Two weeks ago, I got to meet some of the women behind the fashionABLE scarves here in Ethiopia’s capital, Addis Ababa.

At first glance, the fashionABLE factory is pretty modest. Tucked deep into the neighborhood of Mekanisa, it sits on an unpaved road about five minutes from the highway. Inside, five women are quietly working at looms and sewing machines, while another three are washing and dying fabric outside. As I walk around snapping photos, a couple women shoot me shy smiles but most stay focused on their work.

A one-time visitor might not realize that these women –- and this factory -– have an unbelievable story to tell. Most of the women who work at fashionABLE are former prostitutes who have been able to turn their lives around thanks to jobs at the factory. Women like Bezuayhu, who was forced into prostitution as a teenager, are now able to come to work in the morning with dignity and to invest in a better future for their children.

Nora, on the far right, with some of the workers and Barrett Ward, founder of fashionABLE

But beyond Bezuayhu and her colleagues, there’s another hidden success — the story of fashionABLE itself. The World Bank’s annual “Doing Business Index” ranks Ethiopia 111th out of 183 economies; it takes an average of 99 days to start a business here, as compared to 13 in the United States and five in China.

That’s why I’m not surprised when Serawit Tekatel (who heads up Women At Risk, the NGO that benefits from fashionABLE’s profits) cites “running a business” as one of her biggest challenges. And it’s why she wants Americans to buy fashionABLE’s scarves not just because for the women who make them, but because they like them. She knows that keeping fashionABLE profitable and expanding the business so that she can employ more women means they need to stay competitive.

For me, this side of the fashionABLE story is just as powerful. More than any amount of aid or assistance, ventures like fashionABLE –- and trade and investment more broadly — will be what helps Ethiopians pull themselves out of poverty. So, when you buy fashionABLE this holiday season, you are not just buying a beautiful handmade scarf, you are investing in a woman and her family.

Photo Credit: Flickr stream of futureatlascom

Trade = development, but only with transparency.

Last month, at the African Growth and Opportunity Act (AGOA) Forum, Secretary of State Hillary Clinton spoke about continuing challenges and new solutions for success in US-Africa trade relations.

AGOA is a trade preference program which aims to jump start economic development in Africa by allowing African businesses to export certain products to the US duty-free. As Clinton discussed AGOA’s successes in increasing exports of African valued-added products like marmalade and apparel, she also noted the need to strengthen AGOA by increasing opportunities for women, improving infrastructure and ensuring transparency in government revenues generated from AGOA.

While AGOA has successfully broken down many trade barriers and created new markets in the US for African entrepreneurs, improved transparency is necessary to realize the full benefits of AGOA. With transparency, citizens are empowered with information that allows them to recognize corruption, and to question and hold their leaders accountable. Despite an abundance of natural resources, government corruption too often stands in the way of economic development in Africa.

The extractives sector is the most lucrative industry in Africa, generating billions of dollars from oil, gas and mining, and yet public revenue generated from these resources is often lost to corruption and mismanagement. As the oil industry alone constitutes more than 90 percent of AGOA exports to the U.S., transparency in the oil sector is critical to African citizens experiencing the full benefits of AGOA.

In a May 2011 speech at the Organization for Economic Cooperation and Development donors conference, Secretary Clinton spoke about the importance of transparency to successful development:

“Corruption stifles entrepreneurship and it siphons funding away from critical services, hurting the people who rely on those services. Poor transparency makes it difficult if not impossible to determine how governments raise and spend their funds, and therefore, how to hold governments accountable.”

Some of the most resource-rich countries have the poorest populations because corrupt leaders steal public money rather than investing in public services like education, health care and infrastructure, which are necessary to societal well-being, employment and overall economic growth and security.

She reiterated this statement, this time to recipient countries, in her speech at the AGOA forum in Lusaka, and offered improved transparency as a solution to corruption and the next step in realizing AGOA’s full potential, then announced America’s new policy to implement this objective, saying:

“And let’s have a very frank conversation about corruption… The United States now requires oil, gas, and mining companies that raise capital in our markets to disclose the royalties they pay to foreign governments, which will help ensure that Africa’s natural wealth benefits the people of Africa rather than corrupt officials.”

Secretary Clinton was referring the Cardin-Lugar Transparency Amendment, which was passed on July 21, 2010. The new law requires all companies listed on the New York Stock Exchange to publish their payments made to foreign governments for oil gas and mining. The bill will go into effect once the Securities and Exchange Commission publishes the regulations implementing the law.

