Insights

Kina Advisory provides insights on topical issues facing the industry today as companies operate and invest in Africa. Read through our latest thought pieces that give an insight into Kina’s way of thinking, as we discuss ideas that challenge the way business in Africa is conducted, offer solutions to those challenges and highlight the success of others.

 

GE getting it right in Nigeria

04|11|2015

Here’s a great example of how a big name like GE has used its core business to do the right thing by local people, while also making money.

GE is planning to invest $1bn over the next five years in the Nigerian oil and gas services sector. In itself, not very big news. Big multinational companies are frequently investing large sums of money looking to take advantage of Nigeria’s number one international export.

But GE’s investment is different. Unlike so many former oil and gas-related investments by large multinationals, GE is committing hundreds of millions of dollars to benefiting the community in which it operates. And this is no mere ‘box ticking’ gesture to keep the local authorities happy.

Of the $1bn it plans to invest, GE says:

“$750m will be allocated to sourcing local supplies and employee training in the surrounding communities, as well as expanding GE’s service facility in Onne [in port Harcourt].”

The remaining $250m, GE says, will go towards building a manufacturing plant that will employ and train 2,300 local people in nearby Calabar.

Empowering local people

This is an astonishing amount of money to be spending on helping local communities. But GE says the benefits of reliable local suppliers and a skilled local workforce will in the long term far outweigh the cost of the initial investment. Kenny Yeats, GE’s operations leader and regional services manager, says that investing in Africa’s future leaders is a “big focus” for GE. “We believe that when you equip people with necessary tools and empower them with specific skills plus techniques, they would be able to deliver sterling performance,” he says.

Foundations built on local know-how

I agree completely with Kenny. It is far more cost effective in the long term to train and employ people from the surrounding area than to draft in expensive professionals from abroad. With this in mind, GE is spending $2.4m alone on training Nigerian engineering graduates to form the core technical staff of its oil services operations in the Port of Onne.

And, according to GE’s website, the Calabar site will: “Lay the foundation for knowledge and technology transfer to Nigerian sub-suppliers [and] academic institutions.” The site will also include a training centre for technical and leadership development, with GE planning to invest $2m to support building and equipment upgrades, curriculum development and teacher training.

This is a far-sighted investment that will reap long-term rewards, both for GE and Nigerians. Bravo GE!

Rosalind Kainyah, MBE, Founder and Managing Director

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VW’s ESG Failing

01|11|2015

News on Wednesday that VW slumped to its first loss in 15 years just shows the damage a failure of ESG can wreak on even the biggest and seemingly most inviolable companies. It put me in mind of a good quote I read in the FT the other day.

“ESG is no longer a specialism … but integral to the majority of markets and business models.” Exactly!

Here is the full quote:

“With respect to ESG specifically, the analysts say it is no longer a specialism segmented from the main market but integral to the majority of markets and business models in our view. Furthermore, the prominence of politics, regulation, resource usage and climate change are likely to keep this issue on the front burner for some time to come.”

The FT went on to show a breakdown of potential “ESG black swans” to be aware of for the future. Regulation, politics and resource usage come very high up the list. All critical factors that need to be borne in mind when it comes to investing in Africa.

Rosalind Kainyah, MBE, Founder and Managing Director

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Building profitable businesses in Africa: A triangular construct theory

29|10|2015

Foreign companies investing and operating in Africa often talk about the challenges of getting necessary approvals from government to develop or move their projects forward. In a conversation with a seasoned investor in Africa, we discussed the need for businesses to have, not just conversations, but the right conversations with governments and with society. I described this as “the triangular relationship theory”. At one point of the triangle is government, and at the other two business and the society.

Getting to grips with how these three points of the triangle interact could be the key to sustainable business and unlocking long-term profits.

  • Government and business: The greatest concern, to put it mildly, of any government is to lose the acceptance of society. Even your most ardent dictator needs to feel wanted.  Those in government know they can be voted out or overthrown at any time.  Businesses are either not aware of this fundamental anxiety of government or, if they are, of its implications.   Conversations with governments are often focused on what the business wants, and sometimes wants NOW.  Instead, a company can gain a competitive edge by demonstrating it appreciates the problems that are top of a government’s list of priorities. And these are often not the same as what is top of the company’s priority list.  Companies need to include in their conversations with government ways to address problems of national importance. They need to demonstrate the benefits they can bring, not just in terms of tax revenue, but provide tangible data on how they will boost the local economy through local employment; develop a local supply chain; support initiatives that develop job-relevant skills and give citizens opportunities for social mobility; and even help a country move further along the industry value chain.
  • Business and society: Businesses also need to have the right conversations with the right segments of society.  Often, companies have a stakeholder map which has the name of every single person they think could possibly impact their business, be influenced by their business, or become their advocates.  However, the reality is that each business should look hard at the eco-system around it. A company’s best advocates are those closest to home – employees and their dependents, local suppliers and their employees and dependents, and communities directly affected by operations of the business.  I genuinely believe helping society is a bona-fide business strategy that will reap long-term rewards.
  • Society, business and government: In short, each business should look hard at the eco-system around it and target the people with ‘skin in the game’ – employees, local suppliers and impacted communities.  They are the groups of people that a company should engage in conversation explaining their business plans and objectives – in ways that are accessible and understandable – and make the beneficiaries of their social investment projects.     They are the groups of people who will not only speak convincingly on behalf of the company but are also an important part of the society that government wants to please.  But to be true advocates, they must genuinely feel they have a meaningful share in the prosperity created by the business.

