Challenges Group showcases at the Social Enterprise World Forum in Ethiopia

The Challenges team with Scottish Cabinet Minister Aileen Campbell.

Ahead of the opening of the Social Enterprise World Forum in Addis Ababa (October 22–25), the Challenges team had the opportunity to deliver a showcase of our work to the Scottish Cabinet Secretary for Communities and Local Government, Aileen Campbell, who was also in Ethiopia for the conference.

This was the first time — ever! — that staff from all of Challenges’ offices were in the same room together. Away from the heat of the Ethiopian sun, Challenges colleagues from Scotland, Rwanda, Ghana, Malawi, Zambia, and Uganda presented a snapshot of the many projects and programmes we’ve been delivering and the impact we’ve been making. (Our Ethiopian manager Kasonde Kashulwe was already on her way to the UN Conference Centre to chair the SWEF’s first panel session, and only all-female one, on youth and social entrepreneurialism.)

After introducing the Challenges team, our Chief Executive Eoghan Mackie ran through Challenges’ ethos and past successes. Since our launch in 1999, we have worked with more than 3000 businesses in 66 countries, and we now have six permanent international offices. Key to our approach is the aim of supporting small and growing businesses to improve and grow, while also enabling the larger support ecosystems to function more efficiently. At its heart, Eoghan explained, Challenges believes that good business is a more sustainable way to address social and environmental challenges; and as an international social business with a legacy of successful partnership programmes, Challenges is constantly seeking to collaborate in addressing those challenges. The brief presentations that followed would, he said, underline the success of Challenges’ approach.

Building capacity and empowering communities

Speaking for Challenges Rwanda office, Country Manager Neil Walker and Senior Associate Armel Mugenzi gave an overview of our flagship coffee project, which is funded by the Scottish Government’s International Development department.

Launched in 2017, our Coffee Market Building and Building Prosperity project is demonstrating its multi-layered and widespread impact in ways beyond its original brief, and is empowering and impacting communities, in particular young people and woman. Originally designed to build the capacity and export potential of coffee co-ops, it’s now driving a more sustainable and holistic value chain in the sector, while delivering valuable business skills training to hundreds of young people.

Rwandan coffee co-op workers take part in business skills training.

A major factor of our coffee programme is the delivery of tailored business training to farmers and co-op management, taking into account literacy, regional languages, gender issues, etc. So successful has this approach been that Challenges business trainer Liza Imbonabake has since travelled to Malawi and Uganda to train on our CROPS project (see below) as well as to Kampala for a session with senior Ugandan politicians!

Targets for increased productivity, quality and market access are already being surpassed, Neil revealed, but there has also been considerable additional value in Challenges’ work with young people. Our business management and entrepreneurial training sessions have been met with genuine enthusiasm, and we have helped to catalyse a portfolio of revenue-generating businesses within these vulnerable communities. Our engagement with micro-finance institutions means we’ve been able to support both young entrepreneurs and established businesses to access finance. This in is enabling economic diversification and the growth of sustainable businesses.

Adding value the Challenges way

For Challenges Malawi, our Country Manager Phillip Chidawati talked through the Creating Robust Opportunities for Crop Production and Sales (CROPS) project, also funded by the Scottish Government. While one of our younger projects, CROPS was, explained Phillip, already demonstrating considerable successes.

Several years ago, the Malawian government invested almost $40million for the promotion of agriculture production as well as crop diversification and value chain development. This included the construction of Value Addition Centres (VACs) designed to cater to thousands of nearby farmers and co-ops. Unfortunately, following a value assessment that removed the opportunity for farmers to manage the VACs, these units lay unused for two years, with much of the investment at risk of being written off.

Challenges came in with a different approach, however …

With just under £1million of Scottish Government funding and using our technical expertise and practical tool, we designed the CROPS project, instigating a programme that has enabled local farmers to process, package and market their own products, including rice, pigeon pea, cassava and soya.

Malawian farmers receive machine operating training at one of the VACs.

The numbers speak for themselves, explained Phillip. At these once-dormant VACs, local farmers have in the past year processed seven tonnes of rice, three tonnes of cassava, and one tonne of pigeon pea. The CROPS project is also seeking to improve the marketability of products such as pigeon pea, a pulse similar to lentils.

