IFC Advisory Services in Africa PEP Africa, CASA, AMSCO NTF – PSI Reference Group Meeting...
Transcript of IFC Advisory Services in Africa PEP Africa, CASA, AMSCO NTF – PSI Reference Group Meeting...
IFC Advisory Services in Africa PEP Africa, CASA, AMSCO
NTF – PSI Reference Group Meeting
Washington, November 2008
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Background
The economic performance of Africa is stronger during the last few years
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2003 2004 2005 2006 2007
Average Annual Real GDP Growth
SSA Oil Importers Oil Exporters
• Since 2004, average real GDP growth exceeded 6%
• Growth is greatest in oil producers (8.4%), but is still dispersed with 26 countries showing accelerated growth
• Inflation, a barometer of overall macroeconomic management, has declined
• Regional average inflation is below 10% since 2002 (excluding Zimbabwe)
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2003 2004 2005 2006 2007 2008
Average Annual Inflation
SSA Oil Importers Oil Exporters
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Background (cont)
However, significant effort will still be required for many years to unleash the power of the private sector as the engine for economic growth
Africa is one of the most difficult business environments.
The most recent World Bank “Doing Business” report
classifies only four countries as “easy”
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IFC in Africa - Investments
IFC’s investments in Africa have been growing significantly
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Commitments
# of countries
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IFC African country office presence
IFC significantly expanded its local presence in Africa over the last few years
1 Johannesburg Hub
8 Regional Offices
4 Post Conflict Country Offices
5 Advisory Svcs Program Offices
4 Proposed Program Offices
1 Proposed IFC Rep/Prgm Office
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IFC in Africa - Advisory services
The development impact of IFC investments in Africa is enhanced by its advisory services which are delivered through five “business lines” Environmental and social sustainability programs (ESS)
Business Enabling
EnvironmentInfrastructure Access to
Finance
Business Line
Public-private dialogue
Implementation of BEE reform programs based on “Doing Business”
Value Addition to
Firms
Environment and Social
Sustainability
Privatization advice Public-private
partnerships Private health and
education Rural water and
electrification Rural ITC
SME banking Microfinance Trade finance Leasing Housing financing Credit bureaus Securities markets
SME supply chain linkages
SME Toolkit Business Edge Gender mainstreaming and
access to finance HIV/AIDS business
risk mitigation
Energy Efficiency Cleaner production Community
Development
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IFC in Africa - Advisory services (cont)
PEP Africa is the main vehicle for delivering AS in Africa, it complements other global and regional WBG initiatives
World BankPSD
PEP AfricaCASA
FIAS
MIGA
SSCMSI
Micro-level interventions
Macro-level interventions
Diagnostic focus
Implementationfocus
AMSCO
SME Ventures
Sector -level
IFC PEP Africa Strategy FY09-FY15
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Background (cont)
To help unleash the power of the private sector PEP Africa focuses on improving the investment climate, stimulating sector growth and strengthening SMEs
PEP Africa visionTo be the sub-continent’s leading multi-donor AS facility that helps reduce poverty by
measurably improving the business environment, mobilizing investment in growth sectors, and strengthening SME competitiveness
Strategic objectives: Business environment: To improve the investment climate by helping to
implement changes in laws, regulations policies and procedures
Sector growth: To contribute to a measurable and attributable increase in investments (by the private sector at large and by IFC)
SME development: To enhance SME competitiveness as measured through SME creation, growth, employment, and access to finance
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Results
