Volunteer Experts Assist Ethiopian Manufacturing Firms to Improve Productivity and Quality Control System
In May 2010, VEGA AGOA+ program brought in two Garment volunteer experts (VEs) to conduct a series of hands-on trainings designed to help small to medium scale garment factories boost their productivity and quality control system. The principle beneficiary companies included NovaStar Garment, Addis Garment, GMM Garment, Wossi Garment and Mulat Garment. The VEs spent two days in each selected factory, conducted a one day presentation and site visit with Nazareth Garment Factory 100 km outside Addis Ababa and held a wrap-up meeting at the Ethiopian Garment and Manufacturing Association (ETGAMA) to share experiences and lessons learned with all members.
The activity was developed in consultation with ETGAMA through comments and suggestions from the association and its members. Terms of Reference were jointly drafted to identify just the right VEGA/IESC experts. Garment VEs brought with them years of experience working in the garment sector for big name buyers including GAP, VFCOM, Banana Republic, and a plethora of Eastern European garment factories that supply the U.S. market. Care was also taken to target garment factories with ongoing export orders and experience that could fully take advantage of VE know-how. The participants were thrilled with the results. One factory manager summed up the immediate impact in his operation with one word –“magic.”
“Continuity is really to key factor in maintaining manufacturing quality and productivity,” noted one of the Garment VEs. Although investment in machinery and other productive tools, an important lesson learned from the VE visit was that significant productivity and quality improvement can also be realized with the materials on-hand. The activity provides an important example of how the expertise and experience of VEGA/IESC VEs can be an important tool that offers real solutions to business problems for firms in developing countries such as Ethiopia.
Expert Volunteer Assistance
The VEGA AGOA+ Program utilized IESC Volunteer Experts (VEs), Geek Corps Volunteers (GCVs) and professional consultants to impart business expertise and information technology (IT) skills to firms, government institutions and business membership organizations servicing the private sector. Over the life of the program, 18 VEs, of which six were Ethiopian Diaspora volunteers, completed 19 projects. An additional seven senior level experts, including two Ethiopian Diaspora, completed Short-term Technical Assistance (STTA) projects. Where appropriate, the VEGA AGOA+ strategy for its VE consultancies involves: (1) needs-based approach that responds to a specific business and/or organization problem identified by the beneficiary, (2) targeted expertise aimed to solve real problems that the beneficiary encounters on a daily basis and (3) utilization of VEs as a gateway to market products from the companies they support.
Examples of successful volunteer experts include:
- Training to local banking staff from Finance VE on basic credit analysis, risk management, financial statement analysis for SMEs, with a sector specific case study session dedicated to the agriculture section.
- Onsite assessment and training from Customs VE to the Ethiopian Revenue and Customs Authority (ERCA) on US entry requirements for GSP/AGOA privileges, international customs standards, and ways to increasing operational efficiency within in the Ethiopia customs system.
- Briefing from horticulture VE on how to prepare and what to expect at the Miami International Flower Show. Focus was placed on how to handle logistics and support during the show.
- Hands on training and mentoring visit to Muya Ethiopia Plc from handicraft VE that covered market-led product development and design for pottery handicrafts and tactics to penetrate new markets.
Program Background and Impact
The VEGA AGOA+ program was a six year program providing export capacity building and trade facilitation assistance with life of program funding totaling $3,424,278 U.S. dollars (USD).
Since the beginning, VEGA AGOA+ undertook three primary activities: (1) trade capacity building and export promotion, (2) institutional strengthening for Business Membership Organizations (BMOs) and government agencies and (3) promoting access to finance – first through investment finance from the Diaspora and later loan finance through USAID’s DCA loan guarantee program. Particular focus was placed on support to small and medium sized enterprises (SMEs), women entrepreneurs and Diaspora investors.
As a result, Ethiopia AGOA/GSP exports have increased from three million USD in the 2005 baseline year to 10.3 million USD in 2010. Based on sales estimates from AGOA trade show orders the total value of AGOA/GSP exports for the last half of 2011 will put Ethiopia at around USD $15 million. Even using more conservative figures for 2011, Ethiopia will have seen an increase of between than 400- 500% from the Program’s inception. Sales directly attributed to AGOA+ grew from a little over a million dollars in 2005 to 5 million USD in 2011, yielding a life of project total of USD $19.07 million. For every dollar spent, the USAID Mission saw $4.57 US in export trade generated from program activities.
VEGA AGOA+ also assisted 1,920 firms with advice, information and technical support, creating 5,668 new job opportunities linked to AGOA-related trade. The Program sponsored 21 different events to bring buyers from the textiles and apparel, leather, and handicrafts from the U.S. to explore market linkages with Ethiopian firms. In addition, 58 firms attended 21 different trade show and other business to business events as a result of program activities. This assistance has translated into 19 million USD in sales under AGOA, directly attributable to the Program.
The program provided USD 158,240 in volunteer donated services as cost share to the program, more than doubling the budgeted amount of USD 76,800. A total of 18 volunteers completed a total of 19 projects. Of the 18 volunteers, six (6) were Ethiopian Diaspora.
Finally, as a result of DDI activities and DCA loan guarantee, VEGA AGOA+ mobilized nearly USD 6.5 million in private finance through loans extended to 22 women and 36 Diaspora-owned businesses. The latter translated into approximately 1,053 new jobs. In addition, 223 firms received program assistance to improve their management practices through the facility’s proposals review, analysis and commenting process. Further, three trainings and technical assistance to 124 bank personnel was provided by VEGA AGOA+ to introduce new loan assessment techniques so that Diaspora and women entrepreneurs are viewed as distinctive clientele with a unique profile and methodology for underwriting loans.