The Cardin-Lugar Amendment puts new muscle behind the US policy of partnering with African countries for meaningful development, of which transparency is a critical component. Once information on payments is available, African civil society, watchdog groups and law makers must use it to hold their leaders accountable. This new law has the potential to unleash billions of dollars worth of domestic resources to fund Africa’s needs and attract investment for lasting economic development.

I heard about the job from a friend. I had been working in another factory before, but it wasn’t paying well and I was not working. So, I sent in my application and got the job. I’m a quality control supervisor. It’s difficult! I have to make sure the work is done the way it needs to be done -– the measurements are correct, well stitched, etc. It’s tough but it’s a great experience. Telling people to do something and then seeing them do it the wrong way is not easy. I tell them what I want and that they have to give me what I want. I’m learning a lot of things at this job -– particularly how to supervise employees. I feel like the sky is the limit.

I want to go back to school for computing and graphic design to use in the fashion industry. I’m part of fashion now. I’ve always loved fashion. I wanted to be a model when I was young but circumstances led me to the fashion industry. When I was young I loved to make beaded necklaces and toys. One day, I want to have a fashion shop -– to make T-shirts, tops, dresses. And put my name on the products –- I’d have my own brand!

I leave my home by 5:30 every morning –- I live in Shai Hills, about 25 km from Tema. I arrive to the Tema roundabout by 6:30 and then I get on the bus -– it makes two trips every morning to bring workers to the factory. The management here is very good. When we work overtime, the management buys us food and drinks. I know so many people who want jobs but cannot find them. And here we feel special -– there’s unity and togetherness. In one way or another, the jobs have changed people’s lives for the better. Some are able to educate their kids and others are saving to go to school, like me.

Africa Is Awakening, Helped by Free Trade
Six of the 10 fastest-growing economies of the last decade were in sub-Saharan Africa.
By DANIEL W. YOHANNES AND MO IBRAHIM
THE WALL STREET JOURNAL

Long a symbol of stagnation, the African continent is experiencing a reawakening. Poverty and hunger are still widespread problems, but Africa’s growing middle class is creating business and investment opportunities that are among the best in the world. With the right trade policy and development assistance, we can unlock the potential of a thriving private sector and lift millions from poverty.

Six of the 10 fastest-growing economies of the last decade were in sub-Saharan Africa, the Economist recently found. And over the next five years, the average African economy will outpace its Asian counterpart. From telecom to financial services, extractive industries and consumer goods, Africa is open for business.

Yet challenges remain steep, from export tariffs that stunt development to the dismal shape of roads, electricity grids and other infrastructure that prevent businesses from getting their goods to market. Transport costs in Africa can be as high as 77% of the value of the exports.

This is where smart development assistance must play a role. Two excellent examples that work hand-in-glove can be found in the United States, with the African Growth and Opportunity Act (AGOA) and the Millennium Challenge Corporation.

Enacted in 2000, AGOA reduces the tariffs that African exporters face in U.S. markets while providing technical assistance to help them take advantage of the legislation. In 2010, the initiative brought in $44 billion in African export earnings, a more than 438% increase since its inception in 2001, according to the U.S. International Trade Commission. Overall, calculates former Assistant U.S. Trade Representative for Africa Rosa Whitaker, the effort has created more than 300,000 African jobs.

While that law opens the U.S. market, the Millennium Challenge Corporation helps African exporters take advantage of it. In partnership with African governments, the corporation funds projects that build trade capacity, from irrigation systems that boost productivity to airports and seaports for shipping cargo.

To qualify for financing, partner countries must meet international standards for good governance, invest in their citizens, and ensure economic freedom. This means making business-friendly policy reforms, such as fighting corruption and eliminating the red tape that suffocates entrepreneurship. These are many of the same standards that businesses look for when deciding where to invest capital.

Trade and development policies often conflict with each other, but in this case the U.S. government and the Millennium Challenge Corporation have devised a coherent approach to foster the domestic and international conditions that will enable Africa’s private sector to thrive.

Now we should be working to expand opportunities for AGOA-approved goods in sectors where Africa has significant potential for growth, like agriculture. Africa accounts for 60% of the world’s arable but uncultivated land, and although 70% of Africans are involved in agriculture, the continent still faces considerable hunger and malnutrition.

