Remarks on December 8, 2003, by Carrie Walczak, Country Manager for Eastern and Southern Africa, U.S. Trade and Development Agency

Good Afternoon. Thank you for having me here today—it’s the first chance I’ve had to participate in the civil society forum, and given my background in micro-level development, I am very pleased to have the opportunity.

This workshop also poses a bit of a challenge, given that USTDA, the U.S. Trade and Development Agency, is a program agency. Our primary work is to provide grant funding for feasibility studies and technical assistance to help with the implementation of large-scale infrastructure projects in developing countries. Therefore, we have little to do with compliance specifically, but have been active in promoting AGOA. I will divert a bit then from the topic to explain how our agency works and our approach to supporting AGOA through our work.

I expect that many of the participants of this forum would not be entirely familiar with USTDA. This is because part of our job is to link the U.S. private sector to investment in Africa, which means we normally have few opportunities to interact with the NGO community.

More specifically, the Agency has a two-fold mandate, clearly spelled out in our name: Trade and Development. Any project we fund must be a development priority for the host country and should have some potential for the supply of U.S. products or services. I stress there the potential for U.S. exports: Our feasibility and technical assistance funding is not tied aid.

The Agency has several tools that it uses to promote this mandate. The majority of our funding goes toward feasibility study funding for large-scale infrastructure projects. When I speak of large-scale, the projects that the Agency is usually looking for cost at least $10 million for implementation. Such projects include airport upgrades, rail and port infrastructure development, telecommunications and energy projects, and manufacturing, for example.

The way that the Agency assists host countries is to provide grant funding to a host country entity (either private or public sector) to pay for the services of the U.S. company of its choice to carry out the feasibility study. The host country entity has total ownership over the project; they oversee its implementation. When the host country entity agrees that work has been completed, they alert USTDA to the fact, and USTDA pays the U.S. company directly for its work.

Good Points about USTDA assistance include that it minimizes risk for all parties involved and it assists host countries in attracting capital to large-scale priority infrastructure projects by, for example, the private sector, the World Bank, the IFC, etc.

Other tools we have:

-Technical Assistance: (which can be leveraged to support compliance with AGOA)

-Orientation Visits

-Conferences

-Training Grants

USTDA is a demand-driven agency, so we are looking to hear from the local-level what is needed, and we can react to that. The same is true for our involvement in AGOA. We do not have a set program for AGOA, but we act upon request from host country entities about what is needed.

One of the areas that we’ve probably put the most funding into, again by demand, is transportation. Let me give you an example of why.

One of the projects I had the honor to organize and partake in recently was an Orientation, or Reverse Trade Mission, that USTDA sponsored to promote AGOA. The OV brought a delegation of 12 Ethiopian textile and apparel manufacturers to the United States, led by State Minister of Trade and Industry Tadesse Haile, to learn about new methods of manufacturing and supply chain management particular to this industry.

There are many reasons why Ethiopian manufacturers are having a difficult time benefiting from AGOA, but the one I will focus on is transportation and its relation to the greater supply chain implications this sector has.

What we learned on this OV through a recent study by the Kellwood Corporation (which I’ve passed out to you) found that it takes countries in Sub-Saharan Africa 22 weeks in total to make fabric, get the fabric to the factory, manufacture the final product, and to ship the product to a U.S. port. China, on the other hand, takes only 15 weeks. Somehow, African countries need to make up for 7 weeks of a time difference to be competitive--they currently have the longest supply chain time length in the world.

It is for this reason that it is important to prioritize transportation and transportation security projects when focusing on AGOA. Sometimes these projects are seen as capital-intensive when this capital is needed for much more basic needs. However, some sort of balance needs to be achieved in Africa where transportation logistics continue to hinder many of the countries’ abilities to diversify their export markets and enhance competition.

Some of the projects we’ve funded to support transportation enhancement endeavors include:

Walvis Bay Airport in Namibia

Sal International Airport in Cape Verde

Entebbe Airport in Uganda.

Zambia Chipata (with Customs facilitation)

Namibia TransKalahari

South Africa IFRL

Africa Regional Air Cargo Initiative

Transportation is one part of the supply chain that USTDA has focused on. In this week’s government-to-government forum, we are leading a workshop on bringing transportation security into the AGOA framework and in February 2004, we will host an Africa/Middle East Regional Transportation Security Forum in Cairo. This is because transportation security is becoming of key importance to supply chain expediency, as I’m sure my colleague at CBP will talk about.

I hope that this short presentation provides you with one more perspective of how government agencies are approaching the promotion and sustainability of AGOA initiatives. Thank you.