The world has seen thousands of businesses collapse over the last few decades. From the dot.com bubble to the world financial crises, companies went belly up.
Ghana has not been left out of our own corporate failures. The recent financial sector clean up left 9 banks, 23 savings and loans, 347 microfinance institutions and 53 investment companies wiped off Ghana’s corporate list. How did that happen?
Many factors have played up here including false confidence, overly aggressive business growth, personal greed, ethical breakdowns, self-aggrandizement, and maybe, politics have played a part.
These two books tell us real stories of how large companies came crashing down. Though both writers and the cases are outside of Africa, the principles are borderless. Yes, these corporate failures apply to us in Ghana and Africa too.
From endings of suicides, to imprisonments to abject despondency, you will learn a great deal. Once you pick them up you can’t put them down.
How they Blew it – CEOs and Entrepreneurs behind some of the world’s most catastrophic business failures
Authored by Jamie Oliver & Tony Goodwin
The book was published in 2010 and discusses corporate failures from the late nineties to the end of the first decade of the 2000s.
It features the likes of Dick Fuld (King Kong) in the days of LEHMAN BROTHERS and how the collapse unfolded at the onset of the world financial crises. If you want to add a movie, look for the title the Last Days of Lehman Brothers.
The case of Enron with the then CEO, Ken Lay and the World Com story with Bennie Ebbers have been featured in detail.
How the mighty fall (and why some companies never give in)
Authored by Jim Collins
In narrating how some giant companies have fallen, this book does not only narrate the inside stories of how these big wigs collapsed. It takes time to build the theory of the ‘company collapse’ journey and how businesses tread on that path to their extinction.
This is where readers should be able to interpret and relate to their own businesses or companies they work for.
Ghana Talks Business has started speaking to individuals who were at the thick of affairs in Ghana’s company collapses and we would present some of the inside stories to readers in due time.
Jim Collins wrote the best selling business book ‘Good to Great’, which is also a must read.
Get these books and read, until Ghana gets its own version of ‘How they Blew It’ or ‘How the Mighty Fall’
Communication is one key area that has experienced such exponential growth thanks to the power of technology. Gone are the days when such communication tools like telegraph and Morse Code, which took a long time to interpret, were in use. Today, much more sophisticated communication devices are available. They offer instantaneous receipt and response of messages, voice notes/chat among others.
Alex Adjei Bram has capitalized on this technology to provide SMS solutions for business. These solutions offer a quick and easy way to process payments in-store, online, and on mobile.
Alex Adjei Bram is a Chemistry Graduate from the Kwame Nkrumah University of Science and Technology (KNUST). During his final days at the university, Alex Adjei Bram Co-founded Hubtel formerly known as SMSGH in May 2005 and became the company’s CEO.
About Hubtel
The company’s purpose was to aid businesses provide better and efficient service to customers and improve business communication.
During the rebranding ceremony (from SMSGH to Hubtel), Alex Adjei Bram said “with changing times and communities, selling is no longer a community-based activity as products alone are not enough to differentiate any company. Business must do more than just sell. The past few years have taught us that beyond selling we have to serve and engage more with customers. Sell, Serve and Engage. Hubtel is here to shepherd business of all sizes into a modern age beyond buying and selling into one of interactive and smart engagement that awards businesses and customers. We strongly believe that this will result in national and even Pan-African impact.”
This indigenous company has run on the back of its three major platforms/apps; MYtxtBOX, Jumpfon, and MPower Payments. These have grown its customer base to over a 25million across three other African countries; namely Nigeria, Cameroun, and Kenya. The company also has a registered representative office in the United States of America for the authentication of electronic payments.
Hubtel also offers a free point-of-sale app that offers a unique opportunity for businesses to accept all forms of payment from mobile money wallets, bank cards and cash into one wallet!
The Hubtel POS enables businesses to monitor sales from smart phones, tablet or PC. It can be used by any registered business of any size, from a single point to multiple branches. It’s perfect for retailers, restaurants, supermarkets, pharmacies, schools, petrol stations, delivery services, neighborhood convenience stores, saloons/barbering and general merchant shops.
Achievements
At barely seven (7) years old, SMSGH as it was known at the time, was featured in the 2012 edition of Forbes Africa Magazine.
In 2013, Alex Adjei Bram was featured in a United Nations General Assembly Conference on promoting entrepreneurship.
His entrepreneurial spirit, drive, hard work, recognition of an opportunity, and tenacity has turned Hubtel into a global mobile technology brand.
The Catalyst Fund Inclusive Digital Commerce accelerator, managed by BFA Global, in partnership with the Mastercard Foundation COVID-19 Recovery and Resilience Program and the Meltwater Entrepreneurial School of Technology (MEST), have announced the first cohort of digital commerce companies to be scaled, with the goal of improving the livelihoods of informal MSEs in Ghana.
