Fostering stronger UK-Africa economic ties

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Eugene Nizeyimana

AfBC UK – Africa Trade and Investment Summit 2021 will be held on October 7, 2020, under the theme, Boosting Trade Linkages and Value Chains Between the UK and Africa – Unlocking and Capturing New Business Growth Opportunities.

 With the global trade, Economic Partnership Arrangements (EPAs) and WTO in transition, the impact of Covid-19, BREXIT and the launch of the Africa Continental Free Trade Area (AfCFTA), the Summit will showcase, explore investment and economic opportunities in the African region for global companies seeking new channels and consumer market for growth, changes in local business climate, key trends and best practices to operate successfully in the continent.

 The Summit aims to bring together business leaders, Government officials, investors, diasporas, experts, policymakers, academia and professionals from across the World.

 Desiree Joule-Adam, Founder and  Director of Start-Up Africa, spoke with Eugene Nizeyimana, CEO of AfBC.

Desiree Joule Adam (DJA): Could you tell us perhaps what brought about the need to set up the AfBC and what it is doing that other organisations similar to it are not.

Eugene Nizeyimana (EN): Having worked in the UK and Africa for the last 20 years, specifically in the UK and with my passion to champion the growth and contribution of the African business community, I identified a gap within the UK society. The business community highlights the low participation and contribution of African business in the UK economy, which means we are not considered as a valuable society and no inclusion within the existing ecosystem. Having engaged with various Chambers of Commerce and a number of UK Government institutions, I realised, there remains a gap in terms of how they engage African businesses and entrepreneurs. In addition to that, there is no focus on UK-Africa trade and engagement.

We can also see what other international countries are doing across the continent and feel the UK is missing out. Of course, a lot of activities have been hindered by BREXIT and other activities. I’m also an advisor within the Bank of England on a various number of economic reviews where I’m often left wondering how best we can engage our society and our business community. The response is often that there is currently no organisation that collectively represents the African business community, which is the reason they struggle to engage. Living in Birmingham has opened my eyes to other communities that have managed to work collectively, for example, the Asians have the Asian Chamber of Commerce and the Chinese have their own business organisation that represents their community in the UK. So I felt that we needed to create something that will give us as a community, a single voice.

Desiree Joule Adam (DJA): Would you be able to perhaps describe the state of African businesses in the UK? Do we actively engage with one another as an African business community?

Eugene Nizeyimana (EN): Our mission is to bring all the African businesses together. It doesn’t really matter which country you come from so long as you are an African owned business, we can collectively work together, identify some of the challenges you are facing and come up with practical, innovative solutions that can help us drive or help African businesses to thrive in the economy. The Chamber was set up with two specific commissions; firstly, to support and empower African-owned businesses in the UK to thrive and be active participants in the economy and secondly to promote and enhance multilateral trade between the UK and Africa.

Desiree Joule Adam (DJA): In January, Boris Johnson and the UK government hosted the UK-Africa Investment Summit in the hope that the UK becomes the investment partner of choice for Africa. A lot has changed globally since January. Would you mind telling us about the Summit and why you felt the Africa Business Chamber needed to host the one that’s coming up next week?

Eugene Nizeyimana (EN): I was lucky to also participate in the January Summit and it was very encouraging to see that some steps are being taken to boost trade between the UK and Africa. And of course, I had a lot of discussions with business and political leaders to see how we can maintain the momentum. And this follow-up Summit has been created to continue the momentum in the build-up to what was already established in January. I’m sure you’ve seen the list of panel speakers who were involved in the previous Summit; this is an effort to make sure it’s not just a one-off. It’s, unfortunately, Covid-19 happened in-between the two, however, we have to move on. So I’m really excited to see it coming together next week.

And there’s definitely been a lot of interest, with over a thousand participants registered. I will pause and take a moment to say thank you to our supporters. We have received amazing support from the UK Government, The Department for International Trade (DIT), UK Export Finance, close to 15 Embassies in the UK, several Chambers of Commerce and so many business leaders all coming through to discuss business opportunities in Africa, So it’s really been great. And it also shows the appetite for the UK to engage in Africa. Conversations around Brexit seem to focus on UK trade with Europe or the USA and Japan. We don’t see anything inclusive of African countries and yet the continent is full of opportunity and ripe for investment. We want to address this.

