Business24 Newspaper 30th June, 2021

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WEDNESDAY JUNE 30, 2021

The new baileys with an African spin launched by Guinness Ghana

Planning for growth helps SMMES to grow

See page 9

See page 13

BUSINESS24.COM.GH

NO. B24 / 215 | NEWS FOR BUSINESS LEADERS

WEDNESDAY MONDAY MAY JUNE 3, 2021 30, 2021

Industry needs right systems and policies to optimise AfCFTA—AGI

By Patrick Paintsil p_paintsil@hotmail.com

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ocal producers and exporters need to look beyond West Africa and deploy strategies that will enable them penetrate the continent-wide market, Seth Twum Akwaboah, Chief Executive Officer of the Association of Ghana Industries (AGI), has said.

In doing so, makers of products in which Ghana has proven competitive advantage will need the right support systems to expand and to push those goods into the single

NIC says addressing concerns over mandatory import insurance

By Henry G. Martinson

T

he National Insurance Commission (NIC) has assured the importing community that it is taking Cont’d on page 3

BoG issues new orders on captured ATM cards

Cont’d on page 2

By Benson Afful

MoTI backs proposal to license local credit rating agencies

By Benson Afful affulbenson@gmail.com

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Technical Advisor to the Minister of Trade and Industry (MoTI), Anthony Nyame-Baafi, has welcomed the move to license domestic credit rating agencies by the Securities and Exchange Commission (SEC).

affulbenson@gmail.com

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he Bank of Ghana (BoG) says financial institutions must, within 24 hours of receiving of a compliant from a customer regarding the capture of a payment card by an Automated Teller Machine (ATM), take steps Cont’d on page 5

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Editorial / News

WEDNESDAY JUNE 30, 2021

Editorial

AfCFTA requires local producers to step out of their comfort zone

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hanaian industrialists and exporters have a ready market within West Africa but they would need to look beyond this comfort zone as continental trade picks steam.

It’s no doubt that the success or otherwise of Ghana production sector and private sector, as a whole, in the AfCFTA market hinges on their competitiveness, in terms of quality, cost of capital and power as well as a trade facilitating environment.

The business community, governmental agencies and other industry-specific stakeholders have a critical role to play in this regard.

But much of the work hangs on traders and producers who may want to push their goods

onto the continental market.

It is not therefore surprising that the Association of Ghana Industries (AGI) has aptly tasked its members to adopt and implement the right systems that could drive their participation and trade beyond the West African market—which they already have a strong hold of.

Standardisation is another area that producers would have to pay attention as it will be a key criterion for market acceptance of their goods.

Fortunately, there are a good number of local manufacturers that are producing goods that meet ISO certifications, which is good for our cross-border trade especially those goods will compete with similar or like

products from some of Africa’s production superpowers.

“When you’re promoting exports, you don’t bring every producer and try to push all of them to a stock; you look for those with the enthusiasm and capacity to produce goods that meet the standard of the destination markets,” the association’s chief executive, Seth Twum Akwaboah, suggests.

We side with this recommendation of the AGI on the need for a structured and targeted approach to promoting exports under the AfCFTA which will ensure that both the nation and direct local actors in the AfCFTA could fully optimize the market.

Industry needs right systems and policies to optimise AfCFTA—AGI Continued from cover

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market, he added.

“Our [AGI’s] analysis shows that we’re not the best country in terms of competitiveness; and we have the likes of Egypt, South Africa, Morocco, Kenya—who are advanced in a lot of ways—also strategising to enter our market.

Contact Email: hello@thebusiness24online.net Newsroom: 030 296 5315 Advertising / Sales: +233 24 212 2742

Alan Kyerematen, Trade and Industry Minister

If we want to take full advantage of AfCFTA, we must be mindful of these big players that are a threat to us and strategise more to be able to test this market,” Mr. Akwaboah said as a panellist at a trade forum in Accra.

According to him, factors of competitiveness such as cost of power and capital must be

addressed to de-risk the local business environment and make it conducive for enterprises to thrive.

“Export is about trade in mostly goods, and services as well, which means competitiveness in terms of product quality, price and other elements. For us to take full advantage of the opportunities that are being created [by AfCFTA], the business environment must be so conducive that we’re competitive.”

