It’s easy to do business in Africa !
I agree partly with the writer, and disagree on other parts.
I don’t pretend to be a General Africa specialist because Africa is huge, fractured and has many different cultures, so yes there is 1 Africa geographically but there are many different Africans and African cultures who almost all need a different business approach.
My comments could be useful in other African countries but are based on my deep involvement in just one African country; Ghana.
My opinion in general is; Study the country, the culture and the people first. Start small business(es) first and learn how it is to deal with the people and their habits. Check where this behavior fits in with your personal background and behavior and find out what your strong points are and which ones you can use in your new environment.
Also limit yourself, don’t think everything you know, have seen and done before can easily be implemented in your new country, some technology or working ways, will come but it can be to early to adapt them. Get involved with the people, don’t turn around in your expatriate circles or with local workers, et involved with the local “upper ten” and listen to their take on society.
If you only behave like a foreigner in somebody’s country, you will constantly end paying foreigners prices for all services you need, weakening your own competitive pricing and actually weakening the competitive position of your host country at the same time, but often local people don’t see it like that.
If you follow these comments doing business in Africa will be easy.
My position on the mentioned subjects in Ghana;
Urbanisation and the rise of the middle class. Nestle’s and many other companies mistake is/was that the middle class is not a middle class as we know it in Europe, the real position of the middle class is just under the top class, but the majority of them still have (through their only recent rise) their poor and often village background, spending pattern and behavior, that’s my warning of being too early !
Infrastructure indeed Africa needs to upgrade a lot of infrastructure, but EU and US should study more carefully why the Chinese are taking big bites out of the cake, to me the only reason seems to be the cheap price, Chinese are much cheaper than Europeans or Americans, but I also think Africans are cheaper than Chinese, so why not train the Africans at least as good as the Chinese and use them to compete against the Chinese construction companies Win – Win for all of us, but the Chinese.
Agriculture as a business is a very big deal. I agree that agriculture is big but the high participation grade of Africans in agriculture makes the sector week. In the US and EU, farmers and people indirect involved in farming make up between 2 – 5% of our populations and yet we export more than most others. We need to mechanize farming in Africa rapidly because as soon as labor cost rise we price ourselves out of the market, we need large scale and competitive farming and need to tell farmer communities honestly that participation in farming will decline and that we need modern farming instead on larger farms with less people, examples are the last 100 years in EU and US when farmers participation dropped from over 50% to 2%.
Technology leapfrog. Be careful, you can do good things with that fact but bad things can also happen, don’t forget most users jumped from writing letters or verbal passing of news and events to mobile phone use. They missed the “evolution” phone use from post office to your home, from landline fax and from just calling to twitter. At this moment the majority of people, sometimes buying modern and expensive phones with tens of apps, only use them for calling and maybe a taking a picture because that is all they understand.
Financial inclusion: Mobile money is a way to transfer money for poor people to less poor people only. As soon as we really develop this will disappear just as fast as it came up, not only because the there will be new possibilities but also because the senders will get tired of constant pushing of the receivers.
Globalization: Is the end of African countries who don’t adapt. At the moment popular politicians are asking and applauded for, popular past-colonial steps to be taken, asking and shouting things like’ Africa is for Africans, local content bills, no export of raw materials, no or high investments minimums for foeigners, pushing for local co-ownership for investors etc. Although I agree that there is a bag log of African participation in the world market I do believe that African countries need to globalize to reach that goal and not to “lock” their economies.