Supply Capacity - Denmark

The Green Growth and Employment Thematic Programme objective is “Inclusive greener growth with higher employment” and will be achieved by focusing support on two intervention areas:

• Sustainable growth and jobs from investment and trade; and

• Sustainable use of natural resources and community resilience.

Under the first intervention area, the Thematic Programme (TP) will, first and foremost, seek to stimulate growth, based on green solutions, and to generate employment. Employment is an important transmission mechanism between growth and poverty reduction, and there are opportunities for generating sustainable employment in the “greening” of growth. Danida will continue to help Kenya achieve its green growth agenda through reducing poverty and improving livelihoods, through climate mitigation and adaptation of green technologies. Targeted innovative enterprises, both start-ups, and existing enterprises will be supported in efforts to uptake green technologies and innovative businesses in agribusiness, water management, and renewable energy. This will be done by leveraging funds for investments in clean energy through proof-of-concept funds, seed funds, and commercial funds. In this respect, the expected medium-term outcomes are the sustainable utilization of natural resources and employment creation.

Support will be provided to partners working with both the normative framework and the private sector. This is in recognition of the fact that on the one hand, the public sector alone cannot drive a transition towards a green economy, and on the other hand, the private sector needs a conducive business environment (including the right incentives) from the public sector to consider green investments. The focus will be on working with partners offering innovative solutions and a willingness to meet the challenges of promoting a greener economy and creating employment.

The support to the normative framework will emphasize implementation of the existing framework rather than the formulation of new policies and strategies. The focus will be on capacity development for implementation (including awareness raising, development, and promotion of incentives and enforcement) as well as on interventions to create partnerships and trust between public institutions/authorities and the private sector. This will include support to better integrate sustainable environmental management principles into sector strategies within Ministries, Departments and Agencies (MDAs) and budget processes in MDAs and at the county level.

The private sector support will, with limited funds and a limited number of strategic partners, concentrate on activities that can generate immediate and medium term results as well as stimulate catalytic effects, in areas such as green technology, ecosystems management, and the creation of green employment opportunities. Capacity development/knowledge sharing will also be central. Interventions should, to the extent possible, be able to generate immediate, visible results while simultaneously encouraging continuity beyond the life of the programme, thus ensuring more significant longer-term impacts.

Under the second intervention area (sustainable use of natural resources and community resilience) the focus will be on sectors that are most vulnerable to climate change, where investment in natural capital and sustainable use of natural resources plays a key role, and where opportunities for fostering green growth and creating employment are significant. To address the daunting challenge of inequality in Kenya, geographical areas with notable poverty due in part to marginalization, and where people are most prone to suffer from natural resource degradation, climate change effects, and the ensuing conflicts over natural resources and livestock, have been selected.

The U-Growth II Programme 2014-2019 (DKK 500 million) supports two organizations, the aBi Group (aBi=Agribusiness Initiative) and the Uganda office of Trade Mark East Africa (TMEA), and a project supporting economic revitalization in northern Uganda i.e. “Recovery and Development of Northern Uganda Component (RDNUC).” The focus of the later is on improved farm productivity and yields, and commercialization. Although not directly linked to trade and export, the support for northern Uganda comprises rural infrastructure including rural roads.

The Danish support for TMEA (DKK 45 million plus possibly an additional DKK 18 million from the unallocated funds under the programme) is focused on the implementation of the so-called ‘Electronic Single Window’ (ESW) aiming at reducing cross-border transit time and costs, increasing revenues, and improving transparency and security in cross-border trade/supply chains. Furthermore, increased alignment and harmonization of Ugandan laws and policies with those of EAC is expected together with the improved capacity of the private sector and civil society actors to influence regional integration policies and practices positively.

aBi supports private sector actors in six selected value chains (coffee, oilseeds, cereals, pulses, horticulture for export and dairy) aiming at making the value chains more competitive and profitable. Cost-sharing grants are provided to enhance production and productivity, including training farmers in good agricultural practices, use of agro-inputs, quality assurance and post-harvest handling. Interventions to establish value-addition facilities, support marketing, and addressing issues needed to adequately meet end-market requirements, including export markets) are also supported.

