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Employment creation through Private Sector Development GIZ Malawi
- 1. Seite 1 Implemented by Before we start – Please follow the following steps: Step 1 Make sure you have internet connection on your smartphone/laptop Step 2 Browse https://www.sli.do/ Step 3 Step 4 Answer the question: What percentage of the Malawian workforce is employed in agriculture? Type event code BBLGIZ here (no hash #) Click ‘Join’
- 2. Seite 2 Implemented by Brown Bag Lunch: Employment creation through private sector development GIZ Malawi CO - 25 June 2018
- 3. Seite 3 Implemented by Agenda Agenda 1. Employment trends in Malawi - Andrés Mella, DA MIERA Program 2. BMZ/GIZ approaches to employment creation through private sector development - Valeska Grob, Jr.TA Sector Project Private Sector Cooperation 3. GIAE and MIERA approaches to employment creation - Tymon Mphaka, PO GIAE and Andrés Mella, DA MIERA
- 4. Seite 4 Implemented by 81% 19% EXPORT EARNINGS Agriculture Others 42% 58% GDP Agriculture Others Provides direct employment in cultivation and harvesting in • plantations, • commercial estates, • horticulture and • primary agricultural processing, Including small-holder farming, where there are significant amounts of unpaid family labour as well as highly irregular casual labour (ganyu) The Agriculture Sector 1. Employment trends in Malawi
- 5. Seite 5 Implemented byImplemented by Workforce distribution by sector in Malawi (2017) Agriculture (84.78%) Manufacturing (7.74%) Wholesale (2.74%) Education (1.38%) Services (1.23%) Construction (0.62%) Public Admin. (0.50%) Transportation (0.38%) Human Health (0.32%) Others (0.31%) 1. Employment trends in Malawi
- 6. Seite 6 Implemented by 1. Employment trends in Malawi Implemented by Lack of Structural Change Inter-sectoral change is obtained by the better allocation of resources between sectors. Intra-sectoral growth is obtained by better allocation of resources (such as labour and capital) among given sectors.
- 7. Seite 7 Implemented by Has this always been the same? …. …. Will it be the same the same in the coming years? Gap minder graph 1. Employment trends in Malawi
- 8. Seite 8 Implemented by 1. Employment trends in Malawi Implemented by Gender Distribution of Workforce in the agriculture sector
- 9. Seite 9 Implemented byImplemented by Employment and working conditions in Malawi 1. Employment trends in Malawi Relatively low unemployment: 6- 7% Increasing youth unemployment: 9% Very low productivity - Underemployment High informality Child labour Forced/bonded labour Low skills development and increasing skills mismatch Gender inequality –Sexual harrassment Occupational Health and Safety
- 10. Seite 11 Implemented by Private Sector is indispensable to achieve the SDGs 2. BMZ/GIZ approaches to employment creation through private sector development „Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all“
- 11. Seite 12 Implemented by The German answer: A Marshall Plan with Africa 2. BMZ/GIZ approaches to employment creation through private sector development
- 12. Seite 13 Implemented by 2. BMZ/GIZ approaches to employment creation through private sector development
- 13. Seite 14 Implemented by Reorganisation of BMZ in May 2018 2. BMZ/GIZ approaches to employment creation through private sector development
- 14. Seite 15 Implemented by 2. BMZ/GIZ approaches to employment creation through private sector development
- 15. Seite 16 Implemented by Employment effects of PSP instruments 2. BMZ/GIZ approaches to employment creation through private sector development Increase labour productivity Access to non- financial business services Development of clusters and VCs Local and regional economic development Promotion of innovation and technology Promotion of economic organisations Promotion of start-ups Improved climate for business and investment
- 16. Seite 17 Implemented by 3. MIERA and GIAE approaches to employment creation Implemented by More Income and Employment in Rural Areas (KULIMA - MIERA) • Funded by EU-KULIMA component and BMZ • Budget 17 Million EUR (10M BMZ and 7M EU) • Funding Period 02/2015 – 01/2019 (extension foreseen) • Funded by European Union KULIMA component and BMZ (German Government) • Attached to the Ministry of Industry, Trade and Tourism • Aligned to the National Export Strategy
- 17. Seite 18 Implemented byImplemented by The MIERA Approach on Job Creation The MIERA programme seeks to increase employment and accelerate structural change through a value chain approach within the agricultural sector as well as in two non-agricultural value chains (tourism and eco- friendly construction materials) focusing on the promotion of inclusive business models. 3. MIERA and GIAE approaches to employment creation