In the first three years PEP Africa has exceeded expectations in staffing, programming, countries covered, and establishing partnerships
Indicator First five-year target (to FY10)
Actual to June 08
% of FY10 target achieved to date
Number of programs 35 85 243%
Country coverage 28 36 129%
Number of staff 148 152 103%
Funds from partners $112.5 million $76 million 62%
Time elapsed: 60%
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Results (cont)
PEP Africa is also beginning to show development impact results against its five-year targets
PEP Africa Development Impact Targets
STRATEGIC OBJECTIVE: Improve the Business Environment
# of recommended laws, regulations, amendments or codes enacted 26 15 58%
# of recommended procedures, policies or practices that are improved or eliminated 52 5 10%
# of countries with multi-year Investment Climate Reform programs 13 6 46%
STRATEGIC OBJECTIVE: Proactively mobilize investment
Value of IFC investment commitments resulting from IFC PEP Africa AS 300,000,000$ 98,000,000$ 33%
STRATEGIC OBJECTIVE: Enhance SME competitiveness
$ increase in SME revenues as a results of IFC PEP Africa programs 200,000,000$ 115,245,000$ 58%
$ increase financing accessed by SMEs as a result of IFC PEP Africa programs 320,000,000$ 219,009,000$ 68%
OVERALL DEVELOPMENT IMPACT
# of jobs of created as result of IFC PEP Africa programs 70,000 45,027 64%
Increased # of people with access to improved water sources 3,500,000 2,270,000 65%
Increased enrolment in schools 8,000 581 7%Time elapsed: 65%
Total (FY06-10)First 5-year cycle
Actual to Sep 30, 2008
Percent achieved
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Strategic challenges
To meet long-term demand for its services, PEP Africa needs to adapt to external and internal changes that have occurred since it was launched
Greater focus on PSD in Africa, especially since Gleneagles (and WBG focus in IDA)
Growing willingness by governments to make investment climate reform a priority
Windows of opportunity created in new post-conflict countries (Liberia, Sierra Leone, DRC)
Need to increase awareness of climate change and food prices as issues to be addressed in Africa
More demand than expected for PEP Africa’s services
External changes
Realization that TA is an IFC core business and re-naming of TA as broader “Advisory Services (AS)”
Creation of global and regional Business Lines as the structure for managing AS
Integration of AS into IFC mainstream operations, governance structures, and Global/Local strategy
New Africa Department Structure
PEP Africa is more integrated into IFC’s AS services
Internal changes
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Strategic challenges (cont)
However, the rapid growth experienced and the greater than anticipated demand for PEP Africa’s services creates new challenges in managing growth
Risk of losing strategic focus
Overstretching of management and increase in “management-from-a-distance”
Long recruitment process compounded high growth/dispersion
Uneven program management, process compliance, financial controls, and reporting
Risk of insufficient service delivery supervision and quality control
Implications of rapid growth and increasing geographic dispersion of staff
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Strategy FY09-FY10
The final two years of PEP Africa’s first five-year cycle will therefore be a phase of consolidation to ensure focus and improve program supervision
Continue to review pipeline and consider cutting number of new programs planned
Focus on replications/roll outs Rapidly close out programs coming to an end, and
be tougher on non-performing programs
Action plan for more focus
Move senior management/technical expertise closer to the programs in countries
Gradually deploy senior Country AS Team Leaders (CASTLs) to supervise program teams in-country
Deploy rapid response teams to facilitate replications/roll-outs similar to the SWAT Team, e.g., an SME Advisory Services (SAS) Unit
Action plan for better supervision
Is the program in an extreme frontier/post conflict country where we have no or very limited presence (including frontier regions of more developed countries)?
