This Speech was delivered by Mike Nyinaku (CEO of The
BEIGE Group) during the 2016 Ghana Economic Forum,
under the theme “A Ghanaian Owned Economy”
Your Excellency, Mr. President, Honorable Ministers and Members of Government, Members of the Diplomatic Corps, Business Leaders, Distinguished Ladies and Gentlemen. I’m honoured to have been chosen once again to be amongst the speakers for this forum. It’s truly an honor and I thank you.
As has already been mentioned by previous speakers, the organisers have chosen to maintain the same theme – A Ghanaian Owned Economy – for this event for the 5 year period. I support this as it makes it easy for referencing and also helps us monitor our progress. My definition of a Ghanaian Owned Economy remains that economy where at least 40% of GDP is derived from the economic activities of businesses of Ghanaian ownership…not origin. OWNERSHIP.
It’s not too ambitious an aim to have because that seems to be the case with most of the countries that a small mind like mine would consider as showing signs of prosperity. I can speak of Cote d’voire, Nigeria, Egypt and until recently, South Africa AND advanced nations like Japan and others.
In sync with the organisers I’ve thus chosen to do a sequel to the presentation I made in 2015. Last year I touched on the evolution of entrepreneurship in Ghana, why I believe in GH and I also shared some
personal thoughts about PPP. Today I intend to advance my presentation on entrepreneurship, but from a totally different perspective. I would certainly gossip about the government. Again I’d share why I still have faith in GH and finally, I’d share with you something personal.
It’s normal to expect most of the SMEs (Small and Medium Scale Enterprises) in any country to be owned and run by natives but there’s also an emerging trend where natives are beginning to own respectable shares in MNCs (Multinational National Corporations) operating in their respective countries. This is because MNCs are very crucial in any society and as a matter of fact most SMEs revolve around them and would not survive if these companies or corporations cease to exist. To gather sufficient basis to support my claim I considered some statistics available for Toyota & General Motors – of Japan and the US respectively. Let’s do some small mathematics here…
Toyota employs about 350,000 people worldwide, about 72,000 of whom live in Japan. The company also has a total of over 5,000 direct suppliers. It’s estimated that Toyota’s indirect suppliers exceed 50,000. This group of persons – their direct staff, direct and indirect suppliers – also have their own network of distributors and suppliers who they deal with at several levels. They all buy food, drinks, go to church, buy clothes, patronize hotels, buy cars, fuel and the list goes on. When you work the math, about 20million people representing almost 16% of the population of Japan have their livelihood connected to the existence of Toyota.
I gathered similar statistics also for General Motors. Now, the sheer numbers of lives that are impacted by these companies alone have turned them into micro–economies within their country’s larger economy. And because some of their suppliers are from outside their mother countries, the stakes are so high that it’s in the interest of their local government as well as external governments to keep these institutions running. There would be complete chaos if they fail and trust me GENERAL MOTORS or Toyota would never die. I’ve come to realise that, as societies evolve, these monster corporations are created in order to move wealth around within the system as well as to preserve the wealth for a long time within the system. If Toyota collapses, it means a certain farmer at Kiyamishito, a remote village in Japan loses income because the company that provides canteen services for that company that supplies just seat-belts to Toyota would have run out of business. The impact of these MNCs are too enormous to comprehend. Now let us ask ourselves, would all of these people make more money than the MNC itself? C’mon. Certainly NO. And for me that is where it begins to hurt when I notice that the MNC in question is not from that country. Yes you would pay tax… BUT how much, aaahhhh! Only 25% of profits you choose to DECLARE… I’M SURE YOU KNOW WHAT I MEAN…And what happens to that 75% remaining…It’s for the shareholders. If shareholders are not locals, the funds would be repatriated and safely so because it won’t make sense for risk management purposes to keep the funds here. Besides, it’s their money anyway. That’s the reality of the case.
