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Running a business in Africa

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As the author of more than 100 articles and 10 books and former CEO of companies dedicated to public transportation, fishing and shipbuilding in Africa, here are my tips for any person or business which wants to conduct business in Africa.

1. Do not forget that Africa is not one country - there is no 'one size fits all' approach

The first point to make is that obviously Africa is not one country - but the second largest continent in the world, comprising 54 states. There are huge differences between these countries and you simply cannot approach Africa with a 'one size fits all' attitude.

For instance, South Africa (and you can browse businesses for sale in South Africa here) is a modern industrial regional power, while countries like Angola, Sudan and Equatorial Guinea are experiencing spectacular economic growth stimulated by the expansion of their oil extraction capacity.

Meanwhile other countries live off agriculture, self-subsistence and international aid, with Mediterranean Africa being heavily influenced by Arab and Islamic culture. The key thing is to make sure you are familiar with the cultural, economic and political specifics of each African state that you plan to bring your business to.

You have a big advantage if you have had some experience of working for diplomatic service or for a large company with local branches in Africa

2. Always start by contacting the official channels

Before starting your business, you should always contact the official representatives of the country in which it is located, in order to present your business plan and anticipate any legal or administrative obstacles for its development. 

You have a big advantage if you have had some experience of working for diplomatic service or for a large company with local branches in Africa. This will make it easier for you to assess the situation and obtain the necessary contacts. Moreover, the administrative officials will generally have a more favourable opinion of you, as opposed to if you were a newcomer or a freelancer.

For example, many Americans and Europeans have started their own businesses in Africa, after working for many years as NGO volunteers.

In the end though, you will be judged not by your words or promises, but by what you actually do. As a friend of mine used to say, unlike Europeans, African people are not won over by advertising and marketing techniques, but by results.

3. If you want to do business in Africa, be prepared to spend a lot of your time in Africa

If you are thinking about trying to run your African business from the comfort of your own country - checking in every now and then with a timely Skype or video conference - forget about it. Just like in any country, if you want your business to be a success, you have to be around - especially in the early days.

By directing your business from a distance there is a real danger you will lose touch and lose sense of what is really happening on the ground. Modern communication tools are a real danger, because although they give you the illusion that you are physically there, it is just that - an illusion.

4. Make sure you have a business partner

While it is extremely important to be around as much as possible in the early days, the fact is there will be times when you will be out of the country. Also it is worth noting that in tropical Africa the optimum term recommended for Europeans to stay is about three months per visit.  

Each week over this term sharply raises the risk of catching tropical illnesses, the most notable of which is malaria.

The question is 'while you are away who should run the business?' Over five to 10 years you will build a team of individuals who you can rely on to manage the business whilst you are away, but prior to this the best thing is to find an 'alter ego'.

In other words you need someone who can be you while you are away. Indeed it is interesting to note that many foreign businesses are structured on partnerships - of course, most importantly, you must find a partner who you can trust implicitly.

5. Hire your employees in the place where your business is located

Employing local people is vital to the success of your business.

Some international companies bring all their administrative staff from abroad when they expand their business to Africa. They only employ a local workforce when under pressure from administrative authorities and usually for low tier positions. 

In my opinion, this is a big mistake, and it simply does not work for small or medium sized businesses. The more local employees you have, the better your business will integrate into African society, the more useful it will be regarded by the authorities and by your potential clients. 

Besides, you learn a lot about the country by working with the people who live there. You need to learn how to work with them and how to choose the best candidates.

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