Poverty Reduction Blog Tag: Private Sector
Posted on April 7, 2014 by Tamara Heimur, Liberia country team
Each MCC compact is designed to create economic growth. Since the private sector is a key driver for sustainable growth, MCC’s Finance, Investment and Trade team works with partner country colleagues to ensure that companies have input throughout the compact development process.
This work includes consultations with American, Liberian and international businesses to learn firsthand about the challenges they face when considering investment in our partner countries. We then work with our partner countries to design compact grants that address these challenges.
MCC, the Government of Liberia and The Corporate Council on Africa (CCA) recently hosted a roundtable meeting in Washington, DC for companies that are active in Liberia or are interested in investing.
At the roundtable, the Government of Liberia (GoL) and MCC presented the Liberia Constraints Analysis, a report outlining the primary constraints to economic growth and investment in Liberia.
Every MCC partner country develops a constraints analysis, which takes an evidence-based approach to identifying the primary factors that limit investment. The analysis clarifies priorities among a country’s many development needs and identifies potential areas of focus for an MCC compact. The Liberia Constraints Analysis identified the lack of roads and electricity as the primary constraints to growth.
After the presentation of the constraints analysis, the Liberian government delegation presented some initial concepts for potential projects in the roads and energy sectors. We invited feedback and questions from attendees, which helped start a conversation that will help the GoL to refine the proposed projects.
This event is part of a series of conversations that MCC and the GoL have hosted since Liberia qualified for MCC assistance in December 2012. In mid-2013, the GoL organized roundtables with businesses in Liberia to learn what is constraining the growth of local companies, and in late 2012, MCC, the GoL and CCA hosted another event for companies in Washington, DC to provide feedback on the proposed compact projects. We expect to continue the dialogue with companies through more events, webinars, email updates, and other forums as the GoL continues its compact development process.
This type of private sector engagement is an important component of the MCC model. Together with our partners in the GoL, we are ensuring the private sector and other stakeholders provide input every step of the way.
We invite additional input and feedback from private sector firms; please contact the following individuals for more information:
Government of Liberia:
- Monie Captan, National Coordinator, National Millennium Challenge Compact Development, firstname.lastname@example.org.
- Philip Pleiwon, Private Sector Lead, National Millennium Challenge Compact Development, email@example.com.
Millennium Challenge Corporation:
- Evan Freund, Country Team Lead for Liberia, firstname.lastname@example.org.
- Tamara Heimur, Private Sector Lead for Liberia, email@example.com.
Posted on March 31, 2014 by Randall Wood, resident country director, Senegal
If Oumou Khairy Fall and Téty Fall are smiling in this picture, it’s because their lives are already better off—economically and socially—since the beginning of MCC’s investment in Senegal. And the work has just begun!
Both come from the northern village of Mboubéne in the Senegal River Valley, part of Africa’s dusty Sahel but the heartland of Senegal’s rice production zone. Production there is expected to increase by 10,500 hectacres by the time MCC’s five-year, $540 million compact ends in September 2015, and the dramatic improvements to irrigation channels, pumps and water conduits will help local rice farmers plant three crops per year instead of one.
That’s big news in a country that imports nearly 70 percent of its rice, Senegal’s main staple food.
Speaking of rice, Oumou and Téty would like to offer you some. They competed and won the right to manage the cafeteria for local contractor Eiffage Senegal, a contractor involved with the construction funded through the compact's $170 million Irrigation and Water Resources Management Project. It’s hot in Senegal’s north this time of year, and construction is hot, sweaty work that stirs up an appetite in a hurry.
Oumou smiles. “These men are always hungry,” she says. “And they come back and back for more.”
“I think they like our food,” laughs Téty.
Oumou and Téty start serving breakfast while the first rays of the sun are still throwing long shadows and the desert air is cool. The day’s heat will arrive in less than an hour as the Eiffage crew lines up for their first meal of the day. “Coffee,” Téty explains, “with lots of powdered milk, fresh bread and some stew.”
While the crew heads out to pour concrete and lay the iron rebar that will eventually bring the additional irrigation waters over the rice fields, Oumou and Téty begin preparing for lunch. When the sun is overhead, the temperature soars to well past 90 degrees. The Senegal River Valley swelters. The workers come back in for some nourishment, camaraderie—and shade. Lunch is a stew of local red beans in tomato sauce, a specialty of the region.