So can you imagine if MTN was owned hypothetically by a mass of Ghanaian shareholders… What would they do with their profits? That money would just be going round and round in Ghana. Isn’t it a shame that 60 years after independence we cannot count even 10 MNCs from Ghana? And by this I’m not talking companies owned by individuals who may have some skeletal branches outside GH; I mean companies listed on the stock exchange, employing massive numbers and who have been able to extend their dominion across our borders. That’s what I’m talking about. You may disagree but I believe that at this rate it would take almost forever for us to build MNCs of our own. Do you know why? It is because the folks who can make it happen – either knowingly or unknowingly – are waiting for it to happen by natural occurrence.
As they always would say…Yerr and so the private sector is the engine of growth and as for us we just create the enabling environment for private sector to thrive. Yerr…our work is done. So the businessmen must move. No Sir! You are wrong. By creating the environment, small companies like mine would thrive and find our level. We would be able to provide livelihood and economic opportunities to a few thousands of individuals but that’s where it ends…and I’d explain this soon. You don’t have to expect BEIGE Capital to organically grow into becoming Ecobank, just like that. It doesn’t happen. A company like Ecobank was created into being by forces of greater influence. Same can be said for others like Dangote, GLO, UBA and the like. And for that to happen there has to be a willingness on the part of the force that has influence over the system and can make things happen – in this case, the government – and also a willingness on the part of owners of the vessel that has potential to be exploded. Without this, if you are waiting for such monster companies to emerge through organic transformation then we would be waiting for a long time. As I struggle to build my business I have come to realise that there are various levels of entrepreneurship categorized by order of the level of influence. And over the years I have come to identify 4 broad categories.
- For me, level 1 is the level of entrepreneurship that enables one achieve influence over one’s household and handful of people. The waakye seller across your street, my mum’s pre-school in Dansoman, that bakery in your neighbourhood are classic examples. There are thousands of such examples littered around us and such undertakings provide employment opportunities to as many as 100 persons, depending on the nature of the business. There’s at least one of such entrepreneurs in every household in GH.
- Level 2 is that scale of entrepreneurship that goes beyond the household to impact on one’s larger community. Undertakings of such nature have capacity to employ up to 1,000 persons and often such ventures tend to have multiple channels for distribution so they are visible at multiple locations. Such businesses are of enormous value, have significant impact on the micro economy, they require a little more sophistication & technical skill to manage and hence are fewer in number as compared to those in level 1.
- Then the level 3 scale…and I’d bore you with some maths again…These ventures provide direct employment to between 1,000 and up to 5,000 or more persons. I’d happily refer to the GN Groupe, led by Paa Kwesi Ndoum as one of such. Again, assuming we have 5 persons per household then businesses at level three can be said to be directly affecting the lives of over 25,000 people who are all connected to their employees.
Now let’s assume that such a business hypothetically trades with 500 direct suppliers who in turn directly employ an average of 25 staff each. Using the same number of persons per household then by extension this level 3 business is impacting directly and indirectly on the lives of at least 100,000 individuals. If any business is of such nature, you would not need me to tell you it should be of national relevance.
And obviously as we are climbing up the ladder the numbers and availability of such undertakings reduce, naturally.
- Come to level 4, and you can estimate the numbers yourself. This is the stage I call GLOBAL INFLUENCE and as discerning fellows I’d leave you to find out how many of them you can find as being of Ghanaian origin…And if you find any, please keep the details to yourself, I beg you.
So now please hear me out on why I believe we are far from producing our own MNCs … Your business needs to be at level 4 or at least the upper bands of level 3 for you to assume MNC status. You see, by the time most Ghanaian companies attain that level of real stability & maturity, most of the promoters are tired because they would have been running for well over 20 years or more. Most of them would be in their late fifties and some past 60. At that age, Charlie…entrepreneurs ABRE! Obviously these gallant men would have contributed to society by providing employment and support to the social system and all…they are tired and want to rest. Their entrepreneurial spirit would have declined somehow and they would rather like to keep it cute and safe within the family. And as if that is not enough, at that stage you would be fighting your EMPLOYEES, the regulator, the GRA, the municipal authorities, sometimes the government and the entire system.
