3. 3
It’s pretty big already…
Second largest & Second most populous continent
32 million square kilometres
54 – 56 countries
1.1 bn people
Between 1250 – 3000 native languages
4. 4
Why Sub-Saharan Africa?
Many companies setting sights on Africa as the new
frontier
Improving political environments
Above average GDP growth
– Ivory Coast 7.5%, Nigeria 6.6%, SSA overall 6.5%
Rich opportunities in an area where much is still at ground
level
5. 5
Things to consider when doing business in SSA - i
1. One Country – One Approach
Africa is not a connected economy
– Vast area, no common laws, standards
Isolation on both economic and geographic point of view
– Travel, transport all take longer
– Weather can play it’s part too
Each country needs an independent approach
Careful consideration as to which countries to enter
– What natural resources are there?
– Population size & demographics?
– Will your products fit these constraints?
6. 6
Things to consider when doing business in SSA - ii
2. Look for the long run
– African economies are growing, but still small (all SSA
economies together are smaller than France’s!)
– Do not expect immediate success
– Building a smooth operation takes time – more in SSA than
in Europe
Complex political & regulatory context
Developing an extended “operational perimiter”
Developing local talent
– So add contingency into your business plan
If your ROI calculation is 5 years in Europe, add 2-3 years in
SSA
7. 7
Things to consider when doing business in SSA - iii
3. Local Context
– Local knowledge key – help with approvals, permits,
regulations
– Access to local resources easier
– Better at managing local talent
– In the past businesses have focussed on areas where there
are
Historical governmental links
Local diaspora communities
– Perhaps look to acquire established local business to enter
completely new areas
8. 8
Things to consider when doing business in SSA - iv
4. Extended perimeter
– Often auxiliary services – power, water, transportation,
supplies are missing in SSA.
– You need to consider developing these services yourselves
to ensure continuity of production, remember, the cost of
doing these things in SSA is normally a fraction of what it
would cost in Europe
– Service company standards might not be up to yours
– The knowledge that you gain from this extended perimeter
will give you an advantage over others entering your market
9. 9
Things to consider when doing business in SSA - v
5. Develop local talent from the outset
– Shortage of local talent is one of SSA’s largest problems
Lower end due to lack of training & illiteracy
Higher end small pool of talent creates competition for talent and
often managerial salaries higher than in developed countries
Expat solution is very expensive long-term (premiums to cover
risk and high living cost in some major cities)
Grass root approach to talent development
– Working with NGOs
– Partnering with local universities
This extends your perimeter still further!!!
10. 10
Things to consider when doing business in SSA - vi
6. Corruption
– There is a corrupt side to Africa
– However an emerging African business community that
understands that this does not have to be the way
– Choosing to do the right thing may make your business
grow more slowly, but it does not mean that you will not be
successful in the end
– Be public and open about everything you do.
Use the growing developed and independent media to inform
the local community
Corrupt politicians are less likely to stop good deals when the
community is aware of the benefits you bring
Be aware of the real needs of the communities you are entering,
this may open doors to you without the need for you to grease
the wheels!
11. 11
Focus on some main players - Nigeria
Feeling is, if you want to make it big in Africa you have to
be a success in Nigeria
– Nigeria is Africa’s largest economy but as much as it is held
up as example of Africa’s opportunity it also highlights its
shortcomings
Nigeria suffered attacks from Ebola in the west and Boko Haram in
the east (health and security)
Utilities – massive electricity shortage (185/189 countries for
getting electricity)
Creaking infrastructure – no deepwater ports, goods once landed
must be transported through Lagos’s gridlocked streets
Paperwork – seems endless and can add weeks/months to getting
product moved
– Getting Paid
Central Bank sells foreign exchange to Bureaux de Change twice a
week, max $200k each day
12. 12
Focus on some main players - Kenya
Most developed economy in East Africa
Nairobi undisputed transportation hub for Central & Eastern
Africa
Nairobi is largest city between Cairo & Johannesberg
Mombassa is a deepwater port
It has a fully liberalized economy, with free flow of trade, foreign
private investment and ease of transferring money outside
Kenya
Ease of doing business – 136/189(up one place!)
Security issues
Corruption (154/183)
13. 13
Focus on some main players - Ghana
UK’s 5th largest export market in SSA
Investing heavily in infrastructure – but electricity still
erratic
Politically stable and democratic
Stifling red-tape
Improved corruption rating (63/177)
Improving ease-of-doing business (70/189)
Has introduced automated commercial court system to
improve dispute resolution
Licenced Credit Bureaux (now 3)