Evaluation of the Business Centre project in Tanzania

The evaluation covers the period 4/94-10/95. The project is being implemented by Development Alternatives, Inc. (DAI). The Business Centre officially opened to the public 7/1/94, after putting in place an adequate administrative and management infrastructure. The infrastructure, which ensures the provision of timely and responsive TA to the private business sector, includes financial management systems, internal controls, policies and procedures, information systems, high quality and committed professional staff. The Centre has acquired information technology that can connect its customers to worldwide information and other services. The Centre has developed a 10-module training course and 30 business skills workshops for business managers and entrepreneurs. To date, however, only 444 of a targeted 4,000 participants (11%) have been trained. The target is overly ambitious even if the Centre manages to have a rapid take-off in 1996. Nonetheless, the business skills courses are based on adult education principles not commonly adhered to in Tanzania at this time, and interviews reveal a high level of impact in terms of improved enterprise performance, revenue, and participants' use of training manuals to guide business activities. An important milestone is the Centre's market-oriented approach to business planning in Tanzania. The project has operated under a number of significant constraints. Due to the project paper requirement that it respond to the needs of the whole Tanzanian business community, the Centre has spread its resources too thinly, and has been unable to reach any one of its targets. Also, DAI's contract with Business Care Services (BSC), which provides the Centre with local staff, does not outline procedures for obtaining the consent of all parties concerned (DAI, BSC, and USAID) in recruiting and replacing staff; high staff turnover reflects this anomaly. Further, salary levels approved by USAID for BSC professionals are not high enough to attract the high-quality staff best suited to serve as mentors to Tanzanian businesspeople. This has limited the Centre's effectiveness in its first year and the morale of BSC in the first half of 1995. Lack of enabling private sector environment has also caused implementation problems. Due to the lack of qualified consultants, for example, the Centre has had to find its own consultants to provide business advisory services. Likewise, the extraordinary difficulty of the Tanzanian process of registering and obtaining business licenses has resulted in fewer formal customers for the Centre than had been expected, while the slower than expected pace of financial reforms has led to a lack of finance for bankable projects, which in turn has constrained the Centre's efforts to create new jobs. Finally, although the Centre is supposed to operate on a cost-recovery basis in order to promote the commercialization of business skills training, donor subsidies (the payment of "sitting allowances") have undermined this goal by distorting consulting fees and moving business services away from a sustainable position. Three implementation issues are noted. (1) The subcontract between DAI and BSC requires BSC to attach two of its principals to the Business Centre full-time. This has not only robbed BSC of its best talent, but also hurt the Business Centre, which did not get the full attention of the two principals. It was unrealistic to expect BSC's top management to devote its full attention to the Centre. (2) Unless its clients get better access to finance, the Centre may have difficulty meeting its target for employment impact. (3) The Centre has been unable to effectively reach out to associations as planned. But even if such an effort were undertaken, its effectiveness would be doubtful, since the leadership of these associations is often weak and isolated and does not represent the aspirations of the members. (Author abstract, modified)