Challenges Facing Beninese Small Businesses

I've been reading a book called Je Gere Mon Entreprise written by a Cote d'Ivoirien named Kanga Ballou. It's interesting because its a practical guide written for African Small Businessman. As such, it explains alot of western-originated management tools as they could--and might not work--in sub Saharan African contexts.

The book does quite a bit of diagnosing of the issues facing small business owners and managers. I've seen most of these problems operating also in Benin, where it can be very, very hard to establish and develop a profitable business, at any level. Despite the variety of causes, when I try to spur the folks I work with here to analyse their business-related problems and then to brainstorm possible solutions, they have a hard time moving beyond "le moyen," or the financial means, as the preeminent problem facing them. If only there were enough of ______ (equipement, money in the cash box, etc), all problems would be resolve.

Ballou is a bit refreshing because it's an African voice giving a more honest assesment of the situation. He finds that the problem of poor management is one of (if not the) key impediment to African businesses. That is, even when businesspeople here have enough capital resources of any given type: money, materials, etc., they often still end up with unssuccesful businesses for lack of proper managament of these resources. For example, stocks are poorly monitored, little market anaylyse is done, often the most basic accounting books are kept, let alone the financial position of the entreprise periodically analyzed and planned for.

The reason for poor management is both a within and without problem. There is certainly often a problem of initiative and will: alot of people that I have given training and guidance to here simply don't put the tools into practice. On the other hand, this is hard. Let's face it, businesses in the world run on western models and values, and most business people are not adequately trained in even the most basic management tools. Many have not furthermore haven't evolved in a culutral milieau that endorses certain Western notions of efficiency, linear time, market operations, etc. This is espcially an issue for in the case of Benin, which before 1990 was a so-called Communism-style controled economy--little opportunity here to develop intuitions about supply and demand, market analyse, workers incentive, etc.

Of course, there are other problems ailing Beninese businessman. Some of the other significant one's I've seen here in Nikki include very poor infrastructure (chronic power outages and one of the worst roads in Benin connecting a major town to the main highway); lack of access to markets (Benin has valuable commodities, but unfortunately doesnt see much profit on them for for lack of market info and a surplus of middlemen); difficult physical environment (sickness, heat, shortage of water); and dishonest business practices (in Nikki, its very difficult to be both honest and profitable as vender of many imported items--gas and processed foods, for example--because of the price-deflating affects that smuggling has on the local market.

What I’ve Been Up To…

It was about this time last year that I swore in as a Peace Corps and made my way up to Nikki. Recently I’ve been realizing that the vast majority of blog entries in the last 12 months have been more about what I’m learning or miscellaneous experiences, rather than what I’ve been doing vis à vis “formal” work.

Truth is, a PCV generally has to work really hard to work, and this is especially true the first year, as you are learning the language and locality, and getting a better idea of the needs, resources, and assets of a community. These being the prerequisites to productivity, one could say that work wise the first year sees a lot of false starts: ideas that seem promising, but eventually fizzle out for one reason or another. Nevertheless, I have been doing my best to put those token tax dollars to palpable good use (consider this my yearly report), and will now attempt to satisfy the common question—most recently recited by my sister— “What do you actually do?”

Business Formations. The biggest priority for Peace Corps Benin’s Small Enterprise Development sector program objectives, developed with the Béninese government, is providing business technical training to artisans, small businessman, and trade groups. In the last year I’ve given classes (Formations) on basic Accounting and Financial Planning, Marketing, and Business Planning, with some individual consulting here and there.

Formations usually are completed in 6 to 12 one-hour sessions. It’s hard to gauge a success rate with these, and the real work always begins after the course ends, as you try to follow-up and ensure proper application. Aside from the couple participants whom you see trying to apply the material, there are at least always a handful of participants who seem especially engaged during classes or who come back again to take another course subject. I personally have enjoyed these interactions a lot, as they have helped me to improve my French and to gain important entry points into the lives and business realities of many Béninese.

Working with Shea Butter Producing Women’s Groups. This, almost verbatim, was what I was told would be my primary project at Nikki, in conjunction with a local NGO. The mandate started out vague, but over the last year the work with 4 Shea Butter-producing groupements (women’s groups) has managed to define itself, if only in several different directions. One front of this has been business technical support in the form of accounting lessons, given to each of the groupement’s leaderships. In June we set up a small quality control training, in which over two days one local groupement (who themselves have taken quality control trainings, and who produces quality butter) shared their methods with the others. Three of the women’s groups and my NGO have been working on Karité Tree (whence comes shea nuts) replantation projects, with which I’ve assisted a bit in the manual labor. Two groups have also built Foyers Ameleriorées, simple but more energy-efficient earthen hearths used for cooking and making butter. And preparations are being made to start a garden for one group during the dry season.

