The African Diaspora Marketplace contest recently awarded $50,000 to $100,000 to 14 immigrants to the United States from African countries to help them start or expand businesses in Africa. Some of them share how they plan to use the money on the New Enterprise blog.

Henry Adobor

You may not believe it, but goat farming is my passion. It connects me to my childhood during which my mother kept a few goats (as do most people throughout Sub-Saharan Africa.)

What I am trying to do with Aceritas Ghana Ltd. – the company I have started – is turning the passion into a commercial enterprise. The company will own and manage Green Acres Goat Ranch. Beginning with 100 goats, this commercial goat farm will use improved breed stock imported from South Africa and modern husbandry methods to produce the animals for meat and breeding. This will be a huge improvement over traditional small-scale livestock farming, which is inefficient and unsustainable in the long run.

But my goal is far from pushing small farmers out of competition. With a small laboratory and education center, the ranch also will work as a platform for sharing knowledge with local farmers to help them upgrade breeding and farming methods and grow. Aceritas is forming an alliance with a local university to promote research on goats, particularly on the new breed. My hope is that this project becomes the nucleus of an emerging industry. I plan to entice others to form a Commercial Goat Breeders Association to lay industry’s foundation.

The Accra Plains where goats will roam soon.

My partner in Ghana -Stephen Adrah who owns several companies and farms - will manage Aceritas operations.

Because the market for goat meat is huge in Ghana, the initial focus is on selling the animals to large buyers, brokers and individuals directly from the ranch. Breed stock will be sold to farmers. Thinking ahead, Aceritas also will prepare for farming milk goats and selling goat milk in the future.

The ADM grant has come handy. It will help to defray the cost of importing the breed stock (that is substantial because the animals will be air-freighted, no first class please!) and building housing for goats.

The African Diaspora Marketplace contest recently awarded $50,000 to $100,000 to 14 immigrants to the United States from African countries to help them start or expand businesses in Africa. Some of them share how they plan to use the money on the New Enterprise blog.

Hunger and malnutrition are not foreign to Ethiopians. I see improvements in local farming as the best way to address these problems. My father-in-law – an Ethiopian American who teaches agriculture at Fort Valley State University in Georgia – suggested that one could contribute to these improvements in a major way by propagating quality tissue cultures selected from local edible plant stock, particularly fruit stock. With that goal in our minds, the company we jointly started - TAF Plc. - will build and operate a commercial-scale plant in Addis Ababa, which will grow and multiply select plant cells, tissues and organs in a laboratory-type environment for sale to farmers. (Later, we plan to open satellite offices in Oromia, Amhara and other regions.) A lab building already has been constructed and a small greenhouse will be ready soon. The $100,000 grant will be used to buy laboratory equipment.

So far farmers have had to rely on the government to provide them with seeds and other planting materials. But those supplies are insufficient, costly and often not of the best quality. As a result, some large farmers idle chunks of their farm lands. With foreign investors buying or leasing land for large-scale farming, demand for quality planting materials will grow tremendously.

When the company was launched three years ago, it had to gain trust of the farmers as it had no name recognition to rely on. Through the word of mouth – with support of a network of relatives and family friends – TAF has established an initial customer base. Now potential customers come to our local partner - well-connected businessman Tsega Asamere – asking him when we will open.

Our main goal is to help farmers increase crop, produce technological spill-over effect in the agriculture sector and make profits in the process. The venture also will create close to 100 jobs. In the future, TAF also wants to make a concrete contribution to sustainable economic development by producing materials for reforestation of deforested areas.

We are excited about this venture and the prospect of helping the agricultural sector in Ethiopia that represents a significant portion of the economy.

The African Diaspora Marketplace contest recently awarded $50,000 to $100,000 to 14 immigrants to the United States from African countries to help them start or expand businesses in Africa. Some of them share how they plan to use the money on the New Enterprise blog.

