Practical Tips for Doing Business in Africa
By Cornelia van Heerden, Heyns & Partners Inc.
Africa is a vast continent with up in excess of 1 billion inhabitants and a plethora of cultures and different language groups. Although doing business in Africa was once perceived as a difficult and complex undertaking, this is slowly starting to change. With fewer conflicts, more democratic elections and economic growth rates that have gradually begun to compete with those of other developing regions, Africa is proving itself to be a continent of positive change.
Newcomers to the continent still perceive various factors as detrimental to conducting business and sharing in the massive potential for growth that Africa presents. However, doing business in Africa should be no harder than anywhere else – it simply requires a different set of skills. Creativity is needed to adapt to local conditions and its demands.
For purposes of this article we shall focus on Sub-Saharan Africa, a region often portrayed negatively in the media. For instance, over 42% of the region's economy is informal, as a percentage of GDP, the highest proportion in the world. Conversely while large proportions of the population are definitely poor, Africa also has its fair share of filthy rich people, both locals and expatriates. In reality there is an enormous amount of positive things happening in many of the countries and potential investors or businessmen who wish to part-take in that might find the following general advice enlightening.
Firstly it should be remembered that Africa obviously is not one country – it is the second largest continent in the world and comprise of 54 different countries. Given the huge differences between each country it would be fool hardy to approach Africa with a one size will fit all mentality. Make sure you are familiar with the cultural, economic and political specifics of each African country you intend to visit or conduct business in. Gaining knowledge about Africa from sources other than the Discovery Channel would thus be encouraged.
It is extremely important to involve and work with the local population in order to ensure success. To thrive in this continent an acute awareness of different customs and traditions is paramount for which local knowledge is indispensable. For example, many communities are built on a culture of mutual help and support and sometimes the lines between business, friends and family can become blurred. Establishing a good working relationship with a member of a culture you do not understand, might preclude you from creating unforeseen consequences for yourself or your business due to ignorance or your own bias.
As a result you must be prepared to work with people from all levels of society. In some African countries local authority levels are segmented, leading to immense difficulties for investors or business men more accustomed to regions where organizations and the authority of, for example governments, extend to every level of society. Prospective business men should be prepared to negotiate with a wide ranging group of individuals from governmental authorities to local tradesmen and important figures in society.
It is important to realize that Africa is not only home to a variety of cultures but also a variety of languages. While certain regions are infused with a local lingua franca, others are mired in a seemingly endless amount of regional dialects or languages. An understanding of Swahili and French will keep you in good stead in East and West Africa respectively. While in a country like Cameroon up to 24 different African language groups may be expected in addition to English and French. This reality demands a significantly different approach to, for instance, customer management compared to single-language markets in Europe or the United States of America.
To ensure that people attend a meeting, it will help tremendously to arrange it either at a restaurant or make sure that there is food available at the meeting and that the people that you have invited to the meeting are aware of this. Furthermore if you invite two people to a meeting, rather cater for at least 4 to 6. Africans believe in the principle of "ubuntu" meaning that they belief in sharing their good fortune with others!
Lastly potential investors and businessmen should be mindful of the fact that Africa sometimes moves to the beat of its own tune. In some regions the much celebrated "Africa time" is not only an amusing anecdote but a way of life. When potential business partners do not arrive as promptly as you are accustomed to, please keep this in mind or even allow for this reality in your planned schedule. The Latin maxim of Festina Lente or "hurry slowly" comes to mind when trying to formulate this attitude towards life.
While conditions in Africa and its accompanying hurdles is not always considered to be ideal, it's important to be patient and persevere by staying focused on the opportunities and potential of which Africa is an ample supplier.
Cornelia van Heerden, Director
Heyns & Partners Inc. (Law Firm), Cape Town, Johannesburg, South Africa