Foreword

During the past few years, the donor community has been giving more consideration to the African private sector, following the latter's growth in importance as a result of a broad process of democratization and liberalization whose effects began to make themselves felt.

Previous attempts to finance economic development through public bodies had been faced with a number of difficulties. As the results had not always matched expectations, the private sector appeared to be a possible means for channelling funds towards recipients.

We must, however, recognize that in order to enable the private sector to play its role in full, we must first and foremost examine how it functions. What, for example, are its internal dynamics? Who are the main players that we find on the national scene?

The essential aim of the present study is to spotlight the various components of the African private sector. It uses an analysis of both lessons drawn from the implementation of several projects whose main objective was to help the private sector and from measures taken by small business associations as a basis for studying the possibility of producing recommendations of a prescriptive nature.

The various examples provided by the author serve as a guiding thread in the attempt to define the precise role which the African private sector can (and should) play in the rapid expansion of small business, which is also a starting-point for the private sector itself.

The present document is part of a series of publications of the interdepartmental action programme on privatization, restructuring and economic democracy recently launched by the ILO.

Max Iacono,

Action Programme Coordinator for Privatization,

Restructuring and Economic Democracy.

Contents

Foreword

Introduction

1. "Gaps" in the world of small businesses

1.1. The credibility gap

1.2. The production gap

1.3. The finance gap

1.4. The marketing gap

1.5. The management gap

2. A supportive environment

2.1. Small business consultancy group (SEDAG)

2.2. Development funds (SEDIF)

2.3. Training/action (SEDAT)

2.4. Technology/information (SEDIT)

2.5. Research/action (SEDAR)

3. The role of professional associations

3.1. Difficulties

3.2. A favourable environment

3.3. Information

3.4. Linking institutes to the industrial world

3.5. Government

4. The private sector

4.1. Composition

4.2. Mutual perceptions

4.3. Perception of the main actors

4.4. Prescriptions for the private sector

4.4.1. Organizing small businesses

4.4.2. Organizing professional associations

4.4.3. Means of action

5. Conclusion

Tables and diagrams

Diagram showing gap interaction

Gap dynamics

Table 1: Options for professional associations to increase their usefulness

Table 2: Characteristics of the components of the private sector

Table 3: External environment of the private sector: Principal components and
immediate mutual perceptions

Table 4: Attitudes of the components of the private sector towards the main actors

Table 5: Difficulties of professional associations, groupings or syndicates

Table 6: Why are the associations in Cameroon so undynamic?

Introduction

The International Labour Organization (ILO) has implemented a project, funded by the United Nations Development Programme (UNDP), that aims primarily to:

"give the organizations and institutions in the African private sector the chance to play a more significant and effective role in the creation and development of small businesses".

The project was based in Douala, Cameroon, for the French-speaking countries in Africa, and in Accra, Ghana, for the continent's English-speaking countries. The steps taken toward achieving the objectives assigned to it seek, through a certain number of pilot experiments in a number of African countries, to conceive and develop innovative ideas for the development of self-sustaining mechanisms for the creation and development of small businesses by the private sector. In other words, to try to understand better the inherent dynamics of the private sector in order to lead it to invest more in the process of making small businesses thrive.

Small businesses being its primary object, this project, to begin with, tried to rally the corresponding support organizations around these units of production of goods and services and to place the new grouping in the context of the private sector. This is perhaps the first attempt on the African continent to put together these three components: small businesses, support organizations and the private sector, and it has led to new insights, new questions and innovative ideas.

The main aim of the present study is to share with other African institutions the experience thus accumulated, so that a fruitful dialogue may be opened about the project's findings and conclusions regarding the emergence and/or consolidation of the African private sector.

These findings are based on:

(a) the activities carried out directly by the project;

(b) the determination of the degree of harmony between the methodology developed within the framework of certain national projects and the specific context of a single country. Various ILO projects have been the key element in so doing;

(c) reports by those who have had to implement certain recommendations made by the project and then shared their results and conclusions;

(d) activities organized following contact among several participants in the project; in other words, where the project has been a catalyst for specific activities;

(e) the sharing and the analysis of general information gathered by the project.

It is worth making clear here that the guiding principle of this set of activities has been that the small business can be and very often is a possible starting-point for the private sector.

Small businesses and the private sector can be linked in several ways. The project has opted for that of associations; in other words, to look at how to bring small businesses to create associations. The underlying hypothesis is that:

-- dynamic businesses will give birth to dynamic associations, which, in their turn, will help to create and develop healthy, lasting businesses;

-- the existence of solid support organizations has a decisive influence on the emergence of a "private sector" spirit.

However, the project has had to come to terms with the fact that in the field not only do small businesses have their own history, with their own share of successes and setbacks, but associations, too, have their own history and their own contradictions, and the "private sector" has reached a certain level of development and has developed specific relationships with the various actors. The relationships already existing between businesses and associations have been studied to enable prescriptive suggestions to be made concerning the private sector. Accordingly, information on the dynamics of the sector has been accorded priority.

Taking into consideration what has been presented so far, in an attempt to bring together the actors of the relevant sectors of the environment, leads us to the following questions:

-- How can we reconcile two different types of dynamics: that of the private sector and that of small businesses?

-- How are small businesses viewed by private sector organizations?

-- Similarly, how are private sector organizations and institutions viewed by small businesses?

-- What are the possible ways to make small businesses aware that they will only be able to make their weight felt on the economic scene through groupings?

-- How can we legitimately advocate a grouping among such small units when each of them, in pursuit of its own interests, necessarily reasons in terms of competition?

-- Why does the history of support associations reveal a certain amount of suspicion on the part of the other economic players, even small businesses?

-- When we focus on the dynamics of the private sector, what lessons can we draw for small businesses and for the private sector itself?

Answering these questions means that we have:

-- to analyse the life of the various bodies in question, to study the different attempts at bringing them together in order to help us decide whether certain prescriptive principles can be applied in the specific case, with a view to getting results that may contribute to fulfilling the designated aims of projects looking for innovative ideas that will enable the African private sector to play its role in the creation and development of small businesses in particular;

-- to present the knowledge we have of small businesses and of associations from a new perspective, so as to generate recommendations that will lead us toward a more efficient private sector;

-- to advocate the emergence of a responsible private sector, so that the vacuum created by the withdrawal of the State and the liberalization of the economy is filled as swiftly as possible, especially in the context of a much-heralded democratization.

1. "Gaps" in the world of small businesses

Experience of how small businesses work in the field supports the analysis that such units develop as a function of (a) the speed with which they clear a certain number of "hurdles", (b) their ability to draw lessons therefrom and to store them so that they will know how to react in the future, for they will meet with these obstacles throughout their life, and (c) their ability to form groups (embryo of the private sector?).

These "hurdles" are characterized by the fact that:

-- at given moments in the life of a business, the problems it encounters converge around one main theme;

-- the nature of these problems is the same for every type of business; in other words, they are to be found in the life of all businesses. More generally, we find that there is a close relationship between the size of a business and the complexity of the mechanisms to be activated to clear these "hurdles". For example, in a small business it is the owner/director who takes the decision about a problem, whereas in a big company the director must first of all make his colleagues aware of the problem facing them before acting, because he needs to unite individual efforts to resolve it. If we need a common point of view on the "private sector", the actors acknowledge that it requires even more time and energy.

What makes these "hurdles" a particularly thorny problem for a small business?

To answer this question, we propose to introduce the term gaps, the better to understand the obstacles.

