Africa has failed to unlock the latent value of its local communities, because it has not looked outside of the box and been innovative, former Tanzanian President Benjamin Mkapa said in Johannesburg on Wednesday.

Speaking at the launch of the Business for Development (B4D) Pathfinder initiative, which would give businesses in the Southern Africa Development Community (SADC) the opportunity to contribute to the region's economic development, while ensuring the sustainability of the communities they worked in, he noted that more communities had to become consumers and suppliers in these economies.

The local market and consumers played a significant role in "oiling economies", especially during difficult economic times, he added, highlighting that the countries which were less reliant on exporting goods to foreign markets had been most resilient during the global economic downturn.

Communities and the poor had to be empowered so that they too could have purchasing power and contribute to the economy.

The B4D Pathfinder initiative, which was being driven by the Southern Africa Trust and the SADC Employers Group (SEG), was aimed at getting business and other stakeholders share the responsibilities and create opportunities together to ensure poverty alleviation in the region.

It would contribute to sustainable development by integrating low-income communities into a company's value chain, while retaining profitability and upholding the principles of corporate social responsibility.

Southern Africa Trust trustee Riah Phiyega noted that it was everyone's business to find lasting solutions to ensure the region could mediate the cycle of poverty.

SEG chairperson Jerry Vilakazi said that the initiative had the potential to make a significant impact in the region and had much to offer the continent, which was still confronted with the challenge of poverty, despite its wealth of resources.

He said that business' participation would be key to the success of the initiative.

Mkapa stated that not only political governance, but also business could be inclusive. He added that this could also silence concerns over foreign ownership of companies in certain countries and lead to greater stability in the region.

By promoting inclusive business, the poor would be provided with opportunities to get themselves out of poverty, he highlighted, saying that just because a person was poor did not mean he did not have good ideas. There was often simply a lack of opportunity.

He urged business, government and civil society institutions to embrace the initiative and to play their respective roles in making it a success, adding that the payback could be enormous and assist the continent in meeting its Millennium Development Goals in terms of poverty.

Mkapa also emphasised the need for regional coordination to ensure the success of the project.

B4D BENEFITS

Southern Africa Trust head of programmes Dr Themba Mhlongo pointed out that the inclusive business model would benefit companies, government and local communities.

A wider market share, new consumers, import substitution, better relations with government and the local communities and lower operating costs were just some of the benefits companies could expect.

Local communities would be involved in the value chain of business, be able to improve their living conditions, have better access to credit and access to information and technology, among other benefits.

This would also result in increased tax revenues, improved social services, easy access to lines of credit and an improved business climate to the benefit of government.

The B4D Pathfinder initiative consisted of three products, namely the B4D Charter to set out the aspirations business and stakeholders want to achieve, the B4D Barometer that would help businesses to include the poor in their value chains and to promote public accountability and the B4D Toolkit, which would provide a set of knowledge-based tools to guide a company towards best practise.

Participating businesses would be ranked according their performance, with a level four business achieving the highest "Gold Standard" ranking.

Mhlongo emphasised that the initiative was still in a consultation phase, with the products still to be refined and a market developed.

The projects would then be piloted before being upscaled, he noted.

Mhlongo noted that there were 15 countries that would participate in the consultation process, but said that the trust was hoping to conclude the consultation and piloting phases simultaneously.

If there were no objections during the consultation phase in a certain country, piloting of the initiative could go ahead in that country.

Mhlongo said that trust hoped to have the consultation and pilot phases completed by the end of the year so that it could start scaling up the implementation of the initiative.