Combined, the VACs trade with 6200 smallholder farmers, of whom about half are women and 40% are youth. As well as growing the market and marketability for these crops, and the livelihoods of farmers and their families and communities, the VACs have also created job opportunities for four senior business officers, as well as machine operators, financiers and assistants.

It’s relatively early days for this project, but Phillip has already been invited to speak to the Malawian government to discuss the Challenges’ approach and explain why our CROPS project has been so successful. Phillip is also due to visit Zambia to share his expertise with Lusaka colleagues and clients working in similar projects.

Implementing new business opportunities

Speaking for Challenges Zambia, Country Manager Gwen Parry and Senior Associate Daniel Zimba narrated the journey of how our Lusaka office has grown into an enterprise consultancy that now employs nine full time staff and can draw on a pool of 300 business consultants.

Two main projects dominate Challenges Zambia’s current portfolio, explained Gwen: Musika and PEPZ. The former is a project funded by USAID and the Swedish embassy, and for which Challenges is a major implementation partner. Over the past six months, Challenges associates have delivered business skills and management training to about 180 SMEs across Zambia in the agricultural sector, including farmers, aggregators, input suppliers, and other businesses that supply services to the agricultural sector such as veterinarians and insurers.

With 76 languages spoken across Zambia, literacy and access to our business skills training was always going to be an issue, but, as in Rwanda, Challenges trainers have adapted our training modules to a local context, with the material translated into five different languages — often all used in the same location! — another pioneering approach to our business skills and management training. Such has been the positive response to Challenges’ approach that Challenges is now advising on Musika on its future strategy.

The other main project in Zambia is with DFID’s flagship Private Enterprise Programme Zambia (PEPZ), of whom Challenges is the major delivery partner. PEPZ was set up to drive private sector development focusing on four sectors: food and agriculture; mining and mining services; tourism and hospitality; and access to finance. This year, Challenges has designed and implemented the strategy of initiatives across all of these sectors, working with more than 40 SMEs to a tune of £1.2million.

One of the great demonstrable outcomes of this project is the capacity for collaboration with other projects, partners and Challenges offices, and to develop exciting and beneficial cross linkages. Working with mining firms, for example, we’re looking to what will come next for the communities once the mine closes and unemployment rears its ugly head. Our joined-up and holistic approach to business development means we can easily bring in the expertise to look at alternative means of sustainable employment and job creation, such as tourism or agriculture. For when it comes to a local industry, a question we have to always ask — and be ready to answer — is what comes next?

This type of mindful approach addresses other issues of course. For example, one way to alleviate the complex issue of poaching is to create other revenues for locals and generate value in other sectors, such as tourism; a sector we also have a global expertise in supporting sustainable businesses. As we were delivering our showcase, our UK office was delivering training to the Edinburgh World Heritage team, while in Zambia we’re also collaborating on a future strategy for a David Livingstone experience, having driven policy improvements on business tourism at the Department of National Parks and Wildlife. Examples, we explained, where our successful implementation has led to the ability to influence government policy and make national impact.

For us within Challenges, it was brilliant to hear these narratives of Challenges’ successes; for the Scottish Cabinet Secretary, “This strategic approach to maximise impact was exciting and incredible to hear.”

Tackling the unemployment crisis

Next up was Marcel Koomson, our Ugandan country manager, whose colleague Vivian Achan was at that same time preparing to take part in the SEWF’s panel on youth and social entrepreneurship. Although the main focus of Marcel’s presentation was our Youth to Work initiative, he kicked off with a brief description of Challenges’ work with the Ugandan Solar Energy Association (USEA). During this project, Challenges utilised its network of young professionals to conduct needs assessments for 38 solar companies to gather market insights for the Uganda solar industry. As a result, Challenges was able to devise a national strategy for USEA to create a business development hub for its members, while at the same time giving us unrivalled insight into the sector.

Vivian Achan helping to launch our Youth to Work project in Uganda.

Turning his attention to the Youth to Work programme, a pioneering project within Standard Chartered’s £50million Futuremakers initiative, Marcel revealed the unprecedented demand for the Challenges pilot. Working with SC’s teams in London and Kampala, Youth to Work is addressing the unemployability challenge in Uganda by empowering young people with entrepreneurial and business skills to create impact within small and growing enterprises. From a massive 800 applications, we have selected 40 young professionals who will work with 40 enterprises. An additional 200 current employees will receive training, while the young professionals themselves will mentor 400 university students through employability and entrepreneurship training.

