Download Enterprises and Suppliers Development Programme (ESDP)

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1. Titre du projet
Enterprises and Suppliers Development Programme (ESDP)
2. Contexte et justification
Burundi is a fragile State in peace consolidation process. This process depends on the ability of
the Government to build strong institutions to foster democracy and to impulse the economic
growth. There are concerns that the government needs to control the situation as the extreme
poverty, legal framework but the most important is the effective integration of young people
into economic activities, as a key factor to consolidate the stability of the country, and most
important to preserve the natural resources and revert deforestation and environmental scarcity.
In Burundi, 35% of the GDP is based on Agriculture on rain-fed non-mechanized agriculture and
handicapped by decreasing crop yields due soil degradation, climate hazards, galloping
demography and land grabs for other purpose than for food production. Also, Agriculture
represents more than 80% of employment which are in very great majority indecent.
The manufacturing sector only contributes with 9% of the GDP, that’s why is so necessary to
impulse the creation of new private enterprises, in order to up-grade the local content and
wealth distribution through jobs creation.
The strategic sectors for Burundi must be Energy and Agriculture, due most of the 30% of the
GDP is used to import products related with this two sectors, only 5% of the population has
access to modern energy, 70% of the energy consumption is bases on fuel wood consumption,
and has a complete dependability on petroleum / oils imports.
The industrialization of the country also requires an adequate industrial policy, the understanding
of the global market dynamics, the identification of potential technologies, practices but must
important is the definition of a strategic industrial pathway that allows Burundi to compete at
regional level.
The economic trade balance deficit also means the opportunity to develop local value chains
that implicates the creation of new players and the impulse of an incipient private sector.
Most of the imported products by Burundi can be manufactured locally through the creation of
linked value chains to the Primary Sector (Agriculture), through the implementation of microgrids.
But maybe the main challenge for Burundi is to identify a sustainable economic model, due
during the last decade the consumption of the natural resources have been superior to the
replacement rate and the deforestation level seems to be irreversible.
The Enterprise and Suppliers Development Programme (ESDP) is an integral initiative
based on 4 main components:
1. Observatory: Think Tank Centre created to identify economic growing opportunities an
to enhance the Burundian industrial policies.
2. Enterprise Incubator: Business School and technology transference unit, but also a
factor for social cohesion through educational, artistic and social activities.
3. Consultancy Unit: Creation of a top level business consultancy unit that will help local
Small, Micro and Medium enterprises (SMMEs) to be integrated to global supply chains
and developing access to markets.
4. Value Chain Demonstrative Case: Implementation of a Green Energy Value chain
linked oriented to provide 2 of the main inputs required for agriculture activity.
ESDP will make linkage of local SMMEs to global market which means: long-term business
relationship, source of regular income and cash flow to invest and grow and sustainable jobs.
Also, it will contribute to peace building consolidation, through the integration of a long term
sustainable green economy model, besides despite value chains that significantly to increase
the level of domestic production and imports substitution to strength the domestic market.
This project is an agro-industrial pathway initiative oriented to create quality jobs, a green
economy model, and mainly to bring a social cohesion instruments for peace – building
consolidation.
The main reason to choose a Green Economy Value Chain is that Biomass systems for energy,
provides a unique opportunity for a more regional distribution of wealth and, therefore, to
increase the equity of development between rural and urban areas. Lack of energy is also
considered as the main barrier to provide basic means of health care. Decentralized energy
systems (micro-grids) are probably the only answer to the serious energy problems facing more
than 90% of Burundi population. Production and conversion of biomass also generates several
additional low cost products that can be used successfully to impulse the rural economies.
3. Alignement du projet au SP (Strategic Plan du PNUD 2014-2017) et au
CPD (Country Programme Document 2014-2016) du Bureau de Pays
This project will contribute to the following Outcome of the UNDP SP and the IWP 2016
Burundi CO: “Growth and development are inclusive and sustainable, incorporating
productive capacities that create employment and livelihoods for the poor and excluded”.
It will also contribute to peace building consolidation, through the integration of a long term
sustainable green economy model, besides despite value chains that significantly to increase
the level of domestic production and imports substitution to strength the domestic market.
4. Résultats attendus
Main results of the project:

Result 1: Value Chains Observatory: A Think Thank Center that will develop strategic
research for industrial policies suggestions.
o Indicators: Number of Analyzed Value Chains; Strategic Industrial Road map
per year

Result 2. Incubator Centre: A Community Centre that will function as Incubator, also
as a community integrator factor.
o Indicators: Number of created enterprises

Result 3. Suppliers Development Execution Unit: Provide high level of business
consultancy services to improve the competitiveness and productivity of micro, small and
medium enterprises on the local value chains.
o indicators: Number of mentors trained on the methodology; Number of SMMEs
assisted

