- what we do

Cluster and value chain development

LIC works through targeted initiatives that identify and engage with private enterprises operating in strategic clusters and value chains. We facilitate cooperation among cluster actors with the aim to innovate and catalyse solutions that stimulate sustainable local economic development and trigger growth and productivity. Our objective is to identify the critical constrains, challenges and opportunities of local businesses and strengthen their horizontal and vertical linkages. Where weakness in these linkages is found, LIC explores measures to address these and the capacity of local support institutions to respond more effectively to local demand (e.g., providers of financial and business services).

The LIC cluster engagement is closely linked with the SIFF, which provides financial support to specific initiatives that enhance the performance of selected value chains. Together with the Small Industries Development Organisation (SIDO), LIC is also developing a workable model and guideline for cluster enhancement on region and district level. Our overall approach for cluster development is the M4P approach, which ensures that the interventions are aligned with poverty reduction and lasting benefits for the poor.

Overview of the selected value chains for each region

In Dodoma LIC works with horticulture, beef and hide, grapes, sunflower, poultry and mushrooms.
In Kigoma LIC works with cassava, palm oil, fisheries, sunflower and paddy.

Public Private Dialogues

LIC has since 2014 facilitated the establishment of District-level Public Private Dialogues (PPDs) through which business and Districts (through Local Government Authorities (LGAs) can agree on actions to be taken to create a more conducive business environment for growth and poverty reduction. The PPDs takes place at the District Business Councils (DBCs) at least two times each year in all Districts of Kigoma and Dodoma and through the biannual Regional Business Councils (RBCs). The platforms support the Districts and the business community to identify and prioritise the challenges it faces in the local business environment, and to establish a common understanding of how both the public and private sector can nurture the growth of the local economy in order to increase incomes and make private enterprises more competitive and sustainable. PPD through DBC has provided a common ground for the two sectors to settle amicably on critical constrains and fostered a trust-based relationship for the common good of the respective Districts and their citizens. Issues such as unpredictable hiking and introduction of new taxes and levies, engagement of private sector in by-laws formulation, allocation of land for investment and business etc. are examples of topics tabled at the PPDs.

One stop Business Centres (OsBCs)

As an effort to reduce the costs of compliance, time spent and the risks of register a formal business, LIC supports the creation of One-stop Business Centres (OsBC) within District, Municipal and Town councils of Dodoma and Kigoma regions. The heart of these initiatives is the creation of a single place where businesswomen and men have access to the information they need in order to comply with national and local laws and regulations, and take a big step towards becoming formal, sustainable and competitive entities. To ensure that services at OsBC are of required standards, LIC works with relevant Central Government Authorities such as TIC, TRA, TFDA, TBS and MKURABITA to simplify and improve the processes for business registration and licensing, thereby facilitating a smooth and swift formal business registration and licensing. The OsBC clients are local business communities and investors looking for new business opportunities.

In less than two years, the OsBCs managed to register more than 3,000 new businesses and reduced the registration time from 3-4 weeks to 1-3 days.

The OsBCs are located in proximity to the LGAs offices in Dodoma and Kigoma. An overview of the OsBCs location can be found here.

District Business Database

LIC supports the establishment of a local District Business Database (DBDB) in all district, municipal and town councils in both regions. The DBDB will allow LGAs to track the issuing of local business licenses and to generate a profile of the local business community that can be used to monitor and facilitate local private investment. It will also support information analysis for the preparation of LGA revenue collection improvement  strategies.

Local Business Environment Reform plan

As a major product of the PPD mechanisms LIC assists the LGAs in the formulation of Local Business Environment Reform (LBER) Plans. These plans focus on legal and regulatory factors that can be addressed at the district or regional level (e.g., trade licenses, other business licenses and permits), and include reform initiatives that can be undertaken by the District and Regional offices of the relevant Central Government MDAs (e.g., BRELA, TRA). The LBER Plans are an agreement between LGAs and the business community on a practical way forward for local reform efforts. LIC is supporting the LGA officials in implementation and monitoring of these plans.

SIFF Investments

LIC has established the Small Industrial Facilitation Fund (SIFF), designed to catalyse investments in local clusters and business facilities that boost productivity and unlock the flow of investments into the local economy. SIFF operates in accordance with the outcomes of local reforms, with targeted investments that can unlock critical constraints in local markets and value chains. The SIFF can be applied for by private and public entities such as an LGA, for facilities owned or operated  through Public Private Partnerships (PPPs). For larger projects that need external financial or technical assistance, the LIC and SIFF can team up with other organization such as UNCDF  and PASS to assist an applicant to develop a bankable business plan. The SIFF operates accordingly to operational guidelines and appraises the proposals before tabling these to a Projects Assessment Committee (PAC), who gathers four times a year. The investments will be awarded as matching grants to those who meet specified criteria, which include:

 

  • The demonstrable potential of the project to contribute to increased local income among poor households
  • The transformation of strategic local value chains and clusters
  • The formalisation of informal enterprises
  • The creation of more and better jobs
  • The sustainable use of local natural resources
  • Clear and commercially oriented management setup of the investment e.g. through a PPP
  • Solid understanding of scope, costs, risks and revenue potential
  • The sustainability and overall Value for Money of the investment
  • Present how funds from additional sources (e.g., private investors, public entities) will contribute to the investment

Who is eligible for SIFF investments?

The SIFF will provide funds in three broad categories, which are:

Challenges

SIFF support

1.  Improved local business facilities

In many cases, the lack of appropriate and fully functioning business facilities hinders the operations and growth of local businesses. Examples include local business stalls, business sites, cold storage, and business incubators.

The SIFF will provide matching grant funds to support PPPs that embark on the development of strategic business facilities.

2. Improved local business infrastructure

Improvements of public infrastructure, such as roads, energy and water supply, irrigation may boost productivity and growth of local businesses.

SIFF can support the development of market facilities, small scale irrigation or access to energy. On large-scale infrastructure projects beyond the scope of the fund e.g. projects with long timeframes of 7-15 years, the SIFF will fund technical assistance in the preparation of feasibility studies, BoQs and PPP proposals.

3. Local cluster enhancements

Selected clusters and value chains require investments that can enhance productivity and create opportunities for additional investment and participation of local businesses.

The SIFF can provide financial support to specific initiatives that enhance the performance of local clusters of the selected value chains. This may involve the removal of legal, regulatory or administrative bottlenecks and strategic investments to improve the functioning of value chains e.g. developing market linkages, promote new technology, green investments both at producer as well as processors level, new varieties of approved seeds, and demonstration plots.

 

How to apply for SIFF Investment - Concept note & application form

For further information or submission of SIFF applications, please contact siff@lic.co.tz