Tucci Goka Ivowi, Deputy Chief Executive Officer at the Ghana Commodity Exchange
The framework for successful Intra Africa trade already exists. The seven action points highlighted are both my recommendations and my current views on the status quo. I surmise (unsurprisingly) that what is remaining is to continue to add value, improve the quality of goods and services, and then increase the scale.
1. Recognise the role Diasporan play.
I don’t know if I still classify today, but once upon a time, I was a diasporan. I came to Ghana from the UK on holiday about 18 years ago, and never went back, except for on holidays. On one of these trips back to London I received a Christmas hamper which tickled me and I’m not sure I’ll ever forget it. One of my sisters-in-law gave me a large delightful hamper with lots of goodies in it. One of those goodies was a pack of ‘Chocomilo.’ For those who don’t know what that is, it is a confectionery product produced by Nestlé in Ghana and Nigeria only.
Now the irony for me was that I was the person responsible for the brand and product business in Central and West Africa. But I travelled to another continent and received it as a gift, unbeknownst to my sister in law. I was excited to know that ‘my product’ was so valued that she bought and carted boxes of it from Nigeria during her last holiday. And many others do the same. But it also highlighted for me the relevance and role that diasporans (and multinationals) play in the global trade of African or any country of origin products.
2. Learn from multinationals who successfully contribute to intra-regional Trade
That was just one product. That product is made in two countries using mainly locally sourced raw materials, and mainly local labour from the respective countries. That product is then sent across the ECOWAS region so that consumers in other countries can enjoy it too. They have found audience in multiple countries, they understand the customs, taxes and other legal frameworks of the countries they do business in. African companies can learn a lot from multinationals like Nestlé. They play a positive and beneficial role in Intra-African trade!
So diasporans and multinationals help by:
- Contributing to increase in exports – large volumes of goods are exported and responsible multinationals pay large sums in taxes
- Contributing to introducing goods and to increasing demand in foreign markets – market expansion.
I can’t leave out the strong influence and impact that other aspects of culture have in expanding markets. Thanks to diasporan presence globally, modern African music and film has steadily been expanding its footprint. If Intra Africa trade is supposed to benefit Africa, it sometimes has to reach beyond the shores of Africa. What is attractive globally, becomes attractive locally. Once African film, for example, is appreciated by global markets, it becomes less taken for granted in its home markets.
3. Build Alliances, one person, one country, one step at a time
Alliances are key to any successful venture; even individuals who are establishing their own companies need a string of alliances to succeed. Those alliances may come in the form of investor, advisory, connections, advocacy… These are all useful and in some cases instrumental to business success.
A former team member organised an Innovation Forum bringing together start up business owners from across central and west Africa. At first the participants were a bit suspicious as to why a multinational would bring them together. Did the host organisation want to steal their ideas? At the end, they were most grateful for the opportunity to exchange with people facing similar triumphs and, particularly, hurdles as they were and realised they could learn from each other as some were further ahead in the process.
They even started to recommend to one another suppliers of raw and packaging material and what they had learnt working with trans-border companies. What these types of alliances do is they help create scale leading to better pricing, they provide opportunities for market expansionand so many other softer opportunities. If you can be successful in Cameroun, why not expand into Burkina Faso, perhaps with a local partner? African companies can become global too if they see the benefits and capitalise on strategic partnerships.
African countries are far behind today, making the need to form strategic alliances with one another even more pertinent. There is no solid argument in favour of waiting until all countries are on board, or until ‘everything is ready’ before being able to benefit from synergies and partnerships. Strategic alliances can be formed between one or two countries in strategic areas. With reference to Ghana and Cote d’Ivoire’s recent stance on cocoa, it’s not only the act or the outcome, but it’s the collaborative nature of the bilateral ‘teams’, (from the two Heads of State, to the Ministers, to the technical teams), that we can learn from.
