South African Business 2016 edition

SPECIAL FEATURE

SPECIAL FEATURE Understanding Africa Lebo Motshegoa (MD of Foshizi Mass Market Research and Strategy), says there are seven essentials that South Africans as well as international business people need to know about doing business in Africa. Most of us believe that business is business, so it’s easy to think the same rules apply everywhere. The fact of the matter is that this just isn’t true, especially in Africa. Socio-economic differences between countries-and even within countriesare significant, and this needs to be taken into account when entering into new markets on the continent. I’ve learnt some important lessons on my many business trips into Africa, and these are the seven things I believe all South Africans need to consider when doing business in other African countries: 1. Africa is a big continent with many different languages and cultures. The same social norms simply don’t apply everywhere, and it’s important to be aware of this when doing business. If you intend to enter into a new African market, it’s vital to research the social and religious customs of the countries in which you intend to operate, and to make a concerted effort to understand workplace dynamics. 2. While South African companies compete mainly against each other for share of market within the country, the competitive environment is very different in other African countries. Companies entering a market in Africa are not only competing with other companies within the same country, they are also competing against other South African companies entering the same space. To make matters even more complicated, they are competing against the local operations of other foreign companies, which already have a well-established presence in Africa. This means that an in-depth understanding of market dynamics is essential for success. 3. English isn’t the language most commonly used to do business in Africa. People who work with tourists speak English, but it’s a different story in the business environment. It’s therefore important to have at least a basic knowledge of the local language if you intend to do business in Africa. Greeting people in their own language is a great icebreaker, even if you can’t hold a conversation with them in their language. 4. South Africa is not necessarily the leader on the continent in all aspects of business and social life. For example, the Nigerian economy is significantly larger by value than the South African economy, and other economies are catching up quickly. Mobile money solutions are also much more developed. In Kenya, for example, you can buy anything from a cow to your lunch using a mobile phone. South Africa has a long way to go SOUTH AFRICAN BUSINESS 2016 22

SPECIAL FEATURE before it reaches this point, so it is important to acknowledge that some African countries are way ahead of us in certain things, and not to come across as arrogant when doing business with African counterparts. 5. South Africa is the last of the African countries to have become a democracy, with many other countries having been independent for twice as long as we have. We have a lot to learn from these countries, which have faced many of the challenges we’re currently facing. We need to show a willingness to learn, and should not set out to impose our own ideas and solutions on our African counterparts. 6. It may come as a surprise, but many African countries are streets ahead of us when it comes to technology. For example, research done by Net Index put Ghana at the top of the pile in terms of download speed, which averages 4.78Mbps. Zimbabwe is ranked second, while South Africa comes in at only sixth place. And, as already mentioned, the use of mobile banking technology is widespread across the continent, even in rural areas. 7. Finally, even seemingly mundane things can influence business success and business relations. Firstly, it’s essential to keep an eagle eye on currency exchange rates to ensure they don’t adversely affect business deals or business expenses. Then, while South Africa adheres to a single time zone, Africa spans five time zones from east to west. This is the same number of time zones as in the United States (excluding Alaska), so time differences need to be taken into account when doing business with or in other African countries. Similarly, the weather may influence how a customer does business, and may affect the needs of that business. It’s crucial to take these seemingly unimportant things into account because they could have an adverse impact on efficiency and, therefore, on the bottom line. Africa has many varied opportunities for both corporations and entrepreneurs, and now is the time to take advantage of that. The benefits of moving into other African markets goes beyond money, though, as there is a real opportunity for a meaningful exchange of ideas. All it takes is insight and sensitivity to the dynamics of the many different markets on the continent in order to unlock them. Lebo Motshegoa 23 SOUTH AFRICAN BUSINESS 2016