Aga Khan Fund for Economic Development

Aga Khan Fund for Economic Development

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The Aga Khan Fund for Economic Development (AKFED) (AKFED) is the sole for-profit agency of the Aga Khan Development Network
Aga Khan Development Network
The Aga Khan Development Network is a group of private, non-denominational development agencies that seek to empower communities and individuals to improve living conditions and opportunities, in sub-Saharan Africa, Central and South Asia, and the Middle East...

 (AKDN) (AKDN) and works in partnership with international organizations and governments to stimulate the private sectors of developing economies, with the aim of generating capital for investment into long-lasting and sustainable development
Sustainable development
Sustainable development is a pattern of resource use, that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for generations to come...

 initiatives. The agency’s operations include, but are not limited to, industry and tourism. Critical to the development
Economic development
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...

 process are goods and services including financial institutions, and infrastructure, such as power generation and communications, which together comprise some of AKFED’s initiatives.

Introduction


Aga Khan Fund for Economic Development (AKFED) is one of eight agencies operating under the direction of the umbrella organization, Aga Khan Development Network
Aga Khan Development Network
The Aga Khan Development Network is a group of private, non-denominational development agencies that seek to empower communities and individuals to improve living conditions and opportunities, in sub-Saharan Africa, Central and South Asia, and the Middle East...

 (AKDN), founded and Chaired by His Highness the Aga Khan
Aga Khan
Aga Khan is the hereditary title of the Imam of the largest branch of the Ismā'īlī followers of the Shī‘a faith. They affirm the Imamat of the descendants of Ismail ibn Jafar, eldest son of Imam Ja'far al-Sadiq, while the larger Twelver branch of Shi`ism follows Ismail's younger brother Musa...

. Aga Khan Fund for Economic Development (AKFED) has approximately 150 companies in some 15 countries, and employ over 30,000 people. Of these eight, AKFED is the sole for-profit agency, the purpose of which is to build high-performing institutions and to sustain long-lasting development
Economic development
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...

 projects in developing regions
Developing country
A developing country, also known as a less-developed country, is a nation with a low level of material well-being. Since no single definition of the term developing country is recognized internationally, the levels of development may vary widely within so-called developing countries...

. The agency works to build infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...

s that support economic development
Economic development
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...

. Its major investments include the Financial Services, Industrial Promotion Services
Industrial Promotion Services
Industrial Promotion Services is the industrial development arm of the Aga Khan Fund for Economic Development . AKFED is a member of the Aga Khan Development Network.-Location:...

 (IPS) (IPS), and Tourism Promotion Services (TPS) (TPS), . These initiatives span improvements in banking, electricity, agriculture
Agribusiness
In agriculture, agribusiness is a generic term for the various businesses involved in food production, including farming and contract farming, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales....

, hotels, aviation, and communications linkages.

Aga Khan Fund for Economic Development (AKFED) provides a living for millions of people, in particular in the agribusiness sector. For Example, AKFED developed green bean farming in Kenya by providing 50,000 farmers with technical assistance and buying their produce for export to Europe. The company has 2,000 employees, turns a profit and indirectly provides a living for 500,000 people.

In conjunction with the governments of certain developing countries, AKFED operates to promote the private sector. Through the support of industries
Industry
Industry refers to the production of an economic good or service within an economy.-Industrial sectors:There are four key industrial economic sectors: the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction,...

, the agency aims to bolster the participation of developing regions in market economies
Market economy
A market economy is an economy in which the prices of goods and services are determined in a free price system. This is often contrasted with a state-directed or planned economy. Market economies can range from hypothetically pure laissez-faire variants to an assortment of real-world mixed...

. In addition, essential to sustaining development initiatives is a stable human resource
Human resources
Human resources is a term used to describe the individuals who make up the workforce of an organization, although it is also applied in labor economics to, for example, business sectors or even whole nations...

 bank from which to draw support. To this end, AKFED provides training in administrative, managerial and marketing skills with the aim of fostering locally owned enterprises. Where capital is unavailable, the agency provides the initial investment for companies through the use of microloans
Microcredit
Microcredit is the extension of very small loans to those in poverty designed to spur entrepreneurship. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit...

