ECIdeas Issue 3, April 2011

April 2011

Issue #3

IN THIS ISSUE

ECIAfrica is an economic development consultancy based in Johannesburg, South Africa. Established in 1994, ECIAfrica has designed and implemented assignments throughout Africa for a variety of clients including government institutions, non-governmental organisations and private sector organizations such as the World Bank Group, the US Agency for International Development, the UK Department for International Development, and a host of government organizations in Southern Africa.

ECIAfrica is a subsidiary of DAI, a leading international development consultancy based in Washington, DC. DAI has offices in London, Palestine, Pakistan, Jordan and Mexico, employing more than 2,500 staff members.

Editorial

Claudia How do we make markets work for the poor? A few weeks ago I attended a Roundtable hosted by the Business Trust which was convened to consider this question. Over the course of a thoughtful and thought-provoking day, a few of us, drawn from the private, public and NGO sectors, shared views about what could be done to extend market participation by the poor in South Africa’s economy.

It is a sad reality that participation in the mainstream economy by small businesses and informal businesses, particularly informal or small black businesses, is woefully inadequate. South Africa stands out as having the least active and integrated small business sector of many similar sized economies.

That this needs to change is uncontested. Much of the attention of the Business Trust has been focused on identifying effective strategies to enhance market participation by the poor, particularly by the rural poor. ECIAfrica has been privileged to be the implementing partner of one of these Business Trust programmes – MABEDI, in Bushbuckridge, Mpumalanga – which set out to increase rural farmers' access to the market in this poverty node. Not only did MABEDI succeed in linking over 1600 small farmers to retail markets, creating over 3000 jobs, but it did something that to date hasn’t been accomplished in South Africa: it opened up previously inaccessible rural land markets to investment by the private sector, creating a multitude of opportunities for poor people to structure commercially sound relationships with the market.

ECIAfrica has been applying similar principles to successfully link small, medium and large black businesses with large corporations for over a decade, through the USAID-funded South African International Business Linkages (SAIBL) programme. This successful programme focuses on opening up procurement opportunities and providing technical assistance and competiveness-building services for black suppliers. To date SAIBL-supported black suppliers have reported over ZAR 10 billion (US$ 1.4 billion) in domestic and export sales as well as more than 18,000 net jobs.

There can be no disputing that programmes like these really do extend market participation by the poor and disadvantaged – the challenge is scaling these programmes up to the point where they make a significant impact on the economic landscape. Equally clear is that this can only be done by effective partnerships between the private sector and government – not by one or the other.

We are delighted to announce that USAID has extended the SAIBL programme for another year to March 2012, providing additional funding of US$4.5 million and bringing the total support provided by USAID to $24.5 million since its launch in 1998.

A great deal of the focus of SAIBL over the next year will be directed at strengthening the private sector advocacy body that has emerged - the South African Supplier Diversity Council (SASDC) - which counts as its founding members 11 blue chip companies who understand that supplier diversity is not only the right thing to do, but it’s good for business too.

Through expanding and replicating programmes like SAIBL and MABEDI we can further successfully integrate marginalized communities with the mainstream economy. I look forward to seeing these pilots being rolled out across our region.

Claudia Manning
Managing Director
claudia.manning@eciafrica.com

Corporate South Africa Commits to Supplier Diversity

The South African Supplier Diversity Council is now open for business. This demonstrates a clear commitment by Corporate South Africa to supplier diversity as a core business strategy.

Supplier diversity is the active business process of sourcing products and services from previously under-used suppliers. In South Africa, it involves the process of integrating a growing pool of competitive black suppliers into corporate supply chains, using targeted procurement and enterprise development to achieve this.

The South African Supplier Diversity Council (SASDC) is an initiative of ECIAfrica's SAIBL Programme, supported by USAID. The 11 founding members of the SASDC are: ABSA, Barloworld, Cummins, De Beers, FirstRand, Foskor, Johnson Controls Inc., Rand Water, SASOL, Standard Bank and Unilever.

