20 August 2010

5 top tips for doing business in Africa

Vladimir Kokorev (PhD), author and former CEO of companies dedicated to public transportation, fishing and shipbuilding in Africa, offers up tips for doing business in Africa

5 top tips for doing business in Africa
1. Do not forget that Africa is not one country – there is no ‘one size fits all’ approach
The first point to make is that obviously Africa is not one country – but the second largest continent in the world, comprising of 54 states. There are huge differences between these countries and you simply cannot approach Africa with a 'one size fits all' attitude. For instance, South Africa is a modern industrial regional power, while countries like Angola, Sudan and Equatorial Guinea are experiencing spectacular economic growth stimulated by the expansion of their oil extraction capacity.
Meanwhile other countries live off agriculture, self-subsistence and international aid, with Mediterranean Africa being heavily influenced by Arab and Islamic culture. The key thing is to make sure you are familiar with the cultural, economic and political specifics of each African state that you plan to bring your business to.
2. Always start by contacting the official channels
Before starting your business, you should always contact the official representatives of the country in which it is located, in order to present your business plan and anticipate any legal or administrative obstacles for its development.
You have a big advantage if you have had some experience of working for diplomatic service or for a large company with local branches in Africa. This will make it easier for you to assess the situation and obtain the necessary contacts. Moreover, the administrative officials will generally have a more favourable opinion of you, as opposed to if you were a newcomer or a freelancer. For example, many Americans and Europeans have started their own businesses in Africa, after working for many years as NGO volunteers.
In the end though, you will be judged not by your words or promises, but by what you actually do. As a friend of mine used to say, unlike Europeans, African people are not won over by advertising and marketing techniques, but by results.
3. If you want to do business in Africa, be prepared to spend a lot of your time in Africa
If you are thinking about trying to run your African business from the comfort of your own country – checking in every now and then with a timely Skype or video conference – forget about it. Just like in any country, if you want your business to be a success, you have to be around – especially in the early days. By directing your business from a distance there is a real danger you will lose touch and lose sense of what is really happening on the ground. Modern communication tools are a real danger, because although they give you the illusion that you are physically there, it is just that - an illusion.

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