A gap is defined as the observed difference between the ideal conditions for something and the real conditions for that it has to put up with.

The idea is that steps must be taken to reach an ideal situation (without perhaps ever reaching it). These steps can be defined as operations that are in harmony with the relevant facts in the environment. A business, therefore, must always seek to reduce the shortfall between its present situation and its set ideal.

For example, in an analysis of the "market", we can say that the ideal situation is that in which the business has taken all the necessary measures to meet the demands of its present and future clientele. To identify the gap, we need to compare this ideal situation with the one in which the business finds itself, using criteria selected from those suggested below.

The need to study these gaps derives from our increasing understanding, gained from analysing the lives of small businesses, that these units undergo periods of "turbulence" following the appearance of these obstacles. The correct strategy is to try to limit the length of such a period, because staying too long in an area of turbulence may cause a weakening of the structure. One of the clear consequences is that a business may emerge from a period of turbulence with structural scars whose effects will be felt throughout its life. Ideally, a business will come out of this period of turbulence strengthened by new knowledge that will help it to amass a range of adaptation measures.

Although this situation is well known, we have to acknowledge that it is common practice for the head of a business to lose sight of this aspect, and for a sort of erosion to take hold and lead him to make do without rigorous planning whose validity he fails to perceive. This is above all true of small businesses. The net result shifts the business onto a different trajectory, thereby leading it into a spiral of problems, often putting its very survival in jeopardy.

The studies that we have carried out in the field enable us to list five categories of gap:

-- the credibility gap;

-- the production gap;

-- the finance gap;

-- the marketing gap;

-- the management gap.

We identified these different gaps, in the above order, through a study, of the life histories of several small businesses, through discussions with heads of businesses in several countries and an in-depth analysis of what they said. The appellations for these gaps relate to a specific set of problems characterizing the developmental phase in which the small business finds itself. We have discovered that the set of problems relate to the age of the small business. The last gap generally appears five to seven years after the first.

1.1.The credibility gap

First of all, the proponent of a potential business has to sell his idea, to generate support around his proposal. In other words, he must not only make himself personally credible, he must also inspire confidence -- regarding his actions, his assets and anything he produces -- in the people he deals with.

In the case of a small business, this credibility is particularly important because the whole project is extremely personalized: there is no great "distance" between the entrepreneur and the business; moreover, people usually refer to the business as "Mr. X's business", or "Mrs. Y's business". In this phase, then, the owner/director has to show clearly to those in his immediate neighbourhood that they can count on him to successfully implement his project, to show clients that they will get quality products, to show creditors that debts will be honoured, etc. A great deal depends, in fact, initially on the owner/director's power of conviction, and subsequently on his fulfilment of his undertakings.

Overcoming this hurdle will enable the head of the business to draw upon a stock of trust that will remain with him throughout his professional life. But, at the same time, we must stress that, as everywhere else, this stock must be constantly looked after. In other words, the director must be careful not to relax, because as long as he remains at the head of the business he runs the risk of losing his credibility at any moment.

Preserving and maintaining this credit worthiness is vital as the circumstances of the business become more complex over time. As time passes, the director will discover that in addition to his personal reputation (i.e. essentially the way in which others perceive him), the people he deals with also become interested in his personal history and, more generally, in the image that he projects around himself.

Although this is indeed a subjective assessment, it is hard to produce a better one in this domain. As a banker puts it, "credibility begins as a set of impressions which experience then confirms".

1.2.The production gap

Generally, once the owner/manager of a small business has convinced those he deals with -- members of his own "tontine", his banker, etc. -- has put together the necessary funds and acquired the production equipment according to specifications, he starts producing.

Throughout this stage, the director must again ensure that he strictly fulfils his undertakings:

-- the products must match the samples he has provided;

-- delivery schedules must be met;

-- quality must be guaranteed whilst not overrunning costs;

-- the director must sometimes also posses technical mastery of the production equipment.

This phase is crucial for a small business because the director can draw upon the credibility he generated in the previous phase, but must do everything he can to hold on to what he has achieved. If he fails to meet his production obligations, he will lose all credibility among his clientele, i.e. the credibility from the previous phase added to that of the present phase. A large number of directors are occasionally content to meet their obligations only in part, and this partially depletes their stock of credibility.

Experience also shows that fairly often the director is so taken up by the need to produce that he throws himself into that task completely, and yet in spite of all his efforts he fails to fulfil his original objectives. He then sees doubt etched on the faces of those around him. From that moment on, he must try to get back on track through his own individual efforts, or else seek help from other owners/directors, for instance within a professional association -- the beginning of a "private sector" spirit.

From the moment he gets production under way, the head of the business must be aware that keeping going depends on his ability and his speed in dealing with these constraints.

If the director is able to set up appropriate mechanisms for tackling these difficulties and overcoming them, he then has to face the third obstacle.

1.3.The finance gap

It often happens that in order to solve his production problems, the head of a small business uses almost all his financial resources (his own funds plus borrowings) to demonstrate his ability to handle problems.

Our contacts with heads of businesses have revealed how frequent this type of situation is. To deal with unforeseen circumstances, the director often has to find "bridging" solutions by seeking to borrow -- if he can -- at very onerous rates, in order to meet his obligations. Loan repayment deadlines may also pose the same problem, and again the director must find an answer.

This gap can also exist right from the start of operations if the business begins with a fragile financial structure. Several studies show that this kind of problem most often occurs because the director is so anxious to begin production that he does not pay sufficient attention to his financial situation. Undersubscribed businesses are common across Africa: the need for working capital is often neglected, entailing an under-assessment of the real funding needs.

A director who is in this difficult situation very soon understands that his future depends on financial injections. We have to admit that one of the reasons behind many business failures is a lack of access to finance at the crucial moment. Moreover, banks do not have a great deal of confidence in small businesses and are reluctant to invest their resources in such operations.

This need for finance can be explained by:

-- overconfidence by the director in his ability to mobilize funds;

-- installing too much productive capacity;

-- underestimating real costs;

-- erroneous or over-ambitious forecasting of market size.

A director who fails to take the necessary corrective measures during this phase will, as in the previous phases, suffer structural fragility throughout the life of his business. In other words, the director will face acute financial problems unless he takes the steps needed to remedy the situation as soon as the first difficulties appear.

1.4.The marketing gap

This gap appears primarily either because the head of the business has devoted so much time to internal problems that he has been unable to -- or has not known how to -- comprehend the changes that have taken place within his potential clientele, or because of an erroneous assessment of market conditions from the very beginning.

Seeking a solution to the problems that have appeared during the previous phases requires constant effort and may prevent the director from devoting himself to other aspects of his business.

A small business is characterized by the fact that the person in charge, the owner/manager, is, by definition, a "one-man band" who has to supervise everything. In practice, because he cannot give his attention to all the problems at the same time and because his market is beyond the boundaries of his company itself, this one person tends to neglect the development of client contacts. This attitude may create a problem in adapting to market requirements.

During this phase, a director must, above all, study the trend of his sales figures. These will give him some pointers: a shortfall in sales against the forecast figures is an alarm bell which will require his immediate attention if he is to be in a position to remedy the situation.

Here, more than elsewhere, the director must attend to the "public relations" of himself and his business, because, given the size of his unit, the two are often the same in the minds of those he deals with. This is all the more necessary because his market is a factor totally outside his control, even if, in the early days, it is located within a fairly small geographic area.

1.5.The management gap

Here once again the head of the business has devoted so much attention to the problems needing to be resolved during the previous phases that he fails to notice that he is losing control of the management of his business.

