How to Do Business in Africa
With the help of experienced B2B sales consultants, it is possible to exploit the excess potential of the African market. With these B2B sales advisors, you can reach the right business contacts in Africa. Africa`s rapid population and market growth offers significant opportunities for businesses in an environment of slowing global growth. At the same time, it is essential for the economy to scale up innovation and investment to meet Africa`s unmet demand for goods and services, close infrastructure gaps, create jobs and reduce poverty. Here, we describe the scale of African business opportunities in key sectors and suggest steps investors can take to turn these opportunities into profitable and sustainable businesses.1 Africa`s strong reform offensive is clearly a cause for celebration. The sad truth, however, is that the world`s hardest places for business are still largely in Africa. Only two countries in sub-Saharan Africa rank in the top 50 for ease of doing business, while many in the bottom 20 are from the region. African innovators are often motivated by a deeper purpose. They examine Africa`s high levels of poverty and its shortcomings in infrastructure, education and health care, and see the human problems they feel responsible for solving. Strive Masiyiwa, President of the pan-African group Econet, said: “Africa is a continent with extraordinary challenges, and it is an avoidance maneuver to wait for governments to deal with it. If you see a problem, think about how you can solve some of it.
Simon London: And as always, thank you, our listeners. If you want to learn more about Africa`s business revolution, you can buy the book online or look for it at your local bookstore. Or visit us in McKinsey.com. In order to run a successful business in Africa, it is imperative that our client understands local business practices. While the following tips apply to the entire region, it will be helpful for our clients to refer to our success tips for each country. If you`re planning to reach a new region for your business, you definitely want to focus on the big players in the market. This is exactly why the Internet is so useful for Africa. Togo`s impressive list of reforms included the launch of an online application portal for building permits, which saved developers time and stress. At the same time, Nigeria has made it easier to open a business through an improved online platform, reduced the cost of building permits, and created a new Small Claims Court to handle commercial cases. Nigeria has implemented reforms in six of the ten areas measured by the Doing Business report. Acha Leke: In any case, I think diversifying your portfolio makes sense. We`ve found that the most successful companies are usually in multiple countries, because as I said, you never know when something might happen.
If you look at the most successful multinationals, they have been to ten or more countries and they have been here for a long time. So this is one of them. But the second thing that`s important is that in building these companies that have over a billion dollars in revenue, we`ve also realized that it`s very difficult to build a billion-dollar business if you`re not in one of the three economies. Over the past decade, sub-Saharan Africa has become the world`s leading reform region. In 26 of sub-Saharan Africa`s 48 economies, an entrepreneur can now register a business in 20 days or less: a decade ago, this was only possible in three countries. More than 40 executives attended an IMD Discovery event that explored some of the opportunities and challenges of doing business in Africa, the third fastest growing region in the world. Guest speakers ranged from multinational and African business leaders to a local entrepreneur and a veteran journalist with a special interest in the continent. Participants from various industries and companies with different levels of engagement in Africa shared their experiences and contributed to the debate. Georges Desvaux: One thing that is very clear in Africa is that you really have to think about the product and services and be able to innovate. You could say that in most markets around the world, but I think it`s particularly relevant in Africa because the needs will be quite local. You have to think about colors, tastes, and prices, and so it`s not about replicating a business model or services that have worked elsewhere. While the traditional innovation model is based on the global marketplace, the new “reverse innovation” model targets the lower to middle level of local markets, and the middle class is being redefined to include those who spend $2 to $20 a day.
Value-based innovation alone is no longer enough; Business system innovation is also needed. Value innovation starts with the need to be satisfied and works backwards to develop solutions at the right price by thinking beyond functions and focusing on value and customer value. It considers whether features should be reduced, eliminated, improved, or added. One example is M-Pesa, the mobile money transfer service for Safaricom and Vodacom in Kenya and Tanzania: through a simple app located on a phone`s SIM card, people who may not have a bank account can access financial services, including: transferring money from one person to another; the purchase of credits for airtime; payment of wages, salaries and invoices; and the purchase of goods and services. Innovation in the business system involves innovative and efficient ways to bring products to market. While most foreign investment targets the most populous and developed countries such as South Africa, Nigeria and Kenya, there are opportunities to do business across the continent. Stéphane Paquier, president of Dow Africa, cited some positive megatrends: The ease of doing business, if you look at the World Bank ranking. Many African countries are at the bottom of this ranking.
Some have improved considerably. Nigeria, for example, moved up 24 places last year. Overall, doing business in Africa means not only building good relationships with your customers, but also treating them with the utmost care and attention. The 53 countries differ in terms of laws when it comes to doing business in Africa. However, culture and geography can be studied in general. To minimize the exploitation effort, the continent can be divided into four regions: South Africa, East Africa, West Africa and North Africa. Georges Desvaux: These barriers are real. But they must be put into perspective, are they addressed? Are they improving? Regional groupings – East African Community, in these regions you can see that trade is increasing by 15% or more.
