Supporting the trade journey of African entrepreneurs
Entrepreneurs are building businesses in response to challenges they are seeing on the ground. They are building small companies for the sake of survival. The onus is on us to help them build legacies that will outlive them, and have long-term, positive impact on not only their communities but society in general.
This goes beyond vision and mission, but into purpose and into strategy. What we know as the norm and how we have been doing business is not working anymore. How do we as big business respond to the challenges facing entrepreneurs on the ground?
This was the apt summation by Shared Value Africa Initiative (SVAI) director Vuyo Lutseke following a riveting discourse hosted by the SVAI at the recent Prosperity Africa Conference 2022, a hybrid event held in Botswana by the Pan African Chamber of Commerce and Industry (PACCI).
Shorn Molokwane from the Botswana Institute for Technology, Research & Innovation moderated the panel discussion, which focused on providing support for entrepreneurs’ along their African trade journeys, as well as identifying solutions to help increase and accelerate SME trade across borders.
The panellists included Tumi Mabitsela, MD of Mpilo Mobile Healthcare (South Africa); Botho Chalebgwa, Creative Director of Botocy Creations (Botswana); Robert Chidzugwe, Founder of Athel Technology (Kenya); Tarryn Daniels representing GS1 and the Consumer Goods Council of South Africa; and SVAI director Vuyo Lutseke, as the host of the session.
Other take-aways included the importance of building Shared Value partnerships across borders, taking the risk to open your business models and nurturing a high level of trust between trading partners.
Trust was identified as a critical issue for all participants as it comes down to the degree of risk associated with sharing resources, skills and business with other entrepreneurs. Panellists underscored the need for a system where African countries can trade without an entrepreneur facing the risk of having products stolen.
Collaboration has become the new competition, noted Tumi Mabitsela, who strongly advocated for entrepreneurs to be open to partnerships and collaborations and for multinationals to be welcoming and more open to dealing with SMMEs, by addressing their internal policies and payment structure, which typically favour bigger entities.
“As a social enterprise, we are constantly trying to balance profit-making with sustainability and addressing our social cause. We must accept the fact that we cannot have a presence everywhere without partnering with a local implementation partner and with private sector for funding. So one of the risks we have to take is to trust another party to execute on our behalf . Instead of spreading yourself thin everywhere, the ideal is to plug and play with other like-minded entrepreneurs.”
Added Botho Chalebgwa: “We’ve been working with different associations on trusted development and environmentally conscious models and we are now helping other SMMEs so that they don’t go through the struggles we faced in our specific industry. We are also making sure that we are implementing more consciousness in the manufacturing sector in order to make it more sustainable. Our biggest risk now is that we are moving away from the traditionally profit-driven fashion business model to a more conscious model, one where you’re really thinking about your impact, not just socially but environmentally.”
During the discussion, both panellists and audience members identified fundamental challenges faced by SMMEs when starting to trade across borders. These included issues of capacity in, for example, the apparel and textile industry typically characterised by limited access to fabrications that are qualified resulting in costly imports of material.
Then there is the challenge of cash flow, training and getting equipment into the country you are expanding into, as noted by Robert Chidzugwe, whose business came about through the invention of an innovative solar cooker for under serviced and remote communities within Kenya. “This is my first year of exporting my solar cooker. One of the main challenges has been to get more cash flow and equipment to the country I am exporting to because I need to employ youth within that country, train and equip them to install the solar cooker. I need to be able to connect with NGOs there too to get the solar cooker into the various remote communities. However, even before this point of engagement, there are challenges and added costs within the trading system itself – documentation requirements, transportation and border delays – before you can even get to the point where you can actually sell into another country.”
The panel also noted the huge demands placed on SMMEs looking to trade across border by day-to-day business concerns.
Fortunately, support is on hand, as illustrated by Tarryn Daniels, who represented GS1 South Africa, a non-profit standards body. “We help with supply chain efficiency, compliance and to ensure product safety, whether it is food, clothing, or mining materials. Our role is to support Botswana and other SADC countries with compliance and conformance to international supply chain requirements through standards. Our sister company, the Consumer Goods Council of South Africa, has relationships locally, from government to industry. We assist SMEs with your global standards; electronic data interchange requirements and putting a barcode on every product. Where something does not fall within our realm. For example, like testing and certification, we will do referrals.”
In wrapping up the session, Vuyo Lutseke noted that it is about Africa for Africans. It is about us building businesses that can trade across borders and how do we collaborate and pragmatically address the challenges faced on a day-by-day basis.
“Shared Value has a framework of how a company can strategically align profit and purpose across its activities so that that economic value and social value are not divergent but in fact intertwined.”
She concluded: “As the SVAI, we build a cross-continental network of organizations that are committed to affecting positive change. One way of doing this is by bringing young entrepreneurs into conversations like today’s and, through their voices, look at how we can collectively support them to effectively trade across borders.”