DAR ES SALAAM, TANZANIA – The second round of Challenge Fund support for innovators and entrepreneurs working in the logistics and transport sector was launched recently with a financing mechanism in the range of $16m.
The Logistics Innovation for Trade (LIFT) Challenge Fund, which is a $16 million (Tsh.35.2 billion) grant-based financial mechanism, supports innovators with good ideas for products or services that can reduce the costs of transport and logistics in East Africa.
According to TradeMark Africa (TMA) which is a non-profit organization, LIFT will provide grants ranging from $ 150,000 to $ 1,000,000 (Tsh.330 million to Tsh.2.2billion respectively) to winning proposals from innovators from across the world whose project ideas will be implemented in the East African Community (EAC).
East Africa is reported to have the highest freight and transport costs in the world. It is said that the freight costs are over 50% higher than those of the United States and Europe per kilometre.
Successful LIFT projects will contribute to TMA’s objective of reducing transport time along the main East Africa transport corridors by 15% by the end of 2016.
Dr. Josephat Kweka, Country Director Tanzania, TMA said it was their hope that the entrepreneurs and innovators of the EAC in partnership with their counterparts internationally will drive forward development through the adoption or introduction of ‘best practice’ technologies in the transport and logistics sector, enabling local businesses to compete favorably in the increasingly global economy.
“LIFT is a valuable financial instrument that supports private sector ‘can-do’ to develop and test new ideas that should reduce the cost and time of transport and logistics in the EAC and TMA is essentially co-investing with the private sector in projects that are seen as being too risky to undertake without external sponsorship or support,” Dr. Kweka said.
LIFT Challenge Fund Manager Mr. David Mitchell emphasized the impact of the challenge fund to local entrepreneurs saying that the Challenge Fund instruments fill a significant gap in the financial support needs of private businesses and the innovators that drive business activity to greater results and efficiencies.
“This is achieved while mitigating the risks of high-return projects that mainstream banking and financial institutions tend to avoid supporting due to the uncertainties of the business proposition or a bank’s own lack of experience in the sector,” Mitchell said. The LIFT Challenge Fund is open to businesses and individuals throughout the world that are either presently operating or intend to be based in the EAC.
Source: Business Week

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