Competitiveness and Job Creation Support Project (CJCSP)

Project Name               : Competitiveness and Job Creation Support (CJCSP)

Funding From              : African Development Bank (AfDB)

Total Project Amount    : US$ 15 million

Effective Date              : 26 June 2012

Duration                     : 5 Years

INTRODUCTION 

The Ministry of Industry and Trade (MoIT) is implementing the Competitiveness and Job Creation Support Project (CJCSP or the Project) financed by the African Development Bank (AfDB). The project will be implemented over a period of 5 years commencing in October 2012.

The overall goal of the Project is to contribute towards the reduction of poverty in Malawi through sustainable pro-poor economic growth and improved socio-economic development led by the private sector as enshrined in the Malawi Growth and Development Strategy II (MGDS II). The project aims at achieving this by improving the capabilities and the competitiveness of the private sector thus increasing export diversification and job creation.

The project comprises of three (3) components which are:

(i)             Capacity Building and Entrepreneurship Skills Development,

(ii)           Development of Strategic Value Chains and Access to Finance for MSMEs; and

(iii)         Project Management.

EXPECTED OUTCOMES

 

The expected outcomes of the project over its 5 year lifespan include:

i.        Increased private credit by commercial banks, to address the most important binding constraint to Micro, Small and Medium size Enterprises (MSMEs) development in Malawi;

ii.      Increased export diversification, with a reduced reliance on the key export crop, tobacco; 

iii.    MSMEs developed and formal employment in the private sector increased by 2,000 jobs (including 50% women and 25% youth);

iv.    Increase in the income of existing and new pulse farmers and existing edible oil farmers in target areas with 50% of those benefiting to be women and 25% youth.

These outcomes will contribute to the reduction of poverty and vulnerability to socioeconomic shocks in Malawi.

GOVERNANCE AND IMPLEMENTATION ARRANGEMENTS

The governance and management arrangements for the project are set out in the following figure:

  

The roles envisaged for the bodies shown in the above figure are as follows:

Project Steering Committee: The project is overseen by the Project Steering Committee (PSC) co-chaired by the Principal Secretary of the Ministry of Industry and Trade and a member of the private sector. The PSC provides a consultative mechanism between the government and all relevant stakeholders including key sector ministries, the private sector and civil society to reflect the cross-cutting nature of the project. As the governing body of the CJCSP, the PSC provides strategic leadership and exercise governance oversight on behalf of the key stakeholders including MSMEs and the poor, especially women and young people. 

Project Management Team: The MoIT is the executing agency and the project is managed by the Project Management Team within the institutional set-up of the MoIT. The Project Management Team includes:

-          a Project Coordinator, who is assigned for the day to day management of the project. The Project Coordinator is supported by a Project Facilitator who was recruited by the Project;

-          a Financial Management Officer;

-          a Procurement Officer;

-          a Gender/Social Development Officer;

-          a Monitoring and Evaluation Officer.

Specialist Consultants: Specialist Consultants were recruited to support the Project Management Team in the implementation of the different activities of the Project and for knowledge transfer, to enable the MoIT, SMEDI and MITC pursue similar activities, during and after the Project. The Specialist Consultants include Value Chain Development Consultant, a PSD Advisor, Business to Business Linkages and Mentoring Counselling Consultant, and a Financial Innovation Consultant. The Department of Agricultural Extension Services provides services to the Project in the training of farmers in the target districts.

Value Chain Development Consultant: A Private sector consulting firm will be recruited to facilitate the development of each of the strategic value chains by:

i.                    Advocating for policy and institutional changes in the selected value chains.

ii.                  Providing stakeholders with technical solutions such as information on better technologies and business models.

iii.                Undertaking research or demonstration activities to provide evidence for change.

iv.                Supporting stakeholders to influence policy making processes.

v.                  Supporting the provision of public goods and market infrastructure.

vi.                Assisting with strengthening of public-private dialogue.

vii.              Making use of a matching grant scheme by providing technical assistance to assist the scheme’s applicants in developing innovative business models that optimize their impact on competitiveness, productivity and job creation.   This technical assistance will be provided in the form of consultancy to help stakeholders develop business plans or conduct feasibility studies on new initiatives, and to make use of new technologies.

Stakeholder Groups: A Stakeholder Group for each sub component was established to guide the selection of innovative sub-projects submitted for support under the matching grant facilities of the CJCSP, and to provide guidance to Consultants in the various sub components.

