QUARTERLY REPORT

TUNISIA JOBS, OPPORTUNITIES & BUSINESS SUCCESS PROJECT (JOBS)

CONTRACT NUMBER: AID-664-C-17-00001

JANUARY – MARCH 2019

Implemented by:

Chemonics International Inc. 1717 H Street NW Washington, DC 20006 Telephone: (202) 955-3300

This publication was produced for review by the United States Agency for International Development. It was prepared by Chemonics International Inc. The contents of this report are the sole responsibility of Chemonics International Inc. and do not necessarily reflect the view of USAID or the United States Government.

USAID JOBS QUARTERLY REPORT (JANUARY 1 – MARCH 31, 2019)

QUARTER HIGHLIGHTS

The Jobs, Opportunities & Business Success (JOBS) program is pleased to present this quarterly report highlighting major activities from January 1 to March 31, 2019. The following report summarizes progress during the reporting period for each technical component and project administration, as well as management concerns.

During the quarter, JOBS expanded operations beyond Tunis to Gabes and Sousse. The project now has offices in five regions, including Beja, Gabes, Gafsa, Sfax, and Sousse. Of its more than 4,820 total expected jobs to be created and matched, JOBS’ client firms have targeted more than 65% for women. These jobs will be created in six regions, 21 governates, and 11 sectors, from manufacturing to mining, agriculture to health, textiles to finance, and many others. Although the project expected that companies in coastal regions would represent the bulk of our initial portfolio, JOBS has signed 31% of its Partnership Agreements (PAs) with companies in non-coastal regions. As JOBS regional presence expands, its job-creation will grow in non-coastal regions.

The project also finalized strategies in three technical areas – Access to Finance (ATF), Work Force Development (WFD), and the Business Enabling Environment (BEE) - for a multi-dimensional approach to job creation. This narrative report is complemented by a presentation here, showcasing the quarter’s activities in JOBS’ ArcGIS online system.

During the quarter, JOBS completed an assessment of lessons learned during its pilot phase using ArcGIS, which supports project Women are the target candidates for more than management nationwide; monitoring, 65% of the jobs expected within PAs signed evaluation, and learning (MEL); and between JOBS and its client firms. Here, an communications and outreach. This report employee of Royal Plants smiles about her led to several enhancements in how the team employer’s bright future – including 40 jobs to be uses ArcGIS for its daily work, as well as created in partnership with JOBS. clarity on the need to hire an ArcGIS specialist, whom JOBS recruited and hired in March 2019.

ENTERPRISE ENGAGEMENT

During the quarter, Component 1 (C1) expanded its outreach to potential client firms in six regions, particularly in non-coastal regions. It also made operational its ATF component. Highlights:

✓ Signed a Collaboration Agreement (CA) with Gabes Chamber of Commerce on February 28, and also signed JOBS’ first PA with a Gabes-based client firm. ✓ Signed PAs with 73 companies, for an end-of-quarter total of 106 client firms, which include an expected 4,820 jobs. On average, JOBS will provide three percent of total costs of activities to address key constraints, while the client firm will cover 97 percent. ✓ Established offices in Beja and Gabes and operations in Sousse. ✓ Launched an aggressive campaign to reach potential client firms via an online form soliciting expressions of interest (EOIs) via JOBS’ Facebook page and social media of more than 50 of JOBS’ partner organizations (e.g. chambers, etc). During the reporting period, JOBS received 30 EOIs from interested firms. ✓ Announced its first call for grants concept papers via JOBS’ Facebook page. The concept papers will promote employability and empowerment of Tunisian women and youth, as well

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as investment by Tunisians living abroad. This call for concept papers will be live through September 2019. ✓ Coached 12 Tunisian firms to participate in the Gulf Food trade forum on February 17-21 in Dubai. During the quarter, just one firm received its first order for $3.6M in dates (pending certification), and JOBS will continue to track these orders as they mature. For example, JOBS sponsored a Canadian short-term consultant to coach firms for participation in a November 2018 Sfax Export Forum, based on which confirmed orders equal $650,000, and anticipated orders equal $1.5 million. ✓ Completed its ATF strategy that expects to generate total financing in Year 1 of 100 million TND, resulting in the creation of approximately 2,100 new jobs. ✓ Signed a CA on March 5 with Zitouna Tamkeen (ZT), the first of several microfinance lenders for diagnostics and capacity building. Two JOBS’ short- term MFI consultants conducted a training with case studies on agriculture value- chain and small- enterprise financing with 22 ZT trainees, including its CEO, heads of key departments, branch managers, and loan officers in Tunis, Sidi Bouzid, and Kebili. Zitouna Tamkeen trainees show pride in completing a mapping ✓ Undertook an exercise – part of a workshop on agriculture value-chain and small- assessment of the enterprise financing. Tunisian tourism sector to develop a comprehensive JOBS tourism strategy.