- 18. Seite 19 Implemented by Strengthening inclusive business models and service provision Farmer Organisation (club, association, cooperative…) Agro-industrial Company (value addition, marketing) Export Markets Domestic Markets MSME farmer Strengthening of farmer organisations and MSME FBS FO CYCLE farmer MSME Loop Marketing opportunities Extension messages Access to inputs Contract Farming Rural Service Providers (warehousing, marketing) farmer The MIERA Approach to job creation 3. MIERA and GIAE approaches to employment creation
- 19. Seite 20 Implemented by • Budget 10,5 Mio. EUR • Funding Period is 11/2014 – 09/2021 • Part of the special initiative ‘One World, No Hunger’ of the German Federal Ministry for Economic Cooperation and Development (BMZ). • Funded by BMZ with Co-Funding from EU for KULIMA component. • Attached to the Ministry of Industry, Trade and Tourism • Aligned to National Agriculture Policy, National Export Strategy “Green Innovation Centres for the Agriculture and Food Sector (GIAE) 3. MIERA and GIAE approaches to employment creation
- 20. Seite 21 Implemented by GIAE Approach Enabling smallholder farms Enabling upstream and downstream enterprises Strengthening the advocacy groups Strengthening transnational exchange between value-chain stakeholders Income and Employment 3. MIERA and GIAE approaches to employment creation
- 21. Seite 22 Implemented by GIAE Objectives Disseminate demand-oriented innovations to sustainably: Smallholder Farmers (45.000) MSMEs Increase Gross Margins Create 600 Jobs Increase Productivity Increase Revenues Enhance Food Security 3. MIERA and GIAE approaches to employment creation
- 22. Seite 23 Implemented byImplemented by Main Instruments and Approaches Used by GIZ for Capacity Development Type of Business/ Organization Instruments Smallholders 1. FBS (Farmer Business School) Farmer Organizations 2. FO Cycle (Farmer Organization Business Training and Coaching Loop) Micro, Small and Medium Enterprises (MSME) 3. MSME Loop (Business Training and Coaching Loop for MSME) 3. MIERA and GIAE approaches to employment creation
- 23. Seite 24 Implemented by MSME Business Loop Assessment & Selection First Training Coaching 1 Second Training Coaching 2 Access to Finance SME Loop Graduation Ceremony (Coaching 3) 1) Assessment & Selection 2) First Training (3 days) 3) Coaching Phase 1 (2 months) 4) Second Training (3 days) 5) Coaching Phase 2 (3 months) 6) Graduation Ceremony (1 day) 7) Coaching Phase 3 (4 coaching vouchers) The time span for the implementation of one SME Loop cycle amounts to six-nine months 3. MIERA and GIAE approaches to employment creation
- 24. Seite 25 Implemented by Value Chains Supported: Tourism Eco-friendly construction Groundnut Sunflower Soybean Cassava Rice Chillies Paprika Macadamia More Income and Employment in Rural Areas of Malawi (MIERA) Green Innovation Centres for the Agriculture and Food Sector (GIAE) Groundnut Soybean Cassava Input suppliers Producers Traders Processors Retailers 3. MIERA and GIAE approaches to employment creation
- 25. Seite 26 Implemented by Präsentationstitel hier eintragen28.06.2018 QUESTIONS!
Editor's Notes
- The agriculture sector currently represents about 42 percent of GDP and 81 percent of export earnings in Malawi. Agriculture provides direct employment in cultivation and harvesting in plantations, commercial estates, horticulture and primary agricultural processing, as distinct from small-holder farming, where there are significant amounts of unpaid family labour as well as highly irregular casual labour (ganyu http://www.fao.org/docrep/005/y4632e/y4632e0n.htm In 2017, agriculture, forestry and fishing together accounted for around 6.4 million (part time and full time) jobs constituting an estimated 84.7 percent of total employment in the country (7.5 M)
- Source: ILO (2017), ILOSTAT, nov 2017 projections. Figure 1: Workforce distribution by sector in Malawi (2017)
- Past and current projections of employment growth reveal that the distribution of employment between sectors has effectively not changed. Structural change theory describes how economic growth can be achieved through two phenomena: intra-sectoral change and inter-sectoral change. Intra-sectoral growth is obtained by better allocation of resources (such as labour and capital) among given sectors, Inter-sectoral change is obtained by the better allocation of resources between sectors. The Malawian economy has grown through intra-sectoral gains, but not through inter-sectoral change.
- Often overlooked, female employment constitutes approximately half of the workforce in the agriculture sector at 50.3 percent. This is slightly higher than the country average of 47.5 percent. Women perform most of the most strenuous and hard tasks linked to production, while men take part in activities with higher value addition, such as processing, trading and marketing of the produce. The majority of women are in irregular and casual forms of employment, and often face discrimination and harassment.