Following the registration of the SASDC as a Section 21 company on 10 January 2011, the Council’s Board of Directors met for the first time on Friday, 11 February 2011. Matthew Govender, Managing Director of Barloworld Siyakhula, was appointed to serve as Interim Chairman of the Board of Directors.

The SASDC is a member-directed, not-for-profit organisation that seeks to be the leading corporate council in South Africa dedicated to promoting sustainable supplier diversity value-add, through targeted procurement and black supplier development. It is the first of its kind in South Africa, and is affiliated with a global network of five supplier diversity councils.

Tourism and Infrastructure Investment Conference, Kruger Park, 21-22 February 2011

ECIAfrica attended a two day conference in the Kruger National Park on tourism investment opportunities in South Africa and the region.

The conference enabled ECIAfrica to engage with the Mozambican Ministry of Tourism on the opportunities for sustainable tourism investment and development in the country.

The conference was an opportunity to profile specific tourism projects requiring additional or start up financing, introduce various government and private sector financing vehicles, and connect business owners and tourism stakeholders. The conference was chaired by Geoffrey Lipman, former Under Secretary-General of the UN World Tourism Organisation (UNWTO) and current board member of African Investor (Ai), which also presented the Ai Tourism Investment Awards at the conference.

The conference highlighted the importance of socially conscious investments, touching on the value of anchor tourism products with wider development benefits, and the importance of capacity building for the development of quality tourism products. Additionally, ‘green’ or environmentally sound design in tourism projects was stressed during the conference, in particular, how projects designed to minimize their impact on carbon emissions could lead to future climate change-related financial assistance.

Ercilia ECIAfrica’s MABEDI project was one of five projects nominated for the Tourism Investment Programme of the Year Award. During the conference, ECIAfrica also had the opportunity to engage with the Mozambican Ministry of Tourism on the opportunities for sustainable tourism investment and development in the country.

(Picture: ECIAfrica’s Resident Representative in Mozambique, Ercilia Mata with Mr Fernando Sumbana, Minister of Tourism of Mozambique)

Launch of the Centre for Inclusive Banking in Africa

ECIAfrica recently attended the opening of the Centre for Inclusive Banking in Africa at the University of Pretoria.

On 23 March 2011, ABSA, in conjunction with the University of Pretoria, launched the Centre for Inclusive Banking in Africa (CIBA). Though initially established in 2004 as the Centre for Microfinance, research conducted illustrated that inclusive finance had a far wider reach than conventional microfinance. Consequently, the centre undertakes research to address why and how access to and use of formal financial services by low-income individuals present an arduous development challenge. As former ECIAfrica employee and head of the Centre, Professor Gerhard Coetzee explained, “almost 80% of Africans have no access to formal financial services, limiting their ability to finance enterprises or sustain their livelihoods.” This has had an adverse effect on economic growth and poverty alleviation across the continent.

Almost 80% of Africans have no access to formal financial services, limiting their ability to finance enterprises or sustain their livelihoods.

CIBA’s overall objective is to improve financial inclusion through affordable access to a range of financial services for low-income individuals provided by viable and sustainable financial institutions. It does this through work with various African governments and policy institutions, industry sector leaders and financial institutions. By developing and offering courses ranging from microfinance to inclusive banking, conducting research on inclusive banking to the poor and previously under-banked across the continent ,and disseminating research findings through workshops and conferences, CIBA has positioned itself as a “prominent player contributing to the mitigation of the access to finance challenge.”

ECIAfrica looks forward to collaborating with CIBA on development finance projects in the future.

New Projects

ECIAfrica is proud to announce the commencement of three new projects in the capacity building, health and agribusiness sectors.

::: Infrastructure Delivery Improvement Programme :::

The National Treasury of South Africa is addressing under-spending on infrastructure and seeking to alleviate a chronic backlog in the rollout of health care facilities, classrooms, and other government buildings. Under a three-year, $750,000 (R5.2 million) contract with the country’s Infrastructure Delivery Improvement Programme, ECIAfrica will work with the Department of Education in the Free State province to establish structures to plan, manage, and monitor infrastructure delivery. This process includes promoting a culture of cooperation within the relevant provincial government departments to support the delivery of infrastructure.

