The Grown Sustainable in Africa Initiative by IDH & Unilever
On 20 June 2019, Unilever together with the Sustainable Trade Initiative (IDH) and Dalberg signed an important MoU that signals the start of the creation of business opportunities for local farmers and SME’s that will be able to supply Unilever locally.
The topic of local sourcing is increasingly important for Unilever as it seeks to find reliable suppliers in Africa. Current Unilever imports the majority of its raw materials destined for African production outside of Africa. This has associated risks of Unilever being susceptible to trade shocks, supply shortages and currency risks among others. Unilever seeks to find local suppliers in Africa that produce constant and compliant volumes that will supply Unilever but potentially also other buyers.
In order to achieve this objective, the three organizations agreed to start an initiative called; Grown Sustainable in Africa (GSA). The initiative is based on the experiences by the organizations and the strategic partnership between Dalberg and IDH. The GSA focuses on sustainability in the social, economic and environmental sense as it seeks to increase the number of SME’s that are commercially viable and able to supply both Unilever and potentially other clients. The initiative in this way also increases intra Africa trade and potentially employment for youths and woman in Africa. The MoU was signed in South Africa where the GSA will create an active project but the GSA is not limited to South Africa but in fact cover the whole continent. This partnership will break the cycle where SMEs are unable to find the significant external finance needed to make the step change in quality and volumes required to join modern supply chains and hence remain excluded from the revenues they need to grow.
Under this new and innovative partnership IDH, supported by the Netherlands Government, and Dalberg will raise $12m funding to directly build the capacity of agricultural SMEs to meet the quality and volume requirements to be part of a modern supply chain. In turn, Unilever will offer a guaranteed offtake once quality standards are reached to underwrite that investment and collaborate closely to provide advice and support to help the SME become market ready.
the Sustainable Trade Initiative
IDH itself is a foundation in the Netherlands that seeks to convene companies, governments, and others in the public-private sector to drive joints projects on new economically viable approaches to realize green & inclusive growth. They do this by convening public and private partners, co-financing and lastly through learning and innovation. IDH is supported by multiple governments such as the Dutch, Danish and British government among many others and organizations such as the Bill and Melinda Gates foundation.
