History
After its creation by an Act of Congress in 1980 as a government corporation, the African Development Foundation began program operations in 1984. It has since provided financing to more than 1,700 small enterprises and community-based organizations. [3]
In 1977, Senators Edward Kennedy and George McGovern sponsored S. 1348, the African Development Foundation Act, in the 95th Congress. It proposed to amend the Foreign Assistance Act of 1961 to establish USADF to strengthen the bonds of friendship between the people of Africa and the United States and to assist in the development of Africa. It required UDASF to cooperate with indigenous organizations representative of Africa and other private, regional, and international organizations. It also authorized USADF to make grants, loans, and loan guarantees to African entities for developmental purposes and required the agency to give priority to community self-help projects with the maximum feasible participation of the poor. It also provided for the appointment of a Board of Directors to manage the agency.
In 1983, The Senate Foreign Relations Committee held hearings on the nominations of William Pickard, Patsy Blackshear, Charles Wells, Chester Crocker, and Frank Ruddy to the USADF Board of Directors. The Senate confirmed the nominations that same year, during which the USADF Board held its first meeting at the offices of the Inter-American Foundation (IAF) in Virginia, USA.
In 1984, USADF began to develop its funding program in earnest in 1984, instituting the Foundation's grants-making processes for sourcing, selecting , and supporting community-led enterprise growth projects and monitoring and evaluation. By September 1984, the USADF Board of Directors awarded grants to 11 grassroots organizations totaling $838,000. This first batch of USADF grants was issued in Botswana, Lesotho, Liberia, Mali, Niger, and Zambia.
From 1985 to 1987, USADF carried out its development model in 19 African countries, awarding over 100 grants totaling $10.3 million. By the end of 1987, USADF had developed accords or memorandums of understanding with nine African governments.
In 1989, Pastoralism was a major focus for USADF in the 1980s as a result of disastrous droughts in West Africa. In 1989, USADF hosted a Herders' Workshop, convening herders, farmers, and artisans from the Savannah and Sahelian zones in Ndutu, Tanzania, to foster learning and networks.
In 1994, In line with USADF's focus on promoting disability-inclusive development, the Foundation in 1994 brought together more than 60 persons with disabilities from 15 African countries in Kampala, Uganda. The attendees represented grassroots community groups and intermediary NGOs involved in horticulture, tailoring, furniture making, bookbinding, leadership and vocational training, and the reintegration of former psychiatric patients into communities. The meeting intended to promote and encourage the transitional process of persons with disabilities moving from a charity to an empowerment model.
In 1996, USADF re-activated its development activities in Rwanda in 1996 following the 1994 genocide there that claimed nearly a million lives. One of the early post-1996 grantees was Gahaya Links, a handicraft cooperative started by two Rwandan sisters who returned from being in Tanzania as refugees, with a group of Hutu and Tutsi women sitting around a circle, talking and making baskets together.
In 1998, USADF entered into its first host country government co-funding partnership in 1998 with the Republic of Botswana, through which USADF and the Government of Botswana provided matching funds for project grants that foster community-led economic development. Since this first co-funding government partnership, USADF has received over $34 million from African governments to implement community-enterprise programming in their countries, demonstrating a continued interest in partnering with USADF in support of peace and prosperity.
In 2000, On May 18, 2000, Congress enacted into law the African Growth and Opportunity Act (AGOA) as Public Law 106-200. The legislation significantly enhanced market access to the United States for sub-Saharan enterprises and organizations, including for USADF grantees that are increasingly export-ready and landing deals with major retailers such as Costco (cashews), Macy's (handicrafts), Target (shea butter cosmetics), and Whole Foods (textiles).
In 2004, President George W. Bush appointed Dr. Ephraim Batambuze and Jack Leslie to the USADF Board of Directors after the U.S. Senate confirmed their nominations. The two joined USADF's leadership as the Foundation implemented new strategic initiatives to expand trade and investment opportunities between Africa and the United States and to provide African communities with resources to prevent HIV/AIDS and mitigate its social and economic impact.
2006 – Throughout the 2000s, USADF supported critical agriculture commodities, including paprika in Zimbabwe, red onions in Niger, vanilla in Uganda, sesame in Burkina Faso, shea in West Africa, and coffee across East Africa. USADF support of coffee cooperatives has facilitated several of them exporting premium coffee to the United States and Europe.
