The document discusses opportunities for growing business in West Africa. It summarizes the socio-economic context of ECOWAS, highlighting Ivory Coast and Nigeria as influential countries. Ivory Coast is described as a pilot country due to its large port in Abidjan, influential consumer patterns, role in WAEMU, and many regional offices of multinational companies. Nigeria is also important due to its large population and economy. The document argues that to succeed in West Africa, companies must understand these regional dynamics and think globally but act locally through regional deployment.
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SUMMARY
SUMMARY……………………………………………………………………………………………………….. 1
ABBREVIATIONS AND ACRONYMS…………………………………………………………………... 2
INTRODUCTION……………………………………………………………………………………………….. 3
I- SOCIO-ECONOMIC CONTEXT OF ECOWAS………………………………………...
I-1 Overview of ECOWAS
I-2 ECOWAS Vision
I-3 Overall objective in ICT
I-4 ECOWAS Common External Tariff (ECOWAS CET)
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II- IMPORTANCE OF IVORY COAST AS A LOCOMOTIVE (PILOT)……………..
II-1 Economic situation in the Ivory Coast
II-2 Ivory Coast as pilot country in West Africa
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III- IMPORTANCE OF NIGERIA IN TERMS OF VOLUME……………………………..
III-1 Nigeria’s volume performance
III-2 Economic freedom rate in Nigeria
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IV- DEPLOY IN WEST AFRICA (GLOCALIZATION)……………………………………… 9
CONCLUSION…………………………………………………………………………………………………… 11
BIOGRAPHY……………………………………………………………………………………………………… 12
ABOUT AUTHOR………………………………………………………………………………………………. 12
APPENDICES…………………………………………………………………………………………………….. 13
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ABBREVIATIONS AND ACRONYMS
ECOWAS: Economic Community of West African States
GDP: Gross Domestic Product
ICT: Information and Communication Technologies
IMF: International Monetary Fund
WAEMU: West African Economic and Monetary Union
USD: United States Dollar
WAMZ: West Africa Monetary Zone
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INTRODUCTION
We find increasingly that the world is now a global village where the presence of the
conquering enterprises in high growth areas is very important. At present Africa is in
a very favorable phase of economic transformation for any company that wishes to
strengthen its international expansion. In Africa and particularly in West Africa,
economic data show a middle class growing consuming and also search for novelty in
consumption.
It is inevitable that the West Africa attracts attention of international firms and
companies for the real development of their activity; however, to get there,
consequently, it is important to observe and understand the following:
- The socio-economic context of the region (ECOWAS)
- Which are the influential countries (catalyst)?
- Why think global and act local is very relevant to these areas in Africa?
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I- SOCIO-ECONOMIC CONTEXT OF ECOWAS (ECONOMIC COMMUNITY OF
WEST AFRICAN STATES)
I-1 Overview of ECOWAS
The Economic Community of West African States (ECOWAS) is a regional group of
fifteen countries created on 28 May 1975. Its mission is to promote economic
integration in “all fields of economic activity including the industry, transport,
telecommunications, energy, agriculture, natural resources, commerce, monetary
and financial questions, social and cultural issues ...”
The area is organized into two sub-economic integration organizations of which
WAEMU (comprising 7 Francophone and 1 Lusophone) and the WAMZ (made up
of English-speaking countries and the Guinea) which share respectively 68.6% and
31.3% the total area of the sub-region.
Demographically, ECOWAS is the most populous regional economic community
that exists in Africa with nearly 30% of the continent's population.
ECOWAS is a market of an estimated population of 280 million people over an
area of 6.1 million square kilometers. The Economic ECOWAS growth rate was
7.1% in 2014 with forecasts of growing trend for future years, and the Internet
penetration is 21%.
The fifteen member states of ECOWAS are:
- French speaking countries: Benin, Burkina Faso, Ivory Coast, Guinea, Mali,
Niger, Senegal, Togo;
- English speaking countries: The Gambia, Ghana, Liberia, Nigeria, Sierra Leone;
- Portuguese speaking countries: Cape Verde, Guinea Bissau.
Map of ECOWAS in appendix 1.
On the monetary side, the region has a dynamic cooperation led by the WAEMU
and ECOWAS. The community has among its members, eight WAEMU countries
that share the CFA franc (XOF) and seven (7) other countries, each with its own
currency. For 2015, it is expected the creation of the second monetary zone in
2020, the merger of the WAMZ and WAEMU and the adoption of the Eco, as the
single currency of ECOWAS, would intervene in 2020.