The grand vision in the Shea Butter domain has always been to equip the women’s groupements for and open them up to better market positions, ultimately ones that will earn them better profits for their trade. We’ve been talking for some time to a producer/exporter in the South named Natura (who produces groupement butter into soap, then exports it to an importer/distributor in CA), and may be soon selling a small batch.

In any case, a lot of valuable research and experience has been gained in the last year to this “marketing” cause, and myself my NGO are in the works of planning a district-wide Shea Butter training conference early next year, which we hope will open up significant opportunities for many local groupements. More on this to come soon.

Small Business Training…and Hopefully More

While the majority of Bénin’s working-class populations (2/3) are engaged in the agricultural sector, the second largest demographic is engaged in service-sector activities. This service sector also generates just over half of Bénin’s aggregate income.

The service sector itself is composed largely of Artisans (and Artisan Entrepreneurs), a broad economic category which includes mechanics, electricians, metal workers, carpenters, tailors, hairdressers, food and drink producers, potters, artists, and small-scale transformers of various household products.

Among Peace Corps Bénin’s Small Enterprise Development (SED) objectives is the technical training of Artisans/Small Business Owners in business skills which will reinforce their organizational and management capacities, and helping to create linkages between markets that will spawn business growth and development for such small and medium-sized businesses.

Such an objective can include an array of activities for a Peace Corps SED Volunteer. For Artisans who have and/or manage their own shops, I recently began teaching Comptabilité (basic accounting). If successful, these formations (training) will not just teach artisans to “crunch numbers” and augment profit. As crucial as profit margins are to the life of a business, good business and development itself is not just about quantifiable growth and the bottom line. Rather, it is my hope that the analytical rigor that accounting demands will also trigger more analytical planning and problem-solving in other arenas of life. I also hope to use the general discipline of accounting to open up other important “less-quantifiable” topics of discussion, to include corruption and transparency, worker’s/employer’s and children’s rights, conflict-resolution, and the conscientious management of household/personal income and resources.

Aside from accounting, SED Volunteers also have taught formations on Marketing, Business Managament, Personal Finance, Savings and Credit, Time Managament, and other topics of practical interest to entrepreneurs. Additionally—pursuant partly to the demands of Sustainability—many volunteers offer formations to “train-up trainers.” These endeavor to teach business specific skills, offer guidance on teaching, and create a “system” of incentives that will ensure that low-cost technical business training continues when Peace Corps Bénin has left Nikki, and eventually Bénin.

Bettering Lives by Making Butter

One of my primary projects here, commissioned by a local NGO L’Enfant Epanoui Bénin and by project financers, will be delivering assistance to three local women’s groupements in the income-generating production of Shea Butter.

In Bénin and across West Africa, a groupement is a group of women (in this case about 30-40) who form some economic collaborative such as the cultivation, preparation, and selling of vegetables, yams, soybean products, cheese, etc. Our groupements are in the business of Shea Butter.

Shea Butter is more recently known to the States as an ingredient to certain beauty products or as an item in the natural products niche market, given Shea Butter’s veritable uses and its supposed homeopathic qualities. But in West Africa, the only region where the Shea Nut (coming from the Karité tree) naturally grows, Shea Butter has been used for centuries for a plethora of household ends, most notably as a moisturizer, healing product, and for cooking.

Although Shea Butter has been produced across this sub-Saharan strip of Africa for generations, most groupements (being the most common producing agent of Shea Butter) employ the same tools and methods always used. Basically, the women will de-husk the nuts with a mortar and pestle; further remove moisture from the already dried nuts by grilling them over a fire; run this through a mill; enliven and “refine” the butter through a lengthy and technical process of kneading, cooling, then boiling the paste; then leave the refined oil to dry into butter in calabash bowls. The end product, as you will see it in a local marché, is a spherical greenish/crème-colored solid with a earthy/nutty taste and odor.