As Aileen said, the demand for these places, “shows the pent-up demand for these opportunities”. But it also demonstrates the difficulties facing university graduates in sourcing suitable employment, where the lack of structure in the job market is a major barrier to employment. Like Scotland, the Ugandan economy is based on SMEs, and traditional means of securing employment simply do not work. Instead, Challenges — in this programme and in others — has formed a bridge programme that addresses systemic problems, such as skills and experience gaps, as well as providing peer-to-peer knowledge-sharing initiatives.

Speaking of Youth to Work, it was, said Aileen, a programme that was “disrupting the system and empowering young people”, while “the test-of-change model meant Challenges could see what works then scale it up”.

With 10–12 million young people entering the employment market each year, the solution we need is more than just about training entrepreneurs. What the Challenges approach does, explained our Research Manager Stephen Hunt, is take the SMEs and opportunities that are already there and engage young people through training and support to make them better. As a way of addressing Africa’s massive youth unemployment problem, it is much more credible method, and in example after example, Challenges was able to demonstrate its technical expertise in delivering genuine value and impact.

With our Ethiopian manager Kasonde Kashulwe about to chair the SEWF presentation on youth and social enterprise, it was left to our Ghana team to conclude the Challenges showcase. Next up were Dorcas Amoh-Mensah and Ben Res-Esantsi who explained that they have worked with 200 start-ups and growing businesses in Ghana, with Challenges Ghana now a significant player in the country’s entrepreneurial ecosystem.

Pioneering approaches to social and economic issues

Recently, our team led on a UN International Organization for Migration (IOM) programme in Kumasi, delivering business skills training to support returned Ghanaian migrants, many of whom became stranded in Libya, Nigeria, Niger while en route to Europe. Over the past six months, Challenges has delivered incubation and employment skills training to 50 beneficiaries; in that time supporting 18 to form partnership or sole proprietorship businesses. On top of this, a further six jobs with relatively competitive salaries have been created, while 10 entrepreneurial opportunities have been identified for future cohorts.

Most of these migrants had minimal formal education, explained Dorcas, so as part of our monitoring and evaluation we recorded our interviews with them in order to gauge our impact. This is a pioneering approach to assessing a programme’s efficacy. Now we’re hoping to expand our work with IOM across a further four sites and empower a further additional 200 people.

Aside from facilitating economic and social re-integration for returned migrants, Challenges Ghana is now working with another mining company, Newmont Goldcorp, to create diversity of employment, similar to work being undertaken by colleagues in Zambia. Tasked with finding new business opportunities, the team are developing business models and undergoing market assessments for the restoration of defunct factories. Simply put, they’re looking at what has potential and building on it. Critical to this project is the aim of creating an economically robust community of businesses that can provide diverse income-generating opportunities and insulate against the prospect of the mine closing and widespread job losses.

Enterprising solutions to global challenges

Dr Stephanie Terreni Brown with Clean Water Wave’s CAFE water filter system.

As the session drew to a close, Eoghan also touched upon our pioneering Access Africa Programme, also funded by the Scottish Government. The aim of Challenges’ AAP is to enable Scottish social enterprises and social entrepreneurs to explore social and economic opportunities through our international offices. After highlighting a number of AAP successes — including Clean Water Wave and Giraffe Healthcare who were also at SEWF — Eoghan flagged up Rwanda’s recent decision to ban single-use plastics — the first country to do so. This he said was a prime opportunity for enterprising Scottish firms to innovate solutions to the global crisis of plastic consumption, and that Challenges had the technical expertise, tools and teams to bring these solutions to a broader market. It was, as Eoghan said, “the kind of challenge we like”.

With the seconds ticking away and the SEWF programme calling, it was time to wrap up our Challenges showcase. Reflecting on our portfolio of projects, Aileen called it a “phenomenal record of achievement”, adding: “It was really brilliant to hear all the different projects, and see the collaboration between all the countries and different projects. Nothing beats getting the chance to meet and hear the stories. I’m delighted so many of you could gather to describe what you’re doing in so many countries and projects.”

The Challenges Group

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