Promoting intrapreneurship in Nigeria’s public sector

In my last column, I highlighted the imperative of promoting Entrepreneurship Education (EE) in Nigeria given the positive correlation between EE and innovative start-up activities, which have positive impacts on the economy. This month’s column focuses on intrapreneurship, which is a way of expressing “entrepreneurial” abilities within an existing organisation.
    
The term, intrapreneurship, was first coined by Gifford Pinchot and Elizabeth Pinchot in a paper the couple wrote in 1978. The concept was further promoted in a 1985 book, Intrapreneuring in Action, by Gifford Pinchot and Ron Pellman. While entrepreneurs are concerned with starting an organisation to provide a service and contribute to the economy, intrapreneurs innovate and create value within organisations as employees or as public servants. Intrapreneurs are not focused on starting their own businesses. Rather, they are focused on the organisations they work for to improve their performances.

If you have ever worked with or had any dealings with state and the federal government agencies in Nigeria, you must have experienced the inefficiencies and outdated operations in most of those agencies. As someone who deals with the government at both the state and the federal levels, I can say the lack of innovation in the public sector is alarming. It is arguably one of the greatest impediments to our development.

There is a dire need to promote intrapreneurship within the Nigerian civil service. Intrapreneurs are employees with the mentality of entrepreneurs. They are invaluable to their organisations because they think big and do beyond the bare-minimum.

When organisations give some autonomy to their workers on certain projects or provide the enabling environments for their intrapreneurs to thrive, they often reap the rewards. Notable results of intrapreneurship include the building of the P-80 Shooting Star, a fighter jet designed by the Skunk Works at Lockheed Martin in 1943 and which was a game-changer during World War II. Skunk Works is a moniker for the Advanced Development Programs (ADP) of the US-based global security and aerospace company. Some of the well-known aircraft used by the US military and the air forces of a number of countries today, such as the SR-71 Blackbird and the F-22 Raptor, were engineered by this group.

Another intrapreneurship group is the Xerox Corporation’s Palo Alto Research Center (PARC), the birthplace of laser printing, computer mouse and Ethernet. There is also the Nokia Bell Labs, which is the birthplace of transistors and some of the well-known programming languages. The Post-it Note, Facebook’s ‘Like’ button, the Sony PlayStation are all products of intrapreneurs within organisations. A classic example of an intrapreneur is Paul Buchheit, who led in the development of Gmail while working at Google. He is also known for his work on Google AdSense.

These intrapreneurship achievements were possible because the organisations and their leadership did not allow Corporate Immune System (CIS) to hamper the “entrepreneurial spirit” of their employees. A CIS develops when organisations allow bureaucracy and various rules to become stumbling blocks and impede employees from expressing their skills to achieve innovation. It is not only very imperative to empower managers; all employees should also be empowered to become more innovative and flexible in carrying out their daily activities and routine tasks.

For the Nigerian public sector to become efficient, an environment that promotes innovation must be established. The leadership of the civil service, beginning with the President, needs to show strong commitment because leadership is ultimately responsible for providing the conditions that facilitate an intrapreneurial attitude.

In developed economies, much focus is on the public sector to improve and deliver services to citizens efficiently. In 1990, the Institute of Public Administration of Canada’s (IPAC) Award for Innovative Management was instituted to recognise federal and the provincial governments who demonstrated exceptional innovations in addressing the wide range of issues facing the society. As part of the country’s drive to improve public service deliveries, senior level bureaucrats were directed to explore ways to foster innovation in delivering government policies and priorities. One outcome of this policy is the engagement of Canadians through their smartphones to provide awareness on energy efficiency.

Governments at all levels operate in environments where change is a constant. To provide effective leadership and optimal service delivery, government institutions have to move from the sporadic to the systemic. Lack of innovation is the reason for much of the government inefficiencies and failures in the delivery of public services in Nigeria. We are not moving forward and the country has lost competitiveness largely because senior civil servants are scared of change. Government ministries, departments and agencies are unable to determine the cost to society as a result of their inefficiencies, let alone improve their performance.

Every low score on the indicators of the ease of doing business rankings of the World Bank can be linked to the inefficiencies and lack of innovation within the public sector. A couple of months ago, the signpost of my company located in one of the Southwestern states was forcefully taken away by the state’s advertising agency on a spurious charge. The agency alleged we had not paid a particular tax, even though we already made payment. The agency could not find our payment because of the absence of a proper database management system. Mine was definitely not an isolated experience.   

To achieve efficiency, service delivery should be measured against certain key performance indicators (KPIs). In healthcare, for instance, key deliveries could include shortening the average length of stay in hospitals and the average waiting times. When these are known, it helps in the allocation of resources. In the judiciary, a key delivery would be shortening the average time it takes for a case to be concluded. Slower courts decrease citizens’ confidence in the justice sector. This, in the long run, deters private investments. For tax administration, a key delivery would be to reduce the cost of collection ratio – which is administrative cost divided by the total revenue collected.

There is an urgent need to transform our public service. We need a modern, people-centered public sector that is flexible, responsive, adaptive and innovative. To meet the expectations of Nigerians, we need to accelerate the pace of the modernisation and renewal. The current laws, rules and structures in the public sector are neither flexible nor responsive enough to allow for a virile intrapreneurial environment.

In his 2002 book, “System Failure: Why Governments Must Learn to Think Differently,” Jake Chapman highlights the obstacles to learning and innovation in the public sector. These obstacles include the pressure of uniformity in public services, the reliance of civil servants and ministers on command and control mechanisms, lack of evaluation of impact of previous policies, pressure for immediate response to the crisis of the day and a tradition of secrecy that limits feedback and learning.  

Today, Nigeria is faced with the dilemma of providing unique identification (ID) for every Nigerian residing in the country and abroad. However, last month, Director-General of the National Identity Management Commission (NIMC), Aliyu Aziz, said the government plans to provide digital identification of all citizens by 2024. Achieving this would require innovation, especially because it would entail consolidating the existing databases such as the Bank Verification Number (BVN); the voter registration database; biometric data of mobile phone users, among others.

Public sector innovation is always aimed at addressing a public policy challenge and a successful public innovation is one that achieves the desired public outcome. To build a virile, efficient and innovative civil service where intrapreneurs are allowed to showcase their skills, there is a need to institute a governance process that can deliver on clearly articulated objectives. Government institutions must have well-articulated job descriptions, not the type of job descriptions that put employees in a box. Personality tests can also be used to create intrapreneurs. These tests provide insights into employees’ habits, needs and strengths. Role switching is another way through which intrapreneurs can be created. Letting employees remain stagnant in a role that doesn’t match their skills does not encourage innovation.

A well-defined pay structure can also encourage dedication and innovation. A pay structure that rewards employees who go the extra mile and are innovative also helps to create an intrapreneurial environment. Some organisations even ask for presentation of formal proposals or business plans from their employees.

Creating an intrapreneurial environment where innovation thrives is not an easy task. But an organisation that doesn’t have intrapreneurs will remain stagnant or eventually cease to exist.

@jideolutuyi

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Posted in Africa, Entrepreneurship, Governance, Innovation, Intrapreneur, Intrapreneurship, Leadership, Nigeria, Public Sector | Tagged , , , , , | Leave a comment

Millennials Are Geared To Create Impactful Change In The Nonprofit Sector

“Harnessing the power of energy to transform the lives of 10 million people.” This is the challenge of the 2018 Hult Prize. Whether teams are seeking to provide adequate protein sources to urban slums or working to bring educational opportunities to children all over the world, competitors work closely with The Hult Prize Foundation, which embodies a range of characteristics similar to those of the millennial generation. Hult Prize is global in nature, promotes connectivity and networking, and exemplifies the intersectionality between social change and startup culture.
These attributes seem to be integral aspects of the millennial mindset, and of the ways in which millennials run businesses, nonprofits and startups. From my seat as chair of the Hult Prize Council, I am fortunate to have the opportunity to witness what is becoming one of the most powerful generations of our time, as it bridges the gaps across generational boundaries and adds new dimensions to the work of the nonprofit sector.

Millennials Have An Innovative Mindset
Why have millennials been able to accomplish what other generations could not? Cited as the first generation to be less well-off than their parents and facing obstacles such as limited job opportunities, soaring costs of living and student debt, millennials seem to have the odds stacked against them.

