When will Sub-Saharan Africa think like Rwanda?

By Patrick Mayoh

And I mean all of Sub-Saharan Africa including South Africa (Take a look at this article). A week ago the World Bank released its most awaited “doing business 2013” entitled “smarter regulations for small and medium-sized enterprises”.  The “doing business” report is the equivalent of a class report at the end of a school year outlining the best students and those who need to make substantial improvements in their courses. So Singapore is the best student for the 7^th year running and there is no reason to think it won’t happen again.

I am mostly concerned about Africa. And this blog is about Africa by the way. Obviously North-African countries show the strongest signs of improvement on the continent. Tunisia was ranked 50^th and the first African country; but I would like in this post to turn my attention to Rwanda.

 Do you remember the Genocide and its one million dead? I can hardly, such is Rwanda's improvements across the board that someone might ask why is Sub-Saharan African not embracing the Rwanda bandwagon? Ranked 52^nd and improving by more than 26% on business regulations since 2005 Rwanda is on the road to becoming an emerging economy before many Sub-Saharan economies with more advantages and natural conditions like Nigeria, Cameroon or the DRC to name just a few.

The “Doing Business 2013” report devoted a whole section to Rwanda outlining the reasons why the country has transformed itself from a hopeless nation following the aftermath of the genocide in 1994 to a strong and dynamic country. From what I have gathered I believe African countries should enact the following if they want to attain the same level of improvement as Rwanda:

Ø  Get rid of unnecessary slogans and formulate clear strategies

Ø  Make investors (domestic and foreign) love your country (and I mean love not like)

Ø  Get leaders (and I mean the tops one like Presidents, Kings and Prime Ministers) to become business reforms evangelists

Ø  Keep the civil society close and the private society even closer

Getting rid of unnecessary slogans

Slogans rarely make things happen in business. They are useless especially when they are not complemented with clear strategies. African leaders are very good at formulating them. Few possess a vision for the future and many of those few have yet to formulate strategies for achieving those visions. In 2000 the Rwandan Government after a 2-year consultation process formulated a vision for 2020. One of the key tenets of the vision was the raising of the income per capita from $290 to $900. This was not all. The government went on to identify the key challenges to address in order to achieve their vision like: the past civil war, poor governance, weak infrastructure, underdeveloped financial and private sectors, unemployment, overwhelming publi debt, a poorly developed education system, HIV and the rapid growth of the population.

Having identified these hurdles the authorities went on to set initiatives and projects to address each of these including: the competitiveness and enterprise development project, the Rwandan investment climate reform program and the “doing business” unit. Those organizations under the umbrella of the Government have an annual reform plan; no wonder Rwanda is improving. In a nutshell formulating a clear strategy revolves around two things:

Ø  Identifying key challenges to your vision as a business or a country

Ø  And formulating clear steps and actions and guidelines to meet each of the challenges identified

Making investors love your country

Rwanda is a landlocked country and natural resources are scarce unlike in many other African countries. The Government found a smart way to offset these disadvantages with attractive business regulations. It is commonsensical, if investors can easily open a business, can be guaranteed their assets will be protected, can have access to infrastructure (electricity being a key one), can easily make a profit and so on and so forth why would they resist falling in love with your country? Rwanda quickly understood this by setting up the “doing business” unit. The World Bank assesses countries’ business attractiveness on 11criteria including: starting a business, getting credit, protecting investors and registering property to name just a few[1].

The “doing business” unit in Rwanda is tasked with improving the business climate of the country alongside the criteria used by the World Bank. The results speak for themselves. Since 2005 Rwanda has introduced 26 new business regulations, improved its credit report system, appointed new notaries to make it easier to start a business (there had just been one notart up to 2006) , reduced the number of days to start a business from18 days to just 3, reduced the number of days it takes to transfer property from 346 days to less than 30 days and reduced the number of days and official documents necessary to export goods from 14 official documents and 60 days to 8 documents and 29 days. No wonder the very pessimistic (especially about Africa) “the Economist” called Rwanda the “new Singapore” in 2012. In a nutshell like Rwanda:

Ø  Set up a “doing business” unit in your country

Ø  Base reform and improvement initiatives on the criteria of the" doing business" reports

