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He Came, He Saw, He Got Thrown Out

Many rising entrepreneurs have beaten a path to Africa down the years. Kamal Budhabhatti is one of them. He turned the ignominy of deportation into a multimillion-dollar success.

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Eleven years ago, a 25-year-old Indian from Gujarat came to Kenya seeking greener pastures. He found a job as an accounting clerk in an Indian-owned polythene manufacturing company for Ksh18,000 ($230) a month. In his spare time, he decided to write software for an extra buck; but his employer discovered his private project. The penalty was costly. He reported to work one morning and was handed a one-way air ticket back to India. His former employer drove him to his house, ordered him to pack, drove to the airport and made sure he boarded the plane. As the plane roared above the suburbs of Nairobi, Kamal Budhabhatti looked wistfully through the window and made a silent pledge. He came, he thought, had seen and he was going to conquer Kenya.

Eleven years later, Budhabhatti can claim to have conquered, as he is one of Kenya’s youngest multi-millionaires. He pioneered the business of software development in East Africa and plans to create a Silicon Valley in Africa. Budhabhatti runs one of East Africa’s fastest growing software development companies—Craft Silicon—with its head office in Nairobi.

Budhabhatti is a techie through and through. He graduated with a BSc degree in Physics and describes himself as a hands-on programmer who makes money out of what he enjoys. “Nobody in my family is a business person and it was not really in my cards to get into business. However, the only link I may have to entrepreneurship is that I come from a region in India that is considered very entrepreneurial,” he explains.

India’s Gujarat state is the home of famous entrepreneurs—among them, Dhirubhai Ambani, the founder of Reliance Industries, that was ranked 134 in the 2011 Fortune 500 list.

Wealth is a far cry from Budhabhatti’s lean first days in Kenya in a clerical job.

“All I used to do was input invoices in the system. It was not what I had expected, and I developed a great dislike for the job. Every day I used to say I needed to do something better. I had a friend where I used to stay who was the IT manager of a local bank. He was looking for someone to come up with a system that would automate the check clearing system. I asked him if I could write something and he said, ‘why not?’”

Budhabhatti had landed his first job as an entrepreneur.

A decade ago, Kenya’s ICT sector was in its infancy. Internet and computers were a luxury few could afford. There was little investment or infrastructure and companies like mobile operator Safaricom were just setting up shop. When it came to technology, Africa was not taken seriously—the US, home of Microsoft, HP, IBM, Symantec and Oracle, largely ignored Africa.

Budhabhatti knew he was onto something.

“These problems that Africa has are the greatest opportunity because if you go to some of the developed economies, they have lesser problems. Because of all these problems that we have here, they present a lot of opportunities to come up with solutions. It’s like playing computer games: if there are no challenges in the game, then it becomes boring. Challenges push you to the limit in terms of thinking and innovation,” he says.

After his forced return to India, Budhabhatti spent 72 hours brooding at home before flying back to Kenya.

“I asked my sister to pay for my ticket back because I felt there was an opportunity here and just had to come back. I had Ksh23,000 ($295) in savings which I survived on for one-and-a-half years!”

Budhabhatti returned to where he was staying as a paying guest, explained his situation to the landlady and she allowed him to stay without paying rent. He says he survived on the good humour of his friends, who often paid for his meals.

“I went back to the bank, but the bank realized I was desperate and took advantage of me by renegotiating the price we had agreed on. Every time I went to follow up on the status, they would say come back tomorrow. I finished making the software after one-and-a-half years and was paid Ksh200,000 ($2,550).”

Budhabhatti used the money to settle his debts and set up Craft Silicon. From there, he embarked on an entrepreneurial journey that saw his company win $100,000 at the 2010 Africa Awards for Entrepreneurship.

Craft Silicon sells software to banks and micro-finance organisations in 40 countries around the world, including China and India.

“Banks talk to each other and since I was cheap, a lot of the small banks thought there was no point investing a lot of money in buying an expensive product.”

As word got round, banks like Equatorial Commercial Bank, KRep and Equity Bank asked Craft Silicon to develop software for them. That led to the making of Craft Silicon’s first solution—Bankers Realm—an automated banking operating system.

Like Steve Jobs at Apple, Budhabhatti rolls up his sleeves and gets his hands dirty. In 2011, he launched his brainchild, Elma, an online way to move cash and transact.

After a decade of doing business, Budhabhatti has created a multimillion-dollar empire.

“To calculate software valuation, you look at a company’s annual turnover in terms of how many licensed softwares you are selling, then multiply by 20,” he says.

In 2010, Craft Silicon’s turnover was $6 million, which translates to $120 million. Budhabhatti’s bet on technology has paid off.

 

Kamal Budhabhatti’s Investment Tips

Planning to invest in a technology business in Kenya? This is what to keep in mind:
• Understand the emerging economy, especially if you are coming from a developed economy, as you may not understand solutions required in these countries. Understand local solutions and provide them.
• Keep in mind the governance structures, especially legislation about intellectual property (IP). These are things you will have to keep fighting every day. Laws here are still not strong in terms of IP.
• Don’t expect a very high return. Most people think since they are investing in a high risk environment, they will get a high return—manage your expectations from day one.
• Currency fluctuation is a major risk. Ensure you have a way to manage that.