We generally notice that this gap appears at the end of the process, i.e. when the business has sorted out the preceding difficult situations. In certain respects, this gap is seen as being the hardest to fill, primarily because it is at this stage that the residual effects of the previous gaps -- not totally filled -- make themselves felt, and also because lack of training begins to show its effect.

During this phase of difficulty, a director often asks himself how he could have accumulated so many problems which all appear, then and there, to be insurmountable.

This gap may also be caused by a director having primarily reacted rather than acted, allowing himself to be swept along by events in the wake of a lack of rigorous planning on his part. Or else, when he needs help to solve tough problems, he cannot find anyone to help him because he has done everything himself and taken no precautions enabling him to delegate.

To remedy this situation, the head of the business must not only resolve specific problems by using the experience accumulated during the previous phases, he must also see to it that these problems do not reoccur. But can he really do so?

Is there not a need for training here? Could not the private sector provide such training?

If we are to answer the questions raised by the gaps, we must first of all understand how they interweave.

Below, we present an explanatory diagram of their interaction.

Diagram showing gap interaction

Credibility gap
characterized by:	Yes	No:
power of conviction		Stop
		or problems to be solved
		before continuing
Production gap
characterized by:	Yes	No:
mastery of technology and		Stop
techniques		or problems to be solved
		before continuing
Finance gap
characterized by:	Yes	No:
the ability to mobilize funds		Stop
		or problems to be solved
		before continuing
Marketing gap
characterized by:	Yes	No:
adaptation to market requirements		Stop
		or problems to be solved
		before continuing
Management gap
characterized by:
the ability to use acquired experience		No:
		Stop
		or problems to be solved
		before continuing
		Yes:
		Continuation
		often to tackle same sequence
		at a higher level

The preceding analysis of the gaps enables us to make the following observations:

1. If the head of a small business does not definitively resolve the problems, he will always be left with a residual effect which, added to other residuals, will end up as a complex, multidimensional problem; he must therefore solve the problems of credibility, finance, marketing, etc., all at the same time.

2. Each of the gaps -- if neglected or not solved -- may prove so dangerous as to lead to the failure of the business. This failure may occur at any stage in the life of the business. If the obstacle is not overcome, the business is in danger of failure.

3. The gaps described appear in several different fields. In operational terms, it is relatively hard to imagine the experience acquired in one area being used to solve the problems of another unless the director finds a means of building up experience in problem-solving techniques. Even if the problems that emerge centre on a different area each time, the possibility exists of transferring experience from one field of investigation to another. A difficulty may sometimes appear insurmountable in itself because the director needs to have too many talents to be able to do it on his own.

4. An analysis of the failures of small companies -- which generally occur between one and three years after they are launched -- shows that the principal cause is the inability of the director to perceive and analyse the signs heralding these catastrophic situations and to come up with answers.

5. The study of the life of a business in terms of gaps clearly reveals the methodology needed to promote a small business. So far, one of the significant difficulties of small businesses is the fact that they remain small: it seems that no sure path to their growth (the famous "graduation process") exists. Overcoming the difficulties inherent in the gaps is a means for the business to acquire the necessary experience with which to build up its stock of knowledge of adaptation techniques. Moreover, it is also recognized that one of the advantages of a small business lies in its flexibility and in its ability to adapt to changes; but it must still do so methodically.

We think that this flexibility will only be beneficial in so far as the business learns the lessons and begins to construct its battery of adaptation techniques, or as businesses organize themselves into groups to study their situation critically -- the embryo of a private sector?

Can these gaps generally be laid at the door of the sole director?

The first part of the answer we can offer is that the environment into which the small business is plunged is itself more uncertain in Africa than elsewhere. Decrees are unpredictable, markets are uncertain, forecasts are hard to make. In short, a set of circumstances which means that the environment hardly facilitates planning; nor does it provide sufficiently solid foundations to support a planning exercise. A company has several points of contact with its environment and, to succeed, it must develop a system of selective filtration, incorporate certain elements and become and remain impermeable to others. To strengthen its structure, it must fill the breaches, but, at the same time, it must continue to progress while conserving the experience acquired in one phase to tackle the next.

The second conclusion is that these gaps have not been sufficiently studied, and, accordingly, their impact on the development of small businesses has not been clearly perceived. Nevertheless, we can say that one of the acute problems is a small business's developmental path. This path is to be seen in terms of success in overcoming these barriers, since the process is of a cyclical nature and tends to accentuate itself after each completed cycle of the gaps.

This accentuation is a function of:

(a) the number of interfaces with which the business must be in contact; and

(b) the growing complexity of the problems to be dealt with as the business survives and develops.

Below, we propose a model of the gaps' dynamics.

Gap dynamics

External environment

Ongoing interaction with the enterprise

To spiral No. 2 with the same gaps

but at a different level

Spiral No. 1

(A)

"Credibility" gap

(B)

"Production" gap

Normal path

(C)

"Finance" gap

(D)

"Marketing" gap

(E)

"Management" gap

External environment

With ongoing interaction

with the enterprise throughout

the process

________ Normal path

- - - - - - - Possible path

In addition to these gaps, we know that there is an "environment" factor which to some extent conditions the survival of a business, and the "private sector" is an important element in this environment.

Because of its size, a small business cannot exercise a structuring effect on the various components of its environment. In operational terms, these components are constraints upon the small business throughout its existence.

Nevertheless, given the experience gained in the field of small business creation and development, it is possible to identify bodies who can structure the environment in such a way as to make it a supporting one.

2. A supportive environment

The experience gained through several projects, especially those implemented by the ILO in African countries, enables us to identify the bodies needed for the development of small businesses. The joint action of these bodies, taken as a whole, can provide a supportive environment.

We must immediately emphasize the important role that the private sector can and must play in generating this supportive environment, in actively participating in it, and in bringing to bear the experience of its various representatives on the constitution of these groups.

What are these groups or bodies?

2.1.Small business consultative group (SEDAG)

This group can be set up on a regional or country level, and should aim to determine the principal lines of development strategy for small businesses.

The tasks entrusted to such groups are generally the following:

-- to outline the main orientations of the lines of action;

-- to act as a regulatory body concerning the different ways in which small businesses are established;

-- to be a central body overseeing various business-launching projects;

-- to coordinate all small business creation and development efforts;

-- to help draw up a national policy to encourage small businesses through the sharing of relevant information at the level of each consultancy group;

-- to advocate the passing of bills specifically related to small businesses, and, more generally, of laws which help to structure the business environment.

Examples:

-- In Kenya, the ILO, with UNDP funding, has helped the Government to devise and implement a global strategy for the development of SMEs, integrating therein the different actions of various ministries and other relevant bodies. The originality of this approach lies in the fact that the recommendations made during the project launch workshop were studied by all the partners, enabling each one of them to draw up a detailed plan of action toward the emergence of a favourable environment, in coordination with the other players.

-- In Tunisia, a group of this type has recommended to the Government to draft a law granting privileges and subsidies to all small businesses that set up well away from urban areas, so as to ease job problems in rural areas.

2.2.Development funds (SEDIF)

At the level of a region or of one particular place, what is most needed is to set up a fund to help the creation and development of small businesses.