Getting your top leaders to evangelize about business reform initiatives

Paul Kagame is a very energetic type. He regularly flies to Europe to meet with the Diaspora. I know a friend from Rwanda who has met him in many occasions; I can hardly say the same about my own President. But you need many leaders like Paul Kagame. Energetic and determined to make things happen.  You need leaders who motivate their teams, their ministers to think about business reforms, about improving the business climate. The Competitiveness and Enterprise Development project, the Rwandan Investment Climate Reform Program and the “Doing Business” unit and many other key development initiatives bring together representatives from different ministries.  The idea of confining the economy or the development of a nation to a ministerial unit is actually a mistake. Instead the Presidents of Africa themselves should be at the top of development initiatives and encourage their ministers to think like themselves. Therefore like Rwanda all African countries should have:

Ø  Energetic leaders that are fully nay entirely committed to the development of their respective nations

Ø  Those leaders should in turn inculcate their vision to their ministers

Ø  Government practice should be organized around a vision and a clear strategy to make development truly happen

Collaborating with the civil society and the private sector

Nothing happens without them (the people). Actually everything that happens does with them. Therefore the people, most particularly those who represent them even at the smallest level should be considered when a country has a development vision. Development never happens in a vacuum, it needs its key stakeholders to work meaningfully for the benefit of all. The Competitiveness and Enterprise Development project, the Rwandan Investment Climate Reform Program and the “Doing Business” unit and many other key development initiatives not only bring representatives from the public sector but representatives from the private sector as well. The combination of inputs from both sectors clearly explains why Rwanda is ahead and in road to becoming an emerging economy by 2020 as its vision suggests. Like Rwanda, African countries should:

Ø  Get the private and the public sector to have mutual rather than conflicting interests and goals

Ø  Identify and engage with key actors of the civil society

Ø  And have the well-being of the society as the priority of all development initiatives

This is why I believe Africa should embrace the Rwandan Bandwagon as soon as possible. Do you agree or disagree?  Please leave a comment whatever your view is.

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[1] The rest includes: Dealing with construction permits, getting electricity, employing workers, resolving insolvency, enforcing contracts, trading across borders and paying taxes.

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New Product Development for Africa

By Patrick Mayoh

A recent report by Mc Kinsey indicates that emerging markets will be worth $30 trillion by 2025 –the biggest growth opportunity in the history of capitalism they suggest--they are worth about $12 trillion nowadays. The report equally suggests that growth will come from second-tier cities people don’t hear much about nowadays like Ahmedabad, Huambo, medan or Douala. Interestingly leading companies of the world get about just 17% of their revenues in these markets when these represent 36% of global GDP.

African Economies are part of those emerging economies in some respect. And because the face of the continent with a fast-growing middle class is rapidly changing, there is room for growth for companies willing to create new market spaces and invest on the African Continent. In this blogpost I will talk about new product development for Africa. I believe western companies willing to gain a stronger position in Africa should:

·         

            --> Develop products and services suited to African consumers

·         -->Invest in Research and Development Centres in and for Africa

·         -->And source local talents to lead their offices in Africa

Products and Services for Africans

I think many western and foreign companies by extension; have gone out of their ways to create products and services that more or less reflect the needs of emerging markets. Unilever the Anglo-Dutch consumer goods giant recently released a new brand of shampoo for the South-African market. Currently it aims to create more products that are reflective of local tastes. I think this is an example that should be followed by many other western companies truly willing to invest on the continent. More Africans have money to spend and more Africans will spend on products that appeal to their needs. As such, businesses have an imperative to rethink their business models as well; that is the way they make and distribute products to customers. A successful example of this is Nestlé spaza shops; a scheme that makes it easier for the company to reach shops in the remotest areas of Africa.

Investing in R&D facilities in Africa

China had about 57 R&D centres in 2007 with global giants like Google, Microsoft, Unilever, P&G and GSK to name just a few; India had about the same number of R&D centres in 2010, though many of the companies are mostly IT ones. No doubt these are high and fast growth economies. According to a recent HSBC report China and India  will be the first and third world economies respectively in 2050, so it only makes sense to invest in these countries in light of all the positive implications.  However Africa will have a strong middle class and it is happening anyway already, plus it will be home to the largest workforce in the world more than China and India combined by 2040 with 52 African cities having a population of at least 1 million each according to another Mc Kinsey report. I believe companies that invest in R&D facilities in African countries are set to reap massive benefits in terms of larger market shares and widespread product adoption for their companies.

Get locals to lead in Africa

Many foreign companies still rely on expatriates to lead. But this does not have to be so. In a previous blogpost I spoke about Africans having all the top qualifications required to help Africa become a great continent economically. Africans have MBAs from top business schools in the world, many have PHDs from top institutions in the US and Western Europe. And therefore many Africans can and should be CEOs in African Subsidiaries of Western and Foreign organisation. There are many advantages to this. For one African CEOs are more likely to understand the needs of customers, consumers will perceive in African CEOs people that have more things in common than others and African CEOs will take more initiatives to expand and grow their companies in Africa because they have a vested interest in that in terms of job creation for example.

