased knowledge of business opportunities in Africa

The picture of Africa differs considerably between companies that have an established presence there and those that do not as yet do business there. Swedish media reporting on Africa is still predominantly concerned with conflicts, catastrophes and corruption, while it is harder for positive developments to be given coverage. Consequently, bridging the information gap and giving companies an up-to-date view of opportunities in Africa is of great importance for achieving greater Swedish involvement in the region.

Measures:

  • Implementation of a series of seminars to give companies (import and export companies) throughout the country the opportunity to gain a modern picture of Africa and of current business opportunities in the region.

Coordinator: The Africa Department at the Ministry for Foreign Affairs (MFA) in cooperation with the Swedish Trade Council or other actors such as chambers of commerce, business organisations etc.

  • The use of as a channel for passing on a modern view of Africa, including webcasts of the seminars mentioned above.

Coordinator: MFA Africa Department in cooperation with the MFA Press and Information Department

  • For incoming official visits from Africa the programme should also include company seminars that can accommodate African export companies.

Coordinator: MFA Africa Department in cooperation with the Swedish Trade Council

  • Updated overall descriptions of trends and current business opportunities (“fact packs”) for the more important markets in Africa should be available for companies to download free of charge from the Internet. Equivalent information in the form of “Market Briefs” for African exporters can be downloaded from

Coordinator: Fact Packs: the Swedish Trade Council
Market Briefs: Chambers of Commerce

Cooperation, coordination and CSR

Efficient cooperation between the various Swedish actors tasked with business promotion is a prerequisite for optimum utilisation of Swedish resources. To work effectively in trade development and promotion in the field there must be coordination and a strategic approach covering Africa as a whole.

Swedish companies are consistent in their awareness of their responsibility as regards human rights, working conditions, possible environmental impact and the surrounding civil society (Corporate Social Responsibility, CSR). Calling attention, in contacts with host countries and local authorities, to Swedish companies’ far-sighted CSR policies, and the programmes being implemented by Swedish companies or in collaboration with various organisations contributes to spreading good examples between companies and strengthening Sweden’s profile as being mindful of human rights, working conditions, improving the environment and combating corruption – the Swedish platform.

Measures:

  • The regional promoter at the Ministry for Foreign Affairs Africa Department is a uniting function that coordinates the measures in the region that are directly or indirectly financed via the MFA’s appropriation, thereby enabling the development of synergies between different African regions and between companies.

Coordinator:MFA Africa Department

  • For coordination and focus in the joint work, an annual meeting is held for those responsible at the embassies for promotion of Sweden. The content of the meeting varies from year to year.

Coordinator: Host embassy in cooperation with the MFA Africa Department and the Department for Promotion and the Internal Market

  • CSR (Corporate Social Responsability) must be a constant element of all business promotion activities. Companies must be encouraged to take social and environmental responsibility, for example by supporting the OECD Guidelines and respecting the ten principles of the Global Compact. This can be done via lunch meetings, seminars etc.

Coordinator: The respective embassy in cooperation with the companies

  • Sweden-promoting events (such as the celebration of Sweden’s National Day, Lucia Day, Swedish Days) should be used to also feature Swedish companies with interests in the country.

Coordinator: The respective embassy in cooperation with the companies

  • The embassy websites must be used consistently to reflect Government policy and the embassy's activities in the area

Coordinator: The respective embassy in cooperation with the MFA Press and Information Department

  • Honorary consuls must be involved in the promotion of their particular areas of activity and kept up to date on their responsibility in this respect.

Coordinator: The respective embassy and Trade Commissioner

  • The possibility of arranging a Consul conference in Stockholm will be investigated.

Coordinator: MFA Africa Department

  • Drawing up a yearly plan for promotion at the respective embassy. Reporting on the implementation of the plan will be within the framework of the operational plan. Not least the content and effect of day-to-day promotion must be described in these reports.

Coordinator: The embassies

Frequent business delegations for increased knowledge and building up of their own contacts

As a result of its long-standing commitment, Sweden has built up extensive networks, knowledge and good relations with many countries in Africa, which companies should use to their advantage. Participation in delegation visits is one way of enhancing knowledge of the countries, marketing and establishing or strengthening contacts with government representatives, authorities, organisations and business partners.
Measures:

  • Organising delegation visits for Swedish export and import companies to interesting African markets, depending on demand from companies. Companies’ participation fees must be on a level that also encourages small companies to take part.

