Case Study

David & Goliath: Creating A Level Playing Field For SMEs

“How can I compete to work with a multi-national if I don’t even hear what jobs or tenders are available? It feels like I am playing a game but I don’t know the rules.”

CEO of industrial plant hire firm, Accra

David & Goliath: Creating a level playing field for Ghanaian SMEs (David & Goliath) seeks to gain a real-time insight into the difficulties faced by SME business leaders in Ghana, as told to us in their own words.

The research, undertaken between November 2013 and February 2014, is comprised of interviews with 213 SME leaders/founders in Ghana’s key commercial locations of Accra, Kumasi, Takoradi and Tema.

The research uncovers a widening communication gap. International players are failing to take the time or make the effort to open up their tender processes. This leads to inertia, leaving contracts in the hands of the same old group of suppliers who understand the unwritten rules of how to work with MNCs. Meanwhile, ambitious SMEs with untapped potential lie hidden from sight by inflexible processes and unrealistic expectations.

This information gap begins right at the beginning of the process: SMEs admitted that they regularly fail to hear about or receive tender or RFP documents from international companies working in Ghana. This excludes them from transacting before they have even been given a chance.

MNCs confirm that they would like to work with a broad-based community of SMEs in Ghana and support competitive tendering yet can find it hard to properly manage an open dialogue. The research found that MNCs often have trouble identifying relevant SMEs, or if they can, find it difficult to either educate or guide local companies through their tender process. While many MNCs think they are communicating clearly, the SME audience is often hearing these messages in a completely different way, creating a groundswell of disenfranchised local business people.

Invest in Africa has a part to play. The African Partner Pool (APP) was launched in late 2014 as an online directory to connect local businesses to international companies. The APP speeds up the identification of credible local business partners for companies operating in Ghana and allows Ghanaian suppliers to promote their businesses and increase their chances of winning contracts while accessing training and support from Invest in Africa’s Partners.

The APP will create better lines of communication between local businesses to international companies and better dialogue and access to information is key: this research brings that point home loud and clear.

The partnership between SMEs and MNCs begins with good communication and that demands a change in attitude and a change in approach. The work of Invest in Africa and the APP will go some way to leveling the playing field: MNCs need to embrace the change too, supporting the ambitions of local SMEs to create a genuinely sustainable dialogue and closing the communication gap for good.

Click here for the full report.