Desiree Joule Adam (DJA): Could you share your thoughts about Africa in general, from an economic perspective, and in your view, how you think they have fared over the last six months?

Eugene Nizeyimana (EN): Well, Africa as a fast-growing economy is of course the last frontier. If you look at 1.2 billion population, that’s a huge market and beyond that, a fast-growing and middle-class consumer, with a huge labour market for companies that looking to tap into low-cost labour. 50 to 60% of the world’s resources lie between Cairo and Johannesburg and around 60% of unused arable land for agriculture, lies within sub-Saharan Africa. In the last six months, Africa has done better than what we anticipated. I was fortunate to be running some monthly economic review on the impact of Covid-19 on the region and the world was expecting worse than what we see. This is because we as Africans are very resilient and agile. We are used to some of these challenges and we’ve learnt pretty well from other major health concerns, like Ebola and AIDS. It’s amazing to see how business communities in African countries have responded. We are still monitoring this but the impact of Covid-19 is lower than in developed economies.

Desiree Joule Adam (DJA): Speaking of the economy, we know that SMEs make up about 90% of Africa’s economy. And we also know that they contribute to about 60% of the workforce and probably the hardest hit by the pandemic in your experience, how would you advise both governments and entrepreneurs through this time?

Eugene Nizeyimana (EN): Before I go into that, I’d like to mention that part of the African Business Chamber in the UK is to also change the narrative. Whenever we talk about international trade overseas, the discussion is always focused on high capital intensive projects or multi-billion dollar investments. We are keen to rectify this by engaging with small and medium-sized businesses; also giving them an opportunity. It’s no different in the UK or Africa; SMEs are the engine of every economy. And they create jobs, they create employment opportunities and improve people’s lives. Of course, they are highly affected by Covid-19, but not all of them, depending on which sector they are in, for example, SMEs in technology and the food industry are actually thriving but face-to-face sectors of the economy, hospitality and entertainment, have been struggling.

SMEs need to quickly re-evaluate, look for opportunities and transform their business model. Based on history, a crisis is a very good opportunity to transform so let’s not waste this crisis. This is an opportunity for business owners to do things differently, adopt technology, transform and eliminate waste in the business process and also identify new sources of value. If your business is more face to face, it’s time to adopt it in order to see also how you can create new revenue channels as well as distribution channels. Our hearts go out to those who’ve been affected by Covid-19. My advice to get through this time is, we need to keep a positive mindset. The future is bright but it’s not going to be easy. We need to stay strong and resilient.

There’s a lot of concern about the second wave and we thought Africa would be going into depression, but some of the economies are recovering well, particularly those who had the right digitisation capabilities. Internet penetration in Africa is already a big issue so SMEs need a lot of support. Governments have come to the realisation that digitisation and internet penetration in Africa is key to future economic development. Access to the internet ensures businesses continue to operate.

And for the first time, we are seeing the drive for e-commerce in Africa which has actually created a new opportunity. People are slowly waking up to see the amount of time they used to spend sitting in traffic travelling to work. Now they’re used to Zoom meetings and all those and have realised how much work they can get done.

Desiree Joule Adam (DJA): Speaking of investment, access to funding has always been a huge challenge to start-ups and small businesses despite the existence of numerous investment organizations, there is low awareness of opportunities. How do SMEs overcome this barrier?

Eugene Nizeyimana (EN): This of course is a big issue and the way we see it is that it’s a collective effort that needs to be addressed on both sides. Investors or financial institutions need to be more inclusive and need to champion solutions for barriers of access to finance in terms of making sure that the message is going out to the right people and the right SMEs, and also making sure that they’re processes are lean and efficient. Scrutiny and due diligence should be fair because some of those SMEs are subject to heavy scrutiny in terms of expectation for collateral, backup and support or other elements which they don’t have and affects their ability to access finance. Understandably institutions want to mitigate risks, but at the same time need to be a bit more lenient. And you are right we keep talking about lots of funding being available and yet it does not trickle down. However, also on the side of SMEs, they’ve got to be a little bit more mature.

