Introduction (The Culture of African Business)
Business culture is a set of non-material competences a company or individual has for resisting variability forced on it by changes in the broad market. In contrast to this, is a company’s success in coming up with new ways of reinforcing its culture in the face of perpetual change. African Business Culture therefore, is the tendency to build responses to market variability and its pressures blaming it on the lack of respect for cultural nuances of a company or individual’s immediate market. This sentiment at all levels has held African businesses and industries back.
What African Entrepreneurs Lack
African entrepreneurs lack proper business skills and greedy financiers have made it worse by granting unrealistic credit terms to gullible businessmen. Africa also lacks the requisite infrastructures, services and government administrations that can support a modern day business market. In Nigeria almost every person you meet on the street has some business ideas but lack the know-how to transform such ideas to a vibrant and going-concern. This is because formal services as those of Accountants, Lawyers, Human-Resource professionals as well as informal interventional services such as government programs for incubation of technology and business skills are largely lacking.
The Business Opportunities in Africa
There are five (5) major types of business opportunities in Africa. These are:
1. Agriculture: ranking first among the business opportunities available to investors and entrepreneurs in Africa, the continent is home to 60% of the world’s total uncultivated arable land. As the world’s population is now above 7 billion, there must be a systematic approach for producing enough food to feed all. The challenge in this case has to do with poor infrastructure and trade barriers and several African governments are making substantial and useful efforts to solve these problems. Agriculture, therefore, has the potential to support other industries such as manufacturing, products marketing, fertilizer production, pesticides and seeds production, food processing and grains refining.
2. Infrastructure: this sector is second in importance only to agriculture. Though successive African governments have made efforts to improve infrastructure, a huge deficit in this sector still looms thereby creating bottlenecks in the smooth running of trade, import and export activities. The World Bank in 2008 estimated that Africa needed eighty billion dollars ($80 billion) annually to cover infrastructure needs. This kind of financing does not come cheap and it provides an opportunity for private investors to partner with governments in the improvement of the under-performing infrastructures such as power supply, water resources, railway networks, roads and airport facilities.
3. Tourism: Kenya, Mauritius, Tanzania have become some of the world’s favourite spots for tourism. Some sources anticipated over 50 million tourist arrivals for Africa in 2012 and with such a number being expected to rise naturally, hotels, resorts, airline businesses, train services, taxis, water transport and beach activities are expected to boom. There are also possibilities of foreign investors partnering with governments – to improve inland waterways or national parks.
4. Mining and Solid Minerals: deposits of mineral resources exist in several African countries in huge quantities. These mineral resources, which have remained largely unexploited due to poor mining capabilities and infrastructural facilities, are the essential components of a business sector that shows promise to support foreign direct investments. A country like Nigeria with a great variety of mineral resources has remained technically incapable due to poor financial management and planning. Interested business entrepreneurs have a chance to tap immensely into this sector.
5. Fast Moving Consumer Goods (FMCG)
It is also estimated that Africa’s consumer spending in 2012 was over one trillion dollars ($1 trillion). With a population that is arguably the fastest growing in the world, a middle class of over three hundred million (300million) people, the FMCG sector promises to be very profitable. Foods, beverages, home and personal care products provide ample opportunity for manufacturers and retailers as their demands continue to soar. Investors who dominate this market at the first instance are likely to remain the main players for a long time.
As Africa on the one hand is now witnessing more conflicts and on the other experiencing good governance, the continent is set for a slow but steady path to development and growth. Several reports showed that Africa managed to grow during the world’s recession of 2009 by 2%. It continued in 2010 by 4.5% and in 2011 by 5%. In 2012, it was presumed to be at least 6%. All other continents of the world apart from Asia had a negative growth during the 2009 recession. This is an eye opener to trade and investment opportunities in Africa now that the entire world has more than ever become a global village thriving on the higher values of interdependence of nations rather than independence. There is no doubt that remarkable strides will be made in African Business Entrepreneurship in the coming years as long as governments of African nations continue to make sincere efforts to ensure the continent remains investor friendly and an investment fair-playing ground for all serious minded businessmen.