Simplified Cost-Effectiveness Analysis - Africa Jobs Fund (Public)

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1	Africa Jobs Fund — Cost-Effectiveness Analysis (DCY view)
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3	WHAT AJF DOES. The Africa Jobs Fund is a philanthropic vehicle that seeds and incubates companies creating high-paying jobs for African workers. We invest in two types of companies:
4	(1) LABOUR MOBILITY companies that place African workers into jobs abroad — for example, qualified nurses moving to Germany, hospitality workers to Italy, healthcare assistants to the UK.
5	(2) EXPORT MANUFACTURING companies that build African factories employing local workers and selling to global markets — for example, apparel in Tanzania, electronics assembly in Kenya, furniture in Ethiopia.
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7	HOW OUR PORTFOLIO WORKS. For each company we make two staged investments: a small $50,000 pilot to test the model, then a $500,000 scale-up if the pilot proves out. Capital is returned in full when the company succeeds; lost if it fails. Our portfolio plan is 26 labour mobility companies and 19 export manufacturing companies, of which we expect about 7-8 labour mobility and 5-6 export manufacturing companies to fully succeed.
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9	HOW WE MEASURE IMPACT. Our core unit is the Doubled Consumption Year (DCY): one year of doubled consumption (income) for one person. If a migrant's annual income goes from $5,000 to $30,000, that is roughly 2.5 DCYs per year worked. We also convert into DALYs (disability-adjusted life years averted) using a standard 2.5-to-1 ratio, so we can compare against the GiveWell top-charity bar of $100 per DALY. A second tab — 'Income gains' — shows the same model expressed in dollars of income uplift instead.
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11	WHAT WE INVEST IN EACH COMPANY (SHARED ACROSS BOTH SECTORS)
12	Pilot investment ($)	$50,000	Stage-1 capital we invest to test the business model. Returned in full to AJF if the pilot proves out; written off if the pilot fails.
13	AJF team cost for pilot stage ($)	$25,000	Our team time on sourcing, due diligence, and deal structuring during the pilot stage. Spent on every company regardless of outcome and never recovered.
14	Scale-up investment ($)	$500,000	Stage-2 capital deployed only if the pilot passes. Returned in full when the company succeeds; written off if it fails to scale.
15	AJF team cost for scale-up stage ($)	$25,000	Our team time during the scale-up stage. Only incurred if the pilot passed (otherwise we walk away). Never recovered.
16	AJF catalytic credit share (applies to both sectors)	30%	Share of total company-driven impact we count as ours. The other 70% is credited to the workers themselves, the company team, host-country employers, customers, and other contributors.
17	Note: Returned capital is assumed to include enough interest to cover discounting and opportunity cost, so we treat recovery at face value (no NPV adjustment).
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19	HOW LIKELY IS SUCCESS? (SHARED ACROSS BOTH SECTORS)
20	Chance the pilot passes	45%	About 45% of pilots demonstrate enough commercial viability to justify deploying scale-up capital. The remaining 55% fail and we lose the pilot investment.
21	Chance scale-up succeeds (given pilot passed)	65%	Of the companies that pass the pilot, about 65% reach a sustainable scaled business. The other 35% have scale-up capital deployed but fail before becoming self-sustaining.
22	Chance of full success (pilot AND scale)	29%	Joint probability of passing pilot AND succeeding at scale-up — pilot pass rate × scale-up success rate. The only outcome where AJF gets all investment capital back.
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24	EXPECTED COST PER COMPANY (SHARED ACROSS BOTH SECTORS)
25	Cost if pilot fails	$75,000	Outcome: pilot doesn't prove out. $50k pilot investment lost + $25k pilot-stage team time. Happens about 55% of the time.
26	Cost if scale-up fails	$550,000	Outcome: pilot passed, scale-up capital deployed, company didn't make it. Pilot investment is returned, but $500k scale-up capital is lost plus $50k of team time across both stages. Happens about 16% of the time (45% × 35%).
27	Cost if scale-up succeeds	$50,000	Outcome: full success. Both investments return in full but $50k of team time across the two stages is still spent. Happens about 29% of the time (45% × 65%).
28	EXPECTED COST PER COMPANY	$142,500	Probability-weighted average across the three outcomes: (pilot fail cost × 55%) + (scale fail cost × 16%) + (success cost × 29%). Same figure applies to both LM and EM given identical investment structure and success rates.
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30	LABOUR MOBILITY — WHAT EACH SUCCESSFUL COMPANY DELIVERS
31	Migrants placed over the company's lifetime	4,000	Total African workers placed abroad over a typical successful LM company's ~20-year operating life. Portfolio-blended figure averaging modest, strong, and exceptional outcomes.
