Guest Writer: Engineering Opportunities In West Africa – An Overview
Introduction
Engineering, like art gets its beauty from taking an idea on paper to physical reality or proffering solutions to a teething problem. In the grand scheme of any development, design engineering accounts for approximately less than 5% percent of capital costs, which unfortunately makes it an unattractive venture for most investors.
In the past, engineering firms got developed out of necessity rather than invention. Today, however, the word is – INNOVATION. How instant, how simple and then how affordable – solutions can be provided in a world of disruption.
Sector Scenario
The major constraint in developing a sustainable business model is finding and deciding on which niche area to focus. This is especially difficult in West Africa either within large infrastructure projects or innovative engineering technology for a number of reasons such as:
- Saturated competing space – too many companies focusing on very little opportunities.
- Lack of funding for projects which ultimately reduces project opportunities and leads to (a) above.
What is critical in the West African environment is the robust opportunity for the development of various projects whether major infrastructure projects or using engineering technology to improve healthcare solutions, agricultural techniques and basic ICT solutions; however the lack of long term and sustainable funding for these projects prevents any type of business model achieving available potential.
Firms that have gotten this right have discovered models for which they develop and source funding for projects. Alternatively, they can attract crowd funding especially for engineering technology focused ventures. Large engineering companies like ILF, significantly rely on the patronage of oil and gas, power and infrastructure projects and need to keep an eye on the sinusoidal nature of state economies.
Smaller firms which I believe should be the foundation of an engineering technology revolution as experienced in emergent economies would benefit from coordinated investment & funding.
Great startup ideas like Arone are defining drone delivery services, others are developing technological ideas to improve manufacturing processes or further scale up for mass production.
Snapshot – Engineering In The West African Environment
Managing a medium or large engineering firm comes with its challenges in West Africa’s environment. The deficiency in skilled and qualified engineers; sustainable or volume of projects to keep critical mass and saturated competition impacts heavily on business sustainability and could significantly affect any startup attempting to scaling.
However, in order to create a sustainable technology business model in this space, the focus must become maintaining a delicate balance between the organization staffing and overhead requirements along with a continuous review of the pipeline of projects in the horizon. This also helps drive scalability plans and implementation.
In order to have adequate visibility of the pipeline of projects in the horizon, ILF has leveraged on Key Client Management which is essentially critical to surviving in this environment. In ILF, our strategy is to be in the face of the Client at all times; guiding and proffering solutions, being there even when there is no immediate benefit. We see supporting our clients goals as our goals.
In a culture like we have in Nigeria for instance, relationships are key. Your clients must know that they can count on your knowledge, experience, and expertise whenever. Flexibility is also key. I see flexibility as a sustainability tool and this gives a company the ability to adapt and weather any economic challenges. Diversification could help you be flexible – are you focused on the Oil and Gas industry, Energy (Power) or Civil /Structural – are your clients all within the same sector. This approach also helps in framing the Client’s needs such that new opportunities are identified early and business development efforts centered around this can be quickly deployed.
Due to the deficiencies in infrastructure; West Africa is awash with latent opportunities; the big challenge however is funding.
The perfect combination for developing any opportunity would be – identify – self fund – self implement. Engineering companies who begin or own their entire supply chain or who are well funded can be successful in this environment.
Internal Perspective
As the CEO of the company, ensuring board satisfaction with business results, customer satisfaction as well as ensuring that all organization staff also share part of the company success are key elements of the organizational strategy. At the board level we are constantly looking for ways to improve the work experience of our employees as well as ensure that maximum productivity is inherent in our business model.
Our board is largely made of up technical personnel who have at one time or the other been involved in the sort of projects within ILF’s portfolio thereby making it less onerous in getting Board support for key decisions that will improve staff productivity and company profitability.
Engineering Outlook – Other Sectors
Looking at three major sectors of the economy – Oil & Gas, Power and Manufacturing where engineering plays a major role my assessment would be;
Oil & Gas – a well-developed sector which will continue to play a key role in local and world economies for years to come. Government’s continued involvement may continue to stifle the potential for further growth especially in gas utilization. This sector will play an important role in the industrialization of the country and could provide sufficient opportunities for engineering companies when the right policies are put in place and implemented.
Power – massive opportunity of course due to the current deficiencies in transmission and distribution of generated power. Further industrialization would also drive up generation demand. Engineering Technology will play a big role in grid stability and as we say – developing a smart grid.
Manufacturing – As a country, our manufacturing capacity is low as we largely depend on importation. Improving this will drastically reduce unemployment and also provide opportunities for engineering companies.
Looking at the present and beyond 2020; imagining the opportunities that abound in connecting West Africa by road and rail. Moving people and trade so easily north and west; opening and developing trade routes which treaties like AfCFTA promote. The opportunities for the development of these massive infrastructure projects could provide engineering companies with a bottomless pool to choose from, hence the scale of operations and business realities of these companies will be positively impacted.
Written by Abiodun Oshodi
If you would like to join our guest writer team send us an email: nichole@getfundedafrica.com
