A study in African ingenuity

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Five years ago, every business school worth its salt was setting up programmes in China. Three years ago, it was India that was in fashion. Today, many of the top business schools in Europe and the US are looking to Africa as the next big market for management education.

Columbia Business School in New York is no exception. This week up to 30 second-year MBA students will be travelling to Ghana, Nigeria, Tanzania and South Africa to work with entrepreneurs there. The trip is intended to be much more than a piece of academic learning: Murray Low, director of the entrepreneurship programme at Columbia, is hoping for a win-win situation – the students, it is hoped, will learn about business in Africa from the entrepreneurs and they, in turn, will help the entrepreneurs develop their businesses.

There are two big hurdles for entrepreneurs starting a business in Africa, says Prof Low, who co-teaches the Entrepreneurship in Africa programme with Paul Tierney, chairman of the board of directors of TechnoServe, a not-for-profit corporation engaged in economic development in Africa and Latin America. First is the lack of professional governance.

Second is the inability of fledgling companies to gain access to external finance. In particular, Prof Low says, there is a disconnect between the main sources of capital and African entrepreneurs although some venture capital organisations are beginning to consider investing in Africa. His hope is that the programme “can play even a very minor role in encouraging capital flows to Africa”.

At the end of their stay in Africa, Columbia’s MBA participants will write a confidential consultancy report for the entrepreneurs they have studied. In addition, they will write a case study about the company. Developing these teaching cases – the third aim of the programme – will be valuable to both the faculty in Columbia and to professors at the growing number of reputable African business schools with which the US school works.

Columbia is trying to help African business schools develop more western-style, student-centred learning. “They need to teach and write cases,” Prof Low says, emphasising the importance for African professors to write their own cases. “Local cases are just more compelling in the African context.”

One group of Columbia students will be travelling to Lagos in Nigeria to work with Computer Warehouse, one of the largest information technology systems integrators in west Africa. The team of three includes two students from Nigeria, one of whom is now a US citizen, and American student Ryan Petersen, who is also a teaching assistant at Columbia. His group will visit many of the company’s employees, including founder Austin Okere, says Mr Petersen, who will be writing a regular blog from Nigeria.

“With no substantial sources of external financing, the company has reached $100m in revenues from a client base including some of the world’s biggest brands.”

Successful

The entrepreneurial ventures the students will visit vary widely in their aims and the services and products they offer. One group will visit a company called Info Tech in Dar es Salaam, where founder Ali Mufuruki, a mechanical engineer, started his company as a computer consulting firm but now has the franchises for Woolworths and Levis in Tanzania and Uganda – and $10m in revenues.

Another family of entrepreneurs involved in the programme are Joseph and Damasi Mfugale, also in Dar es Salaam, who set up Peacock Hotels. It took them eight years to find the money to build the first 27-room hotel: now they are expanding and, in five years, plan to open three more hotels.

In spite of the apparent differences, the seven entrepreneurs have much in common, Prof Low says. They have all established successful businesses without access to outside capital.

“The reason we have picked this scale of entrepreneur is that they have demonstrated the ability to build a business. To go to the next level, they need outside investment,” he says.

The Entrepreneurship in Africa master class took a year to develop and grew out of a broader initiative led by Glenn Hubbard, dean of Columbia, to link the school more closely to the business world in Africa. As part of the initiative, professors from Africa’s top business schools have been invited to Columbia to work alongside professors in the US and learn more about teaching cases.

To read Ryan Petersen’s blog, which begins tomorrow, go to www.gsb.columbia.edu/publicoffering

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