New York, United States of America

The International Fund for Agricultural Development (IFAD) and the UN Global Compact launched a significant new partnership offering preferential treatment to participating companies of the UN Global Compact in project procurement for IFAD-funded projects in Tanzania in December 2023.

With the potential to scale to more than US$130 million in project funding in Tanzania, this is the first collaboration between IFAD and the UN Global Compact to influence updates to Government policy.

Marsha Macatta-Yambi, Executive Director of Global Compact Network Tanzania, and Priscilla Torres, Chief of Project Procurement at IFAD, jointly presented the pilot project, which will grant a 5 per cent grading preference in the evaluation of public procurement bids to companies participating in the UN Global Compact, at the pre-annual general meeting of the UN Global Compact in Dar es Salaam on 12 December 2023. 

In practice, bidders must demonstrate that they are participants or recent applicants to the UN Global Compact when competing for IFAD-financed contracts. As participants, the companies commit to work towards the Sustainable Development Goals (SDGs) in their operations and to report on their progress on an annual basis. 

Membership in the UN Global Compact comes with access to a large network of fellow companies, the associated knowledge exchange and networking and a strong framework to meet the environmental and social requirements of international financial institutions.

With project procurement accounting for some 13 per cent of global domestic product (GDP), organizers noted that the partnership is significant in that IFAD is the first international financial institution to implement these standards.

IFAD and the UN Global Compact expect the pilot’s results will inform several other Governments to consider accepting preferential bidding for participants of the UN Global Compact for IFAD-funded projects in their countries in 2024.

Eliakim C. Maswi, CEO of Tanzania’s Public Procurement Regulatory Authority (PPRA), has committed to supporting the new partnership initiative. Tanzania’s e-procurement system will be modified to accommodate IFAD’s standard bidding documents and allow a preference for participants of the Global Compact. 

On 14 December 2023, the pilot Climate Smart Smallholder Dairy Transformation Project (C-SDTP) in Tanzania was approved by IFAD’s Executive Board, including the expected preference for Global Compact participants. The outcomes of this initiative are expected to be seen from 2024 onwards during the project implementation and will be shared with multilateral development banks and international financial institutions.

The UN Global Compact is a multi-stakeholder leadership initiative that seeks to align business operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. It has more than 20,000 corporate signatories in more than 160 countries. Involving the private sector in the achievement of the SDGs through its initiative is fully in line with IFAD’s new chapter of involvement of the private sector in its operations. The shared objectives of both parties helped promote this great cooperation. 

IFAD is an international financial institution and specialized United Nations agency based in Rome, the UN’s food and agriculture hub. Since 1978, IFAD has provided US $23.2 billion in grants and low-interest loans. IFAD works where poverty and hunger are deepest – in the most remote regions of developing countries and fragile situations where few development agencies venture. It has developed a cost-effective, people-centred and partnership-oriented approach that delivers results. Small-scale agriculture is central to its development model, which connects farmers and poor rural women and men to markets and services so they can grow more and earn more.