Kojo B. Taylor

As my background is in franchising, I thought of leveraging my related knowledge to improve the public health system in Ghana. In the country the greatest need for basic health care services is in urban fringes and rural areas where such services are either scarce or unaffordable. Yet, there are nurses and medical assistants who potentially could provide accessible care in those areas. Three years ago, I started a company – MicroClinic International - that creates conditions for nurses to own and operate their own clinics. We assembled a team with the aim to create a network of community micro-clinics and recruit medical personnel to run them as franchisees.

A model micro-clinic is almost ready.

The clinics are 1,100-square-feet buildings with small labs and living quarters for franchisees. We provide business training, oversight, accounting services, a management information system and manage the brand. We also provide quality control and sources for supplies including the drugs that meet intellectual property protection criteria.

But what might be most important for many is our help in getting loans for franchisees from venture funds and other sources in the United States and other capital markets. A nurse earning on average $100-$200 a month can hardly afford building a $25,000 facility. Our projections show that a successful franchisee will start making profits in less than two years, thus gaining ability to repay the loan.

With two prototype clinics already opened, and two others under construction, our goal is to expand the chain to 150 clinics in seven years.

The grant money we just won will help us fund a demonstration project and develop a billing system for third party payment.

We are aware that even relatively cheap medical services can be beyond the reach of those who live on $1 a day. That’s why from the beginning, our strategy was to have in place a third-party-payment arrangement with the national health insurance plan. A partnership we have formed with that plan will not only allow the poorest of the poor to gain access to essential health services, but also may change the way health care is delivered in Ghana. We hope it will create more opportunities for entrepreneurial private-sector providers. Private-public partnerships for healthcare in developing countries are an imperative in my view.

Jonathan Ortmans

This phenomenon of diaspora entrepreneurship has been receiving attention from development communities. The contributions of diaspora entrepreneurs are beyond the financial impact of remittances used for investment in the most capital-constrained countries in the world. Development experts have identified various types of diaspora capital—human, social, and financial—as a useful development resource for migrant-sending countries.

Business incubators have also been paying attention to this phenomenon. Many incubators now specialize in diasporans’ new ventures, helping turn migrant’s investment interest into actual start-ups. For example, IntEnt  has been offering services to entrepreneurial and enterprising migrants residing in the Netherlands who wish to set up a business in their country of origin (so far, Ghana, Surinam, Morocco, Turkey, Ethiopia, Afghanistan, Curacao). Social projects have also spawned around the idea of diaspora entrepreneurship. Investors without Borders  (IWB), for example, provides a lending platform where individual lenders—beginning with the Ghanaian diaspora, then branching out to include the broader community of socially responsible investors—could loan money to small- and medium-sized enterprises (SMEs) in Ghana.

Many readers of this blog are familiar with the research showing that the entrepreneur is the chief agent for innovation, job creation and economic growth. Diaspora entrepreneurs are extending that role across borders, expanding human welfare one new entrepreneurial venture at the time.

The African Diaspora Marketplace contest recently awarded $50,000 to $100,000 to 14 immigrants to the United States from African countries to help them start or expand businesses in Africa. Some of them share how they plan to use the money on the New Enterprise blog.

Joe-Lahai Sormana

In Sierra Leone, crude palm oil is an essential ingredient in traditional dishes. Between 30,000 and 40,000 metric tons of palm oil per year is consumed in the country. Over 95 percent is derived from palm fruit through traditional methods that are labor intensive and inefficient.

That wasn’t always the case. But during the civil war, all palm-oil processing mills were either destroyed or became inoperable and, to the best of our knowledge, none of them have been re-established or re-started.

I have established a company called Palm Fruit Processing Company Limited with the primary goal of producing palm oil in a modern mill. My local partner, Aloysius A. Beah, is negotiating contracts with palm plantations to provide us with a steady supply of palm fruit. In the future, we plan to develop our own plantation.

Palm Fruit Processing company’s logo

Our oil will carry health benefits as it is cleaner and has a lower level of saturated fat. But the company will be selling it at a discount relative to local prices. We will be able to afford it because of greater efficiency of our processing mill, which will allow us to produce significantly more palm oil from the same quantity of palm fruit than traditional producers will ever do. Our company’s pricing strategy and product quality will give us a competitive advantage from the start.

