The unveiling of the inaugural ‘Companies to Inspire Africa’ report by the London Stock Exchange Group ( LSEG) in collaboration with PWC in Lagos, brings to the fore the resilience of Nigerian Small and Medium Enterprises, (SMEs) in breaking new grounds even in the face of economic recession, CHIKA IZUORA, writes.
It was an exciting moment for Nigerian entrepreneurs being celebrated by a cream of international business men and members of the diplomatic corps who gathered in the commercial hub of Africa, and Nigeria’s economic nerve centre, Lagos to witness the launch of the inaugural “Companies to Inspire Africa” report.
The event was hosted by a leading professional services firm PwC, which attracted top business leaders, financiers, investors and the media who were present to celebrate the top 59 Nigerian companies that featured in the report. ‘Companies to Inspire Africa’ is London Stock Exchange Groups celebration of some of the fastest-growing and most dynamic privately held growth companies in Africa.
This unparalleled research project was carried out in partnership with PwC, Africa Development Bank and the CDC Group. The research report identified 343 companies from 42 African countries as the continent’s most exciting and dynamic businesses, and further examines in detail, the opportunities and challenges facing growth companies and looks at the sectors and trends that will shape the future of the African economy.
The report also highlighted strong company performances and the potential for these firms to become the next corporate champions powering Africa’s future economic and social development. Interestingly as well as expected, 59 Nigerian companies are named in the report, representing 17 percent of the total number of companies in the report, thus making Nigeria the highest concentration of high growth companies in Africa.
In the report, the industry sector was the biggest sector to be represented in Nigeria, with 17 companies featuring on the list, closely followed by consumer services, where 11 providers were selected, demonstrating the success of Nigeria’s efforts to diversify its economy.
On the sideline of the launch, Ibukun Adebayo, co-head of emerging markets strategy of the London Stock Exchange Group told LEADERSHIP that the 59 Nigerian companies which featured in the report aptly demonstrated strong base of successful growth in the country, and potential for future growth and strongly provided a vital platform for job creation and skills development.
The platform significantly provided opportunities for business networking and sharing of ideas by entrepreneurs itching to break new market frontiers in Africa. According to Pierre Guislain, vice president, private sector, infrastructure and industrialisation African Development Bank, one of the key partners in the project, The AfDB, Group expects Africa’s economic growth to reach 3.2 per cent in 2017.
He said that economic growth, job creation and development are driven by the private sector adding that the bank continues to make significant investment to stimulate the growth of the competitive private sector across Africa.
“To catalyse Africa’s transformation, the Bank leverages its own resources by mobilising development finance for Africa as well as domestic resources. While progress has been made, a funding gap remains, as does a cost-of-financing issue” Guislain observed, adding that Capital Markets are alternative funding source for Africa’s SME’s that traditionally have had options for financing.
In his remarks, the chairman of the CDC group, Graham Wrigley a key partner to the project, said, this year began with economies across the world facing their fair share of uncertainty, and Africa is no different. But while the business climate on the continent may have changed and become more challenging of late, the talent is certainly still there shown through the many inspiring companies this publication rightly highlights.”
In his comments, chairman FTI Consulting, Mr Kevin Hewitt, one of the international firms that entered into strategic partnership with Caritas a Nigerian Public Relation Firms, said, “Amidst the turbulence that has shaken global emerging markets over the last few years, Africa’s corporate sector has continued to flourish, with high growth companies helping to drive the region’s economies.”
Similarly, Oscar Onyema, president of the African Securities Exchange Association and chief executive officer, Nigerian Stock Exchange, notes that the success of Africa’s SMEs, the largest provider of jobs on the continent is vital to Africa’s economic growth.
Onyema disclosed that in Nigeria, there are over 70,000 SMEs and that according to the National Bureau of Statistics (NBS), which defines SMEs as businesses as between 10 and 199 employees and assets of around $800,000,but due to high credit risk perception, bank financing for SMEs is characterised by short tenures and high financing costs.
He however, regretted that alternative finance options such as crowd-funding venture capital and private equity are still in their infancy in Africa.
