How to Succeed in African Markets
By ASV Client Relations
Over the years, Africa has been considered to be a highly rewarding trade and investment destination. This presumption is, for the most part, supported by key social and economic indicators.
These key social and economic indicators comprise an increasingly young and growing population, rising GDP estimates, improved infrastructure, and deliberate micro and macro-economic policy interventions aimed at improving the ease of doing business across the continent at large.
Nonetheless, for international businesses and investors to successfully tap into arrays of potentially high-return trade and investment opportunities, the formulation and adaptation of a savvy internationalisation strategy aimed at penetrating these markets – is of paramount importance. This way, costly mistakes would be avoided.
In this view, the following pertinent factors need to be simultaneously considered, whilst formulating and adapting a perceived competitive internationalisation strategy for arrays of African markets.
1. Do your Research
You will be required to carry-out rigorous research on varied African markets. Good practice would indicate that you focus on emerging growth markets in the continent. Do ensure that you only utilise and draw your tentative conclusions from reputable sources, for example, the World Bank, United Nations, World Trade Organisation, African Development Bank, etc. Furthermore, ensure that you draw-upon the most current and contemporary research, therein.
2. Decide on your initial FDI Strategy
Your initial FDI (Foreign Direct Investment) strategy will be vital in ensuring that you indeed attain early internationalisation success. Depending on your preferences and ambitions, you may, for instance, opt for a low-risk strategy, e.g., exporting. Alternatively, you may settle for a higher-risk strategy, e.g., setting-up a subsidiary and/or a regional Head Office, etc.
3. Liaise with official Trade and Investment Organisations
Upon choosing your initial FDI strategy, it would be of utmost importance to liaise with official trade and investment organisations within both your country, and the destination African country. It is advised, however, that you initially liaise with your own country’s official trade and investment organisations.
In particular, start by approaching your country’s International Trade Organisations/Agencies, which are usually Public-sector organisations/agencies and offer their services free-of-charge. These bodies will be vital in helping you to indeed validate the results of your preliminary research, and revise where needed/appropriate. Of essence, these bodies tend to already have strong and trustworthy networks in your target African Market.
Thereafter, ensure that you liaise with the International Trade and Investment department of the Embassy/Consulate, in conjunction with the official trade and investment organisations/agencies – within your target African market. This intervention will ascertain that you both validate the credibility of the trade and investment partners that your country’s official trade and investment organisations/agencies recommended. Additionally, building such invaluable relationships will further help you whilst partaking in future trade and investment diversification endeavours.
Bringing it all together
Africa, and in particular, emerging African growth markets – present a slew of potentially lucrative and high-return trade and investment opportunities. Nonetheless, it is well-known that the potential risks are equally rather high within these markets. With this in mind, ensuring that you develop a savvy and well-executed internationalisation strategy by following the pertinent steps that have been furnished, herein, will ensure that you indeed succeed with your internationalisation endeavours within these elusive, yet highly-rewarding emerging African growth markets.
Contact us for further information on how to successfully tap into these viable and potentially lucrative trade and investment opportunities within the continent.
Tel. +44 (0) 333 567 0779