The Programme for Responsible Business in Myanmar (PRB) aims at assisting Myanmar in linking inclusive economic development with responsible business practices in a period of two years (2014-2015). The programme comprises of three components: (i) the regulatory framework component; (ii) the responsible industry development component; and (iii) the private sector component of responsible business. The program is being implemented by partners: IHRB/DIHR (through MCRB), ILO and ICJ.

The programme is on track although there were some delays in the program start up activities for all three partners. Based on the funding outlook of each component partner and their individual request, the program is extended to 5 months (Jan- May 2016) for ICJ and IOM and 12 months (Jan- Dec 2016) for IHRB/DIHR (through MCRB).

This programme constitutes the third phase of support given to Tanzania's business sector. The aim of this programme is to strengthen the current business environment, enhance access to international markets, and support the development of micro, small and medium-sized enterprises (MSMEs). Accordingly, this programme is aligned with these three main objectives:

• Strengthening of the business environment through support to the preparation and implementation of business environment reform processes, as well as improved dialogue between the public and private sector. Moreover, institutional support will be provided to the Trade Union Congress of Tanzania (TUCTA) and the Association of Tanzanian Employers (ATE).

• Improved access to markets through the continued development of capacity in international trade negotiations and enhanced education with respect to international trade and business studies.

• Reinforcement of business opportunities for MSMEs through improved counseling services and better financial facilities.

Most of the activities and sub-components have been completed and closed. One sub-component (Financial Sector Deepening Trust) awaits the final audited accounts to be closed in 2016. The implementation of three interventions (sub-components) has been delayed: Exit of Danida Investment Fund (DIF) from CRDB Bank PLC, Informal Economy Support Initiative (IESI) and Land Tenure Support Programme (LTSP). There is an agreement between the Danish and Tanzanian government for DIF to exit. The recent plan was to do it in 2015, but due to Tanzanian General Elections, it could not materialize. The negotiations are expected to resume in this year and agreeing on the use of the revenues from the sale of the DIF shares remains a difficult aspect. The implementation of IESI is progressing satisfactorily, and it is expected to be completed in June 2016. The start of LTSP was overly delayed due to issues related to procurement of Technical Assistance (TA) and hiring of other Tanzanian personnel. The programme duration is now 2016-2018. The official launch of the programme by the responsible minister took place on 18.02.2016. Two districts, Kilombero and Ulanga, have been selected for implementation and preparatory work is ongoing. The inception report will be ready by April 2016. A platform for coordination of input from Civil Society Organizations to the programme implementation is under preparation. Tanzania Land Alliance will be strengthened to perform this role.

The Programme (BSPS IV) has three components with a total of 6 engagements:

• Agricultural Markets Development under which a Trust (AMDT) will engage in a number of value chains and thereby facilitate the equivalent of 100,000 full-time jobs and increase income for 300,000 farmers. The immediate objective is defined: The incomes and employment opportunities of poor women, men, and young people are increased in agricultural value chains in Tanzania. Contributors are DANIDA, SIDA, Irish Aid and Swiss SDC.

• Improved Business Climate has the immediate objective: (i) Improved business climate for the private sector, inducing businesses to grow and create employment opportunities; (ii) Local Investment Climate-focused on critical constraints to business growth and economic development at the district level by helping the local authorities and business communities to identify and prioritizes the constraints. Dodoma and Kigoma Regions are the focus areas; (iii) BEST-Dialogue will work with business organizations and government to improve business environment through regulatory reform, improved implementation and effective and efficient enforcement; and (iv) CTI/DI Twinning arrangement will strengthen the institutional capacity of CTI as a key private sector organization vis-à-vis the Government of Tanzania.

• Access to finance has the immediate objective: (i) Farmers, enterprises, and employees increase their access to quality financial services; (ii) Financial Sector Deepening Trust (FSDT) has since 2004 financed the development of pro-poor financial services and new financial products for MSMEs;and (iii) Private Agricultural Sector Support (PASS) operates on commercial terms offering a combination of credit guarantees and business development services to Tanzanian farmers and agribusinesses. The present upscaling of PASS businesses are based on new financial products with a significant potential for increasing the number of beneficiaries.

