The United States African Development Foundation (USADF) is a U.S. government agency established by Congress to support African-owned enterprises which improve lives in poor and vulnerable communities across Africa. C.D Glin, the president/CEO of USADF, during a recent visit to Nigeria, spoke to PREMIUM TIMES’ Ben Ezeamalu about the agency’s new areas of focus, working in conflict-prone communities, and conducting due diligence on fund-receiving entities. Excerpts.
PT: Your grants have been largely focused on the agric sector and renewable energy. But it seems you are now moving towards youth entrepreneurship. Is there a reason?
Glin: Yeah, so the way we operate, as the U.S. African Development Foundation, we use this terminology called ‘demand-driven’ and ‘demand-responsive.’ So, we were driven by and we respond to local demands and local needs. And throughout Africa, a lot of the needs and the opportunities that we tried to seize upon are related to agriculture because of food insecurity issues. They are related to energy access because of the insufficient energy provision in a number of countries. So agriculture and energy are two key areas. And now, increasingly, we are focusing around employment and to create employment opportunities, particularly for young people. Africa is the youngest continent on the planet, Africa as a continent has the fastest urbanising region of the world. So you have this reality around ‘Yes, there’s food insecurity and there’s energy poverty’ but now the rates of unemployment and the rates of unemployment in urban settings is really really expanding. And so, with the Lagos State Employment Trust Fund, we’re looking at an opportunity where we can respond to the demands of a state like Lagos. And help them meet those demands of their constituencies. Young people who are looking for jobs, looking for entrepreneurial opportunities.
And so we think about this from the standpoint with addressing unemployment either through job placement. So working with local business, small, medium, fast enterprises. Seeing what they need and then training young people to fill those jobs. So to place young people in job with employers or young people who want to create their own opportunities. So really creating and developing entrepreneurs and those that are entrepreneurs, we try to provide them with the financial support to start their businesses. This is early-stage grant funding anywhere from $10,000 to $100,000 for their businesses. But also we leave them with the non-financial support. The training, the technical assistance, the financial management skills. So more importantly, now than ever, in our work in Africa, which is now more than 40 years, we are continuing to work in agriculture even throughout Nigeria. I just came from the north, in Kebbi State, where we are working in the rice value chain, we’re working in the dairy value chain. We’re working on groundnuts in the north. But also now I’ve come to the south and that’s where we are focusing on employment and entrepreneurship for young people. And this is yes, maybe in agriculture. But this is in many other areas as well, construction, in fashion, in building and tech, and plumbing, and digital. So all of the skills that young people need in Lagos State and young people need in urban areas is now a key priority for us. Agriculture, energy, and employment through entrepreneurship primarily.
PT: So this LSETF (Lagos State Employment Trust Fund) partnership is $2 million annually?
Glin: Throughout Nigeria, we have a number of investments, so we have a number of agreements at the sub-national level, at the state level. So we have agreements in Kebbi State where, again, it’s $2 million a year and $10 million dollars (in five years). The same thing in Niger State. We have a lot of investments in the renewable energy, off-grid energy with an entity called All On. This is a Shell Oil Nigeria’s impact investing subsidiary. We invest in renewable energy entrepreneurs. So on a yearly basis in Nigeria, we almost invest about $10 million dollars across the country. But in Lagos State alone, we’re creating $2 million, $1 million from USADF, $1 million from Lagos State Employment Trust Fund. So every year for the next 5 years, up to $2,000,000 to really directly invest in Lagos State and employability for Lagos State youth and that’s a big focus for us for this programmme.
PT: The majority of USADF’s budget is applied to project grants that directly fund expansion and growth activities for small businesses. As at 2017, you had invested up to $60 million. Do you follow through to ensure these funds are not misused?
Glin: This is a great, great question in terms of our model. So the majority of our funding comes from the U.S. Congress, and over the past five years throughout about 20 countries in Africa, we have invested $115 million directly into the hands of African grassroots enterprises and African entrepreneurs; $115 million over the last five years and that’s impacted about four million lives. So there’s direct impact and we look at the success, meaning all those entrepreneurs, all those businesses, can we work with them? From start-up to scale up. And we are looking at how they grow. So we want to develop them into enterprises. We want to expand and grow them. They would also want to link them to other forms of investment besides our grant funding. But every grant that we make, we also link them with a local partner for project implementation. So every grantee, every organisation we fund we link with a local partner, that local partner is called Diamond Development Initiatives (DDI) It’s a local, nonprofit NGO. They manage all of our operations in the country. We’re a very different kind of US government agency. We don’t want to have a number of expats coming into Nigeria and trying to work on Nigerian solutions. We want to have Nigerians… the DDI is a Nigerian NGO that also supports the grantees that we funded, they do all project monitoring. They do all the evaluations. They even manage the disbursement of funds to the grantees. So our project management support is just as important as the funding that we directly give to the enterprises and to the entrepreneurs.
PT: What kind of feedback do you get from DDI? Have there been instances where they reported having to blacklist some grantees because they misused their grants?
