Of course, Africa already has been discovered as an exotic home of wild animals, gold, diamonds, rubber, slaves, and the origin of mankind. Because of the scramble for colonies, English, French, Italian, German, Spanish, Portuguese, and Dutch are spoken there along with local languages. Currently, with advances in mobile communication; transportation, including by drones; and medicine, Africa is on track to come into its own normalcy. The middle class is growing. And the size of the continent suggests regional divisions into northern, western, southern, northeastern, and southeastern markets. A recent acquisition recognized the opportunity to finance trade in Africa. Helios Investment Partners, the private equity investment firm founded and managed by Africans, Tope Lawani and Babatunde Soyoye, in 2004, acquired the UK's Crown Agents Bank and Crown Agents Investment Management in April, 2016.
What might be most attractive to the world's future tech-savvy, well-educated, independent workforce is the challenge Africa presents. The enticing work environment Sydney Finkelstein describes in his new book, Superbosses, is one where creative energy is purpose-focused on a vision, commitment to a task is satisfying, and talent is recognized and rewarded at an early age.
Some international bankers already are enjoying unique opportunities to figure out how to handle complicated financial deals in Africa. Lending for African projects from Asia's investors, Japan, China, and India, for example, is secured by assets, such as the turbines Japan provided for a coal-fired power plant in Morocco, and repaid from revenue that the projects, such as the power plant, will generate. Similarly, when a loan for buses will be repaid by future bus fares, bankers have to know what questions to ask. Which government agency has authority to make the purchase? Will the buses be able to handle African road and climate conditions? Who will train drivers and maintenance workers? Is payment to be made in local or hard currency? Is there a way to hedge against the devaluation of local currency, and what are the options should emergency measures prevent hard currency from leaving the country?
Gaurav Wahi of India's Jindal Steel and Power Limited, a company with operations in South Africa and Mozambique, called attention to a May 16, 2016 Forbes article that provided excellent practical advice about doing business in Africa. Companies looking for immediate, low-risk African opportunities have limited options in South Africa, Botswana, Namibia, and Swaziland. Half of China's $12 billion investment in Africa between 2005 and 2015, for example, went to South Africa. Few African countries currently have relatively high per capita GDP incomes and reliable infrastructure (ports, roads) and institutions (legal, police, and educational systems).
Elsewhere in Africa, companies that can become "early pan-African powerhouses" need patience and moxie to do the following:
- Identify home office talent with the ability to live in a foreign environment, to accommodate company policies and processes to local cultures, and to connect with local employees.
- Manage relations with governments (secure agreements and contracts)
- Deal with a lack of government regulations and poor land ownership records
- Develop self-sufficiency that might require vertical integration from raw material sourcing to production and distribution
- Provide low-cost products and services
- Expand uses for mobile phones (prepaid bank accounts, marketing, customer service)
- Train employees and provide benefit retention packages that prevent poaching by competitors
- Establish firm guidelines (ethical reputation requirements, experience working with other foreign companies) for evaluating potential local partnerships
- Provide security
- Form contingency plans for insurrections and political instability
- Anticipate economic volatility from commodity price swings
- Gain guarantees from multilateral organizations, such as the World Bank
No one doing business in Africa will be stuck implementing a bureaucratic playbook. Marketers will be reading the accounts of explorers and missionaries to identify routes to their target markets along rivers and in desert oases. Freight forwarders will fill their Rolodexes with importers and exporters, if they know which carriers can be counted on to meet delivery schedules and if they know how to fill shipping containers to get the best cargo rates. Manufacturers will prosper when they attract the best employees, because they have a reputation for providing excellent training programs and benefits.
Just considering a normal bell curve distribution of talent, not only business, but African agriculture, sports, education, security, law, fashion, and the arts are all fields ripe for development in the coming years. An exciting career awaits those willing and able to work together with Africans.
(Also see the later post, "There's No Business Like Bug Business.")
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