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I-2 ECOWAS Vision
The current vision is formulated as follows:
“Create a region without borders, prosperous, at peace and harmony, based on
good governance, and where people can access vast resources and develop
through the creation of opportunities for sustainable development and
environmental conservation”.
I-3 Overall objective in ICT
- Establishment of a common market liberalized telecommunications / ICT in West
Africa that facilitate the deployment of innovative communication services,
reliable, secure and affordable for citizens of the community.
- Using ICT as a tool for the realization of Vision 2020 of ECOWAS of Peoples, in
particular to facilitate, among others, the development of trade, the free
movement of people, goods and services.
I-4 ECOWAS Common External Tariff (ECOWAS CET)
The Common External Tariff is one of the instruments of harmonising ECOWAS
Member States and strengthening its Common Market. Article 3 of the ECOWAS
Revised Treaty defines the aims of the community as promoting “co-operation
and integration, leading to the establishment of an economic union in West Africa
….” In order to achieve this, the community is to ensure, in stages, among other
means, the establishment of a common market through “the adoption of a
common external tariff and a common trade policy vis-à-vis third countries…” To
this end, the ECOWAS Authority of Heads of State and Government established an
ECOWAS Customs’ Union.
A common external tariff with a common nomenclature so that customs
procedures are transparent, readily followed and delays at borders decreased, is
a key stone in achieving this union.
The observation of the ECOWAS in the framework of a potential commercial
establishment directs us to the study of influential countries (as a pilot
country) of the area namely Ivory Coast and Nigeria.
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II- IMPORTANCE OF IVORY COAST AS A LOCOMOTIVE (PILOT)
II-1 Economic situation in the Ivory Coast
The Ivory Coast is a country member of ECOWAS and WAEMU with the economic
capital Abidjan and the political capital Yamoussoukro. After the crisis experienced in
2010, Ivory Coast today is a politically stable country and in economic growth.
The country is working again, helped by the lifting of economic sanctions and
financial assistance from the IMF (with USD 616 million) and the Paris Club (78%
reduction of the Ivorian debt service). The recovery is significant (8.0% growth in
2013 after 8.1% in 2012), even though the stimulus is concentrated on urban centers.
The GDP growth is currently 8.5%.
The rebound is driven by investments in infrastructure, particularly in transport with
the highway linking Abidjan and Yamoussoukro and construction of the third bridge
in Abidjan, and the telecommunication sector. Mobile phone penetration rate is
95%.
The peace and security are back in 2014 and this newfound stability has allowed
particularly the return of the African Development Bank in Abidjan, after 10 years of
relocation to Tunis (Tunisia Capital) which is now chaired by Dr. Akinwumi Adesina.
This recovery is illustrated by the indicators in Appendix 2.
The economy of Ivory Coast is mainly based on agriculture. The primary sector
contributes to nearly a quarter of GDP (24% in 2013) and employs more than two
thirds of the working population (68%). The Ivory Coast is one of the largest cocoa
producer and one of the largest exporters of cocoa beans, coffee and palm oil in the
world.
The secondary sector contributes 28% of GDP. The main industrial sectors of the
country are food-processing, textiles, construction materials, fertilizer and assembly
of motorcycles, vehicles and bicycles.
As in many other countries of the African continent, the service sector enjoyed rapid
growth for many years. The services have contributed to 48% of GDP the Ivorian
economy in 2013 and employ 22% of the workforce. The telecommunications
industry is a growing business that contributes to boost, with other sectors, the
growth of services.
Distribution of economic activity by sector & Monetary Indicator in Appendix 3 & 4.
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II-2 Ivory Coast as pilot country in West Africa
Ivory Coast is a catalyst and is the locomotive country (pilot countries) of West Africa
for several reasons:
Ivory Coast has the second largest port in all Africa. The Autonomous Port of
Abidjan (PAA) serves all the countries of the hinterland in West Africa and is
the main entry point into the region ;
The Ivory Coast consumption patterns are almost automatically followed in
the countries of West Africa. Some countries in the region consider the
Ivorian consumer as a "discoverer of good news" ;
Côte d'Ivoire is also a member of the WAEMU with 8 countries of over 80
million inhabitants. The economic weight of Côte d'Ivoire in WAEMU is 40%.
The vast majority of companies and industrial giants that are successful in
West Africa based their regional office in Ivory Coast (Microsoft, Oracle,
Gemalto…)
« Doing Business » Report 2014 & 2015
Ivory Coast is among the top 10 of the most reforming countries for the second
consecutive year, according to "Doing Business", 2015 edition, produced by the
World Bank.
