Olayimikah Bolo, Principal Partner at Falkirk Limited(Falkirk Risk)
The just concluded 3-part post on “Why We Must Structure the Unstructured” highlighted the importance of the Micro, Small and Medium Enterprises (MSMEs) sector as a catalyst for sustainable economic development, with observable impact on employment creation and poverty reduction.
However, knowing the “Why” without proffering plausible solutions on the “How” will at best be a fruitless reflection.In contemplating the “How” as a professional Risk Manager, my reflection started by considering the “Context” of the sector – including the cultural factors and human behaviour. At the end of my reflection, the two nagging questions were as follows: (1) What are the “intentional actions”that can be taken to “Structure the Unstructured” considering that the inherent sector risks and challenges are largely known and do not fall into the “realm of the unknown” (the figure below summarises the MSME sector challenges/risks); and (2) What are the “intentional actions” that can be taken to stem the noted high (and growing) level of “Informality” in this sector?
These are indeed questions that require deep reflection and a determination to “Structure the Unstructured”!
Reflection on the nagging questions from my last post continues with a subject I find most intriguing -the existing high and rising level of informality. At the bottom of the MSME pyramid are the micro enterprises (MEs) with the largest population and relatively lower income bracket- in varying degrees (see below figure). Whilst a sizable percentage of the players in this sector are ill-educated, majority knowingly choose to remain informal, primarily for reasons of additional costs of formalisation that in most cases prove excessive –e.g. the high entry cost of registration and the recurring costs thereafter like taxes, licencing fees, contributions, etc.
This brings to mind the MSME registration initiative by the FGN through the Corporate Affairs Commission (CAC) in Q4 2018, where a special window was granted MSMEs to register their businesses at a half-cost of ₦5,000. A large percentage of the micro enterprise players may not be able to bear this additional cost.
To put the micro enterprises in the lower rung of the income bracket in proper perspective, think of the following, most of whom are either found on the corner of every other street, or operate from their homes – the roadside mechanic with their apprentices,the “mama puts” or “bukkas”,the barbing and hair dressing salons, the Mama Deborah and her cleaning ladies, the list goes on and on…
In “Structuring the Unstructured”, in addition to tax incentives that will “help” the MSME cross the estimated “3-year failure” mark, one should consider value creating initiatives that will encourage the players to commence the formalisation process, thereby stemming the tide of rising informality…
Whilst creative incentives to spur the MSME sector are being formulated and considered by Federal and State Government Agencies, the industry players themselves, need to be deliberate on surviving beyond the estimated lifespan.
A key process in being deliberate is the adoption of risk management. The concept of risk management is explained in my article “The Art of Risk Management – On A Lighter Note” https://lnkd.in/gdfxDRs.
It is all about understanding what may go wrong in the chosen line of business, and proactively put appropriate risk response measures in place. Being reactive when an event materialises may cost you the business altogether!
Key challenges or risks facing the sector are detailed in my earlier post https://lnkd.in/gnVmJes. Every MSME can proactively apply the process shown in the below figure in a bid to Structure The Unstructured and thereby increase their chances of survival.
Whilst the MSMEs are encouraged to increase their chances of survival through the proactive internal application of risk management processes, a fascinating external mechanism is through the use of Credit Guarantee Schemes. As with Credit Guarantees, the lender of funds is provided with a recourse in the event of default.
Credit Guarantee Schemes (CGS)provide the needed financial and economic additionality for MSMEs. The preferred model is that of risk sharing by the Credit Guarantee Institution and the lender, as this should ensure the application of adequate credit rigour to viable and sustainable transactions, whilst curbing the temptation for fund providers to transfer non-performing portfolios.
Though most Institutions offering CGS in developing countries are government owned, it is time for creativity and thinking out of the box. It is time for our Institutions to Collaborate with the Government – howbeit Federal or State – to engender economic growth. Much like the Central Bank’s Risk Sharing scheme for the Agric Sector – NIRSAL, funds can be structured and provided by the CBN, local and international development agencies, targeted at specific economic sectors to migrate the MSMEs from low -to medium -to high value-adding activities.
Institutions with credit risk assessment expertise like the Credit Bureaux should begin to see the bigger picture and consider the value chain for plausible forward integration… a Credit Guarantee Division perhaps? Surely food for thought in a bid to “Structure The Unstructured.”
By: Olayimikah Bolo
Industry event co-location to boost science-based industry development
Three industry trade shows across interconnected value chains for food, drink, water, waste and analytics
The future of South Africa’s key industry sectors – including food & drink, water, sewage and waste treatment – rest heavily on science, and never more so than now, as the COVID-19 pandemic highlights the importance of testing and analytics in assuring a compliant work environment and safe products.
