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August 1, 2019

A Road Worth Travelling: business in Africa, beyond the potholes and pervasive graft

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Having attended #AFSIC2019 in London this year, I was reminded again of how Africa is so often talked about in the clichés and platitudes of the Africa rising narrative – which I’m sure you are all aware was founded on the understanding that the deep dark continent was “finally getting its act together”, that the sleeping giant had finally awoken. The problem with such analogies is that they minimise and to some degree trivialise the great complexity – and global opportunity – that is Africa.

And in that complexity, business would do well to remember that Africa is also not a destination for exploitation. Across the continent today, we see many multinationals caught in a vicious circle of corporate greed. The problem lies in the fact that many of them continue to hold on to an outdated and narrow view of value creation. Companies that are merely focused on optimising short-term financial performance are not geared for success in the African context. If anything, they are more likely to experience difficulties, as they deplete the natural resources vital to their businesses, undermine the viability of their suppliers, ultimately resulting in economic and ethical distress for critical stakeholders.

History has given us enough examples of companies that put the pursuit of profit ahead of societal needs. Don’t get me wrong, no one is saying don’t make money, as a business that should be your primary focus. But you can also make a positive contribution to society by supporting developmental initiatives that enhance your ability to do business. This is often referred to as shared value – which has unfortunately become somewhat of a buzz word now. Similar to “Innovation”, “Disruption” and “thinking outside the box” or is it in the box now? I tend to forget…

Whatever the case, these buzzwords often run the risk of losing their original intent and significance. So just to clarify, shared value is unlike corporate social investment (CSI) or corporate social responsibility (CSR). Shared value is more akin to a management strategy, in that it aims to find business opportunities in solving societal problems. Consequently, often opening the door to new markets and improving on cost savings, talent retention, operational efficiencies and more. With all that said, it seems opportune to share some lessons learnt from running a business that operates across multiple African markets:

  • Africa is not a CountryYou laugh, but you would be surprised to know how many people actually think that it is. This is why in my view, it is essential that we first begin by demystifying Africa and its people. Africa is not the deep dark continent. It is a place like any other place in the world, filled with people with hopes, dreams and aspirations in need of basic products and services. It is not a get rich quick haven, open to anyone looking to make a quick buck. Success here requires commitment and tenacity.
  •  Think beyond the box – in fact why should it even be a box?Africa presents some unique challenges, but also an opportunity to develop some really innovative solutions. Access to reliable electricity for one is a significant challenge, as is food security. Let’s find solutions that not only assure our business success, but also put the opportunity to generate income in the hands of African people. A good example is the DigiFarm initiative Safaricom is developing.
  •  Understand the Country and be its CitizenAfrica’s historical and political context shape every aspect of life, here. If one wishes to do business on the continent, you’d better familiarise yourself with this history quickly. Close proximity to government and an alignment with its objectives is a good way to ensure success and prevent any misunderstandings. Companies that are out of step with national priorities will often find themselves at loggerheads with authorities.
  • Invest in peopleAdmittedly finding skilled labour in certain markets can be challenging. In today’s highly competitive global economy, success often depends on identifying, nurturing and retaining talented and committed local staff. As such, businesses must become uncompromisingly in terms of hiring standards, whether this relates to internal staff, the suppliers they appoint or even the value chains within which they work. I believe that the most respect an organisation can pay its people is to expect a lot out of them – and compensate them accordingly.
  •  Multiple market venturesOne way to build resilience into a business model is to expand into different geographies. An example for agriculture sector player could be that when extreme weather impacts business performance in one market, crop deficits in one country could still be offset by good performance in others. While this is a simple example, it showcases the value of thoroughly planning your route to market strategies. Furthermore, there is great value in being able to export to other African markets or shore up a shortage in one country by importing product you have produced in another. This creates a cyclical commercial economy within your own organisation – and if you are savvy, leverages forex too.
  •  Patience and persistenceWe often hear the old adage of “African time” but African time is a real thing. Africa does move at its own pace and rhythm, and the sooner one gets in tune with that the sooner one will start seeing results. The important thing here is planning. Over the years, experience shows that planning for every eventuality is a must and if something can go wrong it most likely will. The answer is not to throw your hands in the air and give up but rather to be flexible, adjusting plans accordingly and learning from trial and error.

This is a road worth travelling! It’s easy to say that doing business in Africa is hard, our pothole-riddled roads, pervasive graft and corruption, political and policy uncertainties, exposure to climate change etc. all make Africa a challenging environment to operate in by any measure. But if given a chance this continent and its people will surprise you with their grit and resilience – and their will to succeed alongside you.

I am reminded of a statement Ambassador Ami Mpungwe, once shared that really resonated with me. He said that private sector investors in African countries need to fully embed themselves and become part of that countrys DNA. Failing to do so, he believes, makes them a virus and risks the formation of antibodies and thereafter, rejection.

So yes, Africa is a land of opportunity but not one to be exploited in the pursuit of short-term profit – pay our continent the respect of investing in pursuit of sustained growth and development. Shared value initiatives can be that growth driver, leading the next wave of innovation and productivity, providing immeasurable social and financial benefits – and personal growth benefits too.

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