Acting as the lead company for the Psi (Private Sector Initiative) Tanzania, BP has been working with nine different partners from a wide-range of industry sectors to develop and increase the participation of local small and medium enterprises (SMEs) in their supply chains.
For an initial two year period, BP has been working in partnership with SBP, a South African based business development and research organisation. Building on experiences of BP and SBP in South Africa, the Tanzanian Psi has leveraged seven other Tanzanian corporations as well as technical assistance funding from the UK Government’s Department for International Development (DFID) business linkages challenge fund.
Tanzania, like many other African countries, has a weak SME sector. Recognising the importance of the SME sector to employment and ultimately poverty alleviation, BP led the way in forming the Psi Tanzania to act as a collective corporate mechanism, with the aim of creating economies-of-scale for local SME suppliers. It aims at providing SMEs with increased business opportunities, and promoting supplier development programmes, while reducing costs to the corporations.
In its first two years, this initiative has produced increased linkages in the local supply chains of BP and other Psi Tanzania participating corporations. Shared knowledge and experience exchange among the partners has improved working relationships in the market, between corporations as well as with local suppliers.