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Anchoring Your Business In The Local Context

Jacques de Vos is the CEO of Mezzanine, a South African company founded in 2012 that delivers digital solutions to companies doing business in Africa. They work with their customers to co-create local solutions in the agriculture, health, social services, education, utilities, and financial management industries. Their last-mile solutions cut costs, increase efficiency, improve risk management, and provide unrivalled access to citizens across the continent. This is a summary of his video interview for Ziwani’s VUCA series, which you can view here. 

 

Introduction 

“With an estimated 800 million mobile subscribers currently in Africa, I sincerely believe that mobile technology can be a major enabler for creating productive societies,” says Jacques de Vos, CEO of Mezzanine. “Even while still an electronic engineering student, I had this dream of combining the benefits of technology and translating that into economic benefit for the citizens of the continent.”  

“But it took us about 20 years to actually get to delivering what we now call ‘scalable solutions’ – meaning that these solutions work effectively in many industries, across different countries,” he admits with a smile.  

Finding the opportunities in Africa 

Mezzanine started by improving access to health services, then diversified into agriculture, financial services, and education, and then eventually started supporting local governments in delivering services to their citizens, for example, access to clean water and electricity. “Although challenging, it has been a very rewarding journey,” De Vos states. 

He continues, “When we started this journey two decades ago, we started from a very low base. Africa hadn’t really participated in the previous industrial revolutions that enabled large-scale progress elsewhere in the world (for example, unlocking the socio-economic benefits of steam and electricity, mass production, or micro-processing in information technology). Even in different local contexts, we hadn’t been able to translate what was at the time a technology benefit, into economic benefits for citizens on the continent.”  

“Economist refers to this as the ‘challenge of economic diffusion’,” he explains. Diffusion theory describes how new things (such as new products) spread through a social system, and the challenge lies in achieving the expected positive socio-economic goals through the acceptance of this new idea or product by the market.  

“With the advent of mobile, we realised that this will be the first opportunity for Africa to not only benefit from these innovations, but to also co-create solutions that speak to local needs and requirements. For the first time, Africa could become a thought-leader, for example in developing innovative financial service products, now generally referred to as FinTech.”  

De Vos mentions that the whole concept of ‘mobile money’ started in East Africa. M-Pesa is a mobile banking service that allows users to store and transfer money through their mobile phones. It was introduced in Kenya in 2007 as an alternative access to financial services. “There are now millions of people using mobile money as a means to transact not only across the continent, but also globally. So, this is just one example where Africa exported capability,” he says. 

Monetising the delivery of value 

Mezzanine currently supports a range of products and services in 12 African countries. De Vos explains that because of their direct engagement in local environments with local problems, one of the questions they asked, was: “How can we use technology to improve food security for rural communities?”  

They approached various banks, insurers, input provider companies, and processors of food and beverage products to develop a digital marketplace that allows small scale farmers to transact in the formal agricultural value chain. De Vos highlights that, “The problem is that most of the small scale or subsistence farmers in Africa are confined to a hyperlocal marketplace – meaning that they are not linked to formal value chains. So, we used the benefits of mobile technology to provide them with access to the larger market.” 

He continues, “This means that these farmers can now buy better quality seed, or better-quality inputs such as fertiliser, from somewhere beyond their immediate environment. They can now sell their produce into a formal market, and translate their hard work into formal value. By doing this, food security is improved for the whole area – because the farms provide better yields and better-quality produce, and the farmers get a better price by participating in the off-taking transaction.” 

He is excited that they are seeing a number of African governments (for example, in Ethiopia, Uganda, Tanzania, and Malawi) migrating from what was typically quite an ineffective paper-based system, to use the benefits of digital and mobile in distributing value to ‘the last mile’. In economic terms, ‘the last mile’ means the final leg in point of service delivery or retail sale. 

 According to De Vos, Mezzanine’s main goals are to enable local stakeholders (specifically referring to entrepreneurs, innovators, and small-medium enterprises) to: 

  1. create value 
  2. deliver the value to the target audience, and  
  3. monetise the delivery of the value 

When these goals are achieved in a particular context, it creates sustainability and can be scaled to more stakeholders.  

As De Vos elaborates, “In the last five years we’ve seen an explosion of start-ups in Lagos, Kigali, and Nairobi – businesses that develop local solutions for their communities and for their markets. In terms of sustainability and scalability, this really excites us. We are always trying to find new ways of lowering the barriers to entry for these innovators and start-ups, in order to create a more conducive environment for business.” 

Creating productive societies through business 

“Business can play a key role in creating what we refer to as productive societies,” De Vos states. He identifies three thematic areas that every business on the continent should include in their KPAs:  

  1. Supporting citizens to have a registered form of their identity. “It is unthinkable that only 45% of citizens on the African continent have an ‘official’ form of identity. As a business community, we should hold governments accountable for making sure that all their citizens have a personal identity, a digital identity, and an economic identity. Just this small change will have a massive impact in allowing people to interact and transact both locally and across borders.” 
  2. Enabling SMEs to become part of the formal economy. “The majority of SMEs on the continent are part of the informal economy, meaning that they do not officially contribute to the tax base. They don’t have access to formal banking capabilities such as transacting across borders. Businesses, especially large enterprises, need to support governments in creating a more conducive environment for SMEs to become part of the formal value chain.” 
  3. Investing in human capital. “As a business community, we should do more in making sure that our skills base is relevant for the next phase of growth.”  

 

Entering new markets 

A key strategy for Mezzanine has been to build local partnerships, in order to ensure that their offering meets country-specific requirements.  

“When entering new markets, it is important to acknowledge that each country, each region, is unique,” De Vos cautions. “For example, in Nigeria (and I learned this only after doing business there for many years) there are more than 80 different languages. If you think you can approach a country as a uniform segment, you are making a big mistake.”  

For this reason, Mezzanine plans (and budgets!) for co-creation with their intended market. This means that all stakeholders (including the ultimate consumers of the service or product) give input on what the offering will look like, how it will be delivered to the market, and how it will typically be monetised. This approach requires investing a lot of time to understand the context, the requirements, and the lay of the land. And then to take that into account when assembling their local team. 

“We haven’t appointed ex-pats in leadership positions in any of our markets,” De Vos shares. “We strongly believe that in Kenya, Mezzanine needs to be represented by Kenyans, and the same in Ghana and Nigeria. We believe in local leadership and investing in local relationships.” 

Yet, he also notes that, “It is really important for your engagement to be authentic. Not in terms of the product or service, but in terms of the ultimate purpose of your engagement. If your aim is to empower people where you are in a position to do so, those relationships will multiply long after you’ve left.” 

Conclusion 

“As a Christian doing business in Africa, I choose to focus on the positives,” he says. “If you consider all the noise in the media, there are so many reasons not to engage, there are so many reasons not to invest. But what is important to us is the people. We believe in unlocking the potential that resides within people to do good, to do better, to do more.” 

“I’ve learned so much from my friends, my colleagues, my customers. It’s been a humbling experience going into new markets, new industries – and each time realising that so many people have limited opportunities, are not able to use their talents, and are not able to live out their purpose.” 

De Vos concludes, “When a business is anchored in the local context, we can create opportunities for people to live out their purpose. We need to do this – especially for the sake of the youth. The reason behind the extremist activities in the Sahel region is because there’s just no future. They see no options, no alternatives. I strongly believe that when a business creates opportunities for people that enables them to contribute to their local community, that will result in creating productive societies, that will multiply long after we have left.” 

Jacques de Vos

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