Develop Africa’s high-priority sectors (agribusiness, health, education, infrastructure) Focus on replication (i.e., a proven AS activity that will be easier to launch and supervise) Enhance the development impact of a potential Private Sector/IFC investment that would not happen without the AS
Criteria for approving new programs for remainder of first five-year cycle
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The second five-year cycle will be a period of renewed growth with the emphasis on better integration across AS business lines
Strategy FY11-FY15 (cont)
Enhanced development
impact through integrated solutions
Improve the investment climate
• Public private dialogue• ‘Doing Business’
reform implementation
Unlock the growth of priority sectors
• Financial markets
• Health & education
• Infrastructure
• Agribusiness
• Oil, gas & mining
Add value to investment projects• SME supplier linkages
• Gender entrepreneurship
• HIV/AIDS risk mitigation
• Corporate governance
• Community development
• Energy efficiency
• Cleaner technologies
• SME capacity building
PEP Africa Integrated Programming Framework FY11-FY15
Strengthen SME competitiveness through access to finance and AS
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The second five-year cycle will also be characterized by a focus on replicating proven AS products, leaving innovation to HQ
Strategy FY11-FY15 (cont)
1. Public private dialogue
2. Doing Business Reform
3. Registration Simplification
4. Investment Generation
5. Rapid Response
6. OHADA
BEE Products
1. Microfinance
2. SME Banking
3. Leasing
4. Housing
5. Trade Finance
6. Credit Bureau
7. Corporate Governance (financial sector)
A2F Products
1. Infrastructure Advisory (CIA)
2. Rural ICT
3. Small-Scale Infrastructure
4. Private Provision of Health
5. Private Provision of Education
IBL Products
1. Sector Development
2. SME Linkages
3. Business Edge
4. SME Toolkit
5. IFC Against Aids
CA Products
1. Community Development
2. Cleaner Production
3. Energy Efficiency (includes Lighting Africa)
4. Gender (cross business line)
ESS Products
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AS and investment have been linked for the benefit of all Private sector investors, including IFC
Strategy FY11-FY15 (cont)
Value of IFC investments
linked with AS
Value of partner funding
Enhanced development
impact
Unlock the growth of priority sectors
Add value to investment projects
Improve the investment climate
The IFC PEP Africa Programming Framework
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Level of AS/investment integration High Low
HighStrengthen SME competitiveness through access to finance and AS
Sweet spot = investment climate/sector growth programs that create investment opportunities for all, including IFC
Sweet spot = programs linked to an IFC investment that are expanded to include other companies in the sector, region or
cluster creating opportunities for non-IFC investment in the sector
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Partnerships and Funding
For the Replication Phase (FY11-FY15), PEP Africa will be seeking $64m from IFC that will be leveraged with $150m from donors
November 2008
IFC Conflict Affected States in Africa (CASA) Initiative
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IFC in Conflict Affected Countries
• 80% of the world’s 20 poorest countries have suffered from a major civil war in the last 15 years
• Private sector can help reduce poverty and promote economic stability but
private sector development traditionally has been 2nd or 3rd generation
reform
• Increasing consensus that earlier engagement on PSD is necessary
• Conflict Affected Countries are different and as such require different
approaches, instruments, skill-sets, etc.
IFC has experience delivering advisory services to conflict affected countries
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IFC in Conflict Affected Africa
IFC is significantly expanding its impact in conflict affected countries and started new initiatives globally, focusing on Africa: CASA and IFC SME Ventures
Engagement in both investment and AS
Initial focus on Central African Republic, DRC, Liberia, Sierra Leone
Country-specific approach, coordinating across business lines
Conflict analyses support program design
Close collaboration with WB, other donors and other IFIs
In-country Advisory Services coordinators
CASA is a multidonor, rapid-response approach to improve the business environment, strengthen SMEs, rebuild financial markets, expand private participation in infrastructure
CASA donor partners: Ireland, the Netherlands, Norway, …
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IFC SME Ventures
IFC SME Ventures will:
• Create a favorable and better business environment for SME investments
• Build risk capital investment capacity in high risk IDA and post conflict
countries
• Invest in small firms across 8 IDA countries and also provide advisory
support to these & many more small businesses
• Develop a replicable model for risk capital and advisory delivery that, if
successful, would be expanded.
