Business Environment and Technical Assistance Project. The objective of the Business Environment and Technical Assistance (BETA) Project is to stimulate an increase in firm-level profits and formal employment from a pipeline of firms supported by the Project, including for micro, small, and medium enterprises (MSMEs) and MSMEs owned by women and youth and in rural areas. To achieve this result, there must be a pipeline of viable private sector businesses, and these businesses must be organized to demand better services from the government. In turn, the government should respond to the needs of the private sector by providing goods and services that are critical for growth. The business pipeline must also be inclusive of women owned and youth owned businesses. The BETA Project will improve access to finance and improve the general business ecosystem to support pipeline development. Given the focus of this Compact, this pipeline should include a sizeable number of horticulture value chain (HVC) firms that cover a range of activities such as input provision, integrated cold chain, and post-harvest handling
Business Environment and Technical Assistance Project. The objective of the BETA Project is to stimulate an increase in firm-level profits and formal employment from a pipeline of firms supported by the Project, including for micro, small, and medium enterprises (MSMEs) and MSMEs owned by women and youth and in rural areas. These businesses will participate in the Public-Private Dialogue, which results in provision of critical services. The project will intentionally target women and youth, who face relatively high barriers to investment. The ERR for the BETA Project has two main benefit streams: the increase in returns to factors of production (land, labor, capital) that can be attributed to the BETA Project, and the increase in GDP growth that results from major reforms because of the PPD component of the BETA Project. The BETA Project will provide one-on-one assistance to approximately 50 companies in the pipeline, and one-to-many assistance to another estimated 500 companies over the course of this Compact. MCC used estimates of company turnover from consultant studies and parameter values for growth of profits and firm employment estimated in the economics literature to calculate the incremental profit and employment compensation attributable to the compact investment. The PPD is expected to identify and raise important regulatory, coordination or other issues affecting the ability of the private sector to be productive and grow. Because the desire is to have the issues identified through a facilitated PPD, it is unknown at this stage exactly what reform activities will be carried out. There is evidence that such reforms should lead to economic benefit and provide parameters for estimating this benefit that can be adjusted to Lesotho’s context. 4 Thus, the key parameters for this activity are the number of consequential reforms accomplished by the PPD throughout the compact period and valuation of those benefits. The key parameters for the BETA Project are the average number of employees in the baseline, the growth rate of profit and labor compensation over time, and the number of significant regulatory reforms that will be accomplished by the PPD over the course of this Compact. The ERR assumes the BETA Project will result in a 7.1 percent increase in employment, a 5.1 percent increase in annual profits for firms in the pipeline, and 4 consequential reforms (one for each year after the BETA Project is up and running in year two). The ERR based on these assumptions is 11.6 percent.
Business Environment and Technical Assistance Project. The BETA Project will be evaluated through a performance evaluation. The evaluator will assess the establishment and strengthening of the PPD, the efficacy of the mechanism in incentivizing the Government to provide critical services to the private sector, and private sector representation within the PPD as it relates to women and youth owned MSMEs and businesses unconnected politically. In addition, the evaluation will assess the success of the BETA-supported businesses in terms of their profits, long-term viability, and representation of women and youth owned MSMEs. We hope to test the biggest assumption that creating a pipeline of businesses and facilitating a public-private dialogue will reduce patronage and make the Government more efficient in its provision of infrastructure and services. The evaluation questions are as follows: • Was the Business Environment and Technical Assistance Project implemented according to plan (in terms of quantity and quality of outputs)? • Did the Business Environment and Technical Assistance Project achieve its targeted outcomes, particularly its stated objective, in the timeframe and magnitude expected? Why or why not? This question links to the following outcome indicators: Increased profit of private businesses in the BETA pipeline; and business environment issues raised by the private sector that are resolved by working groups and/or the government. • Do the results of the Business Environment and Technical Assistance Project justify the allocation of resources towards it? The M&E Plan shall contain the evaluation Indicators listed in Schedule A. The results of all evaluations shall be made publicly available in accordance with the M&E Policy.