This is why I believe foreign companies should think NPD for Africa. See you soon!

And if you have enjoyed reading this please leave a comment to let me know.

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Business Leaders making Africa Proud

 By Patrick Mayoh

Hi

One of my readers this week was appalled at the fact that I said there were virtually no inspiring leaders in Africa at the moment. I believe she was right. Although what I did mean was that we needed more Africans who achieve top education abroad to come and live in Africa to inspire the young people around them. However I have decided to share this good article from Mfonobong Nsehe of Forbes Magazine talking about Africa's premier business leaders including people like: Mo Ibrahim and Aliko Dangote. Enjoy! And see you next monday hopefully.

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Africa needs its brains

 Patrick Mayoh

Dr James Mayinka is from Zimbabwe. After achieving a First Class in Electrical Engineering from the University of Zimbabwe, he moved to Oxford University in the UK to pursue a Dphil, an Msc and an MA in Electrical Engineering, Mathematics and Computer Science. Today, in addition to working as a Director in the states for the Mc Kinsey Global Research Instute--probably one of if not the best business research institute in the world—he is also a Faculty Exchange Follow at MIT not to mention his role as a visiting scientist to the NASA. It sounds too good to be true does not it?

Yet alarmingly he might not be the only African out there in the West doing amazing work for a global company. There are probably Thousands other Africans boasting impressive academic track record and working for the benefit of successful Western Companies. It would seem the majority of those Africans are actually happy to do that and why would they not be? The quality of life, the incentives not to mention the career opportunities are more alluring than anywhere else in the West. Few like Patrick Awuah[1] do decide to come back and do good work for Africa. And I believe Africa needs its brains at least for the three following reasons:

èThe continent is changing ( not just economically, but socio-politically and demographically)

è Young Africans need role models

è African great minds can change our education system

The continent is evolving

You can hardly spend a week browsing the Internet without stumbling on a new story about Africa’s great economic advances and its potentials to be a major economic powerhouse. The truth is that; it is true. Only this morning again I stumbled on this piece about Africa’s latest promising and positive figures, and I bet you can find all kinds of stories on the same subject. Most interestingly is that even great publications like the Economist, Wall Street Journal and the Guardian just to mention these, seem to come to terms with the fact that things are changing in Africa and for the better. I will not spend my time here discussing about the main drivers, but what is certain is Africa is not what it used to be a decade ago. And I think it is great time Africans seize this moment to achieve economic growth and prosperity for its citizenries. And I do feel our Academic Elite in the West can and should play a great part in that. We need our own economists, strategists and policy experts to come back and lay the ground rules for our success story. Socio-politically our civil societies have greater access to the Internet and can tell the world what is happening here which means our leaders are under watch and although there is still widespread corruption, the likelihood of this lasting is weak. Demographically Africa will have more than 1 billion workers by 2030 more than China and India so there is great room for productivity improvement across the continent with so many workers.

Young Africans need inspiration

Few Africans like Patrick Awuah actually decide to abandon lucrative careers in lieu of coming back home to change the continent. But we need more of those at least to inspire young Africans. Africa does have its share of heroes, Nelson Mandela, the late Wangari Mathaii, Samuel Eto’o and Didier Drogba to name just a few. But We need more diversity especially in the kind of heroes we need. We need those leaders that will make Africans think about starting businesses that will inspire them to achieve high in academia and to be more entrepreneurial and more creative.

Africans can change their education system

The Financial Times’ list of top business schools does not include any school from Africa. However we do have the minds to create top business schools and provide Africans with top-notch education. Why do Africans have to fly out of the continent to achieve their dreams of gaining an MBA when our African PHDs can create those chances for our African youth?

What Can African Governments do?

African Governments can and should play a great role in encouraging our stars to come back and do good work at here. For one through their policies they create the economic climate likely to lure their citizens back home. Given the right approach we could witness a mass exodus back to the continent. Firstly scouting talents that are being on the lookout for those Africans making things happen elsewhere can be a good start. How many Governments have put in place strategies to spot and scout their talents out of home? What happens when stories emerge about those Africans changing the world elsewhere? Do their Governments take notice? Do they get in touch with them?

