APS-ATI-001 Addendum - USAID Southern Africa Trade Market Systems Activity

USAID Africa Trade and Investment Partnerships Opportunity:

USAID Southern Africa Regional Economic Growth Addendum

Funding Opportunity Title: ATI Partnerships in Africa Trade and Investment in the Market Systems Activity

Announcement Type: Annual Program Statement

Funding Opportunity Number: APS-ATI-001

Issuance Date: October 24, 2023

Deadline for Questions: N/A – accepted on rolling basis

Closing Date Concept Papers: July 31, 2024 5:00PM - CLOSED

Submit Concept Papers to: USAID Africa Trade and Investment Initial Plan

Addendum: USAID Southern Africa Market Systems APS Addendum

Please note: Given the overwhelming interest in this addendum, we no longer have funding available for agriculture portfolio. We will only be reviewing non-agriculture concepts until this addendum closes on July 31, 2024. Thank you for your understanding

OVERVIEW OF AFRICA TRADE AND INVESTMENT (ATI) PROGRAM

In support of the Prosper Africa, Feed the Future, and other initiatives, the USAID Africa Bureau, Africa Regional Missions, and the Middle East Bureau have established the USAID Africa Trade and Investment (ATI) Program. The purpose of this Program, managed by DAI, is to mobilize enterprise-driven solutions that increase trade and investment in Africa, including North and Sub-Saharan Africa. ATI will support the strengthening of Africa’s markets by developing new trade and investment relationships, particularly between the United States (U.S.) and Africa, and achieve development outcomes across sectors in line with USAID’s Private Sector Engagement Policy and the USG Prosper Africa initiative.

Driven by market demand, the Program will embrace innovative approaches to achieve its goals. The Program is envisioned as a small, core set of centrally coordinated technical and institutional support activities, and a large, flexible performance-based subcontracting and grants under contract facility designed to support the needs and opportunities that missions, and the private sector identify. The Program aims to mobilize private sector resources and expertise, in conjunction with other USG interagency partners, resulting in the increased capacity, competitiveness, and availability of businesses, investors, and intermediaries that will drive future trade and investment.

USAID Southern Africa Trade Market Systems Activity

In Southern Africa, USAID seeks to sustain progress made on the USAID Southern Africa Trade Hub through a buy-in program activity under ATI from 2022 to 2026 titled Southern Africa Trade Market Systems Activity (SATMSA). To do this, ATI aims to deepen the market systems approach initiated under USAID Southern Africa TradeHub (USAID TradeHub) to tackle the root causes that limit Southern Africa’s market systems and trade potential by addressing incentives, behaviors, and relationships that impede the region’s trade competitiveness in Angola, Botswana, Eswatini, Lesotho, Madagascar, Malawi, Mozambique, Namibia, South Africa, and Zambia.

South Africa remains an important player in the African economy, with its success hinging on addressing structural issues, fostering inclusive growth, and leveraging its strengths to overcome a complex set of challenges and opportunities. The country serves as a nexus for the regional trade, manufacturing, and finance systems that have the potential to catalyze and amplify regional economic growth. South Africa has a diverse range of industries, including mining, agriculture, manufacturing, and services. Additionally, it possesses a wealth of natural resources and a growing technology sector, which offer potential avenues for economic expansion. The other countries in the region are mainly dependent on agricultural and mineral exports, both vulnerable to weather and climate variations and international commodity price fluctuations, respectively. Accessing the South African market aggregates the market potential for the region, but this requires overcoming market entry barriers such as price competitiveness and quality requirements. The focus on exports from the region to South Africa maximizes regional integration and South Africa’s well-developed manufacturing sector.

OBJECTIVES OF THE SOUTHERN AFRICA TRADE MARKET SYSTEMS ACTIVITY

The USAID/SA Buy-in Activity supports two objective/priorities in Southern Africa:

Objective One: To increase exports from targeted Southern Africa countries to South Africa.
Objective Two: Sustainable utilization of the African Growth and Opportunity Act (AGOA) and Generalized System of Preference (GSP) opportunities by Southern African countries to export agricultural products to the United States.

