Africa has an energy and a soul that is unmatched, think of the the organised chaos of Lagos, the palpable energy in Harare. The history of Africa has also made its people resilient and we are able to ride storms; all of this makes Africa a great place to invest in! The African narrative belongs to people who have travelled the pavements of African cities. Our beautiful continent is different from what people perceive it to be. Travel and form your opinion thereafter, do not rely on literature.
I attended the launch of the annual publication by Ornico – Open Africa: Continental Brand and Business Intelligence at the Gordon Institute of Business Science and the information I got is a cheat sheet to understand the dynamism that is Africa.
New kind of multinational
A new kind of multinational is coming out of Africa and these companies require foreign investment and are, therefore, adopting new rules and compliance regulations. In order to attract investment these African businesses have to be compliant and this is a game changer for African businesses. BUT there is a caveat – you cannot leapfrog legislation and regulations to suit markets that are developed when there is not enough business penetration. Legislation has to develop in line with the pace that African industries are developing.
You need to explore markets for yourself and not rely on information that you read on the Internet. Get on the ground and find out what the truth is. The story on the ground is very different.
The human resource base of Africa is sceptical of people who fly in and fly out and never localise. It’s is one thing to fly in, stay at a fancy hotel, eat at Italian restaurants and never really localise. Success in Africa takes time. You have to innovate around the challenges that people face and the only way you can do this is to understand how people manage risk. Multinationals must not come in with ready made solutions. Get to grips with the market.
Find a local partner
You need a local management team that understands the local environment. Africa is not one homogeneous country as countries are significantly varied. There can be no cookie cutter approach the way we deal with African countries.
Lack of strong institutions – how do you navigate the challenges?
For instance in the DRC there is a weird dichotomy; corruption exists but people are also generally very respectful and follow laws. There are many people with fatigue of what was and have had a taste of what can be. You can fight corruption by wearing officials out and refusing to pay. It is difficult to fight corruption but once you cross the bribery line, you cannot go back.
Develop a business that hurts when you leave
Build a business with a portion of your operating expenses assigned to developing projects in the area you operate. Use local people and be intertwined within the community. Do not just grab the low lying fruit. To succeed as a business you need to innovate and for you to innovate you need to be an integral part of the community. Once you understand how people manage risk, you start to unlock value.
Build real connectedness
Connectedness is one of the pillars of dynamism. The movement of people and the openness of boarders is beneficial. As Africans we do not travel and do not open our borders to other people. Africans need to allow for regional integration and we need to allow people to move freely.
South Africa and Nigeria as the biggest economies have to realise the importance of connectedness in order to fully realise the benefits of being African Giants.
The role of the informal sector
South Africa’s informal sector is 5% and the Nigerian informal market is 66% of the GDP – you cannot the ignore the informal sector. Understand the models that work in the different countries. There is a lot of innovation here.
Nothing beats going into the different countries, go see for yourself.
Wisdom as shared by:
Boris Kamstra – CEO of Alphamin Resources;
Brooks Mparutsa – Hollard International CEO;
Lyal White – Director of the Centre for Dynamic Markets at GIBS;
and Dianna Games – CE of Africa @ Work and Executive Director of the South Africa-Nigeria Chamber of Commerce.