The tasks of the fund will be:

-- deciding on the conditions for granting credit to small businesses;

-- action to mobilize funds for investment in small businesses, offering the necessary guarantees where sought;

-- developing and maintaining contacts with financial backers, whether or not they are specialists in financing small businesses;

-- monitoring performance in reimbursing the loans agreed, presenting the relevant information regularly;

-- putting together a policy of directly acquiring financial holdings in small businesses;

-- channelling available funds towards those structures that deal with small businesses, trying to link them with informal systems of funding;

-- devising satisfactory policies for small business funding.

Examples:

-- In Mali, an EEC project set up a line of credit for small businesses in the capital. Following encouraging results, it created the same mechanism in the country's main provincial towns. This fund laid down rules for granting credit, loan reimbursement modalities, personal contributions by promoters, etc. The experience gained through this project has helped other donors to get their own lines of credit functioning.

-- In Senegal, several funds have been created to help small businesses since 1980. In the light of operational difficulties, and with a view to harmonizing loan policies, several bodies have come together to create a new body by merging SONAGA, SOFIDESIT and SONABANQUE so as to produce coordinated behaviour.

-- Other cases worthy of mention are the rural banks of Ghana, the National Christian Council of Kenya (NCCK) and the Kenya Rural Enterprise Programme (KREP). Kenya also gives us an example of the creation of a risk capital fund, the "Kenya Equity Fund" (IKEF) as does Madagascar, with its Financière d'Investissement ARO (FIARO). These two examples are important in that the bodies concerned are private institutions: the Equator Bank in the case of Kenya, and the ARO insurance company in the case of Madagascar.

-- Certain funds created in this way have even succeeded in building a bridge between the informal credit system and formal banking activity. Such is the case with the Caisse d'Epargne in Togo (CET), and the Caisse Commune d'Epargne et d'Investissement (CCEI) in Cameroon.

2.3.Training/action (SEDAT)

The main difficulties encountered often exist because the heads of small businesses do not have access to special training courses.

Consequently, we should make provision for a training mechanism with the following responsibilities:

-- preparing training courses specific to the needs of heads of small businesses;

-- organizing regular training sessions on the usual problems of small businesses;

-- research into new training methods;

-- research and preparation of teaching materials in line with the identified needs of small businesses;

-- publishing sector-specific and/or region-specific case-studies;

-- setting up a task force to meet the particular needs of small businesses, calling upon certain heads of businesses or others directly involved.

Examples:

Times">-- The ESAMI (Arusha, United Republic of Tanzania), the University of Ghana in Legon, the University of Benin in Lome, and the Institute of Development Management in Maseru, Lesotho, are all cases of institutions that have developed training courses appropriate to small businesses, incorporating the ideas proposed above.

-- In Mali, under the impact of small business creation projects, two training institutions -- the IPGP and the CEPI -- merged in 1990 in order to pool their training and research resources and make them available to promoters. This merger was made possible by the existence of a potential market composed of heads of small businesses.

-- In Burkina Faso, thanks to funding by the Netherlands, the ESSEC in Ouagadougou orients a great deal of its training towards small businesses.

-- In Senegal, the CESAG has significantly developed small business training, particularly for women entrepreneurs.

2.4.Technology/information (SEDIT)

Contacts with small businesses show one of the causes of failure is often a wrong choice of technology. A poor initial choice weighs heavily ever after upon the day-to-day management of the business: high running and maintenance costs, an unfavourable ratio between equipment purchase price and number of jobs, etc.

This situation often results from a lack of relevant information that could easily be obtained if only a database existed.

Helping small businesses requires the setting up of a technology or technological information service entrusted with creating and running a technological database so as to:

-- supply the promoters of small businesses with relevant technological information;

-- arouse interest in appropriate technological applications;

-- provide a store of technological data;

-- encourage a spirit of research on the part of small businesses regarding new solutions to technological problems;

-- regularly disseminate information on the most common technologies;

-- devise and disseminate standard specifications regarding processes and procedures;

-- devise ways of understanding technological problems and indicate how to find solutions.

Examples:

-- The "Association pour la Promotion des Initiatives Communautaires Africaines" (APICA) in Douala makes information on appropriate technology available to African small businesses and, at the same time, seeks to produce machines appropriate to the needs of the continent (a peanut-shelling machine for Chad, a mechanically simple oil mill for Cameroon, etc.).

-- The Food Research Institute in Ghana is working towards the same end as regards food technology. It also helps other African countries by sharing its knowledge (with UNIFEM funding, the institute has set up a cassava-processing factory at Pouma in Cameroon).

-- The UNDP/ILO project in Mali for the creation of small businesses by qualified young people made an expert available to the promoters to advise them on the choice of technology. The expert was also responsible for setting up a data base which the promoters could access.

2.5.Research/action (SEDAR)

An analysis of the position of small businesses shows that the relationship between them and their environment has yet to be adequately explained. At the same time, one can also note that businesses get set up quickly and their success is restricted by information that is not altogether reliable.

The support mechanisms must therefore include a research unit which should:

-- carry out sociological research to discover how the "small business" unit is perceived by those it deals with;

-- determine the most favourable conditions for the emergence of local entrepreneurship, particularly the relationship between enterprise culture and sociological facts in the milieu;

-- consider how to promote a partnership among sources of funding, research and advisory bureaux, and business owners/directors;

-- carry out reliable market research, in order to make serious information available to the user public;

-- disseminate the available results of previous research in the most appropriate manner;

-- help to devise and develop management techniques specific to small businesses.

Examples:

-- After repeated contacts with the Entrepreneurship Development Institute of India, the SOFISEDIT in Dakar devised entrepreneurship training techniques appropriate to the context of West African countries.

-- The ILO project based in Kenya has developed special techniques to help business creation by disadvantaged groups such as refugees, after in-depth research carried out near the frontier between that country and Somalia. The lessons learned from that experience are being used elsewhere on the continent.

The above proposals reflect a set of services that must exist if the creation of new businesses and the development of existing ones is to be encouraged.

What is achieved at the level of implementation often depends on technical and/or financial resources. A region seeking to develop such a mechanism must ensure that the full range of services is made available to the user public.

These different services may exist in many countries, but their geographic spread and their belonging to several institutional bodies are nuisance factors hindering their use by those mainly concerned, namely small businesses.

When we analyse the business environment in the various countries, we realize that these different services do effectively exist. One of the difficulties encountered by the head of a small business is to identify them and, even more so, to take advantage of them, because it often turns out that the said services are not altogether impressive.

Implementing this type of activity can enable the private sector to consolidate its position as an important player within the environment by trying to organize the various services more effectively and making them more accessible.

In other words, this approach has the advantage of bringing all these services together ("one roof approach") to facilitate the activity of the head of an already created business and that of a promoter trying to create one.

3. The role of professional associations

Here, we consider professional associations as physical or legal entities grouped within a single "operational unit" in order to achieve a certain number of objectives specific to certain sectors, certain professions or even to a group of trades.

A large number of professional associations have clearly expressed objectives, for instance:

-- "La Pépinière d'Entreprise" from Yaounde in Cameroon sets out to:

"help qualified young people in as concrete a manner as possible to create their own business".

-- In Douala, Cameroon, "The New Boss Generation":

"works for the construction of viable businesses concerned with performance and quality products ... to create a strong, united ethos and together overcome the difficulties of the crisis through sharing experience".

At the level of professional associations, there is a desire to help the small businesses, but modes of action have not been specified. The aims are stated -- praiseworthy intentions -- but it is rare to see them followed up with action.

3.1.Difficulties

The AFREDI project (an ILO project) has tried to highlight the main difficulties that professional associations must tackle in an attempt to explain why small businesses do not get helped.