Yet, somehow, they have created a global community, like that of the Hult Prize, that promotes the freedom to explore ideas, take initiative, experiment and fail. I have seen this generation build upon experience and find the motivation to get back up, improve, try another way and work towards successfully solving the world’s problems.
Through crowdfunding, Facebook fundraisers or other online giving sites, millennials are able to be philanthropic with the interest to make change happen for less. Nonprofits should turn their marketing efforts toward these young philanthropists and also leverage this generation’s skills within the sector to create a greater and more effective reach.

By bringing in their friends and contacts to help support a cause, a giving community can develop, which can result in funding projects. As a visible demonstration of reaching a goal to create change, millennials can be fulfilled by their ability to make a difference, regardless of gift size.
Millennials recognize the need to empower each other with this innovative mindset. From my perspective, they have been able to put this into action through increased connectivity, due to technological advancements and their generation’s shift toward a global mindset, as they create solutions to improve the state of the global society.

Millennials Are Connective By Nature
In some ways, there is a disparity between the technology savviness of Genration X, Generation Y and baby boomers, but technology is the glue that connects millennials and the generations before them. This kind of advancement is natural and expected, creating a movement.
Millennials recognize the value of connection, boldly pushing the boundaries of existing tech and creating opportunity where tech falls short. The technological capability of this generation combined with their entrepreneurial spirit enables greater access to global issues. With this increased global exposure, I have seen millennials adopt a sense of being part of an international community. They engage prior generations’ wisdom, experience and shared vision for positive social and economic change.
Nonprofits are in a unique position to take advantage of the tech-savvy skills and connectivity of millennials by making these skills integral to their operations. Technological capabilities improve the understanding of the grant-acquisition process for their innovative ideas while building global communities of members and donors who support their efforts.
The connected nature of the millennial generation gears these young professionals toward successful careers in nonprofit work. Nonprofits can put these skills to practice and use them to make social change. Further, connectivity is important for the donor community that supports these nonprofits. The impact is measurable via technology and through platforms that demonstrate impact.

Millennials Are Entrepreneurial
This entrepreneurial spirit is prominent on an international level. I have seen an abundance of startups that target niche markets and possible social improvements spring up all over the world. And universities now offer entrepreneurship courses and degrees as part of their curriculum. Risk is an accepted challenge, and business is seen as both a means to profit and as a tool for creating social change.
As I look at our ever-changing world, there is a notion that business isn’t only a source of income and employment. Millennials, in partnerships with the generations before them, have reimagined business enterprises as a means of improving lives and making the world a better place.
Impact investing is a trending form of support for nonprofits, in which the risk involved is understood while doing good for the world. By offering philanthropists an alternative beyond traditional grantmaking and giving them an opportunity to create change, I have seen impact investing attract younger philanthropists who may be slightly more open to risk. And the impact can be measured, which is extremely important to the savvy donors of today.

Millennials are often deeply invested in the organizations with which they work and the causes that they give to. This social-change mindset can be leveraged by inviting millennials into the nonprofit sector. Employing entrepreneurial millennials with this mindset will drive business solutions for nonprofits because of their personal investments in the successes of these organizations.
A movement is happening, whether we are conscious of it or not. We have an opportunity to work with a generation that has a robust understanding of the success-and-failure process that comes with creating social change. Looking forward, we have a real opportunity before us. Millennials are with us to work toward what older generations wanted to achieve — and to do it for people in every corner of our rapidly changing world.

By Sheryl Chamberlain
Forbes Nonprofit Council

 

 

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4 Ways Millennials and Nonprofits Are Perfect for Each Other

Millennials have become the largest generation in the U.S. workforce, and employers that ignore the millennial influence do so at their own peril. Many millennials started their careers during the Great Recession, or during its repercussions, with huge societal pressures: record-breaking amounts of student debt, a likelihood of earning less money than their parents, and a higher cost of living. Despite these obstacles, 60 percent of millennials want a sense of purpose in their work and 77 percent chose their job based on that desire, according to the 2015 Deloitte Millennial Survey. These factors create the perfect environment for nonprofits to attract, hire, and retain millennials workers; Nonprofits are starting to take notice. Below we make sense of some recent data that we think demonstrates four ways that millennials and nonprofits are perfect for each other.
Millennials Care
Millennials feel accountable and connected to the broader world and consider the workplace the primary environment for their impact. The Deloitte Millennial Survey 2017 finds that within the smaller sphere of influence that the workplace offers, millennials can connect with their peers and those they serve more effectively. By definition, charitable nonprofits are mission-driven organizations, and one million-plus charitable nonprofits in the United States give millennials the opportunity to explore the type of work that drives and inspires them. Working for the good of the broader world or local community fulfills millennials’ desires to focus their energy and intellect on purposeful work. When working for a nonprofit, millennials can feel their influence; seeing the fruits of their labors fuels their drive, that in turn helps their nonprofit employers achieve greater impact.

Millennials Want Flexibility
Work-life balance and flexibility are so crucial that these factors are cited as among the top five reasons millennials leave a job (source: Ernst & Young’s Global Generations Research). The bottom line is that millennials want more than just work; they want the ability to enjoy the world in which they feel connected and accountable. Millennials are shifting the societal and cultural norms away from a world in which their parent(s) worked nonstop, to one where they value work-life balance for two working adults. Millennials are almost two times more likely than their parents to have a spouse or partner also working full time. Unlike previous generations where one partner may have primarily tended the home, millennials look for flexibility to allow for time to care for personal and family responsibilities. The NonprofitHR 2016 Nonprofit Talent Survey found that the top culture and engagement priority for the nonprofit sector was to improve organizational culture. Offering and encouraging flex time promotes a work culture of trust and support, according to a recent Future of Work Report done at Boston University. Ultimately, incorporating the flexibility millennials seek in order to meet the priorities of the organization benefits both employer and worker. What we’re seeing is that millennials are paving the way so that work-life balance becomes not only a cultural norm, but also a shared value by both employers and employees.
Millennials Want Stability
Stability and flexibility are not mutually exclusive and can be used as complements to promote loyalty and trust. Contrary to some common misconceptions, millennials are no more likely to jump from job to job as previous generations were, nor are they disloyal to a stable workplace as long as they feel connected. Using U.S. Department of Labor data, the Pew Research Center compared millennials to their older colleagues, Generation X (Gen X), and found that millennials are just as likely to stay at their current place of employment as Gen Xers were when they were the same age. College-educated millennials are even more likely to stay at their jobs longer than their Gen X counterparts. If nonprofits can shed this stereotyped misperception, and provide connectedness and flexibility, an unwavering dedication to the nonprofit’s mission can provide a stable environment to engage and retain millennial workers.

Millennials Don’t Like Labels
Nonprofits are required to be nonpartisan, a condition that both encourages public trust in the sector and promotes comfort to millennials who do not want to be labeled as part of a specific political party. Charitable nonprofits are prohibited from electioneering and partisan political activities under the tax code, which protects the nonprofit sector from partisan politics. The 2016 Millennial Impact Report studied how the 2016 presidential election influenced millennials’ attitudes and engagement in causes they believed in. The report found that millennials are breaking away from traditional institutions, such as political parties, as they engage in efforts to effect changes in society. They shed previously used titles and labels, not wanting to identify as “liberal” or “conservative,” as to avoid being construed as confrontational, whether in real life or on social media. While millennials are actively engaged in causes they feel drawn to, regardless of the political landscape, they do so while bucking the word “activist.” Instead of a bullhorn, they use their business cards to show their commitment. Nonprofits can leverage millennials’ desire for a less divisive government, which is consistent with the role charitable nonprofits play to find solutions to social and other problems in a nonpartisan manner. Millennials could be among a nonprofit’s most effective policy advocates!
The great news is that millennials may already be moving towards choosing their employment and careers within the nonprofit sector based on their engagement in causes they believe in and belief in their ability to impact the world around them. By exploiting their own unique structures and mission-driven DNA, nonprofits are perfectly situated to provide a work culture that gives millennials the flexibility and stability they need, and in return enjoy the benefits of committed employees who find a sense of purpose in the mission.

Tiffany Gourley Carter  via Millennials

 

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Promoting entrepreneurship education in Nigeria for job growth

The rate of unemployment – including graduate unemployment – in Nigeria is alarming. While the unemployment rate across the entire working population was 23.1%, according to the National Bureau of Statistics (NBS), the jobless rate among Nigerians between the ages of 15-34 was 29.7% in the third quarter of 2018.

