"The project will directly benefit individual craftsmen and small and medium furniture enterprises by providing access to infrastructure, equipment, skills and markets."

Through the creation of this industry 'ecosystem' FVL will benefit individual craftsmen (known as 'carpenters' in Nigeria) along with small and medium enterprises by giving them access to infrastructure, equipment and markets. With businesses from different sectors (e.g. property, furniture manufacturing, retail and services) relocating to the village, FVL will benefit from profits through long term leases and ground rents. Businesses will benefit from direct access to their suppliers and customers. Manufacturers, for example, can optimise the use of their production facilities to increase productivity which will ultimately result in growth of their businesses.

FVL's main commercial driver for setting up the cluster is to establish a profitable pro-poor business and enhance its appeal to potential customers to achieve business growth. Furniture is currently on Nigeria's import prohibition list1, therefore local demand for furniture is high, but local manufacturing is inhibited by a high degree of fragmentation of the industry, lack of specialist skills and

equipment. FVL offers several short term gains to the manufacturing businesses (being one of its key customer groups): direct access to craftsmen and other suppliers can boost productivity and reduce costs; sharing infrastructure and machinery with other manufacturers can optimise use of production facilities; and the location of FVL with its retail unit, just 30 minutes from Lagos, will ensure proximity to customers.

In the medium to long term, as other companies from the same and other market segments (e.g. metal working and soft furnishing businesses) relocate to the village, there is potential for additional benefits. For example, information spill-over and potential for innovation arise. Ideally, businesses will be able to leverage proximity to other sections of the value chain to extend their product ranges by developing innovative products.

The project will directly benefit individual craftsmen and small and medium furniture enterprises by providing access to infrastructure (e.g. housing, workspaces, and electricity), equipment (e.g. machinery required for the production of standardised and high quality bulk furniture), skills development and markets. All of these factors currently constrain the economic situation for many of the craftsmen due to geographical fragmentation of the value chain. As a result many craftsmen face difficulties in earning a living wage for them and their dependents.

In addition to the direct benefits for the craftsmen, establishing a commercial ecosystem around FVL will also stimulate job creation within the services sector, for instance for transporters, restaurants, traders, hawkers, domestic staff etc. In the long term, the project offers potential for wider systemic impacts such as the development of the Nigerian furniture sector to meet requirements and standards for export to international markets.

Project implementation requires external funding. Support from the Business Innovation Facility will focus on identifying long term financing options and help prepare applications to different groups of potential investors such as venture capital funds, development finance institutions and foundations. In particular, the Facility will help to strengthen the inclusive business value proposition highlighting both commercial and developmental benefits as this is considered to be a potential advantage to secure investments.

The cluster model is an innovation in Nigeria where currently many labour-intensive value chains in Nigeria are very fragmented. If successful, industrial clusters can offer various benefits including potential for innovation by attracting talent from different parts of a value chain. The FVL concept not only offers potential for scale within the furniture sector but also for replication within other sectors.