Social enterprises: A relevant tool to reduce inequalities in the Sahel?

Sharing experiences and testimonials of implemeting partners, artisans and farmers from Mali, Burkina Faso and Ghana

Artisans and farmers will share their views via video about how social enterprises have bridged the inequality gap in various areas such as gender, skills, education, health and safety, and financial inclusion. Representatives from the EU, the International Trade Centre, SNV Netherlands Development Organisation and the British Council will discuss the challenges and opportunities offered by this innovative approach. The goals are to promote, encourage, and make social change happen, while addressing gender, skills acquisition, health and safety at work, financial inclusion and all of the relevant factors linked to the decent jobs agenda. Participants will also address the spirit of inclusiveness of the social enterprises and will analyse how to ensure their market access at a larger scale.

Key points

  • Social enterprises need solid financial discipline and control to succeed.

  • As labour costs rise, the social enterprise has to be sustainable.

  • Social enterprises can be used to cross-subsidise other social actions.

  • They can be a platform to train new entrepreneurs.

  • The EU can play a key role in supporting pilot projects.

Synopsis

Social enterprises in Africa are starting to bridge the inequality gap in key areas. Their goals are promoting and encouraging social change, while addressing gender inequalities, skills acquisition, health and safety at work, financial inclusion and all of the relevant factors linked to a decent jobs agenda. Today’s economic model is focused on GDP growth. It has seen the poorest get poorer while inequality increases. The business model needs to change from one based on shareholder value to one that looks at the wider issues of stakeholders. The model must be able to prevent inequalities, and social enterprises can address this. They are businesses that address environmental and social needs – and returns the benefits to the community. In Ghana, the Meringa Connect social enterprise supports farmers. Training farmers to plant the Meringa trees helps them grow a nutritious product and earn a good income. In this system, the farmer is no longer beneficiary - he is the customer. Other examples include Soronko Solutions, an IT company set up by a woman who uses its profits to fund work with women and jobs across Ghana; and Tebita Ambulance in Ethiopia sells healthcare insurance and uses the profits to subsidise ambulance services. The Ethical Fashion Initiative, which runs fashion projects in Mali and Burkina Faso on behalf of big fashion brands, has a business model centred on paying a living wage to artisans. In this model, labour costs will be more expensive. The social enterprise has to be sustainable and run for a profit, although they can run for a loss for the first three years. Clients such as Vivienne Westwood have to commit to working with the Ethical Fashion Initiative for the long term. These systems need a strong financial control system. Artisans are paid decently but savings have to made elsewhere. There is no room for waste. Social enterprises also need an enabling framework to help them succeed. This involves access to markets, and services from banks and lawyers. It is also important to raise awareness about their operation to improve credibility. The European Commission can play a role in encouraging the development of social enterprises. It is in a position to promote pilot projects and social enterprise initiatives. Indeed, the EU – as Africa’s largest donor - recognises that SMEs are the main providers of jobs (60 %). It has a role as a catalyst for such developments, particularly through creative finance instruments. The EU is able to support the testing of new approaches and pilot models that are sustainable and support local ecosystems.

Insight

The low-cost structure of social enterprises could match the needs of Africa’s many unemployed youths.

Organised by

Speakers

Moderator
Dorota Panczyk-Piqueray
Economist/ Head of Sector of Gulf of Guinea, West Africa
European Commission - DG for International Cooperation and Development
Didier Versé
European Commission - DG for International Cooperation and Development
Paula Woodman
Head of Social Enterprise
British Council
Simone Cipriani
Chief Technical Adviser, Ethical Fashion Initiative
International Trade Centre
Jean Muthamia-Mwenda
Global Youth Coordinator
SNV Netherlands Development Organisation