Coordinator: The Swedish Trade Council in cooperation with the respective embassy

  • To as great an extent as possible, include a promotion component in high-level visits to Africa, regardless of which line ministry is in charge of the visit.

Coordinator: The MFA Africa Department in cooperation with the respective ministry and the respective Embassy

“Early project lookout” – aimed at Swedish companies winning more internationally procured contracts

Early project lookout is based on in-depth cooperation between business promotion actors – a system for collecting, processing and spreading information on future internationally procured projects at a very early stage.

Measures:

  • The objective is to implement the project lookout model successively in several African countries, with priority where a large number of procurement contracts are negotiated, where Swedish companies are active and where the country’s needs are in line with Swedish expertise. The results are to be presented on the respective embassy websites.

Coordinator: The Swedish Trade Council and the embassies. After the initial establishment phase the project lookout should be included in the respective organisations’ remit.

  • Activate the cooperation group with the African Development Bank to draw up, together with the Bank and companies, specific strategies for increased Swedish procurement participation in the Bank’s projects.

Coordinator: The MFA Africa Department in cooperation with the MFA Projects Export Secretariat (PES) and the Swedish Trade Council

Continuing professional development and knowledge transfer in strategic areas

A general trend as far as business with Africa is concerned is the need for continuing professional development, which companies often point out. In development cooperation Sida has designed several instruments that are available in this area.

Measures:

  • The use of ITP– the International Training Programme, KTS – Contract-financed technical cooperation and RPM – Rapid Partnership Mechanism to further augment expertise in sectors where Africa’s needs coincide with Swedish companies’ interests and expertise. This can involve customised national or sub-regional measures that directly identify mutual specific skills-enhancement needs.

Coordinator: the respective embassy

  • Encourage companies to utilise the Start South programme which will be taken over by Swedfund in 2009.

Coordinator: embassies, the MFA Africa Department,the Swedish Trade Council

Strategic project development in the energy and environment sector

Project development must be clearly focused and should also be supplemented by the instruments made available by Sida and the Swedish Trade Council and other actors such as project lookout, ITP, KTS etc.

The energy sector, focusing on problem-solving in power generation, transmission and distribution and on developing effective regional trade in electricity (power pools) in Africa, is one of the most important sectors for establishing conditions for continued positive development in the region. Swedish expertise is great in these areas, and the energy sector is also a priority in Swedish development cooperation in many of the African countries.

The SymbioCity concept, a new marketing tool for Swedish environmental technology for effective utilisation of urban resources by combining energy, waste management, water and sewage, transport and communications in integrated town planning is another area of focus for Swedish project exports.

Measures:

  • The electrical energy market in Africa will be a focus for the MFA Projects Export Secretariat (PES), so as to work together with the Swedish Project Exports network (exporters of projects and services) to utilise opportunities for Swedish project exports.
  • The PES and the Swedish Trade Council are cooperating on SymbioCity to improve environmental and urban development in relevant African countries.

Coordinator: embassies, the MFA Projects Export Secretariat in cooperation with the Africa Department

2. Background – trade-promotion in Sweden’s new Africa policy

The basis for our Africa policy is set out in the Government Communication to the Riksdag of March 2008 “Sweden and Africa – a policy to address common challenges and opportunities”. The Communication emphasises that the Africa policy must rest on and contribute to broad, active and effective commitment in Swedish society to African development and close cooperation between governmental and non-governmental actors. It is pointed out there that the forms and conditions of cooperation between the Swedish business sector and government development cooperation should be improved so as to better build on the knowledge and experience possessed by the business sector. The Communication also states that an action plan will be drawn up for how Swedish business and investment promotion in sub-Saharan Africa can be conducted.

One of the central premises of the Africa policy is Sweden’s policy for global development, which aims to contribute to equitable and sustainable global development. The goal covers all policy areas, not only development assistance cooperation, and proceeds from the fact that development builds on a series of interacting factors and requires a holistic approach. Within the framework of the policy for global development Sweden must be better at stimulating the emergence of self-supporting relationships of mutual interest between Swedish actors and actors in low and medium income countries that contribute to poverty reduction and equitable and sustainable global development. As part of this, the concept of actor-driven cooperation has been devised as a means of stimulating the growth of such relationships in development cooperation.

In line with our policy for global development this action plan for promotion of trade between Africa and Sweden covers both exports from Sweden and imports to Sweden.

