LONDON, 22ND OCTOBER 2018: West, Central and East African associations outline support needed for 10,000 micro-businesses.
Identifies a ‘micro-business paradox’ with opportunities for change at scale being missed.
Research with twenty-one wood industry associations across six African countries reveals for the first time the extent of micro-businesses within their membership, the scale of the challenge facing those businesses, and the consequent support needed for their associations to drive positive change at scale.
As part of the Global Timber Forum’s (GTF) ongoing multi-region research programme, these results highlight research in countries across West, Central and East Africa. The results show that these twenty-one associations together represent over eleven thousand African companies with eighty-five per cent of these members being defined as ‘micro’-sized. The membership across the six countries is dominated by operators in the forest sector and in primary processing (and charcoal). Joinery and furniture are significant products areas for members in three of the countries.
Five key challenges reported by associations for their micro-business membership are:
1. Lack of access to the legal wood supply.
2. Uncertainties about compliance with a changing legal environment.
3. Limited availability of finance to ultimately gain access to more profitable markets via adopting new technologies that utilise all species of wood and can handle plantation timber.
4. Absence of a marketing capability to reach and influence potential customers.
5. A perceived low market demand for more sustainably produced products.
Identifying the ‘micro-business paradox’
This new research shows that the paradox for micro- businesses is that the greater their need of support, the less resources they have to provide to their local association to fund that support. The findings reveal that the average income for associations in these six countries is just 33,000 USD per year.
Whilst much has been done by governments and the international community to work with large and even medium-sized companies, the diminishing returns of working with the micro-sector leave it largely unchanged despite its overall size and impact. Associations are therefore an untapped resource to reach micro-businesses at scale.
Developing associations to support micro-businesses
Recognising this potential for associations to provide services to micro-business members, the new research asked associations to set out their key challenges as organisations.
Five key challenges for associations:
1. Access to finance to build their capacity to support their membership.
2. Recruiting skilled personnel in areas that can support their members business development such as marketing, production and added-value product development.
3. A lack of tools to support their membership who face changing forest legality systems and developing sustainability requirements.
4. Up-to-date market data to support their members in building a greater understanding of changing trade flows.
5. Limited understanding of how to engage government and stakeholders on issues such as changing legality standards.
There was a common view expressed across the interviews with individual associations that they would most benefit from targeted and sustained training schemes. The content for this training was again similar across the associations and included: operational best practice, the requirements of legality and sustainability systems, effective marketing skills, and stakeholder representation and engagement.
George White, Director of GTF and who led the research programme said “We already knew that many of the associations GTF has worked with are dominated by small and medium-sized companies but were surprised by the high levels of micro-sized operations. This represents a huge challenge for those who want to see the development of a more responsible trade. GTF is now utilising these market insights to develop an association training programme that can be part of the solution to supporting micro-businesses on their sustainability journey.”
Notes to editors
1. The GTF’s Association Survey for Knowledge (ASK) research programme seeks to better understand the challenges faced by forest and wood-based industry and trade associations around the world.
2. The West, Central and East Africa report’s research was undertaken with associations in Cameroon, Cote d’Ivoire, Democratic Republic of Congo, Ghana, Liberia and Mozambique.
3. All research was undertaken by interview from March to June 2018.
4. The survey was made up of three complementary sections. Respondent associations were encouraged to complete all three sections. Associations were identified by local experts and interviews arranged with the senior management of the associations.
5. For the purposes of this research the following definitions were used to identify company sizes: Large – a company with more than 250 employees, Medium – a company with 51 to 250 employees, Small – with 11 to 50 employees and Micro – with 10 or less employees.
6. The survey was developed in collaboration with GTF’s project partners: UN FAO (Food and Agriculture Organisation of the United Nations) and WRI (World Resources Institute). The views expressed are only those of GTF.
7. The individual survey results are anonymised and non-attributable.
To receive a copy of the report or to find out further information please contact:
This material has been funded by FAO EU-FLEGT Programme and the views expressed do not necessarily reflect the views of the European Union, Swedish government, UK government or the Food and Agriculture Organisation of the United Nations (FAO)