Thomas Müller is an entrepreneur with more than 37 years of experience in IT and more than 16 years in digital marketing and technology in the global hospitality and tourism industry. In this exclusive interview, he shares his thoughts with Alaba Ayinuola of Business Africa Online on the state of sustainable tourism development in Africa, the role marketing and branding play in facilitating sustainable tourism, the impact of his company, rainmaker in Africa and more. Excerpts.
Alaba: Could you tell us about rainmaker digital and the gap it’s filling?
Thomas: rainmaker has been created as a social enterprise and as such is focused on the impact we can create for destinations, for their hospitality and tourism businesses and people. It is our passion to change the hospitality and tourism sector to keep more tourism spend in the destination through the democratization of technology which we make inclusively and pervasively available to all emerging, small, medium and independent hospitality and tourism businesses. With this, the destination and their hospitality and tourism businesses take back control of their visibility, digital presence, reputation, marketing communication, and distribution.
Together with Tourism Authorities and Hospitality and Tourism Associations we create a public-private partnership, create local capacity and create a digital transformation initiative, aligned to the UNWTO digital transformation strategy and contributing to the Sustainability Goals.
Alaba: What attracted you to sustainable tourism development in Africa?
Thomas: I have got my “Africa-Virus” already in 1984 when I traveled to Kenya. When I was working with Thomas Cook in the early 2000’s I spend quite some time in Senegal. However, for 10 years I am now living in Namibia and am very active in the Southern African and Pan-African Travel, Tourism, and Hospitality industry.
I have realized that in the last 5 years the world has dramatically change to the disadvantage of the destinations and their hospitality and tourism businesses and therefore for its people. One major result of tourism is to contribute to the sustainable development of the destination and its people. However, the way things have developed worried me.
Traditional value chains are no longer sustainable as only 50% of the potential traveler makes use of a high street travel agent and therefore the traditional value chain of a travel agent – wholesale operator – DMC inbound tour operator. At the same time, hundreds of digital platforms have been created. With this a duopoly of the booking holdings and Expedia group has been established, two companies with about 40+ brands now dominating the market.
At the same time, I saw the hospitality and tourism businesses suffer from the overwhelming complexity and the increasing cost of distribution while at the same tie losing total control of their visibility, reputation, and distribution, becoming ever more dependent.
The fact that such a platform makes more money with a booking that the hospitality and tourism business in the destination worried me. I simply find this unethical as tourism in that way can’t contribute to a destination sustainable development as it should and could. I also call this market situation “Colonialism 3.0”.
It has become my passion and vision to change this for the better of the destination, their hospitality and tourism businesses and people. That is when I started rainmaker as a social enterprise or zebra type company in 2016.
Alaba: What are your major achievements and impacts in Africa?
Thomas: We started in 2016 in Namibia and we grew on average by 100% each year only in Namibia. We only started rendering our services in South Africa in late 2018.
We have achieved some 42 Million 360° virtual tour views for our Namibian customers; those have been gained from 11.7 million Google Searches, 23.1 million views. Looking at the conversion we gained some 321.000 website conversions, 612.000 directions conversions, and 74.000 phone call conversions. Finally, more than N$ 20 Million in direct booking revenue have been achieved for our Namibian customers. Some customers we only grew by 80% but others we grew by 700% of direct revenue. This is a significant achievement towards their profit and sustainability.
Given that Namibia is a rather small destination with only some 250.000 to 300.000 leisure tourists, where we only have a market share of about 18% in the hospitality and tourism sector, this is a significant achievement and track record, given that for example the official website of the tourism board scores some 700.000 views per year.
It is because of this tangible impact, our 5 Stages of Success and our VISTA Destination Network have been awarded with the prestigious HSMAI (Hospitality Sales & Marketing Association International) in New York in 2018, with the World Tourism Forum Lucern Destination Innovation Start-Up Award in 2018 and with the African Tourism Leadership Forum Award in 2019.
Alaba: How does your organisation measure its impact?
Thomas: The impact we achieve is measured by key performance parameters such as increase in occupancy, an improvement on average daily room rate, migration from online travel and DMC bookings towards direct bookings and the impact on ADR and profit as well as the improvement of the respective online reputation which as a significant impact on direct bookings. Furthermore, the number of searches, views, and conversions from Google based on the overall strategy.