2011 – USADF launched the Turkana Food Security Program in March 2011 with the strategic goal of boosting food security and reducing dependence on food aid in Turkana County, a highly marginalized, arid, and cattle raid-prone region of Kenya. USADF pledged $10 million in development grants and technical assistance; USADF met this goal, having awarded slightly more than USD $10 million to 53 agriculture and energy grantees in Turkana focused on mostly fishing, irrigated agriculture, and livestock. These projects have directly impacted more than 17,000 people (58% of whom were women) and indirectly benefited more than 88,000 people.
2012 – In Somalia, where nearly 70 percent of youth are unemployed, USADF is filling a skills gap by providing vocational training and job placement for youth between the ages of 15 and 35. USADF provides funding to local Somali NGOs to train unemployed youth and work with local businesses to set up five-month training and apprenticeship programs for the youth. Since 2012, USADF funding has facilitated placement for 6,000 youth. Dahabshiil Bank has provided funding alongside USADF that has facilitated 200 placements. Many of the youth participating in the training reported that their income jumped from $50 a month to $300 a month. In 2020, USADF expanded youth training and apprenticeship to the Democratic Republic of the Congo, Lagos State in Nigeria, Senegal, South Sudan, and Uganda.
2013 – The U.S. government's Power Africa initiative was launched in 2013, bringing together technical and legal experts, the private sector, and governments from around the world to work in partnership to create 60 million new energy connections in sub-Saharan Africa by 2030. Following this launch, USADF began awarding renewable energy grants to small and medium enterprises (SMEs) and African entrepreneurs and has since awarded more than $11 million to over 115 African off-grid energy enterprises to help combat insufficient access to energy across the continent. To date, USADF has leveraged partnership funds from All On, GE, and Nithio Holdings for this portfolio and held various funding challenges in this sector, including USADF's Women in Off-grid Energy Challenge, All On-USADF Off-grid Energy Challenge, and Sahel-Horn of Africa Off-grid Energy Challenge.
2014 – Congress formally changed the Foundation's name in 2014 from the African Development Foundation (ADF) to the United States African Development Foundation (USADF) to reinforce that USADF is a U.S. federal government agency and not an NGO and to further differentiate USADF from the African Development Fund and African Development Bank.
2014 – USADF launched its youth entrepreneurship portfolio in 2014 by funding 35 young Africans to start or scale their social ventures. This initiative was part of the Mandela Washington Fellowship under the U.S. government's Young African Leaders Initiative (YALI). Since launching the entrepreneurship portfolio, which aims to help social entrepreneurs create employment, USADF has provided catalytic funding to more than 300 African youth entrepreneurs.
2020 – Through a partnership with Mastercard Lab for Financial Inclusion, USADF will empower thousands of smallholder farmers in Uganda by extending the reach of the Mastercard Farmer Network (MFN) platform, giving farmers digital access to markets, valuable inputs, financial services, and real-time pricing information. USADF and Mastercard in 2020 completed Phase I of the agriculture digitization pilot in Uganda and reached more than 13,000 farmers through two farmer producer organizations. USADF and Mastercard have created a follow-on Phase II to refine the model and scale its impact by reaching 300,000 farmers.
2020 – As the COVID-19 pandemic threatened the progress USADF had made with grantees across Africa, USADF developed its COVID-19 response strategy in early 2020. The interventions have sought to respond by providing grantees immediate relief and capital assistance, support grantees in repurposing and reconfiguring business models, and building grantees' resilience. A key component of USADF's COVID-19 response is the Capital for African Resilience-building and Enterprises Support (C.A.R.E.S) initiative, through which the Foundation, by June 30, had provided approximately $3 million for over 330 grantees in 21 African countries. Grantees have used these funds to, among other things, manage increased transport costs, decreased production capacity, and insufficient storage for inputs and inventory. Additionally, USADF committed another $2 million to other sectors suitable to fight the pandemic's effects by providing off-grid energy solutions for rural health clinics and isolation and treatment centers and providing grants to support the development of a Personal Protective Equipment (PPE) in Africa Coalition (alongside funding from the Western Union Foundation) to meet communities' PPE needs. The Foundation also provided training to youth in Nigeria in healthcare sector jobs as part of its partnership with Lagos State.
2020 – With the creation and implementation of its youth entrepreneurship summit, held in Kenya in 2018 and Senegal in 2019, USADF scratched the surface of the potential of its convening power. The Foundation enhanced its approach to leveraging its convening power in 2020, creating the Financing, Utilization, Networking in Development (FUND) Africa Summit. More than 200 people participated in the inaugural FUND Africa Summit, held in August 2020, as a virtual event due to COVID-19-related travel and gathering restrictions. FUND Africa provided a platform for notable speakers and subject matter experts to hold discussions with grantees on topics such as navigating the COVID-19 world, augmenting business models, and utilizing technology to find efficiency.
