Business
Investment in Africa: 5 Critical success factors
“There is no template for doing business in Africa. One can also clearly not base one’s investment decisions on data from a spreadsheet.”
So says professional services firm Ernst & Young in a new report, entitled ‘Africa by numbers: Assessing market attractiveness in Africa‘.
The report, however, highlights five critical success factors for companies in the early stages of their African growth journey.
1. Choose your perspective on Africa – glass half full or half empty?
In the Western world and media, Africa is often associated with political turmoil, war and economic mismanagement.
The report notes that this cannot be the frame of reference for those investing in the continent. “It will infect every decision that has to be made. There has to be a strong belief in the African growth story; that Africa is good for business and investment; and that business and investment is good for Africa.”
2. Build up a portfolio of investments
While investors need to be upbeat about the continent’s growth potential, they should also be realistic about the relative immaturity of many African markets as well as the relative lack of scale. Ernst & Young says that a portfolio of investments in a number of African countries has the following advantages…