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A Good African Story: How a Small Company Built a Global Coffee Brand Kindle Edition
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The book tells the surprisingly engrossing story of the challenges and obstacles faced by an African entrepreneur in starting and growing a business. Interestingly, the biggest challenges were not in dealing with a corrupt business environment or bureaucratic inefficiencies. Instead, they were the same types of challenges faced by entrepreneurs in developed countries, only magnified: gaining access to capital, establishing credibility with suppliers and customers, networking, gaining entry to markets, and keeping the creditors at bay.
An interesting aspect of the story is the way in which the prosperity of the enterprise it tied to the prosperity of the farmers who supply the coffee beans. In order to produce high quality coffee, careful attention needs to be paid to the growing conditions. The coffee farmers have to be convinced that their extra efforts will be justly rewarded, and they have to acquire money management skills in order to run their farms well. Thus the author's business has to invest in farmer education and setting up Savings and Credit Co-operatives, making it a natural kind of social enterprise.
Another interesting aspect of the story is the author's personal faith journey. Although we are not told much about his Christian beliefs, it is apparent that they have had a significant influence on his business decisions, which he makes not just as a self-seeking entrepreneur but as a leader who understands how the well-being of many people depends on his persistence and careful stewardship of his company's resources.
Most "solutions" to African poverty are conceived and imposed by Westerners without adequately consulting the intended beneficiaries, and accordingly they do not work. Other "solutions" are conceived by self-interested African elites, and they serve only to enrich the already rich at the expense of the poor. This book shows that there are genuine African solutions to African problems, and we should be doing everything we can to encourage the growing band of entrepreneurs who are making such a difference.
It has an overview of the difficulties of working in Africa and a superb account of the contributing factors that have led to this situation. It is an inspiring story of how a small company managed to overcome enormous obstacles to build a global brand. It provides one of the best accounts I have read of what it unquestionably takes to be an entrepreneur.
In the first part of the book, Rugasira, a Ugandan with a law and economics degree from the University of London, provides context to the story. He describes what has caused the breakdown and failure of government institutions in sub-Saharan Africa and links them to the distortion caused by colonialism. At its centre, colonialists seek only to enrich the mother country which leads to the inevitable exploitation and disruption of the colony’s social and economic life.
Today Africa’s media image is of a desperate, violent and hopeless continent. Africa’s leaders, writes Rugasira, “have generously fed this perspective through misrule, greed and brutality.” In contrast to western democratic models, where the people own the country, and see their government as their accountable servant, in many African nations the rulers use the state’s resources to secure the loyalty of the ruled.
Compounding the situation is the misguided assistance giving to these newly emerging economies by donor agencies of Western governments. Aid comes with conditions that are counter to the needs of developing countries. An example is the insistence on market economies despite the fact that most developed countries developed because of state intervention. Additionally, the sometimes overt and more often unintended covert trade barriers impede a fragile country’s ability to trading its way to success.
Rugasira also lays a large share of the blame for the state of economies such as Uganda’s, on the country itself. As an illustration Rugasira describes the tragic history of his family when Uganda, out of control, led to the disintegration of his parent’s wealth and his father’s life. Idi Amin’s populist and violent rule was followed by destructive chaos with aftershocks that still reverberate. Neither the family’s nightmare nor country’s is an isolated event in Africa. The actors differ, the precipitating histories differ, but the consequences are the same - the suffering of the people, wasted opportunities, and unrealised potential.
Rugasira’s company, the “Good African Coffee” was founded in Uganda with the intention of mobilising the country’s coffee growers and growing this industry into an international player. At the time, and still today, we associate processing countries with products they do not originate. We associate the Swiss with chocolate even though not a single cocoa bean is grown there, ditto Italian coffee. The vision was to turn Uganda from the unacknowledged source of the coffee beans into a coffee brand producer.
Across the African continent, only 18.6% of exports are of beneficiated goods – grown, manufactured and valued-added in Africa. In contrast, 65% of good imported into Africa are beneficiated. The coffee growers who sell only their beans earn a subsistence living from this. Those who process the beans and add value through the roasting, packaging and branding take the greatest share. “Good African Coffee” would change this.
The intention was to give the local farmers enough profit to be able to improve the quality and consistency of their crop. They would also participate in the margins earned through others beneficiation.
Rugasira wrote and spoke extensively in the UK about “trade not aid.” If African products could constitute a mere 3% of goods sold in UK supermarkets, the income would represent £7.2 billion per Annum. This sum represents close to the total direct investment in the continent in 2004. Aid has not saved a single country anywhere; trade has grown dilapidated economies into global powerhouses such as Japan and Korea.
For Uganda to be able to compete would require working around the deficits of a “poor and decaying road network, maddeningly corrupt and inefficient bureaucrats, government regulations that frustrate and hinder business operations, a lack of reliable electricity or water.” These deficits have a frightening cost. To ship a 40-foot container from Dubai to Mombasa costs between $1,400 and $ 1, 700, but the clearing and transporting from Mombasa and Kampala costs $ 3, 800 to $4,500!
The start-up company “Good African Coffee”, would also face the challenge of every start-up - finding finance to fund a secure launch. In Uganda, that is decidedly different from the same activity in Europe or the Americas where the financial sector has liquidity and is developed.
How Rugasira fought his way to get “Good African Coffee” onto the shelves of the largest supermarkets in the UK, Sainsbury and Tesco, is a business success story well worth reading. It is unlike any one would come across in a developed economy, the source of so many business success stories.
Perhaps the most valuable part of the book for an entrepreneur is the human story it tells. The painful truth of this dimension is rarely told in business success stories. The humiliations and the terror of not being able to meet the company’s financial commitments is described factually. Singularly devoid of any dramatic tone, the drama is more pronounced.
Rugasira tells of how a family friend took the time to visit his mother to talk to her about her son. He had now developed a reputation in the community for his inability to pay his debts. Her concern was for a young man who used to have a sterling reputation in business, and the community.
And he kept going.
Rugasira tells of how, in absolute desperation at the rejection for a product listing in Sainsbury, he fell on his knees and prayed. The listing was vital to the very survival of his business. Then, as the last act of totally defeated man, he wrote a letter directly to the Chief Executive of Sainsbury pleading his case for inclusion. He presented the positive social implications of Good African Coffee and appealed to Sainsbury’s proud history of support of good causes. Then he pressed the ‘send’ Button. Then he found all they spelling errors, but could not recall the email.
The realism of this account of the entrepreneurial spirit is so refreshingly different to the popular air-brushed accounts. Everyone who had built a business will recognize the struggle.
Readability Light --+-- Serious
Insights High -+---- Low
Practical High --+-- Low
Ian Mann of Gateways consults internationally on leadership and strategy
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