The United States is doing its part by investing in agriculture projects through the Millennium Challenge Corporation. But, together with African governments and businesses, more needs to be done to build the production capacity of African farmers and improve their links with U.S. markets.

America has always given generously to the cause of poverty reduction in Africa, but moral leadership is not the only interest at stake. Other nations seeking to gain a foothold in emerging African markets are investing heavily in their development. Now is not the time to back away. The economic future and national security of the U.S. are equally compelling reasons to invest in Africa’s growth.

Mr. Yohannes is CEO of the Millennium Challenge Corporation. Mr. Ibrahim is chairman of the Mo Ibrahim Foundation and a board member of the global antipoverty advocacy group, ONE.

The 2011 AGOA Forum brings back into sharp focus the key role of trade in driving Africa’s development.

For Africa to secure its share of the benefits and gains from trade, the imperative for the international community to progress world trade agreements is matched by the need for an acceleration in the pace of economic integration in Africa to create larger and more competitive markets.

Africa faces a range of challenges that have a major impact on the rate of progress toward economic integration, and consequently higher levels of trade, economic growth and poverty reduction. Forty percent of East Africans live in landlocked countries versus a world average of 1 percent, making it much harder for producers to access international markets, and only 10 percent of African trade is with other African countries. Transport costs are 60 to 70 percent higher in Africa than the USA or Europe.

Across Africa, whilst the broader political and structural frameworks are being put in place to enable regional integration and trade, much more progress needs to be made to make common markets work in practice, and to tackle significant infrastructure constraints.

The existence of multiple trading blocs disrupts the cross-border flow of goods, and existing trade agreements are either not in place or not being implemented. Limited improvements in customs facilitation, a wide range of non-tariff barriers and a lack of standardized documents and procedures all contribute to the cost and complexity of doing business.

Hard infrastructure continues to be a major barrier to progress. At Lagos port for example, congestion and slow clearance procedures can lead to a 14 week-clearance time. It can take six weeks to clear containers in Mombasa and four weeks in Abidjan. It is currently more expensive and takes longer to move a product from Abidjan to Lagos, a distance of 940 kilometers, than to import the same product from China or India.

Business, political leaders and development partners have a key role to play to ensure that resources are effectively channeled into delivering much-needed hard and soft infrastructure improvements, and that the regulatory environment is reshaped to facilitate trade, rather than inhibit it.

Emerging models of collaboration between the private and public sector, including developing innovative forms of trade financing and tackling both hard and soft constraints to trade, are starting to make a real difference.

In West Africa, for example, a coalition of businesses, the World Bank and customs organizations of five ECOWAS countries are identifying ways to improve customs administration along the Abidjan-Lagos transit corridor. The route has five customs points and partners have been examining potential options for a green channel fast track mechanism for Authorized Economic Operators to enable reliable businesses to be granted authorization for more simplified and streamlined customs procedures.

A program known as Business Action for the Improvement of Customs Administration in Africa is a private-sector led trade facilitation effort in the EAC region that aims to improve the customs environment and to change the culture of customs administration from a controlling function to a facilitating one. Initiated by Business Action for Africa with support from member companies, in partnership with local government bodies, the World Customs Organization and the East Africa Business Council, the AEO Model being introduced will make the EAC the second region in the world, after the EU, to introduce mutual recognition of authorized economic operators and customs controls at the regional level.

Progress in regional integration and trade involves both public and private stakeholders across industries and countries, all of whom have critical and interdependent roles to play. Greater co-ordination and targeting of effort through collaborative action is necessary to address bottlenecks and accelerate progress. Developing new forms of collaboration requires experimentation and is often risky and complex, but the challenges can be overcome and the rewards can be significant.

BAA is an international network of businesses, business organizations and development partners, working collectively to accelerate growth and poverty reduction in Africa.

Did you know that many of the products at the ONE Store are sourced from organic products from African countries like Uganda, Tanzania and Swaziland?

To help raise awareness for African trade — a crucial tool in Africa’s efforts to develop their economies and escape poverty — we created a special tag to accompany all our African-made products.

It has information about the multi-tiered and multilateral benefits of doing business with Africa.

The production of ONE products in Africa helps provide jobs and independence and puts money into the pockets of hard-working men and women — money that pays for basic necessities such as food, shelter and medicine for children.