::: Thuthuzela Care Centers :::

Under a subcontract to Research Triangle International (RTI) and with funding from USAID under the US President's Emergency Plan for AIDS Relief (PEPFAR), ECIAfrica has begun a seven-month, $199,000 (R1.3 million) project to support South Africa’s Thuthuzela Care Centres (TCCs), which provide care, treatment, and legal services to victims of sexual assault. The ECIAfrica team is developing a self-assessment tool to be applied at each of the 25 TCCs country-wide, and will facilitate the self-assessments with a goal of building the centres' capacities to comply with the TCC blueprint, site-specific protocols and National Department of Health standards. During the project, the ECIAfrica team will conduct workshops and guide the TCCs in implementing the tools while providing support for the review of the action plans.

::: Partnership for African Fisheries :::

The Partnership for African Fisheries (PAF) advises African Union member countries on policy and disseminating information on fishing and fisheries, one of the continent's most important but under-developed and under-regulated sectors. ECIAfrica successfully completed a two-month, $70,000 (R490 000) contract with the UK Department for International Development (DFID) to help transform the PAF into a self-sustainable and independent trust or equivalent. The PAF is currently under the custody of the AU's development arm (NEPAD Planning and Coordinating Agency - NPCA). Under the contract, ECIAfrica reviewed options for establishing a trust or institution and prepared an action plan for the PAF transformation.

Project Updates

::: Private Sector-Led Rural Growth in Northern Mozambique :::

SDC Mozambique This three year project, funded by the Swiss Agency for Development and Cooperation (SDC), is aimed at reducing poverty in northern Mozambique by creating jobs through improved agricultural value chains. This is achieved by promoting private sector development, specifically by increasing the economic involvement of the poor in select agricultural value chains. The project is developed and implemented on the principles of “making markets work for the poor” (M4P).

Following a six-month pilot phase, the three year implementation phase began in January 2011. ECIAfrica is engaging firms carrying out critical functions in selected subsectors with an emphasis on facilitating pro-poor business expansion. Early indications favour the poultry, soy bean, sesame, and pulses value chains, but these are by no means exhaustive.

The project's target provinces represent the Nacala Corridor, a series of interlinked railway lines that provide access to Niassa province, the neighboring country of Malawi, and ultimately, Zambia, forming a critically important transport corridor to Mozambique’s strategically significant deepwater port of Nacala and the minor port of Pemba.

::: Staff News :::

ECIAfrica wishes to welcome the following new staff members:

Leida Schuman: Appointed as Enterprise Development Manager, Leida has 21 years experience in the social and economic development of communities surrounding the petrochemical plants and mining operations of Mpumalanga. She has worked extensively for SASOL in the fields of supply chain development, women and youth development, education, skills training and business development and is a regular guest lecturer on BEE and the Codes of Good Practice at the University of Pretoria. In SASOL's supply chain, Leida has played a leading role over the last 10 years to diversify the supplier base in order to comply with the Mining Charter, Liquid Fuels Industry Charter and the DTI BBBEE Codes of Good Practice. Leida holds a MPhil Degree in Entrepreneurship and Small Business Management (UP), a Certificate in Community Based Development (UNISA) and an Hons Degree in Home Economics (US), specialising in housing and community development.

Phaello Faro: Appointed as HR Practitioner, Phaello works with and supports all recruitment efforts of proposal and project management teams to fill positions on current projects and upcoming proposals. He has extensive experience in human resources management and recruitment, policies and procedures. Phaello is a qualified Skills Development Facilitator and holds a Bachelor’s Degree in Human Resources Management from Vista University (now University of Johannesburg).

Mbali Malekane: Mbali joins ECIAfrica as a Project Associate with strong institutional knowledge in Public Governance and Management, as well as a post-graduate qualification in Demography and Population Studies. She has worked on projects in the areas of health, social protection, environmental assessment, resource mobilization and local governance under the support of institutions such as the World Health Organization, UNAIDS and the African Development Bank.

