“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 levelling 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.
As experienced by many SMEs operating in Ghana, Edge S&S, a global sourcing and supply company, had challenges trying to do business with multinational companies operating in the country. Prince Boateng, Managing Director of Edge S&S, shares his story of how joining the APP has benefited his company.
The Problem: Accessing Tenders
“Prior to joining the APP, Edge S&S had limited exposure to multinational companies operating in Ghana. Business was limited to the same old clients so whenever we wanted to access tenders from multinational companies we had to buy lots of newspapers to look for opportunities advertised in them.
“When I was introduced to the APP and the opportunity it offers to access tenders from multiple companies across various sectors, I quickly signed up my business. Within a few weeks, we got the opportunity to respond to a tender request from UT Bank and thankfully, after evaluation, we won a one year contract to supply their stationery requirements.”
The Impact of the APP on my Business
“The APP has simplified the process of searching for tenders saving us time and resources. Instead of moving from one newspaper and website to another looking for tenders, I now simply log onto the APP and see many tenders from lots of businesses all in one place. The APP has also helped us to grow our business and reach new clients.
“For example, winning the one year contract from UT Bank was our very first time working for the Bank and we are really excited by this new opportunity. In addition, the APP has given us the chance to engage with many other companies including Tullow Oil, Newmont Mining, Guinness Ghana Breweries Limited, EY, GE, AB & David and Lonrho, to name a few. Without the APP, it is most unlikely that Edge S&S could have had access to all these buyers.”
Why Sign up to the APP?
“Local SMEs struggle to get opportunities to do business with multinational companies, do not generally have access to information on tenders and therefore cannot submit bids. This is why I urge all SMEs to register on the APP. It gives you an excellent opportunity to access tenders from various companies, all on one platform. Signing up is simple and the cost is very reasonable.
I believe the APP provides a fantastic opening for Ghanaian companies to showcase their goods and services to multinational companies across sectors.”
Adentiti Ghana Limited is an IT sourcing and supply company operating in Ghana. One of the major challenges that Adentiti faced was identifying the tender opportunities that existed with multinational companies and big corporates working in Ghana.
“The frustration of searching for tenders and going through a labyrinth of procedures just to identify and apply for tenders was a big problem for Adentiti. The decision to join the APP was the solution that completely simplified Adentiti’s search for tenders from corporate Ghana” said Kafui Bokor the Business Development Manager of Adentiti Ghana Ltd.
APP as the game changer
According to Kafui Bokor, joining the African Partner Pool (APP) has remarkably improved Adentiti’s access to new business opportunities and markets: “The APP makes it possible for email notifications to be sent to Adentiti any time buying companies on the APP post new tenders and procurement notices. These notifications from the APP serve as quick alerts that draw my attention to new opportunities”.
Just by virtue of signing up to the APP, Adentiti has access to tenders posted by companies like Ecobank, GE, Guinness Ghana Breweries Limited, UT Bank, Tullow Oil and Newmont just to mention some of the large corporates and big businesses that use the APP as a tool for sourcing for local suppliers.
Upon receiving one of the many alerts the APP sends for new tenders posted, Adentiti applied for one of the tenders posted by UT Bank, seeking for a local SME to supply IT equipment to the bank. Adentiti applied for the tender and successfully won the bid. That was the beginning of a very good working business relationship with UT Bank. Subsequently, Adentiti has applied for other IT related tenders from UT Bank and has won a number of these with a combined total value of over $5,000 just a few months after joining the APP.
APP as tool of learning and business development
Another benefit Adentiti has received from the APP is the opportunity for the staff to develop their business skills using the Business Growth Hub, which is a portal on the APP that has free business critical ‘How To Guides’ specifically written for Ghanaian SMEs.
“Once logged into the APP, I have unrestricted access to several well researched and well written documents produced by industry experts. These documents are very helpful tools I use in training my workers with the ultimate goal of improving systems and processes of doing business”.
“Adentiti has received so many benefits from being a member of the APP. The process of signing up is relatively simple and straight forward and surprisingly very cost effective. The good thing is that, IIA has support staff who provide excellent customer support for companies signed up to the APP. I urge my fellow local SMEs who haven’t yet signed up to the APP to register to enjoy the many benefits it offers” concluded Kafui Bokor.
Invest in Africa partnered with Trace International, the world's leading providers in anti-bribery and corruption certification, to provide local Ghanaian businesses certification. Here is a look at one of the companies that benefited from the certification.
Leemex Foods is a leading producer and exporter of quality instant African foods, who has been manufacturing quality Ghanaian food for over a decade. After ten years of operation, CEO John Kofi Mantey has grown the business from selling to local informal markets to large super markets as well as exporting to the US, Australia and Germany. All ingredients are sourced from local farmers inthe Eastern and Volta Regions of Ghana.
As a United States Food and Drug Administration certified company, Leemex uses its high quality standards to train 20 local farmers to produce high quality ingredients, free of organic preservatives and additives. This improves standards and ultimately means local farmers are able to retain contracts and receive additional sources of income.
Plans are underway to build a new manufacturing facility and introduce new products, but a lack of finance and a formal business plan is jeopardising long-term growth. Without a well-structured business plan Leemix is unable to deliver on these plans.
How Leemex benefited from the BAP
To secure Leemex’s future, John Kofi Mantey successfully applied to the BAP requesting that EY consultants help Leemex to:
1) Create a detailed business plan and keep good financial records on the business to understand performance.
2) Apply for finance to fund expansion plan and the building of a new manufacturing facility.
