This is the first in a series of articles I’ll be writing about Invest in Africa (IIA), an organisation that’s founded on a vision to build thriving economies in Africa through a different model of doing business. As IIA Ambassador, I’ve seen its impact on the growth of SME’s that have benefited from their work. But beyond all the talk of profits, turn over, growth and other jargon, its the potential to create vast business and employment opportunities to turbocharge African economies that excites me.
Imagine what could happen if big businesses decided to bring growth to the economy by helping smaller businesses grow.
A couple of multinationals in Ghana did actually choose to do this. They created the IIA, a not-for-profit organisation to drive their vision to see strong, thriving economies in Africa.
Access to markets
They realised by using local suppliers, their big pocket books would be bringing growth and new jobs to smalle
As it would turn out, local suppliers often couldn’t tell what new contracts were on offer from big business and what was required to win them either. So the IIA set up an online business directory - the African Partner Pool (APP), to connect these big pocket books with eager services.
Big IIA partners like Tullow Oil, Ecobank, Guinness Ghana Breweries, Millennium Development Authority, Atuabo Freeport, amongst others, have provided some US$60M worth of business through product supply and service tenders so far. This is some good money for SME growth while easing local sourcing challenges and achieving local content compliance for big business. Everybody wins, everybody is happy.
Access to skills
The IIA quickly found that SMEs could run their businesses better, raise the quality of their services and their ability to scale up into new markets, if they received some skills training. So some IIA partners stepped up with various interventions.
The African Development Bank, through the Business Linkage Programme (BLP) has funded training for some 200 entrepreneurs over the past two years. These SMEs typically received a week’s worth of the latest in business skills training, from running financially transparent systems, to identifying new business opportunities and growing out of local-champion-mode to seek out new markets.
Mentors and consultants were contracted to help deal with technical challenges in product innovation or product quality improvement for trainees. Then accounting firm EY was also on hand to provide up to 90 per cent subsidised consultancy services for targeted businesses.
Ad Precision, a supplier of engineering tools and services, attributed the 20 per cent annual growth in profits, the employment of 92 staff and business opportunities from the ECG, VRA and Ghana Ports and Habours Authority to competencies its CEO, Micheal Adaflagbe, had acquired through BLP.
Access to finance
The IIA assisted SMEs in raising US$500,000 last year, and has already raised US$1.5M so far this year. Apart from efforts by partners like Ecobank to push financing for small businesses, the IIA has helped SMEs with business plans and other useful documentation to make strong business cases to banks.
That they are able to show good financial management practices (through IIA training) also helps banks see that they are not risky prospects. For entrepreneurs like Godwin Akuamoah, CEO of electronic security company Right Consult who saw a 110 per cent increase in sales after receiving funding for a project, this access to funding must make a real difference.
The IIA’s work to support businesses to grow has created income and opportunities for improved livelihoods. Through its own impact tracking systems it is able to show that it has supported the creation of 13,000 jobs in just over three years.
Of its pool of success stories, Fuseini Ayisha’s Asheba Enterprise is my outstanding personal favourite. Ayisha’s business directly engages 600 women in Northern Ghana who process shea butter for cosmetic, food and pharmaceutical use for local and export markets. Fuseini insists on paying her workers well and in training other women’s groups to produce shea butter because she says, “when women are free financially, they make better decisions, and are heard”.
Imagine just how many households, 600 and probably more, and dependants have improved lives because of this one business and how many more lives can be transformed by the IIA’s work, hundreds of thousands.
Surprisingly, all this noteworthy work has been done in under four years. This is proof that the IIA’s unique model works. Ghana Country Manager, Clarence Nartey expects a stronger push later this year, “with their validated model”, to continue the work for greater impact.
It’s almost certain that how well SMEs across Africa perform in the next few years will determine how strong African economies become. Growth in trade with SMEs will also translate into opportunities for the millions joining our workforce in the next few years.
With offices in Ghana, London and Kenya, and plans to open a fourth country office soon in the works, IIA is also rolling out a continent-wide programme one country at a time.
The Invest In Africa project is a great way of doing business. It packs a lot of social impact too. — GB