Over the past year How we made it in Africa interviewed many DHL Express country managers across the continent. Most of them have been operating in Africa for decades and know a thing or two about doing business on the continent. Below are six tips for growing your own business in 2014.
1. Many opportunities, but patience required
Although Africa certainly holds many opportunities for business, dealing with red tape and bureaucracy remains a major challenge. Even getting to a meeting on time can be a taxing exercise due to traffic congestion in many cities. It is therefore important to have patience and not expect success to happen overnight.
According to Randy Buday, who looks after DHL’s operations in Nigeria, businesspeople need patience and tenacity to succeed in Africa’s most populous nation. “Nobody is going to make a fast buck here. You need investment, you need patience, you need the ability to understand the workforce, and some of the other unique constraints particular to the country,” he explains. “Even coming to work can be a daily challenge for employees due to inadequate public transport and congestion which is endemic to a number of the larger cities. That being said, there is no doubt that Nigeria is offering some of the most attractive investment opportunities and companies that are willing to invest time and energy here, will see major returns.”
2. Know your market and customers
As a continent of 54 different countries, each with its own distinct economic and cultural features, companies need to ensure they have a good insight into the market they are targeting.
Bernard Malaba, manager for DHL Express in the Democratic Republic of the Congo (DRC), notes that companies wanting a national footprint in the DRC should make sure they have a very good knowledge of the country, as the market can differ widely from one region to another. “The people in the country are so different. For example, what applies in the south of the country, does not necessarily apply in the east.”
Kader Coulibaly, country manager in Ghana, says foreign investors need to do their homework and choose their local partners wisely. “The biggest challenge to doing business in Ghana at the moment is market knowledge. It is also important to choose the right local business partner because the Ghanaian market is a very particular market, and it is better to have somebody that knows the environment very well.”
Coulibaly adds that companies shouldn’t “cut-and paste” strategies used in other territories.
3. Look at the opportunities in lesser-known countries
While countries such as South Africa, Kenya and Nigeria are receiving significant attention from a foreign investor perspective, there are many often-overlooked countries that might offer good opportunities for business.
The West African country of Niger is such an example. “According to some mistaken beliefs, Niger is seen as a country with no resources and few economic fundamentals useful for doing business. Actually, Niger is one of the richest countries in West Africa with a lot of natural resources, including uranium and oil. Moreover, the authorities have managed to establish an acceptable legal and regulatory framework for the conduct of business,” says Amadou Diabate, DHL Niger country manager.
Sierra Leone’s reputation as a war torn economy also remains one of the greatest hurdles for business today. “One of the biggest challenges is the misconception about the state of insecurity, particularly for those who have never been to Sierra Leone,” notes country manager Basil Akinbinu.