Alleviating Poverty With Joint Venture Commercial

EstatesWILMA has embarked upon a program

to improve living standards in some of Africa’s poorest communities through the formation of businesses structured as joint ventures. These businesses will be partly owned by African nonprofit organizations, which will provide the land, the initial planning, the labor, and services to the local community such as health and education. Commercial firms from industrialized countries will also be part owners, and they will provide the business expertise, technology, and capital to make the joint venture a success. To increase efficiency and sustainability, our business model clusters small business start-ups to take advantage of technical linkages, supply-demand relationships, and common land-use needs. The result is the Joint Venture Commercial Estate (JVCE), a community center for business and social services that relies on its own profits for sustainability.

This business model addresses the problems that curb the growth of small business in Africa:

▪ Vast distances, poor transport infrastructure, and high fuel costs

▪ Poor health, education, and social services near production sites

▪ Lack of local business planning and management capacities

▪ Lack of local ownership and control, and therefore lack of community support

▪ Little access to mainstream finance

Our confidence in the JVCE program is based on our experience with two independent businesses that WILMA helped plan and finance. The first was Dar CDA Mushroom, commonly known as DarMush in its home location of Mbweni, just north of Dar es Salaam, Tanzania. WILMA hired mushroom experts from China to train local workers to raise mushrooms in the hot and humid coastal environment. These experts have returned to their homes, and the company continues to produce mushrooms and expand its operations in the care of the Dar es Salaam Community Development Association.

This mushroom business still depends on aid: the building of new mushroom barns and other costs sometimes exceeds monthly revenues, and DarMush cannot afford to borrow. WILMA suggested that a cluster of companies including construction and materials production could make DarMush self-sustaining. The

availability of a school for workers’ children and a clinic would also help in the hiring and retention of a labor force. Working with our commercial partner, Tucson Transatlantic Trade, which specializes in low-cost construction and has its own program for developing joint ventures in foreign countries, we have planned a JVCE in Mbweni including both commercial enterprises and social services.

The second business around which we are planning a JVCE is Ahakishaka Waterworks. Ahakishaka is a village composed of five hamlets in northwestern Tanzania near the Rwanda border. In the

Ahakishaka villagers construct the storage tank and pumping station for their water-distribution system.

Innocent L. Bash, WILMA’s program manager for Tanzania, inspects a new mushroom variety being

introduced to east Africa by DarMush, coprinus comatus.

Members of the Dar es Salaam Community Development Association meet in a local classroom.

middle of the hamlets is a spring where traditionally children have spent much of each day fetching water for their families. WILMA provided some initial capital for the residents of Ahakishaka to build a storage and pumping system to distribute water to hamlet centers. Freed from the task of fetching water, the village children are now able to attend the local elementary school, which is being expanded by the local government to accommodate the influx of new students.

As with the mushroom company, profits from the water company are

meager. Villagers are willing to pay for the water, but what they can afford will barely cover the cost of maintaining the current equipment. In order to expand and raise the living standard of the village, the company plans to begin selling bottled spring water outside of the village. There’s plenty of demand for this product, but although WILMA has paid for a specialist to certify the quality of the water and has completed negotiations with the government for rights to bottle and sell it, the capacity to build the bottling plant remains out of reach. WILMA proposes a JVCE including a

construction company and other complementary businesses. In both Mbweni and Ahakishaka the demand for improved housing is high. The former is dotted with tin-roof shacks; the latter is a region of mud huts. In either location a company specializing in sturdy low-cost construction should find continuing demand for both residential and commercial buildings.

WILMA’s network of partners and colleagues includes an ever-expanding roster of professionals who stand ready to provide valuable services to support the formation of JVCEs. Some of them are in mid-career, others retired; while they will donate their time, their travel and other expenses must be covered, and it’s often necessary to hire local professionals at standard rates for short-term specialized assignments.

The Way Forward: WILMA’s SEED

WILMA with its commercial partner, TTT, are combining their experience on the ground in Africa with their network of senior professionals in Africa and around

the world to launch a course of training and mentoring for the future leaders of JVCEs. We call this course WILMA’s SEED.

WILMA staff and local leaders inspect one of the new faucets installed in a hamlet center.

Another faucet located on vacant land makes the construction of a new girl’s school and other long-

needed facilities feasible.

GETTING AFRICA OUT OF THE POVERTY BUSINESS

The World Institute for Leadership and Management in Africa (WILMA), a nonprofit organization dedicated to combating poverty in Africa through the support of indigenous leaders and managers, has experimented with alternatives to traditional development methods since 1999. Success with two community-based small businesses has led us to design a new way of promoting and expanding such businesses. If our objectives can be fully realized, we may be able to reduce or eliminate the need for donations in the communities where we are pursuing this effort, and we hope to expand to many more communities. WILMA’s strategy for Getting Africa Out of the Poverty Business now focuses on launching a course for training and mentoring the future leaders of social enterprises

SEED stands for Social Enterprise and Entrepreneurship for Development.

In SEED, WILMA Senior Mentors lend their time and talents to groups of students at the world’s leading liberal arts colleges and universities. After extensive preparatory study, the course starts formally with a two-week seminar at the students’ school, conducted by the Senior Mentor during or after their junior year. The seminar starts the process of creating a business plan. The course formally ends with the successful launching of a JVCE that serves a particular community and that is planned with its leaders and local investors. The capitalization of the JVCE repays student loans contracted to pay for the course. The loans are guaranteed by the students’ sponsors, by their Senior Mentors, and by other interested investors and donors.