Strengthening SMEs in ACP States: Challenges and Solutions

1. SMEs competitiveness and upgrading: current issues and challenges ONUDI – Service de Renforcement des Capacités Commerciales [Service for the the Reinforcement of Commercial Capacity] Brussels – September 2009 FEKI Rafik

2. Context

3. The agricultural and food processing industry in ACP states is characterised by: A predominance of SMEs and micro-businesses, generally badly structured and poorly organised; The absence of an environment (institutional, infrastructure, etc.) suited to the growth of the industry; The weakness of the supply-side capacities needed to produce competitive merchandise; Non-diversified agricultural and food-processing production; Poor value-added and materials transformation rates: the majority of the products are exported in a raw or semi-finished state; Unskilled workforces and obsolete technology; Difficulty accessing international markets: high transportation costs, poorly adapted infrastructure, etc. Problems in complying with OTC/SPS standards. The main challenges faced by the agricultural and food processing industry in ACP countries

4. High-Income developing countries Middle-Income developing countries Low-Income developing countries Growth in International Trade and the Problem Scenario caused by the Marginalisation of the SMAs World Source : UNCTAD, 2008 Developed Economies Developing Economies LDCs Over 90% of goods exports worldwide are industrialised goods (2007)

5. To improve the quality of life of the poor of the world through sustainable Mission - industrial development Priorities Strengthening Energy Poverty reduction via by area Productive activities Commercial skills - And Environment Industrial policy, Restructuring and Programme Renewable energy Improving the business upgrading SMEs Components and institutional environment Analysing commercial Developing ’ Climate change competitiveness policies - female and rural entrepreneurs Industrial energy efficiency Innovation of Systems, Technology Developing clusters Management and prospecting Clean and sustainable Food processing - production and value chains Modernising the food-processing - industry for export - Rural energy for productive ends Water management Sustainable production in Export Consortium for SMEs poor communities Corporate social Montreal protocol responsibility Wider take-up of technology Standards, Measurements, Promoting local investment Stockholm Convention Tests and Quality - SMTQ IDEs and partnerships

7. ONUDI TCB: The Offer • Development of manufacturing capacities (ONUDI) • Industrial policy and infrastructure support • Investment and technology transfer • Development of SMEs • Export clusters and consortia • Productivity and quality • Industrial upgrading and modernisation • Sector-based technological support • Cleaner production, energy efficiency • Standards and compliance auditing (ONUDI) • Developing and harmonising standards • Development of testing services, PT plans • Certification (products and business systems) • Metrology/calibration • Accreditation plans • Incorporation into the multilateral trade system • WHO rules and negotiations • Freeing up trade (customs, documentation) • Infrastructure (transportation, ports) PSD IPT PSD PSD TCB TCB AGR ENV TCB TCB TCB TCB TCB

13. Regional Programme: Modernisation of food-processing industries in WAEMU states – PRMN [Restructuring & Modernisation Programme] €15 million • Strengthening institutional capacities at • regional and national levels • Setting up a permanent PRMN management body • Developing the legal and regulatory framework of the Programme • Upgrading the capabilities of the partner structures • Developing management tools and procedures • Support in designing and implementing funding mechanisms • Research into improving the businesses’ financial context • Feasibility study for the establishment of two Funds: modernisation and restructuring • Establishing or strengthening regional and national technical capacities • Training 80 consultants specialising in restructuring and modernisation diagnosis • Pilot programme for Restructuring and Modernising 120 food-processing businesses • Producing 120 modernisation diagnoses • Defining restructuring and modernisation plans • Technical assistance in implementing the action plans

14. 160 businesses benefiting from the Programme; 150 national experts trained in diagnosis and modernisation methodology; The Modernisation Office is up and running; A national Modernisation Programme has been drawn up and a Modernisation Fund established; etc. Senegal Modernisation Programme: Achievements

15. Impact of the Industrial Modernisation Programme The example of Tunisia Business performance

16. APPUI A LA FORMULATION DES PROGRAMMES REGIONAUX DE MISE A NIVEAU ET DE MODERNISATION DES INDUSTRIES CONCERNEES PAR L'APE DANS LES PAYS ACP EN AFRIQUE • The purpose of the ONUDI action is to design regional programmes to streamline and modernise industries and services supplying demand in 4 African regions (CEDEAO+Mauritania, CEEAC/CEMAC, SADC and COMESA) divided into 2 phases: • A launch/start-up phase; and • A deployment phase at the level of each of the 47 member countries. • Specifically, in the context of the freeing and opening up of the economy of these regions, the aim of the programme is to: • Support the restructuring drive, competitiveness and the growth of the industries and associated services; • Stimulate regional integration.

17. Ensure sustainable actions at all levels of the process; Involving the private and financial sector at an early stage of the programme; Ensuring the process is perfectly adapted to the country in question; Gaining and building trust between all stakeholders; Allocating increased importance to the modernisation of the business environment as well as to the business itself. For greater success in modernising the agricultural and food-processing industry in ACP countries: Lessons learned

18. THANK YOU FOR YOUR ATTENTION