Alaba: What are the practical tips to create links among ecotourism, conservation and community development?
Thomas: When it comes to terms and buzzwords such as ecotourism, sustainable tourism, green tourism, responsible tourism, etc. I am getting quite excited as this is a big topic nowadays in almost every source market to Africa. However, as you can see already on the wording, and the so-called “Greta Thunberg” effect has done a lot to sensitize travelers, it is rather only focused on the ecological site of sustainable and to an extent to the social side of sustainability.
I am of the opinion that this is short thinking and not taking all aspects into account. To me, there is one major part missing. Economical sustainability. If that can’t be achieved in the first place, there is no basis, no funds and no resources available in a destination and from their hospitality and tourism businesses to properly invest in social and/or economic sustainability and with this helping communities, conservancies and therefore emerging businesses, entrepreneurs and the people in the region to prosper.
As long as 60% to 80% of the profits leaking outside of the destination to global giants, this is a problem we need to fix in order to actually achieve a real sustainable tourism development.
Alaba: Can you say that sustainable destinations have a competitive edge? Why?
Thomas: Yes, they do have a competitive edge as the world and the travelers globally are sensitized on climate change, sustainability, ecotourism, green tourism, etc. and are very careful when selecting their journey. However and as mentioned above, they are not aware that they actually harm a destination and it’s hospitality and tourism businesses when booking through online travel agents and such as their tourism spend doesn’t contribute to the destination, their hospitality, and tourism business and its people as it should and could.
We need to make the traveler aware of the impact it has, especially for developing countries and destinations, their businesses and people when booking directly instead of through platforms.
Alaba: What role does brand and marketing play in facilitating a more sustainable tourism in Africa?
Thomas: It plays a huge role in my perspective. But as mentioned the focus is only on one or two parts being the ecological and social segment of sustainability, often neglecting the at least equally important economical sustainability aspect. There is a growing market of conscious travelers who care. This issue needs to be addressed and the market needs to be made aware.
Alaba: What advice will you give African decision-makers (political and business) on tourism sustainability?
Thomas: Well, from my perspective, destinations need to enable to do businesses with potential travelers to meet their demands, wants and desires while at the same time address the sustainability issue as a holistic topic.
At first, every hospitality and tourism business in a destination is it a Lodge, Guesthouse, B&B, Guest Farm, Hotel, Activity Provider, Activity Provider, Tour Guide, Car Rental provider, and local Tour Operators need to be digitally enabled.
This is why we are working with Tourism Authorities, Tourism Associations and the UNWTO to democratize technology, make it pervasively and inclusively available in a public-private partnership and freemium applications.
It provides a huge competitive advantage for all stakeholders in the destination and makes it seamless and easy for potential travelers to do dream, plan, book and pay for their journey in such an enabled destination.
Alaba: What are the trends to watch in Africa’s tourism ecosystem in 2020?
Thomas: While many countries and destinations such as Ghana, Rwanda, South Africa, and others are on the right track and are very dynamic and progressive with all kinds of innovation, digitization and implementing the basis for the 4th industrial revolution, other countries are a bit behind and need to hurry up in order to gain back control of their visibility, digital presence, reputation, communication and distribution for sustainable tourism development.
I know that there are many fancy technologies and some vendors talk about the Internet of Things (IoT) automated check-in/checkout and automated room key on the smartphone etc. However, I am of the belief that we first need to get the basics right and enable the destinations and their hospitality and tourism businesses before we even look at all the fancy and cool technology that might work in a Hotel in New York but not necessarily in an i.e. remote Safari Lodge in Africa. It is also the question if travelers even want this.
Alaba: Could you mention some of your favorite destinations in Africa?
Thomas: This is a very difficult question as every country has its beauty and attraction. You can’t really compare them with each other. This is why “Brand Africa” is an important initiative. We are not 54 countries competing against each other, but 54 countries offering the most diverse, interesting and educational experience in all aspects.
B I O G R A P H Y
Thomas Müller is an entrepreneur with more than 37 years of experience in IT and more than 16 years in digital marketing and technology in the global hospitality and tourism industry. While working for companies such as IBM, (Mannesman Mobilfunk) Vodafone, TUI, Thomas Cook, amongst others, he was part of opening four Hotels, turning around Hotels and other tourism businesses and started rainmaker digital as a social enterprise TravelTech company in Namibia in 2016.