Apart from a weak economy that is haemorrhaging jobs, one of the factors responsible for the high unemployment rates in Nigeria is an obsolete higher education system that continues to churn out graduates, many of them having neither employable nor entrepreneurship skills.

There is, therefore, an urgent need for a paradigm shift that entails training students to become highly skilled entrepreneurs and job creators upon graduation. This requires entrenching entrepreneurship education (EE) into the academic curricula of tertiary institutions. But the big question is whether entrepreneurship can be taught.

A 2014 World Bank report identified EE and training as a catalyst for innovation and job creation initiatives among university graduates, especially in Sub-Saharan Africa (SSA) where graduate unemployment rates are high. The World Economic Forum (WEF) has also said teaching entrepreneurship is key to combating unemployment. This suggests that entrepreneurship can be taught and learned. Promoting an entrepreneurship culture particularly entails teaching a set of cognitive and non-cognitive skills, including those that will enable students identify opportunities, take risks, and also have the ability to persevere through failure.

Some years ago, the Nigerian University Commission (NUC) introduced entrepreneurship development programmes into academic curricula of universities. In 2012, the Skills Acquisition and Entrepreneurship Development (SAED) programme was established by the National Youth Service Corps (NYSC) as a way to promote skill acquisition and entrepreneurship development among young graduates. However, findings on the outcomes of these programmes have revealed that there are not enough trained lecturers and instructors to teach EE in the country’s tertiary institutions and during the NYSC programme. Instructional facilities or materials for teaching EE are also sorely lacking.

Entrepreneurship Education is not a new concept in education. In 1947, Harvard Business School’s (HBS) professor emeritus, Myles L. Mace, taught the first entrepreneurship course at HBS. Since then the number of programmes in the field grew as EE became popular in the 1980s in Western countries.

In a research article, published in the Journal of Entrepreneurship Education, Chien Wen Yu, an Associate Professor at Bridgewater State University in Massachusetts, concludes that there is actually a strong relationship between the level of EE in a country and the amount of start-up activities. The article, “Understanding the Ecosystems of Chinese and American Entrepreneurship Education,” shows that entrepreneurship education, as well as government support for startups at industry level, are the factors that have set the United States and China apart as the world’s entrepreneurial powers today.

The established entrepreneurship education system in the U.S. is underpinned by strong institutions and processes, including business incubators, accelerators, and protections for patents and trademarks. Each institution or process exists to play a role to advance entrepreneurship and innovation.

Placing a high priority on innovation and entrepreneurship, the Chinese government has, since 2015, been expanding the scope of its “mass entrepreneurship and innovation” campaign. The campaign involves financial support and tax incentives for entrepreneurs, with the aim to make the economy more innovation-driven. Over the last two decades, the Chinese economy has produced billionaire entrepreneurs such as Ma Huateng, also known as Pony Ma, CEO of Tencent; Lei Jun, co-founder and chairman of Xiaomi; and Jack Ma, co-founder and executive chair of Ali Baba Group.

These two countries understand that while traditional courses such as medicine, accounting, finance, marketing, and so on are useful, the new economy also requires the supply of other skills and aptitudes. For example, innovation, complex critical thinking, networking, negotiating, team work, social and emotional intelligence, and creativity are valuable and must be learned by any entrepreneur that wants to be successful.

Innovation is a vital element of the entrepreneurship system. Innovation involves creatively coming up with new ideas and novel solutions to address various social needs or problems. Vera Songwe, Executive Secretary of the United Nations Economic Commission for Africa (ECA) said innovation is the key to Africa’s jobs crisis and the bulging youth population.

Innovation is also what gives businesses competitive advantage. Therefore, it is important that new and would-be entrepreneurs are taught how to think creatively and innovate. Integrating innovation and creativity into EE curricula can go a long way in attracting more students, reducing graduate joblessness and boosting overall socio-economic development.

Another critical unit of the EE is social entrepreneurship. Social entrepreneurs are those entrepreneurs who seek social change by finding solutions to social, cultural, or environmental issues. In recent times, academic institutions are introducing entrepreneurship students to this concept, developing a unique business model whereby they can make profit while addressing societal challenges.

Bilikiss Adebiyi-Abiola, Founder and CEO of WeCyclers is a Nigerian social entrepreneur. Wecyclers is a recycling company. It has an innovative approach of using fleet of cargo-bikes to collect waste from low-income and densely populated urban neighbourhoods across Lagos State. The company provides incentives or “point” to households for every kilogramme of waste material collected. Those “points” can be turned into rewards. The waste is then used as raw material for the local recycling industry. In 2018, Nairametrics described her as “Nigeria’s queen of recycling and environmental sustainability.”

Some people have misconstrued entrepreneurship to mean simply starting a small business. But nothing could be further from the truth. Every great business or innovation in the world today was started by an entrepreneur and had myriads of chances of failure.

And without a doubt, entrepreneurs play a major role in economic development. According to the Organization for Economic and Co-operative Development (OECD), small and medium-scale enterprises (SMEs) account for 60-70% of jobs in most OECD countries. SMEs also constitute over 95% of enterprises and account for 60-70% of jobs in most OECD countries. Indeed, they are considered the backbone of the entire British economy, accounting for more than half of the trade turnover of the United Kingdom.

Nigeria must develop its human capital to be globally competitive. One of the ways to achieve competitiveness is by supporting entrepreneurs that will drive innovation in the economy. Training students who graduate only to become job seekers is an underutilisation of the country’s human resources. There needs to be a coordinated policy support to deepen entrepreneurship education in tertiary institutions. And like China and U.S., the Nigerian government must also provide financial support for entrepreneurs and selected sectors that would drive big and fast job growth.

@jideolutuyi

Posted in Africa, E-Commerce, Entrepreneurship, Innovation, Lagos, Nigeria | Tagged , , , , , | Leave a comment

The rise of a new Tribe

The Cambridge dictionary defines a tribe as a group of people, often of related families, who live together, sharing the same language, culture and history. It is in this light that tribe in this piece has been used to describe the tribe of young and middle aged Nigerians who possess similar traits. Traits like blazing new trail, ardent belief in the country in spite of obvious drawbacks, innovating businesses that do good to the society while they also profit from it. A new tribe that understands that continued and persistent complain will not add an inch to their personal well-being or development. This new tribe, if anything has brought a slim glimpse of hope. A new tribe of progressive, versatile and entrepreurial Nigerians. These new tribe understand that their fate is in their hands, they understand that if no one does its part nothing changes. Most importantly, while this new tribe believes that good governance and good leadership play a huge impact in shaping our society they also understand that governance alone doesn’t build the society.

As an entrepreneur and a student of entrepreneurship, I continually look for traits that set apart one entrepreneur from the other. I continually search for the skills that drives their innovativeness and I must confess that these new tribe continues to leave me awestruck. I begin to imagine what and how it would look at if government played its own role excellently by providing the much needed infrastructures.
From healthcare to financial technology to agriculture, education and transportation, this new tribe are doing new things and in some cases innovating and changing how we do things.

In Education there is Tobi Obasa of Davton Learn and and Gossy Ukanwoke of Edutech. While Davton provides a platform for people to learn and sit for certification exams Edutech takes pride in taking African universities online , one degree at a time. Kiakia, She Leads Africa and Social Lender pioneered by Olajide Abiola, Yasmun Bello Osagie and Bade Adesemewo respectively are blazing the trail in lending and financing. Kiakia provides a smart and convenient way to borrow money and lend out money in real time , She leads Africa helps young African women achieve their dreams while Social Lender is a lending solutions based on social reputation. I actually find the solution provided by Social Lender very innovative and you can check them out. These new tribe exist in every facets of our society and to be honest they all are not getting it right but the passion , the commitment and the risk they take set them apart. Time and space will not permit me to go into details into what the start-ups or organizations started by this new tribe do, you are free to check them out at your convenience.
Healthcare is not left out, in this category we have Temitayo Omotayo of Mobile Dentist, Bayo Ojelabi of Highrise orthopaedic, Temie Tubosun of Life bank ,Dr. Ola Orekunrin of Flying Doctors and my good friend Dr. Femi Olaleye of Optimal Cancer foundation.
The Agriculture sector presents a lot of young, passionate entrepreneurs with great innovations amongst these are Osagie Azeta of Crop Safe Agro Allied, Femi Owolabi of Morakempire , Onyeka Akumah of Farmcrowdy,Mosunmola Umoru of HoneySuckles and Nasir Yammama of Verdent Agritech. In financial technology and payment solutions, an area that I find fascinating , you will find my high school senior Mitchell Elegbe of Interswitch, Yinka Adewale of Kudi.Ai , Iyinoluwa Aboyeji of Flutterwave, Simeon Omonobi of Simplepay and Tayo Oviosu of Paga. It is incredible how these various platforms have transformed the way we make payments online.
Transportation and automobile presents the likes of Deji Oduntan of Gokada , an Uber like platform for okada, Etop ikpe of Cars45, Tobi Ajaji of Jetvan automobiles and Bankole Cardoso of Easy Taxi.
Blazing the trail in online and ecommerce are Fikayo Ogundipe of Tolet.com.ng, Lanre Akinlagun of Drinks.ng, Kola Ajayi of Myshayo.com, Mark Essien of Hotels.ng, Obinna Ekezie of Wakanow ,Raphaeal Afaedor and Gbolahan Fagbure of Supermart.ng .