Entrepreneurs

Enterprise And Traceable Tea From Tanzania

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Tahira Nizari; images supplied

How this Tanzanian entrepreneur’s tea startup is weathering the Covid-19 storm.

When Tahira Nizari started her social enterprise Kazi Yetu in Tanzania’s bustling city, Dar es Salaam, with her business partner and husband, Hendrik Buermann, almost two years ago, she didn’t anticipate the sheer scope of her big idea.

But she also didn’t expect that, because of an employee’s exposure to the coronavirus in April, she and her entire team would be quarantining for two weeks, stalling work in a year that she had projected growth for her company. With the pandemic’s onset, she lost most of her customer base in Tanzania, albeit temporarily, and was forced to come up with a game-plan and quickly pivot.

“It’s been an economic recession overnight, more or less,” says Nizari.

With family roots in Tanzania, and armed with formal degrees from Dubai and Canada, and experience in economic inclusion in the non-profit development sector, Nizari aimed to set a benchmark in the agribusiness sector in Tanzania through value-addition and by employing local women in her factory based in Dar es Salaam to produce “a traceable product” for the local and international market.

“Right now, tea is just exported in bulk completely (from Tanzania) and then all the jobs thereafter in that value chain are done abroad. So what we said was ‘let’s redistribute that job creation, let’s bring it back to Tanzania and let’s create a facility in which we can hire workers all locally and have a product that is 100% made in Tanzania’,” says Nizari. After extensive research in multiple target markets, both locally and abroad, building relationships with 250 Tanzanian farmers, setting up a factory exclusively employing local and previously-unemployed women, and many iterations of the seven blends of its flagship Tanzania Tea Collection using local flavors and spices, Kazi Yetu was ready to expand its scope in 2020.

“We were following our business plan… but we were really cautious and risk-averse (in 2018 and 2019). And then, we said, ‘you know what, when 2020 hits, it’s going to be growth’.”

Nizari was planning on reaching up to 4,000 farmers, buy machinery from China, grow the local B2B customer base, permanently employ all the women at the factory and begin to export on a larger scale after the launch of Kazi Yetu’s online store.

But when the coronavirus hit the local and international markets, things started looking very bleak, especially since Kazi Yetu is currently fully self-funded.

 Not only did it lose almost all of its monthly income, but the farmers stopped meeting in groups for the training, so the supply chain was disrupted.

“In Europe, people are all sitting at home. They’re looking for products to build their immunity – tea is a great solution.”

The factory also had to introduce safety protocols for employees at work and at home, as well as reduce the number of people working at any given time in order to adhere to social distancing.

An employee’s father also died of the coronavirus, which forced Nizari to ask everyone involved with Kazi Yetu to quarantine at home for 14 days.

“So what we said was, ‘look, we don’t want to risk their safety, but we also don’t want to risk their economic well-being’. So we just paid all of them their full-time salary,” says Nizari.

“Generally, our operational costs have been really hard to cover right now… but it’s okay, because it made us pivot.”

It inspired Nizari to expedite Kazi Yetu’s plans to export, kickstart the online store sooner than anticipated and build up stock to send to Germany, rather than just focus on the Tanzanian market, which is temporarily quite small. Exporting has been an issue, given limited shipping at the moment, but the European market proved to be a pleasant surprise for Nizari.

“In Europe, people are all sitting at home. They’re looking for products to build their immunity – tea is a great solution,” she says.

Slowly, the factory is moving back to normal operations and Nizari is trying her best to ensure a steady income for the employees. Kazi Yetu is also now available on local delivery applications in Tanzania, so people can order tea to their doorsteps.

Looking ahead, Nizari hopes to scale up exporting through the online store and retailers, whether in Europe, or also in markets like South Africa where products from sub-Saharan Africa are popular, and North America where innovative African products are in demand.

“We want our product to be competing with products made in Europe, and for example, Sri Lankan tea, Indian tea and Chinese tea. We want Tanzanian products to be well-regarded,” she adds.

Since the teas are traceable, which is a unique selling point, Kazi Yetu is also working on an app that uses blockchain to allow customers to access data on the tea they purchase, from the farm level, all the way to their cups. This way, they will know first-hand the impact the product has.

In addition, Nizari is working on a farm-hub model to build Kazi Yetu’s supply chain by helping them produce better raw products through a no-interest investment that can be paid back with their final product over time.

“The whole ‘economy versus safety’ debate… it’s something we have to think about moving forward… You can’t just operate as a business that makes money, you have to think about… the well-being of your workplace, the well-being of everyone in your supply chain… And I think this is where social enterprises really come in,” Nizari adds.

And a hot cup of locally-produced tea can certainly help take forward any such deliberations.