Thomas had the opportunity of working and living in eight countries around the globe and Southern Africa is his home for more than 10 years. It is his passion to democratize technology for African destinations and its hospitality and tourism businesses to keep more tourism spend in the destination for sustainable tourism development. For the extraordinary achievements of the 5 Stages of Success and the VISTA Destination Network, Thomas and rainmaker were honored with several awards in Europe, the USA, and Africa.
Interview With Amadou Diallo, CEO of DHL Global Forwarding Middle East & Africa
Amadou Diallo is CEO of DHL Global Forwarding Middle East & Africa based in Dubai. A role he is well-placed to perform with his experience in logistics and international leadership. He is responsible for the performance and long-term strategic development of the unit. In this exclusive interview with Alaba Ayinuola of Business Africa Online, the DHL Global Forwarding Middle East & Africa CEO speaks on the DHL’s experience in the African market, current state of the logistics sector, the biggest potentials for growth in Africa and outlined his company’s future plans in Africa. Excerpt.
Alaba: Kindly share your set goals when assuming as the CEO, and how much progress has been made?
Amadou: I’m a strong believer that there is a strong correlation between how well the organization does and how well we treat our people. In this regard, I’m very fortunate to work alongside talented individuals who are not just skilled at what they do, they do it with the utmost commitment, in the interest of our customers. I’ve taken on many roles within the organization, in various regions over the years, and I believe my diverse experience has given me a refreshing perspective to run the team here, and most importantly, I’m happy to contribute back to the community I was born and raised in. I’m proud to be African and I think Africa has a lot more to offer to the world.
My aspiration is to make our business in Africa the most attractive to talents in our industry, the most customer centric logistics company, the most efficient and profitable region in our division as well as the most socially responsible team within the next three years. We want to become the champions of logistics within our division as well as in the market.
Alaba: Can you provide some insights into DHL historical presence in Africa?
Amadou: DHL first started in Africa in 1865 under Hull Blyth in Angola, and has since built up an extensive network of offices offering end-to-end logistics services throughout the continent. It now has representation in every African country often with multiple business units covering Express shipments, Ocean Freight, Road Freight, Air & Supply Chain services.
We have over the years, built up a strong brand, and I expect us to maintain this as we operate in the diverse markets in Africa with the best of local talent who are sensitive to cultural nuances and local business practices.
Alaba: What has been DHL’s experience in the market in terms of its challenges, competition and successes?
Amadou: Having provided world-class freight services in Africa for the past few decades, we have seen the rapid economic growth and development in the region, and the opportunities which businesses here can tap into. With our long-term expertise and with the support of our extensive, global network, we at DHL Global Forwarding work every day towards offering our clients the best possible tailor-made solutions, which meet their evolving business needs. We remain committed to supporting them with timely, agile, and cost-effective global freight connections that allow them to reach their fullest potential.
As one of the fastest-growing markets for DHL Global Forwarding, Africa remains very attractive for many of our customers. Therefore, staying close to the market and being adaptable and responsive to customer needs are part of our fundamental principles. In order to provide the best to customers, DHL Global Forwarding relies not just on world-class facilities in Africa, but also places emphasis on our robust workforce in the region to build on its successful legacy.
Beyond adaptability, we are also cultural experts in our field of business – we operate in each diverse market in Africa with the best of local talents who are sensitive to cultural nuances and local business practices. We are heartened that our clients also see the value we bring to their table – in 2019; we were voted Africa’s International Freight Forwarder of the Year for the fifth consecutive year by readers of STAT Times, a leading international air freight publication.
Having said that, we also recognize that there remain challenges to navigate, given that the continent continues to see the lack of infrastructural support and connectivity. Nonetheless, we remain optimistic about the region’s prospects and are well-equipped to deal with challenges, and see them as opportunities to tap into. With our targeted investments and strategic initiatives, we are focused on megatrends in logistics, such as e-commerce, and are developing promising growth prospects.
Our approach is clear: We think global and act local. That requires us to have a global and long term view, while at the same time operating within local or regional constraints or cultural restrictions, to best maximize the situation. In order to achieve that, we have built a strong local team of experts in each of the countries in Africa – those who understand the nuances and can help us navigate through these challenges.
