Monday, May 25, 2020

Local companies have to wise up to the outside – Econsult

Botswana companies that are making forays outside the country are said to be doing well despite a few challenges. 

 Econsult Managing Director Dr Keith Jefferis is of the view that the companies do well because they exhaust the scope for growth in core business domestic market. He said that their options for growth were by moving from domestic market to exports adding that they grow by investing externally and foreign subsidiaries

Speaking at the Standard Chartered Bank breakfast meeting on leadership insight on growing local businesses and the transition from local to international focus, Jefferis stated that Botswana-specific pressures included small domestic market with limited population/GDP and also slow domestic economic growth

“There is problematic domestic business climate as well as slow growth in government spending and competition concerns limit domestic takeovers,” he stated.

He added that BSE listing is of an advantage to a company on issues of corporate governance as well as access to capital. 

He observed that success in exporting is based on being competitive and efficient and limited access to privileges and protection by government procurement preferences. He stated that the ability to respond to shocks and changing circumstances is also key.

“Don’t just leap in, be prepared to say no. Be prepared to pull back if not successful. Understand local conditions,” said Jefferis. 

He spoke of companies understanding local conditions, business environment regarding competition and also the political environment. He added that companies needed to note legal, regulatory and economic environments as well as exchange rates, labour, skills and industrial relations.

He is of the view that it may take time to become profitable and gave an example of Choppies in South Africa and Zimbabwe RDC in Madagascar, Furnmart in Zambia and also Letshego in South Sudan.

“There are more successes than failures. It is Tough but achievable,” he said. 

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Sunday Standard May 24 – 30

Digital copy of Sunday Standard issue of May 24 - 30, 2020.