|Exporting Africa: Technology, Trade and Industrialization in Sub-Saharan Africa (UNU, 1995, 434 pages)|
|Part II. Country studies|
All the firms in the sample, with one exception, occasionally use consultants' services, mostly to meet their training needs. This is particularly important for the knitwear enterprise, which wishes to improve internal communications and to create a sense of duty and responsibility among its workers. Consultants' services are also used by the cloth enterprise for marketing. These services are crucial for the survival of the firm, since it has failed to export the bulk of its production, as it had originally planned. The firm is now engaged in an active search for markets both overseas and locally. Marketing consultants are also used by the edible oil enterprise, partly because it has lost its monopoly over the local market and has to face local competitors as well as increasing imports.
Licensing and management agreements
Only one firm in the sample, the jewellery firm, has a licensing agreement, with its French partners. In fact all its production comes under this agreement. The firm also has a management agreement with the same partners. The paint manufacturing enterprise is producing inks under a licensing agreement too. However, this accounts for a negligible fraction of its total output.
Management agreements with foreign partners seem to be directly related to the level of foreign participation in shareholding. This is evident in the case of the jewellery firm and the cloth manufacturer. However, the cloth firm discontinued its costly management agreement recently because of the firm's financial problems.
The paint manufacturing enterprise set up a joint venture with another local company which was already in the same line of business. The purpose was to obtain a major share of the local market.
Joint ventures are important for EOEs because these facilitate, for the local partners, access to technology, material inputs and markets. Ultimately, joint ventures increase the competitiveness of EOEs. Thus the jewellery firm, which has to compete with well-established jewellers in France, could not have started operating had it not been a joint venture. Similarly, the knitwear enterprise, although very successful internationally, has set up business in Madagascar, where labour costs are lower. Such investments will increase the firm's production capacity and make it more competitive in international markets.
With the introduction of new technologies, new firms would be expected to rely heavily on providers of technical services, unless the firms have their own technical personnel. Only two firms in our sample have so far made use of outside technical services. The edible oil enterprise requires these for the servicing and maintenance of its computers. The knitwear enterprise also has an agreement for the maintenance of its computers, which are partly used for design and production.
Linkages with input suppliers and financial institutions
Most EOEs and ISEs maintain links with their suppliers of equipment to keep up with new types of equipment coming on the market and to evaluate their usefulness. These links are also maintained to ensure that after-sales service and maintenance are provided.
As for links with financial institutions, these refer mainly to links with commercial banks which are used for normal banking transactions. In addition, the services of insurance companies are also required for the insurance of the assets of the firms.