Alaba: In terms of reputation and performance, where would you like to see DHL Middle East and Africa in 3-5 yrs?
Amadou: Having been in the region for the last few decades, DHL has already established itself as a trusted partner to our customers, and I am sure we will maintain market leader position because of the value we bring to our customers.
In the next few years, we will also continue to invest in meeting growing market demand, amplifying the region’s transport infrastructure, and applying global innovations to the Africa context, with an especial focus on partnerships that will bolster our capabilities to deliver best results. We will also look into setting up more competency centers for verticals such as automotive, life sciences and perishables for example, to ensure we put in place highly specialized teams that know the unique contexts which customers in these sectors navigate, leading to winning partnerships. Wherever possible, we look into new or existing markets for us to enter or grow, to best enjoy first-mover advantage and anticipate our customers’ needs.
Digitalization will remain a key focus because there is potential for digital technologies to drive significant productivity improvements, transform customer service and create new revenue streams. We are looking forward to bringing customer benefits through an enhanced shipping experience and improved access to information.
On the people front, I hope to attract the brightest people to join our team, and to retain the talent we currently have. Diversity is celebrated in our organization and I am going to continue pushing this agenda – we will work toward having more women in leadership, and run programs that groom young talent for key positions in the company.
DHL is and will remain The Logistics Company for Africa.
Alaba: How would you evaluate the current state of the logistics sector in Africa?
Amadou: I see the logistics sector as the best enabler for Africa’s transformation towards a manufacturing platform for the world and we are seeing various forms of changes, similar to what we witnessed in Asia ten years ago. According to the World Economic Forum, the continent’s growth is projected to reach 4% in 2019 and 4.1% in 2020. An enabler of trade, logistics will play an instrumental role to facilitate the movement of goods intra-regionally and in/out of Africa.
However, despite the optimistic outlook thanks to rising urbanization and a growing middle class, the region’s growth opportunities are tapered by political risk factors, infrastructure and a fragmented market typical of an emerging region where each country has its own unique economic and cultural environment. While there is limited influence we can have on government policies on trade, logistics providers should work with customers to help them navigate through complex customs regulations and be accountable for customers’ entire end-to-end operations.
We can expect more competition among logistics providers in this region, but I’m confident that DHL, with our global expertise and local talent, will best value add and meet our customers’ expectations.
Alaba: Where are the biggest potentials for growth in Africa now and beyond?
Amadou: Africa is one of our network’s fastest growing markets. The business and socio-political climate in the region has definitely stabilized as compared to what we have experienced in the last few years – that bodes well for the economy as a whole. For example, Egypt, Nigeria, Ethiopia and Morocco are heavily working to improve on policies as well as infrastructure towards becoming important logistics hubs.
According to the World Economic Forum, the continent’s growth is projected to reach 4% in 2019 and 4.1% in 2020. With the region’s economic landscape growth attributed to a young urbanizing population, we are anticipating that digitization, digitalization and the adoption of new technologies in our services and solutions will be crucial to cater to Africa’s mobile-first consumer and business preferences.
Equally, a boost in intra-regional trade will be critical to growing the economy further, and there is room for logistics providers such as DHL to scale up our operations to support our customers’ needs.
Alaba: What’s your view on the African Continental Free Trade Area?
Amadou: Currently, Africa has the lowest intra-regional trade in the world as compared to Europe and Asia, so greater integration of African economies will accelerate growth by removing barriers to trade and investment, hence sharpening Africa’s edge in global trade and value chains. Logistics as an enabler of trade will also grow to support the region’s logistics needs, so wherever possible, we will look into new or existing markets to enter or grow, to best enjoy first-mover advantage and anticipate our customers’ needs.
Like ASEAN and the EU, ACFTA will enable stellar growth and job creation within the continent whilst making it more attractive for foreign investors.
Alaba: How would you describe your leadership style, and monitor the performance of the people you lead?
Amadou: I believe in our people as they are the cornerstone of the company’s success. They are the best we can find in the continent – in addition to being extremely skillful in their respective fields, they also wear their hearts on their sleeves, know Africa inside-out and are fiercely passionate about giving their best to our customers. Rather than monitor or micro-manage, I prefer to trust my senior management team to set clear goals, which their teams can align to, and make available the needed resources to help them do their work well.
