Over the years across the continent I had a great time, met fantastic people and experienced a number unique events that will remain with me for my entire life. In conversation with people I meet its evident that there is an absolute misconception in most cases about Africa, especially in terms of companies wishing to enter Africa for the first time, so I thought it would be beneficial if I shared some of my insights I gained over the years.
The story you are about to see in this post is slightly censored, but mostly practical, staying away from getting too strategic as well as attempting to make it real for those that will be on the ground.
But before we start let me tell you about the most basic rule before entering into this great Continent… Leave your beliefs about how business should be done at home, be prepared to adapt everything you know into a new mould in order to achieve your objectives, it is NEVER copy and paste, it is ALWAYS looking deeply, thinking carefully and executing flawlessly.
Africa is not a country
The picture above shows not just the fact that Africa is actually much bigger than some people actually think it is… But its also important to note that Africa consists of 55 countries… Now before we go on, lets address this point of how many countries there really are in Africa. 55 Countries is the number when taking into consideration the number of countries recognised by the African Union (AU), the United Nations (UN) or both of these organisations.
Looking at the AU list of member countries you will in fact find this list consists of 54 countries (Before you start arguing remember South Sudan is Africa’s newest country), so where is number 55 then? Well number 55 is Morocco who withdrew there membership from the AU after the Organisation of the African Union in 1984 recognised Western Sahara as a country, whilst Morocco’s view was that Western Sahara is in fact a territory.
Interestingly is also the area known as Somaliland, which declared itself independent since 1991, and have been operating like a separate country since then, whilst not being recognised as such. For those of you that have visited Somaliland it is indeed an interesting place and when you travel through this country (well is it now or not) you will constantly find its citizens asking you to tell the world about their story, its a worthwhile trip indeed, and one that will provide you with some good stories to tell when you return home.
So if we counted Somaliland that would put Africa at 56 countries. Now if we count Somaliland then some may argue that we need to count Puntland as a country too, also declared independent in 1998 but not recognised as such by all stakeholders. So now we are at 57 countries.
I enjoyed reading this Blog that took the argument much further and suggest you head over there for an interesting take on some other areas and thinking around the subject 🙂
In any event we are now at 57…
Here is the actual point that i am trying to make though, each of these countries are unique and different, and do not assume in any of your strategies and tactical plans that everything that worked in one country will work in another, even if they are neighbours.
SIDETRACK POINT: If ever you ASSUME, then be ready to make an ASS of U and ME 🙂
The Regions Defined
Today’s Blog is about Sub-Saharan Africa (SSA) and therefore I will focus on SSA in looking at the regions. SSA is divided into different regions, these being Southern Africa, West Africa, Central Africa and East Africa. The UN and the AU define the regions slightly different, I normally work on the AU definition of the different regions (AU info and regions can be found here) when conducting business and research or whilst engaged in conversation. The point there is to do the same in your organisation, whether you use the one or the other make sure that your entire organisation is on the same wavelength in terms of the different regions and which countries are included in each of the regions, don’t ASSUME as it could lead to embarrassing mistakes. (UN regions can be found here)
Each of the countries and regions are different, and in your strategies should be treated as such, you will even find that the way of doing business is completely different across the different regions. Some argue that East Africa is more soft spoken than West Africa and French countries approach business different than their English counterparts, this may be true for some countries but once again don’t ASSUME. My advice to you is to do the most important thing when entering into any of the markets, get your boots dirty, walk the markets, speak to the people, engage with other business in the country, research the legal frameworks (both what is written on paper and what is being implemented on the ground), do your homework and do it well, and remember in Africa relationships is everything.
Languages we see
When looking at the different language regions across Africa you will find most references linking the different regions to key main languages, commonly referred to as Anglophone, Francophone, Lusophone etc, however It is estimated that there are more than 3,000 native languages spoken across Africa, and if you want to touch the hearts and minds of consumers on the Continent then incorporating language into your product strategy is critical and could secure you immense brand value, an example of such a strategy can be seen with Nokia in Nigeria. Then its interesting to hear the different languages in the different country styles as well, just ask anybody that listened to Liberians having great conversation around pepper-soup and a beer and you will understand what I am referring to.