On the issue of standards, the AGI boss said not every locally made product can meet international standards, especially products by infant industries now springing up and undergoing a learning process, and urged that efforts to promote standards in exports must be pursued.

“When you’re promoting exports, you don’t bring every producer and try to push all of them to a stock; you look for those with the enthusiasm and capacity to produce goods that meet the standard of the destination markets. There are a good number of companies that are producing goods with ISO certification, which means they are actually meeting the international standards.”

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MoTI backs proposal to license local credit rating agencies Continued from cover “The proposal to establish a domestic credit agency to assist firms with access to capital and implement the Ghana Stock Exchange (GSE) market initiative will help attract capital to Ghanaian businesses,” he told industry players at a trade forum in Accra.

SEC has already issued draft regulations to facilitate and standardise the establishment and operation of credit rating agencies in the country.

Mr. Nyame-Baafi said since 2017 the government has implemented a lot of policies aimed at improving access to finance as well as reduce the cost of credit.

These, he said, include the financial stimulus package for local industries, which is being implemented with the support of participating financial institutions in the country.

“The Ministry of Trade and Industry will collaborate with other relevant institutions and organisations to conduct a review of the regulation of export finance institutions to enable them establish a special financing

window for products for strategic sectors and special programmes such as 1D1F,” he added.

He said Ghana’s monetary policy rate, which is an important benchmark for pricing lending rates, stands at 13.5 percent compared to 3.5 percent in South Africa, 4 percent in Côte d’Ivoire, 7 percent in Kenya, and 11.8 percent in Nigeria.

“Financing for export has therefore become an important issue that requires immediate collective attention if the Ghanaian private sector can harness the benefit of export to the preferential market.”

Mr. Nyame-Baafi stated that Ghana’s exports to the rest of Africa vis-à-vis its imports for the past 10 years have been very positive, adding that the gap has widened.

Overall exports have also enjoyed continued growth, he added, with the current industrialisation effort providing an opportunity for Ghana to promote value-added dutyfree export to the United States market under the African Growth and Opportunity Act (AGOA), the European Union market under the Economic Partnership Agreement, the United Kingdom

market under the UK-Ghana Partnership Agreement, as well as the Africa market under the African Continental Free Trade Area (AfCFTA) agreement.

The country’s exports are dominated by traditional products such as gold, petroleum oil, cocoa beans and wood products, which, according to Mr. Nyame-Baah, collectively account for 96 percent of the total exports of the country.

Non-traditional exports include fruits, cashew nuts, processed cocoa, aluminum, and iron and steel products.

NIC says addressing concerns over mandatory import insurance Continued from cover steps to address their concerns over the implementation of the National Insurance Act. This follows several complaints from members of the Importers and Exporters Association of Ghana and the Food and Beverage Association of Ghana (FABAG) over the negative impact the law will have on their businesses.

The two associations are kicking against the law’s requirement for all imported goods to be insured by local insurance agents and are also opposed to the sanctions prescribed for failure to comply with the law.

Sam Aggrey, Executive Secretary of FABAG, had told Business24 in an interview that, rather than making it mandatory, it should be left to importers to decide whether to insure their cargo with local or foreign insurance companies.

In a statement, the NIC said it “has taken the issues raised onboard and will address them appropriately. We will also continue with ongoing stakeholder engagements towards finding harmonious ground for

the smooth implementation of the insurance law.”

It added, however, that the legal requirement to insure imported goods with only local insurance companies has existed since 1989, and that the current effort simply

aims to enforce compliance with an age-old rule, which is currently captured in Section 222 of the Ghana Insurance Act 2021 (Act 1061) and states that “a person who imports goods other than personal effects into the country shall insure the goods with an insurer licensed under the Act.” “For effective administration, the new law requires that the NIC designs regulations as [a] guide for implementation. This process has since commenced and will involve various stakeholder engagements,” said the commission.

“We assure all stakeholders that their interests will be served as we traverse the path to grow the economy and to enable us be in the position to provide adequate buffers against all risks emanating from all manner of business transactions in real time,” it added.

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News

WEDNESDAY JUNE 30, 2021

BoG issues new orders on captured ATM cards Continued from cover to identify the cardholder and further work expeditiously to return the card to the customer.

