Partnership Focus: Chevron Strengthening Economic Institutions and Entrepreneurship in Angola
In 2002, Chevron established the Angola Partnership Initiative (API) to partner with the Angolan Government, USAID, UNDP, CARE, Africare, Save the Children, World Vision and other local and international development NGOs. This was part of a national effort to rebuild the country’s economy and social infrastructure after years of devastating civil war. At the time, hundreds of thousands of people who had been displaced during the war were starting to return home. The majority of them had few assets with which to rebuild their lives and most of them were returning to communities that had been physically destroyed and institutionally weakened. There was an urgent need to restore livelihoods, achieve economic stability, build human capital and offer people hope for a better future.
API was established to support these goals. It focused on achieving the following objectives: improving
food security and revitalising commercial agriculture; reintegrating refugees and ex-combatants into the economy; investing in the development of micro, small and medium enterprises; improving health and education standards; and supporting capacity building of Angolan NGOs and government development agencies.
API was initially capitalised with a US$25 million commitment from
Chevron, matched by funds and technical assistance from other partners with the goal of mobilising US$50 million. From the outset, it paid attention to building or strengthening economic institutions, intermediary organisations and rural infrastructure in order to develop a more diversified and entrepreneurial economy and to ensure local capacity and ownership. These have included the establishment of a Business and Resource Development Center; NovoBanco, a commercial bank for small and microenterprises; and the ProAgro initiative to strengthen local agricultural value chains and food security. API has also supported capacity building of operational NGOs and research institutes such as Angolan Action for Rural Development and Environmental Protection (ADRA) and the agricultural faculty in Agostinho Neto University, both of which are driving the implementation of new technologies and approaches to improve rural productivity and incomes.
In 2007, after the initial API funds had been committed (having exceeded the initial target of US$50 million
by US$ 6 million), the initiative was independently evaluated. Some 1.6 million people had participated in food-for-work activities resulting in the rehabilitation of rural infrastructure, including almost 4,000 kilometers of rural roads and over 1,000 kilometers of irrigation channels. The ProAgro initiative had organised 249 ‘solidarity groups’, 82 farmer associations and 11 management committees. These represented over 2,000 smallholder coffee farmers who were able to apply for and receive bank loans totaling more than US$1 million. ProAgro also supported efforts to expand banana and beef production and partnered with a local bank to facilitate loans to small and medium-sized agribusinesses. By December 2007, NovoBanco had cumulatively extended loans valued at over US$27 million and taken in US$ 9.2 million in deposits, and the Business Resource and Development Center had provided business development services to about 7,000 clients. In addition, API has supported entrepreneurship training in schools and several vocational training facilities for adults, one of which is focused on women.
As part of the company’s own value chain and local content program, Chevron has joined other industry partners to support Centro de Apoio Empresarial (CAE). CAE was initiated by BP in partnership with Citizens Development Corps (now CDC Development Solutions) in 2005, and is also supported by Esso/ ExxonMobil, Total and the national oil company Sonangol. All participating companies contribute resources and contract opportunities. CAE was established to meet the industry’s need for more skilled local suppliers and provides training and consulting services for local small and medium- size enterprises with the potential to win contracts in the industry. It also houses a Certified Supplier Directory and works to build the capacity of local trainers. Since 2005, CAE has provided training courses to over 1,300 local Angolan companies and provided specialist consulting assistance to some 100 companies. By the end of 2008, CAE clients had won $59 million in contracts, enabling them to create almost 1,500 jobs.
The Partnership Agenda
Collaborative efforts such as the Angola Partnership Initiative and Centro de Apoio Empresarial demonstrate the potential of leveraging different resources and competencies to support local enterprise development and entrepreneurship. Chevron cites a number of lessons that have emerged from its experience in API.
It has shifted from a transactional and project-based approach to investing in more transformative alliances that aim to have systemic impact within a particular location or economic value chain. The company’s philanthropic and community engagement activities have evolved to a longer-term development and investment model. Chevron is also adopting a more participatory approach to project planning and decision-making that aims to engage local stakeholders from the outset. And, while working more strategically with partners, it is allocating more resources to build the capacity of its own staff in economic development and participatory stakeholder engagement.