A Member, Board of Directors, Global Reporting Initiative, Amsterdam, and Chief Executive Officer CSR-in-Action, Bekeme Masade-Olowola, in this interview speaks on the role social entrepreneurship plays towards the sustainable development of any economy. She also speaks about ways to harness entrepreneurship opportunities within the continent. Hamid Ayodeji presents the excerpts:
What does it take to be a successful entrepreneur?
There is no straightforward answer to that question, especially in a country like Nigeria. However, I believe that certain attitudes increase the probability of success in any enterprise. These include adaptability, consistency, and foresight. Entrepreneurship is a leadership crash course. You have to constantly evolve and do things that will increase your credibility and reliability with your stakeholders. Also, I believe that while it is necessary to hire people to do things that are not in your core expertise, you also need to be very versatile and know something about a lot of things.
How would you describe the role of social entrepreneurs in enhancing economic activities in the country?
Social entrepreneurship is crucial to the development of the economy. Social entrepreneurs recognise social problems and use entrepreneurial principles to organise, create, and manage ventures to solve them. In doing this, they create and sustain social values that lead to increased economic development in the society. Social entrepreneurs also help improve general welfare of the society by tackling social problems such poverty, inequality, climate change and unemployment. The social entrepreneur is a smart optimistic who contributes to the economy by taking on economic inequality, thereby stimulating even economic development.
With the increased incorporation of sustainability as a business strategy these days, more businesses are actually becoming social enterprises adding that consciousness to their whole new paradigm for management, which considers a business less as a “company” and more as an “institution,” integrated into the social fabric of society.
How do social entrepreneurs identify social needs?
There are various ways to identify problems. The most important thing is that a social entrepreneur is committed to solving problems. However, access to research and information in one’s area of focus will help a great deal, because there are some problems you may like to address but would find someone else is already addressing it. I usually identify a need while attempting to meet another need. For instance, we developed the Community Engagement Standards as a tool for promoting peace in extractive communities having organised the Sustainability in the Extractive Industries (SITEI) Conference when in the course of creating sustainability reports for companies, we discovered that there is a conversation gap between critical stakeholders in the extractive industries including the oil companies, their host communities and the government. Today, we’ve had seven SITEI conferences attended by key representatives of government, extractive companies and their communities.
How has the journey been so far and what has been your key driving force thus far as a Nigerian social entrepreneur and a member of the Board of Directors of the Global Reporting Initiative (GRI)?
As a social entrepreneur, the road has not been totally smooth, but the journey has been interesting. I started CSR -in-Action in 2010 because there was a challenge that wasn’t being addressed – managing institutional impacts. And so I thought to establish a movement for good business and government citizenship and collective action. When I started, people told me our society was not ready for it, but I was persistent. I had lived in the UK with its 169 indicators for measuring performance of local councils and I was adamant that we have a structure for doing same in Nigeria. There has been a lot of highs and lows but gradually, the idea of incorporating sustainability as a corporate strategy is seeping into Nigeria’s business environment.
The GRI is the world’s leading sustainability impact measurement and reporting standards body, it is based in Amsterdam. I was appointed to the board in October 2018, as the first person from West-Africa and the youngest person thus far. I was humbled and elated by this appointment because it indicates that the world is beginning to notice the work that we have done and our contribution to the improvement in sustainable practices in the region and in Nigeria, specifically. We had identified reporting as an effective way of upping sustainability performance and had decided to push that agenda of our own volition and without thought for pecuniary benefits from any third party. I believe that is the crux of our successes, adopting a Blue Ocean Strategy through innovation and differentiation and just staying true.
I remain convinced that Africa is ripe for advancing and embedding sustainability practices. Look at the extractive industries, for instance, only a few years ago, most oil and gas companies did not take their sustainability reporting seriously because it didn’t immediately affect the bottom-line. But with sustained advocacy, we were able to convince organisations to see more clearly the need for responsible and sustainable behaviour if they will compete, survive and even excel on the local and global scale. We were also able to create a Community Engagement Standards, a framework that will yield improved relationships through better engagement practices between companies and their host communities.
What initiatives do you think the government can implement to support entrepreneurs?