Speaking at a panel discussion at the event, chief executive officer, Diamond Bank Plc, Uzoma Dozie, noted that globally every nation has attempted to deal with the issue of poverty and unemployment by leveraging the catalytic importance of SMEs. Dozie said that in Nigeria, the contribution of SMEs to the economy is huge and significant; adding that around 10 per cent of total manufacturing output and 70 per cent of industrial employment is generated by SMEs.
“These businesses are essential components of the manufacturing sector that forms the link between the extraction industry and the services sector and are therefore pivotal in the wealth creation process of such economies. They are vital tools in achieving sustainable economic development, especially in emerging markets and developing economies such as Nigeria and West Africa sub-region at large” he stated.
Dozie added that while a lot has been done across the continent to enhance the robustness of the SME sector, a lot more needs to be done, particularly in areas such as power and access to capital. There is urgent need for African countries to come up with a clear roadmap for building a robust SME sector that permeates the entire country” he noted.
Highlighting the importance of the report in an interview with LEADERSHIP, Joel Kibazo, Managing Director FTI Consulting, whose company is in partnership with Caritas Communication to further strengthen the platform in Nigeria said, that Nigeria has been going through a difficult economic situation over the last two to three years and that it looks as if the country is now coming out of it.
But he said what this publication really show is the strength of companies across the African continent, particularly the biggest contingent coming from Nigeria.”It shows that there is hope. It shows that there are companies that are doing good work. It shows that there are companies that are managing to succeed in spite of all the challenges that you find in Africa.
These are audited companies, these are companies that have been scrutinized and yet they have come out on top. For me, the biggest thing I would say is hope, excitement and the fact that we have a good story to tell as Africans.
On the Caritas partnership, he said, “We are a global firm that works with different companies. We have four thousand seven hundred employees working in 29 countries. The reason why you have partnerships locally is because you can’t always be on the ground in everything and sometimes even if you are on the ground, you will have specialism you may not be able to meet may be sitting in London, New York or Washington .
So we have a wide circle of partnerships across the African continent and so Caritas falls within that. We have been working with Caritas on quite a number of clients and businesses that are pertaining specially to Nigeria.
Speaking further he said, “Caritas is not the only firm we have ever worked with in Nigeria or we work with in Nigeria. But Caritas in the context of the work we do in Nigeria has shown that it has the ability to execute the assignments to the level that we are able to feel comfortable and meet international standards.
We are a global firm so at the very least, what we look for in a partnership with local consultancies is the competence to deliver to the level at which our clients want. Caritas falls within that group”. On utilising the partnership to project the country, he said, Government just need to realize that communicating to their populace and them being able to be understood in terms of legislation, regulation and the systems is necessary.
There is need to have professionals do the job. As a law, many of these offices have a PR officer so it is not by mistake that they have that. If you look in many western countries what they have is an internal Public Relations Officer and then they also have the external Public Relations Officer who assists with the various programmes that you have to execute.
Sometimes, they assist but sometimes the person on internal communications also helps out in the external communications. There are different combinations that can work. But I think slowly as we as a continent grow, and get to know a lot more different things, we can also change. On how to address challenges of Nigeria SME’s he said government should stabilise the power sector to reduce cost of running business.
“If you are competing internationally, there is no way you can do it because your cost is much higher. So whether it is power, whether it is in an environment that is fully regulated or the regulations are not yet in place, these are some of the challenges. However, these challenges are not only being faced by Nigeria, they are also faced by many other countries on the African continent.
“I think there is need to ensure that there is a conducive environment for businesses to operate whether it is taxation or regulation. For me the sort of companies to inspire Africa are all potential clients at some point. We must look at them like that. As these businesses grow, there will be need for our services whether it is communications, whether it is public affairs, they would want to use consultancy services. So, that means that while we are happy that the publication is there, we are also hoping and thinking that some of them might want to use our services. So that’s the way in which I see it.
Speaking in a similar way, Mr. Adedayo Ojo, CEO Caritas Communications, noted that beyond business relationship in terms of experience sharing, in-house technology, there is a lot of benefits that the collaboration can bring when you work with a Group such as FTI.
“A cursory look at the breadth of services that FTI Consulting Group offers will show that they are not a typical public relations, advertising and communications company, they have specialists in Finance, Strategy, Communication and in diverse areas within the Group and when you attempt to learn more about the company, what you see will amaze you” Ojo added.