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Lessons from the informal economy

It’s a well-documented fact that the informal sector is key in many developing countries, accounting for most employment opportunities, delivering a full range of services and providing social cohesion. In Kenya, for example, the informal economy is referred to as Jua Kali in Swahili, which loosely translates to the ability to solve any problem.

But can it also provide useful lessons for delivering green growth?

In Kenya’s thriving informal sector, all needs are catered for. If you have a bad hair day, a salon is just a few steps away. If your car is broken down? No problem, there is a roadside mechanic. And who needs a supermarket when you can pick your fresh vegetables from the Mboga (vegetable) lady in front of your housing estate?

It’s no surprise that 2.5 million people in Nairobi are employed in the sector. In South Africa the sector contributes between South African Rand 150- 300 billion (around US$10-20 billion) to the country’s gross domestic product.

Indeed the informal economy is so intricately connected with people’s daily lives, it boggles the mind when we attempt to box it in as the ‘other’ sector. If we are to achieve the green growth agenda, it makes sense to look to the informal sector as a starting point.

Lessons from the informal sector

In the last couple of years significant strides have been achieved in driving the green growth agenda, with various strategies and action plans at country level. The real challenge is how to translate all those policies and strategies into action.

In that regard the informal sector offers many lessons that we could all learn from in driving the transition to a green economy:

  • Collaboration is the currency of the informal economy. Informal traders often have to collaborate with their competitors in order to forge ahead, whether its through pooling resources to bulk order goods, or helping to staff each other’s stores, they value building coalitions and social capital. If the protracted climate change negotiations are anything to go by, we could learn a few things from the informal sector in how to close a deal.
  • The sectors where informal actors are most active, such as manufacturing, agriculture, construction and transport, are also the key sectors that are vital for driving the green growth agenda. Due to the creativity and flexibility in the sector, it presents an excellent opportunity to test new business models that more inclusive, and that can be applied in the mainstream economy
  • The informal sector mostly employs young people, a key demographic in charting the transition to a green economy. The green growth agenda can learn a lot from models of youth engagement, and how to inspire a generation. Youth in the informal sector are also the future business leaders, community organisers and politicians whose buy-in will be key to achieving the green growth agenda, and
  • In the agricultural sector, many smallholder farmers have been implementing sustainable agriculture practices for millennia. There is an opportunity to tap into those practices to promote climate smart agriculture. The current top down approach to driving the green growth agenda has stifled local involvement, resulting in farmers questioning the tools and practices being forward to promote sustainable agriculture.

The thriving nature of informal enterprise in developing countries provides clear potential for promoting green growth. In South Africa estimates suggest there are on average 10 enterprises per square kilometre in the townships; while Uganda was voted as the most entrepreneurial country in the world in 2015.

Indeed, I would argue that the informal economy should be seen as providing solutions to many of our problems, a place where anything and everything can be fixed, including our planet if need be.

NB: This article was originally published here: http://www.iied.org/lessons-informal-sector

Impact investment in a new economy

Impact investment has emerged as an important approach for mobilising financial resources for sustainable development. Through impact investment, it has been possible to divest from harmful business practices to sectors that have strong social and environmental outcomes. If well harnessed, impact investments have the potential to unlock significant financial resources that could be used to address systemic challenges as outlined in the sustainable development goals, while at the same time getting a financial return.

Even though impact investments present significant opportunities, there is a lack of awareness of what impact investing is, and how the opportunities it presents can be harnessed to drive economic development. On the other hand, a lot of traditional investments have been packaged as impact investments. It’s important to therefore to be able to navigate through the maze of potential offerings, and to strategically situate oneself.

The African Centre is primarily interested in impact investments that signficicantly alleviate poverty, by focusing on creating opportunities at the base of the pyramid, and helping to promote the emergence of sustainable enterprises. In this regard, we are very keen to initiate dialogue with industry players with a view of making sure impact investments are widely inclusive as possible. For example in South Africa, strategies of investing for impact are mostly focused on investor engagement, thematic investments and to some extent impact investments.

