5 Things You Must Know For Doing Business in Africa
Being a large continent with 53 countries, doing business in Africa is lucrative as well as challenging. While the presence of developing economies makes it attractive, the large area makes it difficult to market products in Africa.
When it comes to Africa, most of us form a hazy image of a place with utter poverty, dangerous wildlife, plentiful natural resources, and endless crimes. Although all this is somewhat true, there is another side of the coin.
Most of the African nations are developing economies. Therefore, these countries have a huge potential market for technology.
All the 53 nations differ from each other in terms of laws, when it comes to doing business in Africa. However, culture and geography can be studied on a general note. Additionally, to minimize the overhead of operations, the continent can be divided into four regions – South Africa, East Africa, West Africa and North Africa.
To build effective marketing and selling strategies for Africa, it is imperative to know the basics of the various countries. One needs to have an elementary knowledge of how to do business in Africa.
How to do business in Africa – 5 things you must know
1. Importance of Customer Relationships for doing business in Africa
Similar to the neighboring continent, Asia, Africans too values customer relationships quite a lot. Putting faces to names becomes essential for people who value relationships.
Africans prefer to hear and to be heard and that is better done face to face. Some of them might even expect special treatment as a customer or a client. They like it when they are showered with gifts and special dinners organized exclusively for them.
Relationships might sometimes even get personal and they might go over the board by discussing their personal lives. A happy African customer might prefer to discuss his hobbies with you. He might even go to the extent of discussing the gift that he wants to purchase for his sister’s wedding.
Overall, doing business in Africa not only means developing good relationships with your customers but also treating them with the utmost care and attention.
2. Work-Life Balance
Most Africans maintain a healthy work-life balance. They value their personal lives as much as their professional lives. Many of the Africans even pursue their hobbies as part-time jobs.
For people who wonder how to do business in Africa must remember to respect the personal space and working hours of the Africans. Most of the African countries work from 9 AM to 5 PM as per their local timing. They like to work strictly during these hours and preferably more actively during the second half of the day.
As said earlier, many of the Africans pursue their hobbies during weekends, either professionally or just for fun. That is why, they generally do not work on weekends, unless it is something unavoidable.
3. Local Currency and Languages
Like many of the people across the globe, Africans too like to calculate expenses in their own currency. You might want to sit with a calculator while negotiating with your African partner. The brighter side – you might be able to strengthen your relations with your Nigerian customer in a single shot by marking your product in Naira instead of Dollars.
However, due to the vast number of countries and their multi-linguistic cultures, expectations from a foreign national to speak in a local language are nil. More or less, English is understood and spoken by everyone. Therefore, the toughest part of learning a new language for doing business in Africa is actually non-essential.
4. Use of the Internet
We all know the importance of the internet in the digital era. Like any other part of the world, Africa too is increasingly using the internet on phone in day-to-day activities. Though, the inclination might be lesser than any of the developed nations but the growth rate is definitely quite high.
According to an article published on CNN in 2016, as many as 93% of the population of Africa has a mobile phone. However, just 63% of the total population has access to piped water. These statistics are enough to signify the rate of digital development in the continent.
There are two main areas where internet finds its usage for doing business in Africa.
a) E-Commerce in Africa –
As per the UN estimates as of 2016, the total population of Africa was about 17 percent of the world population. Interestingly, this population is expected to rise to about 25 percent of the global population by 2050.
With a large population having easy access to mobile phones and the internet, Africa can be a huge market for the e-commerce business in the years to come. All you need is a solid business plan from an expert to penetrate the correct market for your niche. Then you will have unlimited opportunities to grow.
b) Find Business Partners –
When you plan to reach out to new geography for your business, you would definitely want to focus on big players of the market. This is precisely the reason why the internet is so useful for Africa.
Africa lacks small and new entrepreneurs. In addition, being comparatively new to the internet, smaller companies are not widely present on the web. Hence, the websites that provide African Business Directories and other vital information can prove to be very fruitful. It will be easy to contact the right and big people in the industry through the information available online.
5. Regional Hubs of Africa
It is easy to talk and plan but extremely difficult to win over the African continent with the area as large as 30.37 million km2 and extreme diversities of language, culture and geography. However, here we give you an easier solution to triumph over the whole continent. You just need to divide the whole of Africa into four operational areas.
a) South Africa –
If you are wondering how to do business in Africa or how to enter the African market in the first place, consider South Africa as your gateway. A good educated English-speaking gentry makes it easy for you to start your African safari.
A country with simple rules and regulations, transparent and strong work ethics welcomes you whole-heartedly. Since they are used to working with British and Australians, they are used to the fly-in and fly-out model of business relations. You can come here, stay for about half a month to foster your relationships with them and can go away to your native country.
b) East Africa –
You can consider Kenya to play the operational centre of East Africa. Comprising of about 10 countries, this region is quite different and difficult as compared to South Africa.
You can expect to encounter corruption, delayed responses and decisions, lack of transparency and weak work ethics here. However, the best part is that language isn’t a barrier here as well. Most people can speak and understand English.
Since the work-culture here is relatively different from South Africa, the methodology of fly-in and fly-out doesn’t work here. If you want to penetrate and make profits in this region, a local operational office is essential. Just a local sales team should suffice the purpose.
c) West Africa –
Nigeria is the largest economy of not only West Africa but also Africa. It also accommodates the largest population of Africa. Thus, it would not be incorrect to state that Nigeria is the country that can serve as the operational hub for West Africa.
There are a lot of struggles that Nigerians face, viz. unemployment, stress on public infrastructure, a lot of power distance, power shortages, constant strife in north Nigeria by Boko Haram, etc. All this has made them quite aggressive and sensitive to issues like racism. Hence, to prosper your business in Africa, you ought to have a good local contact or partnership with a local to do business in Africa.
d) North Africa –
North Africa is majorly influenced by the Middle-East culture and policies. The area is generally called as MENA (the Middle East and North Africa). Dubai plays an important role in decision making and shaping of work culture. To get more insight into the Middle-East work conduct, please read here.
With the help of experienced B2B sales consulting firms, it is possible to tap the excess potential that the African market has in store. You can reach out to the right business contacts in Africa with these B2B sales consultants.
They are helpful in planning the right strategy to work for a particular location. Furthermore, they can also help you build a local team for easy and smooth operations if that is required.
Africa is a continent rich in natural as well as human resources. If you are able to establish yourself in the African market, no one can stop you from stretching your arms profitably across the globe.