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In the middle of difficulty lies opportunity

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Taking risks is part and parcel of the life of an entrepreneur. Once you are in business you need to manage the risks that will come your way. The financial crisis in 2008 was a wake-up call for every business leader to be aware of risks and to address them as a matter of urgency.
Risk management is now being emphasised as one of the key responsibilities of directors. Failure to do so can result in the board being dragged to courts because of negligence. The Board of Directors is responsible in overseeing risk.

Risk-taking is inevitable if an organisation is to achieve its objectives. Taking and managing risk is the very essence of business survival and growth. Organisations that are more risk aware appreciate that actively managing potential problems, threats or risks provides them with a competitive advantage.
An opportunity that avails itself to an organisation has some risk attached to it as Albert Einstein once commented, “In the middle of difficulty lies opportunity”.
A business will exploit the opportunity as long as it’s within its risk appetite and also as long as the return to be achieved will be enough to compensate for the risk.
To navigate the murky waters of entrepreneurship you need a risk management framework. An effective risk management process requires a framework that will identify, assess, control, monitor, and mitigate exposures. The tone to deal with risk or manage risk should be spelt out in the organisation’s strategy.

This shows the board’s and senior management’s commitment in dealing with risk. Risk management starts with the definition of business objectives. The level of risk and acceptable levels of risk appetite will depend on the context set by the organisation’s objectives.
Objectives should include an expression of risk appetite, such as the level of available capital or a maximum level of acceptable earnings volatility.

The key steps in any risk management process should include the following key issues:

l Risk identification. It is important at this stage to define what you mean by a risk event. What are the potential risks that the business is exposed to. You need to create a register of the risks that affect your organisation.

l Control framework. You need to come up with the controls that will control or mitigate each of the risks that are identified. Typical controls would include management oversight, information processing, automation, process controls, segregation of duties, performance indicators, and policies and procedures.

l Assessment. Assessment processes will provide the organization with an objective process to determine how well the organisation is controlling the identified risks.

l Measurement and monitoring. The process here is to determine how large or small the exposures are, whether controls are working properly, and whether exposures are changing and subsequently require attention

An organisation that implements effective risk management is likely to improve performance against its objectives. Effective risk management will bring the following benefits:

l An organisation with an effective risk management framework will minimise unwelcome surprises in its performance. Such unwelcome events will have been forecasted and measures to deal with them would already have been put in place. By identifying and managing risks managers can plan well ahead of the problem occurrence. By planning for unexpected events, you can be ready to respond if they do arise. An organisation can also draw up a contingency plan in case of the risk event occurring.

l Management will not spend most of its time engaging in fire-fighting. The process of risk identification and addressing their possible impact in advance will result in a more focussed approach to dealing with risks.

l The organisation will focus more internally on doing the right things properly. These right things are the ones which when implemented will reduce the impact of risk on the performance of the organisation.

l The organisation will craft strategies that effectively deal with any identified risks and thus improve the likelihood of achieving both short and long-term objectives.

l An organisation with an effective risk management model/ strategy will reduce the occurrence of fraud. The internal controls that are put in place to deal with identified risks will have the effect of quickly highlighting any incidence of fraud.
l Organisations with a sound risk process will have higher success rates on their projects than those with mediocre risk processes.

Every organisation should endeavour to have a robust risk management framework so that shareholder value is preserved. Theodore Roosevelt said “Risk is like fire: If controlled it will help you; if uncontrolled it will rise up and destroy you.” Business leaders should see to it that risk is managed.

l Stewart Jakarasi is a business and financial strategist and a lecturer in business strategy (ACCA P3), advanced performance management (P5) and entrepreneurship.
He provides advisory and guidance on leadership, strategy and execution, preparation of business plans and on how to build and sustain high-performing organisations.

For assistance in implementing some of the concepts discussed in these articles please contact him on the following contacts: sjakarasi@gmail.com or WhatsApp +266 62110062.

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Business

Start-up companies win big

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TEN start-up companies were awarded about M130 000 each as capital at a ceremony held at the Limkokwing University of Creative Technology yesterday.
The companies include Rosemore Couture, Techno Map ICT Company, Nkhekhe Innovative Solutions, Travel Tag Lesotho, Weekly Observer Electronic Newspaper, Media Lab Multimedia, and Green Lovers.

The awards were given under the Limkokwing Entrepreneurship Acceleration Platform, part of higher education institutions and corporations and companies that spearhead incubation programme for start-ups.

These Enterprise Support Organisations are from the Limkokwing University through its LEAP, the National University of Lesotho’s Innovation Hub, Basotho Enterprises Development Cooperation (BEDCO), The Entrepreneurs Network (TEN), and Gem Institute.

Each of these organisations was awarded M1.9 million, totalling M9.5 million.

The initiative sprang from Lesotho’s acquisition of a loan from the International Development Association (IDA) of the World Bank to execute the Lesotho Competitiveness and Financial Inclusion (CAFI) Project.

CAFI’s purpose is to enhance the availability of business support services and financial products for Small and Medium Enterprises (SMEs) and entrepreneurs, with a special emphasis on women and youths.

Limkokwing’s Enterprise Support Organisation manager, Lisema Ramaili, said the ceremony marked “a significant milestone into our journey and highlights the impactful work we are doing to support entrepreneurship and economic growth”.

“It also marks a significant step forward in our allegiance to foster innovation and entrepreneurship,” Ramaili said.

