NGO Inclusive Business Workshop Karen Smith BIF Malawi Country Manager

NGO Inclusive Business Workshop

Time Activity 8.30am – 9:00am Registration: Tea, Coffee and Snacks 9:00am – 9:15am Introductions 9:15am – 9:35am Presentation on BCA/CBE 9:35am – 10:00am Introduction to inclusive business and BIF 10:00am – 10:45am Break out to discuss the opportunities and challenges for NGOs in

realising their objectives through working with the private sector.

10:45am – 11:00am Coffee Break 11:00am – 11:20am Afri-Nut, NASFAM, a successful inclusive business story. 11:20am –12:15am Break out for action planning session 12:15am – 12:30am Summary and wrap up

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Contents

•  What is Private Sector Development? •  What is Inclusive Business? •  Introduction to BIF •  Imani Development Projects

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What is Private Sector Development?

•  PSD is a strategy for promoting economic growth and reducing poverty in developing countries by building private enterprises and competitive markets that are stronger and more inclusive.

•  In recent years there has been a shift in development thinking towards integration with PSD

•  Approaches include: –  Making Markets Work for the Poor (M4P) –  Green Growth –  Industrial Policy and Business Environment Reform –  Value Chain Development –  PPPs –  Business Development Services –  Inclusive Business

Macro

Micro

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What is Inclusive Business?

The term ‘inclusive business’ refers to profitable core business activity that also tangibly expands opportunities for the poor and disadvantaged in developing countries. Such business models can engage the poor as employees, suppliers, distributors, consumers and/or innovators.

Business as usual & CSR:

non-core business

activities for philanthropic or strategic

aims

Inclusive Business:

core business that innovates to include the poor in the value chain

Social Enterprise:

profits reinvested in stakeholders

/ the community

Fair Trade: combines

core business with

non-core producer and

supplier relationships

Government brokered: contract

farming – socialist

model; rigid price setting

Tax & spend: revenues

from parastatals

used for social

programmes

Liberal / Pro-business

Interventionist / Non-business

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BIF Basics

•  Objective: to facilitate inclusive business projects, with an environmental sub-objective

•  Benefit to DFID: learning which will better enable large scale private sector development

•  Pilot in 5 countries: Malawi, Zambia, Bangladesh, India & Nigeria •  PWC lead contractor, Imani is local subcontractor in Malawi •  3 years; now half way through the second year •  Initial Budget per country £500,000, scaled up in Malawi by another

£500,000 for Years 2 & 3 –  If model proves successful, there potential for DFID and other

donor partners scale up the Facility both within and beyond the initial pilot countries from £3M to £30 – £60M

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Engagement With Different Kinds Of Organisations

Commercial Businesses

Social Enterprises NGOs

Universal Industries: High Quality Cassava

Flour project

MEGA: Micro-Hydro electricity generation at Mulanje Mountain

Microloan Foundation: Market linkages for smallholder farmers

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BIF Projects: Impacts Along The Value Chain

Malawi Mangoes

Universal Industries

GTC MEGA

Microloan

Afri-Nut Nali

BISC

Tree Crops

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BIF Projects: Environmental

•  Climate Smart Agriculture •  Information on adaptation and mitigation for climate change •  Tool to develop a climate smart strategy for agri-businesses •  Information about carbon finance

•  Global Tea and Commodities Renewable Energy Feasibility Study •  Processing facilities on Malawi estates reliant on diesel generators •  Options considered for solar, wind, biomass and micro-hydro as

alternative clean energy sources •  EcoBricks

•  Commercial drive for quantities of better quality bricks for construction •  Environmental friendly solution to be explored using Vertical Shaft Brick

Kiln technology

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BIF Mechanisms

•  Signposting: –  Sharing knowledge and information –  Examples include introducing companies to potential investors, linking

organisations to others with similar objectives, sharing research papers and case studies, sending links to relevant information online

•  Non-Contracted Support Projects (10 underway): –  Small technical support projects, up to £12,000 –  Examples include feasibility studies, workshops, business plans, surveys

•  Cost Sharing Projects (5 underway): –  Larger projects providing consultancy support of up to £70,000 which

must be matched in-kind by the client –  Types of work undertaken cover all aspects of business, e.g. marketing,

financial modelling, shareholder structures, KPIs, partnership brokering, value chain analysis

