A question relating to Q1 and Q2 - what is being done by big businesses such as those represented in this discussion and also other organisations to engage with the governments in developing countries to try and encourage a more supportive/conducive environment to SME and entrepreneurship? After all, political will is essential if there is to be change. From my experience currently living in Ghana and working for SABMiller, there is still a long way to go in terms of fostering change to encourage SMEs and entrepreneurship here.
Alyssa - that was a great report - there's an excellent blog about it by Jürgen Nagler at UNDP here.
Small business start ups should be encouraged amongst the growing youth population in Africa. Focus should be on the need for more productive small and medium scale enterprise. Governments on the other hand should be tasked to create an enabling and conducive environment and systems that support African youth SME’s.
Africa should also consider making immigration laws a bit relaxed for easy flow of businesses amongst countries in Africa.
This is great, Alyssa.
We at Acumen believe in the ecosystem as well, and one of the things we are focusing on going forward is engaging corporations to provide technical assistance and support to our social enterprises in Africa.
However, we are very adamant that these opportunities are not simply having a corporation teach social enterprises rather facilitating mutual knowledge sharing about these emerging markets. We're not just trying to develop our own social enterprises but also have a profound impact on the way multinational corporations are approaching these markets as well.
This is how we'd like to develop a whole ecosystem around high priority sectors such as water, agriculture, energy, and health as opposed to simply investing in businesses.
Hi Suzannah, we have been working very closely with the Government of Botswana and it has been and extremely positive experience. We co-designed a new initiative which main goals were to strengthen the current offering they were providing and find new services or funds to fill the gaps. We are also cooperating with other corporates and in that way we will be operating within supply chains which makes the whole transactional risk for SMEs much lower. But you are right, more needs to be done.
I think we've learnt that efforts to promote economic development that don't take into account maket realities, will basically fail, and waste donor / taxpayers money! In the past, some interventions have actually undermined markets, by providing things on a temporary basis for free, rather than setting up long term markets for those products that will be financially self-sustaining.
The development community is also learning to engage directly with the private sector to achieve development goals. However, there is only limited robust evidence of which types of donor partnerships work best, and much more lesson learning needs to be done on how to overcome challenges in developing implementing these kinds of partnerships, and to maximise their impact.
Dear Christian - thank you for your reply. I would like to ask both you and and Doug from Unilever have your corporations participated and thought about supporting basic primary school education in your communities/markets? What I see from a development and business perspective is that is that is answers so many development issues and business growth issues and is a terrific investment for the future. Would you both please comment on this?
Good point, Suzannah - we recently held a great discussion on supporting entrepreneurs, in which SABMiller participated: http://snipbfp.org/11R4UPh
Q3: How can African governments and institutions further unlock business’s contribution, and how will the current G8 agenda help to accelerate further progress?
Many private sector companies are climbing a steep learning curve in terms of developing inclusive business models and forging the non-traditional partnerships which can make these happen. Diluting their focus on profit above all else and sharing learning with network partners is challenging work. Inclusive innovation will thrive in a policy environment which incentivises and creates room for experiments but will wither away under the control of prescriptive regimes. The catch is in the balance, encouraging innovation whilst at the same time protecting consumers from the unscrupulous.
Hi Suzannah, All businesses, large and small, will support an environment that improves the ease of doing business and makes it easier to create jobs.
However, the "costs of doing business" are too often presented as dry economics or profit and loss issues but in reality they make basic consumer goods like margarine and soap more expensive in most of Africa than they are in the US and Europe. How can that help poor families emerging from the bottom of the pyramid?
We need a sensible and mature debate among everyone about changing this stiuation in a way that meets the objectives of government, people and business - which is why we at Unilver continue to stress the word "partnership" rather than the role of any one particular actor.
Thanks Teyei Pam - I was listening to Nkosazana Dlamini-Zuma, Chair of the AU, last night and she stressed the importance of integrating African economies and speeding up progress on the free movement of goods and people.
Thanks to everyone for joining today - especially our panel and those who posted comments. We'll leave the discussion open, so please do feel free to continue adding your comments!
