Category: Posts

An unconventional suggestion to tackle unemployment

An unconventional suggestion to tackle unemployment

Employment prospects through CSR programmes.

It’s incredible how high the unemployment rates have persisted in the Mediterranean basin. Without an end in sight, the percentage of those out of work has steadily gone up, despite the opportunities for growth in the agricultural sector.

Mainly, countries rich in biodiversity, including Greece, Spain, Italy, Croatia, and Cyprus have untapped potential to make their agricultural output great again. Instead of crafting work relief programs, these countries are misguided through desperate actions of claiming loans to fund more debt and social welfare initiatives.

Work-relief programme vs Social welfare programme

Do not get me wrong; I believe that social welfare is useful for those not able to work and in danger of falling into the poverty trap. However, a nation-wide work relief program would be more beneficial in the long run for the individual and society. Millions of long-term unemployed Mediterranean would preserve their dignity and working skills.

Recommendations

To address this unfortunate economic phenomenon, the high-performing corporations could exercise impactful corporate social responsibility (CSR) programs across geographical borders. By joining forces with the public sector of countries plagued with high unemployment rates, CSR programs can be designed to establish long-term work- and skills development projects, particularly in the fields of sustainable agribusiness and GreenTech.

Perhaps the European Commission and its member-states could mandate an incentive-driven program for enterprises of all sizes to create employment and stem a tide of societal degeneration?

Corruption is a byproduct

I know the cynics reading this would scream this proposal as a breeding ground for fraud and corruption. But realise this: Corruption is a byproduct of Public-Private Partnership (PPP), and only behavioural reform and possibly technology can banish fraudulent activities. Your argument is welcomed in this respect.

A work relief program initiated by CSR and powered through PPP may force high initial investments with no immediate returns, but in the long run, the benefits include high national output, healthy competition, higher consumer spending, preserved self-respect for those out of work, and more.

Just a thought. What are yours?
curious@aphropean.com

 

 

image courtesy thebalance.com
How ethical business can be big business

How ethical business can be big business

Thoughts on the principles of profitable sustainability

It’s not a secret that the prerogative of an organisation is to maximise profits. It is in our interest that the business can afford to pay wages, continue to produce the products and provide the service that we have become accustomed to love. The issue of public concern is unethical practices to achieve these profits.

Typical examples are the emissions scam of Volkswagen that went on for seven good years, or the slave labour in Bangladesh endorsed by H&M, and if that is not enough, the latest insult of H&M tweeting that white models portrayed a more positive image for the brand in H&M South Africa. At least the company apologised.

United Nations Sustainable Development Goals as Guiding Tools

The list is endless. I don’t want to use this post as an assault. Instead, the aim is to share insights on how businesses can be socially more responsible and remain profitable by adopting policies in line with the 17 Sustainable Development Goals (SDGs).Aphropean Views UN SDGs

The 17 SDGs were set by the United Nations to combat climate change, protect our oceans and forests, improve overall health and education and to tackle poverty. All members of society are encouraged to work towards these goals by the year 2030. It is a tall order but better than nothing at all.

Governments across the world have developed policies towards SDGs, by dashing tax incentives for dynamic organisations and innovative entrepreneurs, that adopt activities of corporate social responsibility (CSR). You may ask, what is CSR? According to Think Tank Simply-CSR, it is the process of assessing an organisation’s impact on society and evaluating their duties.

Profiting from Corporate Social Responsibility

By incorporating feasible corporate social responsibility (CSR) activities into a strategic action plan, it is possible for a business to boost employee morale, strengthen the brand, increase customer loyalty, improve investment opportunities for supporting communities, reducing the exploitation of the environment and developing countries.

For all of its advantages, CSR is something of a double-edged sword: The initial costs of implementation are high. But, in the long-run, it pays off for all stakeholders, as recognised at the 3rd Frontiers of Dialogue on CSR Across Borders: Kenya, Nigeria, South Africa.

It’s Win-Win

Acting social responsible for business and an individual is a win-win situation for the overall global society. Despite high costs of initial investment, an ethical business can be big business. Just look around you and see all the current efforts made towards sustainable living. Even H&M is trying hard to convert.

Turkish Airlines dominates African tarmac

How Turkish Airlines positioned itself onto Africa’s tarmac

Contrary to beggars belief, Africans love to travel.

A rising wave of Africans increasingly takes advantage of their favourite airline frequent flyer programme syndicate. Despite the media attempting to shape your mindset of desperate Africans travelling mainly by rubber raft or bare-footed across the hot Sahara desert, an emerging population of middle-class Africans are benefiting from airlines meeting their relevant needs.

