South African companies should learn to adapt to the different business cultures in the rest of the continent, says Nigerian-born entrepreneur Nissi Ekpott.[hidepost=9][/hidepost]
“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.”