When travelling to different countries have a look at the different billboards, you will note “new” guys on the block may advertise in English, (In English Countries) whilst “older” players adapted to local lingua, and you may not even understand what is being said on the Billboards.
The First Success Factors
Your people will be the most critical component of your strategy, and you should apply significant effort in attracting the right resources to supplement and execute your strategies. If you will be sending Expats into the different countries then you need to ensure that you have an intense number of induction sessions with these Expats, covering a number of areas, such as:
- Emotional Intelligence as the most critical element to take with to new country
- History of country to today, sensitivities, do’s and dont’s
- Cultural sensitivities, do’s and dont’s
- What can be expected in the new country
- What is expected from the Expat and his/her family in the new country
- What the company needs to be presented as, in ALL circumstances
I can write a whole book about this specific subject and therefore strongly suggests that any company carefully think through its entire Expat lifecycle, including what happens to Expat once he/she returns back to home country and company, to a position that in all likelihood is not there for the said Expat anymore, keeping in mind that most of these Expats would have grown enormously in the visited company and country.
There are also issues that can become extremely sensitive, especially as operation on host country matures, an example of this is Expat Salary Structures vs Local Staff Salary Structures. Inevitably your Expats would earn more than your local staff, this could lead to serious discontent internally in company between Expats and home country staff, a situation you want to avoid.
It is also critical that you have within your Expat contracts a Key Performance Indicator (KPI) that directly addresses knowledge transfer to local staff as its not sustainable to keep Expats as large part of staff complement indefinitely. Africa has great people and I have seen with the right guidance and loving attention that people will excel beyond your imagination to become great assets for any company, so although it may appear on many corporate presentations that human resources is a challenge (which it is in many instances) it is one challenge that can be overcome with a proper program and care for the individual.
When I interviewed people I also loved to meet their families as part of that process, the results are astonishing
I also found that Expats tend to get what I call “tunnel vision” after an extended period in host country and rotation programs are strongly suggested as one method to counter this trend, similarly you require different personalities during startup phase of operation than a more stable operation entering a more mature stage in business cycle, this includes all C-Level positions including the CEO.
For this specific subject questions you are most welcome to contact me, but I will cover some insights in the next few parts of Blog below.
An example from way way back on country specific elements…
When I arrived in Rwanda the first time somewhere in 1998 it was the rule of law that whenever the country flag was raised in town everybody had to stand still on attention, wherever they may be, and if you were in your vehicle you had to stop the car and turn of the engine until such time as the flag raising was completed, if you didn’t you could land yourself in some serious problems, imagine if you did not know this… By the way this is not the case today in modern Rwanda, a country i still consider to be one of the closest to my heart but that is a story for another day…
Lets get back to the people factor and lessons learnt.
Discovery that Race is a non-issue
This is specifically a point for Expats from South Africa, where we will for a long time still carry some of the history of South Africa. It was astonishing to see and experience how outside of South African borders race seemed to disappear and people of all races and cultures interacting with each other in pursuit of the common goal of succeeding in business, but also in building a social life not around colour or culture but rather around people as a persons within that community.
One thing that i also noticed is that as South Africans we have a very high work ethic, and its important that this work ethic be managed in a fashion that is not seen as overly “aggressive” in nature.
Sacrifices would have to be made
Meet my friend the bucket…I bathed with this bucket many times indeed, or in Lake Kivu at times, when no water was available to run a bath or take a shower.
Anybody going to stay for extended periods in most of the African countries would have to make some sacrifices, whether that is power outages, water outages, no DSTV when wanting to watch your favourite sport due to torrential rain, harmattan, a yearly trade wind that brings dust from the Sahara Desert through Nigeria and the rest of West Africa, not getting your favourite foodstuffs, medical facilities that may not meet your standards, or a host of other elements (The list is long), therefore if you are “finicky” its best you stay at home, or you will become what I call a “High Maintenance Expat”, which is not good for team spirit amongst others 🙂
They will be challenged not to judge
Inevitably and depending on the country, your employees may be presented with things that they do not agree with, or may not understand, its incredibly important that you have a clear program on how your employees as visitors to these countries are expected to behave under these circumstances, do not allow someone to be surprised and the be surprised in return.
But they will discover a new world
The photo above must have travelled the world a couple of times and was taken in Nigeria, leading to an image that does not in fact justify Nigeria and the story behind the above picture, many captions and stories accompanied the specific photo, not all of them true.