.
As a for profit organisation AKFED however conducts its businesses as a standard employer with ups and downs associated with financial results.

Financial Services


Operating in East Africa
East Africa
East Africa or Eastern Africa is the easterly region of the African continent, variably defined by geography or geopolitics. In the UN scheme of geographic regions, 19 territories constitute Eastern Africa:...

, Central Asia
Central Asia
Central Asia is a core region of the Asian continent from the Caspian Sea in the west, China in the east, Afghanistan in the south, and Russia in the north...

 and South Asia
South Asia
South Asia, also known as Southern Asia, is the southern region of the Asian continent, which comprises the sub-Himalayan countries and, for some authorities , also includes the adjoining countries to the west and the east...

, AKFED supports the creation of financial institutions including banks and insurance groups within these regions. The agency is a major supporter of corporate activity and is a prime lender for local business both in Bangladesh
Bangladesh
Bangladesh , officially the People's Republic of Bangladesh is a sovereign state located in South Asia. It is bordered by India on all sides except for a small border with Burma to the far southeast and by the Bay of Bengal to the south...

 and the Kyrgyz Republic where it founded the Kyrgyz Investment and Credit Bank (KICB).

One of the agency’s earliest holdings was the Diamond Trust Bank of Kenya
Kenya
Kenya , officially known as the Republic of Kenya, is a country in East Africa that lies on the equator, with the Indian Ocean to its south-east...

 and Uganda
Uganda
Uganda , officially the Republic of Uganda, is a landlocked country in East Africa. Uganda is also known as the "Pearl of Africa". It is bordered on the east by Kenya, on the north by South Sudan, on the west by the Democratic Republic of the Congo, on the southwest by Rwanda, and on the south by...

, founded in 1930, the aim of which was to use locally generated funds to create loans for small business
Small business
A small business is a business that is privately owned and operated, with a small number of employees and relatively low volume of sales. Small businesses are normally privately owned corporations, partnerships, or sole proprietorships...

 and the construction of homes. Soon after, Jubilee Insurance Group joined the agency’s banks in East Africa. In India, the agency became an important shareholder for the Development Credit Bank
Development Credit Bank
DCB Bank is private sector scheduled commercial bank in India. It has a network of 82 branches and 139 ATMs in the country. It offers value for money products to cater the needs of individuals, small and medium businesses, rural banking and corporates in selective regions.The Bank is present in...

 Ltd. In 2004, AKFED acquired holdings in Pakistan
Pakistan
Pakistan , officially the Islamic Republic of Pakistan is a sovereign state in South Asia. It has a coastline along the Arabian Sea and the Gulf of Oman in the south and is bordered by Afghanistan and Iran in the west, India in the east and China in the far northeast. In the north, Tajikistan...

’s largest private-sector financial institution, Habib Bank Limited (HBL). By stimulating the corporate sector in the regions where it operates, the agency generates capital for the purpose of reinvestment into services essential for development.

Industry


AKFED operates in conjunction with private donors, international economic organizations and individual governments to address constraints and hindrances to development. Working primarily in Africa
Africa
Africa is the world's second largest and second most populous continent, after Asia. At about 30.2 million km² including adjacent islands, it covers 6% of the Earth's total surface area and 20.4% of the total land area...

 and Asia
Asia
Asia is the world's largest and most populous continent, located primarily in the eastern and northern hemispheres. It covers 8.7% of the Earth's total surface area and with approximately 3.879 billion people, it hosts 60% of the world's current human population...

, the agency encourages the growth of industry and infrastructure in order for developing regions to generate the capital necessary for investment into AKFED’s many projects and more generally, for a country’s growth.

