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Business Opportunity Support Scheme (BOSS - NZAID New Zealands

By Leo Snyder,2014-07-09 09:11
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Business Opportunity Support Scheme (BOSS - NZAID New Zealands ...

    9 July 2010

Business Opportunity Support Scheme (‘BOSS’)

Tonga and NZAID agreed that under the New Zealand’s Development Cooperation

    Programme with Tonga, supporting private sector development will be a key focus. The

    BOSS is one initiative to support private sector development in Tonga.

What is the purpose of BOSS?

    This scheme will provide grants to help entrepreneurs and investors conduct feasibility

    studies to quantify business and investment opportunities, including opportunities for

    joint ventures. This scheme will have a focus on the development of the private sector in

    Tonga, by increasing investment in export-related ventures.

What are the objectives?

    ? To encourage commercial investment in projects or business plans that will

    increase earnings from Tongan exports, import substitution and tourism. ? To provide Tongan and New Zealand firms making significant investment

    decisions with an informed opportunity to compare the benefits of investing in the

    proposed project with other options.

    ? To identify any impediments to investments or business plans proceeding. ? To support Tonga/New Zealand business linkages.

Who can apply for funds?

    ? The sector focus will be for feasibility studies in the export-related, import

    substitution and tourism sectors. Other sectors will be considered on a case-by-

    case basis.

    ? Recipients must be a registered business or business-related organisation that

    has been in operation for at least one year.

    ? The feasibility grant cannot be applied retrospectively. ? Recipients can only receive one feasibility grant per annum. ? GoT through the National Economic Development Council (NEDC) will make a

    judgement call on whether applicants need funding (i.e. whether or not the

    applicant has sufficient financial capacity to fund the proposal itself). ? There will be no specific quota for applications from women entrepreneurs.

    However, BOSS will be promoted via the Chamber of Commerce, Civil Society

    and the Ministry of Women's Affairs. In future, the upstream supply of proposals

    from women could be promoted via the proposed Tonga Business Enterprise

    Centre.

What will the proposal for an assessment grant need to demonstrate?

    ? How the potential business/new investment could contribute to the livelihoods of

    the wider community. The proposal will need to meet the same criteria as

    required for other grants administered by the NEDC. This criteria includes:

     1

    o Level of foreign exchange earnings/import substitution.

    o Employment creation & type.

    o Direct contribution to economic sector.

    o Indirect contribution to the economy.

    o Demonstration of management expertise and access to technical

    resources.

    o Demonstration that demand & supply issues have been addressed

    (marketing plans, pre-orders, client base etc.).

    o Regional benefits (employment/opportunities in remote islands).

    o Attraction of foreign investment.

    o Sustainability & growth potential.

    ? How the feasibility study will assess the commercial viability of the new private

    sector investment or business opportunity, and if the study proves that the project

    is commercially viable how that project will be funded. ? A plan for the feasibility study and how it will be conducted, including an itemised

    budget.

    ? Each proposal will have been pre-approved by the relevant sector umbrella

    organisation.

What funding is available?

    ? TOP$250,000 will be provided in 2009/10. Funding beyond this point will be

    subject to a review of the effectiveness of the scheme ? There is a maximum of TOP30,000 per recipient.

    ? There is a minimum of TOP10,000 per recipient.

    ? Recipients will be required to contribute 30% towards the cost of the study.

    Contributions will be cash contributions or in-kind contributions and include for

    accommodation, food, and vehicles provided by a business to visitors

    (prospective investors or consultants) either in Tonga or in NZ. The value of

    accommodation and food will be set at the NZAID per diem rates.

What are the eligible costs for the grant?

    ? Eligible expenses will generally include consultant fees, per diems, travel and

    accommodation or other items agreed by the NEDC as essential to complete an

    approved feasibility study. Per diems will be provided at the NZAID rate.

How will the grants be approved?

    ? The NEDC will consider and approve proposals for funding. The NEDC will meet

    on a monthly basis.

    ? The NEDC is supported by a secretariat located in the Chamber of Commerce.

