A Multi-National Company is a corporation that is registered in more than one country or that has operations in more than one country. It is a large corporation which both produces and sells goods or services in various countries. It can also be referred to as an international corporation. MNCs play an important role in the field of business world over.
In Uganda, examples of MNCs include MTN, Barclays Bank, Citi Bank, Tullow Oil, Shell, Total, BAT, e.t.c.
Women face numerous challenges in trying to do business with MNCs as enumerated below;
The gender card
Historically due to cultural, religious and tribal beliefs, women have been labeled as not being business orientated. Of course a number of women have challenged this cliché but others have come to take on this ideology. They have an inferior complex and low self-esteem surrounding operating businesses. This has led to some Multi-National Corporations (MNCs) to doubt the leadership and productivity of some women owned companies that seek to supply to them. This bias has proved a hindrance to having women owned businesses to supply into MNCs.
Limited adherence to contract requirements
Most women owned businesses are often SMEs and as such they encounter challenges with meeting the supplier requirements of large MNCs such as packaging, brand consistency, product quality and standards e.t.c. Most times MNCs come with their set standards that need to be met, but unfortunately few women owned businesses can meet them.
Limited access and cost of credit
In Sub-Saharan Africa, there is a chronic problem of access to business credit. Even when it is available, it is too expensive for an average business person. Moreover, lending institutions require collateral which many women owned businesses do not have. This constrains their ability to finance their commercial activities and be able to supply to MNCs.
Unfair competition: Not all local services providers are as indigenous at it seems on paper
A very regular occurrence is that a lot of companies are owned by foreign nationals who have recently acquired Ugandan passports. They incorporate companies which are later contracted by MNCs. Some people are using such kinds of avenues, thus there is an urgent need to clarify who exactly is a Ugandan company. For example, In Kenya, the definition of a Kenyan company is one, where 51% of the shares are owned by a Kenyan or Kenyan nationals. In Angola, it’s 70% and they use the word indigenous; it means that person has to be indigenous to Angola. This safeguards local companies from this trickery because foreigners can come, incorporate companies, purport to be Ugandans and leave Ugandans out.
Lack of affiliation to sector associations
A large number of women suppliers are not members of sector associations. These associations are at the forefront of ensuring the inclusion of Ugandan companies in a specific industry. For example, the petroleum industry has an association called the association of Uganda oil and gas service providers. This group brings together Ugandan suppliers who are involved in the oil sector. Because of being locked in their own silos, women miss out on the collective bargaining power, standards and contracts awareness, access to cheap credit, lobbying for better local investor treatment etc. For example under the association mentioned above, if an MNC requires a company to supply welders, the association will back one company, offer bid security and try to make sure that they render available support for their member to win the tender because as a group they have much more clout. A sole company can achieve little individually; there is always need for a much bigger, stronger entity.
Informal nature of most women owned businesses
Most women owned enterprises in Uganda are not formal in nature. In most cases, they are not legally registered, do not pay taxes, and do not keep clear records. Most MNCs however like to deal with formal companies who have proper books of accounts, trade licenses and a credible credit history. Many women owned companies do not have these and hence lose out on doing business with MNCs.
Limited consideration for local content
In some countries, there are provisions for MNCs to have special consideration for local companies in terms of contracts. Certain categories of supplies must be made by locally owned companies including those that are owned by women. This affirmative action enables SMEs owned by women to access business with MNCs. This system should be replicated here to give special consideration to locally owned companies to supply to MNCs.
Lack of information
Most women owned business are not exposed to information relating to available contracting opportunities in MNCs as well as on the procurement and disposal procedures used by MNCs. This has left many local supplying companies in a vacuum and thus miss out.
Lack of relevant skills
A lot of women lack relevant skills to engage in business with MNCs. The skills they lack include business management skills, resource mobilization skills, negotiation skills, ICT skills, marketing skills e.t.c. This is a big hindrance to doing business with MNCs.
Proposed way forward from the Uganda National Chamber of Commerce and Industry (UNCCI)
- Women need to change their attitudes and be more outspoken, confident and proactive to operating businesses.
- Private sectors players like UNCCI should increase their lobbying for access to finance for women in business to bodies like the East African Development Bank through partnerships with women CSOs.
- There is need to avail and make accessible to MNCs supply tender and contract information easy for women to take advantage of.
- Partnerships and joint ventures between Ugandan companies and other outside companies that are versed with standards and experience should be encouraged, so that after a certain period of time, Ugandan companies will have acquired standards and skills, and then take over.
- Sensitize women to have their businesses formalized.
- Encourage women owned business to form/join associations for collective bargaining
- Increase the ease of access to credit
Olive Zaitun Kigongo is a Hospitality Industry and Interior Decoration Executive. She is the current President of Uganda National Chamber of Commerce and Industry (UNCCI). Ms Kigongo, has held several leadership positions which include; Managing Director of Mosa Court Apartments, Homes Ltd, Global village Investments. She is currently the Managing Director of Amagara Skin Scare and is a Patron of Young Achievers Awards.