There are also some online store sensations on social media, they stock products and post on those platforms and sell to customers. They make convenience and prompt delivery their competitive advantage. In this category we have Pinkreach Kiddies an online kids store, Snap Addict an online camera store and Yeti Adeyeye of Yetik collections that stocks perfumes , watches and sunglasses. These online and social media stores have also lead to the introduction of so many logistics start-ups that help in delivering the products.
Revolutionising how entrepreneurs start their business with low cost rented office and virtual office is the Box Office Hub, while Foodie24lagos is revolutionising how we eat by providing a 24hour food delivery platform.
In the oil and gas sector specifically in the LPG downstream value chain a bunch of young lads are changing how we buy cooking gas as well as bringing LPG closer to consumers . There is Okebugwu Ikechukwu of Sargas Energy, James Atiti of Doowe Inc., Emmanuel Uwandu of Kiakia Gas, Kayode Oluwadare of ATOGAS and my own younger brother, Tope Olutuyi of Topgas.
Surprisingly , this new tribe have also ventured into social enterprises, these include Bilikisi Abiola of Wecyclers, Adeneyo Idachaba of Multimeth and Njideka Harry of YTF all providing solutions to different social problems.
There is also Hussain Yakubu of Linkifin, leading a financial technology firm that focuses on supply chain finance while Jobberman .com co-founded by Ayodeji Adewunmi is changing how we recruit and search for jobs.
Supporting start-ups with incubation labs and accelerators are Bosun Tijani’s Cocreation Hub and Wennovation Hub co-founded by Wole Adetayo , Michael Oluwagenmi and Idris Ayo Bello.
In Entertainment and lifestyle we have Jason Njoku of IrokoTV and Damilola Asolo of Dapper Wedding Hub. Kendal Ananyi’s Wifi.com.ng is also changing how people access the internet. Branding and communications present the likes of Ronke Bamisedun of BWL agency while Adebola Williams and Chudi Jideonwo preside over Red Media.
In the civic sector and civic engagement is Seun Onigbinde’s BudgIt, helping Nigerians better understand how government’s budget works.
Interestingly the political space also possess its own share of the new tribe, in this category is my friend Tope Fasua, the presidential candidate of the Abundant Nigeria Renewal Party (ANRP), he is also a co-founder of the party, there’s also Kingsley Moghalu a presidential candidate of the Young Progressive Party(YPP) as well as Omoyele Sowere of the African Action Congress Party (AAC) and a host of others. It is worthy to note that while the entrance of this new tribe into the political space may not have any effect on the 2019 presidential elections what they have started today will surely change the course of our politics in the coming years.
The list of this new tribe is not exclusive to those outlined above, there are others making waves, solving problems and creating innovative firms that are changing how we do things who are not mentioned here.
This piece doesn’t in anyway try to advertise or promote the aforementioned businesses but to encourage the teeming youths in the country who think all hope is lost. To be frank, the dearth of infrastructure, lack of security and poor enabling environment can be so discouraging but the fact remains that challenges always present opportunities.
While we give kudos and keep hope alive with the rising of this new tribe it is important to mention that we need more members into this new tribe. We need new tribe in our Police Force who will begin to truly protect its people, shun corruption  and treat its people with dignity. We need new tribe in the armed forces who will start treating Nigerians with respect.

We need new tribe in politics and leadership who will start to understand that their role in governance is to truly and genuinely serve the people. The civil service is also not left out, we need new tribe there, who will start to understand how truly important an effective and efficient civil service means to the society. We need new tribe amongst our clerics both Muslims and Christians who will stand up and speak truth to power always, regardless of where they come from or their religious affiliation.
Folks, every facet of the society is begging for the rise of a new tribe. In 2019 become one. Start something. Build something. Solve a problem. Do business with integrity. The old way can no longer take us to where we need to be. We need problem solvers. The society is full of so many society ills begging for solutions.
May the new tribe keep rising.

@jideolutuyi

Posted in Africa, Agriculture, E-Commerce, Entrepreneurship, Finance, Fintech, Gas, Governance, Innovation, Inspirational, Lagos, Liquefied Petroleum Gas, LPG, Nigeria, Payment Solutions, Personal Development, Politics-, Social Media | Tagged , , , , , , , , , , , , , | Leave a comment

Want To Make Money In Africa? Start by Solving Any of These 5 Serious Challenges

When most people look at Africa, there are two very strong but opposite images that emerge:

Some see a continent where there are too many challenges and others see a land of vast opportunities. The interesting thing is, Africa’s biggest business opportunities look like scary difficulties. That’s why most people miss them.

This article looks at five opportunities entrepreneurs can explore to create significant impact on the continent.

1) Agribusiness
The United Nations estimates that Africa’s agribusiness sector could be worth $1 trillion by 2030, and there are several lucrative opportunities for entrepreneurs who start businesses, no matter how small, that help to solve the food shortage problem in Africa.

The opportunities in Africa’s agribusiness space is massive. The continent has 60 percent of the world’s uncultivated arable land, a conducive climate for agriculture, and an overwhelmingly young population that guarantees a vast labour pool. These agribusiness opportunities include vegetable farming, cassava farming, livestock farming (fish, chicken, pigs, ostrich, snails).

2) Jobs
On the surface, it looks like there aren’t enough jobs in Africa. When you look closely, you find there’s a structural gap in Africa’s job market: employers of labour are having a hard time finding suitably qualified candidates to fill vacancies.

What if there was a quicker, more effective and affordable way to match open job positions with the best candidates?

Several smart African entrepreneurs are already rising to the challenge.

In Nigeria, Jobberman.com, which was started by three university undergrads in 2009, has become Nigeria’s Number One job search and recruitment portal. To date, it has helped to match more than 40,000 people with jobs.

3) Health and Well-being
The size of the continent’s pharmaceutical market is expected to reach $65 billion by the year 2020.

To meet the demand for health services, the continent needs a consistent supply of medicines and doctors. However, at the moment, most medicines consumed in Africa are produced overseas. What Africa needs is a strong base of drug manufacturing companies that are based in Africa, and entrepreneurs like Uganda’s Emmanuel Katongole are already taking advantage of this huge opportunity.

4) Education
Inadequate access to quality education at all levels is a nagging problem across the continent. With many public schools falling below the mark, there is an opportunity for entrepreneurs to provide affordable quality education.

Some entrepreneurs on the continent are already taking a swing at the problem. Omega Schools, based in Ghana, is a chain of low-cost private schools that offers basic primary education to children from poor families at an incredibly low and affordable fee (less than $1 a day per student). Bridge International Schools in Kenya uses a similar low-cost model to provide affordable education to thousands of children in East Africa for less than $5 per month per student.

5) Transportation
As Africa’s population and economic strength grows and the continent becomes more urbanised, the demand for transportation will grow exponentially, especially in towns and cities. And governments alone cannot meet this demand.

Yes, entrepreneurs cannot build roads and public transport systems, but they can create solutions that can help people get to their destinations quickly and more efficiently.

City transport services like Nigeria’s OgaTaxi, a social ride-pooling app, have joined global players such as Uber and Taxify which have entered the African transport market to crack the continent’s transport problems and harvest the opportunities in this emerging market.

Do you still see problems instead of opportunities?
It’s the same with everything in life. This article is intended to open your eyes to the possibilities around you.

Have you noticed a serious problem or suffering in your environment? What will you do about it?

