African Dream: Malawian business tycoon Mike Mlombwa on red tape

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Media captionCar rental firm owner Mike Mlombwa says: "Do not be afraid to take risks"

Mike Mlombwa is a Malawian business tycoon who, as a teenager, walked about 50km (30 miles) from his village near the southern border town of Mwanza to the commercial capital, Blantyre, because he could not afford a bus fare.

He managed to raise the money to buy two second-hand cars and today owns a car rental company, with a fleet of more than 70 vehicles.

As part of the latest series of African Dream, Mr Mlombwa shares his tips on dealing with red tape, which he describes as one of the major obstacles to doing business in Malawi:

  • Identify all the regulations so that you understand the expectations of the regulator and the penalties for non-compliance for each measure. These can run from warning notices to simple fines and legal judgements and, in some health and safety cases now, personal liability claims on individuals in the company
Image caption Mike Mlombwa started his business with two second-hand cars
  • Consider positive questions such as what outcomes are the regulations trying to deliver? What stance are your competitors or industry peers taking? Can you gain a competitive advantage or improve your business' standing by leading on a particular regulation? Do you want to be seen as "best in class", "one of the pack" or "just doing the minimum" to comply?
  • Focus on those which will make a big difference to your business, positively and negatively. Categorise and rank them by importance, on a region-by-region and project-by-project basis

Did you know?

The term "red tape" dates back to the 16th Century when Henry VIII of England besieged the Pope with around 80 petitions regarding the annulment of his marriage to Catherine of Aragon - each one bound and sealed with the obligatory red cloth tape.

Even today, most UK legal documents are bound with pink or red tape.

In the US, the phrase originated from the practice of binding Civil War veteran records in red twill tape.

  • Identify business partners to see how they can help you manage your regulatory burden
  • Empower your managers by giving them the tools, key performance indicators (KPI) and guidance on managing regulations so that they weave compliance into their roles, and not treat it as an add-on
  • A culture change is often required so give staff support and add training to the mix resources
  • Develop a compliance dashboard and reporting tools for senior managers so that they can track trends. Identify and reward the leaders in the organisation and measure the impact of good compliance on the bottom line
  • Build an audit trail because simply being compliant is of no use if you cannot demonstrate it easily to regulators

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