Africa is changing and changing fast, the economic indicators show or paint a very positive picture , but say that to the lay man on the street, very little have changed since 2005, infact things have gotten worse to most Africans, price of basic necessities have 'sky-rocked' climate caprices have made subsistence agriculture very difficult, banks still ignore farmers and forest users, and the business environment is far from being favourable and the informal sector is still the dominant business model. What have really changed? especially in Francophone Africa, where wars and arms conflicts are instead on the rise with Mali, CAR, Cote D'ivoire, RDC is still a mess etc. Yes Africa features far more on CNN , BBC etc and is shown in a more positive way, so what? so what really. Here in Burkina Faso, mining have gone up 10 folds, new companies are in , indicators show the economic is better, better for who??. How many Africans have been taken out of poverty , how many youths have decent jobs? I like the 'feel good ' stories about Africa these days, but I am not really seeing it when working with communities in Ghana, Niger, Mali, even Ethiopia , yes.
Thanks Tim - could you describe how the African Development Bank's direct engagement with business has evolved during this period?
To respond on the issue of leveraging the current G8 agenda, I'd like to highlight that access to basic infrastructure is consistently amongst the top constraints cited by businesses in Africa. For example, the lack of reliable and affordable electricity is a huge impediment for businesses of all sizes. Inefficient ports and other transport services makes the cost of moving goods and people are among the highest in the world which makes African businesses uncompetitive in the global marketplace. The current G8 agenda acknowledges the importance of addressing the infrastructure gap as an urgent and high priority. For those of you who saw PM Cameron's G8 address you may have noticed a reference to a new initiative conceived by the President of the African Dev Bank, Donald Kaberuka, to create an ambitious facility to radically scale up finance for infrastructure. The "Africa 50 Fund" will focus on bringing transformational infrastructure projects to the point of bankability and getting them financed.
My apologies as I am new to this technology - May I please ask again? And thank you so very much for this wonderful discussion.
Dear Christian - thank you for your reply. I would like to ask both you and and Doug from Unilever have your corporations participated and thought about supporting basic primary school education in your communities/markets? What I see from a development and business perspective is that is that is answers so many development issues and business growth issues and is a terrific investment for the future. Would you both please comment on this?
More than 90% of the African labor force is estimated to work outside the legal perimeter meaning that small businesses or employees are not formally registered with state or municipal authorities. They are not recognized by Governments as legitimate contributors to the formal economy. Most of the smaller business owners and workers do not know their rights nor do they know or understand their obligations. Many of them pay some form of taxes that do not always end up at the right place. They cannot apply for loans or use property for collateral. Upholding ownership rights is almost impossible for the mere mortal, the way to formal ownership blocked by notary publics, multiple civil servants, fiscal stamps, photocopies, delays, commissions, useless publications, fees, etc.
Complying with the legal requirement and attaining rights is perceived as way too complex by the aforementioned 90% that it's not even worth the try. Bureaucracies uphold rules that its civil servants do not understand and do not have the means to enforce. This state of affairs only strengthens the intense distrust between the private and the public.
It woud be great to see more efforts to make laws and procedures work for small business owners in order for them to comply with rules, feel like legitimate contributors and attain rights and opportunities that are designed for them in a clear, simple, very cheap and inclusive manner.
I agree with Kathy. We need more policies, more implementation programmes promoting education and infrastructure in Africa as a mean to promote business and growth in Africa...small business programs, I think, remain an important pilot too but we need to make sure that small businesses are responding to a need in that specific region where they are being promoted and sometimes provided trainings in financial literacy so that they keep their books clean.
Free movement of goods and people in Africa? Richard, this is one of the biggest challenges faced in this continent, it is so bad that even to go to Addis Ababa, the capital of Africa, you need to look for visas, apart from Djibouti and Kenya, any other African needs a visa for Ethiopia. Let them start with clearing off this particular visa, then we will start thinking that there is a possibility of free movement of goods and services in Africa for Africans , by Africans