Get the perks right

Mostly, Africans in Diaspora contribute to the changing travel habits of Africa and typically remain brand-loyal to their favourite airline if their travelling demands are met. Popular among African tourists are features such as generous baggage allowance, bad-ass onboard entertainment and civil customer service, precisely in this order of priority.

Africa’s travel industry is booming

Turkish Airlines has carved a competitive strategy by banking on the rising number of African tourists. Operating from its central hub in Istanbul, the national flag carrier airline commands 116 flight routes worldwide, of which 50 include countries across Africa. (Sorry, I just need to ask this: You do know, that Africa is a continent with 54 countries, right?? Just checking…).

As a member of the Star Alliance syndicate, Turkish Airlines has recognised the potential of Africa and the commercial appetite of investors to facilitate an international trade to emerging markets. The imminent global economic growth shift from Asia to Africa is a financial opportunity for airlines to connect the continent with the rest of the world. It is a win-win situation.

It’s a cut-throat business

The airline industry is among the most competitive and a rough business to be in, but also very lucrative, if planned and executed strategically. Recently ranked as the fastest growing airline globally, Turkish Airlines is a force to be reckoned with, despite the recent political unrest and security challenges in the Republic of Turkey. Nevertheless, it is worth to keep an eye on how Turkish Airlines positions itself on Africa’s tarmac.

What are your thoughts?
curious@aphropean.com

Rethinking Industrialisation in Africa

Rethinking Industrialisation in Africa

Observations made at the Africa Industrialisation Day 2017

Africa Industrialisation: a topic that has been discussed far too long but no significant changes are observed. One may ask, “significant to whom and observed by who?” It has also become obvious that the topics for discussion usually revolve around: “Poverty, Unemployment, Quality of Education, Gender Equality, School dropouts, Early Marriage, Migration in search of “greener pastures” to mention but a few. These discussions are important, but if the same topics are repeatedly discussed, maybe we have reached the time that these issues are approached from a different angle.

A new approach may demand more resources and effort for execution; measuring results and adjusting as progress develop. This will allow Africa and developing countries to not only adapt to the global trends but compete and participate globally in businesses, technology, innovation, research, education amongst others. Because if Africa does not adjust accordingly, we might be discussing the same issues a decade from now.
But then again this brings us to the question: “Who is responsible for making things happen and who determines if Africa is ready to participate in the global arena of technology, innovation, research & education, amongst others?”

Some observations made at a discussion forum for the Africa Industrialisation Day 2017 include:

Increasing unemployment/poverty rates
There is a significant number of expatriates and foreign workers for instance from Europe, China and India making a good living in Africa. This is worrying due to the rising number of unemployed youth. The government and MNCs based in Africa need to reduce the number of expatriates occupying jobs that could otherwise be occupied by Africans, and this can only be done by putting in place proper Knowledge Transfer Systems and Rotational Programmes.

For Africa to fight unemployment/poverty, entrepreneurship education and nurturing entrepreneurial mindset from an early age is necessary.

Technology & Innovation
Innovation and creativity in Africa remain stunted. This is because of the youth in Africa being rewarded and encouraged to maintain the status quo; challenging the norm is not readily welcomed. This has led to lack of room and reward for innovation and creativity. For Africa to overcome this, instituting creativity and innovation into learning curriculum/education is necessary.

While literacy is the basis for any development, nowadays Digital Literacy is the key to success in the modern era where the world is heading towards robotics, autonomous driving, automation etc. For instance, in Agriculture in Africa, where traditional methods of farming are still prevalent which have proven to be futile for large-scale farmers. Utilizing land to its full potential, managing and running a big farm needs more than hard labour workers. And that is why technology and advanced digital literacy might be a necessity and not a luxury.

Business opportunities and competing in the global marketplace
Sourcing locally, hiring locally and providing world standard products and services is imperative. This can only be achieved through certifications, setting up accreditation bodies in Africa and packaging products to meet global market standards.

What Africa needs to ask itself

Are these expatriates better skilled than the locals? If so, where did they get educated or, better ask, which bodies gave them accreditation? If it is agreed by the employer and the government that the expatriates’ qualifications are superior to the locals’ qualifications, then perhaps changes need to be made to the University/College Curriculum. Bringing in expatriates for know-how and skills transfer does not solve the matter to improve ancient curriculum and low-level skills in the long run. The approach of knowledge and skills transfer demands high running costs.

