What you need to know about conducting business in Africa
If you thought that Africa was the “hopeless continent” think again. Since 2005, the continent has outpaced world growth since the start of the last commodity boom and is expected to grow faster than any regional country in the world.
Are you taking advantage of the continent’s vast naturally resources, substantial debt relief, improved economic management and increased private capital flows?
But, despite the fabulous business opportunities in Africa, there are risks involved.
Some of the risks are economic and include poor infrastructure, high taxes, indigenisation issues, skills shortages and volatile currencies. From a social perspective, unless African governments lower the current barriers to growth and development, there is the risk of an African Spring.
Conducting business in Africa poses other threats, the biggest being to your Reputation. Whilst drought, famine and other natural disasters might impact on your business operations and short term profitability, the growth of sectarian violence, terrorism, corruption and underhand business dealings will impact on your profitability and shareholder confidence.
Recent research by the Rand Institute and other policy think tanks have indicated that if the public company experiences a terrorist act or a product contamination incident, their shareholding value can drop by almost 2% overnight. If your local staff are paying bribes to, or otherwise influencing the decisions of government officials, you could be exposed to severe penalties in terms of the Foreign and Corrupt Practices Act (FCPA). These penalties are substantial and new anti-corruption legislation is the cause for many companies to become more careful when conducting business in Africa.
As the only corporate intelligence (CI) firm to operate in all 55 African countries, we can identify the obsticals your company may face when conducting business in Africa. We will provide you with country specific operational, security, marketing and human resources intelligence to help you make informed business decisions.
Whether you require early warning of possible market and industry threats to your business, or want to know how to secure your supply chain, assess the credit worthiness of your debtors or the regulatory changes that may loom large, contact us now for a confidential assessment.