Under Objective One, USAID/SA REGO under ATI aims to:

Strengthen market actors in target sectors to support and/or enhance the export of products and services to South Africa and to the U.S.
Address enterprise-level and systemic constraints that hinder market efficiency to facilitate export trade to South Africa and to the U.S.
Challenge private sector actors to provide market support and technical assistance to leverage and scale promising trade deals.
Improve the overall international competitiveness of the trade-oriented market systems in Southern Africa including support to export firms to attend and exhibit at trade events to drive exports.
Create an enabling environment in the agriculture and non-agriculture sectors for the growth of green energy, leading to increased exports, job creation, reduced carbon emissions, improved environmental sustainability, and increased energy security.

Under Objective Two, USAID/SA under ATI aims to:

Encourage and support national and private Trade Promotion Service Providers (TPSPs) and Business Membership Organizations (BMOs) to deliver on their export promotion mandate, drive current export initiatives via cost-sharing mechanisms, and to collaborate with U.S. based TPSPs and BMOs to implement market-entry support services for companies exporting goods and services to the U.S. under the AGOA and GSP trade preferences including support to export firms to attend and exhibit at trade events to drive exoports.
Strengthen the broader trade ecosystem, thereby bolstering longer term mechanisms for export promotion.

Cross-cutting objectives & outcomes:

Creation of private sector jobs.
Empowerment of women and youth.
More resilient, inclusive economic ecosystems across countries in the region.
Supply- and value chain activities that span countries and crowd in various enterprises.
Sustainable resource management. The Southern Africa region faces critical sustainable resource challenges due to population growth, urbanization, and climate change. Key issues include water scarcity, land degradation, biodiversity loss, energy transition, waste management, climate resilience, food security, urbanization impacts, and transboundary resource management. Addressing these challenges will ensure long-term socio-economic prosperity and environmental well-being.

BACKGROUND AND PURPOSE

Under the USAID/Southern Africa (USAID/SA) Buy-in Activity, USAID has established a multi-year partnership mechanism that will allow the private sector to co-create and co-invest in development activities that will significantly increase bilateral trade between Southern African countries and South Africa and between Southern Africa and the United States and thus expanding employment opportunities, particularly for youth and women. USAID/SA seeks to build on the success of the USAID Southern Africa Trade and Investment Hub (USAID Trade Hub) that engaged with partners across Southern Africa to promote sustainable economic growth, global export competitiveness, and trade. This Buy-in Activity will continue the progress made by USAID Trade Hub in line with USAID/SA’s 2020-2025 Regional Development Cooperation Strategy (RDCS) and aligned with the ATI scope, contribute to ATI’s Objective 1: Increased Trade to expand and accelerate two-way trade between African nations and the United States.

The primary purpose of this APS is to engage a broad range of private-sector partners in targeted sectors to increase regional trade from Southern Africa countries to South Africa and increase exports to the United States. Partnerships will typically include the co-design and co-investment in activities that leverage the resources, expertise, and capabilities of private sector actors, leading to increased capacity, competitiveness, and more impactful and sustainable development outcomes.

Within the context of this Scope of Work (SOW), the assistance provided through this APS, in the form of performance-based grants, will be focused on various activities related to agricultural and non-agricultural trade, supply chain management, business services, and other forms of support. These efforts will contribute to facilitating export growth. Under this overarching framework, ATI will consider partnering with both U.S. and Southern African companies in targeted economic subsectors to expand trade at regional and international levels. ATI will also explore partnership opportunities that address heightened food insecurity in the Southern Africa region. Examples of illustrative subsectors that USAID may consider funding include but are not limited to:

The region exports a variety of agricultural products, machinery, and equipment. Challenges like land degradation, climate change, water scarcity, and market access influence competitiveness. Tackling these issues through technology, innovation, skills, and sustainability is vital for sustained success.
The energy sector. Energy challenges are a pressing concern in the region, impacting growth, development, and trade. Power shortages, coal dependence, high costs, and limited renewable integration have worsened the situation. Sustainable energy solutions will improve energy access, stimulate trade and economic development, and contribute to global climate change mitigation efforts. Firms proposing such solutions should demonstrate how such investment support will lead to increased exports.
Export of forestry and wood products from Southern African countries is an important economic activity that contributes to both local economies and international trade. South Africa, Madagascar, Malawi, Mozambique, Eswatini, and Zambia are rich in forest resources, and their timber and wood products are sought after in global markets.
In some countries in the region, the textile sector in the region holds significance, driving economic growth, employment, and exports. South Africa, Lesotho, and Eswatini, among others, are key players in textile and apparel manufacturing for exports, leveraging trade agreements like AGOA.
South Africa exports a range of automotive products to the U.S., including fully assembled vehicles, automotive components, and parts. These exports contribute to the U.S. automotive supply chain and meet consumer demand for vehicles and parts. Support for SME upstream suppliers in the automotive supply chain in South Africa is crucial for maintaining a robust and competitive automotive industry.
The chemical sector in South Africa exports a variety of chemical products to international markets, including the U.S. In some instances, raw material inputs used as feedstocks or intermediates in the production process are imported from neighboring countries. Producers would need to align and adhere to sustainable resource management principles.
The leather industry in the Southern Africa region encompasses various stages of production, from rawhide and skins to finished leather products. Leather products from the region are exported to various international markets, including Europe, North America, Asia, and neighboring African countries. While the industry's size and scope can vary from country to country within the region, it generally contributes to economic growth, job creation, and trade.
As an export service, tourism in the region generates substantial revenue, contributes significantly to job creation, and bolsters various sectors such as hospitality, transportation, and entertainment. By strategically focusing on tourism, Southern African countries region can develop synergy between tourism and trade, driving economic growth, job creation, infrastructure development and generating foreign exchange earnings.

Illustrative Examples under Objective One (all activities should result in increased exports to South Africa:

Cost-shared partnerships working creatively with buyers and potential suppliers to realize commercial potential for trade.
Support new business and sourcing relationships.
Develop intelligence that identifies and supports new commercial trade opportunities.
De-risk corporate opportunities to build out supply chains.
Strategic/sector-level technical assistance to overcome transaction challenges.
Support to commercial platforms that can disseminate actionable market intelligence and facilitate linkages to trade services (distribution, logistics, financial).
Incorporation of more women-owned businesses into local and international supply chains.
Supporting activities, enterprises, and projects in the tourism sector that contribute to economic growth, generate revenue for local businesses, and have positive effects on job creation and foreign exchange earnings.
Illustrative examples to support the development of tourism include:
- Raising awareness about the region's tourism offerings and trade potential.
- Promoting eco-tourism and sustainable practices in both tourism and trade.
- Supporting efforts to preserve and maintain cultural heritage.
- Providing opportunities for local women entrepreneurs to start and grow businesses catering to tourists.

Illustrative Examples under Objective Two (all proposed activities should lead to increased exports to the U.S.):

Build capacity of African trade facilitators and service providers to offer trade services, including market linkages, distribution, certification and financial.
Support those services that increase export competitiveness and functional ability to export.
Provide support for Southern African exporters, especially to the U.S., to meet export requirements and/or accelerate the implementation of the AGOA export strategies.
Support efforts to improve product traceability, quality, and efficiency and increase exporters’ market access to South Africa and the U.S.
Use pay-for-results model to expand the use of trade service providers to facilitate U.S.-African matchmaking (including intra-African trade, AGOA exports, U.S. technology/equipment deals).
Help U.S. companies do business in African markets and expand U.S. trade with Africa.
Support linkages between U.S. industry, State/Federal-level trade promotion agencies and African counterparts, in collaboration with Prosper Africa.

AWARD INFORMATION

Grant Size and Type: ATI will issue performance-based grants ranging from $100,000 to $500,000 to establish partnerships with firms meeting the objectives stated in this APS. Grant sizes of smaller or larger amounts may be considered, should the proposed activity meet the objectives of the APS and deliver commensurate exports. A range of grant award types may also be considered.