The problems listed are as follows:

-- The members of the associations are primarily concerned to study ways and means of prolonging the profitable life of their business, and in their view the association and/or grouping only makes sense in so far as it promotes this objective.

-- Fees are not paid regularly; most of the associations have neither office nor secretary, and usually rely on the goodwill of members for summoning and holding meetings, etc.

-- Members are mobilized around specific problems rather than regularly or permanently, which makes it impossible for the associations to draw up development plans for the medium and long term.

-- In numerous cases, the associations and/or groupings are identified with the person of their founder and/or leader. This extreme personalization to a large extent determines the future of these groupings: if the person in charge has no serious problems, the association endures; but if the leader disappears, so does the group. Within the association there may even exist a de facto "inner association" comprising a few people who know each other well and trust each other to take the major decisions. The other members are generally kept on the fringe, have little say in big decisions, and feel frustrated.

-- This frustration sometimes leads certain members to seek solutions to their problems outside the framework of the organization -- causing a loss of interest.

-- Heads of businesses become members of an association or a grouping, etc., not because they are convinced of the usefulness of the new body that is to be created, but primarily because they do not wish to feel left out. In other words, the directors and/or owners join an association to imitate their peers and not necessarily because they are convinced of the usefulness of groupings in general. We have to acknowledge here that the history of such associations does not necessarily show them to be wrong!

-- The associations and groupings often experience considerable difficulty in getting the message concerning their objectives and operational measures across to their members. Moreover, there is rarely an overlap between the personal aims of the members and those of the association. This situation often leads to disappointment ensuing from the discrepancy between ambitious intentions on the part of the association and the expectations of its members.

-- No method has yet been devised that ensures gradual progress toward the achievement of the common goal. For instance, experience has shown that all groupings must first learn to handle conflicts, because aims differ. The absence of conflict resolution mechanisms often leads groupings to shatter into as many pieces as there are interests to protect.

Despite the difficulties listed above, our contacts with professional associations show that they can play a vital role in the emergence of a favourable environment for small businesses, in making certain services available, and in the emergence of a private sector.

3.2.A favourable environment

A favourable environment is an environment which effectively helps businesses to thrive.

The environment in which businesses currently operate is marked by a high degree of uncertainty, making it impossible to set up a system for planning activities. The point of planning is questionable if operating conditions can change from one day to the next.

Professional associations can contribute to the emergence of a favourable environment by:

-- organizing awareness-raising sessions for governing authorities on the need to work toward a certain operational stability;

-- drawing the attention of their members to the contribution that each can make toward establishing a certain number of rules of conduct so that a business can operate in a context of relative security;

-- making concerted proposals as to the modifications needed in administrative decrees and regulations to make it easier for businesses to operate.

Several heads of businesses believe that "there is an entrenched artistic vagueness" as regards the environment, because this permits everyone involved to "capitalize on their little parcel of authority", and that the time has come to "make things clearer", and for "operations to be carried out transparently".

This dearly sought transparency can only be achieved if the degree of certainty about the environment is strengthened. To that end, professional associations must seize every opportunity to express this need for clarity.

Examples:

-- The repeated steps taken by associations of accountancy experts in several African countries to persuade the authorities to legislate on auditing.

-- Associations of out-of-season fruit and vegetable exporters who establish quality standards that they commit themselves to respecting so that they can penetrate foreign markets, and who negotiate preferential freight charges with the help of the National Civil Aviation Authority.

-- Mango exporters' associations in the countries of West Africa, who hold congresses to set standards for the fruit and ask for these standards to be incorporated into the CODEX, and who organize joint advertising campaigns and persuade the authorities to help them to sell their produce abroad, thereby helping their members to boost their turnover.

3.3.Information

Repeated contact with heads of businesses enables us to say that one of their principal needs is for access to useful information both on domestic market and on export markets. For example, we know that many businesses in Africa do not cover the whole of their national territory. As well as the usual reasons of transport costs, inaccessibility, etc., it has to be acknowledged that the lack of reliable information is a particular hindrance to the development of a business.

Professional associations can -- and must -- play a role here, by gathering and processing relevant information. It must also be recognized that such information exists in various places, and most often the necessary links have not been established: directors ask the associations to collect and release such information.

In this specific domain, sector-specific associations -- i.e. those whose members are the economic operators within a single sector -- have the advantage of being able to gather homogeneous information or else to specialize in gathering information useful to the sector. Associations that bring together various sectors have to provide general information as a basis for decision-making.

A business generally needs a stock of general information upon which to base certain decisions, as well as specific information for its day-to-day running.

These days, given the financial difficulties, a business no longer has significant resources to devote to information gathering, hence the need to join forces to achieve the "critical mass" required not only to collect information but also to process it and release it in a form that enables swift decision-making.

By carrying out this activity, a professional association will also improve its image through trying to meet a need shared by a good number of businesses.

If such information is available, it will help in the organization of projects. Research and advisory units in many countries quite readily acknowledge that one of the weaknesses of funding requests is the lack of verifiable information. The consequence is that the market studies which underlie the project proposals are not always reliable, which may sometimes explain the problems that businesses run into.

What can professional associations do?

Below, we present a few practical examples:

-- The fruit and vegetable professional associations of the countries of West Africa have organized themselves -- with the help of the UNCTAD/GATT Centre for International Trade -- to find out the prices of their produce on the European markets and disseminate them among their members.

-- The professional association of exporters in the duty-free zone of Mauritius disseminates information among its members on all potential foreign markets and has worked in close cooperation with the authorities to create an information centre linked to the major world data bases. (Fees are charged for accessing these databases.)

-- A professional association of hoteliers and restaurateurs disseminates among its members all the information needed to plan their activities: tourist arrivals, organization of exhibitions, etc.

-- The Cameroonian association of maintenance engineers attempts to gather information on the domestic market and make it available to its members, and to see that the profession is marketed throughout the country, creating a market for maintenance.

3.4.Linking institutes to the industrial world

It is commonly admitted that, for example, several research projects with promising results were left on the shelf because of lack of follow-up by the industrial world. Or again, that certain training institutions do not have relevant programmes because the industrial world was not consulted when contents were being discussed.

Here again, professional associations have a very important role to play in setting up a channel of communication between the industrial world and the various training and research institutions. This means establishing links so that the industrial world is represented on the management boards of training establishments in order to decide fundamental strategic options that should govern the training courses, guide the modules in the direction given by the needs of industry, and also -- most importantly -- make on-the-job training available to students and have representatives from industrial enterprises to sit on end-of-course examination boards.

At the same time, interest in research results may generate a concrete project. Or else one particular sector may encourage the conducting of a research activity that enables a business to be created. For example, the technical skills of a management training institute and of an agronomy research station made it possible to set up a frozen agricultural produce business. Later, when the business became profitable, it used its own funds to finance research that led to the setting up of a production line for canning selected vegetables.

The model proposed above also has the advantage of overcoming certain reservations, because those involved get into the habit of working together, and this contact can contribute toward instilling the climate of trust necessary if we are to contemplate the emergence of a private sector.

Examples:

-- In Ghana, the Export Development Council, with technical assistance from the Centre for International Commerce (UNCTAD/GATT) has organized export management courses using training institutes' infrastructure and choosing some of their members as trainers.

-- In many countries of English-speaking Africa, associations of accountancy experts play a leading role in training future accountants, both as trainers and as examiners. If the country decides to have its own certification structures, these associations play a pivotal role in the development of standards for them, and make an important contribution toward relevant training based on specific needs.