Nobody says this is easy. Many companies will have experienced the day-to-day frustrations of doing business in an African country: the stultifying bureaucracy, inability to find reliable local suppliers and the shortage of local skills. In many ways, one could argue this is the fault of governments. However, it is all too easy for companies to be vilified, especially when they fail to benefit society more widely. Pointing out examples of exploitation and neglect by the corporate world is a perennial vote winner.

That is why it is so important for companies to convince governments of the positive role they can play within communities. Show them they are investing for the long term.  I passionately believe that responsible business can create growth that is genuinely inclusive. To achieve that growth we don’t just need to have conversations with government and society, we need to have the right conversations with government and society. I started Kina to help foreign investors in Africa do just that.

Rosalind Kainyah, MBE, Founder and Managing Director

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Article by Oil Review Africa: Socio-economic investment

20|03|2015

“As a pan-African socio-economic advisory firm, our objective is to deepen economic empowerment. We identify socio-economic tools to help international companies mitigate the risk and leverage opportunities, of doing business, and support local African companies on building up their capabilities and their social, governance, and human resource development standards so that they can become part of the value chains of international companies.”

Read full article here.

Rosalind Kainyah, MBE, Founder and Managing Director

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What we are up to & News

12|08|2020

Ahaspora’s Webinar on Building Business Resilience in Our New World

Join our Managing Director, Rosalind Kainyah MBE, as she participates in Ahaspora’s webinar “Beyond Survival, Thrive! Building Business Resilience in Our New World” with Kosi Yankey, Executive Director of Ghana’s National Board for Small Scale Industries, and David Hutchful, Co-Founder of Bloom Impact. The webinar will explore ways to support Ghanaian business owners impacted by the Covid-19 pandemic, sharing ideas on how they can cope in these difficult times and possibly take advantage of the crisis to pivot their businesses for growth. To register, please click here.

Date: Sunday 16th August 2020. Time: 18:00 GMT/19:00 BST.

Ahaspora’s webinar banner | Beyond Survival, Thrive! Building Business Resilience in Our New World

05|08|2020

Joël Rault appointed as the Chief Representative, Western Europe for Gawah Holdings

Congratulations to Joël Rault, a member of our Advisory Board, who has just been appointed as the Chief Representative, Western Europe for Gawah Holdings. Click here to read more.

13|07|2020

Strategic Partnership Between Kina Advisory and INTESTRAT Services Ltd

We are thrilled to announce a strategic partnership between Kina Advisory and INTESTRAT Services Ltd. Reshma Shah, founder and CEO of INTESTRAT Services, will also join Kina as a Partner and Senior Associate. Reshma has extensive experience in Finance, Strategy, Risk & Performance Management, Change Management and ESG. For our full press release, ‘click here’.

28|05|2020

Joël Rault joins Kina’s Advisory Board

We are thrilled to have Joël Rault, Chairman and Founder of Hermès Advisory, join our Advisory Board. Joël has previously served as an Ambassador Extraordinary and Plenipotentiary for the Government of France and has extensive experience in administration and the management of private companies. He is also an emerging leader of the Harvard Kennedy School. We are looking forward to having his advice and guidance as we forge ahead with advising companies operating in Africa on Sustainability. For our full press release, ‘click here’

02|05|2020

Invest Africa Ltd’s Webinar On Renewable Energy Solutions in Africa

Join our Managing Director, Rosalind Kainyah MBE, as she moderates Invest Africa’s webinar on Renewable Energy Solutions in Africa – Covid19, Sustainability & the future of the continent with Jennifer Boca of Lekela Power, Mansoor Hamayun of BBOXX and Scott Mackin of Denham Capital. They will be looking at whether investment bodies will have to pivot away from renewable energy assets in light of COVID-19; how renewable energy operations have been affected by the virus; the multilateral funds such as AfDB’s SEFA play in renewable energy developments across Africa; and the importance funds should place on ESG standards in the investment decision?

Date: Wednesday 6 May 2020.  Time: 12:00-13:00 BST

For more information, please click here:

 

Rosalind Kainyah moderates Invest Africa’s webinar on Renewable Energy Solutions in Africa