Fairtrade Africa 10th Anniversary- Strathmore University
Distinguished guests, ladies and gentlemen… I am pleased to join you on this day as we celebrate the achievements of Fairtrade Africa over the last ten years. Fairtrade Africa plays a crucial role in helping to improve the lives of poor people in a sustainable way, by ensuring farmers receive fair prices for their products and workers receive better wages to help them support their families. My core proposition today is that growth must be sustainable and inclusive. Fairtrade Africa is a model of that.
First, some background on the UK angle to this: the UK is the largest contributor to the Fairtrade movement, having contributed around £18m (approximately Ksh 2.9 billion) over 7 years through DFID's economic development programme, and working with Fairtrade since the outset to build markets for the poor and the marginalised. Fairtrade in turn has reached over 7m smallholders, workers and businesses, 2/3 of which were in Africa; of which 25% were women.
We are also proud that so many top UK retailers have bought into the model - Marks and Spencer, ASDA, Sainsbury's — to name but a few… It speaks to the success of the brand that almost all major UK retail outlets now have Fairtrade products on their shelves.
Here in Kenya, Fairtrade Africa has played an important role in protecting workers from exploitation and improving working conditions. This has had a hugely positive impact not only to direct beneficiaries, but also their communities.
During my stay in Kenya, I have had the pleasure of interacting with some of the beneficiaries. I'd like to share with you a few examples:
Under the Fairtrade certified flower farms, workers conditions have over the last 10 years improved- Fairtrade has been instrumental in providing workers with a platform to negotiate for better pay and favourable working conditions.
Companies such as Wildfire Flowers, based in Naivasha, have benefited through training provided by Fairtrade - which has led to growth of their sales of flowers from 60 % of their produce to 100%, with 30 % of it sold as Fairtrade.
We have also seen projects targeting women farmers such as the Kabng'etuny Coffee Cooperative Society. Here the women, with support from Fairtrade, will now be able to supplement the coffee proceeds earned once per year with income from maize milling. The surrounding communities will also be able to buy maize flour, a major staple for majority of the population in Kenya, at a subsidized cost compared to brands sold in local markets. Moreover, the communities will also be able to process other cereals and pulses often grown in the region including livestock feeds which are by-products of the milling process.
More broadly, Fairtrade's agenda is right because agriculture is essential for sub-Saharan Africa's growth. Agriculture employs 65% of Africa's labour force and accounts for 26% of African gross domestic product.
Agricultural performance has improved since 2000, but growth is not yet fast enough. Agricultural productivity must increase, enabling better goods to be produced more efficiently - farm yields in Africa are currently among the lowest in the world. Ladies and gentlemen I would like to propose that we demand a revolution in agribusiness over the next 10 years in the same way as we have seen one in mobile telecoms in the past 10.
Fairtrade can be a central part of that revolution. The last twenty years have shown us, unequivocally, that opening up markets to trade is the most important driver of growth in developing countries…and ultimately defeating poverty for good requires that African Agribusiness reaches markets.
Men and women in Kenya…just like in any other part of the world… want dignity of work. They want the chance to work their way out of poverty… The chance to provide for their families and build themselves a future.
But trade remains disproportionately balanced away from the people who grow our food. And while Fairtrade plays its part in re-balancing in favour of the poorest…we know that there are still only a tiny proportion of global commodities sold on Fairtrade terms.
So the Fairtrade agenda can help Kenya transform agriculture into a thriving, commercially-oriented sector that creates jobs on a large scale, boosts value-added exports, and ultimately improves livelihoods for the poor.
This work to improve working conditions and job opportunities is part of DFID's wider programme in Kenya is to drive sustainable, inclusive economic growth. The new Government which took office in the UK in May has reconfirmed Britain's commitment to development. We will spend 0.7% of our national income on official development assistance every year. That currently amounts to £12 billion a year.
Here in Kenya, UK aid is supporting the Kenyan Government's Vision 2030 and as one of the largest bilateral donors to Kenya, we are contributing around £250 million (Ksh 29bn) in aid a year which has doubled since 2011. We are focused on improving health, increasing the quality of education, reducing vulnerability among Kenya's most disadvantaged; and catalysing private sector growth to create more jobs for young people.
Under our economic development programme, DFID is investing up to £60m (kes 9.6 billion) to support port modernisation, productivity and efficiency improvement as part of a trade facilitation programme implemented by Trademark East Africa.
This will help reduce the cost of trade, stimulate export-driven growth and ultimately create jobs and reduce poverty. We are already seeing the benefits of this as the number of days to clear goods at the port has decreased from 15-20 days down to less than 4 days.
We are supporting a Kenyan company — MKOPA — which uses mobile phones and very small solar panels to increase rural access to electricity. Their pay-as-you-go model means that poorer families can afford modern solar technology to charge a phone, and light their homes. Cheaper and without the health and other problems of kerosene or other fossil fuels. Nearly 250,000 households are already benefiting after two years.
And our investment business, CDC, for which we have just announced new capital of £735 million (kes 118billion), and which already invests in more than 100 business in Kenya will do more. We are also working to increase access to finance, through our continued partnership with Equity Bank and support for the Financial Sector Deepening Trust which has helped CBA develop MShwari. To date MShawari has lent 24 billion shillings in small business loans, and has turned CBA into the biggest bank in East Africa by loan volumes, almost overnight. We need to see more of these innovations to help Africa, and Kenya, to make faster progress.
Finally, we cannot advance this agenda without pushing for freer trade internationally. For too long, global trade barriers and bureaucracy have prevented people selling their goods at a fair price, denying nations the chance to grow.
In December last year, the World Trade Organization delivered the first global trade deal in a generation… A momentous agreement which will see countries cutting swathes of red tape and bureaucracy and could add £7 billion to incomes in sub-Saharan Africa. The UK pushed hard for this deal and we will continue to make the case for freer, fairer trade in the EU, in the G20 and in the WTO.
Kenya's role in hosting the WTO's MC10 in December offers an un-paralleled opportunity to push for a fairer trade environment that will allow Kenya, and other developing and emerging economies, to realise their export potential, and ultimately support sustainable poverty reduction. The UK is strongly supporting Kenya's leadership role in the WTO negotiations — predominantly through TradeMark East Africa — in a bid to generate more and better trade across the region.
It is also why we must continue our resolve to help developing countries to build simpler, fairer, more transparent business environments that will reduce corruption and stimulate investment.
In conclusion, ladies and gentlemen, we cannot pursue this agenda alone. As we celebrate the achievements of Fairtrade Africa today, I would also like to take this opportunity to challenge more businesses to join in their efforts. It isn't just the right thing to do…it's the smart thing.
It's smart for businesses expanding within or into Kenya to lead by example when it comes to workers' wellbeing, corporate governance and local jobs. This is the key to building successful long-term partnerships within growing markets particularly in agribusiness.
All of us - governments, charities, business and consumers — must play their part and focus on inclusive growth and jobs. Breaking down the barriers to free and fair trade. It is fantastic that DFID is supporting projects like these in Kenya…which are having such a transformative impact on people's lives. This is a key moment for shaping the future of development… we must grasp it.