-- Professional associations of heads of management training institutions have been created within the framework of the ILO's "INTERMAN" project. These have contributed greatly to improving management practices through research activities, awareness-raising among members, training activities, the creation of a member network and the development of international contacts.

-- In Mali, certain professional associations of women entrepreneurs have succeeded in developing a mill to process shea nuts, using contacts with an agronomy research institute. We should point out that the local institute found itself unable to solve all the technical problems and contacted certain foreign specialists, who then helped to develop the machine.

3.5.Government

Government agencies represent the field in which professional associations may make their most important contribution.

Relations between small businesses and governments are currently tinged with mutual mistrust: each group is suspicious of the other and attributes various dubious intentions to it. Furthermore, a study of this situation shows that it is based on rumours, each more unbelievable than the other.

An improvement in the situation can only be brought about through a better understanding of mutual responsibilities: small businesses should stop presenting themselves as victims and governments as being eternally misunderstood. For the professional associations, this will mean trying to bring the two points of view closer in order to establish a fruitful dialogue.

This activity will give the associations the chance to play an important role in that they will be able to present themselves as reliable interlocutors vis-à-vis the government with a view to improving the operating conditions of small businesses.

This action is very important, given the role that the government plays in shaping the environment.

Examples:

-- In Mauritius, in July 1993, the association of heads of businesses organized a three-day workshop to discuss the most appropriate management techniques to meet the demands of economic development with officials in charge of various ministries. During the debates, both groups took advantage of the opportunity to raise difficulties they had encountered and seek solutions, particularly as regards speeding up decision-making by the Government.

-- In several countries, professional associations have contributed a great deal in the search for ideas to simplify administrative procedures through working meetings, workshops, etc. Such simplification leads to significant savings by businesses.

This presentation by no means exhaustive has revealed the significant role that associations can play in improving the world of small businesses.

On the basis of the experience accumulated, we have summarized the possible ways for professional associations to increase their usefulness in the table below (see table 1).

Table 1. Options for professional associations to increase their usefulness

Basic unit		Possible groupings		Possible options
Small enterprises		Professional associations Professional groupings Professional technical organizations Professional committees Professional syndicates Professional advisory boards Inter-professional committees		Relations with training institutions/research institutes Negotiations with local/ regional/central administrations Seeking financing from banks/ finance institutions Organizing training sessions for members/debates Organizing diagnostic groups on sectoral/general problems Attempts to create national federations/analyses of sectoral/national trends Organizing trade fairs Seeking markets/sources of supplies Defining technical/ethical standards Improving brand images Contributing to the resolving of problems of civil society

The strategy of encouraging professional associations and inducing them to play a more useful role among small businesses aims eventually to generate a more dynamic private sector. To grasp the implications of this option in full, we now propose to consider the latter entity, which in some countries needs to be built, whereas in others it needs to be made more dynamic. How, then, can we get an effective private sector to emerge, and how can we get it to play a driving role in, for instance, the creation and development of small businesses?

4. The private sector

4.1.Composition

The private sector can be understood through the large groups of units that go to make it up. But, behind the groups, there are individuals who know each other and who may develop temporary interest-based relationships to work together to achieve a common goal; alternatively, they may clash because the positions they seek to defend diverge.

Here, we shall look at the "players".

Who are these large groups?

Generally, they can be placed in the following categories:

-- the informal sector;

-- small businesses;

-- medium-sized companies;

-- big companies;

-- foreign companies.

Table 2, below, presents certain features of these different groups. For this presentation, we have not used the usual criteria of number of employees, amount of investment or turnover, for that approach masks certain realities and has very often been criticized. We prefer to use other criteria that make it possible to spotlight the interests to be protected.

An examination of the table shows us that although such interests are multiple, at times they also converge, for instance when the circumstances surrounding the creation of units are fairly similar or when the directors know each other. To be able to speak of a private sector, action must be taken to produce a grouping around certain rallying issues, so that those involved come to speak with a single voice.

Experience shows us that the private sector only becomes a tangible reality in those fields in which individual businesses have succeeded in organizing themselves to overcome the problems of competition and to work toward improving the relevant environment or to undertake any other action that mobilizes people's energy so as to produce a bloc.

Such blocs have a long life only where they have succeeded in forming pressure groups backed up by dynamic professional associations that press them into action. Each successful action reinforces "private sector" awareness.

The essential dynamics of the emergence of a "private sector" is based on measures to induce awareness of sharing a common need: that of generating and consolidating an environment in which changes are perceived and brought into focus with sufficient clarity to enable future activities to be planned within acceptable limits of uncertainty.

Table 2. Characteristics of the components of the private sector

Items	Characteristics
Informal sector	Created by personal initiative -- often imitation Mostly personal financing Proprietor often illiterate Very large number of units -- geographically scattered Fluid contours -- multisectoral activities Difficult to accumulate funds to ensure the development of units Few or no operating rules -- no accounting system Generally urban or suburban context Sense of direction difficult to identify, often follows the whims of the development market Way of life for owners
Very small enterprises	Exist in both urban and rural areas Attempts to organize and set up simplified management systems Very large number of units in the sector Small start-up funds Extreme personalization of the unit No preparations for handing over the business Operating rules of the director/proprietor often "capricious"
Small enterprises	Start to set up accounting systems Attempts at information concerning rules of conduct Aware of the need to make certain basic management tools long-lasting in order to ensure operational control Organization to adopt certain simplified management tools -- because director is "boss" Aware of the need to develop procedures in order to be able to ensure continuity Director/proprietor still plays a dominant role
Medium-sized enterprises	Development of management procedures No clear view of growth paths (graduation) Still experiencing the problems of small enterprises and those of growing enterprises Turning-point situation difficult to manage Important problem of delegating power
Large enterprises	Difficulties in motivating people towards objectives Have come into existence owing to the desire to take charge of certain activities abandoned by foreign enterprises or the need to organize certain profitable and/or strategic sectors for the country Generally management is not capable or has difficulty in being capable Seek to develop their own strategies so as to ensure profitability Seek means of setting up relevant information systems
Foreign enterprises	Behaviour logic stems from being outside the country because often only "desks" at the outset Relatively large units Active especially in the field of foreign trade, so subject to the fluctuations of world markets Often subsidiaries of powerful groups In most cases seek a rapid return on investments in order to re-export capital Turnover depends directly on the domestic prosperity of the host country Information system ensured by head office

4.2.Mutual perceptions

Any attempt at organization aimed at generating awareness of sharing a common world immediately runs up against the selfish interests of individual units and thus reveals an obstacle to the emergence of a private sector.

In many cases, individual units can be induced to relinquish a few of their prerogatives in order to turn the idea of a private sector into reality. In Mauritius, for example, the most important industrial sector in the economy (the sugar sector) began by creating a post of "private sector coordinator", and the results produced in negotiations with government officials contributed significantly to stirring other sectors into forming a bloc, an outcome of which, however, required the associations and other groupings to relinquish some of their prerogatives to this new formation.

To generate a grouping, we need clearly to understand the position of subgroups.

Table 3 shows the mutual perceptions of the main players. In it we can see a "competition" diagonal, which means that the individual units view each other around a competitive axis. In operational grouping terms, this brings out the main problem here: how to generate and organize a lasting grouping of the various units, bearing in mind that their primary perception is of "competition", and the manner in which they see each other is a function of reputations based on rumours. The players do not make much of an effort to get at the reality. For example, they all think that banks are reluctant to lend businesses money; but when you ask the banks, they often give a different answer.