“The solution to the issues observed at Africa Industrialisation Day 2017 event, does not come from hiring or relying on the most skilled, but by learning from the skilled and making sure that when they leave, Africa will be able to, if not improve, at least maintain the same standards in running businesses, innovation, technology, training, research and education.”

Aphropean Partners believes that both Africa and Europe have something to offer, and neither is superior nor inferior to the other. It is just a matter of learning and continuous improvement. We promote the interface between EU – Africa Relations, Business, Technology, Research and Education.

Business Development: Marketing, Business Research, Training & Technical Assistance for both Private and Public Sectors, SMEs, and Educational Institutions both in EU and Africa.

With our main goal being “To Inspire Profitable Sustainability Through Engagement”, we facilitate a multi-stakeholder conversation series Engagement Event Series: Frontiers of Dialogue.

Written by Edith Tollschein, Programme Manager
edith.tollschein@aphropean.com
Diversification, Growth and Opportunities in Africa

Diversification, Growth and Opportunities in Africa

Commodity diversification as a critical component of African economic growth.

The challenge of a single commodity economy

Across the continent, African countries are witnessing substantial GDP growth, the rise of a middle class and resulting increase in business opportunities. While this has been well documented, it is also important to ask the question; can this translate into real trickled down development across all sectors?
To answer this question, it is important to discuss one of the essential components of economic growth – diversification of the manufacturing industry. Historically, economies lacking in diversity of manufacturing and services and mainly focused on extraction (raw material industries) without making advancements towards a transformation economy usually face significant challenges for long-term economic growth. A third of African countries have been facing this challenge for decades.

The shift in strategy

African countries are increasingly aware of this pitfall and making the adequate changes needed to reverse this situation. This is especially true in the case of Nigeria with its government recently springing into action by putting in place an economic strategy geared towards drastically reducing the countries dependency on oil exports and focusing on other sectors like agriculture, IT, etc. Of course, the results of such actions will not be noticed overnight, but the process of rethinking and advocating for such forward-thinking strategies should not be underestimated both locally and in the international discussion on how Africa can move forward by embracing such best practices.

A look at the map of Africa

Certainly, commodity diversification is only one of many key components that have the potential to turn the tides for African economies. Although there is no clear-cut causality, there is a correlation here. Looking at a map of Africa (figure 1), one will notice that countries like Nigeria, Chad, Equatorial Guinea and Angola are high on the scale of nations heavily dependent on oil for their export revenues (well above 75% of export revenues from oil alone). Such dependency on one commodity alone puts these countries in a situation of massive dependence on commodity prices determined by world markets which heavily fluctuate with unexpected consequences. Meanwhile, countries like Cote d‘Ivoire, Ethiopia, Senegal, Kenya, and Tanzania, are leaning towards diversification of their commodities and moving away from the idea of heavily depending on just one key commodity thereby reducing the risk of economic shocks.

GDP growth and diversification of commodities

It becomes even more evident when we do a breakdown of African countries regarding GDP growth and forecast of future trends. The top 10 countries regarding GDP growth happen to be those with low export dependency on oil or metal and mineral. Even some oil exporting nations like Cameroon and Senegal are high on the GDP list from less dependence on the commodity and opting for a more diverse export basket

The words of Nigeria finance minister, Ngozi Okonjo-Iweala rides home the point in one short quote; ‘’The idea is that instead of young people in Nigeria waiting to get employment, they should create their jobs and employ their peers and employ other people’’

That is what we at Aphropean Partners are advocating for, and we welcome entities and individuals supporting this approach. If you have an opinion and wish to share with us, then drop us a line at partners@aphropean.com to facilitate a talk of your experiences.

Julius Timgum, Aphropean Partner

How to trigger innovation and growth

How to trigger innovation and growth

Standard elements of fostering innovation and growth

A few weeks ago, I took part in a workshop on Global Innovation curated by the Innovation Orbit. The insightful program offered a variety of practical and theoretical content. Lectures featured topics of open innovation, new business models, innovation management in large corporations and the public sector.
Among other things, I learned a great deal on how to trigger growth:

Keep It Simple Stupid – KISS:
Complexity is a silent killer of sustainable growth. You are better off sticking to simple processes and business models that allow rapid adaptation to change

Why be a loner?
If you want to go fast, go alone. If you want to go far, go together. So, there is a thin line to achieving significant scale.
All continents, nations, industries, businesses, and professionals require partners to establish a complementary system. The days of specialising alone in one field are over. However, carving out a niche remains to be the better strategy to position advantageously over others.

Public- and Private Partnership:
Despite the differences of approach and language, a collaboration between the public and private sector is essential to sustain a competitive edge in all social and economic aspects.

