Engaging the private sector, building local ownership
Countries face complex challenges that require solutions from a strong private sector working in partnership with governments, civil society, and the development community. As private sector and development interests increasingly align, the private sector has become critical to creating and shaping opportunities in the low- and middle-income countries.
Creative views private sector engagement as a pathway for developing countries to accelerate their self-reliance and reach untapped potential in hard-to-reach environments. One of the greatest challenges in private sector engagement is identifying shared interests and aligning common objectives. Creative’s early and frequent engagement of the private sector are essential when trying to develop programs that are sustainable, scalable and replicable. Through upstream engagement and relationship building, public and private sectors can identify shared interests and common goals that form a solid basis for cooperation.
Creative is working with host country governments to create strong business-enabling environments and build effective institutions to attract investment for sustainable development. Societies with open markets and a robust rule of law foster freedom and security, allowing businesses to innovate and invest. Creative works closely with developing countries to improve the operating environment for businesses by building the institutions of a market economy, reducing barriers to doing business and promoting an inclusive entrepreneurial culture targeting geographic disparity, gender, vulnerable population, disadvantaged groups, youth and persons with disabilities, among others.
Moreover, Creative promotes effective public-private dialogue as a structured, participatory and inclusive approach to policymaking, geared toward improving the business climate and bolstering competitiveness. We believe creating a platform for engagement and connecting stakeholders will not only help businesses to grow but will result in collective action across sectors. Through collaboration with local businesses, Creative’s programs foster local ownership and increase the long-term chances of development initiatives’ success. We bring partners together to find ideas based on shared risk and shared reward, create long-term impact and scale up solutions.
Creative’s programs deliver a wide range of enterprise and entrepreneurship development activities for micro-, small- and medium-size firms whose success will contribute to increased competitiveness, economic stability and recovery. By working to develop inclusive market systems, our programs benefit marginalized people, including the very poor, women, vulnerable youth and other groups that are too often excluded from traditional economic networks. Together, these initiatives help to strengthen local economies and foster the resilience of communities and individuals to future shocks by supporting local capacity to compete in global markets.
Creative’s implementation with the private sector
West Africa: Creative is a prime contractor of the five-year $140 million trade and investment facilitation activity—USAID West Africa Trade and Investment Hub—that mobilizes new private capital for sustainable development results by engaging private sector at an early stage of co-investment partnerships This activity aims to leverage $96 million in co-investment grants to generate a minimum of $420 million in private capital, $300 million in exports and 60,000 jobs, half of which are for women.
The Trade Hub’s $2 million investible first-loss grant to Stichting Cordaid’s West African Bright Future Fund, complemented by a $14.75 million loan portfolio guarantee from the U.S. International Development Finance Corp. (DFC), serves as a prime example of deployment of de-risking tools to ease access to finance for small and medium-sized enterprises (SMEs) and microfinance institutions (MFIs) in fragile markets such as Burkina Faso, Guinea, Mali and Sierra Leone.
Creative is harnessing private sector expertise and innovations to enhance food security and support the sustainable development of agriculture in West Africa. Partnerships with the private sector to develop and introduce new technology, expertise and equipment provide Nigerian smallholder farmers with customized fertilizer blends adapted to local conditions and crop needs at commercial scale. They help countries achieve self-reliance, by enabling the private sector to take a central role in their own rural and agricultural development.
Asia: Creative is implementing a $12.5 million USAID-funded project in Asia to support sustainable livelihoods among low-income communities. Widespread illiteracy and language barriers, remote locations and social norms against women’s participation in paid labor and decision-making have long hindered the economic development of the target communities. The project strengthens market systems for the poor by engaging target communities as stakeholders, including suppliers of raw material suppliers and service providers, that were formerly marginalized in the formal economy, connecting them with urban and international markets through micro, small and medium enterprises (MSMEs).
Local capacity building and sustainability lie at the heart of Creative’s approach. Creative’s team develops diagnostic tools to assess the capacity of local communities and MSMEs and provide targeted technical assistance in areas including workforce training, business registration and formalization, quality control and product diversification, supply chain management, marketing and sales and access to external financing. To date, the Asia project has created nearly 3,000 new or better jobs, assisted over 750 businesses and successfully raised more than $2.3 million to support MSME growth.
COVID-19: During the pandemic, Creative deployed a wide range of online tools to continue to reach private sector partners and project stakeholders. For instance, Creative identified online key opinion leaders and facilitated B2B linkages that propels MSME sales during a turbulent period, which helped create resilient livelihoods for project beneficiaries. Creative’s in-house capability to design and deliver technical assistance in online trading has successfully brought dozens of MSMEs online and creating alternative sales channels.