USAID Private Sector Activity

Azerbaijan

Overview

The USAID Private Sector Activity (2019-2025) is a six-year, $18.5 million initiative that utilizes a partnership and co-investment approach to support a more resilient Azerbaijan economy and improve the business enabling environment. Supporting the non-oil sector, by improving the competitiveness of the private sector (with a special emphasis on agriculture and other rural economic activities), reducing the barriers that hinder the development of micro, small, and medium enterprises (MSMEs), and strengthening women-led and women-focused organizations will help contribute to a more secure and sustainable Azerbaijani economy.

Expected Impact

• 25,385 farmers using new agronomy and business practices
• 40% increase in agricultural exports by assisted enterprises
• 66% increase in total sales by assisted enterprises
• $6.1 million in business loans to the private sector facilitated under the Activity
• 15 economic administrative barriers removed
• 20 business associations and women’s business organizations receiving assistance

In partnership with the Azerbaijani government and the private sector, the Activity helps address their priorities for modernization and improvement of public and private sector support and service delivery. This encourages the diversification of Azerbaijan’s economy, strengthens private sector member-based organizations, particularly those led by and focused on women, and reduces the barriers that hinder MSME development. It is also crucial to have a private sector that is able to respond to improvements in the business enabling environment.

Approach

• Support a More Diversified Non-Oil Economy: USAID provides assistance that supports the increased diversification of the non-oil economy in Azerbaijan, specifically but not limited to the agricultural sector. The Activity assists small and medium-sized farmers to become commercially viable farmers competing in local or export markets. It also works with processors, traders, and cold storage operators to improve their adherence to international standards. Through Component 1, the Activity will support six agricultural value chains and one rural value chain: berry, hazelnut, orchard crops, persimmon/pomegranate, perishable vegetables, wheat, and agritourism/ecotourism. The Activity builds capacity in support of developing the agricultural sector and value chains in which the activity works, as well as in support of USAID’s Global Development Alliance (GDA) initiatives.
• Improve the Business Environment for MSMEs: Because businesses face administrative barriers that stifle competition, dissuade investment, and constrain trade, the Activity works with associations and MSMEs to identify these barriers, communicate them to the relevant government agencies, and target the elimination of these barriers. These efforts help increase the benefits of economic growth and remove obstacles to competition, investment, trade, and integration into the global economy. The USAID Private Sector Activity works closely with the Small and Medium Business Development Agency (SMB) to engage other stakeholders, such as agencies in the Ministries of Agriculture and Economy, the Azerbaijan Food Safety Agency, the Center for Municipality Affairs, and the State Customs Committee, to remove administrative barriers. The Activity also supports improvements to the ‘Middle Corridor’, an increasingly important trade route that connects Asia to Europe through the Caucasus. As a result, businesses will have increased opportunities to produce, trade, export, and earn income.
• Support Women in Associations: This component will strengthen women-focused, women-led businesses and professional associations, to increase the access of women entrepreneurs and business owners to market information, markets, digital and business development services, finance, networks, mentorship, and other resources that will enable them to overcome the obstacles of starting and/or growing firms. The component will enhance locally driven advocacy by women business associations and women entrepreneurs, improve the business and workplace enabling environment for women, and improve livelihoods and income generation in target sectors.

Sector Focus

• Agriculture and agribusiness
• Agritourism and ecotourism
• Business enabling environment
• Women’s organizations

Partners

To implement the USAID Private Sector Activity, Cultivating New Frontiers in Agriculture (CNFA) collaborates with a diverse group of both international and local partner organizations, including agricultural producers, processors, exporters, input and machinery dealers, and other private sector actors; industry associations, chambers of commerce, educational institutions, and other business support organizations; Government of Azerbaijan ministries, departments, agencies, institutes, and services; and formal and informal women-led and women-focused groups.

Finance and Investment Input and Service Delivery Market Systems Private Sector Engagement Social Inclusion