“Not only is Africa’s population increasing; it not only has the youngest and most productive population, but also Africa’s purchasing power is increasing.”
On June 22, a webinar on “Development in Africa for Food Importers and Exporters” was held with the moderation of Selhattin Urfalı, the CEO of Coimex, and the participation of Lucas Murenzi, the Trade Attaché of Rwanda, and Assistant Honorary Consul of Liberia Jonathan N. Kulah. Murat Can Kılınç, Nairobi Trade Advisor, also participated in the webinar. They discussed many regarding foreign trade, including whether anything can be sold to Africa.
The webinar, which lasted approximately 1.5 hours on Zoom, had registrations from 25 countries. Important strategies for the development of food importers and exporters in Africa were discussed in the webinar and the top 5 strategies were highlighted.
Selhattin Urfalı said: “Dear importers and exporters, welcome to today’s event. I am the CEO of Coimex, a chain consisting of importers and exporters. Coimex is a new generation B2B digital platform, which is a community of foreign traders where we discuss their problems and try to find solutions for them to do business easily and make money safely. Although there are many borders in the world, Coimex says that there are no borders in trade. Especially in the digital world, there are no borders during the COVID pandemic. The digitalization process is rapidly continuing all over the world. The whole world will be digitalized, every city and every village will be digitalized. My father is 80 years old and he has video calls with his supplier in China, which excites me.
Today we really have an international group. Our participants are: 42% from India, 2% from Saudi Arabia, 4% from Ethiopia, 2% from Afghanistan, 11% from Turkey, 5% from Kenya, 2% from Cyprus, 3.6% from Liberia, 3.6% from Cameroon, 2% from the United States, 5% from Pakistan, and other countries 2%. All these participants are either import or export department managers or CEOs of companies.
Our topic today is growth in Africa. Surviving companies survive because they are today’s companies. They are developing and growing. They are more rebellious, out of standards, more futuristic, and more. Today, Africa’s population is 1.5 billion. I looked at the statistics of the World Trade Organization (WTO) today. In 2039, Africa will have 2.5 billion people. So, when we think of today’s world population, it is 6 billion.
If You Develop in Africa Today, You will Win Tomorrow
If you take your place now, if you survive today and develop in Africa, your company will produce and dominate 50% of today’s world in 20 years. Can you imagine that? According to today’s population, Africa is growing faster than other countries. The future Africa will be 2.5 billion in 20 years. First, we must understand Africa and the other countries we will do business with.
5 Strategies for the Development of Food Importers and Exporters in Africa
- Building empathy
- Think big: Avoiding prejudices, being open-minded and trying to understand the local culture
- Employing people who speak the local language
- Being honest about providing information
- Getting information from other businessmen and collaborators
I want to start with empathy. So our first tip is empathy. For example, I will call it empathy to a tribe in Africa. This is a very important issue.
Jonathan: Thank you. Liberia was one of the first nations to gain independence when it comes to forests and mines. This means that Liberia is still a leader in this regard.
Selhattin Urfalı: Let’s start with empathy. Can we talk about this?
Lucas: Thank you very much. Many people know the history of Rwanda, so 27 years ago… We empathize. As a country, we have an inspiring story, at least to some extent. Because we came from the brink of being a failed state to becoming a beacon of hope for the continent and other developing countries.
The first thing I noticed is that the topic is agriculture-centered. So I would say, don’t be biased against agriculture. It is a sad fact that about 70% of sub-Saharan African countries rely on agriculture for their livelihoods. However, if you look at the contributions to the relevant countries’ national GDPs, they contribute an average of about 25% to 30%. So what does this mean? It means that 70% or 75% of the population is engaged in agriculture, but they earn very little from their work. However, they earn more from jobs like mining and manufacturing.
The second thing is to share the hope we see at the end of the tunnel for the African continent. It’s time for Africa to serve. First of all, as you mentioned earlier, Africa’s population is not only growing, but it is also becoming the youngest and most productive population. Moreover, Africa’s purchasing power is increasing. There are also many investments in infrastructure and integration. Africa understands that it needs to connect. First, we need to work together, open up to each other, and then trade with the world. Railway and road infrastructure is being developed. Airlines are increasing cargo connections. Storage is even facilitating the development of many economic and industrial parks in all countries. Therefore, the increase in infrastructure and integration creates another hope for both the African continent and global partners.
