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3Rd Quarter Progress Report Fiscal Year 2019

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3Rd Quarter Progress Report Fiscal Year 2019 Cooperative Agreement No. AID-621-LA-16-00002 3RD QUARTER PROGRESS REPORT FISCAL YEAR 2019 This quarterly progress report was made possible through support provided by Feed the Future through the U.S. Agency for International Development. The opinions expressed herein are the sole responsibility of the International Executive Service Corps (IESC) and do not necessarily reflect the views of USAID or the United States Government. Submitted on July 30, 2019 by: IESC Contact: Andrea Patrick Associate Vice President International Executive Service Corps (IESC) 1900 M Street NW, Suite 500 Washington, DC 20036 Email: [email protected] ii Acronyms and Abbreviations iv Activity/Overview Summary 1 Program Overview 1 Quarterly Progress Report 1 Milestones 1 Component 1: Implementing Policies for Growth 1 Component 2: Business Development Services 1 Component 3: Financing for Growth 2 Cross-cutting: Value Chain Investment Opportunities 2 Challenges and Critical Issues 2 Component 1: Implementing Policies for Growth 2 Component 2: Business Development Services 2 Component 3: Financing for Growth 3 Third Quarter FY19 Progress 3 Component 1: Implementing Policies for GROWTH 3 Component 2: Business Development Services 4 Component 3: Financing for Growth 5 Cross-cutting: Value Chain Investment Opportunities 6 Planned Activities for Next Reporting Period 7 Component 1: Implementing Policies for Growth 7 Component 2: Business Development Services 7 Component 3: Financing for Growth 8 Cross-cutting: Value Chain Investment Opportunities 8 Finance and Administrative Highlights and Issues 9 Crosscutting Issues and USAID Forward Priorities 9 Communications and Outreach 9 Grants 9 Environmental Compliance 10 Gender and Youth 10 Sustainability 10 Monitoring, Evaluation, and Learning 10 Annex 1: ENGINE Progress Towards Indicators I Annex 2: Program Financial Report XI Annex 3: Stakeholder Outeach and Meeting SUmmary XII Annex 4: Key Stakeholders and Zanzibar Engagement XXIII Annex 5: Volunteer Assignments XXIV Annex 6: Success Stories XXVI iii AYA Advancing Youth Activity B2B Business to Business BDS Business Development Services BDSP Business Development Service Provider BFS Business Formalization Survey CC City Council DBC District Business Council DC District Council ENGINE Enabling Growth through Investment and Enterprise Program FIs Financial Institutions FY Fiscal Year HO Home Office ICMA International City/County Management Association ICT Information and Communications Technologies IESC International Executive Service Corps LGA Local Government Authority LGACI Local Government Authority Competitiveness Index LGTI Local Government Training Institute MC Municipal Council MEDA Mennonite Economic Development Associates MEL Monitoring, Evaluating, and Learning MFI Microfinance Institution MoU Memorandum of Understanding MSME Micro, Small and Medium Enterprise MTIM Ministry of Trade, Industries and Marketing OCGS Office of the Chief Government Statistician PBZ People’s Bank of Zanzibar PCT Pyrethrum Company of Tanzania PO-RALG President’s Office for Regional Administration and Local Government PPD Public-Private Dialogue PRPT Policy Reform Priority Setting Tool RBC Regional Business Council RFA Request for Application SCSC Swahili Coast Salt Company SME Small and Medium Enterprise SoW Scope of Work SUGECO Sokoine University Graduate Entrepreneurs Cooperative TA Technical Assistance TADB Tanzanian Agricultural Development Bank TCCIA Tanzania Chamber of Commerce, Industry and Agriculture iv TIOB Tanzania Institute of Bankers TOT Training of Trainers TZS Tanzanian Shillings UI User Interface USAID United States Agency for International Development USD United States Dollars UX User Experience ZALGA Zanzibar Association of Local Government Authorities ZNCCIA Zanzibar National Chamber of Commerce, Industry and Agriculture v PROGRAM OVERVIEW Pursuant to Cooperative Agreement No. AID-621-LA-16-00002, the International Executive Service Corps (IESC) implements the Feed the Future Tanzania Enabling Growth Through Investment and Enterprise Program (ENGINE). The period of performance for the award is September 1, 2016 – August 31, 2020. IESC is the lead implementer of ENGINE, joined by sub-contractors the International City/County Management Association (ICMA), Mennonite Economic Development Associates (MEDA) and Diligent Consulting Limited. Under this Agreement, IESC supports USAID’s Development Objective 2: Inclusive broad-based economic growth sustained. QUARTERLY PROGRESS REPORT The purpose of this document is to report the program’s progress during the 3rd Quarter, Fiscal Year 2019 (FY19). The 2nd Quarterly report was submitted during this reporting period. Milestones