Question: Going by the well known predicaments of the private sector in Nigeria, in line with your propagation thus far [about Bottom of the pyramid (BoP), markets for poor or inclusive market], is it not time for this sector to adopt what’s happening elsewhere – Evolving business models that suit this concept, as respite? Please assist with education on what an interested entrepreneur should expect – M. Ibrahim
In continuation with suggested areas that my perceived “Copy Cat” tendencies of many private concerns could positively replicate, as BoP enterprises, to favour the Nigerian poor highlighted in Part 2 of this title, these are more insights (from more than 100 case studies I have encountered):
- A Bulgarian based multinational company (MNC) setting up private dairy milk procurement system with, small-scale farmer suppliers, in India
- Low-cost drip irrigation systems developed in India
- A French electricity provider producing power through photovoltaic facilities (solar power) for 24 villages and 40,000 people in Mali
- Pastoralists track cattle herds using cell phones and global positioning system devices (afforded by a major mobile telephony provider) in Senegal
- A prominent mobile phone service provider introducing mobile banking solutions (M-PESA) in Kenya and Tanzania
- A United States based MNC (even with a subsidiary in Nigeria, known for manufacturing insect repellent) sources a major product ingredient (Pyrethrum) from poor farmers in Kenya
- South African private sector venture supplying water through smart card technology
- Ceramic water filter developed in Nicaragua
- A cement manufacturer offers a payment system to low-income families, which allows for purchase of houses in instalments (giving them incremental access to services, cement and other building materials through a group savings programme) in Mexico
- Small wind turbines and decentralized energy systems (Micro Power Economy) in Mauritania
- Rain water storage tanks in Uganda
- Cooker, fuelled by coconut oil, in Indonesia
- A renown MNC providing affordable purifier of water sachets in many developing countries
- A prominent energy provider (even with presence in Nigeria) providing “Safe Water Kiosks” in Kenya
- Affordable cardiac health care, as BoP enterprise, in India
- Provision of solar power for rural villagers in Morocco
- Affordable maize silos in Central America
These will suffice for now. Has it occurred to you that none of the above case studies is Nigerian-related? The same holds for all other research materials which came my way on this subject. I recently took it upon myself to reach out to some operators of business models which I felt could be replicated in Nigeria. So far responses have been fairly encouraging, but the issues of conducive environment kept recurring. Something which remains unsettling is an enquirer’s statement that I “sounded more patriotic than convincing…” on the issue of havocs being perpetuated by “Boko Haram” in parts of Nigeria.
Nevertheless, where there is foot-dragging on replicating here BoP business models making waves in other climes, I urge private sector ventures in this country to proceed with replicating innovations that have been applied successfully elsewhere and suitable to the Nigerian environment. In consonance with the proverb that, “Just because a man is short doesn’t mean he is a boy”, let it be known that just because this environment is perceived as unsuitable for BoP enterprises to thrive, let the private sector here take steps to prove sceptics wrong. I have the gut-feeling that when Nigeria ‘plunges’ into BoP all ‘doubting Thomas’ elsewhere will be astounded with the impressive performance in this area within a very short time. Mark my words -This is the Nigerian style.
Interested entrepreneurs around contemplating ‘giving a shot’ at BoP must realise from the unset that serving the BOP market is not just about reducing prices for existing products or providing solutions or product redesign with those old and cheap technologies, but instead, evolving a completely new price-performance package, requiring three strategies – Product development, price policy and process innovation. The Nigerian intending private sector concern dwelling outside of this would not likely succeed in the BoP or Inclusive markets. To facilitate the smooth entry of the private sector into the Nigerian BoP market the following must be in place on the part of, (a) the Private sector and (b) with the government:
On the part of the private sector (To strengthen reaching the poor as consumers, producers, employee and entrepreneurs):
- Develop tools of investment—Such as the form which allow private sector concerns and their likely investors to identify and finance BoP business models which likely affords the highest return for the poor, for investors and for society at large.
- Create the capacity for valuable collaboration—Even if it entails doing so with nontraditional partners and for unusual purposes. Hold dialogue with community groups, local non-governmental organizations, individuals, and then staffers of other sectors. Consider inter-sectoral secondment arrangements.
- Strengthen community engagement—To foster understanding the needs of poor suppliers and customers, in order to set up innovative distribution channels, to share costs and to enhance local knowledge and social connections.
- Always dialogue with the government on policy issues—In order to help expand goings-on in the field (e.g. Making the government to be aware of market constraints, through individual or collective efforts, as a business association, on the platform of policy initiative or stakeholder dialogue). This can make for improvement in education, basic services and legal empowerment of the poor. The same holds for upholding human rights and environmental quality.
- Relationship with local research institutes—Private sector ventures should tap into the impressive (but not often appreciated) output of the numerous research establishments in the country. I am quite convinced that existing resources could be applied to output of such institutes which could definitely impact on markets for poor. This means the over 100 government funded research organisations helping to change lives of the Nigerian poor, through keying into this concept of Bottom (or Base) of the pyramid.
(To be continued)
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