I am not a Jill of all trades. I am a mistress of one; Entrepreneurship. Through this lens, I form my vision of the world. A world that is informed firstly my Africa... and then the rest.
I often times question the folly of my decision to remain an entrepreneur. Why? Because I would very much like to be in the position of not worrying about where my end-of-month compensation and that of others would come from. The seemingly endless strive, worry, failures, setbacks... Did I however mention the extreme high when you finally make a break? This is my drug, and I teeter on the brink of overdose often.
Africa has indeed come a long way from the times of Egypt, when Africa was ahead of civilization. The recent growing interest in Africa is definitely based on solid opportunities. This week, President Obama is visiting Africa and launched the 'Power Africa Initiative', a new initiative to double access to power in sub-Saharan Africa. After Asia, Africa is seen as the next frontier in development. Six out of the 10 fastest growing economies in the world are in Africa with an average growth rate of over 5 percent; many of its markets have become frontier markets. With the boom in telecommunications, Africa is fast becoming a key player in the global market place with an estimated 500 million+ subscribers to mobile technology. Africa overtook Latin America to become the second largest and one of the most innovative mobile markets in the world. Return on investments on the continent is unparalleled. As the youngest continent with over 70 percent of its population under 50, it is estimated that 65 percent of Africans are below the age of 25, with increasingly growing literacy rates. An estimated 60 percent of the world's uncultivated arable land is in Africa, according to the McKinsey Global Institute. THE CONTINENT OF AFRICA IS IN A GOOD PLACE. Increasingly, most first-world corporations facing market maturity, slower growth and cutthroat competition in home countries, have turned their attention to Africa. In few other places, will you find such huge opportunities and resources, coupled with such gaps paired with a young population to potential fill the skills gaps and help sustain investments.
THE TERRAIN IS RIPE FOR INNOVATION AND ENTREPRENEURSHIP. Whether you are an African seeking to step out as an entrepreneur, or a foreigner who sees the potential, pick up your bags and catch the next bus... but wait -- before you do, read this!
1)Understand the terrain. This is an obvious point, yes... or is it? Depending on whom you speak with, Africa has between 54-58 countries. Let's not get into why we cannot be exact at this point. Make no mistake, Africa is not one country with federal states (forgive me for making this point, but there are those who DO think that). The main blocks in Africa are regional and sectional. Broadly, there are the northern African States, and sub-Saharan Africa. Focusing on sub-Saharan Africa, divide it into West Africa, Eastern Africa and Southern Africa. There exists some level of economic collaborations between the blocks that may be helpful. Especially if you are seeking to segment the market for your product entry. West Africa has the Economic Community of West African States (ECOWAS). The east and south has the Common Market for Eastern and Southern Africa (COMESA), etc. You may not need a visa for instance, to travel between ECOWAS States if you are a citizen of one. You may also not require a passport if you are traveling by road. Theoretically, there may be fewer restrictions for people and goods between segments that have such agreements. ECOWAS has a regional Parliament currently working on a regional currency understanding. Most banks in the region have branches in neighboring countries or have strong partnerships to facilitate cross-border trade. Projects like the 'West African Gas pipe line' is underway to transport natural gas from Nigeria to surrounding Ghana, Togo and Benin. Southern and Eastern Africa has similar trade agreements and developments.
2)There are an estimated 2,000 different languages spoken in Africa. Due to its unique history of migration and colonization, Africa probably has one of the most diverse and yet convergent societies in the world! For instance, the Hausas have roots in Nigeria, Niger, Cameroon, Cote d'lvoire, Chad, Sudan, Ghana, and in parts of Libya. The Ga Adangbe people in Ghana are believed to have migrated from Nigeria with stopovers in Togo. Slaves from the United States were later re-settled back into Liberia, even though most of them where initially captured from the shores of the Gold Coast (present-day Ghana). During the colonial times, different 'Masters' also colonized Africa. The English, French, Portuguese, Germans, etc., each of them leaving their individual mark -- chief being the language. Ghana, an English-speaking country, is surrounded entirely by French-speaking countries: Ivory Coast, Burkina Faso, and Togo. Consider this, understanding that trade is very active between the two countries and also that Ghana shares its people, the 'Ewes,' and many other things with Togo! Countries also remain loyal to the cultures of its previous 'Masters.' Thus at one point, FRENCH-SPEAKING AFRICAN COUNTRIES FELT MORE FRENCH THAN AFRICAN. The Portuguese-speaking countries like Angola, Cape Verde, Guinea-Bissau, Mozambique, Sao Tome and Principe, together form the 'PALOP' countries. In the Eastern and Southern part of Africa, Swahili is a more widely spoken language in, Kenya, Tanzania, Rwanda, Uganda, Burundi, Mozambique, Congo and South Africa. Swahili is probably the most widely spoken single language in Eastern Africa. THE QUESTION FOR AN ENTREPRENEUR IS HOW TO DEVELOP YOUR PRODUCT FOR MULTIPLE ENVIRONMENTS AND PEOPLE WITH SUCH DIFFERENCES IN CULTURES, LANGUAGE AND TASTE? No offense, but when I think of the languages of Africa, I usually think of the tower of Babylon!
3)Multiple small markets. This can be a real challenge for the businessperson. The continent has exceeded the one billion mark, but what does this mean for the businessperson? Think of one billion people scattered and behind stringent barriers. The opportunity is massive, but may prove daunting and evasive. Trade barriers are the most difficult realities of doing business on the continent. The largest markets in Sub-Saharan Africa are South Africa, Ethiopia and Nigeria, with populations of averagely 53 million, 83 million and 165 million respectively. After that, THINK SMALL. Liberia is roughly 4.129million people. Ghana, 25 million. How does one strategically expand the market that may be only a finger beyond your reach, but feel like an abyss?
4)Your strategy will also have to keenly consider the travel network. It is estimated that road access rate is below 34 percent. To improve its road networks, Ghana for instance, initiated the 'Eastern corridor road project' to facilitate easier movement of goods and people across the country and also links to bordering countries. It once took me almost 20 hours to travel from Ghana to Cameroon, a country that borders Nigeria. My flight from Ghana took me to Ethiopia, and back again to Cameroon. A trip that should have taken hours even by road. How do you navigate this hurdle for expansion? The easing of trade barriers between Ghana and Nigeria has been very helpful. Nigeria recently lifted its embargo on many previously banned goods from Ghana and Ghana returned the favor somewhat; opening doors for businesses across borders and creating new opportunities for entrepreneurship. Nigeria has a huge impressive market, and Ghana has stability and systems that relatively work. The two countries also have very good trade agreements that enable easier transfer of goods and services, as well as skills. It is therefore not uncommon to see businesses headquartered in Ghana, but having their major business going on in Nigeria. Or the Nigerian businessperson living in Ghana and commuting to work in Nigeria...
For more on what to master as you prepare to launch your Entrepreneurial enterprise in Africa, keep tuned in for more tips.