A major question that still remains to be answered is, how do you achieve tangible outcomes from impact investing, and how do you measure that impact?

This is the question we will be exploring in the coming months through strategic discourse and engagement with key stakeholders in South Africa and the continent, with a view of mobilising investors to support sustainable enterprises at the base of the pyramid.

To kick-start this year long conversation, we recently held a public dialogue on the role of impact investment in driving the transition to a new economy. The dialogue, which  was well attended brought together various impact investment houses in South Africa. The keynote address at the dialogue was delivered by the manager of Sustainable Investment Practices at Futuregrowth Asset Management, one of the premier impact investment houses in South Africa. The next major dialogue on the topic is scheduled for April in Cape Town.

BoP solutions for building inclusive cities in South Africa

  • New Economy Accelerator (NEA) hosts dialogue series
  • NEA discusses the future of cities with Prof Edgar Pieterse

Cape Town, 4 November 2015 – The New Economy Accelerator, a programme supporting enterprises that service or operate at the base of the pyramid (BoP), on Thursday 22nd of October held yet another successful dialogue about the role of small, medium and micro enterprises (SMMEs) in building a new and inclusive economy. The key theme of the dialogue was Building Inclusive Cities in Africa. Prof. Edgar Pieterse holder of DST/NRF South African Research Chair in Urban Policy, director of African Centre for cities and Professor in the School of Architecture, Planning and Geomatics at the University of Cape Town, shared key insights on the importance of the role of an inclusive economy in creating more sustainable cities. Four of the NEA entrepreneurs shared the actions they were taking through their businesses to create more inclusive cities. The focus areas of each business ranged from mass employment and skills for unemployed youth , recycled construction waste being converted into affordable housing, converting illegal dump sites into community gardens to digital inclusion for users at BoP.

Dr Mao Amis, convenor of the NEA and director of the African Centre for a Green Economy opened up the evening by introducing the NEA and its goals. Firstly, the NEA plays an important role in creating an alternative narrative of the economic system, one that is more inclusive and efficient than the current one. The second goal is to build a critical mass of like-minded people passionate about new economy issues and developing solutions “… because when you have a critical mass, you are able to put the message out collectively and bring about real and relevant change…” Dr Amis stated. As part of the NEA’s theory of change, the third goal is to experiment with ideas and models of the new economy with a mandate to take real action on the ground. The NEA provides the platform for enterprises to go beyond business as usual, supporting and fostering businesses that want to bring about change in meaningful ways in communities that need it the most. Each of the ten enterprises is undergoing 9 months of business training including one-on-one coaching and peer mentoring, with expected outcomes being experienced at the BoP rather than change trickling down from the top.

Prof Edgar Pieterse shared important insights in his extensive research on African cities. The Professor stated that one of the greatest challenges was the denial by African governemnts of the rapid urbanisation of the African population. This meant that issues of employment, infrastructure, food security, education and growing inequality were not adequately addressed. Only recently did government recognise the urgent need to understand the realities of urbanisation, its complexity and assess its own capacity to deal with it. Professor Pieterse stated that because of this rapid urbanisation, the bulk of the continent’s population lives in slums and participates in the informal economy. A great opportunity lies in rethinking the way the economy works, a possibility for the formal and informal economy to be valued equally and utilised to create sustainable cities. Therein lies the opportunity for programmes such as the NEA to bridge this gap.

Green Innovations and Entrepreneurship in South Africa: The role of SMMEs

Green Innovations and Entrepreneurship in South Africa: The role of SMMEs

  • New Economy Accelerator (NEA) hosts dialogue series
  • NEA discusses green innovations and entrepreneurship with Mr William Hugh MD of Impahla Clothing (Pty) Ltd

Cape Town, 17 November 2015 – Last week Thursday 12th November, the New Economy Accelerator, a programme supporting enterprises that service or operate at the base of the pyramid (BoP), tried a different approach to hosting their dialogues with the aim of getting more insight from the public. The key theme of the dialogue was Green Innovations and Entrepreneurship in South Africa, with particular attention on going beyond “business as usual”.