Secondly and most importantly the African Elite will choose to come back only if they have a good reason. At least if they can have the same opportunities back home. And Governments can just create those opportunities and commit to work with the African Elite in bringing about economic growth in addition to providing the right incentives for Africans to come back, settle and work here.

The combination of these mean Africa will benefits from its elite and increase its chances of being the next economic powerhouse of this millennium.

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[1] In this Ted Talk Patrick Awuah why he made the choice to get back to Africa in spite of a lucrative career in Microsoft

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Kumbaya

By Patrick Mayoh

Kumbaya is an Afro-American spiritual song from the 1930s. In gullah a language which is a mixture of Western and Central African dialects including Ibo, wolof, bambara to name just a few, kumbaya litteraly means “come by here”. A sort of invitation, maybe an altar call since it is meant to be spiritual hymn.

I have done a lot of soul searching recently. Inasmuch as I like to write about business and marketing, I realise I am not alone and there is a plethora of blogs and publications on the World Wide Web on these issues. I am not implying I will not write about those issues anymore because of saturation; I am just unveiling what this blog is going to be all about from now on. Many of you would have noticed my passion for Africa, I hail from there and I hate to observe all the stereotypes blindly attributed to us. True just like in this article of the Economist, Africa at the turn of the new century was still a hopeless continent plagued with all sorts of woes. But check this out,, 11 years later the same magazine published a cover story on the great economic prospects of the continent.

So much is happening on this continent and I have changed the name of this blog, “kumbaya” to invite investors, decision makers and the world in general to see through this blog how the continent is becoming the next economic powerhouse. Kumbaya to show that Africa is the next best investment destination in the world; kumbaya so business decision makers will begin to see in Africa the next best place for great IRRs.

This blog will be mainly reflective of my opinion but I will supplement my publications with references from other publications just to further convince you of the reasons why I believe Africa is taking a turn for the better. Each week I pledge to provide you with information regarding the agriculture, the burgeoning middle class and the rising labour force of the continent (just like here). I will equally provide my own opinions on the best investment strategies and destinations for Business Leaders wishing to reap the great rewards associated with investing in Africa.

Join me in this new adventure, this new journey and let us show the world why Africa is definitely the hopeful continent.

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Are you a strategic or wishful thinker?/or why you should guard against visioning!

By Patrick Mayoh

There is so much to read nowadays; even more to write about. I am just about to finish a newly released master piece by Richard Rumelt, Havard Doctor and Chair at the Anderson School of Management UCLA, on “Good and Bad Strategy[1]”. The book as the titles suggests initiates managers to the art of successful strategising.

Richard Rumelt himself has been dubbed the “Strategy’s strategist” by the Mc Kinsey Quarterly. He has consulted with the big names in the world and his book is actually very deep and deals with key questions on strategic building for organization. Much could actually be said about strategy but for this post I will just focus on visioning and why this is bad for your organization when it is done recklessly. Here I am going to share what I learned about the dangers of visioning.

Pop unto the website of any organization and go to the “about us” section where you are almost always likely to find:

• · A Vision
• · The Mission statement and
• · Values

While there is nothing wrong with those concepts, do you not actually feel that sometimes they can be devoid of meaning? Not just for outsiders but even more for insiders. Most of the time what people call “strategy” is usually a combination of those three elements. Visioning has nothing to do with strategy.

Visioning is actually a brainchild of the “new thought movement” advocated by such managers as Jack Wech with quotes such as “ reaching for what appears to be the impossible”, or more recently with people like Peter Senge with his concept of “shared vision”. In a nutshell mobilizing people around a common goal unleashes tremendous potentials that will likely propel the organization to success in its industry. There is actually nothing with that; this can be confusing, unspecific and fluffy.

Confusing because making grand statements like “we will be the best company in the world” is actually useless, virtually everyone thinks the same. Those statements will never tell your workforce what you are aiming at. The big picture is actually a series of details that build up to give an organization a concrete image of where the company is headed. When you cannot as a manager or a leader offer a clearer path than visioning, you run the danger of making it difficult for your employees to understand your philosophy.

Unspecific because visioning does not actually tell your employees what you are trying to do, how you plan to beat your competitors, what avenue you want to follow to be the best or how you plan to achieve profit. Visioning only states goals or intentions without actually demonstrating how your organizations will meet the targets. Visioning is often as well a list of things to do but this does not amount to strategy either. Presenting a bullet point series of slides on a nicely designed power point document will not clarify what you plan to do as a business.