IFC’s new $100m risk capital initiative
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CASA in DRC
Enhanced development
impact through integrated solutions
Improve the investment climate
• Business simplification• Trade logistics• DRC Better Business
Forum• Investment promotion,
Special Economic Zone
Unlock the growth of priority sectors
• Financial markets
• Infrastructure
• Oil, gas & mining
• SME Development
CASA Integrates Programs in DRC
Strengthen SME competitiveness through access to finance and AS
•Agribusiness (Poultry study)
•Matanga
Add value to investment projects• Microfinance
• Privatization/Cement plant
• Mining Linkages Katanga
• SME Finance
Conflict analysis: expand PSD to other regions than Kinshasa/Bas Congo and Katanga. But regions are isolated and fighting continues in the eastern provinces
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CASA in DRC (cont)
CASA/Ventures DRC program
Program Development:
1. Regional AS Coordinator appointed (based in Douala)2. In-country AS team expanded to include: SME Program Manager
and Program Coordinator 3. IC team is on board4. Microfinance and ASME Team based in Nairobi5. Recruitment of in-country CASA coordinator is in final stage6. CASA ready to provide funding to the various DRC AS programs.
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CASA in Liberia, SL, CAR
CASA/Ventures Liberia, SL, CAR programs
Program Development:
1. Country assessments in September, October2. Country Strategies in November, December3. CASA coordinators recruitment started4. CASA ready to provide funding to various AS programs
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CASA in Liberia
Enhanced development
impact through integrated solutions
Improve the investment climate
• Doing Business Reforms
• Special Economic Zones
Unlock the growth of priority sectors
• Financial markets
• Infrastructure
• Energy
• SME Development
CASA Integrates Programs in Liberia
Strengthen SME competitiveness through access to finance and AS
•Agribusiness ( Tree crop sector
•Matanga
Add value to investment projects• Microfinance (Access)
Rubber, Oil palm, Cocoa
• Africa Schools
Advising the GoL
• Incubator
Leasing
Conflict analysis: focus economic development on rural areas, but also need job creation for ex-combatants in urban
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CASA in Sierra Leone
Enhanced development
impact through integrated solutions
Improve the investment climate
• Public private dialogue,
• Tax simplification • Investment promotion
programs.
Unlock the growth of priority sectors
• Financial markets
• Infrastructure
• SME Development
CASA Integrates Programs in Sierra Leone
Strengthen SME competitiveness through access to finance and AS
•Agribusiness ( ??)
•Matanga
Add value to investment projects• Microfinance
• Africa Schools
• Incubator (youth)
• Leasing
Conflict analysis: Unemployed youths/former child soldiers do not wish, or cannot, return to their villages. CASA should focus on both agribusiness in rural areas and employment creation in the capital.
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CASA in CAR
Support to the Public Private Dialogue
Support to the one stop shop for business registry
Investment Climate program to be implemented
Working in the CAR is particularly challenging:
The government has little capacity and no funds
Payment of civil servant salaries is in arrears
Very limited private sector
Security issues
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CASA in CAR (cont)
The CASA/Ventures program in the CAR will initially be modest
Continue investment climate program
Chamber of Commerce - capacity building, possibly introduce an enterprise center
Chamber building renovation could allow co-location of the PPD and the one stop shop for business registration at the Chamber, thereby creating an integrated SME development center to support new and growing dynamic businesses
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CASA - Next steps
CASA program and team have been set up, initial funds have been secured and preliminary scoping missions to the priority countries have been conducted.
Next steps are to finalize program designs, hire in-country coordinators and focus on actual implementation.
Collaboration with the World Bank and other donors will be intensified. Follow-up PSD donor meetings in pilot countries.
A January meeting to update IFC’s donor partners on progress and plans
For the second half of 2009, CASA looks forward to expanding the program to two additional countries.