2021 – USADF and the U.S. International Development Finance Corporation (DFC) established the Africa Small Business Catalyst (ASBC) – a partnership to promote investments in technology, innovation, and entrepreneurial solutions in African countries. This program combines DFC's powerful financing tools (loans) with USADF's on-the-ground presence and grant making-expertise. Under the partnership, USADF and DFC will provide loans between $50,000 and $500,000, accompanied by grants between $10,000 and $100,000 to African SMEs.
2022 – USADF made several announcements, including on the margins of the 77th United Nations General Assembly and the U.S.-Africa Leaders Summit President Biden hosted. These include:
A. The signing of a five-year, $20 million co-funding partnership with the Tony Elumelu Foundation focused on youth entrepreneurship and SME strengthening via investment toolkits [4]
B. The signing of a five-year, $10 partnership with the Government of Namibia's Ministry of Industrialization and Trade to provide grant investments that enhance and strengthen the competitiveness of SMEs and ensure sustainable development of the rural economy in Namibia
C. The launch of USADF Off-Grid Energy Challenges focused on energy for healthcare, energy for agriculture, and women in energy
D. The expansion of the USADF and the National Basketball Players Association (NBPA) Foundation partnership to increase investment and development in Africa
E. The launch of an annual Diaspora Award to provide funding for U.S.-based businesses owned and led by members of the African Diaspora to strengthen trade and investment relationships with African SMEs.
Operations
Working through a community-led development model, USADF provides grant capital of up to $250,000, capacity-building assistance, and convening opportunities to develop, grow, and scale African enterprises and entrepreneurs. These investments improve lives and impact livelihoods while addressing some of Africa's biggest challenges around food insecurity, insufficient energy access, and unemployment, particularly among women and youth. USADF utilizes 100 percent African staff and local partners on the ground across Africa, making it an agile, impactful, and innovative foreign assistance provider able to operate in areas that are often too remote or fragile to be reached by other U.S. government development agencies.
The budget of USADF is funded through annual United States government appropriations for foreign operations. USADF maximizes taxpayer dollars by linking African host country government funds, corporate social investments, and U.S. Government interagency funding sources to achieve sustainable economic growth opportunities for grassroots, small, and growing enterprises in underserved regions across Africa. USADF has leveraged over $34 million from African governments.
In Fiscal Year 2020, USADF awarded 253 new grants, investing primarily in early-stage agriculture, off-grid energy, and youth and women-led enterprises and skills training programs.
USADF is governed by a board of directors that includes seven members who are nominated by the president of the United States and confirmed by the United States Senate. The board of directors selects the USADF president and CEO, who manages the day-to-day activities of the foundation.
USADF's current countries of operations can be found on its website.
Programs
USADF's program efforts in Africa align closely with congressional priorities in development, trade and investment, youth and women economic empowerment, and the promotion of stability in fragile states and post-conflict regions. Between 2016 and 2021, USADF was a key contributor to the Global Food Security Act, providing over $61 million in 20 African countries to help approximately 3.4 million people overcome food insecurity. USADF works to improve food security and systems in 6 of 12 Feed the Future target countries.
Since the passage of the Electrify Africa Act in 2014, USADF has invested more than $11 million in over 130 off-grid energy enterprises to help combat insufficient access to energy. On average, for every $10,000 USADF invests in off-grid energy enterprises, 79.3 people are connected to reliable electricity.
Congress in 2019 passed into law the Global Fragility Act which focused on addressing the root causes of fragility and instability. Of USADF's 21-country portfolio, 17 countries are classified as fragile or extremely fragile states by the OECD. USADF's focus on supporting grassroots, community-led enterprises and its emphasis on youth and women entrepreneurs and development model dovetail with the Global Fragility Act's requirement that “participatory, locally-led programs that empower marginalized groups such as youth and women” be a component of the Act's Global Fragility Strategy.
Since 2014, USADF has directly supported more than 300 youth entrepreneurs in 40 countries, providing them with a combined $6 million to launch and expand their businesses across Africa. These businessmen and women work across sectors, from health and education to IT and agribusiness to sell goods and services, create jobs, train youth, and increase incomes. A recent study of USADF's youth entrepreneurship portfolio found that youth-led enterprise grantees in the Sahel reached an average of 12,570 beneficiaries or customers over the course of their grants and hired an average of 15 workers. In the Horn of Africa, youth enterprises reached 2,353 customers and hired an average of 273 workers. In the Great Lakes, USADF-funded youth entrepreneurs reached an average of 403 customers and hired an average of 9 workers.