32	Effective career years (NPV-adjusted)	11	Single multiplier turning per-year DCY flows into lifetime DCYs. Bundles three adjustments: (1) ~20-yr migrant working career, (2) NPV-discounted at 4% to align with how GiveWell measures cost per DALY, and (3) ~15% counterfactual migration discount (some migrants would have moved anyway). Net effective: ~11 years of full-impact equivalent. Applied to both migrant and family DCYs.
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34	MIGRANT DCYs (worker's own income gain)
35	Migrant counterfactual income ($/yr)	$5,000	What the migrant would earn at home in the absence of the placement. Portfolio-blended across origin countries (~$3-5k typical Sub-Saharan African informal/early-career wage).
36	Migrant income gain (after remittances, $/yr)	$25,000	What the migrant keeps for themselves above their counterfactual income, AFTER deducting the remittance they send home. Example: $35k destination income − $5k remittance to family = $30k consumption; minus $5k counterfactual = $25k net gain. Net to avoid double-counting (remittance is captured separately as family DCYs below).
37	Migrant DCYs per year (from income doubling)	2.58	Calc: LN((counterfactual + income gain) ÷ counterfactual) ÷ LN(2). Number of consumption-doublings the income jump represents. $5k baseline + $25k gain → $30k consumption (6x baseline), which equals 2.58 doublings per year.
38	Migrant lifetime DCYs per migrant	28.4	Migrant DCYs per year × effective career years. The worker's own consumption gain over their career.
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40	REMITTANCES DCYs (family member consumption gains + community spillover)
41	Annual remittance sent home per migrant ($)	$5,000	Amount the migrant sends to family each year. Typical 10-15% of destination income. Already deducted from the migrant's own gain above, so no double-counting.
42	Family members supported per migrant	6	Household size of family receiving remittances. Sub-Saharan African families typically support extended family across ~6 individuals.
43	Per-family-member remittance per year ($)	$833	Total remittance ÷ family members. The dollar amount each family member's consumption goes up by.
44	Family member counterfactual income ($/yr)	$1,500	What each family member at home earns absent the remittance. Sub-Saharan African per-capita household income (~$1-2k typical).
45	Per-family-member DCY/yr (from remittance gain)	0.64	Calc: LN((family CF + per-member remittance) ÷ family CF) ÷ LN(2). For $1.5k baseline + $833 remittance, this is LN(2333/1500)/LN(2) ≈ 0.64 doublings/year per family member.
46	Family DCY/yr (all members combined, before spillover)	3.82	Per-member DCY/yr × family members. Total household consumption gain per year, before community spillover.
47	Egger consumption spillover multiplier	1.65	Local economic multiplier applied to the family's higher consumption. When the family spends remittances locally, it lifts neighbours' consumption too. Egger et al. (2022) RCT found ~1.65x total impact. Applied directly to the family DCY total.
48	TOTAL REMITTANCES DCYs per migrant (lifetime, incl spillover)	69.4	Family DCY/yr × effective career years × Egger multiplier. Combines family member impact and community spillover into one number.
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50	TOTAL DCYs per migrant (lifetime)	98	Migrant DCYs + remittances DCYs (incl spillover). Combined lifetime per-migrant impact.
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52	LABOUR MOBILITY — PORTFOLIO TOTALS
53	Total DCYs per successful LM company (gross)	391,403	Migrants × total DCYs per migrant. Gross impact of one fully-successful LM company, before AJF credit share and copycat boost.
54	Boost from copycat companies inspired	1.33	Successful AJF orgs inspire copycat businesses, of which we claim a chained share. 1.33x boost = 1 + (~1.1 expected copycats × ~30% chained credit).
55	AJF-CREDITED DCYs PER SUCCESSFUL LM COMPANY	156,170	Gross DCYs × AJF credit share × copycat boost.
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57	Number of labour mobility companies we fund	26	Portfolio target for the labour mobility sector.
58	Number that progress to scale-up (expected)	11.7	LM companies × pilot pass rate.
59	Number that fully succeed (expected)	7.6	LM companies × overall success rate.
60	Total expected spend on labour mobility	$3,705,000	Companies × expected cost per company.
61	Total DCYs from labour mobility	1,187,671	Expected successful companies × DCYs per success.
62	Cost per DCY (labour mobility only)	$3.12	LM total spend ÷ LM total DCYs. Cost-effectiveness of the labour mobility half on its own. Lower is better.