For a limited time, we’re offering 20 percent off our African-made T-shirts. Simply enter the code TRADE into the promotion code window before check out. Promotion is valid through July 17th so get your ONE shirt today. And of course, it comes with the cool new tag.

Bezuayhu parents died when she was a girl, so she stayed with her grandparents. They wanted her to work as opposed to attending school, so she left for the capital city. Unable to find her way in the city as a teenager, the predators of the sex industry brought Bezuayhu the false promise of hope in the form of prostitution. Her life was having to give herself to dirty men for less than a dollar at best, and facing the threat of being beaten and raped as an occupational hazard.

The rehabilitation program that my company, fashionABLE, helps to fund gave her the opportunity to get off the streets, and she took it. When Bezuayhu was 19 years old, we trained her to be a weaver, and now with great satisfaction, she says “I am so proud to be called a scarf maker.”

Giving people the opportunity to earn one’s own income and have a skill has a transforming effect on dignity. I love being around Bezuayhu. She is quiet, strong, humble, noble — the character of someone who has thrived beyond unconscionable circumstances. To those of us who affectionately call her “Bezzy,” she is very much a hero.

This video is a testimony to Bezuayhu’s beauty, and to the transformation that can happen when we give people an opportunity. Watch the video above and see for yourself.

We’ve heard from a number of commentators as part of our Trade and Development blog series on the importance of helping Africa trade more with the US and with itself. Richard Gilbert of Business Action for Africa and Zenia Lewis of the Brookings Institute both talked about the need to bring down the barriers between countries and make trade quicker and easier. New research from the World Bank says trade between southern African countries accounts for just 10 percent of all their trade compared to 40 percent in North America.

Initiatives like AGOA and technical assistance from the Millennium Challenge Corporation can help build roads and improve communications — but the political will to open borders has to come from African governments themselves. They have been promising to do this for some time (they first committed to a Common Market for Africa at the Africa Union in 1970s) and have signed a myriad of overlapping free trade agreements among themselves (around 27 across the continent at the last count) but few tariffs have been eliminated and it still takes longer to transport goods between countries than practically anywhere else in the world.

This may be about to change though. In a neat follow up to the AGOA Summit, on June 12 African leaders launched talks to form the continent’s biggest free-trade bloc by integrating the Common Market for Eastern and Southern Africa, The East African Community and the Southern African Development Community. This would create a market worth $875 billion across 26 countries and a combined population of 700 million people. It would bring together the continent’s most developed economies of South Africa and Egypt, and some of the most dynamic, such as Angola and Ethiopia and smaller landlocked countries like Rwanda and Burundi. Improving regional integration would in the longer term also help Africa to compete with other joined up markets such as the North America Free Trade Area, the European Union and emerging economies like China.

The proposed free trade area would be a first step in unraveling the “spaghetti bowl,” as it is sometimes called, of the overlapping trade blocs. However, it still won’t be an easy task as each group has different rules and some countries also belong to another trade group that is not part of the initiative. Negotiations will cover issues like streamlining border crossings and removing non-tariff barriers such as import bans and permits. For example, the South African grocery store Shoprite loses $500 a day for a truck delayed at a border post.

Jacob Zuma, the South African president, is a strong supporter of the initiative. At the launch he said “This is but one major step towards achieving economic freedom in our lifetime in the continent. We must also continue building an African continent that is united, and which is free of poverty, disease, deprivation and conflict.” It’s great to see the political will is emerging to tackle these issues. As any traveler will know, it’s no fun being stuck at customs — and while it’s simply an inconvenience for us it can mean the difference between making a profit or loss for Africa traders.

Perhaps you’ve seen it in a pet shop. “Nyjer,” a little black seed fed to birds like the finch and bluebird, is the priciest birdseed at the market at $1.50 a pound. Ethiopians have a near-monopoly on this product. Farmers on Ethiopia’s high plateau have grown and harvested it, under the name of “noug” or “niger seed,” for cooking oil over the last five millennia.

To their surprise, they now sell it worldwide, providing about two-thirds of America’s imported birdseed. The manager of an Addis Ababa trading firm describes how stunned he was to find Americans buying expensive seeds simply to throw them away to birds:

“[Americans] have become the target for whomever wants to sell the Niger seed… We hear that Niger seed goes to the USA market for bird feed, which really amazes us because we know the product as for human consumption only.”