It is important to set our people up for success, and celebrate little wins along the way, to keep our morale high. In essence, positivity, enthusiasm, hard work and determination are the best combinations I put to play in order to lead with head, heart and guts. I have zero tolerance for corruption and disrespect.
Alaba: What inspires you and keeps you going? What books do you read?
Amadou: I work alongside a great team of colleagues in the region – every single individual comes ready each day to do our best for our customers, and this keeps the passion and fire in me going. It is especially rewarding to know that we have the best team for our customers, made up of experts in their fields and raring to go.
The sparkle in the eyes of my colleagues, customers, friends and family keeps me going! My grandmother, Aissatou Labe is still my greatest source of inspiration, and she has not written any books. I read a lot on technology, innovation but also historical books detailing the stories of different entrepreneurs.
Alaba: What is your advice for aspiring entrepreneurs and investors in Africa?
Amadou: Be bold in your endeavors and place your customers’ interest at the heart of everything you do, without compromising on the welfare of your team. It will be tough at the get-go but keep your eye on the prize, and keep pushing your limits. Sacrifice for your teams and build their success, and they will be with you for the long run.
B I O G R A P H Y
Amadou Diallo is CEO of DHL Global Forwarding Middle East & Africa. Based in Dubai, he is responsible for the performance and long-term strategic development of the unit, a role he is well-placed to perform with his experience in logistics and international leadership. Mr. Diallo has more than 30 years of experience in the tourism, banking, express and logistics industries.
He is also the founder of Saloodo!, DHL’s first logistics online platform. Prior to this role, he took on various senior roles within the organization – CEO of DHL Freight, CEO of DHL Global Forwarding South Asia Pacific, Chief Financial Officer of DPDHL Logistics Division and Managing Director for the integration of Exel and DHL. Mr. Diallo has worked across all geographies in Europe, Africa and Asia.
Renowned for his expertise and forward-thinking approach towards corporate integrations, Mr. Diallo played a lead role in shaping the development and structure of the DHL Logistics Division through the Exel integration, which remains the largest corporate integration in the transportation and logistics industry to date. Mr. Diallo is Chairman of Amref Health Africa in Germany, a member of the boards of Welthungerhilfe, Global Business School Network and the Universal Business School of Mumbai.
He is Senegalese and fluent in several languages including English, German, French, Fulani, Wolof and Spanish. As of February 2019
EduStore Africa: We specialize in supplying technology-enhanced education in Africa- Sally Kim
Sally Kim is an educational technology thought leader, international speaker and influencer. She is the Chief Executive for Edustore Africa, an EdTech company that focuses on STEAM, EdTech consultancy and an Inquisitive E-Commerce business managing diverse work force and leadership in the global environment. In this interview with Alaba Ayinuola of Business Africa Online, Sally talks about her brand, Edustore Africa and impact, education and technology in Africa. Excerpt.
Alaba: Kindly tell us about Edustore Africa, the gap its filling?
Sally: Our Motto: “Every child in every village deserves a better future through education.” Edustore Africa utilises a learner centered approaching the digital learning space and through smart partnerships with Robobloq and RoboCamp. This allows all stakeholders to experience the practical application of STEAM (Science, Technology, Engineering, Art and Mathematics) learning environments.
Alaba: What exactly is digital learning? How important is it to Africa?
Sally: Digital learning does not have a single universally accepted definition. It includes but is not limited to delivering instructional material making effective use of technology. Technology has a twofold importance for Africa. The first is the chance to reach a maximum number of learners at the beginning of their education in a vast continent. The second is for those graduates to create, collaborate and innovate in every country here and globally.
Alaba: How do you measure your organization impact?
Sally: All our offerings involve a hands-on relationship with learners. Feedback is direct and immediate.
Alaba: What are the challenges and how are you overcoming them?
Sally: Understanding, acceptance and financial. Making sure people understand and accept the value and long term benefit of current technology.Working to obtain as wide an audience as possible to have access. These elements require targeted marketing.
Alaba: Why should coding robotics important and be included in our curriculum in Africa?