The photo above has a fantastic story and culture behind it which in modern life adjusted and at the blog here you can read more about this photo and much more, makes for some interesting reading
They need to be prepared
Things will go wrong, situations will change and challenges will be presented, you need people that can think on their feet and adjust to the environment and situation fast and in their stride, whilst keeping the end-goal clearly in mind, know, plan, prepare, execute and change accordingly.
They will discover that Africans are proud
Africans are proud, with a very deep heritage stretching back thousands of years, do not underestimate the importance of understanding and appreciating this pride, and do not harm or threaten this pride either. One way of understanding this is to understand the stories behind what you see on the surface, an example is the Intore Dancers in the picture above, the Dance of Heroes is a beautiful dance, with its own story, you can see these dances here.
Understand and appreciate…
Africans are resilient
The picture above was taken in Goma, a town in the Eastern part of DRC bordering Rwanda, with the entire town having been built on Volcano Rock several times as the Volcano erupted and destroyed large parts of town, you can read more about Goma here. I fell in love with the people of Goma, and to this day I have very fond memories of the town, its people and the beautiful lake Kivu in which I had to take may morning bath many times due to lack of water in the house, but the view ofthe lake, the volcano and the fantastic people of Goma will remain with me. The lake itself has its own story too as it has huge quantities of dissolved gas that is held under pressure deep under these waters, this carbon dioxide as well as dissolved methane could be released through earthquakes associated with volcano eruption. To put the danger in perspective Lake Nyos overturn (when gasses are released from under lake) killed nearly two thousand people and Lake Kivu is 2,000 times bigger than Lake Nyos, and Lake Nyos did not have dissolved methane as an additional hazard such as Lake Kivu.
I did not get to leave this great place on my own accord, it was a mixture of events that forced me to leave, sometimes i think that if these events did not occur I would still have been in Goma. I got Cerebral Malaria in Goma and it nearly cost me my life in the process, but that is a story for another day.
I can however tell you that you need to have your plans carefully laid out in case things go horribly wrong, I will dwell on this point a bit later in this blog post.
Africans are creative
What you see in the Pic above is in fact a Coffin in Accra, Ghana, a very creative one indeed, there are hundreds more like these and in most instances the coffin would represent what you did in life, the point made here is not just about creativity either…remember I said earlier that you need to understand the different cultures within the different countries that you operate in, go read all about these coffins here.
Many different cultures and religions
There are thousands of different cultural beliefs and religions across the Continent, before sending your people into a country try and understand these as much as possible and thread carefully when presented with sensitive questions in your operating environment, my viewpoint when I visited any country and got presented with questions around any subject that I may not fully understand was always “I don’t even understand my own country fully, who am I then to come and judge yours”
My interest in all of the countries I visited was and still is the people I met and meet, I loved every single person I met across the continent, they taught me valuable lessons in life and in business, from the West Coast towns of Guinea Bissau and Liberia to Rwanda, DRC, Tanzania, Ethiopia, in fact I met people across 40 countries in Africa and also in the Middle East, and the people in these countries made each country special.
Africa loves brands
Africa loves brands, not just because of the brand attributes that in many cases are inspirational, but also because most of these brands represent value for money, note I did not say cheap. Cheap is a misconception that many companies to date have made, don’t make the same mistake.
Spend time building your brand in the local market (no matter how well you are known in your home or global market) and you will reap the benefits.
Part of your brand efforts MUST include community projects/social responsibility, make sure however that these efforts are genuine and not just part of the marketing plan, Africa does not take kindly to false brands.
From the outside lacking innovation
Many falsely believe that innovation is lacking across the Continent when in fact the opposite is true, have a look at the following:
In reality they can fly
I found this post at http://www.africagadget.com, a great blog showcasing just what Africans can do and in fact is busy doing, you can have a look at their Blog here. This is the story of a 20 year old farm hand that built his dream helicopter by hand, to me however it is showcase of what people across the Continent is capable of with even the little bit that is sometimes available.