In my experience when it comes to SMEs, one often sees a lot of management and structural issues particularly when it comes to financial infrastructure, financial controls and cash flow management; all of which raise concerns for investors. They want to see that a business has the right infrastructure and a robust long term plan that can show a positive return on investment and sustainable growth of the business. I know sometimes it’s difficult because SME business owners are so focused on delivering the actual product or service on a day to day that they lose the focus on critical things like a long term plan. What’s your plan for the next six months, one year or even three years? What is the real potential of the business? These are important questions they need to ask themselves. Businesses must look beyond the short term and focus on the long term.

Desiree Joule Adam (DJA): We know that this Summit and others like it are super important to have, but the concern is that when conversations of progress are made, they never quite translate or transition to action on the ground. So how do we ensure that this Summit that you’re going to have is not the case where it just ends as a conversation?

Eugene Nizeyimana (EN): I’m aware of those concerns because I’ve also been involved in events like that. Certainly one of the key problems is their focus on what we call ‘projects on paper’ or activities that are so complex they never materialise. And oftentimes discussions at Summits and conferences are not very practical. The speakers we have lined up for our Summit are actively doing things on the ground so they are action-driven, they know what it takes to do things, to deliver value and get results.

Our Summit is more focused on discussions that are idealistic and practical and anyone who wants to join can come in and at least have one or two key takeaways, they can say, ‘okay, yeah, I’ve learned something that I can implement in my business, or that can move me forward’. That can be adapted to make sure that we are adding value. We are shifting away from just talking. Yes, it’s nice to have great conversations or deliver nice presentations but they don’t deliver value or action. So ours is more about what we can do realistically, practically in both short term and long term in a way that can help the SMEs and Small Business community.

Desiree Joule Adam (DJA): Well said, what is your hope for African Business Chamber as we close off the year and enter into 2021?

Eugene Nizeyimana (EN): Our hope of course is to change the narrative. The other is to empower the African Business Community in the UK and to be seen as a valuable contributor in the economy, rather than being used as a stepping stone. We want to see them thriving in the economy, to be taken seriously and to be seen as having a stronger voice. We’d also like the community to create new employment opportunities, especially as we are recovering from Covid-19 and the recession. It’s an opportunity for the African community to step forward and be part of the driving force of the economy. We want to see the African Business Chamber championing more trade between the UK and Africa and working in collaboration, thanks to the African Continental Free Trade Area Agreement (AfCFTA).

We’ve already started to see a lot of results, especially with the upcoming Summit. Now we are getting a lot of support from the regional chambers of commerce and as I said before, the DIT and Export Finance. Export Finance is coming to talk about their recent investment of $120million to champion exports between Ghana and the UK.

We have representatives from Rwanda who will also be talking about the recent CDC $1.2billion investment in Rwanda to build a new financial centre in Kigali. So there’s a lot of stuff happening and you can see these are British trade investments. Beyond that, we know there’s a lot of, uh, UK businesses championing a lot of development in Africa, since agri-business, private companies are actually now outsourcing more in Africa.

And there’s also a push towards promoting the African automotive sector which means there are huge opportunities. The Chamber will play a bigger role in terms of bringing all the stakeholders together, both in the UK and Africa, making sure that all the discussions actually deliver results. We want to continue to raise more awareness to, to, to encourage more UK companies, including SMEs to look outwards into expanding into African markets. We want to change the narrative in terms of seeing the continent as the land of opportunity, rather than just seeing it as a risk. A lot of companies are thriving and doing well so we need to demonstrate that Africa is ripe for business. The Africa Business Chamber will play a bigger role in helping some of these investors to learn where the opportunities are and how they can tap into them.

Desiree Joule Adam (DJA): If people want to get involved or just to find out more about what you’re doing, where’s the best place for them to find you.

Eugene Nizeyimana (EN): I would encourage them to visit our website, which is The African Business Chamber. There they can find out more about what we are doing, they can register for the conference, or they can also visit Eventbrite to sign up for the conference. We have another event next month which will be focusing on empowering African owned business in the UK. So there can also be, find more information. We also have our official launch on December 4th which was meant to be a face-to-face but COVID-19 got in the way of that. This will be a virtual event just to communicate our mission and vision and our plan for next year. I’m excited that we have a portfolio of activities that we’ll be doing next year. So please visit our website, sign up and join the journey.

 

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