It’s no secret that the key to growth in Africa is long-term, sustainable economic growth. While countries on the continent managed to provide US$760 billion in goods and services to other jurisdictions between 2015 and 2017, most of this was beyond the borders of the continent. Although any economic activity is welcome, for Africa business to be successful, experts believe that the focus must shift to regional trade and development.
How Africa business can succeed
With a large, young population and access to vast reserves of natural resources, Africa may be poised to create growth that could eradicate poverty on the continent. The extensive free-trade area (the largest of its kind in the world) and a 1.2 billion-consumer market mean that Africa has the opportunity to harness its resources and human capital to create critical jobs while forging a new path to development.
In an interview with the BBC, Acha Leke, Chairman of McKinsey and Company’s African division, shared ideas around what African businesses should be focusing on in order to encourage growth on the continent. These are the takeaways.
1. Map your strategies
There are 54 countries in Africa, each with their own geographical, legislative and developmental advantages. Anyone looking to start a business in Africa should consider where they want to play. If you’re going to be in the manufacturing sector, where is it most advantageous to do this? Which countries are best for tech?
Prioritise your needs, consider the policies in the various business centres as well as what else these countries can offer that will benefit your business model, make a choice and then scale your idea.
The African market is different from anywhere else in the world. Think carefully about how you can innovate within your business model to suit the needs of those on the continent. Consider the types of products and services you want to offer, then adjust that to suit the African consumer.
3. Build resilience
While the road to business success on the African continent is winding; it’s necessary to take a long-term view if you wish to build a successful business. When assessing the multinational corporations that have the most success in Africa, one thing stands out: the length of time they’re in the market before they begin turning a profit.
4. Attract talent
Furthermore, with a population where most will be under the age of 25 in 2050, businesses must not only to consider where and how they will attract top talent, but also how they can contribute to nurturing that talent. For those who wish to succeed in Africa, building human capital is essential.
5. Adopt a mindset of making a difference
While the bottom line and dividend payments are the main concern for many businesses in many jurisdictions, that is not necessarily the case in Africa. Although profitability is important, the bigger motivation behind starting a successful African business is to transform the continent and the opportunities available to its people.
Finally, opportunities abound in Africa. Importantly, a young population, large market and plenty of prospects for innovation, companies who want to succeed simply need to create a long-term roadmap for success. In addition to offering innovative products that speak to consumer needs, they need to find the best methods to attract and develop talent, and most importantly, adopt a mindset of making a difference.