Sally: Children/Students have different talents and we can only explore their different strengths through inclusivity. We cannot solely focus on one sector and ignore another. Let’s have young minds be able to have the opportunity of being part of the revolution.
Alaba: How is Edustore Africa contributing to the development of Africa?
Sally: By putting the learner at the centre of the educational experience we ensure Africa is part of the conversation of development. We create an environment in which we can come up with our own solutions using current and inclusive technology. The opportunity to learn at your convenience, in your schools, individually and in dedicated camps are powerful tools.
Alaba: What is the future for your organization and what steps are you taking towards achieving them?
Sally: We want the whole of Africa to adapt the system and the technology. We need it to be a trend in Africa. We aim to create sustainable change in the continent. We are partnering with different individuals or organizations and schools all over Africa. We have people onboard who believe in the vision, are competent and passionate about it.
Alaba: What is your view on the development of Africa’s education ecosystem and tech? Especially with the girl child?
Sally: Africa is not where it was in terms of Education. A good number of people are adapting to the idea of technology in Education. Labs are more furnished. Schools are open to technology labs and clubs. We have more technology camps and Developers groups over the holidays. We encourage the girl child to get into technology and get excited about it. We know more needs to be done and we plan to be on the forefront.
Alaba: How can African government support the campaign on digital learning?
Sally: Let’s start with the fact that there is no African government. Africa is a continent, made up of fifty-four recognized states. Each is filled with diverse populations all with particular needs and challenges. Each government must change the curriculum to make it inclusive. They must support the advancement of labs especially in higher learning institutions.
Alaba: How do you relax when you are not working?
Sally is an avid reader and loves cooking when she is free.
B I O G R A P H Y
Sally Kim is an educational technology thought leader, international speaker and influencer. She welcomes every opportunity to share her expertise of women leadership and instructional technology best practices with educational leaders worldwide.
She has a great passion for education and has been working towards improving education technology and empowering learners and educators with procurement of STEAM related educational resources. She is a worthy EdTech consultant and key note speaker.
Sally Kim has a bachelors on international marketing management from Alison School of Business Management. She has certificates and licenses from IBM on Artificial intelligence, Internet of things, Block Chain, Data science & Intro analytics, Cyber security and leadership in global environment.
Sally is the Chief Executive for Edustore Africa with several existing business associates in Europe, China, America and Sub-Saharan Africa.
Interview with Najwa El Iraki, Founder and CEO AfricaDev Consulting Ltd
Najwa El Iraki is an entrepreneur, business development and financial services expert. In this interview with Alaba Ayinuola, She talks about some of the biggest mistakes entrepreneurs make in today’s market, the African business ecosystem and advice for entrepreneurs and investors. Excerpts.
Alaba: Kindly tell us about AfricaDev Consulting and the gap its filling?
Najwa: AfricaDev Consulting Ltd is a business development and advisory firm dedicated to the African continent. We work with an ecosystem of partners in Morocco and the rest of Africa in various areas to provide one stop shop for investors and we are supported by senior advisors worldwide.
Our services include: representation and business development for international companies ; investment and financial advisory services; structuring and establishment services in Morocco; strategy consulting in Africa.
As such we support international businesses in their African expansion success. We play a key role in helping them to grow in the continent by leveraging on a deep understanding of local markets in particular in North Africa, as well as using our network of partners in SubSaharan Africa. We work mainly with the private sector, which is a driving force of Africa’s growth, providing business development for financial institutions, professional services firms and digital services companies.
We also help African entrepreneurs carrying out financial advisory assignments notably mergers and acquisitions (M&A) activities and fundraising for private equity and venture capital as well as helping local SMEs with their international strategy and finding the right international partner.
Alaba: As a financial expert with experience in Africa, what’s the biggest mistake entrepreneurs make when they start or run a business?
Najwa: Being an entrepreneur is really hard but also really rewarding. Below are some of the biggest mistakes that entrepreneurs tend to make in today’s market.
- Going for the money only: One of the biggest mistakes that any entrepreneur can make is ignoring their true passion and just opening a company to make money.
- Expecting success right away: Patience is key as well as being realistic about how much money you can actually make at first.
- Not being adaptable: You’d need to go with what is working now then always be ready to make changes in the future.
- Trying to do everything yourself:You’d need to know how to outsource and delegate to others and focus on the tasks that actually need your expertise and attention.
