Oireachtas Joint and Select Committees

Wednesday, 29 May 2013

Joint Oireachtas Committee on Foreign Affairs and Trade

Africa Week: Discussion with Value Added in Africa

3:05 pm

Mr. Conall O'Caoimh:

There are some fantastic and some terrible multinationals operating. One of the biggest changes in East Africa in the past number of years has been the introduction of mobile phones. Money can be sent in Kenya and Tanzania with the bog-standard mobile phone. While rural banks in Ireland are closing, in east Africa mobile phones have enabled people to leapfrog into a new generation of banking which is not based on an institution. Formerly, a woman living on a hill had to pay a bus driver to bring her and her products to the market, where she would stand for a day. If a regular buyer was not there to make purchases she would have to sell her product at a lower price. She can now text her preferred buyer, agree a price and day, put the product onto a van, text the buyer to tell him or her it is coming and have the money texted to her. Vodafone is operating in a number of countries and is making money. Mobile phones have changed the business model. Transaction costs are reduced and women are able to be productive.

Significant multinationals are leveraging power. Tea producers in Kenya and Rwanda currently sell bulk tea. In the past month they have told us they make tea bags for the local market but cannot sell internationally because big international buyers might leave them if they try to compete with their products. They are in fear that the multinationals will squeeze them out.

Fairtrade is similar to us, but the key difference is that the work it does is on farms, and its system does not reach into factories. It does not distinguish whether product is turned into chocolate in Europe or Africa. We are trying to emphasise that we only work with products that are fully processed and ready for consumers at the final stage in Africa.

The basket of products coming from many African countries is the same as that under the colonial system. Change has not yet happened, and that is what we are trying to achieve. As Ireland moved away from selling beef from the hoof, so we want African countries to move from selling cocoa and coffee beans.

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