In the current global economy, businesses are seeking new access points within global markets. The state of the global economy may have left them no choice and this could be because:
they have become stagnant whilst their competitors flourish;
they may be competing with rising prices of raw materials and labour;
perhaps they are looking for growth but unsure where to start.
Most of all, there has been a lot of uncertainty since to the Covid19 pandemic.
The good news is that there is a solution!
Access to global partnerships in strong markets to help navigate this year and beyond. But first, here are some of the most frequently asked questions we get from clients:
1. Where can I find data within my industry?
Some businesses struggle with the idea of entering into unfamiliar territory without sufficient industry and market knowledge. Whatever a business’s position, accurate information is paramount! But where can they find it?
Not knowing where to look for that information leaves many businesses making uninformed decisions and worse still, basing their actions or inaction on incorrect data - and none of us can afford that. There are numerous sources of information that combined with the right advisory services equip businesses for market entry into the continent.
2. How safe is it to do business in Africa and what are the levels of risk?
Perhaps you have not been able to expand internationally because you have never been able to shift from the fear that holds so many people back when it comes to making major decisions for themselves and their businesses. The important thing always is to be informed and to understand how the so-called barriers to expanding into Africa have opened up in order to reduce risk.
3. Which is the best country in Africa to enter?
Well, the answer to this question depends on so many different factors that we explore with the client until it makes sense for them and their business.
Now, wrap this around your head. Africa, historically perceived as the world’s poorest continent, is home to some of the fastest growing economies globally! These are Rwanda, Senegal, Ethiopia, Niger, Cote d’Ivoire, Mozambique and Libya.
And let me add - the myth that Africa is poverty-ridden and a difficult place to do business is exactly why multinationals are monopolising the business landscape whilst everyone else struggles to get growth in a slowing global economy.
Yes, there is poverty in many parts of Africa, but there is also rapid development. There is a wealth gap problem in Africa, yes – just like there is a wealth gap issue in the US, the UK, India, Mexico, Brazil and so on. In fact, that gap has been growing in places such as the US putting the States in a worse predicament than many parts of Africa!
Yes, there is a problem with corruption, but where in the world have we not heard of corruption scandals? Korea, China, Japan to name a few…And yes there are infrastructural challenges; because people cannot rely on the electricity grid for constant supply of electricity, people have to resort to private generators to compensate for periods when there are power cuts. Under-developed? Certainly, in some parts. But did you know that there are more than 400 companies in Africa making over a billion dollars in revenues annually?
Having said all of this, China is in Africa and you know what that means, right? Buildings and supporting infrastructure (transport, power etc.) are being erected at an extremely fast rate. Furthermore, African governments support exports because African exports contribute to their economy's GDP by increasing their earnings in foreign currency. This also positions them to be able to trade and invest globally, so that expansion into Africa is a win-win situation as far as they are concerned.
There are endless possibilities and this is where Gen A’s mission becomes more of a shared Mission. I founded Gen A on the very idea that there are huge opportunities for small and medium-sized businesses in the world that want to engage with Africa the right way - not as charities or donors, but as partners in the co-creation of value for international businesses as well as for the businesses they engage with in Africa.
So not only do we help their growth into a new market, the ventures we work with also automatically become a solution for so many on the African continent through job creation. There is a whole other world out there within reach, where many businesses could have access to valuable partnerships; where they can reach a wider consumer base and where they can achieve phenomenal growth. Let me explain why:
1. The population of Africa is currently just over 1.2 billion people with 60% under 25! It is projected to reach 1.7 billion by 2030 with rising incomes across much of the continent, generating new business opportunities in the consumer market.
2. Growth is predicted to come from Manufacturing to substitute imports and meet the rapidly increasing local demand. Africa is to become the world’s next great manufacturing center as industries shift away from China to lower-cost regions.
3. The products coming out of Africa are in high demand and they can be sourced much cheaper there.
4. Africa has more than 120 million active mobile money accounts. This trend will allow companies to improve productivity, speed up transactions, and access wider markets.
5. Africa’s fast-growing population and markets present important opportunities. The world needs new supply chains away from China so positioning yourself early as a business is an advantage.
Basically, businesses have 54 markets to source from versus 1 if they are looking at China! If this is not enough to convince you, how about consumer spending accounts for 50–60% of the growth of Africa's economy? Furthermore, as the population keeps growing, consumer spending is projected to rise from $680 billion in 2008 to $2.2 trillion by 2030! We are talking about opportunities from Africa as a whole - but which market(s) could be your destination for growth?
Our next article will dive into the opportunities per sector! We hope that by reading about the possibilities in Africa you are beginning to see Africa through a difference lens. Let us know what you think or contact us directly to discuss any opportunities you would like to explore.
To your success!