A National Supplier Development Programme to support local firms service mining and industry

A proposal for Ghana and West Africa

African Minerals Development Centre

Need for a Suppliers Development Programme

• A systematic and more sustainable approach to supply chain development as it helps the organic growth of linkages through local suppliers

• Scaling up domestic suppliers’ capacity, capabilities and competivenessare critical.

• NSDP based on two distinct but complementary components: pillar reinforcing suppliers’ skills in particular, and pillar empowering and supporting existing and new suppliers

• NSDP to address above-mentioned issues and constraints (and particularly to support local firms to link-in with existing and potential value chains) by harnessing stakeholders to identify and deal with weaknesses

• Dis-enclaves and integrates into broader economy, avoids duplication.

Core functions of a National Suppliers’ Development Programme

NSDPIncrease supply to

mining Industry through targeted support to local

producers

Enhance skills and workforce

development

Develop research, technological and

innovation capabilities

Spillovers to other economic sectors and

to spatial development

Forward looking: preparing for the

future of the industry (technology; mine

closure etc.)

NSDP Mandate

• Inputs and contributions made to NSDP structure by a host of government and non-government institutions

• Endorsed by said institutions

• Approval by Economic Management Team (cabinet decision)

• Formally launched by the Vice President

• Publicly welcomed by suppliers and mining firms alike

• Now time to act – not lose momentum

Factors for Success

Success will depend on strategic partnerships to provide:

a. Administrative support (e.g. creating national online platforms to share

information about procurement; networks of suppliers);

b. Technical support (e.g. on product design, standards setting and support

to meet those; access to high tech equipment and facilities; development

cooperation including though JVs and B2B);

c. Financial support (access to finance, special initiatives such as business

incubators, innovation hubs, govt subsidies to support R&D); and

d. Institutional support (e.g. by supporting existing institutions or creating

new ones, to support policy coherence and coordination but also to

ensure that specific areas, such as productivity and competitiveness get

the necessary attention)

Boosting skills to stimulate value addition across

sectors

• A highly educated workforce is important to ensure proper technology and

knowledge transfers and spillovers.

• Yet labour productivity remains low by international standards. Skills

mismatches impact on the absorptive capacity of the supply chain. The quality

of the workforce is a major challenge

Options to address this:

• Comprehensive cross-sector skills development programme and

competitiveness and productivity council

• Assessment of capabilities and skills gaps

• Link TVET better with needs of future activities, orient towards STEM fields

• Facilitate movement of professionals across region

• Boost R&D, improve climate for innovation

Example – the case of Chile

• Chile an often cited “best practice” in moving from dependence on one commodity for income and exports, to a diversified and broader economy

• Many factors led to this: productive investment promotion, coordination under Ministry (CODELCO, ENAMI…), investments streamlined with agriculture and industry, focus on upstream suppliers (services, manufactures)

• Supplier Development Programme – partnership of BHP Billiton and CODELCO – initially covered 11 projects worth $121 million

• Examples: electrical systems, cables, digging technology, health and safety systems

• Still mixed success

Establishing an institutional environment for success

• To ensure that NSDP support is coherent and consistent, it is necessary to

have structured policy dialogue among key Ministries, agencies, private

sector academia/research institutions, CSOs.

• Reinforce this through coordination with quasi-independent oversight

• To end silo approach and ensure policy coherence nationally and regionally

• Thus has potential to foster regional clusters and a mineral-industry

cluster – bridging distributions of minerals, skilled workers etc, and

harnessing sidestream interventions

National Advisory Council

Inter-ministerial coordination committee

National Productivity and Innovation Council

Training and Skills Development

Council

Enterprise Centre

Independent Body

Private-public initiative, led by a training institution

Private-led Body

Quasi-independent Body

Government-led Committee

Reports to EMT

Overall institutional architecture governing the Mineral cluster and Supply Chain initiative

Key functions: Develop skills strategy Develop work force

capabilities Assess & address gaps &

mismatches Build capabilities of local

suppliers, through training and technical support

Key Actors: Ministry of Education Universities Council for Scientific & Industrial

Research Council for Technical & Vocational

Education Training Ghana Skills Development Initiative National Accreditation Board CEO of Enterprise Centre Chair of National Productivity and

Innovation Council Chair of Inter-Ministerial Committee *Human Resource Development

Council

Key functions: Disseminate info on mining

and other industries requirements;

Publish tenders Maintain suppliers’ database Announces tenders and

procurement requests Provide specific support to

local firms Runs executive-level training Coordinate private efforts to

feed into national consultations

Facilitates B2B meetings and JV with international investments

Support SMEs upgrading through business mentoring

Key Actors: Chamber of Mines Association of Ghana

Industries Ghana Chamber of

Commerce Mining companies Suppliers Financial institutions National Board of Small-

Scale Industries GIPC Financial institutions Chair of Training and Skills

Devt Council Chair of Training and Skills

Devt Council Chair of Inter-Ministerial

Committee

Key functions: Fosters R&D efforts Develop innovation

strategy Enhance national science,

technology and innovation capabilities

Foster entrepreneurship and creativity

Technological transfer Knowledge sharing

Key functions: Long-term vision Scale up initiatives at

national level Foster inter-sectoral

linkages Policy coordination at

national level Policy coherence at

local level, across ministries & beyond Develop cross-cutting strategies

Key Actors: GIPC Free Zone Board Ghana Chamber of Mines Association of Ghana

Industries Universities of Technology Research Centres National Board of Small-Scale

Industries CEO of Enterprise Centre Chair of Training and Skills

Devt Council Chair of Inter-Ministerial

Committee * Intellectual Property Office * National System of

Innovation *Technological hub *R&D Support institution

Key Actors: Ministry of Mining Ministry of Trade & Industry Ministry of Finance Ministry of Planning Ministry of Education Ministry of Infrastructure CEO of Enterprise Centre Chair of National Productivity and

Innovation Council Chair of Training and Skills Devt

Council

* In red: Missing institutions

Business as Usual

Virtuous Mineral Supply Chain

Next Steps

1. Define roles of all key actors in moving ahead with NSDP and gain consensus on further partner institutions needed.

2. Recruit firms to engage in JVs and other partnerships to promote local private sector

3. Pursue institutional environment conducive for success of value addition and NSDP

4. Approaching financiers for NSDP

5. Move to Phases 2 and 3 of the initiative, by linking in downstream beneficiation and petrochemicals sectors to the established NSDP and institutional framework.

Thank You!