Building a business in Africa is now as much about embracing digital innovations as it is about understanding the nuances of each country and what it takes to succeed there. If businesses are to successfully expand into Africa, they must be willing to spend time researching the dynamic nature of each country it is targeting.
Long-time strategic partners World Wide Worx, an independent technology research organisation, and CG Consulting, a specialist lead generation and outsourced telemarketing service provider in Africa, have seen a shift take place in the operating environment on the continent. To this end, both organisations believe that the next few years will be critical to drive business expansion here.
Roots in connectivity
“More than a decade ago, the first submarine fibre-optic cable connecting Sub-Sahara Africa to Europe was launched,” says Arthur Goldstuck, founder and managing director of World Wide Worx. “And while it delivered better Internet performance, more importantly, it introduced competition and opened up the Internet across Africa.”
He says that when World Wide Worx and CG Consulting conducted their first joint pan-African survey in 2010, well below half the respondents were already using the cloud, a number that would likely have been 5% before the launch of the cable. When they began surveying cloud adoption in Africa in 2013, the proportion reached 50%, and by the 2018 survey was at 100%.
In the 2020 survey, the focus shifted from adoption to strategic usage. And this became key to many organisations maintaining business continuity during Covid-19 lockdowns.
“Throughout 2020 we have conducted large-scale surveys and are seeing that African enterprises have survived thanks to a combination of fibre, smartphones, and satellite technologies, albeit with data costs still very high in Africa.
“This year marked a watershed between companies simply moving to the cloud to fully embracing it,” says Goldstuck. “As the cloud started to take on more strategic and operational significance in Africa, hyperscale data centres started to arrive. Already Microsoft Azure and Amazon Web Services data centres have been launched in South Africa, with Oracle expected to follow suit next year. Both Teraco and Dimension Data are planning massive data centre expansion.”
The growth of pervasive mobile broadband, and lower-cost satellite filling the gaps, will contribute to what Goldstuck believes will be the disappearance of bad connectivity as a challenge in Africa during the 2020s. He says that all companies will have to leverage the Internet and the cloud to become more competitive, bringing with it a strategic revolution, given the tools, platforms, and systems available from cloud providers.
Business goes beyond tech in Africa
However, while technology is a large part of the business process, it is only one element of the process in getting businesses positioned for success on the continent.
According to Louise Robinson, sales director of CG Consulting, one of the biggest issues is that European, American, and even African companies still do not understand that Africa is diverse, with 54 countries – and massive cultural, language, and technology differences between countries.
“What works in Kenya with its phenomenal start-up culture will not work in Nigeria, which is probably the most difficult country in which to work,” she says.” Similarly, doing business in Ethiopia means overcoming government corruption and frequent internet shutdowns, while South Africa has its share of load shedding issues and legislative challenges.”
Moreover, says Robinson, the value of building relationships and knowing who the industry leaders are of their respective countries, can provide immeasurable value in preparing for expansion.
“Each country has its own diverse way of working, requiring a significantly different approach. C-level designations and their roles and responsibilities can vary between countries. And with more investments being made in Africa, it is about making sense of the opportunities and understanding where to best target potential business growth.”
According to Robinson, this is the value that CG Consulting offers from a strategic perspective, while enhancing the insights World Wide Worx provides from a technological and innovation point of view.
“For us, it is about using people who are local and understand the lay of the land, who continually search, phone, and update all our enterprise databases. Yes, it is a manual-intensive process, but it has enabled us to build significant business-to-business databases of most countries. Europeans and Americans must understand that one email might reach 75 people at an organisation, with none being responsible for replying. Trying to phone someone involves not only more than one call, but usually several calls spread out over a few days.”
Going back to the basics, and understanding they are not so basic
Robinson believes that the only way to crack the African business code is to rely on a manual approach. As with the ever-changing and emerging business landscape, a post-COVID-19 world will continue to be filled with challenges and changes for businesses on the continent.
“Cold calling is never going to go away, and we now need to be more proactive that ever,” she says. “Many African countries do not use the likes of LinkedIn for business, and not everyone has a website, or keeps it up to date for that matter – even larger companies. Gmail and generic emails are still a preference for a lot of large companies.
“Pre-lockdown, I attended conferences, purchased magazines, and networked with people in all the traditional ways. This is fundamental to being successful here. It is also vital to use local experts who understand the market in their countries. Companies must understand they need to do research and it takes time. There are no quick wins in trying to open a new branch in a different country.”
At the same time, says Goldstuck, is massive appetite for digital transformation in Africa.
“While capacity is limited due to budget constraints, expertise, and existing infrastructure challenges, there is a real need to embrace digital here. This is where local partnerships become important. Strategy and planning with a technical understanding are invaluable.”
Robinson agrees. “Africa is open for business!” she says. “It may be an expensive exercise to start out, but well worth it in the long run. Look how Chinese companies have penetrated most of Africa over the last 20 years. You need to be brave, have a lot of patience, and look for opportunities everywhere. A good sense of humour will always go a long way.”