- Strong growth: >5% Dependent on a narrow range of resource-based activities High population growth is threat to Malawian development Land pressure and demand jor jobs in rural and urban areas is increasing
- Casual wage workers : Ganyus
- It is now broadly accepted that the private sector has a critical role to play in achieving the SDGs. It is an engine of economic growth and job creation in developing countries. The world requires over US$1 trillion annually to meet the 17 SDGs by 2030. The private sector, has a key role to play in mobilizing resources. (https://www.scidev.net/asia-pacific/funding/news/private-sector-key-to-sustainable-development-goals.html) Productive employment and decent work are essential elements of sustainable development. This fact is reflected in Goal 8 of the Sustainable Development Goals (SDGs) of Agenda 2030: “Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.” The private sector will thus have a major influence on the implementation of SDG 8 on “decent work and economic growth”. The United Nations Conference on Trade and Development (UNCTAD) says achieving the Sustainable Development Goals (SDGs) will take between US$5 to $7 trillion, with an investment gap in developing countries of about $2.5 trillion. At the same time, the most recent OECD DAC report shows that in 2016 the total official development assistance reached a peak of $142.6 billion, which is one order of magnitude smaller than the needs.
- The Marshall Plan is supposed to initiate a change in paradigm in german development coperation. These are the main targets of the Marshall Plan with Africa (published in january 2017) : - Improving framework conditions for a good investment climate - Promote foreign economy - Strengthening fair trade - Improving european and international cooperation for Africa Put more emphasis on vocational training More than 50 million young people have a precarious employment. Youth unemployment reaches up to 50 percent. (Quelle: OECD, 2016). Africa needs about 20 million jobs every year (Quelle: IWF, 2016). How can PSP contribute to master these challenges? AFRICA GERMANY INTERNATIONAL
- Marshall Plan should serve as an impulse for discussion and it‘s a new dimension of collaboration 3 pillars: private sector, peace and security, democracy/rule of law Core idea of the Marshall Plan: promote political reforms, leverage investments, fair global regulatory framework Afrika is not just a continent in crises, but also of market and workforce potential. Development cooperation is not only alleviating poverty, but rather promoting economic development. From subsidy to investment! - Employment creation plays a significant role for the first pillar.
- After the german elections in Sept. 2017 and the new (partly old) government taking over, the BMZ has been reorganised. The aim was to reflect the current political development strategy in the organisation of the ministry. In the framework of this reorganisation, the Marshall Plan with Africa and subsequently „employment promotion“ gained a lot of importance. Different units were put together in a new subdivision named „Economy, Employment and Trade“. New initiatives for job creation are planned e.g. 1 million jobs should be created through job partnerships in selected countries in Africa
- Integrated approach of German development cooperation on employment promotion: In order to increase the employment effectiveness of German TC, measures of Private Sector Development, active labor market policy and and vocational education and training should be meaningfully integrated. Thus labor supply and labor demand side as well as consultation and mediation can complement each other meaningfully. Private sector promotion: More formal jobs Rise in productivity in traditional sectors Public employment programs
- The German government through BMZ has commissioned GIZ to implement a bilateral project in the new focal area ‘Private Sector Development in Rural Areas’: More Income and Employment in Rural Areas (MIERA) in Malawi. It’s a Bilateral program with cofunding.
- The MIERA approach -The MIERA programme seeks to increase employment and accelerate structural change through a value chain approach within the agricultural sector as well as in two non-agricultural value chains (tourism and eco-friendly construction materials) focusing on the promotion of inclusive business models. -Specifically, MIERA intends to incorporate smallholder farmers and MSMEs into more formalised and direct business relationships with the private sector supporting models such as contract farming and structured trade, while at the same time improving the service package for farmers and MSMEs and directly empowering the target groups as business partners through training them in farm economics, financial literacy and business planning and management. Deeper integration into value chains can in turn help farmers and MSMEs obtain higher profits and participate in better downstream value addition activities, thus improving their income and eventually their livelihoods.
- The three intervention areas of the MIERA program are highly interrelated and tackle identified challenges from various angles with the aim of ensuring more integrated and inclusive value chains. The program works both “top-down”, departing from lead companies (promoting stronger cooperation, business linkages, structured markets and IBM between stakeholders, and “bottom up”, strengthening producers and MSMEs as business entities in the value chains. It also promotes the improvement in the service package for MSME and smallholders in the selected value chains. Directly empowering the target groups as business partners through training them in farm economics, financial literacy business planning and management -Specifically, MIERA intends to incorporate smallholder farmers and MSMEs into more formalised and direct business relationships with the private sector supporting models such as contract farming and structured trade, while at the same time improving the service package for farmers and MSMEs and directly empowering the target groups as business partners through training them in farm economics, financial literacy and business planning and management. Deeper integration into value chains can in turn help farmers and MSMEs obtain higher profits and participate in better downstream value addition activities, thus improving their income and eventually their livelihoods.