The central bank, in a directive to commercial banks on June 29, said the move seeks to address the perennial complaints that emanate from the capture of payment cards at ATMs of regulated financial institutions.

“The objectives of this directive are therefore to provide for standard procedures in retrieving payment cards captured by ATMs and prescribe conditions for releasing, transporting or destroying payment cards captured by ATMs,” the bank said.

The BoG, in addition, asked banks to ensure they maintain the necessary protocols to safeguard

captured card information prior to delivery to the cardholder.

“A financial institution shall

take note and document all persons that come into contact with the captured card prior to

delivery to the cardholder,” it said.

“Provided that a financial institution follows due process in releasing a card to a cardholder, a financial institution shall not be liable for any loss resulting from fraudulent or unauthorised transactions initiated with a card after the captured card has been released to the card holder,” it added.

The sector regulator also directed banks to provide reliable avenues for cardholders to report issues of card capture and card blockage request.

It said a cardholder whose card has been captured by an ATM may lodge a complaint with the bank or financial institution and provide all relevant information to assist in identifying the cardholder.

8 MPs sponsor bill to criminalise LGBTQ promotion

By Eugene Davis ugendavis@gmail.com

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new bill seeking to criminalise the funding and promotion of homosexuality in Ghana has been presented to the Speaker of Parliament.

The private member’s bill, which stands in the name of eight members of parliament and has the support also of religious groups, is the first of its kind in the annals of the country.

It comes at a time when the subject of homosexuality has become topical in the country and has provoked emotive public debates on whether this and other related forms of sexual orientation should be countenanced or definitively outlawed.

Sam Nartey George, MP for Ningo-Prampram and one of the bill’s sponsors, said it will be a reference for countries in the world.

“It looks to criminalise not just the activity but the promotion, advocacy [and] funding of homosexuality and all of its forms.

So, it will become criminal, upon the [bill’s] successful passage into law, for anybody to produce any promotional material [or] any TV station to show content that supports [homosexuality] or for anybody to provide funding for LGBTQ activities,” he said at

the Speaker’s Prayer Breakfast Meeting at Parliament House in Accra on Tuesday.

He added: “Homosexuality is not a human right; it is a lifestyle choice, and we respect the human rights of practitioners to get a free and fair trial. However, their sexual orientation and choices cannot be deemed a human right.”

He said the bill protects the human rights of people who practise homosexuality by criminalising violence against, and extra-judicial treatment of, such persons.

“We believe they must be put before a competent court to determine their fate. [The bill] provides medical, psychological and other forms of support for practitioners who want help.”

Speaker of Parliament Alban Bagbin said the bill will bring a lot of change and promised his unflinching support for its passage.

“The world was created by God for us to enjoy, and he commanded us to procreate and fill the world. Now we know where religion actually started.

This pandemic must be fought by

all of us. I can tell you it is worse than Covid-19, and I am happy our beloved country is together in this.”

The President of the Parliamentary Christian Fellowship, Emmanuel Bedzrah, said the bill represented a statement from members of parliament following the “invasion of our values”, adding it demonstrates that MPs are lawabiding but will not countenance any threats to the society, both within and external.

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News

WEDNESDAY JUNE 30, 2021

Kenyan university sacks whistleblower accountant A university in Kenya has faced criticism after dismissing a senior accountant involved in an ongoing legal case concerning a former vice-chancellor.

Spencer Sankale Ololchike, who blew the whistle on alleged corruption at Maasai Mara University in 2019, was fired by the university council earlier this month on the grounds of gross misconduct, including alleged libel and cyber bullying.

A letter from the Institute of Certified Public Accountants of Kenya, of which Olochike was a member, Amnesty International Kenya and Transparency International Kenya called the development “alarming”.

“We interpret the action to summarily dismiss CPA Spencer Sankale Olochike without a fair administrative hearing as a determined attempt to interfere with a state witness in the ongoing legal case,” it said.

The ‘Mara Heist’ scandal, which Olochike and others exposed in September 2019, involves the misappropriation of 177m

shillings (£1.2m), according to Kenyan media, and proceedings are underway.

The letter said there was “credible evidence” that the current administration of the university had pressured him to expunge sections of a new audit report implicating the current vice-chancellor and some members of the governing council.