 

British Council Enterprise

Posted in Africa, Agriculture, Entrepreneurship, Fintech, Nigeria | Tagged , , , , , , | Leave a comment

11 Business Opportunities in Africa That Could Make More Millionaires in 2018

The term “millionaire” is taking on a new meaning in Africa.

It’s no longer just about the size of your bank account; any shady politician, corrupt bureaucrat, or unscrupulous businessman on the continent can easily claim to be a millionaire.

But Africa’s new and emerging generation of millionaires are not just excited about money. They’re also passionate about impact; they want to create value that touches and improves people’s lives.

It’s called impact entrepreneurship. It’s the new way of making money and doing good, at the same time.

It’s a model that is proving that profit and ambition do not always have to come at another’s expense.

Remember, the bulk of Africa’s “old school” millionaires made their money from resource extraction and sheer opportunism. Often, their wealth had to come at the expense of the common good and the natural environment.

But Africa’s new wave of entrepreneurs is showing no keen interest in the continent’s finite resources; its timber, gold, copper, oil and diamonds. Rather, they’re far more interested in a much more valuable resource: problems.

Africa is a continent overwhelmed by serious problems, from unemployment and illiteracy, to hunger and inadequate electricity.

As you’re about to find out in this article, this new generation of millionaires is focusing on the continent’s problems because solving these problems will unlock massive streams of wealth, jobs and prosperity for the continent.

Most of these problems are tough, widespread and decades old. But while they are scary and frustrating to most people, entrepreneurs see them for the breathtaking opportunities they really are.

This article profiles 11 of the most promising business opportunities in Africa that will make more millionaires in 2018.

Let’s meet them…

1) Crowdfarming

Across the world, agriculture is big business and most farmers are financially well-off. But not yet in Africa.

According to the United Nations, Africa’s agribusiness industry is expected to be worth $1 trillion by 2030.

And it makes perfect sense. The continent has a huge domestic market, owns 60 percent of the world’s unused arable land, and has abundant labour resources, and a favourable climate in most parts.

Still, Africa spends over $30 billion on food imports annually.

A big part of the problem is, most of Africa’s food is still produced by smallholder farmers in rural areas. They are largely poor people who use crude farming methods, and have very limited access to capital.

But what if all of us in the cities pool funds together, invest in these rural farmers, and take a share of the profits at harvest time?

Wouldn’t that significantly boost food production, cut down the continent’s food import bill, and make more money for both the investors and the farmers?

This business model is called “crowdfarming”, and it’s a trend that could totally transform the face of agribusiness in Africa.

In Nigeria, two crowdfarming platforms — FarmCrowdy and ThriveAgric — enable working-class Nigerians to crowd-sponsor farming projects and earn a share in the returns at harvest time. Last year, FarmCrowdy raised $1 million from US investors to expand its operations.

In Somalia, Ari.Farm is an online marketplace and crowdfarming platform that enables investors from across the world to play in the Somali livestock market.

In South Africa, Livestock Wealth, helps investors to own pregnant cows, and track them through a mobile app. Once the calf reaches seven months, it is sold to a feedlot or slaughterhouse and the return for the beef goes to the investors.

As Africa’s population doubles over the next 30 years, the business opportunities in Africa ‘s agribusiness space are very likely to produce a league of millionaires who made their money while pulling thousands of farmers out of poverty.

2) Waste

For decades, waste has been a huge and nagging problem in Africa’s urban areas.

Currently, most of the waste generated in Africa is either burned, buried or thrown away. As a result, more than 80 percent of solid waste produced on the continent ends up in landfills or gets dumped in water bodies.

And as the continent’s population continues to rise, the waste problem will only get worse.

So, what do we do with all the growing heaps of filthy waste before we find ourselves in the middle of the worst environmental crisis the world has ever known?

In South Africa, the solution appears to be to convert waste into animal feed.

AgriProtein is a business that grows maggots from waste collected from markets, households and businesses. The maggots are processed into a highly nutritious protein supplement that substitutes fish meal in animal feed. The company has raised up to $30 million in funding, making it one of the best-funded insect farming businesses to date.

In Ethiopia, the solution is to convert waste into electricity.

The Repi waste recycling factory in Addis Ababa will produce 50 megawatts of electricity from waste collected from across the city. The facility is expected to supply 3 million homes with electricity, and avoid the release of millions of tons of CO2 to the atmosphere.

Across the continent, entrepreneurs are hard at work trying to squeeze out value from waste, and in the process, they’re creating an industry that could provide both low and high-level jobs for thousands of people.

From the trend of waste recycling and transformation initiatives I’ve observed, there’s only one place this is heading to.

I predict that over the next decade, waste will become a valuable commodity that households and businesses can sell for money. And the waste is likely to return to the food chain, to the electricity grid, or in some other recycled form.

3) Drones

In Africa, it appears there’s much more to drones than chasing terrorists and taking breathtaking altitude photographs.

Drones are finding some of their most versatile and impactful roles in Africa and are helping with everything from logistics and farmland management, to humanitarian deliveries and conservation support.

In Rwanda, Zipline is a drone delivery startup that delivers blood and medical supplies to clinics in the country. After successful pilot operations, it is now expanding into neighbouring Tanzania.

Aerobotics is a South African business that uses its drones to provide bird’s eye surveillance for farmers that provides critical information that can boost crop yields by up to 10 percent. It now operates in 11 countries, including the US, Russia and the UK.

In other parts of the continent, drones are playing more roles in humanitarian efforts to deliver aid to remote and conflict-ridden areas. They are also being used to monitor deforestation and illegal mining activities as part of efforts to conserve the continent’s forests and wildlife.

As you know the drone industry is relatively new and still emerging. At this rate, there is still a wide range of possibilities for drone technology in Africa.

And those entrepreneurs who can adapt drones to solving serious problems on the continent will open new and uncharted territory that could unlock wealth, jobs and more business opportunities in Africa.

4) Affordable housing

Africa is experiencing the world’s highest rate of rural-to-urban migration. And by 2030, it is projected that up to 50 percent of the continent’s population could be living in towns and cities.

Urbanisation is great, but where will all these people live? And even if the governments tried, they cannot build homes fast enough to meet the teeming demand for accommodation.

In Nigeria, Africa’s most populous country, the housing deficit is estimated at 20 million homes. In South Africa, the deficit stands at 2.3 million homes.

Africa’s housing crisis opens a lot of interesting opportunities for several industries; from cement production and furniture making, to building contractors and mortgages.

It’s no surprise Africa’s richest man, Aliko Dangote, has expanded his presence in cement production across several countries on the continent. His interests in cement now make up a significant portion of his net worth.

But beyond conventional housing, there is an interesting trend of homes being built from cheap and durable alternatives, like shipping containers.

In Cape Town (South Africa), building contractors like Berman-Kalil are offering sustainable and affordable housing options by converting decommissioned shipping containers into low-cost homes.

In Kenya, entrepreneurs like Denise Majani are also converting shipping containers into amazingly creative residential and office accommodation at half the price of contemporary housing.

These alternative options are significantly cutting down the cost of building homes, making them affordable to a larger segment of the population.

So far, most of Africa’s housing developments have focused on the premium and elite segment of the market. While the large margins from this segment have been very lucrative for investors, the biggest opportunities will emerge from providing housing at scale, and at affordable prices.

5) Automobiles

As more Africans migrate to the cities, the big urbanization wave has caused a surge in demand for transportation services.

Currently, there are just about 44 vehicles per 1,000 people in Africa. This is significantly below the global average of 180, and lower than the motorization rates of other developing regions like Latin America, Oceania and the Middle East.

Estimates suggest that vehicle sales on the continent could reach 10 million units per annum within the next 15 years.

It’s no surprise the big name automobile brands like Toyota, Volkswagen and Mercedes are already digging into the African market by setting up assembly plants on the continent.

But what is more interesting is the emergence of “Made in Africa” automobiles.

The Mobius II is a luxury SUV built in Kenya and is set to hit the market in 2018. It is being advertised as “an affordable, no thrills, but robust and classy SUV that’s built for African roads.”

In Nigeria, Innoson Motors — a homegrown car maker – has released a range of private cars.

And in Uganda, Kiira Motors is developing Africa’s first hybrid cars. It has already launched Africa’s first solar-powered bus.

There are also promising indigenous automobile makers in Ghana, Tunisia and Sudan.

Currently, just about 50 percent of Africa’s roads are paved. As the continent’s development drive continues, this percentage will rise and so will the demand for automobiles and transportation services.