Boost Ghana and KudiGo are enabling small retailers to grow by easing business administration, digitizing operations, improving access to working capital and reducing the cost of doing business, while providing suppliers with efficient access to MSE customers on the ground.
Both companies will receive up to US$120,000 in capital funding, along with:
Connections with Catalyst Fund’s growing global Circle of Investors and Circle of Corporate Innovators, and;
In-market expertise from MEST.
Ghana’s Micro and Small Enterprises (MSEs) Sector
“MSEs are the backbone of Ghana’s economy, representing about 80% of the MSME sector and employing over 50% of Ghanaians (MOTI 2019). Within the MSE sector, informal work is predominant and contributes to 90% of employment,” said Jane del Ser, Program Director for the Catalyst Fund Inclusive Digital Commerce Accelerator.
“Following the COVID-19 crisis, micro and small enterprises in particular lack access to a financial safety net, which significantly impacts their livelihoods and ability to do business. As most transactions and records occur offline, these businesses also lack digital financial records that can grant them access to the working capital they need to survive. Both Boost Ghana and KudiGo present digital solutions that have the potential to significantly impact the livelihoods of thousands of informal MSE owners,” del Ser concluded.
Catalyst fund Inclusive digital Commerce accelerator
Since launching the program in November 2020, Catalyst Fund conducted research on MSEs in urban and peri-urban retail shops around Accra and found that 100% of shop owners have smartphones, and more than half already market their businesses via social media. However, few currently use digital means to purchase inputs, manage their businesses on a day to day basis, or fulfill orders; only 20% buy inputs online, and 80% purchase inventory in-person, at markets or at a store. This leads to costly transportation expenses, and it means MSEs cannot guarantee the availability of supplies or price stability enjoyed by larger retailers.
Boost Ghana and KudiGo
Boost Ghana is tackling this problem by enabling underserved small businesses in Ghana to order stock digitally at the best wholesale prices, and receive efficient, same-day deliveries. For suppliers, they provide direct access to last-mile retail customers at scale, providing critical data and reducing the cost of distribution. KudiGo provides a holistic retail management solution for small business owners, including inventory management, a CRM, mobile money payments and a digital storefront, enabling businesses to build a digital footprint and access financial services more easily. They also offer their MSE customers last-mile delivery via partners.
In addition to working with Boost and KudiGo, the Catalyst Fund team aims to grow the wider digital commerce ecosystem, by partnering with corporate innovators and investors who can help these companies scale, in an effort to create a more enabling investment and business environment.
“Digitizing MSEs is critical to growing the informal sector and unlocking their potential to scale up and be at the forefront of Ghana’s economic recovery. Leveraging the collective capacity of local digital commerce companies to lead this effort is definitely a step in the right direction,” said Nathalie Akon Gabala, Mastercard Foundation’s Regional Director for West, Central and Northern Africa.
Catalyst Fund recently released an investment brief containing three areas of opportunity for inclusive digital commerce innovation in the Ghanaian market. The brief can be found here.
Distributed by African Media Agency (AMA) on behalf of Catalyst Fund Inclusive Digital Commerce.
KudiGo, which focuses on providing user-friendly SaaS retail solutions to the consumer detail industry in Sub-Saharan Africa, will join hands with the textile powerhouse in a campaign called #WearGhana21. Additionally, the Ghana Textiles Printing Company (GTP) has launched its own e-commerce platform that mirrors KudiGo’s StoreFront Solution. The partnership will not only showcase the cream of the local textile industry, but also reiterate the immense benefits SaaS offerings can provide local businesses with.
Considerable savings can be expected
An SaaS application such as KudiGo can result in considerable savings for a number of reasons. First and foremost it is important to acknowledge that SaaS typically negates the need for hefty upfront costs. Additionally, recurring costs such as system upgrades and maintenance are also reduced significantly. When utilizing SaaS applications, the vendor is solely responsible for the upkeep of what can be a rather complex IT infrastructure. Businesses can enjoy additional services when using KudiGo, as its storefront allows a user to manage more than one business from a singular account. As the system is entirely mobile-orientated, the need for costly IT equipment is almost completely eliminated, providing small African businesses with an additional boost.
Implementation is simple
If there is one thing SaaS applications such as KudiGo are renowned for, it’s their ease of implementation. SaaS is cloud-based, which means there are no complicated installation and implementation processes a business owner has to concern themselves with. The SaaS vendor is required to maintain the IT infrastructure, which includes making sure that the physical components of their backend systems are working. It also entails performing system maintenance as required, and actioning software updates when needed. By using an application that is easy to implement, business owners can focus their attention on other aspects of the business to ensure it is as profitable as possible.
