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Business culture in SA different than in rest of continent, says entrepreneur

South African companies should learn to adapt to the different business cultures in the rest of the continent, says Nigerian-born entrepreneur Nissi Ekpott.

Nissi Ekpott

Nissi Ekpott

“The market out in Africa is so much different than South Africa – the structure and how things work. Many times people fail just because of the differences in business culture. Some South Africans are finding it hard to be open-minded and ready to see things differently,” Ekpott told How we made it in Africa in an interview.

In the early-2000s, Ekpott, who now lives in Johannesburg, and two other partners, identified an opportunity to export South African machinery to Nigeria. Their company, called Tradenet-Zoeinc, focuses on equipment for small-scale industries, such as block making machines, maize mills and biscuit making machines. “I saw a market in Nigeria and the rest of Africa, and the nearest place we could get most of the technology and equipment from was South Africa. It has grown excellently and we’ve expanded into exporting not only equipment but also South African skills and services. We’ve also added a section that brings in financial investments from other African countries and (overseas) into South Africa.”

In addition to Nigeria, the company now also exports to other countries in West, Central and East Africa.

Different business cultures

Ekpott says that the slow pace of doing business in a country like Nigeria is often a source of much frustration for South Africans. “I will tell you one little thing about doing business in Nigeria: time is like a slow river. If you can grasp this mindset and learn to manage it, you will do well in Africa.”

He adds that the fact that many transactions in African countries are done in cash, is also a foreign concept for many South Africans.

One of the biggest mistakes South African companies can make is to assume that the rest of the continent functions like their home market. “Some people want to export ideas from their own market to other markets without being very flexible, adapting to and learning from local situations,” explains Ekpott.

Large market out there

Ekpott notes that the African market is large with considerable potential. “Every South African manufacturer should be looking for a way to do business with the rest of Africa. There is a sizeable and fast growing middle class out there hungry for products and services. Some studies show that the African middle class is actually larger than that of India.”

He says that South African firms used to be conservative about doing business in the rest of the continent, but that this is fast changing. “For instance, in the past we struggled a lot against the perception that everything that comes out of Nigeria is bad.”

South African companies shouldn’t aim for “greedy profits” too fast, but also shouldn’t be too cautious that they don’t take advantage of the opportunities. “Some South African companies have already placed priority on their African expansion and are doing very well.”

He says that the telecommunications revolution has allowed many Africans to enter the business world. “The telecoms boom has driven change in many places. It has put a lot of power in the hands of people.”

“Africans are beginning to see themselves as partners,” says Ekpott. “I find it easier now to sell South African machines to the rest of the continent than before. People are more aware of the technologies here than they were. Traditionally the looked to Europe, the US or China. I also encourage other African businesses to develop strategies that enable them to sell beyond their markets, including exporting into the South African market. The trade has to be both ways. For instance, I have seen some Nigerian products that could do pretty well in the Southern African market.”

  • Vusi

    Ekpott’s views about South African “business culture” are narrow and lack objectivity of strategic thought. While he admits of the relatively advanced nature of business activity in South Africa, he should ask himself one question: why is South Africa’s economy relatively advanced than the rest of the Sub-Sahara? His answer should lie around one of the statements he made, i.e. “..that the fact that many transactions in African countries are done in cash, is also a foreign concept for many South Africans…” Without delving much into detail, it is economically evident that the maturity of financial markets, financial and banking services attract investments in any market. Lack of this financial strenght in any market poses high risks for any investor. So, it’s not just about South African entrepreneurs, it’s a bout strategic investment decisions. Secondly, South African businesses operate under ethical business codes and practices that any violation of these exposes businesses to risks in many folds.

    As Africans (civil society, government, institutions), we should’nt be comfortable with a status quo that is taking us backward. If we are to grow this continent and prosper as entrepreneurs within the region, we need to aspire to global business standards.

    Yes, Africa is pregnant with a plethora of opportunities. Those South African entrepreneurs who are already in other markets in Africa should be applauded for their high risk appetite and recognised for thier bravery against all odds. Understanding the market and operating in it amid all these challenges, doesnt necessarily mean the conditions in which business is done acceptable and bearable. Capitalists will do whatever it takes to realise their rents.

    Lastly, to reflect objectivity on Mr. Ekpott’s views, he should perhaps also ask himself, what are African countries doing to better and make doing business in the entire continent friendly and ethical? What are we doing as African entrepreneurs to lobby amongst ourselves, become a strong force to assist our ailing governments through partnerships to develop the continent particularly on infrastructure? Are we waiting for Chinese and the West to take what belongs to us and show us how to do it?

    • Nissi Ekpott

      Thanks for your opinion Vusi. Your points make sense and potray the IDEAL situation. Buy I think you miss the point of the article. It aims to tell things as they are at the moment. Its not written to justify Africa’s problems. Rather it is written to prepare the South African investor for what he is to expect as he expands into Africa. The fact remains that many South Africans are venturing into Africa and they will see shocking differences. They need to be ready for what they will experience.

  • Lucky

    I think as much as Mr Ekpott maybe right about the prevailing “business culture” in parts of Africa, it is not hard to realise that this so called culture is also largely influenced by prevailing conditions and way of doing things which is not in tune with current developments in the rest of the world. It is a bad excuse to say that in Africa people accept hard currency for transactions and that there is little value placed on time!This is an attitude that has got to change as it works against cultivating good business practices in the continent. Why should Africa always be associated with backwardness when the rest of the world is moving forward? With introduction of modern technology there is no reason to be moving around with cash.Electronic transactions save time and wastage and do not motivate theft and corruption that comes with carrying hard cash around!

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