Background

The African Fertilizer and Agribusiness Partnership was awarded a grant by the Alliance for a Green Revolution in Africa (AGRA) on March 15, 2018, to facilitate agricultural Input development, and conduct business and management training for Agrodealers under the project “Smallholder Inclusive Productivity & Market Access (SIPMA) for the maize-soybean value chain in selected districts of Bono, Bono East, Ahafo, Northern and North East Regions”.

The overall objective for the AFAP component of the project is to improve food security and livelihoods of the smallholder maize and soybean farmers in the Bono, Bono East, Ahafo, Northern and North East. Specifically, the project seeks to:

• Increase staple crop (maize and soybean) productivity for smallholder farmers.
• Strengthen and expand access to output markets; and
• Increase capacity of smallholder farming households and agricultural systems to better prepare for and adapt to shocks and stresses.

In recognition of the growing role of the private sector in the lives and livelihoods of Africa’s smallholder farmers, AFAP developed an approach which involves the identification and training of self-employed Community-based “Agri-preneurs” or “Advisors” (CBAs) who are linked to input companies to promote seeds of improved crop varieties and fertilizers, together with good agricultural practices and who provide linkages to buyers of farmers’ yield.

The approach has four main components: Farmer centric service assessment, youth-led agri-preneurships, and private sector-led product Demonstrations and Partnerships. The approach seeks to catalyse the adoption of improved inputs and technologies by farmers through the expansion and strengthening of extension service delivery and input distribution to the last mile by well trained and equipped community-based agents.

The African Fertilizer and Agribusiness Partnership (AFAP) has over the years rolled out various interventions through AGRA’s support for the expansion of existing retailer networks through the CBA model under the Smallholder Inclusive Productivity and Market Access (SIPMA) project. These interventions include but not limited to capacity building of CBAs, the establishment of commercial linkage between CBAs and Hub Agrodealers, linkage establishment between CBAs and off-takers (output market) with an overall goal of improving smallholder farmers’ access to agricultural inputs such as fertilizers, seeds, and pesticides while creating employment, especially for the youth, in the agricultural value chain.

The objective of the Assignment

The overall objective of this cost-benefit analysis is to lay out the theory of change, develop the impact pathway, tell a plausible story about the impacts of the project over time and calculate and compare the net impact of the current V/CBA interventions so as to inform the review and redesign of the model for scale-up.

Description of tasks

Under the overall supervision of the AFAP country team and in close collaboration with the AGRA SIPMA Consortium members the consultant will:

• Conduct background reading on the project (with the assistance of AFAP and AGRA in identifying the relevant sources)
• Attend a kick-off meeting to clarify expectations and agree on the approach.
• Review and update the theory of change and impact pathway of the project, indicators targeted under the project and assess levels of indicators achieved to date and predict these over the life cycle of the project.
• Draft a methodology for carrying out the cost-benefit analysis from the perspective of stakeholders (CBAs, agrodealers, seed companies, fertilizer companies, buyers of farm output, smallholder farmers, government ministries, departments, and agencies) and from an overall perspective of costs and benefits.
• Collect preliminary data from readily available sources – i.e., public data sets, common-knowledge estimates, and information already available to the Ministry of Agriculture, AFAP, AGRA, CBAs, agricultural input supply firms and agro-dealers.
• Provide a detailed work plan with the timeframe.
• Collate initial findings in an inception report.
• Refine approach based on feedback on the inception report.
• Identify and collect any further data required.
• Conduct interviews with Consortium members on their various CBA interventions implemented.
• Conduct field visits and interview 15 CBAs (Bono East, Bono, Ahafo, Northern and North East Regions)
• Carry out a detailed analysis of the Cost-benefit analysis of the Community Based Advisors (CBA) entrepreneurship model.
• Prepare a detailed Gross Margin Analysis of demonstration activities conducted by CBAs and Farmers.
• Present preliminary findings to AFAP, AGRA and stakeholders and the Government
• Revise approach in line with comments received.
• Design and suggestion of a business model for the CBA enterprises informed by the results of the analysis conducted.
• Write a final report presenting methodology, data sources and findings.

KEY RATIOS

The consultant needs to replicate a calculation like suggested, tailored to the case. The CBA should understand the basic logic, but must at least understand the following ratios, contained in both ratios for visibility purposes (when modifying assumptions to directly see the outcome).

• Net Present Value (NPV): if >= 0, the project would be usually approved, but of course the higher the better and if there are comparable projects, the one with the highest NPV would be approved (all else equal). If the Net Present Value is 0, this does not mean that no value is created. It simply means our investment will generate exactly the rate of interest we used for discounting. This discount rate (or interest rate) is something which usually reflects our cost of capital or opportunity costs.
• Internal Rate of Return (IRR): indicates an interest rate a bank would have to pay us if we put the money into a bank account instead of investing it in the project. Obviously, the higher the IRR the better as it compensates the investor (and SDC) for the risks taken and the corresponding efforts.
• Cost-Benefit-Ratios: if > 1, the project would be usually approved, same logic as under 1. Indicates how much benefits we get for 1 $ invested, e.g. 3,4 would mean we create with 1 $ invested 3,4 $ of benefits

Major deliverables

Three deliverables are expected for this assignment:

1. A short inception report to define the scope of work and proposed timeline outlining the approach to be taken and key assumptions.
2. A PPT presentation (max 25 slides) in English, outlining main outcomes of the analysis.
3. All the underlying calculations used in the economic analysis in Microsoft Excel format, which can be fully modified by the AFAP team in the future. The structure of the Spreadsheet reads in this case like this:
   1. Worksheet Assumptions
   2. Worksheet on Flow of Funds total enterprise
   3. Worksheet calculation for one standard enterprise
4. A detailed final report incorporating all comments and feedback from relevant stakeholders.

The African Fertilizer and Agribusiness Partnership invite eligible consultants to indicate their interest in providing their services. Interested consultants must provide information indicating that they are qualified to perform the services (CV, description of similar assignments, experience in similar conditions, availability of appropriate skills, etc.).

The estimated duration of services is 15 business days and the estimated starting date is February 15, 2021.

Expressions of interest titled “Cost-Benefit Analysis Consultancy in Ghana” must be submitted by 17:00 hours, 10th February 2021 to : Nana-Aisha Mohammed, Ghana Country Program Manager – nmohammed@afap-partnership.org

Click here to download ToR for Cost Benefit Analysis – SIPMA