New Ways to Make it in Africa
Most people do not realise that the United States, China, India, the entire Western Europe and a few more countries actually fit into the African continent . . . It is after all the world’s second largest continent and also the second most populous continent (Asia is of course at the top).
Vikram Mansharamani writes about the size of the African continent and the massive population growth, in this article Don’t Ignore Leaping Lions
Source: Kai Krause - The True Size of Africa
In my experience on the continent, many multi-nationals and even smaller and medium sized businesses wanting to expand into Africa, tend to think of Africa as “Africa”. It is ONE place in their view, while in reality they forget that Africa consists of 54 individual countries (this excludes Western Sahara whose statehood is disputed by Morocco).
If you want to expand your business in Africa, then don't think Africa, rather think individual countries. There are many approaches, such as Ernest & Young’s 5 critical success factors (see this post), and I agree with the merits of their “Perspective, Planning, Places, Partnerships and People” success factors. Before I comment further, remember that you should not settle on ONE approach, take the best from the many “strategies” on offer . . .
I think everyone reading this understands “Perspective and Planning” in any business expansion initiative, but I think the more important aspects, especially in Africa, are “Places, Partnerships and People”.
Let’s have look at “Partnerships and People”. I have been visiting many countries in Africa since 2001 (and have lived in Africa my entire life), but from my first visit to other African countries, the “Partnership” factor was evident. You will not do business successfully if you do not have the right Business Partners, and I mean a credible, reliable, in-country partner who can represent your business, products and services. We all know some or other “horror story”, but with the right Business Partner you already have access to their relationships. They know the landscape, they understand what (local) clients want, and how to navigate the “local processes” (legislative, business etc). Easier said than done, but we’ll get to that later.
When you eventually do create your own presence in a country, then “People” will probably be the most difficult challenge. I have conducted some real “interesting” job interviews while my local business partner does the “translation”. I would ask a question and the candidate provides a lengthy and serious response, the translator would respond to me: “He said YES” . . . :-) There are some great people out there, finding them and keeping them is the challenge. Again, not an insurmountable challenge but a separate discussion in it’s own right.
Finally, “Places”, and this is where I started the discussion. Africa is BIG, but there are many potential “hubs” where you can start. Many large multi-national companies spend time, effort and money on analysing the size of the market, and don’t get me wrong, this is crucial. BUT there are many other factors to consider, such as ease of doing business, cost and time to set up a local legal entity, who can own shares in the local entity, who should be directors etc etc. Harnet Bokrezion (PhD) provides a different perspective and highlights 10 countries which may have been “less obvious” choices than the traditional East Africa hub in Kenya, West Africa hub in Nigeria and so forth. Consider “Good Governance” and you will see the Top 10 countries may be rather surpising. Here are the Top 5 (from the article which you can find here):
- Mauritius – TOPS Mainland Africa as a business location
- Cape Verde - Where you can start a business, well,.....tomorrow.
- Botswana a business gem that produces......gems
- South Africa.....The story of staying put and getting there
- Seychelles: and why it has more to offer than beauty
Accenture basically confirms this discussion with their “Three critical success factors” for expanding into Africa. (1) Create geographic Options, (2) Be Authentically local and (3) Network the organization. I also mentioned this here.
With this backdrop in mind, the question remains how do I find the right Business Partners, and People, and Business Opportunities in Africa, when I’m not a large multi-national with a big budget. ABCONN, Africa Business Connect is about to launch, ABCONN is a convergence of Social Networking with the principles of a Chamber of Commerce. Research by The Shapiro Group and Market Street Services, found that when consumers know that a small business belongs to their local Chamber of Commerce, they are 44% more likely to think favorably of it, and 63% more likely to purchase goods or services from that company in the future!! It’s an purely Online Chamber of Commerce offering business networking in delighfully new ways, highlighting business opportunities and even provide a platform to buy and sell products/services. Let’s not give everything away here, ABCONN will be launching 4th May 2015, in the mean time you can follow the ABCONN LinkedIn company page AND/OR join the ABCONN LinkedIn group
In the coming weeks we will provide members of the ABCONN LinkedIn group a sneak preview of the ABCONN platform, PRIOR to the public launch scheduled for 4th May 2015.