Since the 1960’s, the agency has supported a group of enterprises under the Industrial Promotion Services (IPS), each of which was conceptualized to spur investment and increase activity in the corporate sectors of developing countries. However with the international climate largely favouring countries with export-oriented
Export-oriented
An export-oriented company is one which produces goods mainly for exports, rather than for the domestic market. The term is commonly used to describe factories in developing countries producing goods for developed countries....

 economies in place of popular import substitution industrialization (ISI), IPS adjusted its approach. The changes would include an emphasis upon privatization
Privatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...

 and the agency embarked on its goal with a new approach in the 1980’s. Private enterprises and entrepreneur
Entrepreneur
An entrepreneur is an owner or manager of a business enterprise who makes money through risk and initiative.The term was originally a loanword from French and was first defined by the Irish-French economist Richard Cantillon. Entrepreneur in English is a term applied to a person who is willing to...

s became generators for capital investment into agribusiness
Agribusiness
In agriculture, agribusiness is a generic term for the various businesses involved in food production, including farming and contract farming, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales....

 and infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...

, both crucial to the development process.

Food and Agriculture


In the domain of food and agriculture, IPS facilitates agricultural extension
Agricultural extension
Agricultural extension was once known as the application of scientific research and new knowledge to agricultural practices through farmer education...

 to farmers, in order to make possible their participation in global markets. Using a participatory programme of education and technical skills training for farmers, IPS supports the rural economies of developing countries by facilitating export
Export
The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer"...

s to developed regions. For the initial costs of such production until harvest
Harvest
Harvest is the process of gathering mature crops from the fields. Reaping is the cutting of grain or pulse for harvest, typically using a scythe, sickle, or reaper...

 revenues are generated, microloans are provided to farmers by non-profit agencies of the AKDN. In addition to microfinance and education, the agency works to improve the health and sanitation conditions of its beneficiaries, and considers employee welfare to be of paramount concern, providing equitable opportunity
Equal opportunity
Equal opportunity, or equality of opportunity, is a controversial political concept; and an important informal decision-making standard without a precise definition involving fair choices within the public sphere...

 between genders and making child-care provisions for its employees.

Infrastructure


Within the IPS, AKFED operates in conjunction with international economic organizations, private donors and individual governments to resolve issues of electricity and water supply, as well as communications infrastructure.

Private enterprises in the form of power plants have been a major project of the agency, through which it invested in the largest plant within sub-Saharan Africa
Sub-Saharan Africa
Sub-Saharan Africa as a geographical term refers to the area of the African continent which lies south of the Sahara. A political definition of Sub-Saharan Africa, instead, covers all African countries which are fully or partially located south of the Sahara...

, Azito Energy. The project’s counterpart in Kenya, is Mombasa
Mombasa
Mombasa is the second-largest city in Kenya. Lying next to the Indian Ocean, it has a major port and an international airport. The city also serves as the centre of the coastal tourism industry....

’s Tsavo Power plant. In neighbouring Uganda
Uganda
Uganda , officially the Republic of Uganda, is a landlocked country in East Africa. Uganda is also known as the "Pearl of Africa". It is bordered on the east by Kenya, on the north by South Sudan, on the west by the Democratic Republic of the Congo, on the southwest by Rwanda, and on the south by...

, the agency is working to establish the critical Bujagali Hydro Power Project. Currently, the agency is working to establish the Pamir
Pamir
Pamir may refer to:* a pamir, a U-shaped grassy valley in the Pamir Mountains**Great Pamir, a high valley in the Wakhan on the border of Afghanistan and Tajikistan**Little Pamir, a high valley in the Wakhan, Afghanistan...

 power plant in Tajikistan
Tajikistan
Tajikistan , officially the Republic of Tajikistan , is a mountainous landlocked country in Central Asia. Afghanistan borders it to the south, Uzbekistan to the west, Kyrgyzstan to the north, and China to the east....

, the aim of which is to reinvigorate the country’s economy and resolve electricity inadequacies.