The evening was kicked off with an address by Mr William Hugh, the managing director of Impahla Clothing (Pty) Ltd. Impahla Clothing is the manufacturer of high quality apparel clothing servicing customers such as PUMA, Adidas, Asics, UZZI and Merrell. The largest drawing card about Impahla clothing is about how it started as a small business and grew into a multi-million rand company whilst adhering to the commitment of building sustainable relationships with both people and the planet. Mr William Hugh emphasized that businesses were more likely to succeed if they invested in their employees and built a culture of trust within the working environment. The growth of the Impahla business from 60 employees in 2004 to over 300 in 2015 and low employee turnover rates is testament to that. In addition, the sustainable use of resources is a key driver of the business. Mr Hugh stated that their mandate is to use resources in such a way that it is still available for the next generation.

A world café style led by Michael Weatherhead of the New Economics Foundation (NEF) was then hosted with 3 key questions posed to the participants. The key responses are listed below each question;

  1. Why is achieving an equitable and sustainable economy the job of SMMEs?
  • It is not only the job of SMMEs, everyone from government, to corporate and individual citizens must play a crucial role in achieving an equitable and sustainable economy
  • SMMEs are more aware of the realities and needs on the ground
  • The structure of SMMEs allows for faster decision making and therefore action that brings about change
  • SMMEs are more likely to place emphasis on the growth of local economies
  • SMMEs are more likely to create context specific solutions rather than the one-size-fits-all model of big business
  1. What is an equitable and sustainable global economy?

One that

  • Recognizes many economies
  • Allows fair distribution of benefits of the economy
  • Is inclusive in the decision making processes
  • Recognizes planetary limits
  • Shifts the measures of success
  1. How can SMMEs be supported to play a key role, and who are key partners to enable this?
  • Policy reform – less red tape for SMMEs, creating an enabling environment for SMMes
  • Easier access to financing
  • Consumers buying local brands – achieving a sense of Ubuntu, everyone one succeeds when we support each other
  • Education

The NEA provides the platform for enterprises to go beyond business as usual, supporting and fostering businesses that want to bring about change in meaningful ways in communities that need it the most. Each of the ten enterprises supported by the NEA is undergoing 9 months of business training including one-on-one coaching and peer mentoring, with expected outcomes being experienced at the BoP rather than change trickling down from the top.

BoP Solutions Set To Advance Food Security In South Africa**

The New Economy Accelerator, the enterprise acceleration programme for base of the pyramid (BoP) solutions, on Thursday introduced its 2015/16 cohort at a cocktail reception in Cape Town. Aimed at enterprises with new economy and inclusive solutions that target or operate at the base of the pyramid, the evening’s theme focused on food security in South Africa.The evening kick-started with brief introductions by NEA convenor, Dr. Mao Amis, he reminded the audience in attendance that ending hunger is Goal 2 of the recently adopted Sustainable Development Goals (SGDs), “…which collectively aim to ensure the long-term well-being of the planet and its people. Solemn promises however, are not enough. These goals must be converted into tangible outcomes on the ground”. Each of the 10 enterprises who form part of the 2015/16 cohort, got an opportunity to introduce themselves and the solution that they are currently implementing. Shortly thereafter, the entrepreneurs were be joined by Leonie Joubert, an award winning science writer and author of The Hungry Season, in dissecting the future of food and what it will take to feed the nation.The 2015/16 NEA cohort boasts companies whose ambitious goals range from mass employment and skills for unemployed youth to recycled construction waste being converted into affordable housing. The future food and food value chain features strongly with a cross section solutions looking at unique urban farming techniques, to innovative mobile food distribution for informal traders, converting illegal dump sites into community gardens, natural fertilizers and organic recycling of food waste. Although the accelerator programme itself is new, the bulk of the entrepreneurs have been operating for longer than 2 years.