When you are beset with all of these, let’s be real – you would start asking questions like… Why should I kill myself for this? After all, what do I want? So what happens is, when some of our business leaders manage to push their businesses to level 3, they peak there – that’s it – And really why not? Because they owe society no obligation to keep expanding – at that stage they would have reached their limits within the system we operate within.
It would now be the turn of the state to propel THAT vessel into global significance if indeed that means anything to the state. That’s how it’s happened everywhere. So if I become president I’d take a keen interest in those businesses that have reached a stage where they can be propelled into global significance….and I’d BLOW THEM up. But wait, not just that I’d ensure that they are mandated to give back to society bountifully and of course throw some support to my party…OR? Talk is cheap I know… but I also know that where there’s a will, there’s a way. If in doubt ask Obasanjo how he fired up DANGOTE, GLO, UBA and others that have become global giants today.
These huge companies that you see around, 20 years ago were only domiciled in Nigeria. In comes Baba who says let me create opportunities for billionaires to emerge. And through influence over the system he makes room for such organisations to flourish to the extent that they have the guts to explore into territories beyond their boundaries.
Today these huge corporations are littered all over the continent and even in the West, taking territories and enlarging their coast. In Ghana, they dominate some of our industries with audacity, we patronize them with zeal and sometimes refer to them as though they are supermen. They are not. And hear me out, by making it possible for his country business folks to be this large, what OBJ has done is:
- stir up a completely new way of thinking for present Nigerian entrepreneurs who now don’t limit themselves to NĲA but see the world as their platform
- and more importantly he has raised the achievement bar for upcoming entrepreneurs who would have to build upon the milestones being set by their leaders today.
At this rate, there’s no doubt in my mind that the next generation of entrepreneurs from that country would shock the world. The guys behind these companies were like Kofi Amoabeng and Togbui Afede in their prime. They are not at all smarter than Edward Effah or Keli Gadzekpo… What they had was a force behind them that influenced a system to create opportunities for budding entrepreneurs – regardless of their perceived political colour – because those leaders saw the bigger picture. I doubt if anyone would want to suggest that all the employees of GLO belong to the same political party.
Ladies and gentlemen, now let’s come to Ghana. Looking at what is happening, are we just going to stand there and watch…? Why we have succeeded in creating a system that is so intimidating of its own yet very opportune for others beats my imagination… that’s Ghana for you!
I turned 40 barely three weeks ago. And I must confess I’ve had mixed feelings prior to this milestone. So soon, that reality of adulthood has hit me and so very hard. I can no longer bask in the pride of being celebrated as a youth achiever anymore. Early this year, after about 15 years of working non-stop, I finally took a leave for about 2 months so that I can have some time for myself. And during this leave I went through a period of introspection during which I tried to assess how far I have come in this short life. They say life begins at 40 so like most of you have already experienced, I’ve been going through that phase where one keeps assessing one’s self to see if one’s turned out well or not, knowing that time is gradually passing you by.
Whilst doing so, I took a keener interest in the lives of some of our business and social leaders some of whom I admire dearly. Permit me to mention a few and here I’d PROUDLY MENTION Bishop Dag Heward Mills and Dr. Kwabena Adjei of Kasapreko. I noticed that in the lives of each of these persons was a time when their work and brand value gained significant publicity and image. And for each of them, during these periods, they gained significant yardage, chalked life changing milestones that propelled their career to another stage. Thereafter, the pendulum of opportunity swung unto another person. Thus how far they have come now was largely attributable to what use they made of the mileage they attained during that period of opportunity…That was their “BIG MOMENTUM” period…Wikipedia describes it in short as “BIG MO”…and it happens to all of us. It’s that period in life when everything you touch seems to work in your favour. I further concluded that one thing that accounts for the differences in the levels of successes that each of these persons has attained was the stage in their life at which they experienced their BIG MO and the extent to which they utilized their BIG MO advantage.