“It is worrying that this should be happening as a draft internal audit indicates fresh allegations of

corruption and mismanagement of public funds by council members and management,” it said.

However, in a statement, the university council claimed Olochike was dismissed fairly, and had played no part in the new audit report.

“Contrary to media reports, Mr Olochike was not dismissed because of his whistle-blowing activities, but due to his unrelenting insolence, cyber bullying, libel and defamation

towards his employer, among other documented cases of gross misconduct”, the council said.

There are more than 20 whistleblowers and state witnesses “who are working harmoniously in the institution”, the statement claimed.

According to the council, Olochike was made acting chief internal auditor in June 2020 “in recognition of his whistleblowing role”, but he resigned from that position nearly two months later, returning to his post as senior accountant.

The next day, he appeared on television alleging corruption against the council.

During a meeting several days later, Olochike “declined and/or failed to produce any evidence of his allegations,” the council said.

His “smear campaign” has damaged the university’s reputation, according to the council, with “a number of partners” having ended their collaboration with it.

Credit: publicfinancefocus.org

IMF approves $1bn for Uganda amid ongoing Covid-19 fight

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ganda is to receive $1bn from the International Monetary Fund to help its economy as it struggles with the impact of Covid-19.

The three-year programme, which will see about $258m sent immediately, is aimed at supporting the short-term response to the crisis and helping get the economy on track for an inclusive recovery.

It follows the nearly $500m of emergency support approved in May 2020.

“Uganda’s economy has been severely impacted by the Covid-19 global pandemic, which reversed decades-long gains in poverty alleviation and opened up fiscal and external financing gaps,” said Tao Zhang, deputy managing director of the IMF executive board.

“The authorities’ programme… focuses on keeping public debt on a sustainable path while improving the composition of spending and advancing structural reforms to create space to finance private investment, foster growth and

reduce poverty.”

The IMF programme will aim to increase social spending, including on vaccine procurement, and infrastructure investments while still stabilising the debt-to-GDP ratio, which has reached close to 50%.

“Prudent debt management is important to reduce vulnerabilities, particularly given Uganda’s moderate risk of debt

distress,” said Zhang.

“Every effort should continue to be made to seek concessional financing and pursue relief under the Debt Service Suspension Initiative.”

Uganda has also committed to governance reforms as part of the programme, including those to increase transparency and support the private sector.

The government has made

improvements, notably in publishing information on audits and the use of Covid-19 funds, Zhang said, but “further work is necessary”.

The IMF said the programme will also lead to better management of oil revenues.

Credit: publicfinancefocus.org

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Companies

WEDNESDAY JUNE 30, 2021

Injaro Agricultural Capital Holdings sells 30 percent stake in M&B

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njaro Agricultural Capital Holdings Limited (IACHL), the impact investment fund managed by Injaro Investments, has announced the sale of its 30percent stake in seed producer M&B Seeds and Agricultural Services Ghana Limited (M&B) to the founder and other shareholders.

This share sale represents a full exit from M&B after a holding period of 10 years.

Injaro invested in M&B in May 2011 and aimed to leverage the investment from Injaro to expand its processing capacity, increase seed production through both its farm expansion and the set-up of an outgrower scheme, improve marketing and strengthen middle management.

Following the investment, M&B has achieved a 9-year average revenue growth of 67.5percent per annum as it added on 5,000MT of processing capacity, and produced in 2020 more than 26 times its annual production as of 2011.

M&B has increased its number of outgrowers by more than 12

M&B and some of its smallholder farmers

times and generated incomes for over 30,000 indirect beneficiaries over the life of the investment.

Speaking about this transaction, Ben Kemetse, founder and CEO of M&B said “I set out 13 years ago to develop a leading hybrid seed production company to boost yields and enhance food security.

At the time, I had the technical skills but needed a partner who would support us with all the other essential things a business needs to grow.

I found such an invaluable partner with Injaro whose investment and value creation

support has not only led to the growth of my business but also improved my business acumen to continue running M&B. I am optimistic about the future expansion prospects for M&B. I strongly believe having a longterm patient investor such as Injaro is critical to the growth of small agribusinesses.”