This rise in demand will create several interesting business opportunities in Africa and open supporting industries including dealerships, spare parts, auto-service shops, auto financing, and even ridesharing services.

6) Local products for export

Africa spends billions of dollars on imports every year. This includes both food and non-food items.

But beyond the traditional commodities – crude oil, minerals, cocoa, coffee, timber etc. — what else of value can Africa actually export?

It happens there are a lot of local products on the continent that have the potential to become global brands. The problem is, we often overlook or look down on them.

But a few interesting entrepreneurs are now turning local African products into global brands and best-sellers.

Take Nilotica for example, a rare type of Shea butter that is used in luxury beauty products sold around the world. The trees that produce this butter only grow at the source of the Nile River; in Northern Uganda, South Sudan and Ethiopia.

By working with local women in the region to process the butter, Leila Janah – an American entrepreneur — has built LXMI, a luxury beauty brand with a range of skincare products that sell in over 300 beauty stores across the world.

Another example is fonio, a forgotten cereal that has been grown in Africa for more than 5,000 years.

Largely regarded as a “miracle” grain, fonio is gluten-free and rich in several nutrients that are deficient in most other major grains, such as rice, wheat and barley.

By processing fonio into products like crackers, cereals and pasta, one Senegalese entrepreneur and ex-chef — Pierre Thiam – has put this ancient food on shelves in New York, with plans to roll out to other stores across the USA.

Nilotica and fonio are only just two examples of several local African products that have global potential. And in 2018, more smart entrepreneurs will carve niches for themselves by exploring these products and transforming them into international brands.

Will you be one of them?

7) Startup funding

The buzz of entrepreneurship activity on the African continent has caught the attention of a growing number of investors, both within and outside the continent.

The potential returns on investment in Africa is currently one of the highest in the world, and has become too obvious for investors to ignore.

Since 2012, the amount of seed funding and venture capital flowing to Africa has grown 1,400 percent. And the trend continues to look up.

In 2017 alone, African tech startups received $560 million in funding from local and international investors. This amount represents a 53 percent jump from the $366 million raised one year earlier, in 2016.

And the biggest deal of the year was a $69 million investment in TakeALot, a South African e-Commerce startup.

Also, Silicon Valley accelerators such as 500 Startups and Y Combinator have increased the number of African startups that are admitted into, and receive funding, through their programmes.

Currently, South Africa, Kenya and Nigeria are in the spotlight and take the lion share (about 75 percent) of the investment inflows.

It’s important to note that every year, the size of venture capital investments that take place around the world exceeds $100 billion. Currently, Africa gets less than 1 percent of this global deal flow.

It’s still very early days in Africa’s startup funding space, and 2018 will certainly attract more investors looking to explore emerging business opportunities in Africa, and take their positions in lucrative deals.

8) Fintech

Africa’s underdeveloped financial services industry presents very tough, important and widespread problems that need to be solved.

After more than 50 years of banking on the continent, just about 34 percent of adults in sub-Saharan Africa have bank accounts or access to formal financial services.

It is clear the traditional model of banking is too slow, inflexible and incapable of spreading financial access at the pace the continent requires.

But with the spread of mobile phones and the Internet across Africa, the continent’s entrepreneurs are leveraging technology to deepen financial access in ways the banks never have.

Last year, Flutterwave, a Nigerian fintech startup, raised $10 million in funding from a group of investors led by Greyloft, a US-based venture capital firm.

To date, it’s one of the highest Series A round investment in an African startup.

And there are a wide range of opportunities that are opening up in Africa’s financial services space.

They include bill payments, bulk disbursement, international remittances, merchant payments, mobile airtime top up, mobile banking, person-to-person transfers, peer-to-peer lending, micro insurance, and several other interesting opportunities.

In the area of overseas remittances for example, Africa loses more than $1.4 billion annually in charges alone. Western Union and MoneyGram have been longtime monopolies in the remittances segment, and are clearly ripe for disruption.

Opening up, growing and disrupting Africa’s financial services market will certainly transform millions of lives on the continent and create a league of millionaires in the process.

Fintech will surely remain one of the top business opportunities in Africa to watch in 2018.

9) Low-cost private schools

According to this report titled: “The Business of Education in Africa”, it is estimated that 1 in 4 African students – a total of 66 million – will be enrolled in private schools by the year 2021.

Rapid population growth, poor funding, corruption and neglect have caused a serious deterioration in the quality of education in public schools on the continent.

As a result, more African parents are looking to private schools to ensure their kids get a good education. And the demand for this alternative is skyrocketing.

For example, in Nigeria, the number of low-cost private schools in Lagos, its commercial capital, is estimated to be as high as 18,000. By comparison, in 2010-11 the city had just 1,600 government schools.

And this trend of low-cost private education is leading entrepreneurs to come up with several interesting models.

In Tanzania, the Silverleaf Academy is a chain of low-cost private primary schools that charge a daily school fee of $1.50. The school uses a technology-based approach and offers a curriculum taught by internally-trained teachers.

In Nigeria, the Lekki Peninsula Affordable Schools is a stand-alone low-cost school that charges an average annual fee of $125. The school has received up to $75,000 in funding from Village Capital and Pearson Affordable Learning.

As more players enter the low-cost private education space on the continent, I suspect the fierce competition will improve the quality of education, drive down school fees, and afford many children the chance of a decent education.

Rather than set up exclusive private schools for the elite, who says entrepreneurs can’t make good returns and find tons of fulfillment in educating children en masse?

10) Urban logistics

The future of Africa is in the cities. And by 2030, up to half of the continent’s 1.4 billion people will be located in the cities.

Currently, about 60 African cities have a population of over 1 million people. At the top of the pack are cities like Lagos (21 million), Kinshasa (10 million), and Cairo (9.5 million).

And one of the biggest problems that appears to be worsening with the growth of Africa’s urban populations is congestion. Most cities on the continent do not yet have well-diversified transport systems, so getting around town can be a very frustrating endeavour.

It’s a logistical nightmare that worries both consumers and businesses.

Thankfully, some African entrepreneurs are already hacking this problem.

In Kenya, Twiga Foods uses technology to pool the orders of several urban retailers, saving them a trip to the market by delivering to their doorstep. It is now the largest distributor of a number of basic food staples in Kenya, and the startup raised $10.3 million last year.

In Nigeria, MAX is a fast-growing startup that provides last-mile delivery services. Last year, it launched an on-demand motorcycle courier service for clients who have critical deliveries that need to beat the notorious congestion on Lagos roads.

As we go into the future, more entrepreneurs will figure out ways to outsmart the complex problems and frustrating challenges of logistics in urban areas.

In 2018, urban logistics will likely remain one of the most promising emerging business opportunities in Africa.

11) Healthcare services

With poorly-funded public hospitals, and a significant brain drain of African doctors to countries outside the continent, waiting for the government to fix the continent’s healthcare sector will not work.

Also, waiting for international “donor” funds (which are channeled through governments) will not work too. We have been doing the same thing for decades and very little has changed.

With 25 percent of the global disease burden, a rapidly growing population, and a rising middle class, Africa’s healthcare market presents a huge opportunity.

According to the IFC, Africa’s $21 billion healthcare market could double in size in just 10 years.

Currently, a growing number of Africans are seeking medical help outside the continent, in places like India, the Middle East and Europe. This growth in outbound medical tourism costs Africans millions of dollars every year.

To arrest this ugly situation before it gets much worse, Africa needs a private-sector led transformation of its healthcare industry that requires both the innovation of local entrepreneurs and investment from local and international investors.

Gladly, this transformation is already happening.

In East Africa, a growing number of Indian hospital groups, like Narayana and Gurgaon, are setting up hospital facilities to tap into the continent’s healthcare market.

In Kenya, Dr. Maxwell Okoth, a young medical doctor and entrepreneur, started a chain of low-cost hospitals with only $3,000. He is now setting up a 100-bed multi-specialty hospital which will have a cancer center, radiology center, pediatric unit, and several other specialties.

In Nigeria, Lifebank – a startup that develops smart ways to deliver critical blood supplies to hospitals in busy cities – raised $0.2 million to support and expand its operations.

Across the continent, more entrepreneurs are exploring creative alternatives to solving Africa’s significant healthcare problems.

There is no doubt their efforts will not only transform the continent’s healthcare industry, but will unlock millions of job opportunities in the process.

