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Dutch companies in fragile African States

Published on: 27-Mar-2015


Business in Africa’s conflict-affected areas; unique and new opportunities or mission impossible? Why do entrepreneurs choose to work in conflict and unstable areas? What is the potential of these regions? Doing business in conflict and fragile states not only means facing major challenges, it also implies exceptional opportunities. Libya and Nigeria, for example, do not have the most stable climates for entrepreneurship. Libya has been in a state of war since the uprising against Muammar Gaddafi during the Arab Spring of 2011 and a history of rebel movements. Nigeria had the largest GDP in Africa in 2014 but has seen a lot of violence by Boko Haram since 2002 (with the most violent episodes in 2014 in addition to an outbreak of the Ebola virus). In the current times of reduced funding, NGOs are inclined to look for public-private partnerships to stimulate business. Additionally, the private sector may benefit stability because of their investments in the local market . Doing business in these areas is not obvious and immediately thought of, but the stories of three Dutch companies operative in countries like Libya and Nigeria prove that entrepreneurs can indeed take advantage of p.e. the absence of competitors. In cooperation with local partners and NGOs, they can gain access to troubled but nevertheless emerging markets.


The potential of Nigeria
Joop van der Vinne (and his company CAB van der Vinne) advises European companies and entrepreneurs about doing business in Nigeria. Even though Nigeria is often seen as the country of Boko Haram, Ebola and corruption, he is very positive about developments in the country and the opportunities that lie ahead. “Nigeria is the biggest and richest underdeveloped country in Africa. Twenty percent of the population of the whole continent is Nigerian. However, there is still no access to a lot of required products and that is why people are really open to technical cooperation to stimulate local production. Because of the low oil prices, this is an interesting moment to invest in Nigeria. More companies will invest outside the oil sector and other sectors like health, tourism, industry and agribusiness can take advantage of these current opportunities.’’

photograph: Zouzou Wizman

The first Libyan mushroom farm
Mush Comb, specialist in the machinery for the worldwide mushroom industry, also took advantage of  the available business opportunities in a conflict-affected area. Different from CAB van der Vinne, that expects investments of more companies, Bob Holtermans from Mush Comb states: ‘’You must keep in mind that if the overall perception of a country is negative, your competitors are likely to share the same negative perception. In this sense doing business in a country that is often negatively depicted could create a competitive advantage.” He was approached by a potential client in Libya several years ago to set up a mushroom farm for the local market and he took a serious look at the business opportunities offered. “If there is an interest in your products and services, you should explore the possibilities,” Holtermans explains. Of course, doing business in a country of political unrest also brought along uncertainties for Holtermans: Mush Comb was in the middle of a process of delivering containers to the client when the uprising against Gaddafi commenced causing serious delays. Adaptability is required when doing business in a country like Libya, especially considering many aspects that are beyond one’s control. In the end however, Holtermans and this client built a strong relationship and managed to successfully set up Libya’s first mushroom farm.

Aid & trade and the role of NGOs
Delft Imaging Systems (DIS) designs and services medical imaging techniques worldwide. It aims to provide even the remotest areas, including the developing and conflict-prone countries, with their affordable medical imaging devices like the CT, MRI and ultrasound. Additionally, the DIS mobile one-stop-TB-clinic equipped with Computer Aided Detection software (CAD4TB), has significantly enhanced the worldwide fight against Tuberculosis. This technology, developed in a consortium with the Radboud University Nijmegen, is now promoted by the WHO.

Most companies are tempted to focus product development on the western market, after which they introduce this same product in for example Africa. In contrast; DIS takes the needs of the developing market as a starting point, which is an important reason for their success in developing and fragile states. A good relationship with end users of a product is necessary for the verification of concepts. Additionally, local distribution feeds local ownership. DIS outsources the formal distribution to local parties that are familiar with the market. Especially in developing and fragile countries, this will lead to the quickest and best results.

DIS also believes that collaboration is key to the success of any product. The Baby Viewer (a portable, low-cost ultrasound system to improve maternal health) is a good example of a public-private partnership. Fleur Posthumus from DIS stresses the use of a PPP for business success: “Teaming up with Cordaid has facilitated us, as a consortium, in the development of a contextual design that takes due notice of local sentiments and culture. Cordaid has a firm foot on the ground in conflict-affected areas and has experience in strengthening maternal health with mother and child projects.’’

Cordaid’s primary role will be to maximize the social impact of the technology. “Upscaling the use of the Babyviewer to earn back the development costs is important,” says Nathalie Popken from Cordaid, “but it’s more important for Cordaid that the final product suits the exact needs of the users. Only then it will have the desired impact: the early detection of prenatal complications and the prevention of unnecessary deaths.” The success of the work lies in the unique approach:  it is a community-based, multi stakeholder approach and a partnership that focuses on smart, innovative solutions.  

The example of the DIS and Cordaid partnership illustrates how companies and NGOs in African conflict-affected areas can team up and complement each other’s field of expertise.

Dutch entrepreneurs’ advice
Mush Comb’s move on the Libyan market shows that patience and adaptability are needed when dealing with fragile states, but when well-prepared, this can lead to great results. Other advice from the entrepreneur includes knowing the local rules. ‘’It is a good idea to hire an expert who is familiar with the local business climate,” Joop van der Vinne explains. Van der Vinne’s most important lesson is to take the time to get to know the country. “Nigeria can be considered one of the most difficult African countries to break through, but by combining the right product and the right business process Nigeria can be the entry point for the whole African continent.”

For more information about the organizations that contributed to this article and their work in developing countries, check their websites by clicking these links: CordaidDelft Imaging SystemsNABCMush Comb, and CAB van der Vinne.


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