People often ask me what it is like to do business in Africa. The truth is that most aspects of doing business are very similar to what you would find in the west, however there are subtle differences which affect many aspects of doing business.
I’ve mentioned previously that transportation and electricity infrastructure are much less developed in Africa as a whole and this affects many aspects of business and expectations. Getting to meetings on time happens much less frequently because of congestion and the inability of those managing the road networks to deal with incidents. There are many vehicles on the roads in Africa which would not pass inspection tests in Europe or the rest of the west and these unreliable vehicles often break down at inopportune times and locations causing gridlock. Rainy season also causes massive flooding and traffic chaos as the drainage systems are not always able to cope with the amount of water. Electricity is also rarely reliable and virtually every medium to large sized company has multiple generators.
These factors affect delivery times, the ability to maintain proper amounts of inventory, and many other factors that are almost always taken for granted in the west. The informal marketplace also affects many aspects of business. Street sellers throughout Africa increase competition on low cost items but also entangle the traffic system (and in many cases are the cause of it).
In most places in Africa, just like in the west, people are more likely to want to do business with locals rather than foreigners. This is why I always recommend finding the right local partner to help develop your product or service locally. Creating a win-win scenario for local partners is critical as well. Ensuring that your partners are well taken care of while ensuring that your offering remains of value to your end customers is key to long term success.
Most places in Africa look different than the west. Some major cities, especially business and/or political capitals have CBD’s with spacious, well taken care of roads, however outside the centres of most towns and in smaller cities, road are generally less taken care of and the population using them is generally above their intended capacity. Transportation tends to be less formal (less trains, less formal bus schedules), and since roads are less maintained, there are often trouble spots which bottleneck traffic. It is normal for people to travel hours each way for work in many cities throughout the continent.
The other way to look at these differences though, are the opportunities at new business in Africa. Many African markets are the fastest growing markets globally and as a whole Africa has a booming middle class and economy. From the eyes of a westerner, there are many things that you could look at and say, “this problem really should not exist” which, in effect is another way of finding business opportunities. This is the way many locals and foreigners view the market and innovation in business creates wealth from companies who solve issues that don’t even exist in the west. It is this spirit of ingenuity that drives these markets and make it an incredibly open market for the right idea or product.
Visiting Africa is truly special. Doing business there even more so, and I would not hesitate to recommend that western companies seek out opportunities to grow their business in these markets and help make a difference on a global scale.
Derek Kopke is a senior business development executive and consultant. He’s traveled to over 65 countries and closed sales in over 80 countries across the globe. With an undergrad in education and an MBA in International Business, his unique world view and experience with cultures globally give him valuable experience which he has used to the benefit of companies interested in growing overseas. Derek is based in Montreal, Canada along with his wife and two teenage children.
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