Question

You are in senior management in a South African company that exports fresh produce to the SADC region. Your company seeks to grow its footprint into Africa. You have been tasked to identify two countries in the East African Community where there are lucrative opportunities for exporting fresh produce. You have been asked to select these two countries on the basis of the extent to which each of the two countries in the EAC is globalised. You have done your research that analyses the extent to which each country in the EAC is globalized. Write a report to the board of your company with recommendations on which two countries to expand to, using at least three globalisation indices to support your recommendations.

Answer 1

On the basis of the experiences of exporting fresh produce to the South African Development Community Region [SADC] and after a thorough study was conducted on the globalisation effects and export potential of fresh produce to each nation of the East African Community region, two nations Burundi and Kenya have been identified for extending the export of our fresh produce. Two different dimensions have been considered for the selection of these two nations. The various factors that have been identified in these countries have been listed below

Potentiality in Burundi

· The latest Global Food Security Index ranks Burundi in the 112th position which is the lowest among the East African Community Region

· The Global Hunger Index lists Burundi among the last position [117th]

· Ease of doing business index is identified as below average

                                                 As far as selection of Burundi is considered, the major factor that has been considered is the current production levels of fresh produce and the trends it has been following. Since it is following a reverse trend in the production of fresh produce from 2007, the nation is in need of a partner with which it can link so that the requirement is met. Moreover, poor ranks in Food security and Hunger Index specifies the need for more and more inflows of quality fresh produce in to the economy. Although the Ease of Doing business has been identified as below average, it is a factor that is given less weightage as far as selection of Burundi is considered.

Potentiality in Kenya

· Global Hunger Index places Kenya in the 86th position which is the top among East African Community

· Global Food Security Index also places Kenya higher [86th]

· Ease of doing business is ‘Very easy’ with a rank of 56 which is much above many economies

                                                   With respect to the selection of Kenya, the major factor that has been considered is the Ease of Doing Business in the nation. Although the two other factors are somewhat good for the nation, there are still scope for development consider the ranking it has at the world level. With more ease in doing business, the export-import complexities would be curtailed to a great extent.

                                    While taking these two countries, it is kept in mind that the losses that are expected in one nation would be compensated in the other nation. For example, the Ease of doing Business is below average in Burundi, but the market opportunities are more considering the falling production and increasing requirement for fresh produce owing to poor performances in many indices. But in Kenya, although it fares well, there is still a scope for trade, but with higher ranks in ‘Ease of Doing Business’, the losses incurred in doing business in Burundi can be compensated here.