The Government is now intensifying and consolidating business promotion in Africa. Companies and their needs must be the guiding factor and it is in close interaction between the actors (import and export companies, the Government and other promotion bodies) that synergies and business opportunities are created. To facilitate corporate expansion in African markets several agencies and organisations have developed instruments that can be used in international business.

This action plan shows the Government’s specific measures and the tools made available for promoting trade in sub-Saharan Africa. The time perspective is two to three years, based on current conditions. The relevant embassy’s annual plan for how promotional activities are to be formulated in each respective country should be added to this plan.

3 Introduction

3.1 Trends in sub-Saharan Africa

Compared with ten years ago, today’s Africa is showing clear signs of positive change. To speak of Africa as one concept is not possible, given that it is a gigantic continent consisting of several regions and 53 countries with widely differing conditions and levels of development.

Despite the great differences, several general trends can nevertheless be noted. Average annual economic growth in the past 5 years has been about 6 per cent – a clear improvement on earlier decades. Africa is striving to achieve the Millennium Development Goals. Progress is being made in several areas but to fully achieve these Goals, estimated growth of 8 per cent would be necessary. The number of armed conflicts on the African continent have been cut by half since the early 1990s and the increased stability has provided the conditions for stronger democracy – the percentage of countries deemed to be free or partly free in terms of political and civil rights has increased in three decades from 43 per cent to 71 per cent in 2006. Many countries have successfully stabilised their economies and introduced structural reform programmes. Moreover, understanding of the significance of the private sector to a country’s development has increased. All in all, this has contributed to increasing confidence in the African economies.

External factors have also contributed to the positive trend. Many heavily indebted countries have received substantial debt relief, which has improved conditions for stabilising the economy. Another important explanation for the historically high and sustained growth in Africa is the strong demand in the global market for Africa’s natural resources, including oil.[1] Direct foreign investments in Africa have quadrupled since 2000 and in 2006 had overtaken the inflow of development assistance to the continent. Interest has grown particularly from China and India, whose strong growth has made them increasingly anxious to ensure a good supply of raw materials. The development of the global financial system is of course also of significance to African development.

3.2 Increased interest from Swedish companies

Interest in Africa is increasing on the part of Swedish export and import companies. The major industrial companies are still predominant, even though smaller niche companies and service companies have started to turn their attention to the growing markets in Africa. Large Swedish companies that have established themselves there are pointing the way for smaller companies when they bear witness to the possibility of doing good business in Africa. Local presence, perseverance in ventures and endeavouring to be a good employer mark out the Swedish companies that succeed.

Swedish exports to Africa have increased by almost 200 % since 2000 and were almost SEK 16 billion in 2007. South Africa is the largest market with just under half of exports, followed by Nigeria at just over 15 per cent and Ghana at 6 per cent. Sweden has experienced the strongest growth in exports to countries such as Angola, Tanzania, Uganda and DR Congo. The primary export products are mining machinery, telecommunications equipment, heavy vehicles, and electrical and other kinds of machinery.

Swedish imports from Africa have grown more than exports in the same period, 236 per cent, but in real terms are considerably lower than exports, just under SEK 5 billion in 2007. South Africa accounts for 86 per cent of imports from Africa. Kenya follows with just over 5 per cent. Agricultural products are the largest product group.

4. Sectors in focus for Swedish trade promotion with Africa

As part of the EU, Sweden decided at the EU-Africa Summit in December 2007 on a long-term, joint strategy for deeper cooperation and an action plan for the period 2008 – 2010. The cooperation concentrates on the areas of peace and security, democratic governance and human rights, trade and regional integration, the UN Millennium Development Goals, energy, global climate change, migration, mobility and employment, as well as research, information society and space. Sweden will take an active part in this cooperation and allow it to be reflected in Swedish Africa policy.

Among the priority cooperation areas between the EU and Africa is a clear coherence with Swedish trade promotion priorities. Apart from the more general goal concerning increased trade and regional integration, there are also energy and global climate change, both areas of focus for promotion work where Sweden has cutting-edge expertise.

In the climate area transfer and application of green and energy-efficient technology and renewable energy to counteract the effects of climate change are to be promoted. The ambition is to encourage increased commitment by Swedish companies to the environment in Africa. Moreover, the possibilities of linking African and Swedish research more closely is to be investigated further, as well as the establishment of more international education programmes in energy, natural resources, the environment and climate.