Messe Muenchen South Africa, organisers of several of Africa’s major industry trade shows, have co-located food & drink technology (fdt) Africa, IFAT Africa and analytica Lab Africa to bring science and innovation closer to food & drink, water, sewage and waste treatment, for one-stop access to the interconnected value chains in these sectors.
analytica Lab Africa, food & drink technology (fdt) Africa and IFAT Africa bring to Africa the full spectrum of the science and technology laboratory technology, analysis, biotechnology and diagnostics behind consumer products and pharmaceuticals, food and beverage production, and water, sewage, refuse and recycling, water and waste management as environmental concerns and food security become a top priority around the world.
The format of the trade shows and their peripheral events are designed to spark knowledge transfer, showcase global trends and solutions to Africa’s challenges, catalyse business and facilitate introductions that support collaboration and economic growth.
The industry response to co-locating analytica Lab Africa with fdt Africa and IFAT Africa has been resoundingly positive, with up to 10,000 visitors and nearly 400 exhibitors from across Africa and around the world converging at the events to network, share knowledge and explore multi-sectoral business opportunities. Suzette Scheepers, Chief Executive Officer of Messe Muenchen in South Africa, said the synergies between the three sectors were immediately apparent, and gave visitors an opportunity to learn about trends, innovations and opportunities across sectors. Together, the events occupied 17,000 square meters in four halls of the Gallagher Convention Centre.
In 2021, IFAT Africa, food & drink technology (fdt) Africa and analytica Lab Africa will be staged at the Gallagher Convention Centre from July 13 – 15.
analytica Lab Africa is the only trade fair for laboratory technology, analysis, biotechnology and diagnostics in South Africa. The show features both local and international market leaders, addressing visitors in South Africa and Sub-Saharan Africa. The first analytica Lab Africa, in 2019, featured solutions by 148 exhibitors from 15 countries, as well as a strong supporting programme including a forum and demo area with practical presentations on food safety, laboratory applications and topics such as laboratory safety.
food & drink technology (fdt) Africa is a biennial trade fair held in Johannesburg, South Africa. The trade fair and its accompanying programme (including a high-quality exhibitor forum) is the third successful offset of Messe München’s drinktec, the world’s leading trade fair in the beverage and liquid food industry. In 2019, approximately 65 exhibitors from 13 countries presented custom solutions for the African market: from innovative developments for resource conservation to raw materials, through to processing, filling and packaging machines.
IFAT Africa is the leading trade fair for water, sewage, refuse and recycling in Southern Africa.
In 2019, the show welcomed 172 exhibitors and recorded an 83 percent increase in visitor numbers from 2017, with 3,302 visitors from across South African, Botswana, Cameroon, Cote d’Ivoire, Mozambique, Swaziland, Tanzania, Tunisia, Zambia and Zimbabwe. In 2021, the show will again feature a high-calibre forum programme addressing various trends, challenges and solutions from the water, sewage, refuse and recycling sectors, bringing together public and private sector, solution providers, academics, practitioners and decision-makers for three days of valuable knowledge sharing. Highlights of the event also include focused masterclasses hosted by the Water Institute of Southern Africa (WISA) and Institute of Waste Management of Southern Africa (IWMSA) the 3rd edition of the University Challenge, product demonstrations and interactive corner.
Issued by ITP Communication
Black Mamba- Changing the world one chilli at a time
Black Mamba, the HOTTEST African brand is on a mission to bring sustainable, freshly made products to the world, that taste good, look good and do good. In this exclusive chat with Claudia Castellanos who is the Co-Founder and Managing Director at Black Mamba, Claudia shares her African story with Alaba Ayinuola of Business Africa Online. Excerpts.
Black Mamba is a fair trade producer of gourmet chilli products, based in the African Kingdom of Eswatini. Founded in 2010, and manufactures a range of chilli sauces, pestos, pickles, chutneys and jams, all made with natural, fresh ingredients, and no artificial flavours or preservatives.
Currently Black Mamba exports its products to South Africa, the U.K., Germany, Norway and the US, amongst other markets. And their premises posses a FSSC22000 food safety certification, one of the strictest in the world.
This business was started by Claudia Castellanos and her husband Joe Roques who both share their love for chillies with the passion for development of communities and sustainable farming. From the beginning, while stirring a pot of chilli sauce from the back their house, they believed that it was possible to make a high quality, distinctively delicious product with a 100% sustainable value chain that would benefit those involved and the environment.
Black Mamba works in partnership with a local NGO called Guba, whose mission is to improve the livelihood of communities in Eswatini through the use of permaculture practices. Black Mamba and Guba have a symbiotic relationship where Guba develops the farmers and their farming skills, and Black Mamba provides the marketplace for the Guba-trained farmers to sell their organically grown products.
To date, Black Mamba provides a sustainable income to 60 farmers, mostly women, that are part of this initiative. Over 1000 individuals are directly impacted as each farmer has in average 6 dependents and shares their knowledge with 11 members of their community.
