U.S. program helps African entrepreneurs
Ronald Mutebi can now do in three months what might have taken him a year. With his $100,000 share of a grant to benefit Africa, the entrepreneur will soon be sending solar ovens to his native Uganda.
Mutebi obtained exclusive Ugandan rights to market the units from Illinois-based maker Sun Ovens International. His goal is to reduce the country’s dependence on wood and agricultural waste products for cooking fuel.
Mutebi was one of 14 African American entrepreneurs, selected from a group of 58 finalists and more than 700 applicants, awarded just under $1.4 million in total grants at last week’s inaugural African Diaspora Marketplace (ADM) in Washington, DC. The ADM is a joint public-private initiative on behalf of the United States Agency for International Development (USAID) and Western Union, aimed at boosting employment in sub-Saharan Africa.
According to USAID data, there are more than 1.4 million African immigrants in the United States, many of whom are entrepreneurs who operate small businesses in their native countries and send money back to their homelands. In 2008 an estimated $10 billion in remittance flowed back to sub-Saharan Africa from U.S.-based African diaspora members, according to USAID.
Anne McCarthy, Western Union’s Executive Vice President of Corporate Affairs, said the process was started 18 months ago after a conversation between her company and USAID. McCarthy said ADM was inspired by Western Union’s involvement in another collaboration – the “4 + 1″ program – with the Mexican government and U.S.-based Mexican migrant associations that provided joint funding to businesses that had “the best chance to create employment and economic growth in key areas.” McCarthy said it created a couple thousand jobs.
“The root cause driving migration is the need for jobs,” said McCarthy, who is also involved in Western Union’s “Our World, Our Family” initiative that provides $50 million to create economic opportunity and education around the world. McCarthy added the ADM was a product of “looking at something that was more than just providing aid, but was creating long-term, sustainable and profitable businesses that created employment.”
Mutebi, the founder of Chicago-based IT consulting firm Tek Consults Group, and the other entrepreneurs submitted detailed business plans for what their budgets would be over a three-year period, which included the level of employment their companies will achieve each year. They also included how much funding they would raise on their own, with the idea that ADM would match that amount in the form of a grant.
“They needed to apply for somewhere in the range of $50,000-$100,000,” said McCarthy, “because we’re not looking at micro enterprise, but small-to-medium-sized business enterprise.”
Ambessaw Assegued, a co-owner of Ethiopia-based Anfilo Specialty Coffee, was not among the winners, but was still able to get his business in front of potential investors. In addition to funding, Assegued said it’s crucial for Anfilo to be officially certified as an organic business, so they can charge more for their unique coffee beans. Assegued said Anfilo’s beans are grown in the shade, at the roots of trees in Ethiopia’s rain forests. He added that most coffee bean production requires sunlight, which has led to the clearing of parts of the rain forests.
By charging more for the beans, Assegued said they can better compensate the farmers who harvest them, which “is an incentive for them to improve the quality, to protect the forests and at the same time gain economic benefits from it.”