Over the past two decades, Africa has achieved remarkable economic growth, outpacing most other regions in the world. Yet the benefits of greater investment and higher returns have been heavily concentrated among small segments of the population. These disparities stem partly from corruption, but mainly they result from policies that place the majority of the continent’s people and businesses—especially small and medium-scale enterprises—at a great disadvantage. Africa’s future hinges on its ability to develop markets that benefit the whole of society.

In partnership with the International Development Research Centre, TrustAfrica operates a special fund to promote enterprise and livelihoods in Africa through research and advocacy. Known as the Investment Climate & Business Environment (ICBE) Research Fund, it awarded roughly US$1,481,000 in its first phase. In 2010 we lauched the second phase of the Fund, which will provide an additional US$2.5 million for cutting-edge research over a three-year period. We are intent on building knowledge about investment policies and business practices that accelerate human development and fuel broadly shared prosperity.

Featured at the 2010 Clinton Global Initiative, the ICBE Research Fund uses competitive research grant mechanisms, training workshops and partnerships between business schools and private-sector organizations to contribute to a better investment climate and business environment in Africa. The Fund operates in English and French and includes all regions of the African continent.

Phase One: 2006–2009

Our first two calls for proposals, issued in June 2006 and August 2007, drew 306 submissions from universities, business schools and independent research institutions in 33 African countries. Some focused on finance, public services, agriculture, trade, energy and telecommunications. Others addressed governance, entrepreneurship, law reform and alternative dispute resolution.

For each round of funding, we engaged peer reviewers to grade the proposals and convened a pan-African jury to select the winners, who set to work analyzing such issues as regulation and reform in procurement; investment and corporate governance; supply chains and the informal sector; capital markets and foreign direct investments; energy and poverty in rural areas; and the creation and growth of youth and women enterprises. In all, we awarded 31 small grants of up to US$10,000 each, 20 intermediate grants of up to US$50,000 each, and three large grants of up to US$100,000 each. Here are a few of the winners:

• University of Cape Town in South Africa received US$50,000 for a research project by Ralph Hamann entitled “Collaborative governance: Public-private partnerships and multi-stakeholder partnerships”.
• l’Université Polytechnique de Bobo-Dioulasso in Burkina Faso received US$50,000 for a research project by Dénis Ouedraogo entitled “The perception of environmental problems by business leaders in Burkina Faso and strategies to implement sustainable development practices”.
• Centre International de Médiation et d’Arbitrage à Tanger in Tangiers, Morocco, received US$48,000 for a research project by Mohammed Bakkali entitled “An assessment of alternative commercial dispute resolution options and their impact on the business environment in Morocco”.
• University of Dar es Salaam (Faculty of Commerce) in Tanzania received US$10,000 for a research project by Mussa J. Assad entitled “Foreign currency risk: Awareness and management practices in Tanzania”.
  

As Phase One drew to a close, the ICBE Research Fund underwent a thorough review to derive lessons from the first two rounds and thereby refine its operations. TrustAfrica staff and partners took a close look at the grants competition to identify opportunities for improvement. We also assessed the nature, quality and impact of the research findings and began developing a series of case studies to help them reach a wider audience.

Phase Two: 2010–2013

As the Fund enters its next phase, we are paying close attention to two frameworks that now dominate the discourse on business and investment in Africa. The first is a set of “doing business indicators” that provide a quantitative way to assess regulations relating to starting a business, obtaining construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading, enforcing contracts and closing a business.

Because these indicators only tell part of the story, the Fund is also focusing on recent approaches to “making markets work for the poor.” Over the next few years, we hope to learn from our research partners why faster growth in Africa has not reduced inequality or accelerated poverty reduction the way it did in parts of East Asia in the 1970s and ’80s — as well as how policies and practices related to investment climate and business development can have a stronger and more beneficial impact on human development.

Many of the proposals already submitted for Phase Two focus on small and medium-scale enterprises (SMEs). Various applicants, for example, seek to investigate how SMEs are affected by labor market regulation, access to bank credit, accesss to public contracts, the global financial crisis, and information and communication technologies. Others aim to explore entrepreneurship among youths, vulnerable women and the disabled; resilience and risk in the informal sector; and coping strategies for family businesses. By supporting such cutting-edge scholarship, the ICBE Research Fund hopes to build and disseminate knowledge about practices and policies that can fuel equitable, market-driven development in Africa.

Read the call for scholarly papers and practitioner case studies for our upcoming conference on “The Business of Social and Environmental Innovation.” It will be held 14-16 November 2011 at the University of Cape Town's Graduate School of Business in South Africa.

Read the 2011 Call for Proposals (PDF).

View the 2011 Application form (doc).

Read our fact sheet about the ICBE Research Fund (PDF).

See related news and ideas.

See a complete list of ICBE grants to date.