Poverty If Approached Smartly’

the case for most. For the business standing, it’s time to consolidate, rebuild and grow.

It’s important to identify the lessons from COVID- 19 around what the weaknesses in your business or areas of vulnerability are. This can be any combination of things ranging from low capitalisation, lack of diversification or too much of it, and many others. Identify the key issues and fix them or at least note them if you are unable to fix them. If you didn’t carry scenario planning before then definitely make sure you do it regularly. Finally, it’s important to focus on growing your business because the pandemic has also created opportunities either in your industry or similar industries.

Many new startups don’t go past the first year. As someone passionate about SMES, what would you say is responsible for this and how can it be corrected?

I am not sure it’s something to be corrected or that can be corrected. Most businesses at that stage fail due to reasons such as lack of capital, inexperience managing a business, poor execution, lack of adequate marketing, the market for product or service non- existent, or simply bad timing.

My advice when doing a startup is to leverage things like design thinking to take controlled risks so that if it fails then it’s not too painful financially. Yes, you can work to make sure things like capital, management, etc. are addressed however even after all that there is still a high chance of failure. Hence manage your risk and have fun.

What major challenges would you say indigenous exporters face?

The tough operating environment is a challenge, though not restricted to exporters. The foreign exchange environment is a big challenge, especially in agribusiness where the farmers and traders want to use the parallel market rate to determine price whilst the exporter is expected to use official window rates in subsequent legs of the transaction. Even though the farmers/ traders don’t have any inputs affected by dollars, they still use it to increase prices.

A lot of value will be unlocked if the country could just have one market- driven exchange rate. Logistics is also another challenge that needs to be tackled and I understand the rail network will soon get involved in long haulage. That would introduce significant efficiency and effectiveness into the sector.

Personally, how would you say you overcame those issues?

I am not sure one can claim to have overcome some of these issues, because they are affecting you on an ongoing basis. In my case, it’s really about finding ways to minimize the impact on your operations. One very important thing is having a scenario plan that identifies the risks you are exposed to and how you intend to mitigate them.

As an example, whenever there is a scarcity of FX, commodity prices go up significantly, because non- traditional buyers get involved so they can source their required FX. So, you have to be able to read what is happening and know what you will do in advance. There are other challenges such as logistics, maintenance and so on. These challenges just increase your cost of operations, as there is no getting around them. Ultimately just be proactive about identifying and mitigating the risks arising from these issues.

Financing is a major deterrent for many, how did you source funds and what pointers would you give for SMES looking for funding?

This is a very hot topic and people are often like banks don’t lend. Concerning the banks, I would say, ‘ be careful what you wish for because the high- interest rates could damage your business especially early on.’ My suggestion is to focus on cheaper sources of funding that can be supported by your business, depending on where you are in the life cycle. At the beginning, where you don’t have predictable cash flows, it’s better to use sources such as equity and grants.

As your business grows, then you can consider debt as a source of funding. However, it is important to ensure that this can be comfortably serviced by your cash flows. If possible, avoid the very expensive commercial debt as it imposes a very high- performance level threshold that may put your business in a distress situation.

With all you experience in investment banking and management consulting, why did you decide Agribusiness was it for you?

Yes, it has been an interesting career spending time in banking and management consulting. I don’t see it as changing to Agribusiness rather I am just adding another vertical to my zone of activity. My time in banking and consulting was very exciting and I had the opportunity to go underground on a coal mine, start a bank, and other interesting things.