Delivery of Business Advisory Services to portfolio agri-SMEs of the African Agricultural Capital Fund

Agri SMEs
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Situation

The African Agricultural Capital Fund (AACF) conducted thorough pre- and post-investment business capacity assessments that highlighted the critical need for strategic, operational, managerial, and corporate governance assistance for its portfolio companies across Kenya, Malawi, Rwanda, Tanzania, and Uganda. These companies engaged in diverse agricultural industries—including dairy processing, fresh fruit and vegetable exports, flower exports, potato processing, poultry (day-old chicks, layers, broiler grow-out, and processing), primary agriculture (coffee, macadamia nuts, oilseeds, and broadacre staple food crops)—required urgent support to enhance their business systems, improve the execution of business plans, and professionalize their operations for sustainable and profitable growth. The successful implementation of these business advisory services was made possible through a generous $1.5 million grant from the USAID/Uganda Agribusiness Development Facility.

Industries
Business Advisory Services
Implementation Services
Agribusiness & Food Systems
Finance & Investment
Capital Raising & Impact Investing
Engagement

Many portfolio businesses were at the cusp of making the often difficult but necessary transition from informal family entities to corporate structures. To support this transition, ORI supplied demand-led business advisory services, using our DDI methodology -- "diagnose," "design," and "implement". This entailed a structured participatory approach to capacity gap identification and prioritization, followed by the design and development of capability building materials for addressing the gaps and implementing business advisory services to improve business performance.

ORI helped build the capacity of AACF’s portfolio companies by:

  • First, in close collaboration with the companies' senior leadership and Boards, conducting detailed business advisory needs analysis and capacity gaps assessments, building on business plan projections, potential industry opportunity, and talent and systems/processes requirements.
  • Second, analyzing the data to arrive at a full list of capacity needs. In consultation with the businesses, we prioritized the most critical capabilities for technical assistance support. The business advisory services areas where most agri-SMEs require help include financial management, business planning, marketing, corporate governance and risk management, and talent management.
  • Third, designing solutions to address operational gaps to improve firm-level performance. This included the development of training materials—from scratch in some cases and leveraging ORI’s existing materials in others.
  • Fourth, delivery of capability building assignments to boards and senior management teams of the agri-SME portfolio companies. These were implemented through training workshops, field visits, case studies, and key speakers.

ORI was engaged under annual contracts to supply these services for four years (2014, 2015, 2016, and 2017).

Outcomes
  • Approx. 80% of portfolio companies’ boards and senior management teams reported that their businesses were being managed more professionally due to implementing the practices learned.
  • Most portfolio companies reported improved capabilities in managing growth and risks per their business plans, even in challenging economic environments. They were better equipped to navigate the negative impacts of Covid-19.
  • Portfolio companies that did not customarily hire experts from outside family networks reported having greater confidence and better appreciation of the value of seeking and hiring talent from external sources.
  • Half of the agri-SMEs have measurably increased their utilization of contracted specialist business advisory services. Specifically, there was increased use of high-quality financial management advisory, audit, strategy, and marketing services.