Glin: It’s a great question around how we look at project monitoring and evaluation, how we look at success and a lot of it has to do with the model, it’s what we call the high touch model. We’re very close, we hold the hands of these grantees, of these organisations that we are funding. Because some of these groups and some of these organisations they’ve never had $10,000, $100,000. And so for us, it’s very important that we have real controls and oversight. So DDI, yes, they talk and they do a lot of due diligence before we even fund the organization. We don’t have these briefcase businesses, you know, people who can send an email and say they are a legitimate business. We go to the companies. We talk to their clients. We talk to their customers. We do a lot of due diligence. We do background checks on the group. We know where their offices are. We physically go there. We make sure that the work that they’re saying they’re gonna do, even on a monthly or quarterly basis, is actually taking place. Because this level of oversight is really important because this is US taxpayers’ dollars. There’s an American working in the US as a school teacher, as a firefighter, as a policeman, as a doctor, they pay their taxes in the US and then some of that tax money comes to the United States African Development Foundation. And we use that money to invest in Nigerian entrepreneurs. So we have to make sure if we’re looking at developing Nigeria, so that Nigerians can grow their businesses and then those businesses can trade and invest with the U.S.
The U.S. wants to do more business in Nigeria, more business in Africa. It’s my responsibility as the president and CEO of the US African Development Foundation to make sure that we’re building Nigerian and African businesses that can develop, that can grow, and that can scale and that can trade and invest with the U.S. We want to buy your goods and services and we want you to buy our goods and services. So for us, the oversight of these programmes is paramount to the success, to make sure we’re funding legitimate organisations who are committed to generating incomes, to growing revenues and creating jobs, it’s very important.
PT: For decades, USADF has been providing these capacities for African entrepreneurs. You’ve been president for about three years, the Foundation has spent about $115 million over the past five years. When you look around, do you think it has been money well spent?
Glin: You know, I couldn’t be prouder of the impact that USADF has in investing in Africans and their ideas and African solutions. This is definitely one of the most cost-effective US government development programmes around. Because more than 90 per cent of all of our funds, it’s going directly to African grassroots organisations, African enterprises, African young, African entrepreneurs, African women. And they, in turn, are taking what could be $10,000 of investment and they’re turning it into 30,000 in terms of economic returns locally. So they can take a $100,000 grant and then generate $300,000 of return. So we get a real return on our investment. But it’s a social impact return. It’s not all economic impact that comes back to USADF. That money that we have invested in those community groups, in those entrepreneurs, and those young people, as they grow their businesses and generate more income, what we’re doing is we’re contributing to peace and economic stability in Nigeria and in Africa. Peace and economic stability. We’re creating opportunities where we’re looking at this is market-driven solutions, but we also are looking at a contribution to trade and investment.
So the Nigerian businesses, the Nigerian tech firms, the Nigerian agricultural farms, the Nigerian energy businesses that are buying U.S .. goods and services, that are trading with the US, that are really even making sure more Nigerians have a better quality of life is beneficial to the US. So it’s definitely been money well spent and we have very little reports of any fraud or any abuse because of the oversight that we have. So this is where we are really making sure that our investments are having real impact on the ground. This isn’t just talk. This isn’t even free money. We have conditions. We want to make sure that you’re having the impact that you think you’re going to have and we monitor that very closely.
PT: Most of your grants go to small-holder farmers across Africa. In Nigeria, as a case study, how has the insecurity challenges affected your access to the farmers?
Glin: One of our most important contributions to development is working in conflict or conflict-affected areas. Working with underserved populations and communities and looking at moving people out of poverty onto a pathway to prosperity. So we have a strong focus and we always have in Nigeria. In places where people are marginalized and underserved and in Nigeria, a place where I’ve lived for a number of years. Now I live in in the U.S., but I know the country, in the north, in places like Kano, Kaduna, Jigawa, Kebbi, Niger states. We have worked in the past or currently working with those communities that are affected by and that are susceptible to violent extremism, to challenges whether they be terrorist-related or whether they be pastoralists and herder related. Or whether they’re related to resource scarcity. And so we actually pride ourselves on working in those hard environments because we know that the people there are the ones that are being most affected, are not the people who are the terrorists or the ones that have nefarious issues. Most of the people there are hard-working, good people, we want to give them an opportunity. We want to really create, we want to move them out of poverty. We think that one of the key components of this instability, of this extremism, it has a lot to do with economics and so we look at economic development. We look at inclusive economic development as one of the key contributors to our programme. So we work in the north of Nigeria.