WORKFORCE DEVELOPMENT

The Component 2 (C2) team engaged the private sector in closing the gap between skills demanded by employers and skills developed by academic institutions. During the reporting period, JOBS focused on engagement of the private sector in curricula reform at the national level, as well as direct technical assistance to an initial list of 10 Competency Certification and Career Centers (4Cs/career centers) and 12 Vocational Training Centers at the regional level. Highlights:

✓ Submitted JOBS’ WFD strategy on January 31 and presented the associated work plan to AID in February. For higher education, JOBS will focus on WFD in the following sectors with high demand for qualified candidates: Information and Communication Technology (ICT); biotechnology (e.g. agribusiness, pharmaceutical, etc.); and Business Studies. For vocational education, JOBS will focus on four sectors with high demand for hiring: hospitality/tourism; agriculture; textiles; and mechanical-electronics. ✓ Delivered “Employability Readiness” training to develop soft skills in students at higher education institutions. JOBS supported 4Cs to deliver this training for a total of 523 university students trained.

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✓ Organized an ICT Job Fair in Sfax on February 14 in partnership with the 4C. Thirty companies participated in the job fair, seeking to fill approximately 200 open positions. JOBS and the 4C of the University of Sfax posted the event's Facebook photos and videos, which got more than 27,000 views. ✓ Delivered five workshops for study plans in Business Studies and ICT in preparation for the Ministry of Higher Education’s three-year cycle for reviewing study plans (syllabi for curricula). For Business Studies, JOBS delivered three workshops to revise study plans for JOBS delivered employability training and training of trainers to specializations in prepare students to compete for jobs in the private sector, building industrial management, their capacity to write CVs, interview, and contribute productively in quality management, a professional environment. Pictured here, the University of Gafsa finance and accounting, 4C director guides students through exercises on March 2- 3. sales, and community management. For ICT, JOBS organized two workshops to revise study plans for specializations in embedded system and Internet, network engineering and systems, software engineering and information systems, computers and multimedia, e-business, business information systems, business intelligence. In these workshops, representatives of academia and the private sector reviewed the study plans to better align classroom training with employers’ needs. These workshops included faculties and professors in these subject areas and representatives of the private sector interested in hiring highly qualified graduates. The revised study plans will ultimately impact approximately 1,700 students. ✓ Completed five diagnostics at four vocational training centers (VTCs) in Sousse (in agriculture, tourism, and textiles) and one agriculture VTC in Sfax. These diagnostics will define JOBS’ technical assistance specific to its 12 VTCs to support goals defined in its Year 1 work plan.

POLICY AND REGULATORY REFORM

The Component 3 (C3) team promoted public-private dialogue and stakeholder coordination to implement of priority policy areas. Highlights:

✓ Submitted JOBS’ strategy for policy and regulatory reform on January 24 and presented the associated Year 1 work plan to AID in March. JOBS will focus on four policy priorities: ATF, market access for investors, trade facilitation, and public procurement. ✓ Recruited local and international consultants and Tunisian service providers to support activities in JOBS’ annual work plan. For example, JOBS created a SOW to onboard a Tunisian web-design firm to create a portal on Tunisian Doing Business indicators for stakeholders’ broad visibility of Tunisia’s performance toward its goal of ranking in the top 50 in 2020. ✓ Co-sponsored a public-private dialogue on March 13 on the draft Equity Investment Code with members of the Tunisian Association of Capital Investors (ATIC) to answer questions

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of members of the Finance, Planning, and Development Committee of the Assembly of People’s Representatives. ✓ Participated in a workshop on March 26-28 organized by the World Bank and the High Authority on Public Procurement (HAICOP) on coordinated implementation of several donors and institutions for improvement of Tunisia's public procurement system. ✓ Edited, printed, and prepared to disseminate 10,000 copies of the policy manual on export procedures for exporters (mainly in interior regions) and chambers of commerce.

STRATEGIC COMMUNICATIONS AND OUTREACH

JOBS’ Strategic Communications and Outreach team (Component 4) promoted project activities and opportunities via social media and other strategic communications tools. Highlights:

✓ Launched JOBS’ Facebook page in February to engage with Tunisians, share project highlights, and keep its finger on the pulse of Tunisia's youth and business communities. By the end of March, more than 2,500 people followed JOBS, and 151,002 unique account holders viewed JOBS’ page. Engagement was balanced between men (48%) and women (52%), and the most engaged segment of the population was 25-34 year-old women. ✓ Published its first monthly e-newsletter for an audience of more than 900 stakeholders in Tunisia's private and public sectors. This publication will highlight accomplishments through the life of the project. In this first edition, JOBS introduced the team, its technical objectives, and the Women Entrepreneur Forum in March. ✓ Celebrated International Women's Day with the Women Entrepreneur Forum, spotlighting five Tunisian businesswomen, who shared their biggest strengths and challenges in running a business. U.S. Ambassador Donald Blome spoke to an audience of 52 stakeholders about the importance of women to Tunisia's economic growth. ✓ Published 20 profiles of JOBS’ client firms - on ArcGIS to illustrate through photos and short stories the objective of PAs, including job JOBS launched its Facebook page in March and will continually post creation and project highlights throughout the life of the project. matching.

