4 Best Practices for NGO when expanding in Africa

Why does it matter? Depending on its classification, your association may be eligible for tax-related benefits. Such is the case in South Africa, where, amongst (namely Voluntary Associations established under Common Law, Non-profit trusts established under Statutory Law, and Non-profit companies incorporated for a public benefit objective), only Non-Profit companies bearing the status of Public Benefit Organisations (PBOs) carrying out certain activities may apply for partial exemption from levies, as compared to the two other categories of NGOs, which are not eligible for the same benefits This is an important factor to consider in order for both auditing and reporting purposes, which may vary according to the country of expansion.

2. Diligent reporting

Given that much of NGO operating funds come from investors and donations, transparency and accurate reporting are essential in offering stakeholders a view on the distribution of funds. However, keeping accurate records of spending across international borders and governance procedures can make it difficult and resource-intensive for NGO employees to manage satisfactorily.

For instance, if an NGO is managing their employees’ payroll in house, money will have to be sent across borders and through multiple financial institutions, which may take a considerable time, with likely delays in the process. Further, African countries have different legislations with varying levels of stringency that usually depend on a country’s adherence to, which aims to protect NGOs from terrorist abuse and mitigate the chances of money laundering. Under Mauritian and Kenyan law, for example, non-profit organisations have a strict duty to keep proper records of all sources of funding, financial transactions, assets, and liabilities for auditing purposes.  

How an Employer of Record can assist: NGOs may be hesitant to dedicate some of their limited resources to managing these complex financial processes successfully. An Employer of Record can take on this role, ensuring accurate and compliant reporting for stakeholders and governments alike. Reducing the amount of admin-related tasks and responsibilities from employees allows them to invest their time and energy in creating value for the organisation and community around them.    

3. Adopt an inclusive policy

Referencing the African Charter on Human Rights, there is a set of basic human rights and freedoms that all people on the African continent should enjoy. Given many African peoples’ sordid history with injustice and discrimination, NGOs need to be very careful as to how they position themselves and their purpose within different African regions, ensuring to account for subtle nuances in customs, cultures, views on sexuality, disability, and political standings. As NGOs employ local Africans, it is important to understand what fair and equal treatment entails, to ensure to uphold a country’s human rights and to ensure adequate protection of employees against discrimination. Inclusivity and fair labour practices work to promote an NGOs positive reach, as well as aligning to the NGO’s own mission and values.

How an Employer of Record can assist: AHR has worked successfully in Africa for 20 years, and our consultants have a deep understanding of the common practices and way things are done in the different regions. Partnering with an Employer of Record, such as AHR, ensures an NGO has a dedicated ally who can help them recognise cultural sensitivities and create safe and equitable work environments based on a country’s legislation.

4. Comply with domestic employment laws throughout the employee lifecycle

Compliance around contracting, onboarding and eventual offboarding of new employees poses significant challenges for new or expanding NGOs in Africa.

Direct compliance implication in terms of financial reporting and auditing.

Contracting: If it seems that finding the right candidate for a post at an NGO was the most challenging hurdle-think again! As an NGO begins to contract with new employees, ensure to account for the various domestic employment laws necessary for contracting with that employee. Significant differences exist between countries when assessing minimum wage, leave, benefits, working hours and the requirements for local vs expat workers. An NGO needs to be aware of these nuances in minimum requirements to ensure they operate compliantly.  

How an Employer of Record Company can assist: In the contracting stage, an Employer of Record, together with their In-Country Partner, are experts in contracting and basic employment requirements. All the NGO needs to do is provide some basic information to the EOR, who then takes the responsibility of creating the legally acceptable contract. Once the NGO is comfortable with the contract, the EOR manages the finalisation of the process with the successful candidate. Nice and simple!  

Onboarding: Once contracting is complete, the next challenge is to onboard the employee into the payroll system and pay them accurately and timeously through payroll. For payroll to be accurate, employees need to be appropriately registered with the relevant tax authorities and regulatory bodies to ensure that all payments, tax withholdings, mandatory benefits and employer contributions are in alignment with the statutes of law. For instance, in Mauritius, an employer has the statutory duty to pay part of the registered employee’s income tax, the remaining sum of which is paid by the employee themselves. In other countries, such as Senegal, employers must cover their employee’s medical insurance. Not adhering to these regulations when running payroll can lead to expensive penalties, as well as damaging the reputation of the NGO in the country.

How an Employer of Record can assist: In the onboarding phase, an Employer of Record takes on the legal and tax responsibility in ensuring to practice in a compliant manner, with a strict focus on governance and reporting. Our team of payroll consultants are experts within the African regions, and will process payroll in line with any new legislation to ensure your employees are paid promptly and correctly.

Terminating: Over time and for various reasons, all employment relationships come to an end. Most often it is a mutual agreement, with the employee retiring, seeking a new career path and opportunity or taking an extended time off work. However, unfortunately, there are cases where the termination can be difficult and sometimes messy. For instance, should an NGO wish to dismiss an employee for poor performance in South Africa, they would need to follow a specific set of procedures based on the reason for the dismissal, including showing that they have followed a process of progressive discipline, as well as giving the employee the opportunity to upskill and correct their performance. Should an NGO not follow these processes, the dismissal can be contested in court and classified as unfair dismissal and may require the NGO to provide 12 – 24 months of compensation to the employee. 

As termination is the last step of employment relations, it is important to focus on creating positive employee experiences, as it will impact how the employees view you as an employer and whether they go into the market as an ambassador or detractor from the NGO. Employee experience is very much influenced by adherence to legislated procedures in each country, so prevent contravening any rights or standards of employment.

How an Employer of Record company can assist: In partnering with an EOR, such as AHR, termination of any employment contract is done based on accurate labour law knowledge and with legal support. AHR has a dedicated legal team, who are experts in labour law within the different countries, who can recommend appropriate documentation to collect and action steps the NGO may take in throughout the employee’s time at the NGO.

To be successful in Africa, NGOs need to ensure that they ‘get the basics’ right. In setting a strong foundation of compliance and fair practice in an employment relationship, an NGO may begin to stand out as an equitable and principled employer, fostering trust and transparency within the workplace, whilst they fulfil their mission of bringing aid to others. An Employer of Record, such as Africa HR Solutions, can help NGOs to establish these strong foundations, shouldering the legal and administrative burdens of day-to-day business to allow the NGO to do what it does best: bring lasting change in Africa and the African people.