It’s important to adapt business models developed elsewhere to the context of the African market, says Eleni Gabre-Madhin, founder and former CEO of the Ethiopia Commodity Exchange, in an interview in HowWeMadeItInAfrica.

Gabre-Madhin spoke at the Investing in African Mining Indaba in Cape Town earlier this month. The success of the Ethiopia Commodity Exchange (ECX) resulted in several awards for Gabre-Madhin, and she is considered one of Africa’s most respected business leaders, the report said.

“It’s critical to find the African solution to the businesses that we build,” Gabre-Madhin said.

She illustrated this point with an anecdote she remembered from several years back when software was being developed for the ECX’s electronic system.

While delivering coffee to a warehouse outside Addis Ababa, a supplier was asked for a number of details needed for the ECX system to accept the commodity.

One of these requirements was the licence of the vehicle that brought the commodity to
the warehouse. The supplier said he did not have a vehicle licence number and since
the clerk could not override the system without it, an argument started.

Turns out the supplier had brought his coffee to the warehouse using donkeys.

“So we have built an electronic system but the reality is that people are still using donkeys
to transfer a commodity to our market,” Gabre-Madhin said. “We (had to) go back to the drawing board.”

Gabre-Madhin said there are many similar examples that highlight the constant tension between global standards of systems and processes and the reality of the people “that we are working for and with.”

For business success in Africa, Gabre-Madhin said companies must get local political players and market actors to buy in, in addition to understanding the market.

“And I think all of this actually leads to not only understanding the context, but innovating
the right solution and tailoring that solution with all the global knowledge that foreign
investors may bring,” she said. “At the end of the day it’s an African company, it’s an African business that’s been built, and it’s going to be employing African people so it has to be a solution tailored to the context, in recognition of all those challenges and constraints… and equally the size and dimensions of the opportunities that are available.”

Gabre-Madhin is co-founder and CEO of eleni LLC, a new company that is incubating and supporting the formation of commodity exchanges across Africa.