What this type of alliance will do is foster a long running collaboration and start strengthening a country’s position to position it better for growth. As the old adage goes, “too many cooks spoil the broth.” You are are potentially stronger if you develop smaller alliances and build on them. If you wait for everyone, too many different priorities will slow down the process and consequently, progress.
4. To Function effectively, negotiate trade-offs at the onset
A big country like Nigeria being subject to influence by albeit a consortium of smaller countries, will arguably always be a barrier to the effective functioning of a regional trade bloc. It will slow down the take-off of any policy or real initiative. It must be agreed upon that to function in unity, there must remain a certain level of autonomy for individual countries, particularly when it comes to making macro-economic decisions. It is the same for business alliances. Determine the roles each will play before jumping in.
5. The Integration of Infrastructural development within the trade zones should form part and parcel of the Efforts
Even without a trade bloc, African nations would benefit more greatly from trade if transport networks (road and rail infrastructure for one) was better. The increase in the exportability of goods may generate more revenue than that to be derived from tax benefits. Informal trade is everywhere. Reducing structural barriers will propel trade further. So countries shouldn’t limit their infrastructure to within their borders. They should integrate the region as part of their infrastructure planning and development.
6. Stop bemoaning the plight of Africa and become globally Competitive
Until it happens, we won’t stop hearing that what stops Africa from being competitive is the lack of value add that our products and even services offer. Any country that has thrived through trade, has thrived because of value addition. Nation states can start by investing in infrastructure, whilst scaling up industrialisation efforts as a first point of call. Although Africa indexes slightly higher in intraregional trade of manufactured goods vs raw commodities, the value is still low.
And even where commodity trading is still needed, markets can be better structured through, for example, the intervention of a commodity exchange. Commodity exchanges, such as that recently established in Ghana, seek to provide efficient and risk free trading solutions, establish fair and transparent price discovery mechanisms, develop product standards and contracts to protect producers and traders, amongst other things. Lack of structure disturbs markets; exchange rates and nothing else dictate trading behaviour. This is limiting and myopic behaviour which curtails growth in business value for countries and for the continent. Africa should be the originators of many more recognisable quality brands which are the result of adding value to commodities which have African countries as their home.
As the African Continental Free Trade Agreement comes into effect, a good starting point will be to look at the harmonisation of the regulatory frameworks which will be a pre-requisite for smooth implementation of intra-Africa trade and then ultimately, once scale increases, to international trade.
7. Take Action now; refine later
As an entrepreneur, one should:
- Learn more about other African countries; study those markets
- Understand customs and legal frameworks of the countries you are interested in doing business with
- Produce goods and services that will have an audience within the continent
- Create partnerships
- Get going – you will refine your products and services as you go along.
Credit: Tucci Goka Ivowi
Invest In 2020: Why Investing Should Be A Part Of Your Financial Goals
(Image credit: Mbulelo Mpofana)
At the start of each year many of us take the time out for the important task of goal setting for the year. A general tip is remembering that our quality of life is not normally determined by knocking off one huge goal in a year; but by making steady progress on small, achievable goals over a long period of time. Our ambitions often include financial goals, given the impact the state of our finances has on our day to day living standards.
Common financial goals include things like:
- Becoming debt free;
- Improving credit score;
- Create and stick to a budget; and
All these goals are fantastic and can lead to a better life by increasing your disposable income and funds available for emergencies or goals, but we’d like to challenge you to include one other powerful financial goal this year-INVESTING!
Why Invest? Investing is important for several reasons, most important of which is that it builds real wealth. This is mainly due to two factors: the first being because the returns you make on your investments commonly exceeds the rate of inflation over the long term.A former American president Ronald Regan once said, “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.”
Inflation erodes the value of one’s earnings and savings over time; when your rate of return is higher than inflation it not only protects the value of your money but makes you better off financially. Added to this is the powerful effect of compound growth.
Compound growth refers to when one earns addition returns from reinvesting your prior returns i.e. making more money off the money your earned from your investments. Over the long-term compound earnings significantly increase the rate at which you can grow your asset base.