- Overestimating initial sales: This problem often leads to a shortfall in working and permanent capital. It’s no wonder that nearly 50 percent of businesses attribute their failure to a shortage of working capital.
- Ignoring social media: There is a tech revolutionary and entrepreneurs need to use it!
Alaba: What’s your view on small businesses experiencing cash flow problems, and forecast isn’t good. And want to tap into their personal wealth to shore up their emerging businesses?
Najwa: As an entrepreneur, you are thinking about cash flow all of the time. An entrepreneur should not just think about his personal funds but about different sources of funding being it debt or equity when available including from friends and family as business angels tend to be rare in Africa given the cultural context and aversion to entrepreneurship.
Banks are also cautious because they believe that asymmetric information is too important to get a good visibility on the credit quality of SMEs and startups. Investment funds can have too high entry barriers for SMEs and startups, and microfinance institutions offer low funding resources and prohibitive interest rates.
As such, every business needs to consider its financing needs as part of a business plan. The entrepreneur needs to evaluate his personal tolerance for risk. Most businesses have times where business is more robust than others and temporary cash flow problems may need to be addressed with personal funds if financing is not available.
At the same time, the owner should be looking to see if any changes could be made to help increase the cash position as well as profits. While the growth rate is slow, the focus of the entrepreneur remains on making his business successful through delivering value to customers, and that is the most healthy approach an entrepreneur can have.
Alaba: For a small business who have not made as much profit as expected. How can it bridge the gap until it start to make profit? Is profit a key component of a successful business?
Najwa: A profit typically means your business is financially well off. It’s important to identify quickly why your business is not making money. The faster you can discover where the losses are coming from, the faster you can reduce or stop the leak as you can then identify where you need to make changes in your business. There are some common reasons for a small business losing money (e.g. bad or inaccurate accounting, poorly priced products or services, nonexistent investing, etc).
Generally speaking it comes to a strategic use of your cash and investment strategies to potentially provide backup if you find yourself not making a profit. Additionally, there are a variety of available resources one can turn to for lending advice, guidance and support; family members, friends, professional network, financial solutions advisors, small business advocates, online content and more.
Alaba: What is your view about Africa’s business ecosystem?
Najwa: I think that there is still a lot to do based on what I have seen being done elsewhere (in the US for example following the Women Entrepreneurship Program I attended this month as part of the International Visitor Leadership Program –IVLP-). In particular building entrepreneurship ecosystems has become an imperative for African governments and business communities.
To create efficient and innovative African Business Ecosystem, there are a number of needed solutions.
First a better government is required. Kenya for instance is the most innovative African country in ICT by far, because they have good regulation and support from the government.
Also there is a financing need. A lot of people talk about venture capital in Africa but but not many do much about it. The levels of private equity investment have been increasing in the continent over last decade but most of the investments are in mature companies; only a tiny fraction of them are seed or first-round investments. The problem for African startups is that there are only a handful of true venture funds based in Africa and most U.S. and European VCs don’t have the local knowledge and connections, or the right business models, to make a real go of it in Africa.
As for SMEs, on one hand, we have businesses that complain that there are no financiers interested in partnering with them to grow. And on the other hand, financiers complain about a lack of a deal pipeline, namely viable businesses that can be credibly financed. This has led to the perception that Africa can not absorb the scale of capital theoretically available to the continent. But actually the real issue here is linkages and aggregation. What is required are more platforms and entities that link viable SMEs with interested financiers and aggregate business deals. Which is what our company AfricaDev Consulting helps with.
Then there is the issue of support structures for SME development. So while there is a financing need, an ecosystem that provides niche expertise, long-term partnership and technological support are also key. Here, large multinationals can have an impact as an ecosystem enabler.
Finally, one of the most important changes that could improve the climate for entrepreneurship is culture. There is a hope that the startup path will be more respected by African families and more compelling to youngsters. If that happens, there will be more entrepreneurs, more success stories and more people willing to take risks. It’s a self-reinforcing cycle.
Alaba: What’s your advice for entrepreneurs who want to start a business in Africa?
Najwa: I would just say that despite many challenges, the African continent, which has a population of over 1.2 billion people and some of the world’s fastest growing economies, provides entrepreneurs with a very rich ground on which the foundations of a successful venture can be laid down.
