Trade is the greatest tête-à-tête of the moment. Approximately, 40 African countries have duty-free access to the U.S. market. What about local Nigerian products and services?
The economics of buying/selling jargon on tariffs, bilateral agreements, quotas and bans are being ping-ponged from one medium to another. Leaders are debating the best agreements for our the future of our business. Nations and presidents argue over US-UK, UK-China, China-Africa agreements. What does it mean for us today?
GrowthView asks: How can a Nigerian entrepreneur, a corporate or a mother of a family unlock revenue opportunities at an early-stage, despite these uncertainties?
For corporates, the relevant COO & CFO question is, can we truly anticipate the cost of import/export or distribution, as well as integrate this in the financial model with varying scenarios, based on the trade acts/agreements?
For SMEs (small-to-medium enterprises) the question is, can a small-scale trader in Nigeria maximise its return, yield of crop or sell price to the local buyer despite these “trade agreement” talks? The short-answer is “yes.”
Corporates can beautifully influence
However, legislation is forever adapting. Perhaps, a good way forward is for us, people and businesses, to take direct-trade opportunities in our hands. GrowthView builds on our publication (see April 2019) “Do we trust tech?”; which is on the role of tech conglomerates and how they can build trust, in order to contribute to inclusiveness and prosperity. Today is smaller-scale.
We look at the positive foundations of trade and its agreements. How can these freely interpretable “trade-agreement talks” open fresh business opportunities in and out of sub-Saharan Africa? As an individual or as an SME, we can have (1) the access, (2) the funds (3) the value-driven approach that was missing in the “game of monopoly” (see Dec 2018 article).
Stage 1: Define the purpose of a trade agreement
The fruit of the negotiations between nation leaders, WTO, Forbes100 company influencers and local ethnic tribe leaders are the bi-lateral agreements, acts and compacts that are signed in place to enable the business environment. The landscape is complex and players numerous. History has proven this complexity, this is why the United Nations (UN) created the International Trade Organisation (ITO) in 1948 to overcome ongoing trade handicaps.
We wonder, how did the Egyptians manage to make trade amicable and profitable? Ancient Egypt has lessons for Africa and the world. Going back to the basics is key.
The Nigerian economy signed the African Growth and Opportunity Act (AGOA), which as we know, liberalised trade with the U.S. until 2025. It gives access to goods and services in and out of America for these 40 African countries. It came as Nigeria also joined the World Trade Organisation (WTO) in 1995. So, what can we do to anticipate, before the act expires?
As a family in rural Nigeria, what do I care about these acts, right-now? Well there is great outlook for entrepreneurs and families. The future looks positive!
Christina Wehbe, partner at UrbanEmerge, said:
“Focus on the cloth used to weave the shirt, rather than the buttons that will fix the shirt in place! The same applies to trade.”
Being courteous in trade, is to be open to exchanges and provide “free-market” opportunities to nations or companies outside of your country.
An agreement is when 2, 3 (+) countries agree to the same terms. Sounds tricky, right?
Well it is. This is where technology can help us by-pass some of these messy talks. The Egyptians may have had flaws in their trades, but we can learn from their successes. Be friendly!
Amicability is derived from “friendly”. This cordial entente is underpinned by the value of goodwill, which is a value that all communities around the world have. It is a value of our way of life. Whether we exploit it properly is a different story.
Stage 2: Drive growth from within and attract direct investment
Share your vision with people, this is what is missing in our business today and yet so present in African culture. FinTech Investors buy stories. Investors want a story that sells. For a business to sell, you need a person behind that has almost “never-heard before” story.
- Your story | triggers a connection with investors
- Product story | brings out customer emotions
- Future story | improves our lives as a society
We all want to relate. Long-term financiers want to dive deep into the story. CEOs and entrepreneurs often overlook the inherit behavioural and “buy-in” patterns we have. Can you make your business a story to share?
Stage 3: Amicability and access helps
Social lending, FinTech and peer-to-peer financing are all examples of trusted individual transactions – enabled by the right technology. Do you have the social tools you need to build it?
Investors and consumers buy what is closest to them: we are biased by proximity and accessibility. Do they speak my local language? Is the service in a country I know? Can I access the operations freely? Proximity can also be an emotion. Having this trusted connection where you have the platform to share your story.
Foreign policystrategies is about “winning hearts and minds”. This idea applies still today for business and investments.
Founded by Plato in ancient Greece, this philosophy still applies today in 2019 for Angel, VC or seed investors. What captures our heart and mind? What we see, what we can touch, what we hear is what we believe is true. Therefore, proximity and triggering all four human senses are stories financiers or shareholders remember.
As an example, when a hurricane or natural disaster happens close to home, aid and local communities help or fund it passionately. It is close to their “heart” and touches their “mind.” Keeping sustainability on the agenda of all corporates, is a fortunate gift we each have in our hands. The senses that are triggered is key.
Technology offers that accessibility and proximity that a local African business may have overlooked previously. Trigger the emotional connection with people, be transparent and tap into the access to greater networks.
Trust is based on the foundation of truth. So how can social technologies such as WhatsApp, LinkedIn, WeChat build trust among market players by growing the number of transactions and interactions between direct buyers/sellers?
By the time trader agreements are solidified, new informal or B2B, peer-to-peer or fiat currency lending will have grown exponentially. FinTech can unlock opportunities in Nigeria and also for buyers/sellers throughout the world looking to expand and build intra-corridor services.
Stay tuned! Our next article, part 2, will introduce the three A’s to making money sustainable and position your company with shareholders.
- Trade agreement is the “button to the shirt”
- People can do trade
- FinTech is the right technology for access
- Stay local so you connect “hearts & minds”
- Proximity allows for the Truth to be share
Wehbe is passionate about helping others and fighting poverty & injustice. She is the founder of GrowthView. She writes from Zurich, Switzerland.
Cell: +41 79 950 4760