COMPONENT 1: IMPLEMENTING POLICIES FOR GROWTH ENGINE supported six local government authorities (LGA) – Mbeya, Morogoro, Iringa and Urban Municipal Council (MC), West A and West B in Unguja – review and align their investment promotion strategies with the current National Industrialization Strategy and Policy. The Policy Reform Priority Setting Tool (PRPT) and LGA Competitiveness Index (LGACI) online system was completed, tested in the Morogoro and Iringa LGAs; then refined and presented to the President’s Office for Regional Administration and Local Government (PO-RALG) Management for approval. Supported the Ministry of Trade, Industries and Marketing (MTIM) and Office of the Chief Government Statistician (OCGS) to disseminate business formalization survey reports to their stakeholders. Supported and facilitated the finalization of the city council (CC) of Mbeya’s revenue enhancement plan. COMPONENT 2: BUSINESS DEVELOPMENT SERVICES Two volunteer experts delivered technical assistance (TA) to 42 business development service providers (BDSPs). Four additional BDSPs signed Collaboration Agreements with the ENGINE Program. 41 BDSPs sold services to 974 MSMEs worth approximately $145,600 USD. 1 COMPONENT 3: FINANCING FOR GROWTH Seven volunteer assignments were completed supporting FINCA Tanzania, VisionFund Tanzania, and the Tanzania Institute of Bankers. Another four volunteers—all female—provided remote User Interface/User Experience (UI/UX) testing for the Bizfundi platform. 54 bankers received training during the quarter, including 27 trained on credit risk modeling through the Tanzania Institute of Bankers’ (TIOB’s) online training platform and ten who attended TIOB’s five-day course on agriculture finance. Both courses were developed with support from ENGINE. Through their loan activity with ENGINE, Yetu Microfinance issued 346 agriculture micro-loans this quarter to borrowers in Morogoro and Iringa, valued at 251 million TZS (approximately $110,000 USD). This quarter, BDSPs trained by ENGINE on credit readiness reported facilitating 34 loans to seven financial institutions worth a total of 495 million TZS (approximately $215,000 USD). CROSS-CUTTING: VALUE CHAIN INVESTMENT OPPORTUNITIES Finalized action plans for investment facilitation in the poultry, salt and pyrethrum value chains and received buy-in from all three lead firms on the planned approach. Identified promising tie-in between salt and seaweed production by using seaweed as a source for locally- sourced iodine. Brokered a meeting between the Pyrethrum Company of Tanzania (PCT) and Sokoine University Graduate Entrepreneurs Cooperative (SUGECO) to discuss farm management needs and employment opportunities. Linked the Swahili Coast Salt Company (SCSC) with Amana Bank in Zanzibar to promote Sharia-compliant lending to salt farmers in Pemba. Secured an initial sale of 200 chickens from Silverlands to Makifu village. CHALLENGES AND CRITICAL ISSUES COMPONENT 1: IMPLEMENTING POLICIES FOR GROWTH Recurring bureaucratic setbacks and frequent leadership changes at LGAs led to interruptions and delays of planned activities. Difficulty in sourcing needed volunteer experts to facilitate and execute this quarter’s planned activities. Planned Solid Waste Management activities were halted, impacting work programmed for the quarter. COMPONENT 2: BUSINESS DEVELOPMENT SERVICES Expansion of business development services (BDS) to cooperatives has been delayed by the Tanzania Commission of Cooperatives Development and Moshi Cooperatives University, who have yet to sign a memorandum of understanding (MOU) with the Program to implement the strategy to increase the number of private cooperative trainers. 2 COMPONENT 3: FINANCING FOR GROWTH Partnering with financial institutions (FIs) continues to prove difficult; FIs are generally slow to respond and reluctant to commit. The financial services sector remains sluggish. A recent report from the World Bank cited the magnitude of non-performing loans and high borrowing costs as primary causes. 1 Senior leadership changes among FIs serve as both a response to sluggish performance and further cause of disruption. This quarter FINCA hired, and subsequently fired, its new CEO. VisionFund continues to operate with an acting-CEO. Furthermore, ENGINE grant applicant UMI Microfinance indicated that an internal re- organization will preclude them from participating in receiving technical assistance support from ENGINE in the next quarter. COMPONENT 1: IMPLEMENTING POLICIES FOR GROWTH Facilitation of Public Private Dialogues (PPD): ENGINE supported and facilitated 15 PPDs (eight with Mainland LGAs and seven with Zanzibar LGAs) in the following activities and events: a Revenue Enhancement Plan workshop in Mbeya CC; Investment Promotion Strategy validation workshops; a Regional Business Council
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