Africa, the continent which The Economist in 2000 headlined 'The hopeless continent' is now home to 6 of the 10 fastest growing countries in the world.
It has become ‘the hopeful continent' and it better be, since by 2050 the population is projected to grow to 2 billion people and Africa will soon have
the largest workforce.
6 among the fastest growing
Already, about a third of its 54 countries are producing annual GDP growths of more than six percent. Africa is rich in natural resources (coal, iron ore, copper, gold, platinum) and several industries are literally exploding; for example Telecom and Oil & Gas. We better get used to the names of some of those powerful African corporations: Clover, Mediclinic, MTN, Julius Berger, Enterprise Life, Zenith Bank, or Zanaco, just to name a few.
The international business community will therefore have to learn, this time the right way, how to deal with Africa and what the essential principals are for doing business in Nigeria, Ghana, Zambia, South Africa, and the other quickly developing markets. China is leading the way, and does it in an aggressive yet pragmatic way. Not everybody is happy about it, but then, “the quicker you here - the faster you go”, as Pittsburgh-based Wiz Khalifa once rapped.
Build relations first
So, how does one deal with Africa the right way; beyond the rigorous fashion of the Chinese, and way past the colonial approaches of the West? There are three main factors most likely to distinguish success from failure:
I. It is vital to accept that every country in Africa is unique, as each European would claim for his or her nation. Doing business in Senegal, as just one example, needs to reply to the values and behaviours of the Wolof’s, the largest ethnical group, together with the relevant foreign communities (mostly French, but also Lebanese and Moroccans). So, ahead of several ethnical languages, French is the official one. And, Senegal is known for its musical heritage, popularized by Youssou N’Dour. There would be much more to tell about this particular African Country.
II. There is another key, in-line with the improving African educational systems: Foreign companies are now searching for local experts and building strong local partnerships. New projects must have a local sequence and one must understand and integrate the culture of Africa. Africa offers much more than just labour. Yes, rhythm of life and speed of work are slower than in the West. But there is so much creativity, motivation & positive energy.
III. Much more than in Europe, daily business deals & long-term investments must be planned and executed in close collaboration with all levels of national and local governments; as done in China. The business community needs to build long-lasting relationships to the political institutions, as this is the only path to sustainable success.
Other factors are to focus on positives, to be patient and persistent, to have realistic expectations and to be prepared for hidden costs and surprises. And, it’s more than just a help, one must have the joy of travelling in and dealing with Africa.
Mauritius door to Africa
Interestingly, one way global business is taking a 'safety net' leap into Africa is through Mauritius in the Indian Ocean. Multinational corporations & international investors are increasingly using Mauritius as a platform to structure their entry into African countries. Mauritius has signed Double Tax Treaties with 11 African countries (including South Africa, Uganda and Tunisia) and treaties with four others (i.e. Ghana) are awaiting ratification.