The programme's overall objective is to strengthen inclusive economic growth through income and employment generating activities supported by the private sector. The geographic focus of the programme covers the regions of Mopti, Segou, and Sikasso, as well as the district of Bamako. The programme also focusses on selected value chains in the agricultural sector. The programme consists of three components:

1. Strengthening of small and medium enterprises' (SME) competitiveness. An advisory facility supports the creation of business plans, organization, education, etc. and the access to financing of enterprises investment projects is improved through match funding and the National Malian Guarantee Fund. The component is implemented through the Malian National Council for Employers.

2. Development of economic infrastructures to promote production and improve market access in the sector of the chosen value chains. The projects are chosen by the private sector and can be roads, bridges, markets, etc. The components are implemented through the National Agency for the Construction of Infrastructure in Rural Districts.

3. Support for the private sector's access to relevant vocational training. On the basis of demand, capacity and skills are developed for private sector actors to improve competitiveness and employment enhancement. This component is implemented through a delegated partnership with the Swiss Agency for Development and Cooperation in Mali.

Overall, the programme is on track. The infrastructure component is somewhat delayed, a new planning and monitoring system has been put in place, as to get the activity back on track. In collaboration with CNPM, the national employers’ organization, 284 SMEs have been approved for funding, of which 147 SMEs managed to come up with their contribution and the activities to increase the production have been launched. The number of SMEs supported is less than expected because of changes in procedures recommended by the inception review.

The key priority in the programme is to strengthen inclusive market-based growth to reduce poverty and raise living standards. The programme will target commercialization of agricultural products and upgrade rural infrastructure in Eastern Nepal. Also addressing the framework for inclusive growth at political levels will be key to facilitating sustainable, inclusive growth. 400 million DKK have been allocated for a five-year period commencing January 2014. The programme design includes three components, each with two sub-components: The Value Chain Component (with sub-components Access to Finance and Commercialization of Value Chains; The Infrastructure Component (with sub-components Rural Roads and Bridges and Market Infrastructure); and The Enabling Environment Component (with sub-components Private-Public Dialogue and Advocacy for Rights and CSR). To support the implementation of sub-component 1.1 Commercialization of Selected Value Chains, and the entire Infrastructure Component, the programme will make use of a management contractor. Other implementing partners include Local government, Nepal Rastra Bank together with UNCDF, Nepal Business Forum, and an advocacy fund manager.

The development objective of SPSD II, which is aligned and contributing to these policy goals and the PSDS II vision, is defined as: Creation of sustainable and decent jobs The SPSD II outlines two main strategic objectives: (i) to improve the conditions for business operation, enhance local and foreign investor confidence, as well as foster the development of sustainable corporate strategies for enterprise growth and job creation. Challenges to be addressed with SPSD II include: (i) low competitiveness of agriculture and small and medium-sized enterprises; and (ii) a small formal sector which has insufficient capacity to absorb Ghana’s youth and realize their potential. Since there are more students and apprentices than the entire formal sector labor force, a significant number will have to seek their livelihood in the informal economy where productivity and incomes are low. The emphasis on ¿sustainable¿ jobs implies that: (i) jobs are created in firms that are commercially viable and can face the competition without the need for continuous public subsidies/protection; and (ii) the jobs are not based on exploitation of a finite non-renewable resource or on unsustainable use of natural resources (e.g. soil mining resulting in declining soil fertility and yields). The emphasis on decent jobs indicates that: (i) the enterprise or farm generates a value added per employee/entrepreneur/farmer which allows for an income/salary that is decisively above the poverty line; (ii) the jobs generate production and services which are of value to society (which excludes e.g. crime, prostitution, some types of petty trade, etc.); and (iii) the general labor conditions are satisfactory (e.g. occupational health and safety standards, social protection, gender equality, no utilization of child labor etc.)

The Sustainable Marketplace Initiative in Myanmar (SMI-M) is a private sector development project, which aims to promote inclusive, market-driven growth and productive employment. The SMI-M´s goal is to meet the acute need of creating jobs to lift people out of poverty by maximizing the economic impact of official development assistance and foreign direct investment in Myanmar. Promoting a sustainable approach, the SMI-M works to create growth and employment that will continue to be generated for future generations of job seekers.