Performance-Based Grants: The preferred performance-based grant will be a Fixed Amount Award (FAA) agreement under USAID rules. Payment under FAA grants are made upon accomplishment of predetermined results, referred to as milestones. Milestones are agreed upon between ATI and the partner prior to the grant being awarded. Although the FAA is the preferred grant mechanism under this APS, ATI will conduct capacity assessments of all potential grantees in which their mode of award will be determined based on the financial and administrative capabilities of the applicant. Other modalities of awards may include an in-kind grant, standard grant, simplified grant, or a combination of FAA and in-kind grants, but this is dependent on ATI’s determination of the potential grantee’s capacity.

If ATI’s assessment identifies weaknesses or deficiencies that call into question the applicant’s ability to
manage the award, ATI may elect to remove the applicant from consideration under this funding
opportunity or select a mechanism more appropriate for the applicant’s current financial, administrative
and operational capacity. The applicant will agree to the metrics and verification methods of awards
during the development of the full application, giving latitude to the partner on how it will accomplish
the agreed objectives. DAI reserves the right to fund any or none of the applications submitted.

Performance Period: The performance period of grants will be no more than 30 months.
In response to this solicitation, potential grantees may propose their own alternate timelines, work plans, and level of effort associated with the various components of the activity in line with their proposed approach.

Place of Performance: USAID/SA regional programming primarily includes Angola, Botswana, Eswatini, Lesotho, Madagascar, Malawi, Mozambique, Namibia, South Africa, and Zambia. Given existing restrictions on providing foreign assistance to Zimbabwe, ATI will consult with USAID prior to engaging in Zimbabwe under this buy-in activity. Potential grantees should provide details on their justification for targeting and approach to working in the target countries as the activity requires. The selected firm(s) will report to the ATI team based in Johannesburg, South Africa in coordination with the USAID Southern Africa Regional Office.

Eligibility: Applicants must demonstrate that it falls into one of the grantee categories below:

Private Sector Companies. Trade promotion service providers, buyers, import agents, export agents, export firms, wholesalers and retailers, trade platforms, e-commerce firms, business service organizations, industry/sector organizations, trade, or other private sector associations legally registered to operate in Angola, Botswana, Eswatini, Lesotho, Madagascar, Malawi, Mozambique, Namibia, South Africa, Zambia, and/or U.S. are eligible to apply.
Foreign Organizations (referred to as non-U.S. NGOs): either nonprofit or for-profit organizations that meet the definition in 2 CFR 200.47.
Non-profit Organizations: Organizations that meet the definition of 2 CFR 200.70.

Applicants should be an on-going concern with a minimum of three years in business. Newer companies can be considered if the leadership or management can demonstrate experience from previous employers. In addition, applicants must be organized under the laws of the country in which it has its principal place of business or operations in. In lieu of official registration, an applicant may still be eligible for award if it shows proof of effort to secure registration, exemption from registration, or cause for why registration is not optional or practicable.

Evaluation: Proposed activities will be evaluated on several factors, including with priority given to those concepts able to achieve the following: produce significant commercial-scale results or trade figures, raise private capital particularly from US entities, create a notable number of jobs, and/or construct a market-demonstrating effect that will build the case for further similar opportunities. Evaluations will also consider alignment with USAID/ATI objectives, the capacity of partner firms and organizations, the concept of additionality, and the inherent value of partnering with the Project. Activities with the potential to engage women and youth are also priorities. By addressing a variety of these priorities, recipients can build stronger and more resilient economic ecosystems in the countries where they are active.

Proposed activities should provide matching funds on at least 1:1 ratio from the grant awardee or through leveraging new external financing, which can include but are not limited to equity/capital raised, and/or debt capital mobilized from financial providers. ATI funds will not support construction. All construction activities will be resourced through grantee matching funds. All shortlisted applicants will be required to co-develop deal notes with ATI which, when approved by USAID, will then be converted into grant agreements.

