“We look at our company, BizSolutions 360 Inc., as a win-win for creating jobs in the U.S. and Africa.”
– Peter Karenge, President and Architect
On Oct. 17, 2017, professors, industry professionals, interested students, and University of Maryland staff joined the Center for Global Business (formerly the Office of Global Initiatives) at the Robert H. Smith School of Business to discuss the topic of Doing Business in Sub-Saharan Africa. The World Bank Group had recently published its esteemed “Doing Business” report as well as deep dives into different regions. CBG chose to focus on Sub-Saharan Africa for its Distinguished Speaker Series throughout the 2017-18 academic year and this event was the first in a series. The event was co-sponsored by CGB and the Emerging Markets Association student organization.
Rebecca Bellinger, managing director of CGB, gave a brief overview of the organization’s mission and introduced the panel of distinguished speakers. The panel consisted of four professionals who are making a significant impact in their respective fields.
- Gillian Henker is the CTO and co-founder of Sisu Global Health.
- Peter Karenge is the president of BizSolutions 360, Inc.
- Bonny Musefano is a Rwandan diplomat serving as the commercial attaché at the Embassy of Rwanda in Washington, D.C.
- Hulya Ulku is a senior economist at the World Bank Group.
The panel’s moderator, Kislaya Prasad, research professor, began the night’s discussion with the axiom that we should know more about Africa. He highlighted the many misconceptions and lack of information that many Americans have about Africa. He took a poll of the room, illustrating that many people do not know that the land mass of Africa is greater than the total sum of the U.S., China, India, Europe, and Japan. The rest of the session delivered insights into some of the success stories, progress, and challenges that Africans and globally-minded business professionals should be aware of to further the momentum of a thriving Africa. Highlights from Prasad and participating panelists are below:
Question #1: What is a common misconception about Africa?
Bonny Musefano – People ask “Where did you come from? Which country do you come from?” Rwanda has had a dark history, but the people understand where they come from and Rwanda is a different country today because of it. If one looks at the perception gap, Africa is an underappreciated continent with 55 countries with different people. For example, we speak a Kinyarwanda and multiple second languages, but a neighboring country like Uganda may have 100 dialects. We are Africans broadly, but in the details, you will find us different.
Peter Karenge – There is a misconception that Africa is technologically backward – that people are without suit and tie – but the clothing is by choice. Kenya has the great mobile tech development. You don’t need even need a wallet because you can pay your bills through the fintech company, M-PESA.
Hulya Ulku – In terms of the performance of Sub-Saharan Africa, it is one of the most engaging regions in the world in doing business and has been one of the highest reformers. After Europe and Central Asia, it is the highest reformed regions in which 37 out of 48 countries studied have reformed. For example:
- In 2005, there were only three countries in SSA that took less than 20 days to register a business (Burundi etc.).
- In 2016, for more than half of SSA economies, registering a business took less than 20 days.
- In 2012, it took 37 days to register a business on average.
- In 2016, it only took 26 days on average.
- As easy as these indicators might seem, there are a lot of technical aspects. The World Bank Group provides a lot of workshops and trainings, especially when there are turnovers in African governments.
Question #2: Africa is increasingly filled with opportunity that China is taking advantage of, and the U.S. is absent to an extent. How did you two go about finding the opportunities, and why should investors invest?
Gillian Henker – Our company is for-profit and had a seed round of $1M. There is a lot of mindset change in business metrics and business opportunity. It came from identifying with and starting the millennium development goals, talking with users, and seeing growing demand through the middle class to develop tech with the right design to be profitable. We started in Ghana, but we have seen similar stories of changing markets across the continent.
Peter Karenge – Africa is a young continent and the median age is 19 with the youngest average working class. The easiest way to set up business is to identify problems and solutions. There are huge customer segmentations. For us, it was leveraging our backgrounds. It is a two-pronged approach: First, we wanted to find opportunities in Africa that can be used in the U.S. For example, consulting for a coffee shop that wanted to sell directly to U.S. without a middleman enabled our company to develop a logistics division. Second, it was deploying our skillsets in architecture, finance, and logistics that are in demand in Africa to help us to land many projects.
Bonny Musefano – I encourage investors not to look at Rwanda as isolated but as connected to the other countries in the East Africa community. It only takes two hours to drive to Uganda, two hours to Democratic Republic of the Congo, 1.5 hours to Burundi, and 1.5 hours to Tanzania. This community is an economy that is outward looking and has a total population of 160 million people. Rwanda is a country that has had GDP grow at 8 percent since 2008. All the above countries average a growth of 6 percent. The country has focused on efficient governance.
We developed the Rwanda Development Board, and people are able to register a business in six hours. I am the point of contact at the embassy and there is a parallel contact on the ground in Rwanda. We have account managers that know how to acquire land and licenses and who are aware of the cost of labor.
Question #3: What are some of the challenges in Africa and how they can be overcome?
Hulya Ulku – Despite a lot of progress there are areas that are still challenging:
- First, getting electricity and connecting to an electricity grid takes time and is costly.
- Second, getting construction permits is lengthy and costly.
- Third, facilitation of trade by policymakers could be improved by:
- Make waiting lines in the ports shorter
- More streamlined documents for exporters’ records
Question #4 – Are there other regulatory barriers that the U.S. faces and could make progress in the area of supply chain?
Hulya Ulku – In terms of the U.S. versus Chinese investment, China is gaining more and more presence in emerging markets. A typical U.S. firm will go and employ local employees, while the Chinese benefit from a developing economy and takes its cheap labor to other developing countries. Therefore, the U.S. can play a role not in infrastructure but in innovation, and there are a lot of innovation opportunities in Rwanda.
In the most recent World Economic Forum meeting, an entrepreneur told his story of taking an idea to a few African governments that did not sponsor his idea. He then went to Rwanda and found investment backing to develop the successful company called Zipline. This business is scalable and shows the potential of business success in the right context. Zipline improves access to critical products like blood for transfusions and vaccines by flying over impassable mountains and washed-out roads, delivering directly to remote clinics.
The panel discussion ended on a question from a first-year MBA student from Nigeria who asked, “Peter, what suggestions would you give people in the diaspora who are looking to work in Africa, and what is employment like in your company for Africans?”
Peter Karenge responded, “If you have a business bone in your body, start your business today. My big regret was that my colleagues and I did not leave our corporate jobs early enough. We look at BizSolutions 360 Inc. as a win-win for creating jobs in the U.S. and Africa. For one of our larger projects, we employed 175 contractors in Botswana. In Liberia, we currently have 10 Americans for a USAID project, but imagine what a $1 million project does for a small town in Africa. If we can build on that success, we can employ more Africans as we have for other successful projects.”
There were many more facts and insights discussed by panelists that prompted the audience to stay for the post-discussion reception. The organizers of the event thanked panelists for bringing information about Africa to them as the Robert H. Smith School of Business looks forward to the rest of African programming through OGI this year.
For more information about global business at Smith, visit: www.rhsmith.umd.edu/smithglobal.
- Zane Adoum, MBA and Master of Finance Candidate 2018
This event was sponsored in part with funding from the Center for International Business Education and Research (CIBER), a Title VI grant from the U.S. Department of Education.