    The secretariat will review and assess the proposals using graded criteria, and

    then forward proposals that meet the criteria to the NEDC. The secretariat will

    also provide the NEDC with a list of proposals that have not been recommended,

    together with the reasons for declining the proposals. ? Grant recipients will be required to provide full financial reports and monitoring

    reports to the NEDC.

What is the timeframe for BOSS?

    ? The scheme will conclude in October 2010. It will be reviewed in November 2010

    covering the October-October period. If the review finds the scheme successful,

    the scheme will look to be extended for a further year.

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    NEDC PROSPECTUS

1. Background

    The National Economic Development Council (NEDC) is a Government initiative

    emanating from Tonga’s first ever National Economic Summit held in April 2007. It was

    established by the Prime Minister as a response to the national effort to support the

    economic development activities in Tonga.

The Communiqué from this Summit sets the scope for economic growth through:

    i) Forging a stronger partnership between government and private sector (creation of

    NEDC);

    ii) focus on export growth including remittances (corollary is import substitution) and

    tourism;

    iii) maximise the existing aid funding and add additional government funding to focus

    on growing the economy;

    iv) develop market opportunities by facilitating trade;

    v) enhance the access to capital markets (fully utilise the existing natural and human

    resources by improving access to capital) to develop activities to achieve economic

    growth; and

    vi) develop the labour market to ensure full gainful employment to maximise the

    potential for economic growth.

The participating partners agreed to work closer together, with the Government of Tonga

    (GoT) acknowledging its role as a facilitator of private sector growth.

2. Objectives

    The main objective of the NEDC is to:

    “Stimulate economic growth by identifying and recommending to Cabinet policy

    initiatives for a private sector led economy”.

3. Tasks

    The NEDC was established with the following tasks:

    i) set up a sector framework for economic growth (refer Annex 1);

    ii) formulate/endorse sector strategies for economic growth;

    iii) set up a funding framework to implement the sector strategies (refer Annex 2);

    iv) develop funding criteria to determine “best” application of funding to implement the

    strategies; and

    v) identify the funding sources (including NEDC) and “match” the initiatives identified

    in the sectoral strategies

     3

    ANNEX 1: SECTOR FRAMEWORK FOR ECONOMIC GROWTH

1. NEDC Framework

    The NEDC should:-

    1. represent the economic and business interests of the country as a whole and also of

    its component parts;

    2. include those GoT Ministries most directly involved in the regulation of industry; 3. build a structure that provides for the formulation of policy, purpose and practice; and 4. motivate, initiate and consolidate activities that aim to stimulate growth in the

    economic wealth, environmental sustainability and social stability of the Kingdom.

The Sector Framework of Economic Interests:-

    1. an overall umbrella for business groupings; e.g. the Chamber of Commerce and

    Industry; and

    2. a collection of the principle “umbrella organisations” of the economic sectors to

    include;

    i. Agriculture,

    ii. Fisheries,

    iii. Tourism,

    iv. Manufacturers,

    v. Financial and Service Industries,

    vi. Infrastructure, and

    vii. The National Export Strategy committee.

    The number and nature of sector organizations is to be confirmed but it is envisaged that there will be no more than seven total.

2. Role of Umbrella Organisation

    The purpose of the Umbrella Organization is to strengthen private sector representation by ensuring that each sector is represented by one cohesive organization. As such the Umbrella Organisation will work closely with Government Agencies by providing private sector feedback on policy development and implementation in the relevant sector. The role is to assist to stimulate economic growth by identifying and recommending to NEDC policy initiatives for a private sector led economy.

    NEDC Representation from each sector is from the respective Umbrella Organisation.

    Umbrella Organisations will appoint Executive Officers to liaise with Government and private sector to ensure wide consultation. The Executive Officers will be situated at one location, along with the NEDC Executive officer to ensure close consultation, communication and cost efficiencies.

    The appraisal teams for NEDC proposals will be supplied by each Umbrella Organisation. The proposals will be vetted, fine tuned and gain the support of the Umbrella organization before being sent to NEDC for consideration.