Private Sector Development- Integrating Local Content SMEs into Global Value Chains

The World Bank, the Norwegian Agency for Development Cooperation (NORAD), and ACET are collaborating on a program to support private sector development and growth in G20 Compact with Africa countries, starting with Ghana. The project is on the manufacturing sector, given the relevance of manufacturing to economic transformation and the industry’s ability to generate sustainable, explosive growth. To support this agenda in 2020, the ACET program will focus on three work streams: (1) promoting the development of sustainable export processing zones (SEPZ) aligned with Ghana’s industrial policy; (2) supporting local content through the integration of small- and medium-sized enterprises (SMEs) in the global supply chain and value-chains of large enterprises; and (3) supporting the integration of local SMEs in the promotion of SEPZ. Q4 2020 LC-SME Development – Value Chain and Product Space Analysis: Phase one of the study on Product Space Analysis was completed and submitted by the project consultant to the PSD team during the December workshop. The study through the analysis of the product space of Ghana has identified five valuechain/economic activities that have the potential to move local qualified firms more towards backward participation in the global value chain analysis. We also began a Value Chain Analysis of production processes across countries. The field work including interviews started this quarter. LC-SME Development – Coaching/ Mentorship Program: Profiles of proposed mentors and PSD expert advisors were completed this period. The review and final acceptance and signing by senior management is planned for Q1 2021. A lead consultant for SME Support and Technical Assistance coordination for the development of the SMEs has also been engaged. Technical Assistance Partnerships and Research Partnerships: We have recruited a Technical Delivery Partner for firm diagnosis/due diligence and finalizing the plan for development of capacity, systems and structure for SMEs. Engagement with pilot SMEs will start in January 2021 pending full selection of SMEs for the program. ACET has also signed an MOU with the M10 Society to provide technical assistance and expert support. M10 is currently working with our lead consultant on SME Support and Technical Assistance Coordination to pilot the process with one selected SME. Final discussions are ongoing for a research partnership with Cornell University Law School to provide an in-depth study into regulatory provisions on local content, export/economic processing zones and other relevant regulations and their implications. The study will benchmark best practices and lessons from other jurisdictions to engage government and other stakeholders in discussions on policy improvements. The International Senior Lawyers Project (ISLP) has offered to provide expert review on the studies. SME Fund (New) One of the key outputs of the strategy retreat in Q3, was the development of an SME Fund to support SMEs and ensure long term sustainability of the fund. ACET is developing a concept note which expands on two main components of the fund - Technical Assistance and Impact Investment. M10 has been engaged to draft the Fund Thesis to be used to set up the Fund. Q1 2021 (1) Value Chain and Product Space Analysis: Following completion of the Product Space Analysis of the Ghanaian manufacturing sector in 2020, ACET continued with the Value Chain Analysis of production processes. The draft report is in progress. (2) SME Landscape Assessment: A brief assessment of Ghana’s SME landscape was developed to identify constraints to growth, their potential for job creation and assess the types of support available in the ecosystem. The draft report has been prepared and undergoing a final phase of editing. (3) LC-SME Development – Coaching/ Mentorship Program: The SME Mentorship program has been further defined into two sub-programs: • Business Incubator: The Incubator focuses on researching, developing and operationalizing business plans for new products/services to grow SMEs. The program seeks to develop 10 business plans around products and services, some of which will be chosen for scale up. • Business Accelerator: This program will target 10 companies to go through a series of management and technical interventions/support systems aimed at building capacity and investment readiness. We are targeting a higher percentage of brownfield companies, however some greenfield companies working in sustainable sectors such green energy and environment will be also given the opportunity to go through our accelerator programs. To-date the team has identified 28 potential companies and is planning an official launch to accept applications from a wider pool of companies in Q2. Ten companies will be selected to participate in the program. • Currently the team is in the process of procuring a program management firm and a management advisory firm to assist in the diagnostics, advisory and technical assistance of selected firms. SMEs will also have access to seasoned captains of industry and influencers in to inspire, challenge and help open doors for the SMEs in their growth journey. Identification of these mentors has begun. Q2 2021 (1) Value Chain and Product Space Analysis: The value chain analysis has been completed. Editing of the report is ongoing and will be published in the next quarter. The outcome of the study has informed the selection of SMEs under the LC-SME Development. (2) SME Landscape Assessment: The final editing of the draft landscape assessment report continued this quarter. The report examines Ghana’s SME landscape, its growth constraints, job creation potentials and the support mechanisms available in the ecosystem. (3) LC-SME Development – Coaching/ Mentorship Program: Between April and June 2021, the ACET Business Transform Program, which incorporates the Accelerator and Incubator components for SME development in Ghana was designed. We again developed the Investment Readiness Certification Framework (a module that assesses SME ‘s for their investment preparedness). The progress report on the framework has been reviewed. The SME Mentorship program, now the ACET Business Transform program has been further defined into two sub-programs: • Business Incubator: The Incubator focuses on researching, developing and operationalizing business plans for new products/services to grow SMEs. The program seeks to develop 10 business plans around products and services, some of which will be chosen for scale up. In Q2, the project team initiated the development of new businesses component. Recruitment is underway for Technical Delivery Partners to support with incubation management. Contracting is expected to be finalized and signed by close of July. Sector and product identification and Business Ideation has commenced. Q3 2021 ACET Business Transform (ABT) Program The Technical Delivery Partner for Coaching and Mentorship program has been identified and contract negotiations are on-going. Accelerator Component –. Key achievements this quarter includes: • The final selection of 10 firms (MaxtaChem, Bond Roofing Systems, Melach, Solar Taxi, Sky-3 Investments, Saliscom, Home Foods, Nelplast, Groital, Skylink) from the agriculture, agri-processing, cosmetics, technology, and light manufacturing sectors. • ABT Orientation session for representatives from the 10 selected firms held on 16th September 2021 at Peduase Valley Resort. The objective of the workshop was to onboard SMEs that have been admitted into the first cohort of the program. • The successful selection of eminent members of the mentorship program for the accelerator. Incubator Component – Development of New Businesses Component has been initiated. • EVC Africa has been selected as Technical Delivery partner. Contracting has been finalized. • 10 opportunity profiles were presented to PwC for development into business plans. 1st drafts of six of the business plans have been received. All 10 business plans will be finalized before end of November. • Setting up of an Incubator Hub and a co-working space has commenced. PwC is currently undertaking a diagnosis and gap analysis on all firms, coupled with site visits and comprehensive due diligence activities. The diagnosis report is expected by early-November. PwC has also completed the review of the Investment Readiness Certification Framework report (a module that assesses SME ‘s for their investment preparedness). The report is currently being revised by ACET ACET programs launching the ACET Business Transform program on 8th November at Labadi Beach Hotel, Accra. Official Commissioning of ACET Business Transform Incubation Hub and Co-working is Space expected by mid- November 2021. Q4 2021 LC-SME Development - Value Chain and Product Space Analysis The study reports for the product space and the value chain analysis have been completed. Results from the studies informed the selection of SMEs under the LC-SME Development program. ACET Business Transform (ABT) Program The Technical Delivery Partner for Coaching and Mentorship program has been identified and contract negotiations completed. Accelerator Component Following the successful selection of 10 firms and the orientation session on 16th September, PwC during the 4th quarter continued with the diagnosis and gap analysis on the firms. The draft diagnosis report has been finalized. The ACET Business Transform program was launched on 8th November 2021. Incubator Component – The development of the New Businesses component continued this period. In Q4, PwC developed 10 business plans from the opportunity profiles presented to them by ACET during the 3rd quarter.