You will also find at the same blog a favourite of mine, the Jeep below, showcasing to me brand love as well (No wonder Jeep is doing so well in East Africa)
Look below the surface
In Goma I saw a program where a Non Government Organisation (NGO) implemented a program to bring water closer to the village, as opposed to the woman having to travel a great distance to go fetch water, a program which on the surface made perfect sense indeed. After installing all the equipment however the woman still walked to their regular water-point and did not use the newly installed equipment, why? Well it turns out that the regular point of water collection and washing was also the social gathering point for the woman of the different villages to exchange news and get up to date on what is happening around the villages, this is a prime example of looking beyond the obvious from your own point of view.
I had a very specific program I implemented in each country i operated in…
All my community projects were largely aimed at children, and in most of these programs we would always have a handover ceremony of some sort with the institution/s. I however realised that whilst we were handing over cheques, equipment or anything else to that institution the beneficiaries of these programs in fact did not understand and therefore they felt they were not part of this program at all, so I made a plan… I implemented a Super Hero in each of these markets, called Captain MTN, or Captain SuperCell or Captain LonestarCell whatever the brand was that I represented, to interact with these kids, the results with the kids were astonishing indeed.
I am currently busy with a personal project to introduce Africa’s own super hero’s to the continent, yet another subject for another blog on another day…
Below is a tongue in cheek drawing my staff gave to me of myself as farewell gift in Guinea Bissau 🙂
The Environment is difficult
Africa is not easy, lack of infrastructure, water shortages, power shortages, backlogs on investment and a host of other challenges remain and will take a long time to get to the standards required for business and citizens to prosper.
With most living on less than $2 a day
A large portion of the population remain poor and battle this everyday, but companies can do business within this environment. I strongly suggest you read: “Portfolios of the Poor: How the World’s Poor Live on $2 a Day (Princeton University Press, 2009) tackles the fundamental question of how the poor make ends meet. Over 250 families in Bangladesh, India, and South Africa participated in this unprecedented study of the financial practices of the world’s poor. you can find more detail here.
It will serve you well to understand deeply the markets that you are entering into, look below the surface remember.
There is a growing middle class
Just type into Google “Africa Middle Class” and you are bound to have a long list of references in this regard, I caution you however to understand that your understanding of middle class and the middle class of Africa may be completely different, it is defined by World Bank as those earning between $2 and $20 a day.
Word of Caution: Some of these reports focus on very specific markets, apply filter with your local market research as well and your local insights of your team on ground.
There is a fortune at bottom of pyramid
Another must read book on the subject is the now famous Fortune at the Bottom of the Pyramid written by C. K. Prahalad and Stuart L. Hart, you can find more detail here. This book clearly explains to the reader the benefits at the Bottom of Pyramid, now called Bottom of Economic Pyramid by some, bottom line is that once you understand the markets and look beyond what may seem chaotic on surface, you will unlock value for your company and your products.
That is if you can adjust your product strategies
Fuel station in Liberia, no power and serving purchases of small quantities to market. Some purchases of fuel in this market is in plastic bags of 200ml for local motorbike taxis. It is very important that you match your pricing to coinage within market.
From Sachet Purchasing
A large portion of consumers will purchase as the need arrises or as their finances allows, thus packaging your product in smaller sachets is vital to this segment. Your packaging to wholesale and trade should also take this into consideration, as an example if you sell a bulk bag of 20kg, include measuring cups of smaller quantities such as 100grams, with smaller bags to on-sell these small quantities inside these bulk 20kg bags, calculate pricing carefully to ensure value for money and margins in market, and remember match the currencies. Margins in trade would normally be dealt with by traders as buy some get extra. (Margin method Example)
To luxury goods
Dont for one second think Africa is not a market for luxury goods, a classic example is that of Shoprite in Nigeria selling more Moët Champagne in Nigeria through 7 stores than it sells through 600 stores in South Africa, see report here.
You need to adapt
In Kisangani, a town right in the Basin of the DRC, we placed a telecoms site. The challenge we found at the time however was that this town had no power whatsoever, only three cars (That belonged to the UN) and more than 10,000 bicycles that acted as the primary transport for the population. How do you sell phones in this environment where there was no way to charge these phones (Solar Chargers was way too expensive for this community and still in its infancy). We designed a plugin charger adaptor built around Cigar lighters from cars and attached these to dynamos we placed on all the bicycles in town, problem solved.