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64	EXPORT MANUFACTURING — WHAT EACH SUCCESSFUL COMPANY DELIVERS
65	Workers employed at the factory (steady-state avg)	1,200	Average number of African workers a successful factory employs at steady state.
66	Counterfactual annual income per worker ($)	$2,000	What a typical worker would earn in informal/subsistence employment without the factory job.
67	Factory annual income per worker ($)	$4,000	Typical wage at an AJF-backed export factory. Roughly doubles the counterfactual.
68	Annual salary gain per worker ($)	$2,000	Factory income minus counterfactual income. The annual wage uplift each filled position generates.
69	Direct DCYs per worker-year (from salary gain)	1.00	Calc: LN(factory ÷ counterfactual) ÷ LN(2). At 2x salary = 1.0 DCY per year of employment.
70	Factory operating lifetime (years)	20	Years the factory operates at steady state. Each worker position is continuously staffed across this period.
71	Direct DCYs per worker position (factory lifetime)	20.0	Direct DCYs per year × factory operating years.
72	Egger consumption spillover multiplier	1.65	Local economic multiplier on worker wage spending. Egger et al. (2022) RCT found ~1.65x. Applied as (1.65 − 1) × direct DCYs.
73	Egger spillover DCYs per worker position	13.0	(Egger multiplier − 1) × direct DCYs per position.
74	Post-employment wage premium DCYs per worker position	6	After workers leave the factory they retain a ~25% wage premium above counterfactual for ~20 years (training, formal-sector experience, employer references). Each individual earns ~1.5 lifetime DCYs from this. With ~5-year tenure and ~4 cohorts cycling through each position over the factory's 20-year life, this nets to about 6 lifetime DCYs per worker position.
75	TOTAL WORKER DCYs per worker position (direct + Egger + post-employment)	39.0	Direct + Egger + post-employment. Lifetime DCYs from one filled factory job.
76	TOTAL WORKER DCYs across the factory	46,800	Worker positions × DCYs per position.
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78	SUPPLY CHAIN DCYs (workers at upstream local suppliers)
79	Supply chain employment ratio (workers per factory worker)	1.50	For every factory worker position, how many additional positions in upstream local suppliers.
80	Avg DCYs per supply chain worker position (factory lifetime)	20	About half the per-position impact of a factory worker (factory total is 39 DCYs/position). Smaller because supply chain jobs pay less and capture less community spillover.
81	TOTAL SUPPLY CHAIN DCYs	36,000	Supply chain ratio × factory positions × DCYs per supply position.
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83	LABOUR MARKET TIGHTENING (LMT) DCYs (other workers' wages rise)
84	LMT multiple (× factory direct wage gain DCYs)	1.50	Labour market tightening: as factories compete for labour, wages rise across the local market for non-factory workers too. A 1.5x means LMT delivers DCYs equal to 1.5 times the factory's own direct wage-gain DCYs.
85	TOTAL LMT DCYs	36,000	LMT multiple × factory positions × direct DCYs per position.
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87	TAX REVENUE DCYs (15% of factory wages flow to public goods)
88	Tax rate (% of factory wage bill going to government)	15%	Combined corporate + payroll + income tax (~15%) on the factory's wage bill. Treated as worthwhile spending — the tax revenue funds public goods that benefit low-income recipients.
89	Tax revenue per worker position ($, factory lifetime)	$12,000	Factory wage × factory operating years × tax rate. Total tax dollars collected from each filled position over the factory's life.
90	Avg counterfactual income of tax beneficiaries ($)	$1,500	Typical CF income of low-income recipients of public goods funded by the tax. Used to convert tax revenue into DCYs (each $1,500 of public-good spending is roughly equivalent to doubling one low-income person's consumption for one year).
91	Tax DCYs per worker position	8.0	Tax revenue per position ÷ beneficiary CF income. Generous assumption: treats each dollar of public-good spending as equivalent to a dollar of consumption gain to a low-income recipient. Real-world efficiency may be lower; adjust the beneficiary CF input upward to discount accordingly.
92	TOTAL TAX DCYs	9,600	Factory positions × tax DCYs per position.
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95	EXPORT MANUFACTURING — PORTFOLIO TOTALS
96	Total gross DCYs per successful EM company (workers + supply chain + LMT + tax)	128,400	Sum of all four impact channels for one fully-successful factory. Before AJF credit share and copycat boost.
97	Boost from copycat companies inspired	1.40	Successful factories inspire copycat firms at a chained AJF credit share.
98	AJF-CREDITED DCYs PER SUCCESSFUL EM COMPANY	53,928	Gross DCYs × AJF credit × copycat boost.
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100	Number of export manufacturing companies we fund	19	Portfolio target for export manufacturing.