The Chief Executive Officer of MTN Ghana Limited, Selorm Adadevoh, has noted that with the new normal created in a pandemic era, Small and Medium Scale Enterprises (SMEs) must re-strategise to penetrate global markets – starting with the Africa Continental Free Trade Area (AfCFTA) as a tool for skills acquisition.
SMEs account for around 80 percent of businesses, and most usually struggle to penetrate more advanced overseas markets. However, with AfCFTA, the SMEs are well-positioned to tap into regional export destinations and can use regional markets as stepping-stones for expanding into overseas markets with the right skills and resources, he stressed.
Speaking as the guest at UBA Africa’s Business Session on the theme ‘Restrategising business post COVID-19 to remain competitive’, he reiterated that most SMEs are very limited in terms of skills and resources; therefore, the products developed are country-specific and do not qualify for the global market in terms of quality and packaging – a reason for low exports in the country. Therefore, SMEs must strive to acquire the requisite skills that enable them to play in the global space.
“If I look at what is happening in our space today – specifically, the coming into being of the AfCFTA to facilitate trade across the continent, I think it is a fantastic tool that can drive our SMEs to begin aspiring for the global market. Our SMEs must start thinking globally; the focus must change from being just a local or community player to more of a regional, pan-African and global player, then they can attract investments into their businesses,” he said.
He emphasised that the SME space represents the hope and future for Africa; and with counterparts in Nigeria already reaching global markets because of their favourable market size and thinking, the business mentality and culture of SMEs in Ghana must also begin to change from being content with being a local champion to focusing on going global.
AfCFTA will cover a market of about 1.3 billion people with a gross domestic product (GDP) of US$2.5trillion across all 55 member states of the African Union, and will be the world’s largest free trade area. This, he said, presents an opportunity that SMEs cannot afford to miss out on.
Touching on the impact of COVID-19 on the global supply chain and its effect on Ghanaian businesses, he stated that the pandemic exposed our heavy dependence on imported resourcing for manufacturing and production industries – adding that the lessons learnt mean the country must begin focusing on creating a local base of these materials to enable local sourcing.
“The pandemic exposed a dependence on a supply chain that is out of our control, and going forward we need to think about moving from global to local sourcing of raw materials. Manufacturing and production must be aggressive in trying to source locally to supply the local market, because sourcing globally is getting to be expensive and unsustainable,” he expressed.
Furthermore, Mr. Adadevoh added, one important lesson learnt from the COVID-19 pandemic is that businesses must be ready for any kind of shock; and being able to develop a business model that will be ready for different kinds of shocks is the difficult task most businesses are considering going forward.
He also emphasised that going digital has a role to play in building a business that is resilient to any type of shock; therefore, businesses must have a consistent digital transformation strategy on both the operations and channel/circulation sides.