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BIF Outcomes

Technical assistance for a project

Information to help make better decisions

Access to international commercial and development and environmental expertise Become part of a community

sharing ideas and best practice

DfID “seal of approval” as being a socially conscious

business Increased credibility and

branding in social marketplace

Information gained from monitoring and evaluation of

projects – what does and doesn’t work in inclusive

business Lessons learnt from

companies and consultants involved

Developing case studies and other materials to share

Identifying new IB models Growing an IB practitioner

network through Extensive website – the Hub

Better understanding of inclusive busiess and its

applications, limitations and opportunities

Access to case studies and information on companies and individuals who are

practising inclusive business Realising sustainable pro-

poor objectives via commercial projects

BIF Learning Client Benefits

DfID / Development Community Goals

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Direct Through To Systemic Impact

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The BIF Hub

BIF resource as well as for “sister”

project IAP

Blogs by practitioners as well as editorial

comment

Resources include directory of documents, links, project

information, etc

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Emerging Technology Innovations Facilitating Development in Malawi

•  AgroTech –  Smartphone based technology for capturing data –  Includes GPS –  Many potential uses – e.g. enabling smallholders to access loans

based on reliable information of land holding •  Esoko

–  A powerful set of web and SMS tools that any business, project or government can use to affordably and quickly exchange information with members, suppliers or customers in the field

–  Enables agribusiness and projects the opportunity to share information quickly and affordably, creating a free flow of information in and out of rural areas.

•  Mobile money developments

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Learning from BIF Malawi to date

•  Consultancy approach works well as a way of facilitating projects –  benefits from blending local understanding with international

expertise –  networking and “signposting” an important part of the project

•  Current economic climate is extremely difficult – but it also drives innovation – e.g. value addition, exports

•  Less interaction with big business, more with start ups; scale and replication need to come

•  Some BIF tools not suited to Malawi – e.g. webinars •  Appetite for inclusive business in Malawi has been proven, particularly

in agribusiness, and there is also a lot of potential for renewable energy projects

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Imani Development

•  International economic development consultancy with offices in SA, East Africa, Australia and the UK

•  Malawi team have a breadth of skills and experience including –  International trade and economics –  Development consultancy –  Environmental consultancy –  Business consultancy

•  Recent projects in Malawi include –  Managing and delivering technical consultancy for the Business

Innovation Facility –  Developing a Private Sector Engagement Plan for ICCO / Christian Aid –  Managing the development of a National Export Strategy for Malawi

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CA/ICCO Private Sector Engagement Strategy

•  CA/ICCO wanted to engage with private sector for pro-poor impact but no knowledge of how to do this

•  Phase 1: Imani developed overview of private sector in Malawi

•  Phase 2: Analysis of key sectors / players conducted to identify opportunities for engagement

•  Phase 3: In depth analysis and implementation plan, including partnering strategy, for selected sectors: rice and jatropha

•  Phase 4: Pilot (currently ongoing) •  Phase 5: Full roll out (later in 2012)

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COMPETITIVENESS:  Maximise the size of the rice sector in Malawi  

PARTICIPATION:  Increase the ability of the poor to better participate in the growth of the sector and to be allow for a fair reward that allows savings  

This  requires  NGO  to  act  as  facilitators  and  drivers  of  stakeholder  collabora?on  and  coordinated  investment  in  sector:  •     Establish  formal  forum  for  dialogue  and  ac=on  •     Ensure  financial  sector,  government  and  other  key    enablers  are  on  board,  as  with  the  CoDon  Development  Trust  •   Strengthen  Kilombero  branding  to  target  domes=c  and  regional  markets  •   Ensure  price  compe==veness  •   Prepare  for  standard  requirements  

Increase local & regional sales for Kilombero and Super Faya brands and improve the quality & quantity of rice produced by farmers, and enable them to bargain a fair price

Strengthen  farmer  bargaining  power  in  the  value  chain  to  improve  and  increase  rice  supply  and  to  receive  fair  reward.  To  do  this,  find  market  based  solu=ons  to  provide  farmers  with  access  to:    •   Informa=on  •   Finance  •   Business  &  savings  management  training  and  saving  scheme  •   Markets  •   Organisa=on  and  aggrega=on  facili=es  • Extension  services  and  affordable  inputs  

This can only be achieved through building sustainable partnerships and setting a long-term horizon for expected outcomes

Macro  Level   Micro  Level  

Private Sector Engagement: Rice Sector Strategy

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Malawi National Export Strategy

Thank you!!

BIF disclaimer here: E.g. © 2011 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

karen@imanidevelopment.com info@innovationsagainstpoverty.org or visit: www.businessinnovationfacility.org