Implementation Progress

Component 1 - Capacity Building and Entrepreneurship Skills Development

1.1 Private Sector Development Institutional Strengthening

▪           Baseline Survey

The Project engaged a short-term consulting firm to undertake a baseline survey for the project

 

The Baseline Survey was completed. The survey  has established baseline positions and benchmark data that will assist in the continuous measurement of project achievements and impact.

▪           Communication and Knowledge Dissemination Strategy (CKDS)

The Project engaged a short-term individual consultant to assist in the development of communications and knowledge dissemination strategy

The development of the strategy has been completed. The strategy has been developed to serve as a tool to support effective planning, implementation and reporting  of the Project’s activities .     

▪           Policy Research and Reforms

The Project hired a long-term individual consultant as Private Sector Development Policy Advisor. The Consultant is working on various capacity building initiatives with MoIT, MITC and SMEDI.

▪           Labour Force Survey

The MOIT supported the Ministry of Labour and National Statistical Office to  undertake a Labour Force Survey (LFS).

The LFS was  completed   and the report was launched  through a workshop which took place in August 2014 in Lilongwe.

For the first time, data on employment in Malawi is available as a result of the LFS.

 

▪           Gender Equity and Women empowerment Action Plan

The Project has hired a short-term individual consultant to assist the Ministry of Gender in the preparation of the Women Economic Empowerment and Gender Action Plan (WEEGAP). The action plan will be used in Project implementation and also as part and parcel of the programmes for the Ministry of Gender.

 

 ▪           Investment Profiles

The Project signed a contract with a short-term consultant to assist with the development of investment profiles for the MITC in a number of areas including sugar cane and oil seeds under crop agriculture, dairy farming under livestock (agribusiness) and motor vehicle assembly, electrical and electronic goods under manufacturing.

·         Investment missions: The Project is supporting MITC to conduct investment and trade  missions. MITC already conducted investment and trade missions to China in March  2014, United Arab Emirates in November, 2014 and a local investment forum is being planned for April, 2015.

 1.2       Entrepreneurial Skills Development

▪  Business-to-Business Linkages and Mentoring and Counselling Facility

The Project signed a long-term consultancy with ENCLUDE (Formerly Triodos Facet) of Netherlands to facilitate Business to Business Linkage and Mentoring and Counselling facility for MSMEs. A Business Linkages Matching Fund (BLMF) was designed and  is being operationalized.

Component 2 – Development of Strategic Value Chains and Access to Finance for MSMEs

2.1       Competitive Strategic Value Chains Development

The Project support players in the two identified value chains of soya beans and pigeon peas through the provision of matching grants in the form of  farm inputs, infrastructure such as warehouses, processing equipment, among others.

▪           Soya Bean and Pigeon Pea Seed

In the last two growing seasons, the Project procured 162 Metric Tonnes of improved soya bean seed which was distributed to farmers in Mzimba, Kasungu, Ntchisi, Dowa, Lilongwe and Dedza.

In addition to Soya, the Project also procured 18 Metric Tonnes of improved pigeon pea seed which was distributed to farmers in Zomba, Chiradzulu, Mulanje and Thyolo. Pesticides and sprayers were also procured for Pigeon Peas farmers.

▪           Identification of new international markets for pulses

The Ministry of Agriculture is making efforts to sensitize farmers to sell their produce through formal markets  such as commodity exchanges for maximum returns.    

 ▪           Construction of Agribusiness facilities such as  Warehouses and Processing Plants

The Project is supporting  the construction of 28  warehouses  and 1 soya milk processing plant in the 10 targeted districts.        

▪           Agribusiness Training to farmers in Districts

The MOIT signed a Memorandum of Understanding (MOU) with the Ministry of Agriculture, Irrigation and Water Development  through which the MOA provides training and extension services to farmers in the target districts.

 2.2 Access to Finance

▪           Financial Innovation Development 

 

A contract  was signed with International Financial Consulting of Ottawa, Canada to facilitate Financial Innovation component of the Project .A matching Grants Scheme has been designed to incentivize financial institutions in order to come up with innovative lending practices targeting MSMEs. It is expected that this intervention will see the implementation of activities that will improve lending and access to credit by MSMEs which is one of the key bottlenecks in Malawi