Types of USADF Grants
USADF implements its model utilizing five primary grant types, which include:
1) Operational Assistance Grant (OAG) – Many community enterprises in Africa require initial capacity building prior to pursuing expansion. OAGs are awarded to groups with a potential for longer-term growth and business success but require business planning, technology assessment, management, and financial systems development, market research, training, and technical assistance to position themselves for follow-on investment. Outputs from the OAG are a business plan, improved production and products, a defined market opportunity, an investment plan, improved management capacity, and a fully auditable set of business records. OAG grants are one to two years long and range from $25,000 to $100,000.
2) Enterprise Expansion Grant (EEG) – The EEG is the principal financing mechanism USADF utilizes to assist grantees with an established market and defined business strategy to scale up their activities. The purpose of the EEG is to assist grantees in generating increased revenues, increasing incomes, improving profitability, creating jobs, and positioning themselves for future investments. Applicants for an EEG must have a business track record that reflects a strong production capacity, market knowledge, quality products, and well-developed financial systems and records that will enable the applicant to obtain a USADF financial certification. EEG grants are typically three to four years in length and range from $100,000 to $250,000.
3) Enterprise Linkage Grant (ELG) – The Enterprise Linkage Grant was developed as a tool to position an enterprise to scale up operations by securing outside financing from targeted investors, donors and/or financial institutions. ELGs are awarded to groups that have built a strong organizational foundation and achieved significant revenue growth but are still considered too high-risk to secure traditional financing. USADF assists these grantees in identifying the financing criteria for one or more targeted funders, further developing the enterprise's operations, and securing follow-on financing independent of USADF. ELG grants are six months to three years in length and average $57,000.
4) Fixed Amount Awards (FAA) – The Fixed Amount Award is a grant type USADF provides for a specific level of financial support where grant risks are identified and mitigated up front, and financial requirements are determined based on a defined set of milestones. The recipient's accountability is based primarily on performance and results as determined by the achievement of established milestones. USADF's off-grid energy and youth and women-led enterprise grants fall within this category. FAAs are generally for a term not to exceed 18 months and range from $10,000 to $100,000.
5) Community Reinvestment Grants (CRG) – Community Reinvestment Grants are reimbursable grants for which a portion of grant funds are repaid and reinvested in local community organizations selected by the grantee, with USADF coordination and assistance as needed. A project undertaken through the reinvested funds must be directed at improving the overall quality of community life through social and economic advancement and improvements to community facilities and services. Grantees enter into their own agreements with recipients of the reinvested funds.
Small and medium-sized enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel and revenue numbers fall below certain limits. The abbreviation "SME" is used by international organizations such as the World Bank, the OECD, European Union, the United Nations, and the World Trade Organization (WTO).
The KfW, which together with its subsidiaries DEG, KfW IPEX-Bank and FuB forms the KfW Bankengruppe, is a German state-owned investment and development bank, based in Frankfurt. As of 2014, it is the world's largest national development bank and as of 2018 Germany's third largest bank by balance sheet. Its name originally comes from Kreditanstalt für Wiederaufbau. It was formed in 1948 after World War II as part of the Marshall Plan.
A micro-enterprise is generally defined as a small business employing nine people or fewer, and having a balance sheet or turnover less than a certain amount. The terms microenterprise and microbusiness have the same meaning, though traditionally when referring to a small business financed by microcredit the term microenterprise is often used. Similarly, when referring to a small, usually legal business that is not financed by microcredit, the term microbusiness is often used. Internationally, most microenterprises are family businesses employing one or two persons. Most microenterprise owners are primarily interested in earning a living to support themselves and their families. They only grow the business when something in their lives changes and they need to generate a larger income. According to information found on the Census.gov website, microenterprises make up 95% of the 28 million US companies tracked by the census.
ACDI/VOCA is an international development nonprofit organization based in Washington, D.C., United States, that fosters broad-based economic growth, increased living standards, and community development. Incorporated in 1965, ACDI/VOCA's mission is to promote economic opportunities for cooperatives, enterprises and communities through the innovative application of sound business practice. ACDI/VOCA has worked in 148 countries since 1963. Total revenues for ACDI/VOCA and its affiliates are approximately $154 million. ACDI/VOCA employs approximately 1,270 people in the US and overseas.
