-- ~~2 1007 NEWS ABOUT WORLD BANK GROUP SMALL AND MEDIUM ENTERPRISE INITIATIVES Vol. 1, No. 12 September 2000 :-~ :: :- Building Management Capacity in Africa AMSCO f the benefits of globalization are ever to be IN BRIEF Ispread more widely, bringing prosperity to the many instead of the few, one essential thing must NAME: happen: local businesses in the world's poorest African Management Services Co. countries must grow. (AMSCO) Local companies must provide the jobs and skills FOUNDED: necessary to raise incomes and living standards, 1989 giving people in their countries an opportunity for GOAL: lasting escape from poverty. They must become more competitive, at the least able to survive the Strengthening the African private sector ~~~~~~challenge of domestic markets opening to foreign sector competition, and in some cases, learning to manu- BY: facture high quality value-added products that Providing African companies with can earn foreign exchange through sales abroad. : managerial executives on 2-to-3- Doing so requires many things: strong local man- year contracts whose costs are agement, access to financing, linkages with inter- 80% covered by the local business national partners, and a commitment to human owners; AMSCO also provides resources development. each company with customized training programs on a 50/50 It is not easy. But it can be done. cost-share basis. SMEFACTS TRACK RECORD: iSM a publication Currently working with 110 of the - African companies, training more World Bank Group than 1800 local employees a year; SME Department. on average, AMSCO assistance helps double client companies' Director ~ sales and plays a major role in job Harold Rosen creation and protection. For Information Contact: Rob Wright AMSCO: Strengthening African companies. Rwright@ifc.org el Tel. #202 473 7997 1 Fax #202 522 3742 The African Management Services Company (AMSCO) has been working on just this agenda since 1989. Headquartered in Amsterdam with regional offices in I-larare. Nairobi, Lagos. Accra and Abidjan, it is a mid-sized management consulting and trainino company focused on African busi- nesses created as a public-private partner- ship. Operating under a United Nations Fa ry:eNewly Development Programme (UNDP) proJect reporting to IFCG management, it was found- ed with $7 million in capital 70% of it t l diersifia from development institutions such as IFC, the African Development Bank, FMO (Netherlands), and others, and 30%/ from leading companies such as Philips, IBM, BP and Nestle. AMSCO also manages a donor-financed training fund that organizes approximately $4 million in annual employee training programs for Africanl companies. The private sector representatives chair AMSCO's board and ensure that AMSCO operates as a business, not an aid program, with a commitment to full cost recovery or slight prof- itability each year. Liberian national with a background at Arthur D. Little, then organizes customized skills develop- Each operation begins with an inquiry from an ment programs for each client company. These African business owner or financial institution programs operate at all levels, helping thousands needing new or additional management at a sen- of Africans a year increase their own management ior level, such as chief executive officer, chief skills and also addressing important broader operating officer, chief financial officer, or mar- themes. A five-day regional workshop in Mali keting director. In response AMSCO combs its this year, for example, offered programs on large network of contacts in the donor, business, "Changing Management Culture in African and independent consulting communities to iden- Companies," "Improvement in Quality and tify candidates with the special qualifications Productivity." Recruitment and Reinforcement ol requested, such as relevant African experience, Human Resources." and "Corporate Governance." language and inter-cultural communications skills. If the African business owner hires the rec- AMSCO currently has 237 managers under con- ommended AMSCO manager or managers, he or tract at 1 10 African companies, a 21 % increase she contracts for these services by signing a two over 1999 and nearly double the level ol three or three year contract, showing their commitment years ago. Nigeria and Madagascar are currently absorbing all costs, in most cases. Collection of the most active markets, with the financial sector these fees is fully satisfactory, with less than 10% providing more demand than any other--com- AMSCO of contracts lapsing into non-payment. mercial banks, merchant banks, and local devel- opment finance institutions that are on the front AMSCO's training department, headed by a lines of financing Africa's own development. But I .. Booth Manufacturing, Kenya: manufacturer of aluminum and polystyrene products. iFi!~~ ; 9... iF--- o there is an especially strong emphasis on small The most recent independent evaluation of and medium enterprises (SMEs), which account AMSCO showed that its assistance has helped for 85% of all new contracts. its average client double sales, turn from negative to positive net income, and both preserve and Current clients include: create new jobs. As it works to meet growing client demand in the coming years, AMSCO * Financial Bank: a private commercial bank will continue to contribute to poverty reduction with branches in Benin and Chad that is under- in Africa by helping client companies reach these going profound organizational change, includ- same goals. L. ing the introduction of microfinance services. * Precision Air Services: the top private airline in Tanzania and a leader in its country's Contact: improving business climate, offering scheduled, AMSCO, BX charter, scenic, and air courier flights. Friedman Building Hogehilweg 4, 1101 CC Amsterdam-Zuidoost * Dargle Timber Sawmill: an African-owned The Netherlands wood processing company in South Africa with Tel.: 31-20-664-1916 150 employees holding its own despite a diffi- Fax: 31-20-664-2959 cult operating environment. E-mail: info@amscobvcom * Offshore Development Co.: A public-private Web: www.ifc.org/abn/amsco.htm partnership to develop export processing zones (EPZs) in Namibia, including one facilitating trade to and from Angola. 3