African Development Foundation on Chopping Block, 06/30/'95

Washington Office on Africa Update June 30, 1995

With a $16.9 million budget for Fiscal Year (FY) 1995 and $17.4 million proposed by the Clinton administration for FY 1996, the federally funded African Development Foundation (ADF) is a small, innovative and effective agency with an distinct mandate to support grassroots development. But if the direction set by votes so far this year in the House of Representatives is maintained, the ADF will suffer drastic cuts over the next two years, and be phased out entirely in FY 1988.

The appropriations bill passed by the House of Representatives last week (HR 1868) includes $10 million for ADF in FY1996, a 41 percent cut from this year's budget. The authorization bill passed earlier by the House (HR1561) further specifies a cut to $4 million in FY 1997.

The Senate will be considering parallel action in July and August, possibly continuing into September.

The ADF has just published the results of a ten-year assessment of its operations, entitled Sustaining Development at the Grassroots: The African Development Foundation, Lessons Learned 1984-1994. It is available frm the ADF at 1400 I St. NW, 10th Floor, Washington, DC 20005. Phone: 202-673-3916. Fax: 202-673-3810.

The text of a companion summary released by the ADF follows below:

ADF FOSTERS SUSTAINABLE ECONOMIC GROWTH THROUGH DIRECT AID TO THE GRASSROOTS

Congress, recognizing the need to establish a small, flexible agency to provide development assistance directly to grassroots communities in Africa, created the African Development Foundation (ADF) as an enterprising, value-added alternative to traditional assistance programs.

Where traditional development agencies typically provide assistance to central governments to carry out large capital-intensive projects, ADF works directly with grassroots people to reduce poverty and effect positive social change through small, local, private sector development projects that deliver lasting benefits long after ADF ceases its involvement.

Since FY 1984, ADF has funded more than 500 small-scale, private-sector development projects in 26 African nations. Many of these projects have served as laboratories for innovative, cost-effective approaches to development-- testing strategies to maximize sustainability, local control, and capacity building--that often have been adopted by other development agencies.

Employing a participatory, "bottom-up" approach to economic development, ADF supports African grassroots recipients:
* In their own efforts,
* To design and implement their own strategies,
* To resolve their own problems, and
* To promote their own economic progress.

Consequently, ADF-funded projects focus on inducing lasting, self-sufficient economic and social outcomes.

Today, with a modest annual budget of $16.9 million, ADF continues to successfully fulfill its Congressional mandate. By focusing on achieving attainable goals in countries most likely to benefit from U.S. development assistance, ADF concentrates on alleviating poverty and creating durable, small- scale, market economies in desperately poor, mostly rural areas of Africa where no such economies previously existed.

In short, ADF demonstrates appropriate and responsible use of limited foreign assistance dollars that helps promote a U.S. foreign policy committed to promoting democratic participation, self-sufficiency, and income generation.

TYPES OF PROJECTS FUNDED BY ADF

ADF responds to project proposals designed by grassroots African community organizations, providing grants to local cooperatives, farmers' associations, youth organizations, community service associations, women's groups, and others in the local private sector.

Because of the small size and non-bureaucratic, non-governmental nature of ADF-funded projects, the U.S. government can readily see where and how its money is being put to good use.

ADF primarily supports income-generating projects in five areas:
* Micro-enterprise development,
* Agriculture and animal husbandry,
* Credit,
* Irrigation and water supply, and
* Energy and the environment.

By law, ADF cannot fund any of the above activities for an amount greater than $250,000.

WHAT ADF DOES NOT FUND
* Government organizations
* Organizations not based on the African continent
* Capital intensive projects that emphasize large-scale
building and construction
* Relief activities
* Development grants for private individuals
* Major infrastructure projects; and
* Scholarships.

AFRICANS WORKING TO HELP AFRICANS

Unlike traditional development agencies, ADF does *not* incur the expense of maintaining expatriate staff in the field. Instead, supporting ADF grantees are Country Liaison Officers (CLOs).

In each country, the CLO is a highly trained and experienced African development specialist, who works directly with, and for, grantees and potential grantees.

The CLO assists grantees and potential grantees in:
* Drafting project proposals;
* Identifying competent technical assistance providers among local development experts and organizations;
* Obtaining any available assistance from their own governments; and
* Monitoring projects.

In short, each CLO is a cost-effective, value-added liaison between private-sector grantees and ADF, helping to insure that U.S. dollars are being used wisely and providing maximum benefits for grantees.

WHY ADF IS A UNIQUE ALTERNATIVE TO TRADITIONAL FOREIGN AID

ADF provides assistance directly to the private sector-- local cooperatives, farmers' associations, youth organizations, community service organizations, women's groups, and similar organizations--not to governments or state-owned enterprises.

ADF grants range from $700 to a maximum of $250,000; average FY 1994 development grant, $124,000.

Every ADF project must have an income-generating component to foster long-term viability of the project.

Instead of funding national, capital-intensive projects, ADF supports small, limited projects that directly address the specific needs of local peoples in their communities.

Rather than incur the expense of supporting expatriates abroad, ADF keeps project costs down by employing highly trained and experienced African development specialists.

ADF SEEKS EVEN GREATER EFFICIENCY AS A STEWARD OF SCARCE U.S. FOREIGN AID $$$

In October, 1993--prior to Vice-President Gore's call for a National Performance Review and before the 104th Congress set forth its new priorities for U.S. foreign aid--ADF launched a self-initiated ten- year self-assessment.

To maximize objectivity, the evaluation was conducted by an "Assessment Review Committee" composed of Congressional staff, academicians, and representatives from the Office of Management and Budget (OMB), the General Accounting Office (GAO), and Office of Technology Assessment (OTA).