At this point I’d just add that if you have high interest rate debt, it is generally advisable to prioritize settling those debts as interest rates can be higher than the return one could earn on investments – this is usually the case, but specific circumstances need to be taken into account.
According to Old Mutual’s Long-Term Perspectives, investing in shares as an asset class has proven to be the best way to create wealth over time, as equities have consistently been amongst the best performing asset classes. Investing in equities remains the best way to build wealth and importantly ensure one reaches retirement with enough money. For example, 1 dollar invested in Berkshire Hathaway when Warren Buffett became CEO, would be worth around 7,000 dollars about 50 years later. Investing, and compounding, really are powerful when done correctly.
The main reasons people hold on to cash rather than investing in shares is the fear of losing money. This is also a key reason people stay away from investing in individual shares. Credible allegations of fraud and dishonesty by management is one of the main causes of severe irrecoverable losses in company share prices. There are many recent cases on the JSE like Steinhoff, EOH and Tongaat Hullett.
Even where a company recovers, when one factors in the value of time and opportunity cost it becomes clear that investors still lost out. Investsure’s investment insurance product protects investors from exactly these types of losses; enabling investors to transfer this hard to assess investment risk to a trusted insurer.
So there is a way for you to benefit from investing in shares without having to worry about suffering large losses due to fraud committed by management.
Good luck with your New Year’s resolutions this year and remember – Invest Safely!
By Mbulelo Mpofana, Co-Founder of Investure
10 Years of Impact: Tony Elumelu Foundation Entrepreneurship Programme To Benefit More Entrepreneurs Across Africa
Tony Elumelu Foundation Alumni (Credit: The Tony Elumelu Foundation)
Lagos, Nigeria: 27-01-2020 – On the heels of the tenth anniversary of the Tony Elumelu Foundation (TEF), the private-sector-led philanthropy focused on empowering African entrepreneurs has enhanced its flagship Entrepreneurship Programme to empower more entrepreneurs across the continent.
These enhancements, which took effect from January 1, 2020—the launch of the 6th cycle of the Programme—will achieve the Foundation’s mandate to transform the African continent through entrepreneurship.
Most prominent among the enhancements are the new dates in the Programme cycle, its emphasis on providing thousands of entrepreneurs with business training, and its focus on leveraging technology to optimise the application and selection process as well as personalise the journey of each applicant in the Programme tailored to their knowledge and business stage.
The Programme cycle has been updated to place more emphasis on getting more entrepreneurs through the business training. Hence, the announcement of the finalists, who will ultimately be inducted into the TEF Alumni network, will no longer be held on March 22 but will be made at the TEF Forum – the largest entrepreneurship conference in Africa.
Maximising the value derived from the Programme, applicants will now receive instant feedback on their progress to the next stage of the Programme, following their applications. Shortlisted applicants will receive business training tailored to their business stage and for those who move to the next stage mentorship and finally the top performing entrepreneurs from each country will proceed to the business pitching competition, which will determine the finalists to receive seed capital and an induction into the Foundation’s fast-growing alumni network across 54 African countries.
The TEF Entrepreneurship Programme is the $100million commitment by investor and philanthropist, Tony O. Elumelu, CON through his investment company, Heirs Holdings. The Programme has become a beacon of hope for African entrepreneurs, currently empowering 9,631 beneficiaries across 54 African countries with training, mentorship, seed funding and exclusive access to global opportunities as well as a strong entrepreneurial community.
TEF Alumni such as Ugandan Kwabena Danso who manufactures bicycles and its accessories from bamboo is one of the thousands of beneficiaries whose business has expanded beyond the shores of Africa to a global market, and is one of the success stories and impact recorded by the Programme’s innovative approach to the sustainable development of Africa. Others include Mohammed Dhauoafi from Tunisia, founder of Cure, a 3D printed, biosynthetic prosthesis manufacturing company and Princess Adeyinka Tekenah from Nigeria whose coffee making business has been dubbed Africa’s Starbucks by The Financial Times.