AKFED’s first telecommunications initiative is known as Indigo, a GSM mobile phone project based in Tajikistan
Tajikistan
Tajikistan , officially the Republic of Tajikistan , is a mountainous landlocked country in Central Asia. Afghanistan borders it to the south, Uzbekistan to the west, Kyrgyzstan to the north, and China to the east....

. An important aspect of the reconstruction and development process, the agency embarked on its second mobile phone initiative in Afghanistan
Afghanistan
Afghanistan , officially the Islamic Republic of Afghanistan, is a landlocked country located in the centre of Asia, forming South Asia, Central Asia and the Middle East. With a population of about 29 million, it has an area of , making it the 42nd most populous and 41st largest nation in the world...

 (mobile network operators in Afghanistan). Today the country’s company, Roshan (telco)
Roshan (telco)
Roshan is Afghanistan's leading telecommunications provider, serving approximately 3.5 million active subscribers.In January 2003, Roshan was awarded the second GSM license in Afghanistan at a time when there was virtually no telecommunications infrastructure in place; national calls were...

 has expanded to create over 500 jobs for the country.

AKFED owns 51% of the Roshan (telco)
Roshan (telco)
Roshan is Afghanistan's leading telecommunications provider, serving approximately 3.5 million active subscribers.In January 2003, Roshan was awarded the second GSM license in Afghanistan at a time when there was virtually no telecommunications infrastructure in place; national calls were...

 cellphone network in Afghanistan. Started in 2003, it is the largest commercial wireless operator in Afghanistan.

Tourism Development


The Tourism Promotion Services, known as TPS, aims at creating sustainable tourist
Tourism
Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes".Tourism has become a...

 attractions in underdeveloped communities. Paying attention to cultural values as well as environmental issues, TPS creates a wide variety of tourist facilities that generate sustainable community capital, stimulate local economic growth and promote positive investment opportunities.

Under the brand name Serena
Serena
-People:*Aldo Serena, an Italian former footballer*Michele Serena, an Italian former footballer*Fernando Serena, a Spanish former footballer*Bill Serena, a deceased American baseball player*Gustavo Serena, a deceased Italian actor and film director...

, TPS constructs and maintains a multitude of resorts, hotels and other tourist attractions that serve to stimulate local economic growth through increased employment, development of a skilled workforce, increased productivity of local businesses (particularly in the design and craft spheres) and the general development of given areas. In all of these aspects, emphasis is placed on the active employment and input of the local community.

In regions that are neglected by commercial tourism corporations, TPS aims to develop facilities that meet the international standards for hospitality
Hospitality
Hospitality is the relationship between guest and host, or the act or practice of being hospitable. Specifically, this includes the reception and entertainment of guests, visitors, or strangers, resorts, membership clubs, conventions, attractions, special events, and other services for travelers...

, accommodation and service. Attention to such factors further promotes economic growth as well as the potential for local business development within less-frequented regions.

While seeking to stimulate economic growth and generate sustainable capital, TSP aims at protecting and maintaining the local environment.

Media Services


Aga Khan founded the Kenya’s major media
News media
The news media are those elements of the mass media that focus on delivering news to the general public or a target public.These include print media , broadcast news , and more recently the Internet .-Etymology:A medium is a carrier of something...

 service, the Nation Media Group
Nation Media Group
Nation Media Group is a Kenyan media group listed on the Nairobi Stock Exchange. NMG was founded by Aga Khan IV in 1959 and is the largest private media house in East and Central Africa with offices in Kenya, Uganda, and Tanzania...

 in 1960. In the year’s leading up to Kenya’s independence, Nation Media’s predecessors, Taifa
Taifa
In the history of the Iberian Peninsula, a taifa was an independent Muslim-ruled principality, usually an emirate or petty kingdom, though there was one oligarchy, of which a number formed in the Al-Andalus after the final collapse of the Umayyad Caliphate of Córdoba in 1031.-Rise:The origins of...

 and Nation
Nation
A nation may refer to a community of people who share a common language, culture, ethnicity, descent, and/or history. In this definition, a nation has no physical borders. However, it can also refer to people who share a common territory and government irrespective of their ethnic make-up...