Claudia said; “We have established ourselves as a cult brand locally, and envision growing this worldwide, connecting chilli heads and ethical foodies across the world to generation of growers, providing proof that planet and people matter.”
- 14 full-time employees, 12 of which are women and the main breadwinners of their households in average 5 dependents.
- 60 farmers, of which 50 are women- in average 6 dependents and sharing knowledge with 11 members of their communities.
- Current impact over 1000 individuals Possibility to engage up to 180 farmers with a potential impact on 5000 individuals.
- Access to work and sustainable income.
- Welfare programmess: Peer education on health and gender topics, mobile clinics (general checkups, breast and cervix cancer, HIV) and savings programmes for employees
- The farmers have also learnt how to grow herbs for medicinal use, other crops to sell to their communities, healthier food and firewood.
- Improved soil structure.
- Diversity of ground cover crops.
- Reduced erosion.
- Improved use of water resources.
- Improved biodiversity at homestead level.
- Packaging material: glass and cardboard.
- 90% of our waste gets recycled or composted.
Visit Black Mamba Foods
Biography: Remi Duyile- RemiSpeaks, Career and Impact
Remi Duyile: Author | International Speaker | Empowerment Coach | Strategic Consultant
About Remi Duyile
Dr. Remi Duyile is a Nigerian-born and accomplished author, founder of Legacy premier foundation, a business leader with expertise and extensive experience in the financial sector, government and corporate strategy and communication , an eloquent International Keynote speaker who is intentionally in the Diaspora and abroad impacting the next generation and being a business bridge to Global Investors. She is an insightful legislative advocate and trusted community leader. Remi Duyile wears many hats, the one that she wears very proudly is being a devoted wife, and mother to three awesome children.
Dr. Duyile is an example of how faith, hard work and diligence can lead to numerous exposure and growth, she is passionate about seeing others succeed, it’s no doubt she was honored by the Governor of Maryland in the United States of America for her matchless efforts to better humanity. She has made it her life’s purpose to empower others to recognize their own strength, skills and abilities.
Early Life and Education
Dr. Remi Duyile was born and raised in Ondo City and Lagos State, Nigeria. where she learned the thesis of discipline, hard work, commitment and staying true to oneself. With this strong foundation, she relocated from Nigeria to the United States over 30 years ago with just one purpose: to shatter the glass ceilings which she fulfilled, is still fulfilling and will continue to fulfill.
As a fervid believer in the power of education as the key to unlocking opportunities, Dr. Duyile enrolled at the University of the District of Columbia between 1982 and 1987 where she earned a bachelor’s degree in Business Administration and a Masters’ of Business Administration in Finance and Business Economy.
Dr. Duyile started her corporate career at one of the nation’s most revered banking institutions, Bank of America(one of the largest financial institutions in the United States). It was here that she shattered glass ceilings when she was promoted to Vice President of Retail, Premier, and Mortgage Banking. Dr. Duyile served in these roles managing over 600 financial portfolios of high net-worth clients for several years, until she decided that it was time to step into her true calling as a serial entrepreneur and empowering others in her community.
Impact and Philanthropy
Dr. Duyile founded Premier Mortgage Solutions (a mortgage solutions business), Image Consulting Group (an international consulting firm), and Legacy Premier Foundation (a non-profit providing mentorship and financial literacy for women and girls. She’s also the founder of RemiSpeaks. RemiSpeaks is a Coaching, Speaking and Training Platform for Management, Emerging Leaders and Entrepreneurs in quest of sustainable growth with Global Relevance. Under the umbrella of her companies, she has become an empowerment mentor, community mobilizer, certified trainer, as well as an international key note speaker.
She has spoken throughout Africa, Europe, and extensively within North America (Canada and the US) teaching financial literacy, offering entrepreneurial development, and encouraging emerging leaders to engage in the Diaspora and beyond.
Professional Memberships, Affiliations and Boards
- Member Continental Who’s Who
- Member, World Trade Center Institute
- Member, National Black MBA
- Advisory Council Member, Leadership Initiatives
- Member, Wambia Capital
- Advisory Board Member, Mentoring International
- Member, National Speakers Association-DC
- Member, Les Brown Platinum Speaker Network
- Member : NCBW 100 of Prince George’s
- Member: LPGA Golf Female Executive Member
- Board Chair: Pan African Diaspora Women Association
- Board Member, Sisters 4 Sisters Network, Inc.
- Member, Jesus House, DC
- Chair, Census 2010 Complete Count Committee. 2009 – 2010
- Member, Maryland Democratic Party, Continental African Leadership Council
- Member of the National Coalition of 100 Black women
Nomination and Recognition
- Top 100 MBE award winner 2009
- 2010 Smart CEO Award
- Honorary Doctor of Humane Letters, 2013