According to the published report, Ivory Coast is one of the five sub-Saharan
countries holding the record for regulatory of business environment reforms, with
Benin and the Democratic Republic of Congo, Senegal and Togo.
"Not only Ivory Coast has kept its position in the top 10, but ranked second among
reformers worldwide and is the leading country in West Africa and central area,"
said the Director of World Bank operations for Ivory Coast, Mr. Ousmane Diagana.
For Ousmane Diagana, this result "encouraging" results in particular from the
constant in the dynamics of reforms and their implementation, the political vision
and commitment of all public and private stakeholders for a business climate willing
to create private investment, whether domestic or international.
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III- IMPORTANCE OF NIGERIA IN TERMS OF VOLUME
III-1 Nigeria’s volume performance
Nigeria's economy is in its structure comparable to that of many African countries,
but everything is on a larger scale: based on labor and abundant natural resources.
The most populous country in Africa with 173.6 million people, it is the largest
producer of oil and the 2008 ranking of Transparency International Corruption
Perceptions Index ranked it 121st out of 180 countries assessed. With the federal
capital Abuja, the advantages in terms of volume and size make Nigeria the second
largest economy in the African continent.
The Internet penetration rate is 39.7% with more than 70 million internet users.
Despite recent challenges related to weakening oil revenues, Nigeria short-term
economic outlook has improved in 2015 and prospects for continued growth and
macroeconomic stability are good in light of increase revenues to the federation,
stable foreign reserves and an augmented fiscal reserves fund, according to a new
World Bank Report. The Nigeria Economic Report also highlights two remaining risks
to the country’s positive economic outlook; uncertainty in oil prices and output, and
short term capital flows.
A statistical reassessment of national accounts data in the form of the GDP (Gross
Domestic Product) re-basing indicates a quite different size, structure and sectorial
distribution of growth in Nigerian Economy. The Nigerian economy now appears
more diversified, with important sources of growth coming from manufacturing
(especially food and beverages) and previously undocumented services (including the
entertainment industry).
The re-basing has led to a much higher assessment of the level of GDP in Nigeria. For
the new base year of 2010, the assessed value of GDP increased by 60.7% relative to
previous statistics. For 2011, 2012, and 2013, the assessed increases in the level of
Nigerian GDP were 68.3%, 76.9%, and 88.9%, respectively. The new GDP numbers
imply that Nigeria had a gross national product of US$ 509 billion in 2013, making it
the largest economy in Africa and the 26th
largest economy in the world.
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III-2 Economic freedom rate in Nigeria
Nigeria’s economic freedom score is 55.6, making its economy the 120th
freest in the
2015 Index. Its score has increased by 1.3 points since last year, with improvements
in five of the 10 economic freedoms, including labor freedom, freedom from
corruption, and the management of government spending, outweighing a decline in
monetary freedom. Nigeria is ranked 22nd
out of 46 countries in the Sub-Saharan
African region, and its overall score below the world average.
Find in appendix 5, the ten economic freedoms.
IV- DEPLOY IN WEST AFRICA (GLOCALIZATION)
It is undeniable that today deploy in West Africa ensures the expansion of its business
profitably; However, this requires some basic adaptations to local realities.
To reach success, that’s important to be “local in spirit but global in character”.
In Africa and particularly in West Africa, this adaptation does not always refer to the
product as such but on the mode of communication and distribution.
The African consumer has eyes to what is happening outside (through TV media,
Internet,...) but has foot in Africa at local level; thus "think global and act local" is
quite relevant for all companies wishing to attract the African consumer.
The African consumer is willing to buy a product or service that is reasonably average
in terms of quality unless to gradually understand buying behavior and control what
drives him to act.
Prices, Sales promotion and oriented advertising execution have an effective impact
on customers purchasing (behavior) in West Africa.
Develop market opportunities in this region by focusing on the concept of
“Glocalization” which is combining your global efforts with local insights and
consideration.
Balance standardization and customization. Packaging and brand name can often
be standardized, while distribution channels and communications typically required
greater customization.
All marketing mix elements could be considered in the context of the "Glocalization"
with special emphasis on communication, price and distribution channel.
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To do this, the partnership option with local companies specialized in relevant areas
is at to explore with high importance. Sharing resources with local partners and the
provision of opportunities for talent development that will support effective
deployment in the region is of great use.