Commenting on the investment and exit in M&B, Jerry Parkes, Principal at Injaro Investments said agriculture continues to remain the most important sector in West Africa for food security, job creation, and poverty

alleviation in rural areas.

He said Injaro maintains that investing along the agricultural value chain, especially supporting the growth of local seed production companies is critical to improving agricultural productivity in the region.

“The M&B experience demonstrates the power of private equity as a critical catalyst for economic growth in Africa, providing business support and capital to build resilient SMEs. The Injaro team is gratified by the direct link between its work and over 30,000 beneficiaries in Ghana alone. We are also especially grateful to IACHL’s investors who have remained patient and supportive during this long journey with M&B,” he said.

M&B is a part of IACHL’s agribusiness SME portfolio in Ghana that includes Agricare and Sekaf, both important contributors to the national economy and which have seen significant growth following their engagement with Injaro.

The new baileys with an African spin launched by Guinness Ghana

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aileys, the world’s first cream liqueur and one of the brands in the portfolio of Guinness Ghana Breweries PLC, unveiled an exciting new Baileys variant called Baileys Delight. To mark the unveil of this innovation, the company is hosted media partners and

other stakeholders to an exciting launch in Kumasi.

Speaking at the launch in Kumasi, Benjamin Fenyi-Gyesi, Innovations Marketing Manager at Guinness Ghana Breweries PLC stated: “the launch of the new Baileys Delight is part of Guinness Ghana’s commitment

to bring consumers flavorful liqueurs that can be enjoyed on any occasion. The company has played a pivotal role in enriching the lives of its customers with innovative ideas and products.”

The new Baileys Delight is a lighter cream liqueur that blends the taste of African honey with

real dairy cream and premium spirit with an alcohol volume of 15%. It is available in 75cl bottles and sells at a retail price of GH¢40.00 only.

“The brewing team in Ghana has worked closely with the international brewers to deliver this exciting liquid. This new addition is the expression of Baileys developed by our experienced and highly skilled master brewers,” Senior Brand Manager for Innovations, Michael Acheampong added.

“Baileys Delight is an addition to the Baileys Family and not a replacement. Baileys Original is still very active and available across all our channels – on trade and off trade,” emphasised the Divisional Sales Manager for Middle Belt, Emmanuel Nii Aryee.

Baileys Delight is best served chilled and currently available in 7 regions. It is best served chilled - no ice and not recommended for people below 18 years or pregnant women. Enjoy in a delightful but responsible way.

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Maritime, Trade and Logistics

WEDNESDAY JUNE 30, 2021

WTO members advance first review of Trade Facilitation Agreement

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TO members considered a factual report on the operation and implementation of the Trade Facilitation Agreement (TFA) and set out the next steps for the first review of the TFA at a meeting of the Committee on Trade Facilitation.

Members also considered a number of new proposals related to the review and received updates on the status of TFA implementation.

Concluded at the WTO’s 2013 Bali Ministerial Conference, the TFA seeks to expedite the movement, release and clearance of goods, including goods in transit.

It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues.

It further contains provisions for technical assistance and capacity building in this area.

Twenty-three WTO members issued a joint call for parties to the TFA to accelerate implementation of the Agreement in order to

support the timely and efficient release of global goods, particularly in view of the ongoing COVID-19 pandemic.

The call, first issued in October 2020 by four members, notes that the COVID-19 pandemic requires

a global response and that crossborder trade is a critical channel for getting essential products to those who need them.

The TFA requires the Committee on Trade Facilitation to review the operation and implementation of

the Agreement four years from its entry into force, and periodically thereafter.

The TFA entered into force on 22 February 2017 following its ratification by two-thirds of the WTO membership.

DP World, Somaliland open Berbera container terminal

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ubai-based logistics company DP World and the Government of Somaliland have inaugurated a new container terminal at Berbera Port.

The opening on 24 June marked the completion of the first phase of the port’s expansion as part of its development into a major regional trade hub to serve the Horn of Africa.

The event also included a symbolic ground-breaking for the new Berbera Economic Zone, the first phase which is under construction.

Specifically, the new container terminal with a deep draft of 17 meters, a quay of 400 meters and three ship to shore (STS) gantry cranes, can handle the largest container vessels in operation today, and increases the port’s

container capacity from current 150,000 TEUs to 500,000 TEUs annually.