Businesses benefit from flexible applications
Another wonderful feature of an SaaS application such as KudiGo is the flexibility that it provides to business owners. SaaS solutions are generally scalable, and can easily be utilised alongside other SaaS offerings. When integrating several SaaS offerings into the same business model, there is no need to invest in additional software or servers. All that needs to happen is that the additional application has to be enabled. In addition to this, a user can tweak their SaaS usage as required without having to adhere to the lengthy notice periods that are often enforced by traditional service providers. This provides the user with additional peace of mind, knowing that changes can be made on short notice as needed.
SaaS offerings have impacted African businesses in many ways. While the concept is still somewhat foreign in many developing countries, even a slow adaptation has proven to be very beneficial.
The African Continental Free Trade Area (AfCFTA) launched January 1, 2021, has successfully rallied all members of the African Union except Eritrea to create the world’s largest free trade area.
AfCFTA is hailed by its secretary-general Wamkele Mene as “a strong signal to the international investor community that Africa is open for business, based on a single rule-book for trade and investment.”
Given the above facts, a change was needed to cause progressive growth on the continent. AfCFTA is the response to that required change. Africans are the only ones who can change their circumstance hence, the need/importance to boost the intra-Africa trade.
The importance of intra-Africa trade
Source: PWC, 2019
In a webinar by Invest in Africa and The Mastercard Foundation on the theme “Biting a Piece of the AfCTFA Opportunities for Business Growth,” Oheneba Kwame Darko, a Business Development and International Trade Consultant, and Franklin Owusu KariKari, Director of Business Support NEIP explained:
“The business opportunities and potential benefits of the AFCFTA for Ghanaian MSMEs, and how they can take advantage of the free trade agreement for business growth.
Some of the anticipated challenges that the MSMEs will face because of increased trade, and how they can play a part as the market progresses.”
The Uniqueness of AfCTFA that Ghanaian businesses can benefit from
According to Oheneba Kwame Darko and Franklin Owusu KariKari, AfCFTA provides several unique opportunities that Ghanaians can exploit.
Phasing out tariffs on 90% of goods will allow Ghanaian entrepreneurs and business firms to export their goods to other countries in the region at a relatively low price making their products competitive. Business owners will typically transfer the hefty price they have to pay for the export of their commodity to the final product making their products expensive and unable to compete favourably with products from other regions. AfCFTA helps to eliminate that burden and ensure Ghanaian products also enjoy a fair share of competitiveness in the other regions.
Moreover, Ghanaian businesses and entrepreneurs have the opportunity to present their products or service to a population size of over 1.2 billion. Thus, Ghanaian businesses and entrepreneurs have the opportunity to generate more sales, increase their revenue base as well as profit margin and expand their business capacity.
How to tap or expand into another market
According to Oheneba Kwame Darko, to expand your business into another market, you must:
Ensure your product is certified by any of Ghana’s certification authorities such as the Food and Drugs Authority or the Ghana Standards Authority.
Research into the market you wish to enter with your products. Adequate research is needed on the market you are entering into since certain products may be in excess and thus render your product of a similar nature uncompetitive.
Get local certification by the region’s local certification authority to certify your products.
Get a local distributor to help you penetrate the market. According to Oheneba Kwame Darko, local distributors have a better understanding of the market and have a rapport with consumers.
Oheneba Kwame Darko and Franklin Owusu KariKari further stated that if the process of entering into a new market seems cumbersome, seeking aid from a successful consultancy firm is the way to go. Franklin Owusu KariKari highlighted the need for Ghanaian businesses to be “willing to pay for consultancy.”
Challenges
With over 1,000 languages spoken on the continent, language, will certainly be a barrier to the Free Trade Area. Ghanaian businesses may find difficulty relating to the locals in Cote d’Ivoire or Tanzania whose language are French and Swahili respectively. This brings about a gap in communication for a smooth transaction of business. There are however some online tools to mitigate this problem. A local distributor who can bridge the language gap may also be sought to ensure your products penetrate the market.
Lack of a unified standards authority
According to Oheneba Kwame Darko, since AfCFTA doesn’t currently have a unified standards authority, Ghanaian businesses will have to certify their products both in the country and in the region in which they wish to sell their products.
COVID-19 has had a negative impact on African economies which may slow down the entire rollout of AfCFTA. As a result of COVID-19, the original deadline for trading under AfCFTA was pushed back from 1 July 2020 to January 2021.
Also, with over 53% of Africa’s exports that go to other regions of the world, particularly Europe, that are also suffering from the pandemic, AfCFTA is sure to face some setbacks. However, with the vaccines coming into play, the smooth rollout of AfCFTA may still see some glimmer of hope.
How the entrepreneur is protected?
According to Oheneba Kwame Darko, entrepreneurs that have new and innovative products can patent them quite easily under AfCFTA. He mentioned that with the location of the AfCFTA Secretariat in the country, and a department that ensures intellectual property rights, Ghanaian entrepreneurs can easily ensure the protection of their innovative product.
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