The application for the 2020 cohort of the TEF Entrepreneurship Programme is open till March 1, 2020 on TEFConnect.com.
Conflict In Family Business
Tsitsi Mutendi, Family Business Expert
Conflict is a normal occurrence in everyday life. Although many assume that conflict is harmful, not all conflict is negative. Some conflict is healthy and ushers in necessary adjustments to process and operations. In a family and a family business, there are various types of conflicts. Being able to identify conflict and managing it appropriately is essential for the sustainability of the family and of the family business.
Here are some examples of conflict that may be found within the family and the family business:
Sibling Conflict: Siblings are natural friends and equally so, can become natural rivals. In most cases of sibling conflict, the conflict arises from sibling rivalry. Some Causes of sibling rivalry are:
- Competing for parent’s attention and affection.
- Seeking for parent approval.
- Different priorities within the family or business context.
- Competing against each other.
Sibling conflict, unless resolved, can cause problems in their ability to work together towards a common good. At times competitiveness can become toxic if it is against each other: a good example is within the family business if siblings have to work together but take their competitiveness against each other to work. Without clear boundaries, they may cause other employees to take sides or even give conflicting instructions or policies that then effectively ruin the everyday operations of the business.
To manage sibling conflicts, the nature of the conflict must be identified, and methods of resolving or managing the conflict put in place so that the relationship of the siblings is preserved and more so that the operations of the family business is not disturbed. One such method to assist with such conflicts is a family business constitution. It may not directly solve the conflict, but it will give guidelines as to the family values and applications of those values in the conflict and the business as a whole.
Operational conflict: This is conflict that occurs in the everyday operations of the business. Families are complex in nature, and they are made up of various individuals that have different thoughts and beliefs about the values of the family and the business. Without clear direction on what the values, vision, and mission of the business is, conflicts arise. Some members of the family may value the monetary gain the business offers, while others may appreciate the shared goals and unity of family that the business represents.
In such cases, the family must find a middle ground. A family constitution helps document and clarify the family values while ensuring every voice and need is addressed in a way that if an operational conflict arises, it can be resolved in a way that sees all parties’ voices being heard. Equally so, as values change and the family changes and evolves, so will the constitution.
Spousal Conflict. As families grow, so do their various networks. Each time there is a marriage or birth, the family grows bigger. And the complexities of the relationships deepen. One such complication is marriage. How do family businesses handle marriages and the in-law and in-laws that come with it?
How do families and family businesses handle divorces and the similar complexities that come with it. In some famous cases of family businesses, we find that the new in-law can be blamed as the source of new family conflicts. And this conflict has the potential of overflowing into the family business. Issues of do in-laws get jobs within the family business and what expectations or qualifications apply.
Similarly so, so in-laws her shareholding and when. Professional advisors can help families navigate the legal and moral complexities of the spousal conflict and help the family business formulate the appropriate solutions that apply to their needs.
Assumed conflict is our final conflict on this list. Assumed conflict is the conflict that occurs when there is assumption and no clarity on issues or actions that are taken by a family member within the business or in a way that affects the business. The other family members and the public may also assume due to speculation that there is conflict when, in fact, there is not. If clarity in communication is not taken immediately, then the assumed conflict may quickly escalate to become an actual conflict that may have a negative impact.
It is necessary to note that this list of possible conflicts that may occur in a family and its business is by no ways, exhaustive. What is crucial to note is that all the conflicts may sound negative or may seem to have negative impacts on the family business and the family itself; however, this is not always the case. As stated at the beginning, some conflicts create the opportunity for resolution of long-standing issues and, in other instances, opportunities to review values or traditions that need refreshment.
Tradition holds us together, but innovation and development make us stronger and more capable in the face of different generations and the forward advancing world. For families and their businesses to last through many generations, there must be accommodation of the values of the new generations as much as the understanding of the need to grow differently if needs be.
How does your family deal with conflict and conflict resolution? Has it ever affected your family business, and how?
By Tsitsi Mutendi, Founder of African Family Firms and Africa is Rising Collective