We also have a history of working in the south of Nigeria, in the Niger Delta. We have a history of working in the Horn of Africa, in countries like South Sudan, Somalia, northern Kenya, in the Great Lakes region, countries like Burundi and DRC, working in East Africa in the Sahel. And in Nigeria, we’re committed to working not only in the north and making sure that we are creating economic opportunity in vital places, but we’re also working in the south where there is also a need. So for us, we are a unique model because we go directly to the people, because the people own the solutions for themselves. We’re not coming and doing something to them or for them. We’re doing something with them. So that is why we are able to be successful in places where others are not and in places that are sometimes impacted by violence and conflicts and symbols of extremism. Because we’re trying to give hope and opportunity to those in need, the underserved, the most marginalized, the vulnerable, and supporting them directly, in a participatory manner. Again, we are not giving them solutions, we’re asking them what they need and then we’re meeting them where they are, meeting that local demand and responding to it. And so, when we work with smallholder farmers in the north, the crops we choose, the methodologies we employ, the train that we provide, they own those programmes. USADF? Yes, we’re a supporter or facilitator, but the community owns the solution. And we’re going to see the same thing here in Lagos State where these young people are owning their own future. We’re giving them an opportunity to help them walk faster. And then they’re going to run, beyond ADF and our support.
PT: In your work in Nigeria and dozens of other African countries, what are some of the challenges you have faced and how did you try to overcome them?
Glin: One of the biggest challenges that we face is just… the looking, at whether it’s entrepreneurship or particularly around agriculture, looking at it as a business. So some people are entrepreneurs out of necessity. Some people are farmers out of necessity. I don’t have anything else to do, so I have to create a job. I don’t have anything else to do. I have maize or cassava or something that’s around me. So now I’ll be a farmer. The biggest challenge is really transforming people who are entrepreneurial or who are working in a sector or industry such as agriculture out of necessity, turning it into a business and giving them the capacity to treat what they’re doing as a real business. And so that’s really about governance, accountability, financial records, a lot of the business challenges. So a lot of our focus early on in the early-stage startup or early-stage business is around organisational and operational development skills. But then we build on those as time comes with larger level of investment and then enterprise and business expansion, enterprise and business development and advisory skills.
But most people we meet, whether you’re a poor person working in the soil in Kebbi growing rice or whether you’re a young person on the streets of Lagos, if I ask you what you really need, you’re going to tell me you need money. You gonna tell me the solution to all your problems is money and I can tell you that’s very very very, very rarely the truth. They need a strategy. They need a plan. They need systems, you need some level of structure. Because we have seen throughout the world, but definitely in the US, where we have a lottery system, where we have systems where people win big prizes, they win a million US dollars. We have the statistics that show that those same people who got that free money, that quick win, that one million or $10,000,000, after one year to five years, they are actually more impoverished and broker than they were when they got the money because they don’t have a plan. They don’t have a strategy. They don’t have structure. They don’t have organisation nor assistance.
And so usually, we encounter people who tell us they need money, but what they really need is training and capacity building and real technical support and systems. So we make sure we give both. We don’t just give money and we don’t just give assistance and advice. We give assistance, advice, and capacity building, but we also give capital. We also get money and then, thirdly, we also give you a network to convene with your peers. Because being entrepreneurial and being a smallholder farmer or cooperative leader, you feel alone. So we want to make sure you meet others who are like you so that you know what is possible. So whether that’s Nigerians in the north, farmers in the north meeting farmers in the central, in the middle belt, and farmers in the south. For these young people who are entrepreneurs in a place like Lagos, let them meet entrepreneurs in a place like Kano, so they can really see the similarity. So we think convening and collaboration and network building is really important.
In addition to the capital that we give and the capacity building that we give, we also want to give some level of collaboration and network building so entrepreneurs and small businesses and cooperatives can meet each other and can build together for the greater of Nigeria.
PT: We often hear about President Trump’s plan to cut or reduce foreign aid from the United States. If that happens, how will it affect the work of USADF?
Glin: What I can say is that over the past three years of the Trump administration, the USADF has continued to thrive, in our investment, in our support to Africa. Congress not only continues to fund us but also now we have an increase in our budget and we’re able to even do more than ever with a focus around global fragility. So trying to bring about peace and economic stability with a focus around women’s economic empowerment. So we’re heavily investing now in women entrepreneurs throughout the continent and we are, more importantly, trying to ensure that the U.S. foreign assistance, development tools that we have, USAID, any U.S. government agency that’s working internationally, that we are linking up together more than ever. That we’re using all of the tools in the U.S. foreign assistance toolbox together. So ADF wants to make sure what we’re doing is complementary to other US government agencies. And so I can say over the past three years in this administration, that we’ve continued to not only help the community survive in the face of the shocks and the stresses that climate change and extremism and poverty is bringing but we’re helping them thrive. And so our commitment is stronger than ever. And our budget is bigger than ever. And so ADF will continue to be a contributor, an investor in Nigeria and Africa as a whole. And we’re looking at true partnership and that’s what the Lagos State Employment Trust Fund is. That’s what a lot of the subnational relationships we have in Nigeria are. Where they’re matching our funds, where we’re going in 50-50, where we both are committed to helping Nigeria not only survive but thrive in the face of the shocks and stresses and the realities of life. And we feel good about where Nigeria is going together in partnership with the U.S. African Development Foundation.