15 Aug

Tony Elumelu on the challenges of growing a pan-African company

foreign

Policy uncertainty, labour mobility restrictions and foreign exchange issues.

These are some of the challenges foreign companies can expect to encounter as they grow their businesses across the continent, according to Nigerian businessman Tony Elumelu, chairman of United Bank for Africa (UBA). Headquartered in Nigeria, UBA has a presence in over a dozen African countries. Elemu was speaking during the recent Afreximbank annual general meeting in Kigali, Rwanda.

Elumelu, who is also chairman of diversified investment company Heirs Holdings, used UBA’s experience of expanding to Zambia as an example of how changing policies can cause havoc for companies. When UBA decided to enter the Zambian market, it took into consideration the size of the Zambian economy (its GDP) and the minimum capital required to obtain a banking licence. “We did our feasibility and went to Zambia based on that… The capital you deploy is a function of the size of an economy,” explained Elumelu.

However, relatively soon after it opened shop, Zambia suddenly changed the capital requirement to US$100m, significantly higher than the original amount. Although UBA did end up staying in Zambia, Elumelu conceded that “it was a major issue”.

A second cross-border business obstacle is restrictions associated with moving staff from one African country to another. “We can’t be talking of intra-African trade when labour is not as free and mobile as it should be,” said Elumelu

Only 10 of Africa’s 55 territories grant either visa-free entry or visas on arrival to all Africans. In fact, it can be easier for Americans or Europeans to travel the continent than for its own citizens.

However, to overcome this challenge, UBA established its own internal training programmes. “Where we’ve had human capital issues, we’ve set up an internal academy, an internal school – where you hire people, you train them in school, and they are able to deliver.”

Elumelu furthermore highlighted foreign exchange-related constraints in some African countries.

He concluded by saying successful businesspeople look to find opportunities in challenges. “They don’t run away from problems or challenges, they think of how to mitigate challenges.”

Source fromHow we made it in Africa

14 Aug

Kenya: Focus Shifts to New Leaders On Proposed Coffee Sector Reforms

coffee

The elections are over. And the focus is now turning to incoming leaders and whether they will embrace reforms proposed by a team of experts to turn around the fortunes of the coffee sub-sector.

The proposals, which were on the way to being implemented, were stopped after the High Court declared them unlawful following opposition by the Council of Governors and a group of farmers.

Meru Governor Peter Munya, who was chairman of the Council of Governors at the time the case was filed, is among the leaders sent home in the polls. He lost to Mr Kiraitu Murungi of Jubilee.

The CoG had teamed up with New Farmers’ Association, contending that members of the task force did not involve all stakeholders when arriving at the resolutions.

“I am prepared to work with new governors in the 31 coffee growing areas, hoping that they will support the legal reforms we proposed,” Prof Joseph Kieyah, who chaired the task force, told Sunday Nation on Friday.

During the telephone interview, Prof Kieyah admitted that he found it difficult to work with some governors, adding that reforms cannot be successfully implemented without their support.

County governments play a major role in the agriculture sector, which is devolved, and farmers have been banking their hopes on the units to realise better returns for their harvests.

The proposed legal reforms were aimed at improving production for small-holder farmers and enabling them to access credit facilities.

They were also meant to make millers and marketing agents more accountable to farmers.

Restructuring co-operative societies, which growers use to market their coffee, is also part of the reforms.

Another proposal by the task force was to set aside Sh200 million to brand and promote Kenyan coffee locally and internationally.

Some governors were keen on supporting small-holder farmers in improving their production and remuneration.

In Nyeri, then Governor Nderitu Gachagua (deceased) had come up with an ambitious marketing programme for small-scale farmers where they were supposed to market their crop directly to overseas consumers.

But the initiative came a cropper, making producers incur heavy losses. Mr Gachagua pointed fingers at coffee cartels.

As a management official of Rumukia Co-operative Society in Mukurwe-ini sub-county, Mr Wanyaga Mutahi, explains, farmers have never recovered the losses that saw most societies incur huge debts.

 Source from allAfrica