By Inaara Gangji

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Entrepreneurs

Farmer Forays: ‘Creating A New Line Of Business’

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Shola Ladoja; image supplied

Nigerian agripreneur Shola Ladoja, the founder of Simply Green, says the pandemic-induced lockdown brought with it logistic adversity, but also more local sales.  

With the marauding coronavirus disrupting lives and businesses in Nigeria, the financial stability of a majority of the country’s 200 million inhabitants has been severely affected.

The significant toll it has taken on economic activities has forced many small and medium enterprises to reimagine new ways of staying afloat. Covid-19 is also set to radically aggravate food insecurity in Africa. In spite of Nigeria’s dependence on oil, agriculture remains an important cornerstone for its economy, providing employment for millions especially in the informal sector.

The threat of starvation is so present that in a public address in May, Nigeria’s President Muhammadu Buhari, urged Nigerian farmers to produce enough for the country to eat, saying that the country has “no money to import” food.

But every cloud has a silver lining. The food shortage has presented some agripreneurs in Nigeria with serendipitous opportunities.

Shola Ladoja is the founder of Simply Green, which is a farm-to-table company specializing in vegetables, fruits, juices, spices and herbs. The border lockdown has meant that many of the retail and supermarket chains can no longer import foreign produce into the country.

But this hurdle created a new opportunity for Ladoja.

“[Previously], I tried to get my juices into local stores in Nigeria but they all turned me down and most of them wanted to buy imported juices. The lockdown meant that they had to buy a local brand like mine because they could not get them from abroad anymore. We are now able to sell a lot more during this time than previous years,” says Ladoja.

On the logistics side, however, Ladoja has also felt the pinch of the pandemic like most business that require consistent movement of goods and services. The lockdown scenario prevented his workers from coming in and as a result, the company’s daily delivery of juices, has come to an abrupt stop.  

Ladoja has had to start thinking outside the box to make ends meet.

“We have come up with a fruit and vegetable box, which we sell directly on our website to our customers. So, they can now buy lettuce, kale and carrots, which we have never done before. So, this period has forced us to think about how we can expand the business and this time we actually created a new line of business, which was not in the plans for this year,” says Ladoja.

According to the United Nation’s Food and Agriculture Organization (FAO), even before the Covid-19 crisis, farmers had not been able to satisfy the demands of Nigeria’s population.

“I feel like the government should give out grants and loans and support for small businesses so that they don’t crash. I have friends who have complained they are going to shut down their businesses because they haven’t been paid for two months. A lot of people cannot sell their produce in Lagos because the markets are closed which is going to affect a lot of farmers at this time,” says Ladoja.

Nigeria used to import over a million tonnes of rice from Thailand annually. That number has been significantly reduced with the implementation of high import taxes. This has led to an abnormal increase in food prices in Nigeria since the onset of the coronavirus with the UN estimating the number of people facing acute food security stands to rise to 265 million globally in 2020 as a result of the economic impact of the pandemic.

Nigeria has substantially increased domestic rice production in the pandemic but is still a long way from reaching the levels needed for the country to sufficiently feed itself. Coupled with the decline in global oil prices, it is safe to say the adverse economic impact of Covid-19 on Africa’s most populous country is going to be felt for a long time to come.

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All For Grooming Future Leaders

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Katlego Thwane has had to dip into his own savings, with the Covid-19 crisis, to fund his noble cause, teaching the underprivileged in a South African township.

He is in his twenties, yet turning around the destiny of underprivileged young people around him.

Katlego Thwane, a 28-year-old born and bred in South Africa’s lively township of Soweto, is an educator and founder of the Atlegang Bana Foundation here that caters to primary school learners who struggle to keep up at school and need additional help.

“Our foundation also provides for needy learners from underprivileged backgrounds. One of my biggest campaigns at the foundation every year is to give confidence and motivation to learners for the year ahead,” says Thwane.

He has bagged numerous awards and accolades for his work, as a 2017 Young Community Shaper, 2018 Lead SA hero and featuring on live television show Big Up on SABC Mzansi in 2018.

Growing up, he was a “naughty boy”, as he describes himself, but says many are now astonished at the serious, ambitious young man he has become.

“Teaching has always been a passion of mine. I love seeing change, transformation and grooming leaders, and value their education while being innovative in taking our country forward.”

Thwane has recently established a clothing brand, BANA, under the Atlegang Bana Foundation. He is also currently handing out food parcels to the needy in his community, in partnership with Hollywoodbets.

“The virus has affected us immensely with many parents losing their jobs or taking salary cuts, we are not receiving the financial support as before. This has led to me [dipping] into my own personal pocket and [using it] to buy tutors data for teaching virtually,” says Thwane.

Most schools continue operating online because learners haven’t as yet returned to school, however, this has come with its share of setbacks.

Makosha Masedi, a parent of a Grade 4 learner, says her challenges come with network issues and understanding the tasks given to the child.

“Some of the programs that the work is loaded on to is not friendly for all devices, so submitting and retrieving becomes a problem, as also understanding some of the work,” rues Masedi.

But Thwane powers on, hoping for a better tomorrow, for himself and his country.

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