Linking SMEs in the Mining Industry
On March 12-23, I had the opportunity to travel to South Africa and Australia and participate in the “Local Procurement and Supply Development Study Tour.” The event was sponsored by the Australian Agency for International Development and organized by the Africa-Australia Partnerships Facility.
The study tour brought together participants from nine countries to discuss best practices, issues and opportunities that could increase the capability and competitiveness of SMEs in areas where there are mining companies. Each country was represented by professionals working in government, industry, and NGOs. I was joined by David Fromayan, Executive Secretary of the Liberian Chamber of Commerce, as well as Cornelius Wright, Procurement Supervisor for BHP Billiton’s Iron Ore operations in Liberia.
We spent the first week of the trip in Pretoria, South Africa. While there, we met with representatives from Anglo American and Royal Bafokeng Holdings, a South African-based investment group. We even took a tour of the Anglo American managed Bathopele platinum mines.
Some of the key issues we discussed in South Africa surrounded local supplier training – to enhance the capacity of SMEs and farmers to access and supply markets critical for economic growth – by building and improving management capacity. We learned the ‘ABC of linkages’: compliant Suppliers, willing markets, and appropriate development support.
The group also explored some of the major challenges faced by SMEs, including limited access to finance (high costs, limited collateral, creditworthiness, etc), the difficulty of retaining trained staff, and the obstacles to collecting baseline and monitoring data. A key lesson learned is that a specific focus should be placed on SME growth.
After this whirlwind trip to South Africa, we charted our course eastwards to Perth, Australia. In Perth, we met representatives from the Peel Development Commission, the National Statutory and Regulatory Authority, in addition to the research-based Energy and Minerals Institute at the University of Western Australia. We also met with representatives from Chevron, BHP Billiton, Newmont Mining, and Many Rivers, an NGO focusing on microfinance and enterprise development.
In Australia, our group discussions examined the role of different industries in facilitating start-up and growth of SMEs. This involved interesting discussions on enterprise development, industry attitude, and communication between buyers and suppliers. The work of Building Markets’ Sustainable Marketplace Initiative related directly to many of these topics, such as improving information flows in the market, enabling linkages through greater access to tenders, and hosting networking events.
Some of the most exciting times in South Africa were our visits to Wandies Place in Soweto and Moyo Bar & Restaurant. In Australia, we visited the city of Mandurah for a dolphin and scenic canal cruise and the Pinjarra’s Peel Zoo.
Knowledge gained from the study tour will enable me to enhance Building Markets’ efforts in Liberia to build local suppliers capacity. Specifically, these experiences will contribute directly to improving the Sustainable Marketplace Initiative’s services in terms of training, communications and advocacy, tender distribution and matchmaking. I have learned that Industries in South Africa and Australia are facing similar challenges to our industries in Liberia. We can only mitigate those challenges if we work closely with buyers and suppliers.
Some practical steps include working with industry bodies on what their roles can be in terms of training and building capacity. Another step would be to work with the Minister of Commerce & Industry, the Ministry of Lands Mines & Energy, and the Ministry of Economic Development & Planning to influence policy reform and leverage their support and ongoing efforts to create an enabling environment for SME development.
Calitha Bropleh is the Business Operations Manager for the Building Markets’ Sustainable Marketplace Initiative in Liberia.