Acumen is a nonprofit impact investment fund based in the U.S. that focuses on investing in social enterprises that serve low-income individuals. Acumen was founded in April 2001 by Jacqueline Novogratz. It aims to demonstrate that small amounts of philanthropic capital, combined with business acumen, can result in thriving enterprises that serve vast numbers of the poor. Over the years, Acumen has invested $115 million in 113 companies and has had a successful track record in sourcing and executing investment opportunities in the clean energy, health care and agriculture sectors.
The Renewable Energy and Energy Efficiency Partnership (REEEP) is a Vienna-based Quasi-International Organisation that advances markets for renewable energy and energy efficiency with a particular emphasis on the emerging markets and developing countries.
The Lemelson Foundation is an American 501(c)(3) private foundation. It was started in 1993 by Jerome H. Lemelson and his wife Dorothy. The foundation held total net assets of US$444,124,049 at the end of 2020 and US$484,432,021 at the end of 2021. The Foundation seeks to harness the power of invention and innovation to accelerate climate action and improve lives around the world.
Norfund is a development finance institution established by the Norwegian Storting (parliament) in 1997 and owned by the Norwegian Ministry of Foreign Affairs. The fund receives its investment capital from the state budget, and surpluses in the portfolio are reinvested. Its head office is located in Oslo with local offices in Thailand, Costa Rica, Kenya, South Africa, Bangkok and Ghana.
The Pan American Development Foundation (PADF) is a non-governmental and non-political organization created in 1962 by the Organization of American States (OAS), the public sector and the private sector to focus on issues of pressing concern in the Western Hemisphere. PADF, a non-profit organization, has worked in every country in the region. PADF aims to bring together stakeholders to create sustainable economic development, strengthen civil society and respond to natural disasters for the most disadvantaged people in Latin America and the Caribbean.
The OPEC Fund for International Development is an intergovernmental development finance institution established in 1976 by the member states of the Organization of the Petroleum Exporting Countries (OPEC). The OPEC Fund was conceived at the Conference of the Sovereigns and Heads of State of OPEC Member Countries, which was held in Algiers, Algeria, in March 1975. A Solemn Declaration of the Conference "reaffirmed the natural solidarity which unites OPEC countries with other developing countries in their struggle to overcome underdevelopment", and called for measures to strengthen cooperation between these countries.
TechnoServe is an international nonprofit that promotes business solutions to poverty in the developing world by linking people to information, capital and markets. It is a registered 501(c)(3) based in Washington, D.C., with over 1,540 employees across 29 countries worldwide.
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The Grassroots Business Fund is a non-profit organization based in Washington, DC. It has field offices in Kenya, Peru, and India. Their mission is to build and support high-impact enterprises that provide sustainable economic opportunities to thousands of people at the base of the economic pyramid. These enterprises are grassroots business organizations in developing countries that empower large numbers of the poor as producers of income-generating commodities and products, as consumers of affordable goods and services, and as independent entrepreneurs. GBF actively supports enterprises throughout Latin America, Africa, India, and Southeast Asia.
Harold Rosen is executive director of the Grassroots Business Fund. Rosen holds Bachelor's and master's degrees in Regional Science from the University of Pennsylvania, and an MBA from Harvard Business School.
Belgian Investment Company for Developing Countries (BIO), is a private company, based in Brussels, Belgium.
Chuku Wachuku, a royal prince of Ngwaland, is a United States educated Nigerian economist, politician, statesman, servant leader, business analyst, management expert and specialist on entrepreneurship development and SMEs: Small and Medium Enterprises. He is first Director-General of Ngwa origin at Federal Government of Nigeria major parastatal; NDE: National Directorate of Employment.
Enterprise Florida, Inc.(EFI) was a public–private partnership between Florida’s business and government leaders and was the principal economic development organization for the state of Florida. EFI’s mission was to expand and diversify the state’s economy through job creation. In pursuit of its mission, EFI worked closely with a statewide network of economic development partners and was funded both by the State of Florida and by private-sector businesses. Enterprise Florida did not disclose who its donors were.
Dr. Sailendra Narain is a development finance specialist born in Nawadah, Bihar Province, India. For over 40 years, Narain has been a pioneer in developing the global SME sector. His specialities include: designing policy frameworks for SME Growth, establishing SME financing programs in banking and development financial institutions, and capacity building for SMEs with a focus on Entrepreneurship.
Bank of Industry Limited is Nigeria's oldest and largest Development Finance Institution (DFI) currently operating. It is owned by the Ministry of Finance Incorporated (MOFI) Nigeria (94.80%), the Central Bank of Nigeria (CBN) (5.19%) and private shareholders (0.01%).