2018 will continue the reign of business opportunities in Africa
Millionaires in Africa should no longer be determined and celebrated by the size of their bank accounts, but by the size and scale of the problems they’re solving on the continent.

Africa is a continent that significantly rewards problem-solvers, and provides a rare opportunity in today’s world to make a lot of money, while doing a lot of good at the same time.

It is now abundantly clear that entrepreneurship holds the keys to Africa’s transformation; not global pity, and certainly not foreign aid.

The winners in 2018 will be those entrepreneurs and investors who apply their creativity and determination to solving serious problems on the continent.

By John-Paul  Iwuoha

Posted in Africa, Entrepreneurship, Nigeria | Tagged , , , , , | Leave a comment

A case for national LPG and clean cooking strategy in Nigeria

In 2013, my brother ventured into sales and marketing of Liquefied Petroleum Gas (LPG), colloquially known as cooking gas in Nigeria. I visited his plant and a couple of months later, he persuaded me to follow suit. I carried out an independent feasibility study and in 2016, I ventured into the business. I have since been exposed to the alarming energy poverty in Nigeria and I think something drastic needs to be done to address the acute household energy challenges many Nigerians are facing.

The International Energy Agency and other organisations describe energy poverty as lack of access to electricity and clean cooking and heating systems. According to the World Bank, around 1.1 billion people don’t have access to electricity, and almost three billion still cook with polluting fuels like kerosene, wood, charcoal, and dung.

Available data shows that a large percentage of people in Nigeria and other Sub-Saharan African (SSA) countries still rely on these polluting fuels for cooking. Kirk Smith, Professor of Global Environmental Health at the University of California at Berkeley, said “A typical wood fire is about 400 cigarettes an hour worth of smoke.” Cooking smoke causes respiratory, cardiovascular, and other illnesses that have been found to be responsible for nearly 500,000 premature and preventable deaths annually in SSA.

Studies have also shown that aside from the adverse effects of dirty energy on human health and the environment, energy poverty also slows socio-economic development. To address these energy challenges and also provide opportunities for transforming the cooking sector, the World Bank launched the Africa Clean Cooking Energy Solutions (ACCES) initiative along with 15 African countries.

Launched in 2012, the mission of ACCES is to promote market-based clean cooking in the SSA region. By increasing access to modern technologies and cleaner fuels, the initiative seeks to alleviate the adverse health, environment, and socio-economic impacts of traditional cooking practices in SSA.

The World Bank is also working in partnership with Global Alliance for Clean Cookstoves to provide clean cooking solutions to 100 million households that are still using inefficient cookstoves and solid fuels for cooking. The partnership, announced at the Cookstoves Future Summit in New York in 2014, is a five-year efficient clean cooking and heating partnership. The partnership was forged to initially support clean cooking programmes in 12 countries, including Nigeria.

Energy poverty in Nigeria creates a feedback loop that contributes to the perpetuation of poverty, which has become a serious concern particularly since Nigeria was stated to have overcome India as the world’s poverty capital. This means that the country can begin to alleviate poverty by leveraging market-based clean cooking solutions, which are affordable and sustainable.

In this regard, Nigeria needs a national strategy that will entail promoting awareness to households regarding the adverse consequences of cooking smoke; aiding poor citizens to start using cleaner, safer cooking options, including LPG, natural gas, biogas, or efficient cookstoves. Nigeria is a net exporter of LPG; therefore, availability should not be an issue. Barely 15% of its production are consumed locally with the rest exported.

In 2015, total consumption of LPG in Nigeria was a paltry 400,000 metric tonnes. This translates to per capita consumption of less than 2.5kg, compared to per capita consumption in South Africa (7.28Kg), Ghana (9.45Kg) and Morocco (66.27Kg).

India’s LPG and clean cooking reform provides a case to study. India started its LPG reform years ago but not without challenges. The country created incentives to discourage diversions of subsidized cooking gas to the black market. In 2012, the government of India embarked on a Direct Benefit Transfer Scheme for LPG, also called the Pratyaksha Hastaantarit Laabh (PAHAL) programme. The programme is regarded as one of the largest cash transfer programmes in the world. Beneficiaries have unique identification numbers that allow for monitoring and effective payment. There is also a cap of six subsidised LPG cylinders per household per financial year.

A similar scheme can be adopted in Nigeria to ensure that people at the bottom of the financial ladder can receive adequate support to enable them switch to efficient cookstoves or LPG. With Nigeria’s enormous natural gas reserves, ranked 9th in the world, LPG and natural gas in general have the potential to revolutionise not only our cooking but every facet of the economy – from household energy to transportation and commerce.

In 2016, at the Nigeria LPG Association conference, Vice President Yemi Osinbajo, reeled out the administration’s gas policy. According to him, the gas policy aims at stimulating a gas-based industrialisation. While this is a noble goal, let there be a transition to clean cooking for millions of Nigerians before we can move to industrialisation. The low LPG penetration needs to be addressed and very quickly.

To enhance the accessibility, affordability and acceptability of LPG, there needs to be a regulatory framework that supports the usage of LPG by all. This would entail having a more favourable LPG pricing policy.

Price subsidies should be introduced on LPG, while the subsidy for kerosene should be phased out. One way to discourage the use of kerosene is to phase out the subsidy on the fuel. The economy as well as people’s health would be more positively affected by a subsidy on LPG than the existing one on kerosene. The LPG subsidy can also be less burdensome on the government than the kerosene subsidy if it targets only low-income households. In Ghana, Jordan, Mexico, Morocco, and Thailand, the governments keep the retail prices of LPG artificially low, while in Brazil and Dominican Republic, LPG vouchers were introduced for poor families. These are two different models for transmitting LPG subsidies.

Despite Nigeria’s gas policy, it is worrisome that LPG is still on the list of VATable items. Most LPG equipment are imported. Therefore, a policy to promote the use of LPG should exclude taxes and tariffs on the equipment. The government should also provide support for low-income households to be able to acquire clean cookstoves, as it is done by the Ministry of Environment in Ethiopia.

 

At the NLPGA conference mentioned earlier, the vice president also announced the existence of an inter-ministerial committee on the expansion of the domestic market for LPG. He is the chairman of the committee. But till date, I am unware of any policy statement or pronouncements by the committee. Part of the committee’s terms of reference is the transition of four million households to LPG within two years.

Goal 7 of the United Nations Sustainable Development Goals (SDGs) calls for universal energy access, improvement in energy efficiency, and increase in the use of renewable energy by 2030. For this to be achieved in Nigeria, the government should show more commitment by matching words with action and putting together an aggressive LPG and clean cooking strategy.

 

@jideolutuyi

Posted in Entrepreneurship, Gas, Lagos, Leadership, Liquefied Petroleum Gas, LPG | Tagged , , | Leave a comment

Social investment has higher returns than infrastructure

In March 2018, principal founder of Microsoft and co-chair of the Bill and Melinda Gates Foundation, Bill Gates, was in Nigeria. He came into the country quietly but he did not leave without stirring up a hornet’s nest. While speaking at the Expanded National Economic Council meeting in Abuja on March 22, Gates had some home truths for the ruling class. Armed with charts – including a modelling of Nigeria’s economic growth since 2000, prepared by a research institute at University of Washington – Gates did not mince words in his presentation at the meeting.

Gates admonished the council, saying the most important choice the government needed to make now was to maximize Nigeria’s greatest resource, which is the people. In his words, “If you invest in their health, education, and opportunities – the “human capital” we are talking about today – then they will lay the foundation for sustained prosperity. If you don’t, however, then it is very important to recognize that there will be a sharp limit on how much the country can grow.”

With references to available data, he posited that much of Nigeria still looks like a low-income country. According to him, “In upper middle-income countries, the average life expectancy is 75 years. In lower middle-income countries, it’s 68. In low-income countries, it’s 62. In Nigeria, it is lower still: just 53 years.”

But the comment that generated so much uproar was the Microsoft billionaire’s damning verdict on the administration’s Economic Recovery and Growth Plan (ERGP). In his opinion, the economic plan prioritizes investment in physical capital over human capital. Whether the government will heed Gates’ advice remains to be seen.

Be that as it may, it should be noted that what Gates said is not news in Nigeria. It is something we are confronted with on a daily basis at different levels. It is a reality that is captured and presented to us in the Human Development Index (HDI) report published yearly by the United Nations Development Programme (UNDP). Inclusive of the two areas Gates hammered on, the HDI measures the average achievement in a country in health, education and income. The index consists of composite statistics used to rank countries by levels of human development.

