How can I be successful in Africa
Africa’s potential as a growing business market is under-appreciated and misunderstood, as is the possibility for businesses to contribute to solving the biggest problems facing Africa.
The rapid growth of the African population and market offer significant opportunities for businesses in the context of declining global economic growth.
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However more business innovations and investments are vital to satisfy the unmet demand in Africa for products and services, filling the gap in the country’s infrastructure to create jobs and help reduce the rate of poverty.
In this article, we outline the magnitude of African business opportunities in the key sectors , and suggest steps that entrepreneurs can adopt to convert the opportunity into sustainable, profitable ventures.
In order to run a profitable business in Africa it is crucial that our clients are aware of local business practices. Although the tips below are applicable to the entire continent however, consult this page for more info and what ventures are more encouraged.
1. The shortage of talent.
I once attended a business summit, Nearly all of the participants in the business summit acknowledged the serious shortage of talent they had to deal with in Africa,partly because the talents has been promised greener pastures by the developed countries, this has allowed a decline in the number of skillful people within the country. Replicable models could be adopted and this can enable more effective training and sharing of experience which allows individuals to learn quicker which should be the solution to the shortage of talent.
2. Infrastructure challenges.
In numerous African countries there are a lot of operational complexity. “And you face them on a daily basis with so many unforeseen crises, it is imperative that a sustainable environment is created to support and cultivate such minds.
3. The delivery gap.
In uncertain markets, a reliable customer service is an important competitive advantage. “If we can consistently keep the promises we make with simple delivery models, we can win,”.
4. Succession problems.
Many of the founders of successful African companies are now handing over their business to the future leaders. They are keen to turn the work they do in their own heads into a reproducible model that can last longer than their time. this causes a gap of competencies between the balance of local adaption as well as the global scale of complexity.
There is a lot of pressure on companies to adjust their offerings and methods of operation in the local African markets. The more they discover similarities between markets using replicable models, the better they can simplify their offerings.
With more than 2 000 languages in use, Africa is the most culturally diverse area around the globe. English is widely used throughout the northeast region of Southern Africa, but Clients who conduct work with service providers in Northwest African region will need to employ a French or Arabic translator to properly conduct business.
If an opportunity in the market seems too appealing to be real in Africa, It most likely is. “It is sometimes referred to as yahoo” Be aware that African countries have an extremely clever fraud business that earns money by promising entrepreneurs who aren’t aware of big dealings.
Solid relationships are essential for conducting businesses in Africa. We advise our clients to attend the gala meals, trade fairs, and exhibitions that are held in the country to establish a form of familiarity.
In many African countries managing local bureaucracy could be a challenge for entrepreneurs. The public administration can provide little or no solutions to your issues as well as the business “gifts” will often be requested by authorities to accelerate processes. So be careful with authorities as this can immediately sink your business especially if you dont have a trusted local aiding you.
For many African countries the importance of titles is high, so make sure to address potential clients with the correct title, such as “chief”, “prince”, “boss” or “engineer”. But, a good sense of humor is necessary when attending meetings. The majority of African professionals are known for their jovial nature and engage in banter at meetings as well as when conducting businesses.
The problem of ethnicity is prevalent in also, be aware of the race of the local company partner(s).Their ethnicity can influence your opportunities in the marketplace, since local businessmen are more likely to favor their own communities when signing contracts.
Companies could enhance their brand-building and marketing strategies by focusing on African customers not just using global networks like Twitter or Linkedin but also the most popular local networks.
Foreign investors aren’t always welcome within Africa: Indian businesses suffered persecutors during the war in Uganda, Caucasian farmers were expropriated in Zimbabwe and anti-Chinese sentiments are now spreading across the entire continent.
Many African countries are extremely unstable, and therefore, you may want to consider purchasing insurance against political risk. It is recommended to use the World Bank’s Multilateral Investment Guarantee Agency (MIGA) as well as a number of government institutions for the development of countries, offer insurance options to protect these risks.
Finance is a constant issue in Africa and it is important to talk to lenders as early as possible. Although African banks aren’t always reliable, new ventures can look for support from non-profit organizations and microcredit institutions, particularly if they prove that the project will benefit the local population.
While the successful companies of Africa differ in their geographical and business area of focus, what they share in common is an ability to see Africa’s insatiable needs as an opportunity to be entrepreneurial, as well as the commitment for the establishment of businesses on a significant size. In reality, the fastest-growing and most profitable companies in Africa tend to view the challenges as an opportunity for the development of new ideas.
The most successful African innovative entrepreneurs are aware of the challenges to their business success, and are keen to incorporate the long-term sustainability of the business model they employ.
Think of the Nigerian-based Dangote Industries, which manufactures products in huge quantities and has made the founder Aliko Dangote Africa’s most successful businessman. Dangote has developed a robust manufacturing system that can withstand shocks by vertically integrating the supply chain as well as on-site power generation solid engagement with the government, as well as an in-house manufacturing school.