BrandArena: Chevron's corporate social enterprise: A new model for private sector-led development

Tuesday 3 December 2013

Chevron's corporate social enterprise: A new model for private sector-led development

Nigeria, the largest and richest country in sub-Saharan Africa, obtains more than 80 percent of its revenue and about 90 percent of its hard currency from oil.

But not much of that money has benefited Nigerian citizens, including those who live in the oil-producing region of the Niger Delta. The region, which includes nine of the country’s 36 states, has experienced decades of political unrest and armed militancy, which could rise again as Nigeria approaches a general election in 2015. That same year, a government amnesty given to some 40,000 Niger Delta militants — at an astonishing cost of $1 billion — is also due to expire.

In this unstable environment, Chevron, which has operated in Nigeria for more than 50 years, launched an innovative model of private sector-led development. In 2010, the corporation announced an initial commitment of $50 million — not for corporate philanthropy or social responsibility programs, but for a “corporate social enterprise,” an original development paradigm that is unique in many ways.

First, instead of operating unilaterally, Chevron patiently knit together a multi-stakeholder coalition of donors
and supporters, including Nigerian and international civil society organizations, local governments, Nigerian federal authorities, foreign investors and international aid agencies to partner in an effort to break the cycle of poverty and conflict. After extensive value chain research, the initiative decided to focus on three indigenous economic activities — fisheries, cassava and palm oil — and promote market-driven solutions to expand them. Chevron succeeded in leveraging its initial investment by attracting matching funds, generating a development fund worth approximately $100 million to be spent over five years.

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