Leonie Joubert shared her experiences and insights in researching South Africa’s food sector: “If we want to make sure that our fellow South Africans are well fed and properly nourished, we need to understand that food security isn’t just about making sure our farmers are producing enough calories for all of us. We need to make sure that those calories are wholesome and nutritious. At the moment, the industrial food system tends to take these good calories, given to us by our farmers, and processes much of this food so heavily that it brings energy dense foods to us, but ones that don’t have enough nutrients.

The result is that we get too much energy and not enough goodness from our food. It’s making us heavy and sick, and it means we aren’t food secure”. Joubert went further in suggesting that we subside fresh and whole foods, and tax processed and sugary foods.

In an audience that included government officials and impact investors, the future of food proved to be topical and the evening tremendously success, even trending on social media.

**   This article was originally published www.spice4life.co.za

New Economy Accelerator Announces 2015 Cohort of the best BoP start-ups in South Africa

  • NEA announces the 10 startups targeting or operating at the Base of the Pyramid in SA program
  • BoP business acceleration program convened by the African Centre for the Green Economy (Africege) and supported by Stichting Doen (Doen Foundation) and New Economics Foundation (NEF).

Cape Town, 16 September 2015The African Transition To A New Economy (ATTANE), a community of new economy practitioners – citizens who are innovating and finding ways to build bridges and networks to challenge the status quo, to promote an inclusive sustainable development pathway –  has today announced the 10 South African enterprises selected to join its inaugural New Economy Accelerator program.

The finalists, which include enterprise from Gauteng, the Western Cape, Eastern Cape and KZN, have been chosen following a 2-week selection process by new economy experts, including members of the ATTANE community exco and its partners.

All the enterprises are actively trading in the local economy, and are generating annual turnover ranging from R120 000 to R16 million. After receiving a higher than anticipated number of applications, the selection panel considered a variety of factors, namely scalability, new economy fit, employment creation, innovation and investment readiness.

Details of each of the 10 selected enterprises are listed below.

Over the course of the next 9 months, the 10 enterprises will receive expert one-on-one coaching, high-quality skills training workshops and intensive business support, as well as access to finance to grow their businesses. Expert webinars and fireside sessions will also be offered with experts in variety of topics related investment readiness, global expansion, media, government engagement and business development. The program commences in October 2015, and will be led by Dr. Mao Amis and program manager Nikiwe Solomon.

Included in the program will be a business coach, 6-contact sessions in Cape Town, business development support and access to a variety of products and services through the ATTANE community network.

At the end four month business acceleration period, the 10 enterprises will be receiving 2-months of one-on-one coaching and mentorship, followed by 1-month of investor roadshows (including an investor Demo Day). The programme will run from the 1st of October 2015 until 28th of April 2016.

Program convenor, Dr. Mao Amis commented: “These enterprises form the building blocks of an inclusive and prosperous society’’

“The NEA is such an important initiative because it supports radical experimentation…a space to carve out a different way of doing. It creates the space for a different definition of economic activity and does so with practical examples on the ground. People are crying out for actual examples of doing things differently and the activities of the programme participants provide those examples of how to support a flourishing society within planetary limits.” said Michael Weatherhead, New Economy Foundation.

The 2015 NEA Cohorts:

Geza Jozi (Waste and Transport, Gauteng)

Khona Cafe (Digital Inclusion, Western Cape)

Last Mile for BoP (Localized Retail, Western Cape)

Let’s Go Trade (Skills and Mass Employment, Gauteng)

Naturally Good (Eco-friendly Consumer Products, Western Cape)

Sidingulwazi Co-Op (Recycling Co-Op, Gauteng)

Umgibe (Urban/Community Farming, KZN)

Use-It (Sustainable Housing, KZN)

Y-Waste (Upcycling – Food waste, Western Cape)

Zuka (Organic Fertilizer, Eastern Cape)

(*more details and profiles of these enterprises will be released shortly)

End.