Why is this?

We think that the answer to this question conditions the emergence and consolidation of the African private sector. The environment has become particularly difficult with the withdrawal of a hitherto omnipresent state, thereby creating a vacuum that must be filled fast by a private sector that is still struggling to find its feet.

Actual experience shows us that partial alliances are woven on the basis of protecting interests in the immediate present.

How then can we make these ephemeral relationships last?

Professional associations have an important role to play in achieving this outcome, by getting individual businesses to understand the interest that a grouping holds for them. Subsequently, these self-same associations can also join together in national federations, in order to reduce the number of interlocutors at national level. This type of grouping contributes directly to the emergence of a national private sector.

On an Africa-wide level, we observe that the private sector has developed primarily in those countries with very powerful national business federations.

Table 3

4.3.Perception of the main actors

In addition to the mutual perceptions that we have shown above, the components of the private sector have developed specific attitudes through their individual vision of the main actors in the environment.

Table 4 summarizes the situation.

An analysis of this table brings out, above all, the relationships of domination (because certain units fear others) which determine attitudes.

We have already seen that the emergence of a private sector depends on the willingness of individual units to relinquish some of their prerogatives for the benefit of a regional or national organization, yet here we see that their interaction is fraught with the idea of domination.

How, in these conditions, can we consolidate the idea of a private sector in order to channel efforts toward a common goal?

4.4.Prescriptions for the private sector

Given the practical difficulties, a private sector can only emerge gradually. The study of the conditions under which a private sector emerges and consolidates, and the experience accumulated so far, enable us to make the following proposals.

4.4.1.Organizing small businesses

One of the first stages consists in developing contacts with the small businesses themselves, to get to know their points of view.

This knowledge may be obtained through:

-- meetings among heads of businesses;

-- training seminars or workshops organized by a project or training institution;

-- participation in a range of training activities;

-- participation in other types of meeting so as to make participants aware of the need for a private sector.

During this phase, the objective must be to get the small businesses to envisage possible groupings so that they talk about the difficulties they envisage in setting up associations. The AFREDI project, for example, created a working party on "professional associations" during a workshop in order to elicit an initial expression of problems. The rapport which this group established was the starting-point for numerous activities concerned with the running of associations.

4.4.2.Organizing professional associations

This phase primarily involves trying to bring together a certain number of professional associations around the idea of a "think tank".

One of the first results of the various groups' workings is that the participants become aware that they have fairly similar concerns, which spurs the idea that they need to work together. But in one particular case, before achieving this outcome it was necessary to bring in an outside element as a kind of welding agent, because the suspicion which sometimes tinged the remarks of the representatives of the different associations impeded a constructive dialogue.

This observation leads us to advocate that a link-man be brought in from outside the context to bring the associations closer together. The main reason is that the national leaders know each other and know the strengths and weaknesses of those involved. A stranger to this context can play a linking role -- a necessity if we want to see the private sector develop.

Table 4

Table 5 presents the actual reality of Cameroon as an example, and table 6 advocates a set of measures to improve the situation.

The hypothesis underlying our proposals is that strong, dynamic professional associations are essential to building an effective private sector, and can legitimately represent small businesses.

The tables below show the specific difficulties that attempts to organize the professional associations run up against.

Table 5. Difficulties of professional associations, groupings or syndicates

Professional associations, groupings or syndicates experience the following difficulties: their objectives are very broad and too ambitious, which leads members to think they are wasting their time; the people in charge or leaders monopolize the running of these bodies and do not generally involve the other members; they do not receive funding from sponsors or financial backers; the absence of a spirit of belonging to a group and of the notion of partnership limits the degree of commitment of all concerned; heads of businesses in a position to join such groupings do not see the point; those in charge do not give the impression of mastering the day-to-day running of such bodies; information about them does not exist, or else it is not disseminated within the private sector or even among their own members; they are seen as attempts to protect personal interests; they have not developed services which attract people (e.g. training and information); income-generating strategies do not exist: they rely too heavily on membership dues; the spirit of competition among members, exacerbated by selfishness, impedes smooth working; they are neither well-organized nor well-structured, with too many people at the top, over-heavy management structures, etc.; they often experience problems of an ethical nature: dishonesty, lack of transparent management, etc.; they offer no education in associative life; they encourage extroversion and discourage self-promotion; the social environment does not encourage the development of such bodies; the environment contains a contradiction between growing individualism among the population and the level of awareness of those responsible for redistributing the fruits of growth. (Contributed by the "Auto-Emploi" ("Self-employment") Association of Cameroon.)

Table 6. Why are the associations in Cameroon so undynamic?

How can they be made more dynamic? "No personal interest, no action taken", this is the well-known psychological principle which accounts more often than not for an absence of dynamism among groups of people. We would like to show in the next few lines that the real situation is somewhat more complex, by placing the causes for the problems besetting organizations in Cameroon at seven distinct levels. Moreover, before dealing with this question at the general level, we would like to draw attention to the fact that it is worth studying specifically for the two types of organization below: Corporatist organizations in which people meet to solve problems, defend common interests, etc. In our opinion, it is easier to render this type of organization dynamic than the following type. Humanitarian organizations (NGOs) which group together people who are presumed to have obtained such a degree of satisfaction of their own needs that they offer themselves or a part of their resources to help those who are still in need. This type of person is still rare in our country, and the majority of people who belong to these organizations do not satisfy this condition. They therefore have ulterior motives which do considerable damage to these organizations.

The seven levels of causality accounting for insufficient dynamism

in our organizations, and positive corrective action

Each of these levels is presented below emphasizing on the one hand the factors limiting dynamism, and on the other the factors that could act in its favour:

Level of causality		Factors affecting dynamism		Factors able to act in favour of dynamism
1. Tribal culture		Certain tribes are, by their culture, less given to an associative life than others		A long and exacting task: building up a national character marked by a spirit of cooperation
2. Individual conscience		By their nature, certain people are inclined to individualism		Recognizing the fact that there are differences between people before trying to motivate them and press them into action
3. Personal aspirations		People like getting together to eat, drink and have fun, whereas meetings of organizations are intended for work which does not fit in with the prevailing mentality		Finding a compromise between individual aspirations and those of organizations Setting aside, for example, time for work and time for pleasure
4. Action of public authorities		For more than 20 years, public authorities have if anything repressed associations. It had become dangerous to meet other than in the context of the single party or tribe		Winning autonomy for organizations
5. Structure of organizations		Certain limiting factors are found in the structure of organizations, such as: Lack of direction Imprecise definition of the quality of member Insufficiently worked out legislative texts Make-up of leadership team etc.		Draw up and make available to the public adapted documents in order to help them in this area (cf. various publications of APICA, an NGO based in Douala, Cameroon)
6. Functioning of organizations		Insufficient information on the organization, bad management of meetings Tribalism Struggle for power Bad management of assets Easy criticism and mutual denigration Absence of, or insufficient sanctions Members seeking their own gain Unavailability of persons when required Inability to make a financial contribution		Investing in information for the public and members, limiting the duration of meetings Stressing merit Limiting the duration and number of leaders' mandates Setting up a transparent and honest management Discouraging criticisms and denigration by recalling the rules and sanctions Introducing a hierarchy of sanctions Selecting members in accordance with the orientations of the association Seeking time periods to satisfy the majority of members Finding other means of making a contribution, other than money
7. Devolution of the results of the action of the organization		Certain members use the results obtained by the organization for their own gain.		The results must be used according to the statutory regulations and management must be participative and transparent
(Contributed by the "Auto-Emploi" ("Self-employment") Association of Cameroon.)