The company will create jobs, thereby contributing to the economic development of the country and to improvements in the standard of living in the local community.

A win in the competition validates our business model and value-proposition. Grant funding will be used to purchase equipment and develop the necessary infrastructure to house it. We already have selected sites, bought land and obtained the design of the mill.

If you need proof that countries in Africa can experience economic renewal don’t look further than these blogs by finalists of the African Diaspora Marketplace business plan competition and their recent Web chat (http://www.savorchat.com/chat/african-marketplace). These entrepreneurs are competing for seed money to start businesses in their home countries. The joint ventures between U.S. entrepreneurs of African origin and their partners in Africa range from a virtual marketplace for small farmers to business development services for small businesses to clean, on-site power generation for larger companies. Winners will be announced January 13.

The entrepreneurs target markets in Africa because they know them best and because that’s where great opportunities are. They face serious challenges in sub-Saharan countries such as poor transportation and electrical infrastructure. Yet they are willing to take a higher-than-average risk driven by a desire to contribute to the development of their home countries. Many are accomplished individuals – some run their own firms, others have successful professional careers. They could have rested on their laurels. But an entrepreneurial individual can hardly resist a temptation to seize an opportunity when he or she sees it.

As small businesspeople without big money, they sometimes must persuade officials and potential customers in target markets they can leverage their skills and experience to a great effect.

Many African nations have come to appreciate the asset their diasporas represent and are soliciting their opinions on a range of issues from business regulation to investment policies. Although the diasporas by themselves won’t do economic miracles in Africa they definitely can help prepare the ground for accelerated development by spreading the culture of private initiative and innovation.

America.gov asked finalists from among the more than 700 African immigrants who submitted business plans to the “African Diaspora Marketplace” to blog about their ideas. Sponsored by USAID and Western Union Company, the African Diaspora Marketplace is a contest that will award seed money to approximately 15 winners to help them bring their ideas to life in their home countries.

PHOENIX MATT, entrepreneur:

Pineapple processing.

Sardis Enterprises’ humanitarian efforts also distinguish it from other companies that export from Africa but do little for its workers or environment. We maintain a culture of participation and inclusion as we work to raise prosperity, education and agricultural productivity in Ghana.

Sardis Enterprises welcomes guidance and partnerships with donors and regional African organizations. An American agriculture exporting company would be a great consulting resource for us as well. We are interested in learning efficient international export channels and in adopting better IT systems.

MICHAEL DUCKER, business expert:

Sardis seems to have an advantage over several other fruit exporters.

Ms. Maat’s blog entry makes me believe that Sardis is an integrated enterprise that manages everything from the pineapple farm to selling directly to U.S. wholesalers and super markets. This allows it to change quickly to market needs.

Sardis also has a US presence, meaning that it should have direct access to the market. This provides more opportunities to promote the Sardis enterprise and an advantage in gathering information about the U.S. market.

By incorporating good employment and environmental practices, Sardis also has created a branding opportunity, which could lead to higher prices. I would suggest that Sardis focus its selling and marketing on socially conscious consumers and the higher value retail chains that serve these consumers. I would work with the retailers to get prominent shelf space for the pineapples accompanied by point-of-sale displays with a socially conscious slogan, such as “the best pineapples for you and the earth from Ghana.” The displays could carry pictures of happy employees and logos of environmental standards that Sardis might adhere to.

I don’t know Sardis’ cost structure but my feeling is that Sardis would be better served to stay away from commodity-type distribution chains, which are managed by the larger super markets. The commodity-type distribution chains will not bring Sardis the price it deserves.

America.gov asked finalists from among the more than 700 African immigrants who submitted business plans to the “African Diaspora Marketplace” to blog about their ideas. Sponsored by USAID and Western Union Company, the African Diaspora Marketplace is a contest that will award seed money to approximately 15 winners to help them bring their ideas to life in their home countries.

Kinoti Gituma, entrepreneur:

Kinoti Gituma

Within KinConsult, a U.S. online and e-commerce consulting firm based in Sunnyvale, California, I have envisioned Johari, a Web and mobile portal that will bridge the digital divide in Kenya by providing a platform for small and medium-size enterprises (SMEs) to tap the potential of broader markets. It is currently under development.