Most global brands carefully choose marketing partners that help improve
distribution, profitability, and added value.
A fundamental aspect especially in Africa is to always listen and take the local
information that is to say of the teams on site before engaging marketing campaigns
or other activities. It is recommended to back up the opinion of all local managers
for to have all the cards in order to successfully design marketing programs and
some activities.
Effectively transferring successful marketing ideas from one region to another is a key
priority for many firms acting in Africa; the best of them knows some particularities of
regions and influencing countries.
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CONCLUSION
With ever faster communication, transportation, and financial flows, the world is
rapidly shrinking. Countries are increasingly multicultural, and products and services
developed in one country are finding enthusiastic acceptance in others. This is the
case in Africa especially in West African Countries. The Region ECOWAS is in high
growth with 7.1% and waiting for new products and concepts. ECOWAS is the most
peopled regional community in all Africa with 280 Million inhabitants in fifteen
countries of which two influential. The best scenario for conquer firm is to
headquartered in Ivory Coast and extend its activities in Nigeria for its successful
implantation in the region.
The firm has to consider the “glocalization” and partnership as tools to be accepted
and recognize as a leading company in West Africa market.
It’s obvious that your future success is in ECOWAS market.
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BIOGRAPHY
- WORLD BANK REPORT (Doing Business 2014 & 2015)
- BCEAO (monthly economic statistics report): West African Bank.
- IMF: International Monetary Fund (Report N°13 /92 on West Africa)
- Ministry of economics and Finance of Ivory Coast
- BRVM: Regional Stock Exchange
- NER: Nigeria Economic Report (2015)
- 2015 Index of Economic freedom.
ABOUT AUTHOR
KADJO K. Jean-Paul
Business Developer
Jean-Paul Kadjo is a business development professional based in Ivory Coast.
From his experience in West Africa leading companies, he has worked through
different fields in marketing and business development of which FMCG, Enterprise
solutions (IS/IT), Mobile Phone (HHP) and social network (Web).
Jean-Paul holds a master’s degree in international trade engineering and applied
marketing at INP-HB (National Polytechnic Institute – Félix Houphouet-Boigny) after
an associate’s degree in Information Technologies at HETEC Abidjan. He also got
some certificates awarded by HEC Paris, Oracle and WTO-ITC.
Jean-Paul published some documents of which “Boost the business of a company in
ICT field” and speaks four languages:
French (fluent) / English (good) / Chinese (basic) / Agni (one African tongue)
For more information: pagis27@yahoo.fr / +225 08 73 56 17 (Ivory Coast)
Or 13162717791 at Shanghai (currently at Shanghai Normal University for improving
Chinese speaking until 28 July 2015 then returning in Ivory Coast).
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APPENDICES
APPENDIX 1: ECOWAS MEMBER STATES
APPENDIX 2: GROWTH INDICATORS (IVORY COAST)
Growth Indicators 2011 2012 2013 2014 2015(e)
GDP (billion USD) 24,06 27,67 32,06 33,96e 38,17
GDP (annual growth in %, constant price) -4.4 10.7 8.7 8.5 7.9
GDP per inhabitant (USD) 1.061 1.184 1e 1.370e 1.495
Debt of State (% of GDP) 93.3e 44.8 39.9e 36.5 34.3
Rate of inflation (%) 4.4 1.3e 2.6 0.6 2.6
Balance of current deals (billion USD) 2,67 -0,07 -0,67 -1,02e -1,20
Balance of current deals (% of GDP) 11.1e -0.2 -2.1 -3.0e -3.1
IMF: World Economic Outlook Database
Note: (e) estimated data
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APPENDIX 3: DISTRIBUTION OF ECONOMIC ACTIVITY BY SECTOR (Ivory Coast)
Distribution of economic Activity by sector Agriculture Industry Services
Added Value (% of GDP) 22.3 22.3 55.5
Added Value (Annual growth in %) 6.8 8.4 9.4
APPENDIX 4: MONETARY INDICATOR
Monetary Indicator 2011 2012 2013 2014
Franc CFA BCEAO (XOF) – average change rate for 1 € 656,19 655,33 655,90 655.95
Franc CFA BCEAO (XOF) – average change rate for 1 USD 497,72 499,99 477,28 478,28
Franc CFA BCEAO (XOF) – average change rate for 1 RMB 93,87 95,26 94,33 96,02
APPENDIX 5: THE TEN ECONOMIC FREEDOMS (NIGERIA)