Unlike the past, governance is something that is developing in Africa. We see less conflict, more stability, and more openness. There are more countries that can travel to each other without a visa.
Knowledge is a Very Important Power in Foreign Trade
I think one of the most challenging issues that B2B solutions can address is the lack of information. Without information, people are buying from third parties, purchasing substandard products, and rejecting expired products. There is no other way. And at the end of the day, as embassy employees, our businesspeople often want to get information from us. We ask them where they found the company. They say they found it on the internet. And they expect us to verify the information by going to the address. But this can only happen once. However, if it happens frequently, there should be a solution that simplifies everything. Of course, there are many opportunities, but there is always a financial problem. And financial transactions are also important. There are some uncertainties regarding payment. And people don’t like to try new things. At the end of the day, as you know, the cost falls on the consumer.
In Foreign Trade, Niche Products can Make a Difference
You know, every country has its own niche product. And that’s a good thing when it comes to agriculture. It’s a very diverse and generally broad trade. Not all countries have the capacity to produce the same products. They don’t have the capacity to supply all the raw materials and everything. We are a small country, so we cannot compete with countries like Congo or Tanzania, which have very large territories, we cannot produce more than them or be superior to them. Therefore, our ‘niche’ is usually having high-value-added products that are easier to transport: Low-volume, high-value products. Such as processed coffee… For example, instead of sending green coffee beans, importing roasted and ground coffee that creates the value needed.
The Importance of Location in Foreign Trade...
Most people live far from the sea. Therefore, we are trying to position ourselves as a distribution center for international trade companies that want to distribute and sell their products in the region. So how are we going to do this? Of course, the best thing to do is to create a favorable and preferable environment for them to do so. And that is exactly what we are doing in Rwanda. And of course, those closer to the sea may have more advantages than others. However, as a continent, our main vision is for something that everyone can progress together on. You know, the cost of barriers to doing business is extremely high. And at the end of the day, we need to find ways to make both domestic and international trade cheap and affordable for everyone.
SU: There are rules for the European Union in Europe, but I don’t know about the laws in Africa. What do you think, Jonathan?
Jonathan: The laws were probably established a long time ago by someone who was a king or a president. But now, the advantage of the digital platform is that wherever you are, whoever you are, if you have something in demand, you can buy it.
SU: I think I need to find solutions to the problems of foreign traders and exporters. Fourth, we need to be honest when providing information, as everyone agrees on this. Therefore, it is very important to be informative and we need to explain everything.
The fifth point, I would like to say, is digital. But I’m not saying this as an advertisement. Of course, as Coimex, we want more members, but we want them to solve the problems of our members, not just for the sake of numbers. I think the 5th point will come up during the discussions and questions.
Today, among us is Murat Can Kılınç, Nairobi Trade Advisor, who participated in our previous event “Safe Export to East Africa in 8 Steps”. It’s great to see you again.
Murat Can Kılınç: It’s great to see you too. Thank you for the informative presentations.
SU: What was the reason for attending this event? Did this event help you in this regard?
MCK: The event was very good and quite helpful. We thank the organization and also the participants from different African countries.
The main reason for my participation in this event is that I have been working in Kenya for three years and I realized that sometimes we need more insight from African professionals.
SU: Okay, I found the 5th item too. The 5th item: getting foresight from other businessmen and collaborators who know Africa. Thank you.
How is the situation in Kenya, especially in terms of food? Kenya is an important port country. Can you tell us a few things especially for food importers and exporters?
MCK: Actually, many food items are important. When you look at Kenya’s largest imports, you always see some basic things like flour, wheat, date oil, and rice. These products are always in the top 10. These are the products that you can import. Products like rice and wheat are not sufficiently grown in Kenya. Kenya imports such products in large quantities. Of course, there are opportunities and processed goods are still being imported into Kenya.
