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.
[email protected] [email protected] or visit: www.businessinnovationfacility.org
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