How to Ensure Your Business Succeeds in Africa: Top Ten Tips
29 September 2010 Vladimir Kokorev
Vladimir Kokorev offers his top ten tips on how to successfully do business in Africa.
1. Africa is not one country – there is no "one-size-fits-all" approach
Make sure you are familiar with the cultural, economic and political specifics of each African state you bring your business to. South Africa is a modern industrial power, while countries like Angola, Sudan and Equatorial Guinea are experiencing spectacular economic growth stimulated by the expansion of their oil extraction capacity.
Other countries live off agriculture, self-subsistence and international aid, with Mediterranean Africa being heavily influenced by Arab and Islamic culture. Make sure you know your audience.
2. Always start by contacting the official channels
Before starting your business, you should always contact the country's official representatives in order to present your business plan and anticipate any legal or administrative obstacles for its development.
If you have worked in a diplomatic service or a company with branches in Africa, administrative officials will often have a more favourable opinion of you, making it easier to obtain the necessary contacts. Many Americans and Europeans start businesses in Africa after working as NGO volunteers.
3. Make sure your business brings something to the region
In the end you will be judged not by your words or promises, but by what you actually do. Unlike Europeans, African people are not won over by advertising and marketing techniques, but by results.
4. Be prepared to spend a lot of your time there
If you want your business to be a success, you have to be around – especially in the early days. Directing your business from a distance brings the danger that you will lose touch with what's really happening. Modern communication tools are a real danger, because although they give you the illusion that you are physically there, it is just that – an illusion.
5. Get a business partner
Unavoidably, however, there will be times when you're out of the country. In tropical Africa the recommended period of stay for Europeans is about three months per visit. Each week over this increases your chance of catching illnesses like malaria. Over five to ten years you will build a team of individuals that you can rely on to manage the business whilst you are away. Prior to this, the best thing to do is to find an "alter ego" – someone who can be you whilst you are away.
6. Hire your employees locally
Some international companies only employ a local workforce when under pressure from administrative authorities and usually for low tier positions. This is a big mistake. The more local employees you have, the better your business will integrate into society, with authorities and potential clients regarding it as more beneficial.
You also learn a lot about the country and its customs by working with the indigenous people.
7. Be aware of cultural differences
Many communities are built on a culture of mutual help and support, sometimes blurring the lines between business, family and friends.
Some African societies have a matriarchal system of relations, where the uncle on the mother's side might have a legal obligation to give a yearly gift to each nephew. If he neglects to do this, the nephew might be entitled to take any item that he wants from his uncle.
Don't avoid working with local people, just make sure you are familiar with their customs.
8. Don't overvalue "special relationships" with power
If your business is good for the country, you will succeed. Respect the law and local customs and don't get involved in family politics. It may be beneficial to build relationships with influential people – as in any country – but you cannot base the success of your business on this.
9. Work with people at all levels
At a local level, authority is often highly segmented. Be prepared to make deals and cooperate with everyone. Regardless of how good your relationship may be with the governmental authorities, sometimes it is just as important to negotiate with local tradesmen and other members of small communities.
10. Help others
You may be asked to help people that you don't know and who offer nothing in return. Do this even if there is no apparent political or PR gain – it will have a good impact on your business in the medium and long term. The more you help, the more favourably you and your business will be regarded by society.