Dr Thulasizwe Mkhabela: Training and Institutional Liaison Manager, Africa LEAD. Thula is an experienced lecturer and researcher in Agricultural Economics and Soil Science with a focus on the development of small-scale farmers. He has extensive knowledge of issues relating to rural agriculture in Southern Africa and Africa as a whole and holds a PhD in Agricultural Economics (US), a Post-Graduate Diploma in Economics and a Masters in Church Ministry from The Sure Foundation Institute, USA. Thula has recently been appointed to the High Level Panel of Experts on Food Security for the FAO – representing the Southern Africa Region.

Helen Mealins: Helen joined ECIAfrica on a part time basis as a Strategic Market Advisor. Helen is the former head of the DFID South African office with over 16 years’ experience working as an international development practitioner in countries such as South Africa, Zimbabwe, Zambia and India. She has a professional background in business administration, development finance and economics, public financial management and accountancy. Helen is a practiced policy adviser supporting partner governments, private sector and voluntary sector organisations to meet their poverty reduction goals and institutional development objectives.

::: AFRICA LEAD :::

Workshop The AFRICA LEAD project, a key capacity building arm of the Feed-the-Future initiative, operates in three regions, including Southern Africa, with funding from USAID. Over the past weeks, AFRICA LEAD has delivered a leadership and management training course entitled “Scaling Up for Food Security: Champions for Change” in Pretoria for participants from Southern Africa. The training aims at mobilizing a cadre of “change agents” from the region to design and implement CAADP food security strategies and investment plans. In Southern Africa, AFRICA LEAD has partnered with the University of Pretoria to deliver the course, which covers topics such as food security, leadership, change management, and strategic planning.

Forty-four participants coming from Zambia, Malawi, Mozambique, Namibia, and Angola have benefitted from the Southern Africa regional training so far. These mid-senior level professionals have represented a wide array of CAADP-related stakeholder institutions, including government, private sector, civil society, farmers organizations, and academic/research institutes. Southern African participants join hundreds of other “champions” who have gone through the same training across the continent. AFRICA LEAD will facilitate on-going networking for the Southern Africa participants among themselves and with their fellow graduates elsewhere in Africa.

Development News

This section features some interesting recent news articles in the field of development.

AGOA Forum 2011: Zambia will be hosting the African Growth and Opportunity Act (AGOA Forum) summit, scheduled to take place in Lusaka from 7 - 8 June 2011.

Why we should hail Walmart's arrival (Times Live): Carol O'Brien, Executive Director of the American Chamber of Commerce in South Africa, presents a thought-provoking argument for the planned expansion of Walmart into South Africa.

AfDB offers renewable energy boost for Africa (ICA): Energy infrastructure in Africa looks set to get a boost after it was announced that the African Development Bank (AfDB) has created a US$ 57 million fund for renewable energy projects across the continent.

Have you see the calendar of events on our website?

USAID launches a water harvesting programme in Zimbabwe (Africa Investor): The United States Agency for International Development (USAID) has launched a water harvesting programme in the Southern African country of Zimbabwe in response to the recent cholera outbreak that left more than 4 000 people dead in 2008.

Zimbabwe: Government sets aside US$ 26.2 million to fund wheat cropping (Africa Agri): Government has released US$ 26.2 million to fund this year’s winter wheat cropping. Agriculture, Mechanisation and Irrigation Development Minister Joseph Made said US$ 11 million would go to rehabilitation of smallholder irrigation schemes and US$ 5.2 million was for buying last season’s fertiliser and seed from the Grain Marketing Board.

UNECA and AU publish 2011 Economic Report on Africa (IISD): The UN Economic Commission for Africa (UNECA) and the African Union (AU) have published the 2011 Economic Report on Africa, titled “Governing Development in Africa: The Role of the State in Economic Transformation.”

World Bank initiative for a new network to boost public-private infrastructure partnerships: A new generation of public-private partnerships (PPPs) can help close Africa’s large and growing ‘infrastructure gap’ estimated at US$ 31 billion a year. This was the consensus emerging from a meeting “Facilitating Acceleration of Infrastructure Development,” where a new, virtual network of practitioners was launched to strengthen government capacity for conceptualizing and implementing these complex partnerships.