The terminal also includes a container yard with eight rubber tyred gantry cranes (RTGs). A new port One Stop Service Centre is also currently being built and will be ready in quarter three this year, according to DP World.

DP World has committed to investing up to US$442 million

to develop and expand Berbera Port, and with the first phase now complete, Ahmed bin Sulayem, CEO of DP World, also announced that work is already underway to further expand the port in a second phase.

This includes extending the new quay from 400 to 1,000 metres, and installing a further seven STS gantry cranes, increasing the total from three to 10, enabling the port to handle up to two million TEUs a year, and multiple large container vessels at the same time.

“The completion of the first phase has made our vision of establishing Berbera with its strategic location into a major trade hub in the region a reality.

With the new terminal, along with the second phase of expansion and economic zone along the Berbera corridor, we are now firmly positioned to further develop and grow our economy through increased trade, attracting foreign direct investment and creating jobs,” Muse Bihi Abdi, President of Somaliland, said. worldmaritimenews.com

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Feature

WEDNESDAY JUNE 30, 2021

Planning for growth helps SMMES to grow

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earning from the big business playbook and using the science of organisational behaviour to plan ahead for the structure and culture of their businesses, small business owners will have a better chance at longevity and achieving their potential as engines of economic growth and job creation.

Small, medium and micro enterprises (SMMEs) make up 98% of formal businesses[i] in South Africa, but they contribute only 28% (3.8 million) of jobs1 in the formal economy and little more than a fifth (22%/R2.3 trillion) of all formal business turnover.[ii] The economic importance of SMMEs is acknowledged annually on 27 June, the United Nations-declared Micro-, Small and Medium-sized Enterprises Day to raise public awareness of their contribution to sustainable development and the global economy.

SMMEs have a significantly high failure rate, but University of Stellenbosch Business School (USB) Postgraduate Diploma in Business Administration student Nicholas Lamohr says that as SMMEs mature, their job creation potential grows[iii] and that paying attention to organisational behaviour in their business planning and strategic thinking would help SMMEs move beyond start-up to sustainable, job-creating businesses.

He said that entrepreneurship

and business training and support offered by SMME development agencies and institutions should also assist entrepreneurs and small businesses to “think big” and use the science of organisational behaviour to plan for how they would shift from a “one-man-band” to a business that empowers and develops its employees.

“If we are serious about supporting SMMEs towards growth and longevity, it is a serious omission that the business plans required by banks and funding agencies do not ask the vital question of what type of organisation the entrepreneur envisions building, as they move through the stages from startup to maturity. This is a vital building block in the business plan.

“We need a new approach to the business model of small business, that takes a long-term view of the support needed for SMMEs, beyond the start-up phase and through to growth.

We have to change the SMME development framework if we are to come close to achieving the National Development Plan (NDP) goal of SMMEs contributing 60-80% of South Africa’s gross domestic product (GDP) and 90% of the 11-million expected new jobs by 2030,” said Lamohr, who is also a small business owner.

Organisational Behaviour is defined as “a field of study that investigates the impact that individuals, groups and structure

have on behaviour within organisations, for the purpose of applying such knowledge toward improving an organisation’s effectiveness”. [iv] “The science of organisational behaviour draws on psychology, sociology and anthropology to reflect on behaviour at an individual, team and organisational level. For the manager of a small business, these insights are invaluable to predict and support the desired behaviours and to be an inspiring, fair and focussed leader, able to harness diversity and enhance organisational performance,” Lamohr said.

He said that implementing effective organisation design, organisational structure, organisational culture and organisational change would support high quality skills transfer, improved employee retention and performance, and better quality of recruitment, which in turn have a positive influence on customer loyalty and revenues.

On organisational design, Lamohr said control and decision-making in most SMMEs is centralised in one person, the owner, which can result in a limited perspective in decisionmaking, lack of skills transfers and production inefficiencies.

“The owner has a wide span of control, with little decisionmaking power delegated to employees.

This overdependence on the availability

of the owner to make decisions leads to production bottle-necks and longer turnaround times, for example in generating a quote or offering a discount, leading to dissatisfied customers.”

