The Most Essential Factors to Remember when You Engage in Business in Africa

In the fast-paced, ever-growing world of business, it pays to keep your eyes open and your ears to the ground. You need to know what is happening and you need to be attuned to the latest trends lest you miss out on key business opportunities. As a business investor, you should be constantly looking for places where you can venture out.

This is perhaps one of the reasons why Africa has gained tremendous attention in recent years. The continent is booming – its population is growing, its workforce is becoming more skilled, and it is now in the cusp of a rising consumerism. But before you make your investment in the continent, there are a few essential factors you have to remember as well.

Whilst Africa is a continent, it is best to approach it not as an entire continent, but from country to country. The economy of Africa is not entirely connected (yet), so the different countries would have to be approached individually. You need to do thorough research on each country, and if you are thinking of a prospective partnership with a particular firm, you need to do the proper due diligence. Gather as much information as you can about African businesses in the area you are interested in. One tip: make sure you have set criteria in mind when you approach each country independently; abundant natural resources can be one criterion, especially if you are in the energy, manufacturing, or construction industry.

A long-term investment is key

Whilst it’s attractive to think that you will get your investment back as soon as possible, this is hardly the case. The different economies of Africa are still small – but, they are growing, and this is where your investment can pay off – just not in the short term. You have to go into business in the continent with the idea that it will take a bit of time and effort – but the rewards will be more than worth it in the end. Remember: Africa is an emerging market, and as such, it may take some time before your investment pays off – but the chances of it paying off are definitely enhanced.

Look for local contacts

It’s already a given for any investor to look for a trusted local contact or connection – but you need to put some effort and persistence into this. It is important to acquire as much local knowledge as possible, especially when it comes to regulations, permits, and so on. Some successful investors have even created ties with various local authorities or governments. One of your options may also be to make an acquisition of a local firm or establish a partnership with a local business. African businesses are plentiful, but you need to know where to look and what to look for.

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Author: Eddy

Eddy is the editorial columnist in Business Fundas, and oversees partner relationships. He posts articles of partners on various topics related to strategy, marketing, supply chain, technology management, social media, e-business, finance, economics and operations management. The articles posted are copyrighted under a Creative Commons unported license 4.0. To contact him, please direct your emails to editor.webposts@gmail.com.