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Frank Matsaert: How we built a start-up into a continental entity in 10 years

TradeMark East Africa CEO Frank Matsaert. 

After a decade of working to ease trade bottlenecks in the region, Frank Matsaert is stepping down as chief executive of TradeMark East Africa.

His last day in office was June 30 this year, and in an interview, he explains how different the organisation was on that Thursday last month compared to October 2010, when he walked in as the founding chief executive of TMEA.

Matsaert took office when TMEA was in its start-up phase and leaves an organisation that is now transitioning into a pan-African entity. TMEA, he said, is set to become TradeMark Africa over the next couple of months and open its first office outside EAC in West Africa. The organisation expects to play a key role in the proper take-off of the Africa Continental Free Trade Area (AfCFTA).

It is also planning to launch a commercial arm – Trade Catalyst Africa (TCA) – that will source capital and finance the construction of infrastructure, particularly at border crossing points. Matsaert said TMEA will launch TCA in the coming months.

“It has been quite a journey. We started Trademark with a budget of about $40 million (Sh4.7 billion – at today’s exchange rates) and we are now at a cumulative budget of $1.2 billion (Sh141 billion),” said Matsaert, explaining much of the money – about Sh106 billion ($900 million) – has been spent in the region in building infrastructure such as one-stop border posts across and enhancing capacity at the ports.

“We have tried to be a positive player in unlocking the trade potential through a range of things such as work at the ports. For instance at the Port of Mombasa back, in 2010 when we started, it would take you around 12 to 14 days to clear cargo and now, you’ll do it in about four days. Again at the border post, the time taken to go through these borders has fallen by 70 per cent.”

“The overall impact of TradeMark during the last 12 years has been to reduce trade costs by about 30 per cent. That is more than $115 million (Sh13.57 billion) a year in terms of cost savings for the private sector.”

It has worked on 16 One-Stop Border Posts in the East African Community (EAC) as well as in countries in the Horn of Africa and some southern Africa states.

In its quest to go pan-continental, Matsaert said TMEA is currently working on the possibility of setting up border posts at the Lagos-Abidjan Corridor as well as the Ghana-Togo border.

“One of the things we have been talking about is rebranding to Trademark Africa. We will launch the new brand probably in September,” he said. At the onset, he led a small organisation that had a staff of five and has since grown to 160 people. TMEA then focused on just the five EAC countries but has now grown to 13 countries, with the next phase of its growth involving the rest of Africa. Matsaert said at the beginning he had envisioned an organisation that would work across different countries but added becoming an African-wide entity, TMEA will be surpassing the vision he had a decade ago.

“It has quite grown beyond my dreams, actually. I thought we would have an institution that would gradually expand to the neighbours but I never thought that it would get be a trans-continental or pan-continental. It’s really exceeded my expectations,” he said.

“I think that Trademark in the next decade could really make the difference to help the AfCFTA really emerge.”

He also said TMEA would launch a commercial arm Trade Catalyst Africa (TCA), which is borne a growing gap in financing infrastructure.

TCA has already received $25 million (Sh2.95 billion) initial capital from the US government.

“What we’ve seen is quite a decline in donor finance available for some of the work. We realise is that while expensive, infrastructure is critical,” he said, adding that TCA would source for capital and put up infrastructure such as crossing points but put modest user fees. Matsaert said the organisation would heavily focus on ‘ethical’ financing to avoid introducing new bottlenecks to trade.

This would mean avoiding costs while keeping toll expenses to the bare minimum. “We want to find ways to bring in commercial capital in an ethical way and not the sort of thing you see sometimes where development of infrastructure on a user-pay basis is very expensive, but rather to do something that really represents good value,” he said.

“Throughout the continent, for example. There are many border posts that need to be developed. We are developing a toll model that is priced at very low terms and can really get the continent moving.”

His organisation has helped businesses in EAC cut trade costs by some Sh13.57 billion annually through its facilitation work or cut the time spent at border crossing points through the One-Stop Border Posts from several hours – in some instances days – to under an hour.

Matsaert said his proudest moment was working with 100,000 traders in enabling them to get recognition by governments on either side of the borders.

This in turn reduced harassment by government officials at the border points while traders increased compliance with legal requirements including paying levies to continue conducting business.

TMEA also succeeded to get the traders to have a say in how affairs at the border crossing points are run, with some of them included in some of the committees that run the crossing points.

“At the borders, there are a lot of small and informal traders ... tens of thousands of informal traders and many of them women. We tried to help these traders know their rights while sensitising governments on their importance. With time they stopped being viewed as smugglers, such that now the customs officers actually facilitate their trade. They are now an important part of the revenue growth for the two governments,” he said. The initial project involved traders at the Busia border.

“I remember taking the women from the Busia border to the  World Trade Organization (WTO) in Geneva to tell their story. And they really did make a lot of the officials there tear up because it’s such a story of transformation. These women do not get sexually harassed, they don’t have to pay illegal fines, they go through the border unfettered.”

He added that independent studies at some of the border points show that with a reduction in the levels of unfair harassment by government officials, the incomes of the trades doubled.

“From that border (Busia)… to the WTO and getting their stories of transformation to the global audience was really a proud moment. And it’s all based on that work on the ground, understandings stakeholders and the partnership that we talked about earlier,” he said.

Matsaert said TMEA is now working with the Gates Foundation to scale up the project helping small traders at the border points.

He expects the number of beneficiary traders across the border points in the region to grow to 300,000.