While the traditional, hierarchical mechanistic structure might work for a small start-up, Lamohr recommends rather adopting a decentralised, organic organisational design – a flatter structure, in which people work in horizontal clusters or networks, with taskdriven teams and horizontal communication flow, giving employees greater influence and participation in decision-making, while establishing processes of accountability.

He said the organic structure offered the benefit of developing an inclusive, participative organisational culture where innovation is valued. It enables the flexibility and agility that SMMEs need, as team member’s tasks and roles can be adjusted more readily to respond to changes in the business environment.

“SMMEs must possess the ability to respond to change in often unstable environments.

SMMEs using the organic model have the ability to process, analyse, and distribute information and knowledge very quickly, thus being able to respond and pivot the business as needed,” he said.

CONTINUED ON PAGE 19

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Feature

WEDNESDAY JUNE 30, 2021

A little geopolitics is a dangerous thing

By Harold James

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ny hope that Donald Trump’s messy departure from the White House would at least restore a modicum of calm to the world must now be discounted. Already, there is a dangerous new international threat: the return of “geopolitics” in shaping international security.

Consider the events of the past six months. Within weeks of President Joe Biden’s inauguration, his secretary of state, Antony Blinken, got into an extraordinary spat with his Chinese counterpart at a bilateral meeting in Alaska.

The United States has also tussled with the European Union over Nord Stream 2, a pipeline that will deliver Russian natural gas directly to Germany, bypassing (and thus weakening) Ukraine. And, for its part, the EU imposed tougher sanctions on China, citing its policies in Xinjiang, to which China responded with sanctions of its own.

Then, in June, a naval contretemps between Russia and Britain in the Black Sea evoked parallels to the 1850s Crimean War. And a meeting between Biden and Russian President Vladimir Putin did little to reduce US-Russian tensions. When it comes, Biden’s first meeting with Chinese President Xi Jinping is unlikely to be any warmer.

The G7 is rebranding itself as a club of rich democracies that will set “basic rules of the road” for the rest of the world. Never mind

that other powerful countries have no interest in rules set by someone else.

“Geopolitics” is the word most used to describe these developments, most of which are framed as new iterations of old issues. Russia, for example, is said to be continuing the Soviet tradition of using energy exports to induce dependency in others. Hence, Nord Stream 2 reprises President Ronald Reagan’s struggle over German participation in the construction of a Soviet pipeline four decades ago. Blinken calls it a “Russian geopolitical project to divide Europe.”

A classically ambiguous concept, geopolitics has both innocent and perilous uses. For some, it promotes a vague sense of geographical contingency.

For others, however, it amounts to geographical determinism, implying an endless conflict in which space matters more than ideas, maps more than chaps. The term’s danger lies in its inherent nihilism: it leads us to assume that no one can be seriously interested in values, because there can be no universal good.

After World War I and the failure of a dangerously ambitious German vision of “world politics” (Weltpolitik) under Kaiser Wilhelm II, a new term was needed. It was supplied

by Karl Haushofer, an officer and strategic theorist at the Munich Military Academy, who had been deeply influenced by a relatively brief spell as a military attaché in Tokyo. The word Geopolitik

had been coined by a Swedish politician, Johan Rudolf Kjellén, in 1900, and Haushofer adopted it with relish.

It was Haushofer who first conflated geography with necessary conflict, making all international politics into a bitter but inevitable zero-sum struggle between haves and have-nots.

He believed it was his mission to create a new political science – “the science of the political life form in a natural living space.”

Geopolitics was the doctrine of the “earth-connectedness of political processes,” and must ultimately “become the conscience of the state.”

Starting in the 1920s, Haushofer rapidly acquired admirers from the marginalized elements of the international order. Adolf Hitler may well have been influenced by his thinking; he dictated Mein Kampf through the Haushofer disciple Rudolf Hess. Karl Radek, the secretary of the Comintern, was certainly impressed (there was even a Soviet journal of geopolitics).

And geopolitical thinking has since returned with a vengeance to Russian politics, following the humiliating collapse of the Soviet Union. Haushofer has been enthusiastically embraced by Aleksandr Dugin, a quasi-fascist strategic analyst who is widely believed to have influenced Putin’s worldview.

