The mention of Africa conjures images of impressive wildlife, diverse habitats and safaris, but also images of deprivation and inequality. Yet despite its current status as home to the world’s most underdeveloped countries, the past few years have seen a remarkable change in tide for the continent.
According to the Economist Africa’s annual output grew 4.9% faster than the global average of 3.8% in 2000-08. Foreign direct investment increased from $10 billion to $88 billion, which was more than India ($42 billion) and, remarkably, almost as much as China ($108 billion).
The African continent is among the fastest-growing economic regions in the world, attracting foreign direct investment from businesses small to large from around the globe. According to the Harvard Business Review, Africa and Asia
were the only continents to grow during the recent economic recession. Africa’s growth rate increased to nearly 5% in 2010 and is likely to reach 5.2% in 2011. Africa o#ers a higher return on investment than any other emerging market, according to UN data; and is home to a tremendous market of more
than 900 million potential consumers. This reliable growth is due not only to the wealth of opportunities available in Africa, but also due to its continued efforts for greater political stability and an unprecedented level of government reform to attract foreign investment. Africa has proven itself to be an essential asset for any company.
This increase in growth and foreign investment can be attributed to the fact that international businesses can no longer ignore Africa’s potential. The continent is not only the second largest in size and population in the world, but it is also vastly rich in natural resources, a sector which surprisingly only accounts to about a third of the continent’s growth.
Pharmaceutical and telecommunications industries among others are increasingly looking towards Africa as manufacturing costs are cheaper and labour costs in current powerhouses India and China keep increasing. The Economist also mentions the rising sector of ‘frugal innovation’, which involves developing clever designs to serve the poor. International entrepreneurs and organisations would be wise to take advantage of the endless possibilities for development and business ventures that Africa has to offer.
Starting a business venture in Africa successfully requires an understanding of the cultures and societies present on the continent. Africa is still largely considered uncharted territory for the business world compared to other regions, so getting to know the challenges and intricacies of working alongside African colleagues and their traditions could provide your company with an edge by starting on the right foot.
As Africa becomes an increasingly attractive location for international business ventures, we are seeing an increase in the number of corporate and public sector clients who ask for training on African countries like Kenya, Ghana, South Africa and Zambia. These organisations are leading the way in ensuring that their employees have the right level of cultural support and intercultural training they need to successfully adapt to their professional and daily life in Africa.
Providing relocation training courses such as Living and Working in South Africa to international assignees or cross-cultural training for business and management programmes such as Doing Business in Nigeria, you can significantly increase the chances of any business opportunity in Africa succeeding.
With the World Cup hosted in South Africa in 2010, the whole continent has seen an influx of visitors never seen before. This has provided the perfect opportunity for businesses to see first-hand the numerous prospects and benefits of doing business on the African continent. Organisations doing business in Africa over the next few years will lead the way in harnessing the many benefits this greatly diverse continent has to offer.