By marketing their products and services on Johari such businesses will gain access to a consumer market that transcends local boundaries. And I believe that giving SMEs the platform for information gathering and collaborative technologies will help them grow and prosper. This, in turn, will boost business generally in Kenya by giving consumers a greater choice.

The biggest risk is fraud. Initial challenges include attracting, vetting and listing a large number of SMEs and persuading them to use Johari to list their products on a continuous basis. It will take time for the Kenya society at large to embrace new technologies to reach a critical mass.
Questions for experts:
1. How do you mitigate the risk of fraud in operations of a mobile and Web portal in a developing country?
2. How do you create an effective viral marketing campaign for a quick roll out in a region that has high mobile penetration but very low Internet penetration?

IMRAN QIDWAI, business expert:

As I was reading your blog post, the paramount issue of fraud was dancing in my head. It was good to see you identify that as a major challenge yourself.

Identifying the target market segments that will benefit the most from your business will be a key to your success. You need to identify the type of products that would be best served by your online market within the targeted region, both for the buyers and sellers. Thus, commodities may not be the best unless you are sure that buyers will achieve significant overall savings or benefit from the convenience. You also may need to hand-pick a few merchants for such products that pass through a strict selection filter. You may launch the business with few such merchants and closely monitor the transactions for overall customer satisfaction. Using the best practices learned during the early phases, you may have to come up with your own Better Business Bureau type seal of approval. You will then be ready to scale up the business with more merchants and a greater variety of products. You will need to be vigilant throughout and set up a fair process to vet the merchants. You also may need to encourage buyers to provide their satisfaction ratings for merchants and products upon the completion of transactions. Once you have a well-oiled marketplace that is also profitable for the merchants, I am sure that other merchants will be dying to get in.

As for viral marketing, there is a technique called Word of Mouth Marketing being promoted by the Word of Mouth Marketing Association. You may wish to check out their site [http://womma.org/main/] to learn and adapt this and other techniques to the local market.

A Johari promotional photo of a Kenyan Masai warrior

HERMAN NYAMUNGA, business expert:

The impact of fraud on businesses across the globe is phenomenal. Although every effort is being taken to find a lasting solution to this problem, there is no silver bullet yet. However, there are industry-tested strategies that developing countries can employ to mitigate the risk of fraud in operations of mobile and web portal. They include these:
1. Developing a secure platform for information exchange,
2. Effective and efficient electronic verification system supported by well trained fraud analysts,
3. Rolling the portal in phases to permit system modification,
4. Utilizing mobile financial systems like Kenya’s M-PESA - which are transforming the way people save, use, and transport money in poor countries – for most of the transactions,
5. Educating consumers on how to protect themselves against fraudulent activities,
6. Developing and applying due diligence in verifying sellers’ identity before listing them in the portal,
7. And information sharing between credit card companies, businesses, law enforcement agencies, and consumers.

As to a viral marketing campaign, due to limited availability of the Internet, mobile phone networks have proven to be a vital piece of technology for Africa. The technology is ubiquitous and plays an important part in bridging the infrastructure divide. As a cheap alternative, it presents a great opportunity for creating an effective viral marketing campaign to assist businesses in connecting with consumers. The strategy involves recruiting a group of trusted people in every target market, earning their trust and using them as a platform to transmit your message to their network of friends. This strategy has been successfully used in Africa to support initiatives such as Mapping stock-outs, Mobile learning, Mobile search, Mobile Banking, etc.

America.gov asked finalists from among the more than 700 African immigrants who submitted business plans to the “African Diaspora Marketplace” to blog about their ideas. Sponsored by USAID and Western Union Company, the African Diaspora Marketplace is a contest that will award seed money to approximately 15 winners to help them bring their ideas to life in their home countries.

RONALD MUTEBI, entrepreneur:

Ronald Mutebi demos an oven.

Deforestation, in turn, has caused radical change in weather patterns, especially rainfall. We see regular food shortages and famines, extended drought and flooding.

