This document discusses considerations for doing business in Sub-Saharan Africa. Some key points: - Sub-Saharan Africa has over 1 billion people across 54 countries, with vast economic opportunities as many countries have above average GDP growth. - Each country requires an independent approach due to vast differences between them. Factors like natural resources, population, and infrastructure vary significantly. - Success requires a long-term view as building stable operations takes longer than in developed markets. Contingency should be added to business plans. - Developing local talent and knowledge of the local context from the start is important for smooth operations. Corruption can be mitigated by transparency and community engagement. - Nigeria

1. working for you.
London, Oct 6th 2015
CCR-i 2015
Doing business in
Sub-Saharan Africa

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The next big thing…..?

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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

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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

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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?

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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

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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

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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

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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!!!

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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!

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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

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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)

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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)

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Questions.......................