Despite the problems it currently faces from security threats, domestic grievances, climate change, irregular migration and a host of other interlinked challenges, Burkina Faso is not a failed state. As part of its efforts to keep the West African nation on a democratic pathway and reduce instability, Denmark has committed to support economic growth and create job opportunities, with an emphasis on youth and inclusive growth.
Burkina Faso’s economy is mainly driven by the agriculture and mining sectors, and the regional demand for the country’s agricultural products is rising due to high urbanisation rates. Yet productivity in the agri-sector is low and its contribution to GDP is modest. Targeting the primary employment-generating sector, Danida has been funding the Agricultural Economic Growth Programme (PCESA) since 2013. In its second phase, which began in 2018, the goal has been to increase productivity and added value of agricultural incomes in order to contribute to job creation and national economic growth.
PCESA is split into two components:
- Component A: improved access for agri-businesses to advisory support and financing of activities.
- Component B: Optimisation of appropriate framework conditions in terms of strategies, policies, legislation and regulatory tools and the availability of public structuring infrastructure.
NIRAS is responsible for the overall management of the PCESA Agri-business Fund, worth around €6.8 million, which funds companies – as long as they can chip in their own contribution – and provides advisory and business consulting support to facilitate further access to finance from banks and investors. Agro-industries from all regions and value chains, except cotton, are eligible for support.
Due to their importance in a country where water is scare and climate change is a crucial challenge, green technologies and innovations are targeted with a separate Green Investment Fund of almost €1.3 million.
Support is available for a variety of purposes such as how to organise production, technical training in production or quality standards, processing, collection and packaging equipment, or financing of economic players.
Relying heavily on those who facilitate access to finance – private companies, financial experts, investment funds, banks, NGOs and the like – the project team identifies potential agri-business fund beneficiaries. In an exploratory phase, the team considers how the firm’s capacities could be strengthened and what business opportunities might be promising. They then work with the beneficiary to develop a commercial strategy and help them prepare for the credit or investment agreement by supporting with a marketing study, business plan development, and training in accounting, inventory management, personnel management, and quality control.
Implemented by two banks and a guarantee fund, after the credit has been approved, the beneficiary receives continued support in applying the funds, for example in choosing equipment, revamping industrial processes, introducing new standards, or working with subcontractors.
Although not in itself a target of PCESA, those who facilitate access to finance (“facilitateurs”) receive support in the form of training and advisory services or market studies, for example, to ensure a critical mass of business and professional facilitators can continue to support operators when the programmes comes to an end.
To learn more about this programme