Media Queries:

Vuyisa Qabaka           chief@abaphumelelibc.co.za             072 354 4630 / 021 713 4390

Dr. Mao Amis              mao@africancentre.org/AfC                              NEA Programme Convenor

Nikiwe Solomon          nikiwe@africancentre.org/AfC                           NEA Programme Manager

About the NEA:

The New Economy Accelerator (NEA) aims to activate local economies in South Africa to build an inclusive and prosperous society. Social and environmental high impact startups serving the low income or BoP sector stand a chance to be a part of the NEA programme that aims to accelerate the growth of such enterprises. The growth and acceleration of grassroots enterprises is critical for addressing the significant challenges of unemployment in South Africa. The concept of a ‘New Economy’ is anchored around creating local solutions to address local problems. In this regard new economy entrepreneurs recognise their mission is to serve their local communities, to create job opportunities, upskill their community, and use natural resources sustainably.

Dr Mao Amis, talking about the linkages between health and agriculture productivity in Africa.

https://www.youtube.com/watch?v=stEXjhjOivA

New Economy Accelerator – Applications close tomorrow- (27th AUG 2015)

The New Economy Accelerator (NEA) aims to activate local economies in South Africa to build an inclusive and prosperous society. Social and environmental high impact startups serving the low income or BoP sector stand a chance to be a part of the NEA programme that aims to accelerate the growth of such enterprises. The programme will run from the 1st of October 2015 until 28th of April 2016.

NEA programme candidates can expect to take part in a specially designed workshop for skills development, to receive intensive business support, one-on-one coaching, access to national and international New Economy networks, access to finance to grow their business as well as training in New Economy Principles.

The growth and acceleration of grassroots enterprises is critical for addressing the significant challenges of unemployment in South Africa. The concept of a ‘New Economy’ is anchored around creating local solutions to address local problems. In this regard New Economy entrepreneurs recognise their mission is to serve their local communities, to create job opportunities, upskill their community, and use natural resources sustainably.

The NEA programme is seeking applications from innovative startups in the sectors of agriculture,, financial and economic inclusion, retail, tech and digital inclusion, renewable energy and waste management.

 

“Our mission is to catalyse this new economy so that it can create new opportunities, through the cultivation of relationships, experimenting and changing the realities faced by local communities. We aim to achieve this through an accelerated programme that champions sustainable growth, encourages collaboration, advances community, facilitates dialogues, drives scale and rewards global innovation.” – programme convenor, Dr. Mao Amis

Details about the New Economy and the NEA programme are available at www.attane.org.

The deadline for applications is Thursday the 27th of August 2015.

Applications can be filled in online at the NEA website www.attane.org or the application form can be requested from Nikiwe  at nikiwe@attane.org or nikiwe@africancentre.org/AfC.

For further enquiries please contact:

Nikiwe Solomon, e-mail nikiwe@attane.org or nikiwe@africancentre.org/AfC

Tel: 021 713 4390 | 072  314 0114

About the New Economy Accelerator

NEA is a platform for nurturing the emergence of a new economy, one that challenges the status quo to build a more inclusive and sustainable economy. By building networks, innovating and promoting investments, together we can realise a new economy. An economy that maximises human well-being, and is capable of coping with and adapting to global environmental change.

Our mission is to catalyse this new economy so that it can create new opportunities, through the cultivation of relationships, experimenting and changing the current narrative. To do so we are a platform where actors connect, a community of practices grows and emerging solutions spread. We share stories of innovations on the ground, change the economic narrative and build a critical mass of changemakers.

NEA is coordinated by AfriCGE as the African partner of a global movement for the new economy. One of our collective goals is to support 50 new economy initiatives over the coming 3 years. Find out how we plan to do this.

The NEA initiative is born at a time when the fastest growing economies are located in Africa, and where foreign investor sentiments are very optimistic. It’s therefore an opportune time for Africa to set itself on a development trajectory that will ultimately address the root causes of poverty, conflict and inequality.

