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As multinational companies and global investors seek new opportunities around the world, a lot of the smart money is heading to Africa. Here are some tips on how to join them. [Read More]

 

 

 

 

 

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Logic List: How to get into Africa

Africa is poised to experience an economic explosion that, according to many business experts, might rival the emerging market phenomenon of the BRICs in the past decade. A report from McKinsey’s Global Institute underlines that Africa is now among the fastest-growing economic regions in the world, with a number of industries offering genuinely exciting business opportunities for global players. A series of socio-political developments have improved the economic environment in a number of sub-Saharan countries immeasurably, including liberalization of markets, reducing tax rates and inflation, positive moves towards democracy, strengthening governance and, perhaps most significantly, a cessation of violence in conflicts such as between Ethiopia and Eritrea and within Sudan. Taking advantage of the improvement business climate, though, still requires some careful planning. Here are five tips to exploiting Africa’s new opportunities.

 

 

1. Go East
For sheer proximity and accessibility, the East African nations of Kenya and Tanzania  ought to be attractive to MENA region enterprises, especially as their well-established ports and shipping infrastructure already facilitate international commerce. Recently, however, a Community Customs Protocol signed by the governments of those nations, plus Rwanda, Uganda and Burundi, has created a common market for the free movement of goods and labour between countries whose total population exceeds 130 million. For any company seeking to enter the African market, this represents a viable springboard.

2. Think Consumer Goods
Not all business opportunities in Africa are equal. According to Business Week, one of the industry sectors that will outstrip the rest in the medium term is consumer goods. Economic growth and prosperity always create new consumers, and with in excess of one billion people, 40 per cent of which live in urban centres, Africa’s consumers have both increasing demands and amounts of disposable incomes. Total consumer spending is set to top $1,400 billion by 2020.

3. Go for Growth
Agriculture is another key market segment. According to the Boston Consulting Group, Africa has 60 per cent of the world's uncultivated arable land and, when combined with low crop yields from areas that are being farmed, there is strong potential for the sector to improve and help produce the food that global demand is dictating we must. Projected growth for this area is 4 per cent per year for the next 10 years – although this is a conservative estimate.

4. Think Infrastructure
The rapid urbanization taking place across the continent is a driver for a large number of new infrastructure projects, from mass transport system, new and upgraded roads and bridges to sanitation and energy provision. Clean energy, both for domestic use and technological development, is also an area that is expected to grow.

5. Hire a Local Counsel
Obviously any new venture in a new country or continent requires the best legal advice, and a local counsel with in-depth experience and understanding of the business climate and regulations should be a priority. International legal directories such as www.legal500.com offer lists of the best lawyers in each country.