At the same time we branded all the bicycles with our brand through a program we initiated with local woman to knot these seat covers for us at $1 a piece and handed these free to these bicycle owners, kind of a circular economy such as the Ellen Macarthur Foundation, just this was more than a decade ago (to read about circular economy you can go here)
In creative ways
Here is what I believe is an excellent example of adapting to conditions as they arise with KFC advertising a different fry due to some supply chain issues, but there is more to this story head over to this excellent article and see how KFC also adjusted to local cultures and became part of the fibre in Kenya, brilliant indeed, both the article and the key learnings.
Some markets will be busy
And sometimes makes no sense
You may look at a market like this and wonder why everybody would be selling the same thing next to each other, remember this Africa is a village, where people have a sense of community and sharing, but some of the customers visiting these traders would only buy from a specific trader, not from anybody else…get your boots dirty and find out the different market dynamics.
You will get formal markets
Formal markets and retail environments are a plenty, so you have to have a strategy for both. DO NOT CONFUSE INFORMAL CHANNELS WITH BOTTOM OF THE PYRAMID, EVEN THE MOST AFFLUENT WILL SHOP AT INFORMAL STORES/POINTS
Stanlib claims that retail space requirements far outstrip supply. This according to me will lead to eCommerce in African cities growth that will outstrip normal brick and mortar sales in the next few years, examples of this already exists in Nigeria, but thats a subject for another day in another blog post.
East Africa retail store that is open 24 hours a day
See below the surface
These wheelbarrows are manned shopping trolleys, they will follow you around and carry all your shopping in these trolleys, after which you pay them for the convenience. Some wholesalers also fill them to the brim and place them in strategic spots to act as sales agents, note the painting on the wheelbarrow, that means they are registered. (Not everything is as Chaotic as it seems)
In Ethiopia I saw shoppers that bought their donkeys to market, after packing donkey’s back they just slapped the donkey and it wandered of on its own, taking the owners shopping home by itself :), unfortunately contraband traders in area used same method to smuggle goods (You cannot arrest a donkey?)
Media channels will take many shapes and forms
This is a popular news spot in Liberia, and also a powerful media channel to get your message to the people in the street.
Some other examples of media that is not so obvious:
- Newspapers although low in sales are used by Radio Journalist as script for news and announcements over radio station, if youre in the paper you’re on the radio if you plan it right, and radio is a good medium
- Community radio stations in the rural areas is an extremely powerful medium, relationships with these informal stations are truly valuable, they normally transmit a radius of about 2km to 5km, with home made studio equipment salvaged from a variety of sources
But nothing beats mobile channels
Mobile is the most powerful channel to consumers on the Continent and i will do a complete section on this specific point as its justified to cover this in detail, know this…if you do not have a digital/mobile strategy in your communications in market you are most probably wasting your marketing money, so watch out for this post soon…
Africa will continue to leapfrog technologies and processes
And Africa will be enabled more and more through infrastructure investments
As long as you understand business may be different
Money trader on street in Somaliland
It is true that things can change dramatically, quickly…so you need to be prepared, always
I have been involved in incidents where a country is turned upside down overnight, borders closed, airports closed with no access into or exit out of the country possible, with staff that fear for their lives, Expat staff that is desperate to get their families (Children included) out of country, if you are not prepared for these eventualities you could be in for massive shocks, don’t underestimate this.
BUT KNOW THIS: EVENTS SUCH AS THESE HAVE BECOME LESS OVER THE PAST DECADE, MORE TURMOIL SEEMS TO BE ROCKING OTHER PARTS OF THE WORLD THAN AFRICA CURRENTLY
Corruption is less than people preach
But something you have to watch carefully, you need programs in place to protect company in cases where employees may not always understand the ramifications for global brands.
Your IP protection programs needs careful analysis
Piracy and grey market stock is a reality, especially in FMCG environments, there are excellent companies dealing with these issues today and having these are great, just make sure that locally they have the experience to enact these, you will be surprised how well local IP protection is enabled once these relationships have been established
Your project will take longer than your initial estimations, especially if you are new to the game 🙂
Stay abreast of whats happening in regulatory environments, constantly update your knowledge base
Africa is more than resources
It is about PASSION for the Continent and its PEOPLE and the OPPORTUNITIES