ADF's principal reasons for undertaking this assessment were to:
* Evaluate the broad impact of its programs;
* Determine which aspects of its programs and procedures work best;
* Systematically document and share its "lessons
learned."

The Committee oversaw the review of more than 200 ADF grants and found that the vast majority of ADF projects were meeting their stated goals and objectives. The assessment found that ADF's program is working well and documented that: * More than two-thirds of ADF projects produce increased income and/or needed services for participants.
* More than half of ADF projects increase the skills and knowledge of participants through training and technical assistance.

For the vast majority of ADF projects, participants are actively involved in implementation of project activities.

Most ADF projects produce sufficient income and possess management capabilities to continue to produce benefits for participants long after ADF funding has ended.

In addition, ADF contracted with an international management consulting firm to explore ways ADF can streamline its operations, both at ADF/Washington and in the field.

As a result, ADF's board of directors has established the following goals for the Foundation:
* Reduce the number of active countries to which ADF extends grants by at least 20 percent in FY 1996.
* Reduce the number of employees at ADF by at least 17 percent in FY 1996.
* Reduce ADF's overhead expenses by at least 16 percent in FY 1997.

Since 1984, ADF's goal has been to continuously improve its operations to maximize the benefit of limited dollars available for U.S. foreign aid. And it will continue to do so.

A TYPICAL RURAL ADF-FUNDED PROJECT

The Kalijiisa Blacksmith and Farmers Association Project typifies a rural ADF-funded project.

Location: Kalijiisa, a remote village in the Upper East Region of Ghana, 725 miles north of Accra, Ghana's capital

Grant recipient: Kalijiisa Blacksmiths and Farmers Association (membership: 78 men; 50 women).

Project funded: In 1990, ADF granted the cooperative $148,000 to:
* Build and equip a workshop
* Begin a reforestation program
* Increase agricultural production
* Purchase a grinding mill

In 1993, an additional $81,000 was granted for:
* Purchasing a tractor
* Building a storage facility for farm produce
* Building classrooms

Results: Four years after the original ADF funding:
* Kalijiisa is the region's top cultivator of rice.
* 800 trees have been planted.
* Local children and adults are receiving literacy training.
* Ten additional townsmen have been trained as
blacksmiths.

* In addition to hoes and plows, blacksmiths now produce cooking pots, bicycle carts, and iron furniture.

* Using their earnings as capital, cooperative has expanded into a chain of small retail outlets.

* Last year, the cooperative earned more than $10,000, an enormous sum of money for the region.

Today, Kalijiisa's quality products are in high demand in northern Ghana.

The capital provided by ADF helped this group turn a traditional activity into a thriving business.

A TYPICAL URBAN ADF-FUNDED PROJECT

The Spring Cabinet Furniture Manufacturing Project typifies an urban ADF-funded project.

Location: Harare, the capital of Zimbabwe

Grant Recipient: Spring Cabinet Cooperative Society, Ltd. (original membership: 10 men)

Project Funded: In 1987, ADF granted the cooperative $217,035 to:

* Provide low-cost, quality wood furniture for consumers

* Employ craftspeople and provide vocational training opportunities for recent school graduates

* Purchase machinery, tools, timber for furniture making

In 1989, an additional $25,542 was granted for the purchase of a sawdust exhaust system.

Results: Eight years after the original ADF funding:

* Spring Cabinet was named Zimbabwe's 1993 Small Business of the year.

* Earnings have risen dramatically, from nearly $700,000 in 1992 to more than $1 million in 1994.

* Profits have been reinvested, qualifying Spring Cabinet for an overdraft credit line with a local commercial bank.

* Spring Cabinet's payroll has risen from 10 to 178 employees; and with the construction of an expanded facility, the group continues to expand its operations.

Today, Spring Cabinet produces dressers, bedroom suites, dining room suites, and cabinets from locally available wood. It also imports fabric and oak from the United States. Originally targetting its products for low-income consumers, Spring Cabinet's quality furniture is now purchased by upper-income consumers, government offices, and private business.

ADF's minimal investment provided the necessary start-up capital for this group to become one of Zimbabwe's major furniture suppliers.

ADF AT A GLANCE

Created by U.S. Congress, 1980; began assistance to African grassroots organizations, 1984.

Current annual budget, $16.9 million.

Makes grants directly to local private sector organizations, not through governments or state-owned enterprises.

Overseen by seven-member Board of Directors: five uncompensated members from the private sector, appointed by President of the United States with advice and consent of U.S. Senate.

Mission:
* Provide support to small, private sector development efforts;
* Support long-term local development strategies;
* Support research on grassroots development issues by African researchers working directly with local peoples; and
* Facilitate dissemination of development information at community level throughout Africa.

Since 1984, ADF has funded 415 development projects and 123 research projects in 34 African counties. Average FY 1994 development grant: $124,000. Average FY 1994 research grant: $25,000.

Generally, development projects involve from 10 to 2,000 participants, with up to 10,000 beneficiaries for largest, most comprehensive local or regional undertakings.

ADF supports small, limited projects that directly address the specific needs of local peoples in their communities.

Because of the non-bureaucratic, non-governmental nature of ADF-funded projects, the U.S. government can readily see how its money is being put to good use.

ADF supports U.S. foreign policy by fostering sustainable economic growth through direct aid to the grassroots.

Message-Id: 199507011541.IAA14506@igc3.igc.apc.org
From: "Washington Office on Africa" woa@igc.apc.org
Date: Sat, 1 Jul 1995 11:35:50 +0000
Subject: African Development Foundation on Chopping Block

Editor: Ali B. Ali-Dinar

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