Construction materials, steel products, textiles, fertilizers, pasta, and flour are exported from Turkey to Kenya. But last year there were a lot of green vegetables and fruits. I see a green light for vegetables in Turkey’s exports to Kenya.
SU: Fresh vegetables?
MCK: Fresh and processed vegetables. Like green peas, for example.
SU: Green peas?
MCK: That’s right, green peas. If green peas are being purchased in Kenya, pay attention to that. This was not the case in 2020. I don’t know what has changed now.
Don't Be Prejudiced
SU: Anything is possible, everything is possible. Thank you for the information. We were also saying the same thing, don’t be prejudiced based on old figures because the old numbers could be different. If Kenyans have never bought peas before, you would never think you could sell peas to Kenya. But if you get information from a supermarket or wholesaler there, that could make a difference. As Lucas said, you need to get the information correctly.
You need to build the confidence you need. And this happens through giving and receiving, not just by receiving. You need to give something, you need to share something as well.
Jonathan: In addition, the beauty of Africa as a whole continent is that there are many sectors that are underutilized. Therefore, there is nothing impossible for people who are trying to innovate once you create quality resources.
SU: I will ask a question: we said that Africa doesn’t eat cheap food. Is that so? If the answer is yes, then they eat low-value products. If the answer is no, can products that are worth your money be sold more than cheap products in Africa?
MCK: I agree, but I would like to add that there is a very large population in Africa. It is also true that they cannot afford expensive products. I live in Kenya, so I understand better how the middle class is rapidly growing in Kenya. Therefore, you can also see that they are moving from cheaper products to higher-quality products. More and more people in Kenya are demanding higher-quality products and food because the middle class is really growing in this country. And during the pandemic, the Kenyan economy grew by 0.6%. In many other countries, there are negative growth rates. In 2021, the World Bank predicts that Kenya will change and its economy will grow by 6.9%, which is a very high rate.
SU: All of Africa is growing. I checked the trade organization’s numbers. All of Africa grew in 2021.
MCK: Therefore, the people of the future will demand higher-quality products, and demand in the future will be greater than today.
Payment Systems in Liberia
SU: I want to ask a question. How are payment services in Liberia? I’m also asking the same question for Rwanda. How are credit card services and do they have access to international banks here?
Cash always Works well for fast Trading in Africa
Jonathan: We have 10 international banks in Liberia, some of which are open to letters of credit, and some are open to TT payments according to the trade sector. There is still a trust issue with the banking system in Africa. Therefore, they do not use it too much. For this reason, they prefer to keep their money at home. So if you want to do business quickly in Africa, it is better to use cash. For example, if you are involved in forestry in other countries, you just need to send us a route. You need to get a phytosanitary certificate for Turkey. You cannot pay for this with a letter of credit.
SU: Mobile money?
Jonathan: Mobile money is money used through phone banking. You use your phone number instead of a bank account. But I must point out that one of our biggest challenges in Africa is the system. Because we don’t have a standard system. This is one of the biggest challenges that most digital platforms will face. For example, you lend money to someone but you may not find that person in the records. This is a problem if you do not have a standard database that controls that person. In Africa, the government can decide to change a person’s entire passport and everyone can change their passport number. This also creates a problem.
What products can be exported to Kenya?
SU: I want to ask Murat Can Kılınç. Can textile exports be made to Kenya? You mentioned pasta, flour, and green peas. What are the other right products?
MCK: Actually, anything can be possible. A Turkish company even sold a ferry to Kenya. So anything can be sold to Africa.
SU: What can we say about Rwanda?
Lucas: Construction materials, machinery, and textiles are imported from Turkey to Rwanda. Wheat is also imported for food. But the largest percentage is made up of textiles and construction materials.
SU: How about in Liberia?
Jonathan: The situation in Liberia is not about the product. Connections and marketing plans are important here.
Thank you all for your participation. The webinar ended after the Q&A session following the determination of the “5 Strategies for the Development of Food Importers and Exporters in Africa”.
You can find growth strategies in Africa-India-Turkey food trade in this article.