According to my own observations, transforming a 25kg of dried Shea Nuts takes: about three days, the manual labor of several women (at least), and about 4300 CFA (about $8.70) in direct costs. Yet, in the local market such a transformation will yield only about 5,000 CFA (about $10.00) in sales for the women to divide up or reinvest in the next production cycle.

Our project hopes to cut the direct and indirect costs of the production cycle by purchasing for each groupement a machine that effectively subverts the time spent de-hulling, and the money spent running the nuts through the mill. We also hope to regularize the quality and quantity of production enough such that we are able to export raw Shea Butter to a buyer in the States (where demand for raw Shea Butter is catching on fast) or Europe. According to my preliminary research, in these markets one can generate revenues of more than four times that in the local Béninese marchées. If such a point could be reached (indeed, many groupements across West Africa are already selling directly to buyers), our groupement women and their families could benefit greatly from the sustainable supplemental income that is generated.

Supplementary and complementary activities will include the replantation of Karité trees in the our locality; community sensibilization concerning the problem of desertification; and the technical training of the women’s groupements concerning topics such as accounting, shea butter production techniques, and others directed towards the better well-being of their households.

Photos:

Top Left: A woman from a local groupement sells Shea in the Nikki Marche.

Bottom Left: A drawing depicting the kind of Machine Production of Shea Butter that is replacing more traditional methods. Acquiring such technology will greatly economize our groupements Shea transformations.

Don't Know Much About...

The Republic of Benin

Benin is a small Francophone West African country wedged between Nigeria and Togo. It is an unfortunate reality that if you don't know much about a particular African country it is probably because that state hasn't had the tumultuous and notorious recent history that it's neighbors might have had and, therefore, doesn't stand much of a chance on the international newspage--such is the [fortunate] case with Benin, I think.

Nevertheless, Benin's history and culture has its share of points of interest. For example, in the days of cross-Atlantic slave trading, Benin was the primary exit-point for slaves captured and gathered from across the African continent to be shipped to the Western Hemisphere. Historically and today the country is the progenitor and primary practitioner of the Voodoo belief system (with over half the population practicing either purely or in syncrestitic forms). During the 1970s and 1980s Benin was commonly known as the "Cuba" of West Africa for its exceptional communist postures and policies. After a stark turn of events in the lates 1980's however, Benin's government was overhauled, its economy was liberalized, and today is considered of the most stable of West African states.

For a more info and a country profile of Benin check out the BBC's or the CIA Factbook's entries. Other informative sites of interest include a Peace Corps Friends of Benin site (a hub for news and other info), Benin's Tourism site (I believe put together in part by Peace Corps Volunteers--includes an exciting welcome anthem), and the U.S. State Department's notes on Benin.

The Peace Corps

When it comes to the Peace Corps, there are a number of associative images floating out there in the popular consciousness: long-haired idealists evading the draft and developing the world with smiles (or perhaps more likely developing their own tastes for local drink, etc.); candidate pools for the CIA's historic recruitment of cold war spies; or, if your imaginative powers are especially fueled by film, maybe you think of Tom Hanks and John Candy bumbling around to build a bridge in a Southeast Asian village (1985's Volunteers).

If you're interesting in augmenting a popular education with some other sources, I'd recommend first checking out the Peace Corps website for the PC's self-spin on history, goals, etc. To get a more candid exposure to what a Volunteer's work and life looks like on the ground, check out the Peace Corps Benin Blog index, which includes updated blogs from current Small Enterprise Development volunteers, some of whom I will probably be working with in Benin.

Economic Development

There's no way that I'm going to be able to sufficiently broach this issue here. But if you're interested in learning more about what has arguably been the most important international social question of the past 60 years, the problem/possibility of "Third World" Economic Development, check out the UN's Millienium Development Project to eradicate poverty (an overly-optimistic project in my opinion but nonetheless noble in its goals and worth looking into for a full-orbed look at some of the goals that international development entails). For the most holistic definition of poverty and development, I'd have to reccomend Bryant Myers's book Walking with the Poor, which is likely to trigger a paradigm shift in any pre-conveived definitions you might have concerning "the poor."
Small Enterprise Development (SED, aka Micro Enterprise Development) is the grass-roots development of small businesses. SED is just one facet and strategy within the whole Development Project, and best describes the type of projects in which I will eventually be engaged in Benin. For a primer on what SED entails, check out an introductory paper put together by the Chalmers Center for Economic Development at Covenant College.