 newspapers, served as vehicles of independent opinion. Today, the group operates nation-wide newspapers in English
English language
English is a West Germanic language that arose in the Anglo-Saxon kingdoms of England and spread into what was to become south-east Scotland under the influence of the Anglian medieval kingdom of Northumbria...

 and Swahili
Swahili language
Swahili or Kiswahili is a Bantu language spoken by various ethnic groups that inhabit several large stretches of the Mozambique Channel coastline from northern Kenya to northern Mozambique, including the Comoro Islands. It is also spoken by ethnic minority groups in Somalia...

 languages, as well as radio
Radio
Radio is the transmission of signals through free space by modulation of electromagnetic waves with frequencies below those of visible light. Electromagnetic radiation travels by means of oscillating electromagnetic fields that pass through the air and the vacuum of space...

 and television
Television
Television is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...

 stations. At present, the group has expanded to serve Uganda
Uganda
Uganda , officially the Republic of Uganda, is a landlocked country in East Africa. Uganda is also known as the "Pearl of Africa". It is bordered on the east by Kenya, on the north by South Sudan, on the west by the Democratic Republic of the Congo, on the southwest by Rwanda, and on the south by...

 and Tanzania
Tanzania
The United Republic of Tanzania is a country in East Africa bordered by Kenya and Uganda to the north, Rwanda, Burundi, and the Democratic Republic of the Congo to the west, and Zambia, Malawi, and Mozambique to the south. The country's eastern borders lie on the Indian Ocean.Tanzania is a state...

 also.

Aviation Services


The Aviation
Aviation
Aviation is the design, development, production, operation, and use of aircraft, especially heavier-than-air aircraft. Aviation is derived from avis, the Latin word for bird.-History:...

 division of the foundation is dedicated to providing support to the existing aviation infrastructure, which serves to support various projects of economic development. By providing worker training, investment knowledge and general management guidance, the division seeks to strengthen existing airline
Airline
An airline provides air transport services for traveling passengers and freight. Airlines lease or own their aircraft with which to supply these services and may form partnerships or alliances with other airlines for mutual benefit...

 companies and provide them with efficient equipment and resources.

In areas such as Mali
Mali
Mali , officially the Republic of Mali , is a landlocked country in Western Africa. Mali borders Algeria on the north, Niger on the east, Burkina Faso and the Côte d'Ivoire on the south, Guinea on the south-west, and Senegal and Mauritania on the west. Its size is just over 1,240,000 km² with...

, the division supports previously existing airlines by increasing fleet size and reviving currently non-functional companies in order to provide much-needed air support for the development projects within the region. In Uganda
Uganda
Uganda , officially the Republic of Uganda, is a landlocked country in East Africa. Uganda is also known as the "Pearl of Africa". It is bordered on the east by Kenya, on the north by South Sudan, on the west by the Democratic Republic of the Congo, on the southwest by Rwanda, and on the south by...

, a new airline, Air Uganda
Air Uganda
Air Uganda is the designated national airline for Uganda. The company was formed in 2007 and began commercial flight operations on November 15, 2007...

, formed in 2007, fills a void that has been vacant since the national airline, Uganda Airlines
Uganda Airlines
Uganda Airlines was the flag carrier of Uganda. The airline was established in May 1976, and started operations in 1977. It was headquartered in Entebbe, Wakiso District, Uganda, and operated from its hub in Entebbe International Airport under the IATA airline code QU and the ICAO airline code code...

, collapsed in 2000. In addition, the multiple airline companies of AKFED are connected through a network known as “Group Celestair
Celestair
- Fleet :Celestair Group represents an alliance of three airlines under the Aga Khan Fund for Economic Development, AKFED, and benefits from technical and operative support from other airlines owned by the Aga Khan, such as Meridiana and Eurofly of Italy....

”, which serves to collectively increase the efficiency and scope of support for the various airlines throughout the region.

AKFED is currently considering possible airport management opportunities at a multitude of locations.