By Richard Atem Ojong
Ask 80% of entrepreneurs in Cameroon what their major challenge is, and without a moment’s hesitation, you will hear answers like, “funding,” “local support,” “poor government…” The lack of financial resources to effectively run start-ups, small and medium-sized businesses is a major hindrance to the growth of the economy. However, it is not, in my opinion as much of a hindrance as the entrepreneurs would have us think. There is a greater evil at play here. And it is not the lack of funding for initiatives. It is rather, I believe a lack of workable initiatives tailored to solve the needs of a community.
This article may not satisfy the fragile ego of many of our “young start-ups” but I hope in time it proves relevant to the narrative. Many of the business ideas we so eagerly term “start-ups” are driven by profitability and not long-term stable value, top-end revenue and growth potential. In other words, they are built for the owner’s personal interests and needs and not to cover market niches. This makes them fall short of the major universally accepted definitions of start-ups. And in my opinion one of the major reasons for which funding for such initiatives is hard to come by.
The proof in our stock exchange
I hope you can share with me the indignation I feel each time I write the phrase ‘Cameroon stock exchange.’ I wish we could simply come to terms with the fact that there is no stock exchange in Cameroon. However, for the sake of this argument let us call it as the government calls it.
In the past 10years or so, every time the government of Cameroon has sought to borrow money by issuing bonds, they have almost always raised more than the required amount. Even Gabon’s recent bid to raise xaf100 billion, was funded principally by lenders in Cameroon. My point is there is a lot of money to fund initiatives in Cameroon. So much so that our banks (well, they aren’t really our banks? Are they? At least just a few, lol) can underwrite loans for foreign initiatives but cannot buy equity in local start-ups.
The big question obviously, is why? Why would our small and medium-sized enterprises, some of which have won international repute find it so hard to raise capital from financial institutions and ‘local angel investors?’ Whatever the reasons are, I believe unless we begin to pull resources together from within the system and build enterprises that are intended to outlive us and not fill our pockets within the next three days, we may never truly live out our true potential.
That ‘our banks’ would trust this corrupt government, that has proven over and over again that they cannot keep their word over struggling businesses many of whom have a proven track record such that the latter has to go abroad to find funding is still a wonder to me. Perhaps it is because these bankers know that regardless of how corrupt the system is, their benefits by way outweigh the risk. And despite my disdain, this is how business is done. It is not about personal sentiment or political affiliation. It is about who creates the highest value for you.
So, let Cameroonian SMEs and ‘start-ups’ change their playbook and find ways of hooking on local investment. Build businesses that those corrupt officials in Yaounde can invest in rather than siphoning our meager resources abroad.
The case of Jumia and WeWork
The recent uproar over Jumia’s closing shop in Cameroon came as a shock to many, but frankly, the signs were very visible to anyone keen enough to pay attention. Regardless of how you see it, Jumia simply proved unfit to operate in a market system like Cameroon’s. Blame internet infrastructure and poor geographical mapping of the terrain all you want but the fact remains that the company did not understand their target market and so failed to put a sustainable structure in place.
Unfortunately, I see the same problem with many of our start-ups (I really feel uncomfortable calling them that). While it is true that many of the business trends abroad will be applicable back home, these are and will always be different market types. You cannot, therefore, seek to meet a need in Cameroon with US solutions just because the need is replicated in the US and someone has fixed the problem with similar tools.
In many cases, those tools are worn out and ineffective. Do your own market research. Understand the demographics and psychographics of your particular niche. No two markets are the same and certainly, no two-time frames are the same either. If Jumia did their homework, I doubt they would be exiting the market for Cameroon so soon. Their problems in terms of the structure and brand of the company are another issue. I leave that to the experts like Rebecca Enonchong to explain to you.
I will conclude by drawing inference from WeWork’s crashing business and former CEO Adam Neuman’s downfall. In Cameroon where funding is as hard to come by as snow in the tropics, please don’t make the mistake of going the Neuman way. I see several people already replicating WeWork’s shared working space idea. My worry is, they are also replicating the same principles that led to the company’s swift fall. They want to grow big too fast.
Cameroon will grow and we are growing. But it has to be on our terms. We must strike deals with banks and funders that shows we understand the future that is coming. We must operate with the knowledge and assumption that those who cling to power and sully the waters in which we must build our businesses will not be there forever. That a day is coming when envelopes will not change hands under the table, but we will watch from TV screens and phone screens how one start-up after the other is launching IPOs. And hopefully, I’ll be reporting live from the Douala stock exchange.