“It seems like no matter how many beans we buy in the market, we need more,” Téty explains. “These men are always hungry, and food is so important.”
Téty has neatly summed up just one way this project itself is important. When construction concludes in 2015, MCC’s investments in rice production and irrigation will help the Senegalese people get closer to meeting their demand for the staple. But it’s paying dividends already in the local economy. With well over $100 million in construction contracts ongoing in Senegal’s north, MCC’s investments are indirectly generating jobs for many hundreds of laborers, drivers, engineers, surveyors, community interpreters, social organizers, technicians, specialists, and more.
The impact these workers are having on the local economy—from food to gas to equipment to haircuts to lodging and more—is rippling through the Senegalese economy. The beans Téty purchases at the local market are just the beginning.
MCC’s program in Senegal places a special emphasis on gender equality from project design to implementation to evaluation, and these two women are an example of that. MCC’s construction contracts stipulate that women be given opportunities to join the workforce in whatever jobs they qualify for and are willing to do. Women are increasingly taking up positions such as flag person, gas station attendant and warehouse overseer. Moreover, if Senegal has any female welders, they are to be given an equal chance to work.
There are many opportunities for women to benefit from the sudden influx of capital and labor in Senegal’s north. This cafeteria is just one of them.
The compact is expected to benefit more than 1.1 million people over the next 20 years. As I finish my scalding hot glass of attaya—sweet, Senegalese tea—I watch Oumou and Téty manage their kitchen as the lunchtime crew cleans their plates and prepares to head back out for the afternoon’s work. I’ll be proud when this program is complete, and the people of Senegal benefit from this investment. But I’m even prouder to see the impact the investment is already having.
Posted on February 14, 2014 by Damiana Astudillo, associate director, agriculture
(This post is part of an ongoing series on food security and is adapted from the Winter/Spring 2012-13 issue of Knowledge and Innovation Network Journal, a technical publication featuring lessons, innovations, ideas, and thinking behind MCC’s poverty reduction investments around the world.)
How do you ensure the sustainability of a post-harvest investment after a donor project ends? And how do you incentivize private sector investment without providing giveaways that risk being underutilized or benefiting businesses that are financially better off?
When post-harvest losses were identified as a major cause of inefficiency in Ghana’s agriculture sector, MCC struggled with how to make investments to reverse these losses sustainable and private-sector driven while simultaneously benefiting poor smallholder farmers. One answer involved constructing 10 agribusiness centers throughout the country as part of the country’s five year, $547 million MCC compact. The agribusiness centers have the objective of reducing post-harvest losses by offering processing, drying, storage, and marketing services for staple crops.
Each agribusiness center is jointly owned by a private sector investor (with a 70 percent share) and an agriculture cooperative of about 1,000 smallholder farmers (30 percent share). In exchange for its share, the private investor was required to contribute the land on which the facility was built and about $35,000 in start-up working capital, as well as business plan, documented financial and management capacity and market connections. Each farmer shareholder was required to contribute a 100-pound bag of grain as a membership fee. MCC funds covered the building and basic equipment of the centers and legal support to formally establish the new companies as well as capacity building for the farmer cooperatives. In this way, both the investor and the farmers had a stake in the profitable operation and maintenance of the facility.
Selecting individual investors, selecting and building the capacity of farmer-based organizations (FBOs) and training shareholder members on what it means to hold a share of a business were the most challenging parts of the project. Building trust between the farmers and their FBOs—as well as between the FBOs and individual investors—took time.
The legal technicalities of setting up these ownership arrangements, which were unprecedented in Ghana, required significant legal resources. And to select which businesses would receive the assistance, the Millennium Development Authority of Ghana (the local organization implementing the compact) evaluated proposals from 30 businesses who competed for the 10 partnership opportunities.
Some of the challenges included determining which businesses were most capable of sustaining operations and which private sector investors had the greatest potential of partnering with smallholder farmers. Additionally, assessing which locations made sense as aggregation centers, based on the availability of infrastructure and access to markets, was challenging. The end result is a set of agribusiness centers that will be able to reduce post-harvest losses by 20-30 percent.
Share your experiences! Have you worked on a project that facilitated partnerships between investors and smallholder farmers? How have other projects addressed the problems of losses and under-investment in post-harvest infrastructure? How have projects attracted investors to work with smallholder farmers in various parts of the value chain?
Click here to read the full article.
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