As people across the globe eye Africa for possible investment and South Africans head north there is some encouraging news to feed these ambitions, stressing reports to temper our excitement and some errors to learn from. Network Africa
Ghana's capital Accra is awash with knowledgeable, well-dressed young up-and-coming individuals, driving top-of-the-range autos living in fashionable houses. It Is indicative of Ghana's economic growth, 14.4% last year. According to the Whole World Bank many African markets are forecast to be among the world's quickest growing in 2012. Top of this list are the DRC, Nigeria, Ghana, Liberia and Ethiopia.
"There is a new story appearing out of Africa: a narrative of growth, progress, potential and profitability." China's trade with Africa reached $160 billion in 2011, producing the continent one of its biggest trading associates.
"Since The Economist regrettably labelled Africa 'the despairing continent' a decade past, a profound change has had hold." Now "the sun glows bright... the continent's notable increase seems likely to keep up."
Africa's commerce with the remaining part of the world has skyrocketed by more than 200% and yearly inflation has averaged only 8%.
The International Monetary Fund (International Monetary Fund) is anticipating Sub-Saharan African markets to grow at above 5%. Added to that, there are currently more than half of a billion cell phone consumers in Africa, while improving abilities and rising literacy are attributed to some 3% growth in productiveness.
An end to the access to considerable natural resources, numerous military battles and economic reforms have boosted a much better business climate and helped propel Africa's economical growth. Greater political stability is greasing the continent's economic engine. Network Africa
Urbanisation and all this growth is putting a strain on social services in the towns, in addition it has led to an increase in urban consumers.
Then there's the more sobering information. "A sustained slowdown in advanced states will dampen demand for Africa's exports," writes Christine Lagarde, managing director of the International Monetary Fund. Europe is the reason over half of Africa's external trade. Tourism may also experience as fewer Europeans come to Africa, effecting vacationer dependent markets like Egypt, Tanzania and Kenya.
The South-African Reserve bank warned in-May that the financial disaster in Europe, which use up 25% of South Africa's exports, introduces large risks.
Another stress is the resurgence of political disasters. Recent coups in Mali and Guinea-Bissau could have broader economical repercussions. "Mali was scoring very well, now we are back to square one," claims Mthuli Ncube, the AfDB's chief economist. Uganda, Kenya, Ethiopia along with other states have militarily engaged in Somalia, which may slow their economies. And Nigeria is grappling with Boko Haram, a terrorist sect in the north of that state.
A trigger for worry what the majority are referring to as Africa's "jobless recovery." Investors are focusing on the extractive sector, particularly gold and diamonds, in addition to oil, which creates fewer employment opportunities. 60% of Africa's jobless are aged 15 to 24 and about 50 % are women.
But none of this is discouraging South African company interest north of the border. One might ask why? South Africa's national market isn't providing local companies with enough increase chances, prompting many to go through the remaining portion of the continent. This according to Ernst & Young's Africa Company Center's leader, Michael Lalor in a web based press meeting recently: "While South Africa is still growing well compared to the advanced economies, it's certainly not checking up on a few of the other rapid-growth markets." Says Lalor.
Analyzers are pointing out that most of the other emerging markets, such as China and South America, are difficult to enter, creating the rest of Africa the apparent pick. Asia is viewed as nearly excessively competitive. Latin America ventures mean coping with a really strong and ever-present Brazil. Hence Africa, given its sustainable growth story and its possible, is an obvious region for South African companies to grow into.
Quoted by howemadeitinafica.com Lalor states that most Johannesburg Stock Exchange-listed companies are developing approaches for the remaining part of the continent. Ernst & Young is encountering strong interest from foreign firms to invest in the continent. "The response from our customers and from prospective investors is overwhelmingly favorable, to the degree that individuals just cannot keep up. So there is no uncertainty that we're seeing important interest, both talked, interest in spirit, but also people placing their cash where their mouths are," he said.
These thoughts are affirmed by means of a survey done last year by Price Waterhouse Coopers. A CEO study published by PwC identified that 94% of South African firm heads anticipate their enterprise in Africa to increase in the coming 12 months. PwC interviewed 32 South-African CEOs in the ICT, financial services, and customer and industrial products businesses.
Bearing this in mind it is worth turning to Raymond Booyse, creator of consultancy firm Expand into Africa, who recognized four errors frequently made by South African businesses venturing to the rest of the continent.
The first was: Not doing your homework. South African companies are often not willing to spend cash on marketing research. "Go and appear when there is a marketplace for the products or services. After you have confirmed that there's indeed a market, find out who your adversaries will be," says Booyse.
Booyse highlights that South-African firms underestimate transport costs and dismiss how local laws and rules sway doing business.
Secondly: Ignorance. Many South-African business folks are ignorant of local customs and approaches in accordance with Booyse. By way of example, ignorance doesn't realise that simply since they are equally former Portuguese colonies, what operates in Angola's capital Luanda, does not necessarily mean it will work in the northern Mozambique. In a recent report, research company Nielsen noted that African buyers' attitudes towards technology, trend and the way to spend leisure time differ significantly.
Thirdly: Lordliness. Booyse claims that South Africans occasionally believe they understand what people in the remainder of the continent need. "In the remainder of Africa, South Africans are regularly regarded as haughty."
Finally: Not being prepared for the large prices of conducting business in Africa. Many South-African firms do not know of the large costs involved with doing company in the remaining portion of the continent. "If you need to spend fourteen days in Angola it costs R40,000 (US$4,700)," notes Booyse. "It isn't cheap and easy." Flights for example, from South Africa to both Kinshasa or Lubumbashi may be expensive, and resort rates are also very high.
It Is clear that Africa is a rich spot to plant seed. But Africa is perhaps not for the fainthearted as company is done in a totally distinct way to elsewhere in the world, with all manner of societal and political hoops to leap through. South African businesses possess a possibly bright future and definite edges if they are prepared to take risks, remain humble and do their assignments.
I'm Matthew Campaigne-Scott. I invested 19 years working in Ministry and Missions. I am now enjoying the lifestyle of a freelance writer.
I have written for periodicals and websites, composed sermons and speeches and ready copy for investigation papers and web advertisements. I can tailor my work according to your needs. I love a challenge and take pleasure in establishing work relationships.