Businesses are usually very innovative and yet vulnerable in the early stages. This is why entrepreneurs need support to help sustain and grow their businesses. Most businesses are SMEs when they start, which means they are usually limited in capital, so government can make funding schemes more accessible. Access to funding also needs to be more flexible, especially loans. The requirements for credit facilities for start-ups need to be lower, especially if the business and its owner(s) have been properly verified, whilst making provisions to protect financial institutions from losing their funds. Besides capital, entrepreneurs also need training and concessions from the government, as well as tools that will facilitate the ease of doing their business.
Government needs to make it easier and more transparent to do registrations and obtain licences. I know a lot is being done along this direction but more needs to be done, especially fast-tracking registrations from bodies such as SON, NAFDAC, CAC, etc.
I think that business-to-business networking opportunities are also very vital for start-ups.
What sort of impact can the AfCFTA have on the development and sustainability of enterprises and entrepreneurs in Nigeria?
The African Continental Free Trade Agreement is perhaps, the most revolutionary inter-country initiative in Africa’s history. The agreement, which was recently signed by Nigeria, links 54 African countries together to facilitate more efficient trade across border. The agreement initially requires members to remove tariffs from 90 per cent of goods, allowing free access to commodities, goods, and services across the continent. With the AfCFTA, innovation will flow easily across borders. Nigerians will trade directly with South Africans and vice versa. The United Nations Economic Commission for Africa estimates that the agreement will boost intra-African trade by 52 percent by 2022.
This initiative presents a great opportunity for Nigerian entrepreneurs as the interchange of ideas will boost their businesses. It will also expand the market available for their products and ideas. Expect Nigerian entrepreneurs to conquer new grounds and explore new frontiers. The downside is the usual job issue as we typically do not like to go for blue collar roles, but that would mean that we are likely to dominate other markets. We are not called the giant of Africa for nothing. Big ideas and vibrant people come from Nigeria. With the AfCFTA, new avenues have been created for these vibrant people to showcase their big ideas. It would be nice if the government creates avenues for educating our people on good values so that we have good representation wherever we go.
What are your projections for this year?
For the country, I would say a lot of things are uncertain at the moment, sadly. However, having access to information can give some certainty to a lot of seemingly uncertain things. Inflation is already on the increase. However, the economy is expected to regain its growth later in the year with increased activity and Foreign Direct Investment (FDI). I foresee a lot more growth in the agricultural space and this space where government can also shore up expertise for entrepreneurs to have more access to exporting goods.
How vital is access to capital towards establishing a successful enterprise, and how best do you think entrepreneurs can overcome this factor as some consider it a challenge?
Capital is very important, but it is not the most vital factor in establishing a successful enterprise. I believe that before seeking capital, an entrepreneur needs to establish important relationships with her stakeholders and be able to earn people’s trust depending on the type of business that needs to be done. After gaining trust, it will be easier to raise capital. Whilst capital is needed in order to purchase assets and maintain their operations, there are many businesses that can be started with just a laptop and business cards, and maybe a website.
Since capital is difficult and expensive for small businesses, it is particularly important for small business owners to determine a target capital structure for their firms. The capital structure concerns the proportion of capital that is obtained through debt(borrowing) and that obtained through equity(investments).Again, this is dependent on the kind of business being considered. I always discourage loans unless particularly necessary. For instance, I struggle to understand why a service business that does not deal in finance would require a loan to start off.
For social entrepreneurs, there are a number of funding opportunities in Nigeria and abroad set up for various purposes and supported by the government and international organisations. Some are in form of investments while some are grants and they have various eligibility criteria. But to access those funds, one needs to start small and prove themselves in little before aspiring to convince another entity to part way with their hard-earned cash.
Financial efficiency is an important factor in getting capital as people will not want to invest in you if you don’t have a proper record of your finances and if you are not seen as prudent with money.
Accomplishing great results require the right team so, what approach did you take towards finding yours and how did you build the team?
I can assure you that one would not achieve much without the backing of an efficient and dedicated team working with me. What has worked for me has been having young, vibrant, inspirational people on the team. The challenge with such a team is that they are easily lured by the seemingly greener grass on the other side, especially as we are pace-setters in the space. But that is something that I have resolved to use as a strategy because what that means is that we have CSR-in-Action alumni across diverse sectors and it means that our name and vision spread far.
In all the things we do; whether it’s creating reports, organizing conferences, or setting up a radio show, my team have also been dedicated to the cause because I try to go for people with a certain value system. They call me The Galvaniser, and I take that as a compliment.