In an interview with CNBC Africa, Sam Darwish, Executive Chairman and CEO of IHS Towers, discussed research recently commissioned in partnership with the Economist Intelligence Unit and IHS Towers on better understanding Nigerian SMEs. Sam Darwish commented that the report recognizes the efforts of government institutions in supporting SMEs but also importantly shines a light on the innovative thinking embedded in this vital part of Nigeria’s economy. Sam also indicated that the importance of mobile telecommunications and its role as a leapfrog technology is readily apparent from the commissioned study, affirming IHS’s belief that an enhanced mobile network materially contributes to the growth of both urban and rural businesses, with the potential to reduce societal inequality. IHS Towers is the largest mobile telecommunications infrastructure provider in Africa, Europe and the Middle East currently owning and operating over 23,100 towers in Nigeria, Cameroon, Côte d’Ivoire, Zambia and Rwanda. The company’s infrastructure and tower sharing model coupled with its renewable energy capabilities to power the towers is crucial to telecoms accessibility for millions of Africans.

1. Growth Prospects For Nigeria’s SMEs
By CNBC AFRICA on June 5, 2015
Cele: Walk us through the key findings of
the research result commissioned by you
and the EIU.
Darwish: We commissioned the economist
intelligence unit few months ago to do a
detailed analysis on the status of SMEs in
Nigeria in particular being the largest economy
in Africa. We’ve always suspected that SMEs
have an important role to play but we wanted
to understand what is the level of that role? We
are shocked to realise that 90% of all
businesses in Nigeria are SMEs, 90% of the
workforce are employed by SMEs. We were
positively and extremely surprised that the
massive ICT revolution and growth over the
past years have contributed to and facilitated
the evolution of SMEs.
Cele: What does it mean for a private player and a big player that you are; not
only in the Nigerian space but on the rest of the continent, does this alert you
to developing programs that can help SMEs and ensuring that you are
considering these entrepreneurs in your procurement and pipeline strategies?
Darwish: Definitely, this report is comprehensive; it looks at the state of SMEs in
Nigeria in particular. We realised that in Nigeria, SMEs have several issues, starting
with their policies. In Rwanda, the Government decided that taxes are paid online
through an e-finance system; this has reduced the number of working hours to
produce tax reports from 900 in Nigeria to 200 in Rwanda.
Nigeria needs to create things like that- although the registration cost has been
reduced by 60%, the request for the presence of a lawyer to register an SME has
been waived, so policy is quite important to simplify tax, to reduce customs laws and
to create a more enabling environment.
Other sectors of the economy need to play a role. In Nigeria, we found out that only
14% of SMEs have a bank loan overdraft, this is abysmal; no business can function
without the support of Banks. Banks need to relax their requirements, find a way to
work with these SMEs, engage and mentor them. This is the key finding we need to
look at in other countries in Africa.
Cele: As an entrepreneur who moved to the African continent in 1998 and has
managed to build a power house which is not struggling to raise capital or find
new opportunities, do you think something also needs to change in the mind
set of Nigerian and African Entrepreneurs to improve their capital raising
efforts?
Issam Darwish

2. Darwish: Yes, definitely. Entrepreneurs need to improve their governance
structures, book keeping, transparency needs to be prioritised. Most Entrepreneurs
just go after the sales and cost reduction aspects but there are many other aspects
to the creation and growth of their businesses. Banks find it hard to work with these
entrepreneurs based on the aspect of governance and book keeping and I advise
and encourage SMEs and Entrepreneurs to invest more in that.
Cele: IHS from the operational perspective now takes care of 23,000 towers
across the African continent and you have raised quite a bit of money for your
capital expenditure going forward. Give us an operational update on how the
company is going and what new targets have you set for yourself?
Darwish: IHS is the largest tower company in Africa, Europe and the Middle East
and we are extremely proud of that being a company of African Origin, we started in
Nigeria in 2001.
Today we operate in five African companies, we own most of the 23,000 towers you
mentioned; we were extremely aggressive on growth last year, we moved the
number of towers we owned from around seven to eight thousand to twenty-three
thousand within the next few months as we close the second tranche of MTN in
Nigeria.
The focus now is on consolidating this portfolio and improving the cost base which
means it is good for our shareholders as we reduce the cost but more importantly, it
means investing in solar energy, investing in more efficient power systems that can
substantially reduce the cost of operating these towers and it is equally important to
eliminate diesel.
It is a shame that we emit so much pollution because of the hundreds of thousands
and millions of generators.
Our mission as a company aside from making money for our shareholders is to
eliminate the diesel burnout on our towers.
Cele: It was such a pleasure having you with us and hopefully, the initiatives that you
deployed at IHS will have a ripple effect on the entrepreneurs not only in Nigeria but
across the continent.