To realize these ambitious goals, USD 5 million is required per year
CASA focus will be on country program design and implementation
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AFRICAN TRAINING & MANAGEMENT SERVICES
(ATMS PROJECT)
November 2008
Background
The Future – ATMS IV
The Impact – Case Studies
Overview of AMSCO
VISION To assist African companies in becoming globally competitive, profitable and sustainable
MISSION To build management capacity within the African private sector by providing management and training support, primarily to African SMEs
SERVICES Senior management placement and assistance Capacity building and management development
ATMS Organization and Partners
ATMS ProjectATMS Project
IFCIFC
AMSCO BVAMSCO BV STICHTING ATMS FOUNDATION
A Regional Project of UNDP
Executing Agency
Project FundingProject Implementation
SHAREHOLDERS
IFUIFCAFDAfDBFMO
DONOR AGENCIES
Regional Coordinating Agency
AfDB
Banco BPISwedfundNorfundFinnfund
UNDP UKIFC IrelandAfDB World BankNetherlands SwedenDenmark Switzerland
Host Govt.National
Coordinating Agencies
ATMS Services
MANAGEMENT CAPACITY
Recruitment and secondment of managers Local management succession
TRAINING Training programs that improve local management capacity and the skills of staff
SUBSIDIES (for needy companies)
for management for training
We aim to grow client companies – their bottom line and competitiveness – and to leave them with local successors
Countries of Operation
Regional Offices• Accra• Nairobi• JohannesburgCountry Offices• Lagos• Douala (proposed)• Dakar (proposed)Operational Head Office• JohannesburgHead Office• Amsterdam
We are currently in 24 countries split between 3 regions.
Our Projects and Managers
Total = 169 Total = 323
Client Breakout Manager Nationalities
Data as of Dec. 2007
Southern Africa45%
West Africa28%
East Africa27%
African38%
European34%
Indian14%
Other10%
American4%
Current Portfolio Statistics
Clients: SMEs and Large
(as of July 31)
As of 31 July 2008 69 % of client Portfolio is SMEs.
Capacity Building – Renewed Focus
PROGRAMS Corporate Governance Leadership, Strategy and Planning Diversity Management Quality Management
HIV/AIDS Health and Safety Environmental Standards (Company specific)
Defined through training needs analysis
OBJECTIVE: To enhance AMSCO’s development impact and improve management capacity within client companies.
Measuring Impact
PERFORMANCE INDICATORS 1. Growth in revenue2. Growth in profits3. % successful companies assisted4. # of managers placed5. # of local managers promoted6. Employment generation7. Female participation8. Improved corporate governance
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1997 1999 2001 2003 2005 2007
Managers Clients
History and Current Growth
Managers:323
Client companies:169
AMSCO became financially sustainable
(in US$ ‘000)
13,320
17,191
22,950
29,001
2,132 2,964 3,9305,898
290 446 738
-1,4552004 2005 2006 2007 P
Revenues Gross Profit Operating Income
Previous cycle’s Donors
Donor (US$ 000) Donor (US$ 000)
AfDB 2,260 MOFA (Norway) 750
MOFA (Denmark) 432 SIDA (Sweden) 1,587
Irish Aid (Ireland) 2,279 SECO (Switzerland) 1,137
DFID (UK) 1,200 UNDP 500
IFC 2,850 World Bank 1,200
MOFA (Netherlands) 2,207
Total = $16,402 k
ATMS IV Objective: Expand the Reach and Impact
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394
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Managers Clients
Case Study: Nile Commercial Bank, Sudan• In 2006, NCB was one of a number of banks operating
in the south of Sudan, Juba• Became an AMSCO Client in June 2006 • 4 AM’s seconded• Training grant provided and training conducted• Employment levels up by 144%• Good geographic distribution of jobs created • Only bank in southern Sudan with female managers
June 2006 January 2008 Change
Staff 152 370 144%
Branches 15 25 67%
Female Managers 0 5 n/a
Employment Creation
Case Study: Magana Flowers, Kenya• Agribusiness• Exports flowers to Europe• Employs 435 staff• Recognized threat posed by HIV/AIDS• Partnered with AMSCO to establish an
HIV/AIDS In The Workplace programme• 11 committee members benefited from ATMS-
sponsored training• 4 members of staff were sponsored by ATMS
to attend an HIV/AIDS forum• Outcomes
Development of an HIV/AIDS policySetting up of a Peer Education ProgrammeEnhanced awareness by Management and Staff of
HIV/AIDSIncrease in voluntary testing (25/250 HIV+)20 of 25 HIV+ staff on ARV or maintenance treatment
Capacity-Building: HIV/AIDS Education
Thank you for your support!
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THANK YOU