Result 4. Green Value Chain Implementation: Create a competitive green economy
value chain to demonstrate the viability of a large scale model.
o indicators: Transference Technology Agreement; Number of hectares seeded
with Biomass; Productivity of biomass per hectare; Productivity of Biogas CuM
per ton; Productivity of tons of fertilizer and forage per processed Ton.
This project should create in a period of 2 years 950 new permanent sustainable jobs.
The yearly estimated wealth created for this initiative is estimated on $7.7 Million USD, and
57% are long term assets (10 to 15 years) that will allow replicate the wealth creation level.
5. Stratégie de mise en œuvre du Projet
The Strategy for this project is to build/strengthen national institutional capacities and using the
expertise of SDP Specialists to develop the supplier’s capabilities and hence increase the total
added value in both products and services. For this, UNDP promotes the implementation of
technical assistance models, which identifies and significantly reduces restrictions on the value
chains, and contribute to create enterprises or develop the established ones as providers of those
chains, so that they are competitive with other alternative non-local supply.
Under this framework of productive integration for Development Project seeks to incorporate
SMMEs companies of global supply chain companies’ using as a base the intervention model has
been applied in Mexico, Honduras, El Salvador and South Africa with satisfactory results.
This opportunity to be linked to the market can often, in and of itself, provide a strong incentive
for suppliers to improve their performance, particularly in areas such as delivery reliability and
lead times.
A further advantage of this supplier development approach is that the areas chosen for improved
performance or capability are tailored to the specific needs of the buying company, and this
alignment ensures that the benefits feed directly through into the organization’s products and
services, enabling it to become even more competitive in its own market place.
6. Donateurs potentiels
European Union, AfDB, GIZ, Belgium, UNDP
7. Partenaires potentiels de mise en œuvre
Government: will play key role through the main Ministries related to the targeted sectors:
Energy, Industry and Trade, Agriculture, Labor, Education, Finance and Economic Planning.
With the assistance of several government departments and institutions, industrial and economic
related policies has to be developed and implemented to ensure that adequate financial and nonfinancial assistance is provided to the sector, for its long-term prosperity and that of the country
as a whole. Especially the participation of the State Owned Enterprises (SOE) must be an
essential element as potential buyers for the emerging and assisted SMME´s through the import
substitution.
Private Sector: Industrial Chambers, Anchor Companies, Banks and Donors and any agency
related with economic development may be part of this initiative. It is important to involve
organizations that bring together companies in strategic sectors to generate the critical mass
necessary to build a network of local suppliers based SMEs. Organizations such as; ADB, EU,
ABSA, JETRO will be part of this project and will be invited as they become achieving the
objectives.
United Nations Systems: UNDP is the global development network established by the United
Nations mandated to promote the development of countries and link them with the knowledge,
experience and resources to help its people build a better life. FAO is a source of knowledge and
information, and helps developing countries and countries in transition modernize and improve
agriculture, forestry and fisheries practices, ensuring good nutrition and food security for all.
IFAD is a specialized agency of the United Nations dedicated to eradicating rural poverty in
developing countries.
Main roles of the participants
8. Période de mise en œuvre
The pilot phase should be 2017-2018 if funds are raised in 2016 or at the beginning of 2017.
9. Principales Activités
Result 1: Business Incubator Centre
Support Emerging companies linked to market needs (Methodology Adaption, Training,
Application, Evaluation, Facilities Development, Potential Business identification , Mentorship,
Start Ups, Following / Evaluations, Business Plan Creation, Feasibility and Market analysis,
Evaluation, Funds allocation)
Result 2: Observatory Value Chain and Competitiveness Creation
 Value Chain Evaluation (Local capabilities creation, Methodology Adaption, Crew
Selection, Crew Training, Operational Model, etc…)
 Tactical research and benchmarking, Information source identification
 Industrial policy recommendation (Data Mining, Indicators Evaluation, Impacts
analysis by value chain, etc..)
Result 3: Suppliers Development Program Consultancy Unit Implementation
 SDP specialist Methodology Adaptation (Mentors Selection, Mentors Training,
Accreditation)
 Website design and functional Operation (Website Road Map, Electronic Workflow,
Functional Assessment, Virtual Handbook, Support Services and Reports, Launch)
 On field application (Collaboration agreement with Anchor companies, SMEs Filter /
Selection by value chain, Methodology application, Impact Evaluation
Result 4: Renewable Value Chain Implementation: 400 KT of Biomass Forage plant
Fertilizer plant
 Enable conditions (Technology transference agreement, Land identification and
exploitation agreement (100 Has), Business Model Definition)
 Investment and Development (Seedling, Equipment Acquisition, Equipment
Installation, Production flow work)
 Production (Harvesting, Operation, Quality system, Logistic, Evaluation
10.Budget estimatif (par source éventuelle de fonds si possible)
The financial resources required are totally by $6.9 million USD, for Pre-Operational and First
year of operations (including working capital)
11.Populations cibles
All Burundi population for all regions is potential beneficiary of the project depending on
sectors, value chains and SMMs which will be selected and supported.
12.Mécanisme de suivi et d’évaluation
Management, monitoring and evaluation mechanisms will be made according to the guidelines
and regulations of the UNDP Projects and Programme Management
13.Détermination et justification du niveau de maturité du projet (Classe
A, B, C)
 Class B – Soft Pipeline (Projet qui peut être mis en œuvre au cours des 6 - 12 mois à
venir)
14.Risques et Mécanisme de gestion de ces risques
Funding for a sustainable operation
 The legal framework that establishes that large companies should allocate up to 3% of
their net income to boost local supply will be used.
 Should negotiate with the tax authority recognition payment for these services as part of
the accreditation for meeting this standard.
 Should be necessary to show to the big companies that the use SDP is an investment that
results in lower logistics costs, better service and lower total financial cycle.
Do not count with key indicators over the program performance.
 The Advisor and the Coordinator of the Project will define the minimum level for key
indicators in order to integrate a report of best practices that includes all the variables to
ensure an adequate evaluation.
Do not have a group of qualified specialists to implement the methodology
 Has been defined a minimal input profile for the candidates.
 Plus has a psychometric study and knowledge assessment.
 A third filter that is applied in a real case in a SME company will have.
 A highly selective process will be to identify the best talent in the country.