The search for an alternative to the conventional assessment of development based on metrics such as Gross Domestic Product (GDP) led to the introduction of HDI. It was first published in 1990, under the supervision of Mahbub ul Haq, a former finance Minister of Pakistan, with technical assistance from the Nobel Laureate economist, Amartya Sen. The HDI has, since inception, been measuring human development under three basic dimensions, namely: a long and healthy life, knowledge, and a decent standard of living.

However, since 2010, the index has been using four components to measure those three dimensions. The HDI components are: life expectancy at birth (used to measure attainment of long and healthy life); mean years of schooling received by people aged 25 and above (measuring ability to acquire knowledge); expected years of schooling for children (measuring ability to acquire knowledge); and Gross National Income (GNI) per capita using purchasing power parity (PPP) (measuring achievements of decent living standards). From the foregoing, one could see that the knowledge dimension has two components while the other dimensions have one each.

Responding to Bill Gates’s observations, the Vice President, Professor Yemi Osinbajo, reeled out the government’s efforts with regard to investment in the Nigerian people. He mentioned the Social Investment Programme (SIP) launched in 2016. The SIP comprises of a scheme to provide jobs for unemployed graduates; a school feeding programme; a micro-credit scheme for small businesses; and a cash-transfer scheme for our poorest and most vulnerable. The SIP is a key component of the ERGP.

Although there have been criticisms surrounding the school feeding programme, there is evidence that it has achieved some success. Notably, it has reportedly increased primary school enrollment by 30%. It currently caters for about seven million children in 22 states across the country. The jobs scheme has provided 200,000 jobs to previously unemployed graduates. According to the government, about 300,000 will soon be employed under the N-Power programme. Meanwhile, about 300,000 households have been recipients of the conditional cash transfer initiative.

Looking at these numbers, one doesn’t need a special analytical skill to conclude that the achievement of the SIP thus far is unremarkable. Approximately 83.5 million Nigerians are living in extreme poverty, as the socio-economic conditions of the country deteriorate. Over 16 million people are unemployed. Moreover, the government’s spending does not focus on the actual components of human development.

The 2016 HDI report ranks Nigeria in the 152nd position out of 188 countries. The country, which simply retained its ranking in the 2015 report, was closely followed by Cameroon in the 153rd position and Zimbabwe in the 154th position.

What the Nigerian government is facing is not even a chicken-and-egg problem. The evidence across the development world suggests that investment in human capital and human development must take place before investment in physical capital can boost productivity. But the Nigerian ruling class seems to be unaware of this basic fact as seen in the misallocation of huge proportions of national budgets to infrastructure.

For Nigeria to transit from low human development to medium or high human development, the federal and state governments must begin to increase spending in quality health care, as well as accessible, affordable and quality education. The government must also provide a conducive environment for businesses to thrive and income levels to increase. There must be a credible and strategic development plan geared towards poverty alleviation and improvement in the standard of living of the people.

To improve the country’s standing in terms of expected years of schooling, adults who missed the opportunity to have an education while they were young should be encouraged to go to school or participate in a semi-formal education programme that is no less engaging. Average number of years of education in Nigeria – currently six, compared to 13.3 years in Britain – can be enhanced by making higher education programmes more affordable and accessible. For instance, online learning and after-work education programmes should be promoted.

In a PWC report, titled: “The Future of Nigeria: Three critical levers for improving HDI,” it was argued that the national polices should be guided not just by improvements in GDP but also a broader measure of development such as the HDI. The report lists some areas in which Nigeria must improve to move up on the HDI rankings. These areas include the ease of doing business; labour productivity (from the current $3.61/hour to about $12.05/hour in 2030); and anticorruption.

China is the only country, since 1990, to emerge from being in the low human development segment of the HDI to high human development. It ranked 90 out of 188 countries in the 2016 HDI report, with a GNI per capita of $13,345 and life expectancy of 76 years. Nigeria’s GNI per capita is less than half of China’s (at $5,443) and life expectancy in Africa’s largest economy is 53.1 years. In India, there have been arguments that the rise in incomes has not translated into higher quality of life for many Indian citizens. The country ranks 131 on the 2016 HDI with life expectancy of 68.3 years, GNI per capita of $5,663 and 6.3 average schooling years.

From the foregoing, we can deduce that high GDP growth rates or economic development (rising income levels) alone does not always translate to high human development. It is important that policymakers focus on social investment policies that improve employment, education and healthcare.

The primary objective of government should be to improve the quality of life of its people by putting in place economic and social programmes that promote investment in people. Outcomes of such policies would be measurable not only in terms of how many people are lifted above the poverty line but also have sustainable means of livelihoods.

The HDI has its limitations. Some critics have wondered why it doesn’t capture many aspects of the human life such as social and political freedom, protection against violence, insecurity and discrimination, among others. Nevertheless, the index is still considered an important step in the domain of measuring human development.

Bill Gates did not only challenge the economic policy of the current administration; he also provided possible solutions backed up with analysis of historical data. Perhaps the Microsoft founder has earned the right to make his policy recommendation, having committed about $1.6 billion in Nigeria mostly in the fight against deadly diseases. The ball is now in the government’s court.

@jideolutuyi

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June 12- Let the healings begin.

Buhari’s declaration on June 12 has huge significance for Nigeria’s democracy. Many have described it as a political masterstroke and they are right. It was a strategic political move. Those who sold the idea to the President should be commended and the President should also be commended for heeding to their advice.

Aside the political aspect, it also heals many wounds. This is one of the major righting of an old wrong done by government in the country and it is not only significant, it is phenomenal. Last year, this government also announced that pension will now be paid to those who were part of Biafra police.

For those who don’t know, June 12 was a major wound especially to those from the South Western part of Nigeria and for those who don’t know it was as a result of June 12 that OBJ was conscripted to the presidential race in 1999 and his victory ensured just to placate the southwest. To those who argue that Buhari was part of a government that incarcerated Abiola, that’s correct but you see one thing about stuffs like this is that it doesn’t matter who does it, but knowing that it’s the right thing to do is what matters. If IBB had done this himself it would still have been huge.

Some have argued that this was done to garner votes from the south west. That remains to be seen but it will sure have some effect on some demographics especially to those between the ages of 48 and 75years old. My mum called me yesterday and asked,”sho gbo nkan ti Buhari se” (Did you hear what Buhari did? She went on and on and could noticed she was elated about it. And just so we are clear, this is very different from the MAULAG/UNILAG debacle.

Saying sorry and righting wrongs of the past has always been the hardest for any government.

Righting the wrongs of the past by government is not new, it is now common in advanced societies. It heals old wounds and binds the society together. In 1988 then PM of Canada Brian Mulroney apologized in the House of Commons for the internment of Japanese- Canadian during the Second World War.

In 2008, Prime Minister Harper apologized for the head tax imposed on Chinese immigrants between 1885 and 1923 and in 2017. Current Canadian PM Justin Trudeau apologized for the abuse and cultural loses at residential schools in Newfoundland and Labrador.

Ten years ago In Australia, then Prime Minister Kevin Rudd apologized to the indigenous people of Australia for the laws and policies of successive governments that inflicted profound grief, suffering and loss to them. Ian Hamm, an aboriginal welcomed the apologies and said he’s been waiting a lifetime to hear it.

For the first time in History, the British government in 2013, formally apologized for the colonial crimes committed by the British Imperial officer’s during the 1950s “Kenya Emergency”. Compensation running into 19.9million pounds (about $31million) was also announced to benefit about 5,228 Kenyan claimants.

In 2010, the British government also apologized to children from London slums sent to work in colonies from later 1800s to 1939. Seven Canadians travelled to London just to hear that apology in the British parliament.

What President Buhari has done is huge, yes it has political undertone for now but it will open doors for other wrongs that needs to be right by the Nigerian government. Some of which include:

The Biafra war

The Odi Massacre

The Zaki Ibiam Massacre

The maltreatment and eventual death of Funmilayo Ransome- Kuti

The killing of Nigerians daily by the Police and Army

The extortion of Nigerians daily by SARS and the Nigerian Police

The killing of Ken Saro-Wiwa and others

The degradation, underdevelopment and pollution of the Niger Delta and many more

These healings will go a long way. Buhari has open the

floodgate, let the healings begin.

@jideolutuyi

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