Monday, November 18, 2013

Sustainability in African Businesses, Are we ready yet?

By Emmanuel Dennis Ngongo.

Nairobi – November 18th 2013

I have been preparing for the Sweden@Zambia event that will be taking place in Lilongwe from November 19th to 21st 2013. In supporting African business development, the Swedish institute and the Swedish Embassy are keen at finding lasting solutions as part of their commitment in Africa.

My brief is on the general theme of new realities providing new opportunities. Today we all are experiencing exponential growth on various disciplines around the world. As the world changes, so we are called to adapt to new realities. It is the new realities that keep challenging us to begin to interrogate our old ways of doing things in order to adopt and create a new, solution befitting the challenges of tomorrow.

In my interactions with young people, I see a generation eager to make it in life to attain financial freedom. In emerging societies, business people are seen to be the most successful as such many young people look up to them. It then begs the question, what kind of leadership do we need in order to create sustainable economic growth in Africa today?

All African businesses exist to make profits so is any traditional business any where in the world. It doesn't matter whether the profits are ethical or not, what is commonly used in business terminologies as "the bottom line".  As I leave for Lilongwe, I am thinking through Sustainability – the best approach to business in a changing world.

The Challenge and Opportunity

Africa is endowed with natural resources. It is the virgin continent yet to exploit its full potential as a business leader in the global economy. Leading global corporations have setting their attention on the continent. The latest economic entrant is China, which is rearing to go the extra mile to make a business case for the stake in Africa. There are big challenges of corruption, war, poverty, disease, and poor infrastructure that makes business a hard sell. The growth seen in the last decade shows a lot of promise.

The challenge that we must face head on is that of setting the right framework that will ensure future generations enjoy the exponential developments that are emerging today. Africa has left much to be desired. The many new entrants are coming in on their on rules and terms.  Africa has everything to lose. The past and current trends are not sustainable.

Africa's population is nearing the 1 Billion Mark. The youth aged below 35 years make a paltry 65% of the total population. It is estimated that about 10 Million young Africans enter the job market each year. Despite the increasing youth bulge on the African continent, we still see increased unemployment across the nations, underemployment, and lack of skills due to the commercialized education system where we have some good education and poor health exacerbated by the HIV menace. If the levels of youth unemployment continue to go high, we are facing a ticking social Time Bomb that will soon explode where social conflict will be the order of the day as crime rates bite. It is time African nations put in place social, political and economic policies that will turn the youth bulge into an economic boon that Africa will be proud of.

Each African nation is struggling to get a piece of either the American, European and now the Chinese Pie without thinking of sustainability in setting up the sustainable economic development pillars.

What is a Sustainable Business?

Many companies have various versions of sustainability to fit in their profit making ventures. Others have adapted an environmental angle to brag about. Companies in Africa are thinking more about the quick profits bottom-line rather than solutions to manage the challenges they will face in the future.

A sustainable business must be adaptable to renewable resources that will in turn make their venture profitable as they meet the peoples basic needs while at the same time be accountable for the environment and human rights thus making them economically viable without compromising the opportunities for the future generations. The scenario for a company to reap economic value derived from both nature and society.

The changing trends in population growth means that competition for resources for future survival is very high. Businesses that want to continue in the competition must come up with strategies to continue being relevant in future.

One of the biggest challenges Africa is facing today is youth unemployment.Businesses must ensure they address the people challenge in ensuring continued supply of basic needs as a core human rights and within their operating ethos.This should not be misconstrued for social cooperate responsibility, but sustainability as a core function of the business.

Because Africa's economies are still struggling with the worst problems the globe has to face, business must address the social challenges to make the solutions as much inclusive or face immediate collapse.

The business must ensure the people have sustainable living standards for gainful economic development. Each business must employ a strategy for sustainability learning in order to ensure it remains relevant in the communities it targets to sell its products beyond marketing. This will only happen if we change the mindsets of the African business by protecting, conserving and regenerating our natural and human resources if our economies and society are to be sustainable.

The Ethos, Principles and Values of a sustainable business

Every thing in the ecosystem is interconnected and as such each step a business takes must be cognizant of future effects for it to remain relevant. A business depends on the people and society for profits and in this case sustainability means the business must help the society to thrive with it. These facts yield to various values including kindness, compassion, trust, empathy, responsibility, value, efficiency, respect, honesty, courage, kindness and diversity in business for society.

There is a growing global trend for sustainable products. Consumers are mounting pressure on corporations and organizations to be ecologically and socially responsible. This has been seen with the emergence of the Fair Trade movement. Millions of consumers today will only buy sustainably produced products. African businesses are not operating in isolation.

Facts any business won't run away about Sustainability

  • Sustainability must be applied across the value chain and not as a stand-alone activity for a business. The dividends will be much higher.
  • Sustainable products are competitive if the right market approach is employed. There is a growing trend of green consumers that business must target. The demand surpasses supply. That is where the future is.
  • The business must train its workforce into a green workforce that addresses the challenges of the future to remain relevant.
  • There is more return in investment if a company invests in developing the right products to cope with future demands. That is what is called sustainability in business.
  • Your enterprise should be designed with sustainability as a core in operations, culture and strategy. This way it will remain in business for longevity what every business desires. Why establish a business that will fall out of the taste of the consumers in 10 years? Adaptation is expensive. Just get it right from the beginning.

The Nigerian banker and economist Tony Elumelu's injection of Africapitalism – asserts that "Africapitalism an economic philosophy that embodies the private sector's commitment to the economic transformation of Africa through investments that generate both economic prosperity and social wealth. Africa's renaissance lies in the confluence of the right business and political action"

Sustainability presents a shift on how we do business and it is the only thing that matters in an enterprise that wants to make sense off the profits it makes in the community. A business that extracts from nature and society to maintain economic viability has no place in the future.  Corporate profits do not necessarily lead to growth in the current times where consumers play a critical role in deciding what works for them. The need for a corporate paradigm shift is direr right now than what the past has presented. The models for the businesses in the changing world must and should organize and manage sustainability to remain in business. Sustainability is the buzzword. You ignore it, and your enterprise has no chance for survival.

Has your company created a sustainable code across the value chain?Is your business a liability to the environment it operates in or a value addition?

Let us all change the role of business in the African context and embrace the philosophy of sustainability if the future of Africa's children is to be guaranteed, it is moral, it is ethical and it is a matter of responsibility.

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