3) Manage the demands for growth, with the day-to-day operating needs and the training of local farmers.
“In the water supply sector, we want to be known as the best in groundwater engineering in Africa,” says Vincent Amewornu, Founder and CEO of Enacent Agency Limited. The business started in 1982 as a sole proprietorship and undertook printing and general supplies of equipment to the construction industry.
Amewornu worked as secretary to the Tender Committee of the Ghana Food Distribution Corporation. While there, he realized that the best way to improve his financial fortunes was to venture into entrepreneurship. That realization served as the springboard for his personal pursuit of business. He was optimistic that the ride would be smooth, but the reality was tough.
In 1997, he incorporated Enacent as a limited company and revised his business by phasing out of stationery supplies and equipment supplies, venturing into a new area of water engineering. Although this too was challenging, Amewornu was able to grow beyond the building of culverts and drains, to being able to construct dams and all kinds of irrigation and treatment plants. Competing with existing and relatively well-known construction firms proved a huge hurdle to overcome. Nonetheless, he prevailed eventually with some financial support from the banks.
The pursuit of higher heights
In 2016, Amewornu heard about Invest in Africa (IIA) and the Business Linkage Programme (BLP). IIA is a not-for-profit organization committed to improving Ghanaian SMEs’ access to skills, contracts and finance to build long-term capacity. Through the BLP, Invest in Africa is able to offer coaching and mentorship interventions that assist SMEs to scale up and become globally competitive. The African Development Bank provides funding for the BLP through its Fund for African Private Sector Assistance (FAPA).
So, in pursuit of what he refers to as “higher heights,” Mr. Amewornu signed up for the BLP. He thought that since Invest in Africa grooms “local businesses to achieve higher targets,” the BLP would be beneficial to him and his business. For him, securing contracts from multinational organizations was “very difficult.”
Support from Invest in Africa
He and other participants received training in so many aspects of business. According to him, they learnt about how to prepare tenders professionally and what to do if one feels they have been unfairly eased out of a bidding process. He also found the sessions on how to structure and establishing partnerships very relevant.
“Since receiving the training, we have seen that the business has improved,” Amewornu testifies. “We have been able to bid and win two major tenders. Things are now better than when I was on my own,” he says. He reveals that their bid success rate and revenue have improved by 50%. Notably, they have won substantial contracts from the African Development Bank and the United Nations Development Programme. He reveals that although he employs a total of ten people on full time basis, he had to recruit forty (40) additional team members with various levels of expertise to execute the contracts for the two international organizations. He attributes these major wins to his participation in Invest in Africa’s BLP.
He looks forward to leveraging other opportunities offered by Invest in Africa; in particular their SME financing opportunity through their partner banks – Ecobank, GCB and Barclays Ghana. As they plan to procure new and more advanced water engineering equipment, they are hopeful that this network and the set of skills offered by Invest in Africa will be very helpful.
Success in leadership is not automatic but must be deliberately nurtured” In 2014, Kweku Hayford and key members of his current strategic team set out to establish KH3 Inc., a rising Accra-based construction project management firm, which specialises in commercial and residential interior decoration and fit-out.
“Originally when we started out, we weren’t sure what our drive was. We got project after project and were driven to execute well. However, at some point, we felt the need to sit down and figure out what drives us and what gets us out of bed every morning,” says Kweku. This period of reflection led to the development of the company’s vision “to become the standard of business excellence in Africa.” He is concerned that very often products, services and skills of African origin are perceived to be mediocre; a narrative he is poised to rewrite through KH3.
JOINING THE AFRICAN PARTNER POOL
In 2015, KH3 became more interested in the category of clients they wanted to attract. They set a new challenge for themselves; to be able to attract high profile and high value corporate clients. Working with their foreign partners at the time, they executed projects for Google Ghana (Csquared) and Nestle CWAR. It was subsequent to these projects that one of their vendors recommended Invest in Africa’s African Partner Pool (APP) to them. The APP is an online marketplace that bridges the gap between large companies with
procurement needs (referred to as buyers) and SMEs who have products and services to sell (referred to as suppliers).
The vendor who recommended APP hinted that the platform hosts many large organizations such as Tullow Oil Ghana, MODEC, Newmont GoldCorp, AngloGold Ashanti, Millennium Development Authority (MiDA), Ecobank Ghana and others. As a result of their membership of the platform, they were selected to redesign and refurbish the new office of a not-for-profit in Labone, a suburb of Accra. They are also grateful for the strategic connections they have developed with other SMEs on the platform.
IMPROVING EFFICIENCY AND BUILDING CAPACITY
Overtime, the KH3 strategic team saw that although the business was doing well, they needed to work on their efficiency and cut out waste. That was when they enlisted for the Business Linkage Programme (BLP), a capacity-building and mentoring initiative of Invest in Africa that offers SMEs tools needed to improve their entrepreneurial, managerial and technical proficiencies.
Through the BLP, they have learnt that success in leadership is not automatic but must be deliberately urtured. Additionally, they have learnt about the importance of goal-setting, planning and forecasting. They also reveal that the programme has helped them understand their areas of strength and weakness.
SO FAR SO GOOD
Since joining the BLP, the team clearly notice that things have improved. Kweku says, “Applying what we learnt, we changed the way we work; scrutinizing expenses more effectively to ensure we get value for monies spent has helped reduce leakages in our revenue pipeline.” As a result, salaries have increased by 50%, staff strength has increased from twelve to eighteen, and they even acquired property which is being developed to serve as their new office and showroom.