Knowledge Management
Managing people is tough. Managing knowledge is even more challenging but paramount for creating a foundation to adopt innovation and room for scale. In today’s competitive world, the successful conduct formal or informal processes of sharing, transferring, disseminating and storing knowledge for growth.

Thinking through the elements of achieving growth, I connected this with the intense discussions revolving around sustainable agriculture.
As you may know, significant demands for organic production has led to an increase in farming methods without compromising our health, the environment, economic profitability and fair trade.

Making Sense and Profit of Sustainable Agriculture
This year’s final Frontiers of Dialogue series will address aspects of agricultural business, technology and innovation in the context of sustainability, income generation and shifting mindsets. Learn more

Private Equity Trends in Africa

Private Equity Trends in Africa

Views on private equity funding in Africa

Last evening I had dinner with my childhood friends at Aso Rock, a Nigerian restaurant in Vienna’s third district. As usual, when we three get together, we have a great time discussing international business and affairs.

I particularly enjoy bouncing ideas off each other, in our respective fields of entertainment, automobile, and international development. To me, it is interesting to rub minds with people working in industries that rarely cross over. By default, our viewpoints conflict, but often we unanimously agree on the topics of finance and Africa.

Opportunities for shrewd private equity players

It appears that investors within and outside of Africa continue to invest in African enterprises with long-term growth potential. Private equity transactions in Africa require complex structures to fund transactions that mitigate risks and develop enterprises from the ground up.  If you are looking to invest in Africa, consider experienced partners with market knowledge and the ability to manage risks on large-scale investments.

I learned about the Blackstone Group, a private equity funds company considered as the largest in Africa and perhaps the world. In 2016, the Blackstone Group invested over USD 2 billion in infrastructure building and development in Nigeria, Ethiopia, Togo, and Mozambique. The latest significant deals made are in the industries of agribusiness, e-commerce, energy, FinTech, transport and pharmaceutical. Erratic fluctuations in the commodity market have shifted the focus on non-commodity and domestic consumers in Africa.

Check out the Emerging Markets Private Equity Association (EMPEA) for more information on private equity funding in Africa.

Cost of sending money to and within emerging markets

Our conversation transitioned from the rise of US and UAE private equity funding in Africa to the topic of money transfers. My friend mentioned the shamefully expensive fees of transferring money to Africa. Money transfer fees vary between 10%-15% and equate to an additional tax on the diaspora.

Remittances – a fancy word for money transfer – account for more inflows than foreign aid or foreign direct investments. According to the World Bank, the three largest remittance recipients in 2016 were Nigeria (USD 20 billion), Egypt (USD 18.7 billion), and Morocco (USD 7.1 billion).

We debated on the possible reasons for high fees and concluded that antimonopoly regulations need to play a role for fair competition in the remittances market. We also considered the high costs as a possible deterrence to terrorist financing. But then again, it would not deter a big-time crook to invest in money laundering operations.

Alternative options of sending remittances are few – out of 54 African countries, the PayPal community is active only in South Africa. Mobile payments, such as MPesa remain to be sluggish in the Western African region. Sending money internationally with the bank is for many, not an option due to the hidden and high transaction fees.

Somehow, our conversation about Africa and Finance concluded by a quote that I read somewhere. I am not sure who cited it but it goes something like this: “If opportunity doesn’t know, build a door”.

Are you an impact investor? Or managing a private equity portfolio including African markets? Then drop us a line at partners@aphropean.com to facilitate a talk of your experiences.

Nurturing relations for business and development

Nurturing relations for business and development

Growing supply and demand through business relations

No doubt, the toughest terrain in doing business is the Sub-Saharan region. The endless red taped bureaucracy, the myriad of licenses and permits, accessing capital, ridiculous legal costs for enforcing contracts. Actually, now that I am listing this, I realise the challenges are not different from doing business in Austria.

What makes doing business in Africa difficult is the high diversity of cultures, poor infrastructure and sourcing the right skilled workers. Let me add in poor time-keeping and keeping up with customer behaviour. How can you circumvent these barriers to enable smooth trading? The answer is: You cannot. Your best bet is to understand your target customer, find a trusted local partner and mirror the negotiation skills of an Asian trader.

Nevertheless, there appears to be a growing trend of European enterprises taking advantage of the mixed economic system, private freedom and rising middle class in Africa. Austria is slowly catching on to this trend and realising the potential high returns of investment in education, skills, health and off-grid renewable energy.

Do not fear the dominant presence of Chinese.