Lastly visioning can be quite fluffy. By that I mean those organizations that usually state the obvious as strategies. Take the example of this bank whose strategy is” our fundamental strategy is one of customer-centric intermediation”. Ok let us stop there a moment. Intermediation actually means receiving deposits from customers to lend them to borrowers; do you not think this is pretty much what all banks do? Fancy words on a document do not amount to a strategy. In a nutshell according to Richard Rumelt bad strategy is either one of those following:

• · Fluff
• · Failure to face the challenge
• · Mistaking goals for strategy
• · Bad strategic objectives

Which brings us to the next question; what is good strategy or how can you lay down a successful one? See you next week for that. I cannot wait to read your comments.

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[1] http://www.amazon.co.uk/Good-Strategy-Bad-difference-matters/dp/1846684803/ref=sr_1_1?ie=UTF8&qid=1320246419&sr=8-1

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Aurevoir L’artiste: A tribute to Steve Jobs

By Patrick Mayoh

On my table next to the laptop sits a copy of Richard Rumelt’s acclaimed Good strategy/bad strategy[1]. The book embarks on a journey to explain readers what a good strategy is and is not. It was just released this year but I can tell it has all the potential of a classics in Business and strategy literature. Ok back to my table! I read the first case study about successful turn-around strategies and unsurprisingly Steve Jobs’ turnaround of Apple is the first case. Ominous!

Tributes keep pouring in on my facebook page, I click on one link from HBR[2] (havard Business review) and there is a PDF file on sales about him. Oh my! I just cannot keep from reading pages after pages of tributes from major publications and other great world changers like Bill gates. And I wonder how a few lines from this blog can actually capture what this unique person means to the world today. But I want this to be a personal but open letter to the world about what Steve Jobs represents to an MBA and a potential entrepreneur.

Thanks for showing me how being successful in business is all about:

• · Being Unique
• · Being Resilient
• · Seeing the big picture
• · Pursuing excellence
• · Great design

Unique

When you made your come back into Apple in the late 1990s the world held a breath, wondering how you could turn around a company on the brink of collapsing. But you actually performed one of your magic tricks that was quite obvious on second thought but to which the corporate board was inexplicably oblivious to. You chose to ditch all underperforming apple products and focussed on just a few ones creating. You were a true Blue Ocean thinkers not satisfied with more but little and simple. I wish your Apple remains true to that philosophy. Simplicity is better than variety. I got that.

Being Resilient

It is not just the way you fought your battle with cancer or how even after being evicted of your own company you still went on to create the most successful animation company in the world and ended up racking 7 billion in sales to Walt Disney and sit on their corporate board (talk about a rebirth). “I am going to wait for the next big thing”. This is actually what you told Richard Rumelt[3] eager to know about your strategy to upset the WINTEL[4] monster. And true to your word you fought a fierce battle to convince the music industry to help them combat piracy and revolutionize the way we access music nowadays.

Seeing the big picture

Michael Porter rightly lamented the fact that American corporate board were too much focussed on quarterly and annual profits. It is annoying how a nonsensical market fluctuation can send CEOs scrambling for small gimmicks to try and re-establish their images. But you were never drawn into that kind of silliness always choosing to pursue your dreams of what the world should be like and you succeeded. The IPHONES and IPADS have changed forever the way we interact with technology. No wonder people would run to buy your latest gadgets at unbelievably high prices and in the worst recession in human history. Thanks to you I know that focussing on the big picture is the recipe to changing the world and achieving greatness.

Excellence

People like you taught me that excellence is not just a goal but a culture. Is it any wonder that you were a hand-on manager always assessing all the details of your product designing process to make sure people like us get the most amazing gadgets? How you would carefully prepare each of your slides, how you would cultivate respect from your colleagues how you would oversee just about everything on your Apple planet should be a benchmark for any CEO or Entrepreneur.

Design

You once famously said that design “is a funny word. Some people think design means how it looks. But, of course, if you dig deeper, it's how it really works. You have to grok what it is all about”. AMEN.

I have to meet a friend tonight. I wonder if I should wear a turtleneck polo and a pair of blue jeans, where are my snickers? Thank you Steve and good bye.

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[1] http://www.amazon.co.uk/Good-Strategy-Bad-difference-matters/dp/1846684803/ref=sr_1_1?ie=UTF8&qid=1317914884&sr=8-1

[2] http://hbr.org/product/decoding-steve-jobs-select-commentary-from-hbr-org/an/10973-PDF-ENG

[3] Remember the book i told you about in the beginning

[4] Windows and Intel in the mid-late 1990s

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