In many treeless villages, people have started to cook with grass for fuel. In other places, there is no fuel at all, so people must eat their foods raw. In still other places, people must choose either food or fuel; they live in a situation in which they can afford only one cooked meal a day. The biggest casualty in all this has been the children, who have become malnourished or undernourished.

In 2002, my business partner, Denis Wandera, and I came across an oven that uses the sun’s heat to cook. It is made by Sun Ovens International, based in Elburn, Illinois. We plan to manufacture and sell these ovens in Uganda.

Since the start, we have encountered and overcome many obstacles, ranging from high Ugandan taxes to a lack of knowledge by customers of how to use the ovens. After extensive training and demonstrations, the Ugandan government now sees the value of this oven and supports our project. (The ovens can not only bake but can also be used to boil water, which will result in better health because many water-borne diseases will be eliminated.)

My partner and I have acquired the license to manufacture the sun ovens in Uganda. We will make them readily available to everyone at an affordable price. The manufacturing process is labor intensive, so many jobs will be created.

PAUL MUNSEN, supplier/partner:

Solar ovens are desperately needed in deforested countries like Uganda. The business concept that Ronald has developed – making and marketing the ovens locally – will make the price affordable and create jobs. His purchase plan allows people to pay for the ovens in small weekly installments, using money they will save by not having to buy charcoal. It is a win-win solution for everyone concerned.

The ovens are sold at a profit. Initially, we here at Sun Ovens International are going to ship oven parts to Uganda for assembly there. Later, Ronald will develop the manufacturing capacity to make most of the oven parts in Uganda. At that point, Sun Ovens will be financially rewarded stilll, because the company will receive royalties on a special gasket that allows our ovens to get considerably hotter than other sun-fueled ovens. Each Sun Oven can cook for a family of eight people. We believe that 75 to 80 percent of Ugandan households could significantly benefit from these ovens, so the market is potentially huge. Because the country has a great deal of sunshine, our ovens will be very useful there.

Ronald has shown entrepreneurial ingenuity in making this project possible. Originally, the high government taxes on the ovens doomed the project. In most places in the world, that is still our biggest issue.

Ronald was able to convince the Ugandan government to grant a total exemption of both the import taxes and the value added taxes for the ovens. That has changed the economic viability of the project dramatically. Ronald went to the home of the then Ugandan minister of finance and worked with the minister’s maid to cook with a Sun Oven. The minister’s wife got involved with the cooking and was so impressed that she sent her driver out three times that day to put additional food in the oven. She lobbied her husband, and he arranged for the tax exemption. Ronald showed exceptional creativity in working with the minister’s maid and wife to get that accomplished.

JEFF KLEIN, business expert:

This business plan demonstrates social innovation and wealth creation at a number of key junctures. In developing economies, the consumer’s purchasing power is severely constrained – especially for larger, one-time payments. By developing a payment structure that allows buyers to channel their savings on charcoal into the purchase of a Sun Oven, Ronald enables a large segment of the population to become buyers. This marketing and pricing structure is a true “bottom-of-the-pyramid” strategy.

Local manufacturing is another impressive feature of the plan. Not only will the region benefit from the additional wealth generated through the venture (and retained in Uganda), but it will also benefit from the capacity built within the workforce to adapt the Sun Oven to local conditions and uses.

Nutrition and safe drinking water are two of the major social challenges facing the world today. By adapting an existing product for use in a new market, Ronald applies new, market-driven solutions to address these challenges. The for-profit model that he has developed creates incentives for multiple stakeholders and supports long-term sustainability.

Ultimately, the success of this project – indeed, most projects – will depend upon the network of collaborators and supporters who stand behind the launch. By generating government support at an early stage, Ronald has both eliminated an obstacle (high taxes) and enlisted an ally. The alliance with Sun Oven imports technical knowledge and business process support. It is my hope that Ronald can continue to grow this network of collaborators to include additional parties from the private, public and NGO sectors.

PATRICK DOYLE, business expert:

Solar oven.