“I look back in all the journeys that we have travelled, from application to this programme, consolidating our proposals,” she said.

Limkokwing University’s Vice Chancellor, Advocate Tefo Macheli, said it is good that the small businesses are being helped to stand on their own as Lesotho marks its 200th anniversary.

Advocate Macheli said Limkokwing and the government awarded more than M1.2 million to small businesses.

“The Limkokwing University of Creativity Technology and innovation in cooperation with the Lesotho government made history that small Basotho enterprises are supported,” Advocate Macheli said.

“It has always been a challenge to the youths to start or have their own businesses because they were not supported financially” he said.

He said the Lesotho government is working hard to promote small Basotho enterprises which has not been happening in the past.

The university also provides business space with all necessary resources like water and electricity for its students in the understanding that “students are fresh from school and do not have any means of funds to have their own resources”.

Moleboheng Rose Molatelle, co-founder of Rosemore Couture, said that they first filled application forms with their business ideas and bankable business plans.

“Very fortunately I was among the top 20 that were to pitch and was able to meet the requirements,” Molatelle said.

Rosemore Couture is a clothing company.

Molatelle said the company needs equipment to grow its clothing footprint in the market.

“We need to go on with the production and add more workers so that at end of the day we could have a big company,” she said.

Staff Reporter

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Khemisi bags the big prize

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HOA Hlamatseha is a Sesotho expression that means lots of riches. Econet Telecom Lesotho is running a campaign by that name.

This week, Mamiki Khemisi struck the jackpot after she won the M150 000 prize during the Hoa Hlamatseha #EconetBlueOceans campaign for January.
The winner, from Masowe in Maseru, was announced at an event held at the Sefika Complex on Monday.

The Hoa Hlamatseha campaign allows customers to participate in a series of engaging activities, ranging from sending SMSs to opting-in as they purchase data or calling bundles.

Each participation earns customers points, contributing to their overall tally and increasing their chances of winning the grand prize.

Beyond being a celebration of connectivity, the campaign demonstrates Econet’s commitment to fostering a sense of community and shared joy.

“This campaign, a hallmark of Econet Telecom Lesotho’s commitment to celebrating and giving back to its loyal customer base, represents a culmination of joy, generosity, and community spirit,” ’Mapusetso Ntšekhe, Econet’s General Manager for Marketing, Communications and Customer Experience, said.

Ntšekhe said Econet recognises the importance of cultivating lasting relationships with its customers and understands that customer loyalty goes beyond the quality of service alone.

She added that by organising such campaigns, the company aims to foster a sense of belonging and appreciation among its customer base.

“Handing over this M150 000 grand prize winner for the month of January symbolises Econet’s dedication to make a meaningful impact in the lives of its customers and the broader community,” Ntšekhe said.

“In a world where communication is crucial, Econet is not only bridging the digital gap but also creating a bridge of shared joy and celebration,” she said.

Khemisi joins a distinguished list of individuals who have been positively touched by Econet Telecom Lesotho’s commitment to excellence and innovation in Lesotho’s rapidly evolving telecommunications industry.

Her selection as the grand prize winner serves as a testament to her loyalty and the enduring bond between Econet and its valued customers.

“I’m overwhelmed and equally excited to be announced by Econet as the winner of the M150 000 grand prize,” Khemisi said.

She further noted that “this amazing reward for my involvement in the campaign will be essential towards establishing a juice bottling company that’s already in the pipeline in partnership with my mom”.

By unveiling staggering cash prizes of M100 000, M150 000 and M200 000, Econet is setting a new standard for corporate generosity aimed at alleviating challenges faced by individuals and families in tough economic times.

In addition to the grand prizes, Econet customers also have the chance to walk away with M500 in daily prizes, M2 000 in weekly prizes, and smartphones.

Staff Reporter

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Business

Chicken import ban lifted

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BASOTHO will finally have chicken on their dinner tables after the government lifted a ban on poultry products from South Africa imposed four months ago.
The Department of Livestock Services said the decision was with effect from yesterday.

Keneuoe Lehloenya, who is the Director of Livestock Services, said the department had decided to lift the ban imposed on poultry products from South Africa “except Gauteng, Mpumalanga, Limpopo, and Western Cape provinces”.

She said import permits will be issued only for compartments certified free from the Highly Pathogenic Avian Influenza (HPAI), a serious bird disease that requires a rapid response because it is highly contagious and often fatal to chickens.

Lehloenya said it is South African veterinary authorities that will issue certificates for farms that are free from HPAI.

The import permits by Lesotho authorities will not be given for poultry products from “farms situated near or epidemiologically linked with affected farms”.

“They will not be considered for import,” she said.

The lifting of the ban comes after Agriculture Minister Thabo Mofosi temporarily banned imports of all poultry and poultry products from South Africa due to the bird flu outbreak last November.

The highly infectious bird flu had struck several provinces in South Africa, affecting major chicken farms.

There were reports that South Africa had culled 7.5 million birds, between 20 and 30 percent of its production chicken stock.

Mofosi issued the directive revoking all import permits for poultry and poultry products with immediate effect.

The bird flu outbreak came as South Africa’s chicken industry was already grappling with power shortages which have hit their production.
Chicken is the most imported meat in Lesotho.

In the 2019/2020 season, chicken constituted 81.1 percent of meat imports from South Africa.
Pork was at 15.8 percent, beef at 2.3 percent and mutton at 0.7 percent.

Nkheli Liphoto

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