One pattern was prevalent. Those who experienced their BIG MO in their 30s & 40s appeared to have attained literally much bigger achievements and influence than those who experienced it in their 50s. It appears to me that one factor that caused this could be the fact that naturally the zeal and impetus to take risks had significantly diminished with age. I bet you would agree that this is a fact of life. If you are lucky, BIG MO would occur more than once in your life. I’d like to juxtapose the concept of BIG MO in the case of Ghana and I can recall that barely a dozen years ago Ghana prided itself as the gateway to Africa. There seemed to be some momentum in the country at the time and investors the world over found us to be an attractive destination…. but lately that attraction seems to be waning gradually. It’s difficult to identify what mileage we gained during that BIG MO period. Perhaps I was too young by then so did not take note.
Now have we all noticed what is happening to Cote d’ivoire? Looks like BIG MO is on their side now … Before I leave, permit me to share with you something from the Bible. It’s in Ecclesiastics 9 vs 11… and I read “ I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor ye favour to men of skill; but time and chance happeneth to them all.” Even the good book recognizes that time and chance happens to everyone. Again I also encountered from the book of 1 Chronicles 12 vs 32 where the author describes the men of Issachar as men who understood the times and knew what Israel should do — 200 chiefs, with all their relatives under their command. If there’s any ability I crave now that I’m 40th floor, it’s the ability to discern my BIG MO moments and also the gift to be able to know what I have to do in such times. We may be losing our shine but I dare say I still have faith in Ghana because of the calibre of entrepreneurs we have and are breeding today.
Two weeks ago I made a new friend. His name is Galley Klevor and he’s in this auditorium….Galley let’s see you by hand. Gally is 23. THAT’S GALLEY.., a computer science student at the University of Ghana. And from my alma mater…Presec Legon. ANYWAY…Galley was introduced to me by someone who said he (Galley) had a reputation for fixing things…So I handed over my old blackberry to him to fix, as I had lost all my contacts… What had taken many technicians over 2 months to fix was diagnosed and sorted out for me in a day. So I took a keen interest in him and wanted to know more about him. Whilst still in school, Galley has a technology company called GHALYWORLD through which he fixes solutions to software and hardware problems. He owns his company with two other friends – all students of the University – and because they do not have a car or proper office, they work on call, according to him. They go round scouting for jobs and when they get any, they carry the computers to Galley’s house and fix them in his mum’s garage or anywhere they can sit to work.
That’s how Apple was started. In his own words, Galley’s aspirations are to have a GALLEYWORLD computer product in every Ghanaian home by 2050. If Galley is to realise his dream, he needs to start from a platform that would make it possible for him to catch up and compete with the rest of the world. And it’s the responsibility of you and I to hand over that platform to him. If as of today we are unable to keep up with the pace of the world then God knows how far back we would be by the time we handover to Galley and his generation.
I can identify with him as he embodies, for me, the symbol of a generation that wants to go somewhere. So we at The BEIGE Group have decided to give them a hand to propel them.
For the love of Christ, our children, and country it should never be said again that another generation did not do enough for Ghana. It’s true that Ghana may have lost the opportunity to utilize that BIG MO period we enjoyed a few years ago to its full advantage. But thankfully a new crop of entrepreneurs are emerging who have AGE, ENTHUSIASM, DRIVE and ENERGY on their side. You need not look too far to find hem. Remember that these are the ones you need to invigorate if you really want to achieve a sustainable impact on our society. It was done for us by Kwame Nkrumah…so you and I have no choice.
Our leaders – while convicted by the guilt of their failures – should derive strength in the fact that there’s an opportunity to make amends. Let’s rise up and do it again. Let’s do it in a way that would inspire, ENERGISE, and challenge Galley and his generation to respect us and also commit to outdoing us and themselves. Let’s do it in a way that would pay homage to our forefathers who risked their lives so you and I can have this platform…. …And as aptly profoundly captured in the lines of this timeless creed passed on to us by our fathers…”Yen ara asase ne…ehTe abodenden ma yen..
Thank you for indulging me. Thank you again for honouring me with this invitation. As we go through the remainder of the sessions lets be guided by the adage that says.
“Adepa wo fie a…OYE” I wish you well and God Bless.