NGO-PRIVATE SECTOR PARTNERSHIPS IN AGRICULTURE Lessons learnt by Farm Africa and Self Help Africa Geoffrey Nyamota

CONTEXT WE ARE SPECIALISTS IN Agriculture Natural Resource Management Market Engagement WE HAVE A STRONG FOOTPRINT across Africa, with projects in ten different countries. WE ACHIEVE IMPACT Reach over 3.3 million farmers Over 1000 enterprises

OUR THREE TAKE-HOME MESSAGES 1 Private sector means many things Local: bottom up building of agribusinesses, access to finance International: trade and market linkages with national and international firms 2 Build TRUST – across value chain and between NGO, producer, trader, financier, … NGO’s are not normally seen as an agent in this space 3 There is still a role for the public sector enabling environment (infrastructure, regulatory framework, …) address market failures – risk, capacity, ...

The First Mile

Regional, national and international markets Local market ‘First-mile’  businesses Regional, national and international markets ‘The missing middle’

Regional, national and international markets Local market ‘First-mile’  businesses Regional, national and international markets Access to finance

Regional, national and international markets Local market ‘First-mile’  businesses Regional, national and international markets Access to finance High quality inputs

Regional, national and international markets Local market ‘First-mile’  businesses Regional, national and international markets Access to finance High quality inputs Business development

Regional, national and international markets Local market ‘First-mile’  businesses Regional, national and international markets Access to finance High quality inputs Business development Marketing

Regional, national and international markets Local market ‘First-mile’  businesses Regional, national and international markets

Keringet Dairy Bulking Project EXAMPLE 1 Keringet Dairy Bulking Project Context 1 Community development programme identified the dairy sector as a high-potential value chain Farmer-owned dairy set up – phased expansion 2,000 farmers are producing 15,000 litres/day. Turnover: $1 million+ 2 3

Keringet Dairy Bulking Project EXAMPLE 1 Keringet Dairy Bulking Project Learning 1 Build local institutions - VSLAs 2 Contractual arrangements to manage risks between buyers, input providers and producers 3 Focus on systemic impacts on the market - through fostering competition

Maendeleo Agricultural Enterprise Fund (MAEF) EXAMPLE 2 Maendeleo Agricultural Enterprise Fund (MAEF) Market Failures Context 1 We are working with 12 SMEs in Kenya, Tanzania and Uganda x 2 Company profile: potential for scale x 3 Average turnover: $50,000 – $150,000

Maendeleo Agricultural Enterprise Fund (MAEF) EXAMPLE 2 Maendeleo Agricultural Enterprise Fund (MAEF) Learning 1 Focus on organisational capacity of target businesses 2 Prepare for financial sustainability - grant, loan and capex 3 Necessity of integration in the wider value chain context

MAIN LESSONS

1 2 3 THINK AND BEHAVE LIKE THE PRIVATE SECTOR Know and focus on the value chain Focus on commercial viability  financial sustainability Flexible, adaptable, agile 2 DON’T FORGET DEVELOPMENT OUTCOMES - don’t get stuck with one player only - aim to achieve systemic impacts across the value chain - be aware of new risks and mitigate them 3 THERE IS A ROLE FOR THE PUBLIC SECTOR - enabling environment must be right – infrastructure, regulations, … - market failures – capacity, risk, … - Blended finance (private and public)  SIDAI