Thus with a bit of information and some global linkages, traditional farmers become producers for the world.

Their success suggests that the hope of the African Growth and Opportunity Act (AGOA) a decade ago for growth through trade was not misplaced. A decade after then-President Clinton presided over a sunny White House-signing ceremony, the energy and metals boom fueled by Chinese growth is drawing more attention than America’s African trade policy. But over these ten years, the near-universal waiver of American tariffs on African products has helped Kenya, Lesotho and Swaziland become strong clothing exporters, enabled South Africa to rise, and -– as Ethiopian birdseed exports suggest -– also had some more subtle, indirect and less-noted successes. The deep and continuous exchange of information through annual AGOA Forums and the four trade hubs are a unique way to help African producers find markets for things like noug and shea butter, where tariffs don’t exist and all farmers need is information.

But the decade also brought some disappointments. Supply chain and port problems still place African manufacturing outside South Africa –- especially in inland countries -– at a disadvantage against Asian and Latin rivals too great for tariff margins to overcome. This is why only three countries have taken significant advantage of the clothing tariff waivers. Likewise, and perhaps for similar reasons, Americans remain tiny buyers of African agricultural products –- by value almost half of all our African farm imports are cocoa beans from Cote d’Ivoire. On the American side, AGOA’s tariff benefits lacked by the capacity-building and aid-for-trade support that would help African governments and businesses take full advantage of them.

As we take stock on this anniversary, we must understand that AGOA’s success is real but limited. But the areas in which it has delivered less than its authors hoped still offer lessons on how to do better, and how to match American policies more effectively with complementary African strengths. The unexpected success of Ethiopia’s noug farmers is testament to the fact that idealistic ideas often work –- and sometimes in ways their creators never expected.

The resource boom is a unique opportunity to take a good program and bring it to its full potential. If Africa’s oil and metal exporters can invest some of their earnings to create a top-quality continental infrastructure, with ports and internal crossing points, African farm and manufacturing exporters will come level with their competitors in other regions. Americans simultaneously should cement AGOA’s successes, by extending its generous textile benefits this year, ensuring that it remains a continental program rather than one which chooses only least-developed countries for benefits, and developing new capacity-building supports in agriculture and logistics.

As this is done, a much larger set of African farmers, workers, businesses and nations will be able to succeed in trade -– and stories that today seem cheerful and inspirational story will become, as they should be, simply typical and normal.

If you think US trade policy has nothing to do with you, think again. Ten years ago, it was much harder to get items, especially from Africa, imported into the United States and on supermarket shelves.

I know some of you have to have been in my shoes. You try something on vacation in a foreign country — or someone brings you a peace offering in their carry-on -– and six months later you crave it. But where are you going to get that German rosehip jam, that Scottish fizzy drink, that amazing Moroccan saffron, or chocolate bars made with Ivorian cocoa? Thanks to the Africa Growth and Opportunities Act (AGOA), African exports can now get into the US market more easily.

There are other benefits in addition to making the world a “smaller” place. AGOA has increased exports from Africa, and spurred economic growth, creating more sustainable, stable economies.

Nealon and Sipho from ONE attended AGOA’s annual Ministerial Conference and Civil Society Forum in Lusaka, Zambia a few weeks ago and reported on the goings-on, including the arrival of Secretary Clinton. If you haven’t already, check out the #AGOA hashtag on Twitter and contribute to the conversation. If you need a little help with what to say, here are a few handy-dandy tweets:

#AGOA has created 300,000 jobs, $300Bn in export earnings (incl. nearly $30Bn in non-oil exports) @ONECampaign

In 10 years, exports from African #AGOA countries have grown over 300%, from $21 billion in 2000 to $86 billion. @ONECampaign

Thx to #AGOA, Kenyan apparel exports have increased by 800% since 2000, from $30m to more than $240m. @ONECampaign

#AGOA has created new market opportunities. Ethiopia now exports over $4m annually in cut flowers to the US. @ONECampaign

Cost of #AGOA: $2 million/yr in tariffs on non-oil products – negligible compared to the creation of 300,000 jobs. @ONECampaign

Coffee and tea exports from Tanzania to the US increased 600% since 2000 under #AGOA @ONECampaign

Africa reps only about 1.5% of global exports. Increased trade = economic growth and development. #AGOA @ONECampaign

Get in touch! Tell us @ONECampaign what AGOA product you couldn’t live without!