There is a common pattern here: geopolitics tends to be the favored term for historical losers who want to give a cynical twist to their efforts to dismantle a

victorious intellectual project.

This was not what European Commission President Ursula von der Leyen meant in 2019, when she declared that she would lead a “geopolitical Commission.” The point was to distinguish the new Commission from a “political” one that would interfere in EU member states’ internal affairs, and the term seemed to suggest that Europe would engage openly with others. In a globalized world, many Europeans thought that Europe writ large needed a voice, and they were sympathetic to the argument that even large member states like France, Germany, or Italy could not be influential on their own.

But under current circumstances, geopolitical posturing once again looks like compensation for impotence.

The bad symptoms associated with the old geopolitics are reappearing and hampering solutions to global problems like the COVID-19 pandemic, which will not end until there is universal vaccination.

Using “geopolitics” promiscuously achieves nothing, because invoking the term is no substitute for substantive discussions and an airing of conflicting interpretations.

Thinking in terms of great-power clashes, and sparring over who is the bigger hypocrite, will neither resolve international disagreements nor solve common problems. The only way to do that is to focus on what achieving common goals actually requires.

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19 CONTINUED FROM PAGE 13 The “production approach” to organisational structure often adopted by SMMEs, where everyone is multi-skilled and can do every task, mitigates the risk of downtime when an employee is on leave or ill, but also often results in production waste, inefficiency and job dissatisfaction.

Lamohr argues that many SMMEs would benefit from adopting “work specialisation” and “departmentalisation” in their production workflow, where employees each specialise in a specific aspect of production, and creating departments that group activities by functions performed.

“Adopting this change in organisational structure would address production inefficiencies, promote high quality skills transfer and increased shared learning amongst staff; as well as improved customer loyalty due to the consistency and reliability in the delivery of the SMME’s service or product,” he said.

Organisational culture – the way employees interact and behave amongst themselves and with customers and suppliers – is often a product of the SMME owner’s personality, leadership

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style and approach to doing business, Lamohr said, and owners seldom consider the type of culture they want to establish and how to purposefully build a positive organisational culture.

“A culture built around the personality of the owner can become a blind spot in attracting new business or investors, and it doesn’t enable employees to play to their strengths. SMME owners need to remember that employees will treat customers as the organisation treats them, and so customers are the ultimate recipients of your organisational culture – positive or negative.”

Lamohr recommended being deliberate in defining the optimal culture for the business.

“Do this in collaboration with your team. Then entrench it throughout the business through behaviour, systems and processes and ensure new entrants are inspired and share your way of doing things.”

He said multimedia communication (or E-Learning) could be used to convey and inculcate the company culture in employee inductions, with regular refreshers and internal communication, and that organisational culture should be assessed as part of individual

and organisational performance reviews.

“We live in a VUCA world – volatile, uncertain, complex and ambiguous.

Constant and unpredictable change is becoming faster, and the Covid-19 experience was no exception. SMME owners often do not have the skills to navigate organisational change or manage resistance to change,” Lamohr said.

He recommends improved tactics to deal with organisational change; create awareness, harness buy-in across the business and empower employees to take ownership of new changes impacting their work.

Workshops, information sessions and internal communication platforms can be used to communicate major changes in the organisation that affect employees, share correct information, address misinformation and deal with negative or incorrect perceptions.

“This allows employees to receive the full facts and the logic for the change and will also strengthen relationships and the organisational culture.

Employees will see management as more transparent, which

will make them feel included and motivated to deal with the change,” Lamohr said.

As “custodians of the SMME narrative”, SMME-related government departments and agencies, state-owned enterprises, development institutions, banks and SMME owners themselves need to adjust the narrative and “lens” of SMME development to adopt a long-term view of assisting SMME owners with business planning and growth.

“It’s time to apply the critical thinking provided by Organisational Behaviour into our business plans, thereby serving those who are impacted by the need for a job and supporting hopeful small business owners to become leaders of people,” Lamohr said.

Join us for a virtual information session on Thursday 26th of August 2021, by registering with: Dr Marietjie van der Merwe Ghana In-Country Representative marie@globalnatives.com WhatsApp:+230 5 701 1362 For more information on Stellenbosch University Business School: https://www.usb.ac.za/

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