PROJECT ADMINISTRATION

During the quarter, JOBS’ Operations Team prepared to support expansion of technical assistance and grants in six regions and an increase of staff by 30 percent in the coming months. Highlights:

✓ By the end of March, the JOBS team totaled 57 employees, including 19 BAs (two in Sfax, two in Gafsa, two in Sousse, one in Beja, and one in Gabes). ✓ Negotiated additional office space on the same floor of JOBS’ new office space to accommodate the growing team and began construction of the expanded space.

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✓ Signed approximately 50 short-term agreements for consultants to provide technical assistance to 39 client firms. ✓ Transitioned to a cloud-based Enterprise Resource Planning (ERP) platform, improving operational efficiencies and minimizing paper-based tasks.

MANAGEMENT CHALLENGES AND OBSERVATIONS

Impact verification

By the end of the quarter, JOBS had signed PAs with more than 100 firms and was on its way to signing similar agreements with hundreds, and perhaps thousands, of companies. Verifying job creation, sales, and training attributable to JOBS’ technical assistance requires for this many companies, with a team of five MEL staff, a rigorous methodology. At the same time, these procedures cannot be overly intrusive to our client firms, nor beyond our management capabilities, to execute. How to strike this balance is an important management issue. During the quarter, JOBS researched best practices and identified the key protocols of a verification methodology for USAID’s review in April/May.

Aligning technical and administrative operations

All JOBS’ technical components are now fully operational, including subcomponents such as ATF, export development, and foreign direct investment. The workforce development, policy, and communications components are also aggressively executing their work plans. Implementation requires contracting technical experts on a nearly daily basis -- at least one short-term technical assistance consulting contract for each PA -- arranging for vehicles and other transportation, processing per diem, and all the necessary “back office” functions to support technical operations. This rapid growth has placed considerable pressure on our operations staff. Our response has been to hire additional administrative support and receive Chemonics’ home-office support in key areas, such as recruiting and biodata processing. While these are important – and we will continue to receive strong home-office support in the next quarter – we are examining ways to restructure and streamline administrative operations to ensure that the Operations team can keep up with growing technical requirements.

Expanding the number of Business Advisors (BAs)

At the end of the quarter, JOBS had contracted 19 BAs. The project aims to expand this number to approximately 35 total BAs by the end of next quarter. Our strategy also includes hiring the bulk of the remaining 16 BAs in regional offices. This includes not just the current offices in Beja, Gabes, Gafsa Sfax, and Sousse, but in other regions, as well. However, identifying, hiring, and training qualified staff – especially outside Tunis -- is a major challenge. The BA job requires an exacting combination of inter-personal skills – especially the ability to present well before senior business managers – business acumen, sector knowledge, and other attributes not easily found in Tunis, and much less so in non-coastal areas. New BAs have to be trained, mentored, and are not able (nor necessarily expected) to be fully productive the first months after they are hired. The coaching/mentoring requirement also means that experienced BAs must take time from their work to support capacity development for their new colleagues. JOBS monitors closely the performance of new BAs. In some cases, we have already terminated those that have not performed, while others we have put in a trial period. We are addressing this issue with a mix of Tunis-office based training, “shadowing” assignments with experienced BAs, and other means. Nonetheless, it is important to note that during this first year the addition of BAs does not always translate into a comparable increase in PAs -- especially when BAs also have to focus not only on generating new PAs, but also on overseeing technical assistance to firms. This downward slope of the BA effectiveness curve is normal for a project of this magnitude, but requires careful tracking, as we are doing.

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Salaries

Some JOBS salaries exceed the local compensation plan (LCP), which continues to be an issue. USAID and Chemonics have formally established that – at this time – subcontractors and consultants (essentially non-Chemonics employees) do not fall under the LCP. Accordingly, we have addressed the salary issue for a handful of key technical staff hired last Fall by employing them through a series of short-term contracts. We are now in the process of requesting to hire them as long-term consultants and, in one case, as a subcontractor. For a variety of reasons, it is not possible nor fair to these staff to keep them under short-term contracts. We understand that USAID may revisit the contracting modalities and their authorized salary ceilings in the future. However, at this time, especially in light of the Expanding the number of Business Advisors (BAs) issue discussed above, it is essential for project performance to maintain this staff. Given the issues encountered in hiring new BAs, losing the most senior members of the BA and Enterprise Competitiveness Team at this time would be a serious obstacle to achieve project objectives. We also note that in recruiting for the open Work Force Development Team lead position, we have yet to identify a single qualified candidate under the LCP, as we seek a professional with a background not just in workforce development but in innovation and private sector outreach, per our discussions with USAID. We intend to hire this person as a consultant or subcontractor.

QUARTERLY FINANCIAL REPORTING Per contractual requirements, JOBS’ quarterly financial report covering January 1 to March 31, 2019, was submitted via a separate report on April 12.

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