We don’t know what an alternative development pathway looks like, but we do know that there are practices on the ground that are bravely charting new courses. And people with great ideas who would like to share their stories and experiences in the hope that such innovative thinking and doing might gain traction and become mainstream.

The goal of NEA is to be an agent of change, a community where stories are heard, ideas are nurtured and action is stimulated.

Africa rising and the new economy

One of the key highlights of US President Barack Obama’s visit to Kenya last week, was the spotlight it placed on the importance of entrepreneurship, whilst co-hosting the Global Entrepreneurship Summit (GES). The occasion drew some of the world’s most high profile investors and budding entrepreneurs from the continent.This is a clear recognition of the investment opportunities the continent presents. The key challenge is whether we can harness the increased spotlight on Africa to create truly meaningful opportunities that promote inclusive and sustainable growth.

Many of you have probably heard (a few weeks ago) that the IMF acknowledged that “trickle down” economics doesn’t work after all. This is an indictment of the current economic system that focuses on hoarding assets over sharing; individual wealth over community well-being; and competition instead of collaboration.

The majority of the world needs a new economy, one that challenges this notion of growth at all cost, and advances an approach that places the well-being of people and the planet at the centre of economic development. This approach also redefines the determinants of success, allows for the creation of alternatives, and decentralizes the economy. In a decentralized economy businesses are created to address the specific needs of a community rather than the one size fits all models. It also creates opportunities for entrepreneurship, fosters co-creation and the sharing of resources for the common good.

Africa has its own unique challenges and therefore the notion of the “new economy” presents an excellent opportunity to address some of the systemic challenges the continent faces.

AfriCGE will be launching the New Economy Accelerator (NEA) on Thursday 6 August 2015 at the Centre for the Book, 62 Queen Victoria St, Cape Town at 17h30. Places are limited, so RSVP (nikiwe@africancentre.org/AfC)  here and secure your spot to this new and exciting launch event promoting inclusive business practice in South Africa.

Launch of Africa Climate Smart Agriculture (ACSAA) Forum

The vulnerability of Africa to climate change and it’s interlinkages to poverty and food in-security are well documented. Africa’s growing population and a declining agricultural productivity, presents a major challenge to the continent’s development propects. There is a need to develop strategies that can support sustainable increase in agricultural productivity to generate wealth and build food security, without negatively impacting the environment.

Over the years various approaches such as conservation agriculture, have been proposed for improving agricultural productvity and building resilience against climate change. The most recent approach, that is receving significant traction is climate smart agriculture (CSA).

CSA has become an important approach for achieving the three dimensions of sustainable development, by increasing agricultural productivity, building resilience to climate change and mitigate greenhouse gases

To this end, the New Partnership for Africa’s Development (NEPAD) with mandate from African heads of States, has launched the the Africa Climate Smart Agriculture Alliance (ACSAA), as a multi-stakeholder plfotor_fotoratform for championing CSA on the continent. The aim of ACSAA is to assist 25million farmers to adopt CSA approaches by 2025.

AfriCGE and it’s partner organisation, Shared Value Africa (SVA), are honoured to be playing a leading role in driving the establishment of ACSAA, by helping NEPAD to develop an investment framework and a funding mechanism for the Alliance.

On 13th May the Africa Climate Smart Agriculture (CSA) Forum was launched in Addis Ababa, and our Executive Director Dr. Mao Amis, and the co-Founder of SVA Dr John Fay, were invited to lead a discussion on financing mechanisms for climate smart agriculture in Africa. Their presentation was well received by delegates from various sectors in Africa, including government, civil society and the private sector. Lack of capacity in accessing global finance for climate smart agriculture, was identified as one of the major gaps in promoting CSA. This is therefore going to be a focus theme where AfriCGE and its network members are going to play a leading role, to ensure that African governments are well capacitated to tap the opportunities in the climate finance space.

To find out more contact us on:

Info@africancentre.org/AfC

+27 (0)21 713 4390