SUB-SAHARA AFRICA November 8, 2011 Sabina Zunguze CEO, A Gift To Africa
SUB-SAHARA AFRICA• Comprises 48countries on themainland Africaincluding 8 islandcountriesMadagascar, The Comoros, Seychelles,Mauritius, and Reunion in the Indian Ocean,and Cape Verde, Sao Thome, Principe, and St.Helena in the Atlantic Ocean)• Excludes the mainlyIslamic countries ofNorth Africa Western Sahara, Morocco, Algeria, Tunisia,Libya, and Egypt - most of which border theMediterranean Sea.
TRADE: US and Sub-Sahara Africa• Current trade between the United States and Africa is mostly in oil and minerals, BUT there has been increasing diversification.• Total two-way trade: – US and sub-Saharan Africa trade increased 57% over the first 5 months of 2010, compared with the same period the previous year, reaching $33.1 billion. – U.S. exports to sub-Saharan Africa rose by 7 percent to $6.4 billion during the first five months of 2010.• Africa always displayed as Poverty, disease and conflict – See good examples of Botswana, Ghana, Uganda, South Africa
Maxwell Lucas risk map shows the majority of African countries fall into thelow/medium risk category.
SECURITY• Political The key is to keep abreast of current situation in countries where events e.g. elections can have a significant bearing on the security situation.• Legal: The executive must negotiate a swathe of challenges, from start-up regulations to ambiguous tax payments.• Personal: Cumbersome logistics, poor infrastructure, abundant red tape, a shortage of skilled workers
MEN Vs WOMEN IN AFRICA• Gender Inequalities that may affect you: – Personal security, the performance of the judiciary, and the time and cost required to register, license, and operate a business – obtaining credit, information needed to start and operate a business – for the most part the regulatory environment may be “gender-neutral” in principle but with possibly gender-differentiated outcomes in practice
MEN Vs WOMEN IN AFRICA• Gender Inequalities that may affect you: – Men and Women enterprises visualize Corruption and labor regulations contraints differently.• For specific results see: WorldBank’s document “Gender, Entrepreneurship, and Competitiveness in Africa” by ELENA BARDASI, etal.. at https://members.weforum.org/pdf/gcr/africa/1.4.pdf
DOING BUSINESS IN AFRICA • Doing business in Africa is much like doing business elsewhere with nuances,. • The continent’s unique history, diversity, geography, political, and institutional landscape. The result is that one cannot do business without recognizing that this legacy has shaped the business environment in ways that cannot be ignored.
DOING BUSINESSin Africa Doing Business IN AFRICA• Understand the areas of need and high profit. For Start-Ups : Don’t Come without being Informed• Educate yourself about Africa from sources other than the Discovery Channel. Consult with the Chamber of Commerce, the Embassy, or traders in the country of your interest. Get information about your business interest from Chambers of Commerce or business consultants. Educate Yourself• Develop a sound business and marketing strategy. Understand their environment, tailor your product to the environment Don’t Communicate the Wrong Attitude• Identify reliable business partners in Africa either by yourself or through the Chamber of Commerce or the relevant Embassies. Don’t Get Trapped in the Web of Brokers and Connections
DOING BUSINESSin Africa Doing Business IN AFRICA• Visit the location if you intend to establish a company or an outlet. Don’t Expect to Do Business in Africa and Not Be There.• Follow up on every arrangement to make sure that conditions and terms are fully understood and are being implemented.• Arm yourself with a lot of patience and keep an open mind because communication and correspondence from Africa may not flow as smoothly or as fast as you may expect.• Understand the cultural environment of the African country in which you intend to do business. Don’t Go It Alone
DOING BUSINESS in Africa Doing Business IN AFRICA• Use a consultant, especially those that have a real understanding of Africa. Be mindful of the three Ps of African business: Pensiveness, Patience, and Perseverance. Pensiveness demands the use of common sense. Success demands a lot of patience. Above all, you must persevere and be persistent but polite.• Lucrative as it may be, the African market is not without pitfalls. Keep your guard up and insist on cash transactions as far as possible.• Establish direct contacts with your business counterparts in Africa
Conclusion• Security – Political, Legal Issues, Personal Safety• Negotiation Skills – Cultural hierarchy (men and women), command respect• Cultural Factors – respect and appreciate nuances in different countries & within countries• Relationship Management – Time looked at differently, physical presence, Trust
Useful Resources• http://www.doingbusiness.org/ - by International Finance Corp (World Bank)• http://wbl.worldbank.org/• http://www.afribiz.info/content/what-it-take- to-do-business-in-africa• http://library.stanford.edu/depts/ssrg/africa/b iz.html• http://www.africasunnews.com/doingbusines s.html#
Useful ResourcesBusiness Opportunities, Conferences, General Information• LinkedIn: – Africa – All Things Business – Africa Gateway – Africa Import Export Business – Different country Chambers of Commerce – Regional groups: SADC, COMESA, ECOWAS, etc..• Facebook – WIIB, etc..