The Chinese trader does a very good job in manufacturing and infrastructure development. The quality levels remain a matter of debate. But you should know that the African consumer loves quality goods, which are affordable, durable and fitting to local needs. You have a great chance of winning the African consumer if you provide sustainable products or services. Very often, no-frills products without unnecessary features are enough to cater for the mass market.

Have patience.

You are on the path to sustainable profitability as long as you are persistent, resilient, own enough liquid cash flow, supported by trusted local partners, and have an understanding of the consumer, local cultures and market trends. Your chances of success are heightened further if you are trading with African countries led by governments that are accountable and pushing innovative industrialisation strategies. Take for example Mauritius or Rwanda.

Join the expanding network circles of Austria-Africa relations. 

Throughout September 2017, Austria offered an exciting programme of discussions, entertainment, education and training with a focus on business and development in Africa, including Aphropean Partners’ Frontiers of Dialogue, the Aussenwirtschafts Österreich’s Forum on Business and Development with focus on Africa, The African Gala 2017 hosted by the Diaspora, and so forth.

Building relations is the key to success. Together with strategic partners, we can help frame your understanding of the emerging and frontier market of Africa. Simply get in touch and email curious@aphropean.com for consultation and seminars.

Using CSR marketing to confront the cancer epidemic

Using CSR marketing to confront the cancer epidemic

Using CSR marketing to ensure healthy lives

It seems like all we hear about these days is the topic of cancer. Why is that?

The gruesome fact is that hardly any of us will be spared by cancer. One way or the other, either yourself or someone close to you will be afflicted with this prevalent disease.

But don’t worry. If you are based in the developed world, you will be alright. Most middle- and high-income countries have all the facilities to prevent and treat cancer. Africa, on the other hand, has too many patients and not enough cancer specialists nor equipment.

 

Impressive advancements have been made to ensure healthy lives and promote well-being for all at all ages.

AphropeanViews_SDG goals_icons-individual-rgb-03

Behind every challenge lies an opportunity. Strides are made to confront the rising cancer crisis around the world.

Technologically advanced countries in the Sub-Saharan region, such as Kenya, Nigeria and South Africa actively seek to collaborate with top cancer experts in Europe and elsewhere on research and development programmes customised to local needs.

Cancer registries are virtually non-existent in most African countries. So far, only the African Cancer Registry Network (AFCRN) established in March 2012 is carrying the burden of collecting data on patient history, diagnosis and treatment.

The International Atomic Energy Agency (IAEA) established a Programme of Action for Cancer Therapy (PACT) in partnership with the World Health Organization (WHO) and other organisations are working towards cancer control.

We can all be instrumental in confronting the cancer epidemic across the world. Corporate Social Responsibility (CSR) is a powerful mechanism to initiate market expansion across geographical borders, attract and boost engagement with loyal customers who can relate to the campaign.

 

Watch this short video to recognise opportunities of cancer treatment and prevention in Africa

What’s Better: Aid for Dependency or Trade for Stimulus?

What’s Better: Aid for Dependency or Trade for Stimulus?

Stimulus or
Dependency?

It’s not a secret that I am an advocate for trade rather than aid except in the occasions of force majeure.

Some of you may think it is easy for me to favour trade over aid in the comforts of an Austrian safety blanket. Nevertheless, I can reassure you that millions of internet-connected Africans exposed to the perception of them by high-income countries reject the reliance on foreign aid and pity.

Money alone does not solve the issues of brain-drained migration, security, climate change and weak governance. There are countless studies to show the high spikes of corruption levels upon receipt of aid money in countries with poor governance. Many foreign-funded orphanages resemble prisoner-of-war camps because managers pocket most monetary donations. Contributions in kind of equipment, materials, and supplies are either sold on or not suitable for local conditions, such as the hot, humid/dry climate and weak energy infrastructure and so forth.

The principal activities to finding solutions to stubborn global problems are constant open dialogue to foster knowledge exchange and international trade, particularly intra-regional trade to fuel economic progress for low-income countries.
Of course, other factors come into play to strengthen a strategic partnership for sustainable development, such as the accountability of African governments, European aid pushers or multinational corporations. However, both continents – young and old need each other to achieve sustainable growth, wealth, and development.

The Africa-EU Partnership reflects the commitment of both sides to work together on a strategic, equal, and long-term footing.

If managed well, the Africa-EU Strategic Partnership could facilitate favourable frameworks to mobilise all five capitals for individuals, enterprises, and institutions in both neighbouring continents to enable fair and mutual trade and cooperation.

Perhaps, you do not agree with my views – please get in touch. I always welcome a healthy debate!

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