As such, the good thing about developing countries is that they are a lot of things that have not been done yet and a lot of problems that need innovative solutions. And this fact alone presents key opportunities for a lot of entrepreneurs to take advantage of.
I would add that there is no one single advice but the following points are worth taking into consideration for a starting business to succeed in the continent :
- Have a clear and adequate vision for your company that you focus on and learn how to communicate it.
- Choose your founding team wisely, which is what many investors are looking for.
Find a way to fund your startup and be aware of those sources of capital that are around us and within our reach. You should remember that if you have no proven track record, only people who know, like and trust you will be willing to take a chance on you in the early days of your business.
Another source of finance worth looking into is crowdfunding.
There are also hundreds of international and local organisations which support businesses that tackle issues such as environmental pollution, illiteracy, disease and other social problems. They usually provide grants, donations, loans, equity or even training and advice.
As previously mentioned, avoid some of the common financial mistakes entrepreneurs make when starting a new business (e.g. cash flow management is key; focus on customer acquisition; establish financial goals which are reachable and measurable).
Finally, achieving your desired success will take time and you have to be patient for it to happen. They are a lot of exciting success stories in Africa. So if they can do it, so can you.
Alaba: You are also the Managing Director in the North Africa for Opportunity Network. Tell us about this platform and benefits for Africa businesses.
Najwa: Opportunity Network is an exclusive business match making platform for vetted companies to share and connect to global trade opportunities, as well as strike reliable investment deals.
Opportunity Network partners with financial institutions to allow their corporate and SME clients to find their next business partner in over 120 countries in the world. Members can only be invited to join the platform by a leading financial institution, which does a pre-screening of each member of the network.
Current partners include UBS (global), ABN AMRO (The Netherlands), Intesa San Paolo (Italy), Caixabank (Spain), BCI (Chile), Citizens (USA), Alfa Bank, (Russia), Vietinbank (Vietnam), Eurobank (Greece), Sterling Bank (Nigeria), FCMB (Nigeria), YPO (global), GLG (Global), Entrepreneurs organization (Global)… and many more.
The partnerships we have in Africa form part of an effort by banks to put their African customers on a global platform and enhance their ability to do business in a collaborative manner with other investors across the globe. For instance, there are existing opportunities for African companies looking for an opportunity to export commodities, or looking for investment to grow. There are also deals for African companies in tech, healthcare, education, oil and gas looking for buyers, suppliers, distributors or clients of any sort.
B I O G R A P H Y
Najwa El Iraki is the Founder & Managing Partner of AfricaDev Consulting Ltd, a business development and advisory firm dedicated to the African continent. She is the Managing Director in North West Africa for Opportunity Network, a global business matchmaking platform headquartered in London that connects CEOs worldwide. She is also currently the General Representative of Lloyd’s of London in Francophone Africa.
Prior to this, she was the Head of Business Development at Casablanca Finance City Authority (CFCA), a public-private held organization dedicated to positioning Morocco as a regional financial center and a premier gateway into Africa. Najwa structured the project from its inception, contributing to the overall strategy for building a regional business and finance center.
Previously, she was Senior Manager within Mazars’ Financial Services Group in London. A role she took on after working within both large international investment banks (Lehman Brothers/Nomura) within their EMEA equity derivative business and a big four firm (KPMG London) advising financial institutions and corporates in various consulting areas including tax, corporate/project finance and restructuring.
Najwa has accumulated 15 years’ experience and holds a Master’s degree in Business Management and Finance from leading French and British business schools (Kedge Business School & Aston Business School). She is a qualified Chartered Accountant, member of both international accountancy and UK tax leading professional institutes (ICAS & ATT). She holds a certificate in leadership management from Harvard Business School and she is an Alumni of the IVLP, Women Entrepreneurs – 2019 (International Visitor Leadership Program by the US Government).
She is also actively involved either as a co-founder or a member in a number of business associations and networks in Africa (e.g. Africa Expert Network, CasaExpats, Women in Business Network of Africa CEO Forum…)
Najwa was named among the 60 most influential women in Africa in 2016 by “New African Woman Magazine”.
Najwa speaks fluently English, French, Arabic and intermediate Spanish.