It would be good to have some more information on the Sun Oven technology. It appears Sun Ovens are easier to manufacture locally than parabolic solar cooker technologies, for example. Local manufacturing will help avoid or reduce tariffs if the policy changes in the future. I do have some questions about the project. Has the technology been proven in other similar environments? How many units will be operating? Are there any independent reviews comparing the technology to others? Some factors to consider, in addition to cost, would be its hardiness and durability in rough conditions and ease of cleaning. How long does the stove take to boil water? The stoves can’t be used on cloudy, rainy, windy days, so being able to set it up quickly during brief periods of sunshine would be useful.

The cost and lifespan of this gasket that must be supplied by the manufacturer over the long term is critical, as I’m sure you realized.

Unless the manufacturer –- Sun Ovens International Inc. — is financing the ovens for you, it appears you will need a loan. The cost of this finance is key, as it makes the systems more costly for you and your customers. Have you worked out this issue in your business plan?

You may want to consider leveraging the carbon markets to help finance the stoves by registering your project with the United Nations Framework Convention on Climate Change as a “Clean Development Mechanism” (CDM) project or with the Voluntary Carbon Standard group. A CDM project in Indonesia using parabolic solar ovens has resulted in the reduction of more than 1000 tons of CO2e emissions. Each stove in the early stage produced about .5 tons of reduction per year. The reductions depend on how often the stoves are used and the fuel type that the solar oven is replacing.

Donor funding may be able to help get the project off the ground as well. Good luck!

America.gov asked finalists from among the more than 700 African immigrants who submitted business plans to the “African Diaspora Marketplace” to blog about their ideas. Sponsored by USAID and Western Union Company, the African Diaspora Marketplace is a contest that will award seed money to approximately 15 winners to help them bring their ideas to life in their home countries.

FRANCIS V. ERO, entrepreneur:

Francis V. Ero

AFAS Inc. operates a 17-pond fish farm in Badagry, Nigeria, which can produce up to 375,000 kg of catfish, tilapia and other fish types, depending on demand. It takes approximately six months for juvenile fish to reach market size, about 1.0 -1.5 kg. The market for catfish and tilapia is expanding, and AFAS has an established customer base in that market niche.

Our research shows that demand will continue to outpace supply for many years to come; the long-term outlook for this industry is phenomenal.

But supply is short for clear business reasons. High costs and meager supply of quality fish feed, along with a lack of private-sector funding and a lack of government support for fish-farming, have hindered the growth of the domestic aquaculture industry.

As AFAS plans to expand production to meet demand, it must overcome the limited supply and high costs of fish feed. Fish farming is capital intensive, and feed costs represent about 70 percent of production costs. That is why our company is seeking funding from a local bank to manufacture feed at the Badagry farm. This effort will directly support more ambitious fish-production goals.

Electricity supply in Nigeria is unreliable, and our fishery is fully dependent on diesel-fueled generators to power pumps and provide electricity for the farm. Any suggestions from experts how to deal with this challenge?

INGRID ARDJOSOEDIRO, business expert:

AFAS fish farm in Badagry, Nigeria.

To answer the last question first, unfortunately, considering the lack of appropriate energy-infrastructure in most regions in Nigeria, there is no other immediate alternative to diesel-fueled generators to power machines.

The desire to expand to produce fish-feed at the AFAS Inc. facility is an important one, as the lack of local fish feed is the most common and crucial barrier to growth in aquaculture production in Africa.

It is not clear, however, how big the yearly fish production is by AFAS Inc. and what type of feed ingredients will be used. The type of fish-feed production will dictate the amount of investment needed.

Are we talking about extruded/expanded floating pellets (heat extrusion pellet feeders are more costly) or just pressed pelleted feed for ponds? Although floating feed is not a requirement for good fish production, feed ingredients that are finely ground and properly cooked will make for better fish conversion ratios.

One cautionary note: Please be wary of apparently cheap Chinese pelleting/extruding equipment. Experience shows that much of this will not produce satisfactory pellets at all. Here is a great Web site for equipment suppliers and a free on-line journal: www.aquafeed.com.