To expand trade and investment relationships between Africa and the United States, ATI is particularly interested in working with African firms with the potential to engage U.S. companies and investors or companies that are suppliers for U.S. companies or use U.S. equipment and technologies to advance the objectives of this Buy-in. Concepts for opportunities that would have significant negative impact on U.S. exports or US jobs may be deemed ineligible.

APPLICATION PROCESS

Through the Annual Program Statement (APS). ATI will include open, competitive, transparent opportunities for firms and organizations to express interest in partnering with the program. ATI may combine the announcement of the APS with direct outreach efforts to potential partners to enhance the intake of higher-quality concepts.

Through the APS, potential partners will be invited to submit concepts that support the objectives outlined above. Partnerships facilitated through the APS will leverage private sector buying power and expertise. The private sector will identify specific needs and propose solutions that potential partners will refine together with ATI through a co-creation process. These partnerships will generally be structured on a pay for performance/pay for results basis will clear deliverables that directly achieve shared results (e.g., increased exports and jobs). The approach will empower companies to identify and directly manage these efforts rather than establishing a list of predefined service offerings and experts.

COLLOBORATION, LEARNING AND ADAPTING

The Applicant is expected to work with the ATI Monitoring, Evaluation, and Learning team to align with the relevant performance indicators and document learning experiences from the Incubation implementation. This collaboration will help to share evidence regarding effective strategies for fostering trade and development in challenging commercial markets, such as Angola, Lesotho, and Mozambique. The Applicant will adapt its strategies to troubleshoot any challenges faced. This learning and iteration will be shared and included in the ATI report as part of the Learning and Adaptation report. Applicants will be expected to provide quarterly progress reports to ATI and share learnings from the incubation processes.

Expected deliverables for collaboration, learning, and adapting:

Development of a learning and adaptation quarterly and annual performance report.
Quarterly performance data collection and processing.
Final report including activity accomplishments, performance, and recommendations for future programming and replication of the intervention(s).

GENERAL IMPLEMENTATION STRUCTURE

ATI will work closely with the awardee(s) upon selection and award to determine the grant structure, including adhering to final timelines, deliverables, and associated costs. Additionally, ATI and USAID will also work closely with the awardee(s) on the overall learning agenda, including the appropriate cadence for reporting, communications, and other general ongoing project management activities, as well as be a resource to help the awardee achieve overall objectives.

MONITORING, EVALUATION & LEARNING (MEL)

ATI will work closely with the applicant to define appropriate indicators for the overall interventions based on applicable ME&L (Monitoring Evaluation and Learning) indicators as identified by ATI and the USAID stakeholders. ATI will work with the applicant to develop the Monitoring Evaluation and Learning (MEL) plan at the kick-off, edit as needed during implementation (e.g., if additional transactions are added), and will collect and review data from the applicant for requisite reporting to USAID throughout the life of the activity. The applicant will be required to reasonably maintain and report on relevant data as part of the periodic check-in process. ATI will conduct data quality assessments, as necessary. In many cases, the grantee must be willing to share results for at least six months following the completion of their grantee for ATI and USAID to accurately capture results (e.g., an investment that closes after the period of performance but was facilitated during the contracted support).

PLACE OF PERFORMANCE

The place of project performance for the entire duration of the engagement is required to be in any one of the USAID/SA regional programming countries, namely Angola, Botswana, Eswatini, Lesotho, Madagascar, Malawi, Mozambique, Namibia, South Africa, and Zambia. Applicants should anticipate the need for in-country presence and should provide detail on their approach to working in the target country(ies) as the activity requires.

The selected firm(s) will produce written reports to the ATI team based in Johannesburg, South Africa. ATI will report to the relevant stakeholders in USAID South Africa and in Washington, DC accordingly.

IMPLEMENTATION TIMEFRAME

Applicants should propose a realistic implementation timeline, based on the approach suggested to fully achieve the objectives stated above. The activities outlined above are estimated to start from January 2024. Applicants should propose a timeline commensurate with their technical approach, and shorter timeframes are preferred.

Information on Applying: CLOSED