Finland Signs Funding Deal With TradeMark Africa

 

Public Private Partnerships & Financing

The Finnish government is rooting for the use of sea freight in exporting horticulture produce from Kenya, which is viewed as more environmentally viable in a bid to reduce carbon emissions in business operations.

Visiting Finland Minister for Trade and Development Tavio Ville said this will also help reduce the cost of exporting the products, which is currently done by air due to their perishability.

Farmers have been complaining over the high cost of air freight, but the European Union (EU) has for years been rooting for the sea to reduce cost incurred by transporting by air.

Tavio said the Finnish government committed 12 million euros (Sh. 1.7 billion) towards supporting the African Continental Free Trade Agreements (ACFTA).

He was speaking at the Naivasha Inland Container Depot in Maai Mahiu, Naivasha during the signing of the African Continental Free Trade Agreement between Finland and TradeMark Africa (TMA) Friday.

The funding will support projects aligned with TMA’s third strategic plan (2023–2030), which will advance inclusive, clean, and digital trade in Africa.

The Finnish Minister said the plans to change transportation of multibillion shillings’ horticulture products from air to sea were a game changer as they would not only reduce costs but also align the sector within the commitments to reduce carbon emissions.

He said Finland believes in free trade, adding that trading across borders was necessary to ensure a future that was more prosperous.

The Finnish Trade Minister observed that Kenya is among the countries that will benefit from the project that will be undertaken by Trade Mark Africa (TMA) with the sole objective of unlocking and driving the huge potential of the intra-African trade.

Tavio also stated that TMA has been impactful in lifting regional barriers in the East Africa region, noting that the agreement would push for more environmentally sustainable ways of moving goods.

The Minister expressed his satisfaction at the progress and impact of projects supported by Finland through TMA, noting that the renewed support resonates with Finland’s commitment to championing sustainable development and economic growth in Africa.

“Now, digitization is brought to the centre of the activities. Harnessing the new technologies is key to surpassing some of the challenges faced by the African continent. This funding is particularly timely as TMA designs new projects that are expected to generate impact in the context of the African Continental Free Trade Area (ACFTA),” he stated.

TMA Chief Executive Officer (CEO) David Beer said the company will shift its operations from air-freight to sea-freight to transport horticultural produce from Naivasha and the region to EU member states.

The CEO said TMA will support the Naivasha inland depot to develop a logistics master plan as well as electrical infrastructure to enhance its capacity.

Beer said that the funding will help reduce trade barriers and lower transaction costs for businesses in post-COVID pandemic period, which disrupted transport businesses.

He praised Finland’s long-standing support, which has delivered projects that have driven down the cost and time of trading across borders in the region and boosted trade between Africa and Europe.

“This partnership allows us to deliver real results for businesses in Africa. We have seen dwell times at major ports reduce, and the time and cost of transporting goods along East African corridors go down significantly. These successes increase margins for exporters and build trade flows. As we expand our operations across Africa, we are grateful for Finland’s strong continued commitment to taking down trade barriers in Africa,” Beer remarked.

Over the past ten years, Finland has contributed over 26.9 million euros (Sh3.6 billion) in core funding through TMA, which has facilitated innovation, sustainability, and cross-border collaboration, resulting in empowered enterprises.

These interventions include the digitization of port systems, construction, and operationalization of one-stop border posts (OSBPs), support for women in trade, among others.

Since its establishment in 2010, TMA has implemented initiatives aimed at increasing efficiencies through physical and digital infrastructure development and enhancing trade policies and buildings at the ports of Mombasa and Dar es Salaam.

TMA has also supported implementation of customs systems for revenue agencies such as Kenya Revenue Authority’s Integrated Customs Management System (ICMS), Uganda Revenue Authority’s Asycuda World System, and national electronic single windows in Uganda, Rwanda, and Burundi.

TradeMark Africa (TMA), formerly TradeMark East Africa, is a leading African Aid-for-Trade organisation that was established in 2010, with the aim to grow intra-African trade and increase Africa’s share in global trade while helping make trade more pro-poor and more environmentally sustainable.

TMA is funded by the Bill and Melinda Gates Foundation, Canada, Denmark, the European Union, Finland, France, Ireland, the MasterCard Foundation, the Netherlands, Norway, the United Kingdom, and the United States of America and works closely with regional and continental inter-governmental organisations, national governments, the private sector and civil society. 

By Mabel Keya – Shikuku and Erastus Gichohi