Experience has shown the relevance of training for senior members of professional associations, especially in the following areas:

-- conducting meetings;

-- animating groups;

-- setting objectives and the preparation and presentation of a plan of activities;

-- group dynamics;

-- negotiating techniques.

Such training will allow professional associations to be more dynamic and to attract an increasing number of small enterprises.

4.4.3.Means of action

Although initially professional associations may not be in a position to group together, projects have demonstrated, through their activities, that certain actions can have a lasting impact on the development of private sector awareness:

-- Seeking financial backing for small enterprises: Associations can act as guarantors for a small enterprise that has financial difficulties.

-- Organizing trade fairs: Gives small enterprises the opportunity to exhibit and sell their products.

-- Organizing training activities: Taking part together with a training institution in the design, organization and implementation of a training action on topics of interest to a specific sector or group of enterprises.

-- Organizing diagnostic groups: Professional associations may take the initiative to set up diagnostic groups on problems of topical interest by choosing members having special leadership skills for the activities, or else by recruiting an external consultant.

-- Trade information: By means of mini-bulletins, associations can share with their members -- on receipt of payment -- statistics concerning the economy in general, or statistics regarding one particular sector. Similarly, commercial information on foreign markets can be made available to members.

-- Conferences/Debates: Professional associations can organize conferences/debates using available expertise or by turning to account the availability of visiting professionals.

-- Counselling: It is a question here of seeing to what extent the advice of experienced directors can be made available to various groups. Members of the association can act as volunteers to advise directors who encounter specific problems.

We should like to mention the positive results of an initiative undertaken in collaboration with the Rotary Club of Douala. In order to assist young entrepreneurs, members of the Rotary Club have agreed to "adopt" young businessmen and offer them advice. Coordination is ensured by the association of young entrepreneurs. Beyond actual assistance, contacts between the two groups contribute to the forming of privileged links in the longer term.

-- Bureaux and consultancy firms: In general, throughout the continent bureaux and consultancy firms have a mixed image. This is owing, in particular, to the fact that certain firms are not altogether competent and the work delivered is not necessarily of good quality.

While recognizing the need for these firms to make available quality services to consumers, we believe that associations can play an intermediary role on behalf of reliable bureaux and also protect enterprises by filtering out undesirable firms.

5. Conclusion

Overall these activities will have the advantage of orienting small enterprises towards associations which, gathering strength themselves, will be able to envisage grouping together in the form of national federations in order to create a private sector.

We have seen that certain prerequisites are necessary in order for a private sector to emerge. In order to ensure its consolidation, those holding positions of responsibility in the sector must constantly demonstrate their efficiency so as to maintain the confidence of individual actors. In this context, professional associations have a prime role to play -- a role they will play even better if they have information on the situation in other countries. They can also draw lessons from the experience -- whether positive or negative -- of foreign countries given that the present situation of the continent calls for swift action.

Let us not forget that the economic context has changed radically: the ever-present State is no longer the general rule. As far as possible, the State is seeking to disengage itself from production activities and to liberalize so that a market economy may be installed within its national boundaries.

However, it should be noted that there is here a fundamental contradiction: the managing of this new environment is based on existing institutions having a mode of action that is often foreign to that of a market economy. The essential task of the private sector in Africa is to make political decision-makers aware of the need to adopt a new logic, one that is compatible with a market economy, in order to overcome this contradiction which is detrimental to economic development. From now on, the State must play a different role by implementing a democratic process in order to restore confidence in the population as a whole, because without confidence investment in production activities is impossible.

This is the challenge facing the private sector in Africa.

Table 3. External environment of the private sector: Principal components and immediate mutual perceptions

Perception of:

By

Private enterprises

Public enterprises

Bureaux and consultancy firms

Banks

Administrations

Clients and consumers

Providers of services to enterprises

Remarks: Possible strategies

Private enterprises

Serious competition

Too often receive preferential treatment

What are these offices for?

Difficult people with little liking for us

They create problems

They always want more for less money

Services cost more and more money

Struggle for survival

Public enterprises

Too often receive preferential treatment

Competition for public funds

We have what we want

People who do not often lend their money easily

They create problems

Clients obliged to use them. No particular relationship

A necessary evil

Struggle to obtain funding

Bureaux and consultancy firms

As a whole they make up their market

Not an interesting market because not very solvent

Serious competition

Critics of the conclusions of work delivered

A potential market

A research field in order to increase their turnover

Can sometimes be of assistance

Struggle to educate clients

Banks

Too greedy for money

Swallow up money -- archaic management

They lean towards their clients

Serious competition

They create problems

People with money who do not deposit it

Clients and dictators

Struggle to survive

Administrations

They want to have every-thing too easily

Privileged because they have salaries

They usually ignore each other

Necessary for certain operations

Mitigated competition

Market for products and services

Victims and dictators

Struggle to improve their image

Clients and consumers

Always sell at higher and higher prices

Have impression that they do not count

They do not even know what they are

Rarely lend money

Instruments of persecution

Competition for resources

Often ignore each other

Struggle for survival in a difficult environment

Providers of services to enterprises

Always want everything more cheaply

Bad payers

A necessary evil

A possible market

Possible market Bad payers

No evident links

Serious competition sometimes

Seeking profits through the market

Table 4. Attitudes of the components of the private sector towards the main actors

Actors:

Components

Public enterprises

Bureaux and consultancy firms

Banks

Administrations

Clients and consumers

Providers of services to enterprises

Remarks

Very small enterprises

Feelings of fear because these units are too large

They do not even know of the existence of these units

They do not expect any help from banks

They do not like the representatives of administrations much because they are "swindlers"

They do everything to satisfy because they are on the lookout for small markets

Cannot or can only with difficulty benefit from the services

Overall still too small to really count

Small enterprises

Feelings of fear because these units are too large

Often know what these units are, but cannot use their services

Use the services as customers as far as possible

Perceive the representatives of administrations as "swindlers". Need to have useful "contacts"

People who do everything to have the best product at the lowest price

Try to turn to them for certain very specific fields

Fairly isolated actions and so lack of impact

Medium-sized enterprises

Indefinable feeling of fear and admiration

Can sometimes aspire to their services, but must always contest the price

Try to obtain funds, but without much success

They do not like administrations much because they are synonymous with creating obstacles

They make efforts to improve quality and win over certain markets

Can sometimes call on these units

Too small for some and too large for others

Large enterprises

Direct competitors in certain markets. They crush small enterprises

Use their services fairly often for specific dossiers

Have the possibility of obtaining funds

Can sometimes hold administrations to ransom, hence a subtle game of balancing useful contacts

They try to lay down the law, but often fail because there is no dialogue with consumers

Can impose their law by the size of their market

Often only have a domination reflex and so a strategy of seeking to dominate

Foreign private enterprises

Make efforts to keep on good terms with all actors in order to avoid problems

Use the services of these offices more or less regularly

Perceived as important assistants

They can only submit to requirements. They do not have the necessary "contacts"

Usually look to the foreign community

Usually call on external offices because they have no confidence in national offices

Have no feeling of belonging to the national environment

* Note: In this table, the "Very small enterprises" component also covers units in the "Informal sector".

International Labour Organization (ILO): Contact us | Site map |

Copyright and Permissions 1996-2009 International Labour Organization (ILO) - Disclaimer