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Africa - The land of milk and money

15 March 2012, 14:24
Many entrepreneurs approach our firm, a specialist firm on assisting entrepreneurs entering the African business market, to assist them in obtaining their big dreams in Africa. They all have eagerly wagging tails and eyes that glow like a wild buck in a spotlight. However, sometimes we feel like the evil dream dashers when we find an opportunity of a lifetime to be nothing more than an opportunity to shorten your lifetime.

A key fact to remember is that large corporate companies are attacking Africa like wild dogs with rabies, they are setting up shops and offices quicker than what we can comprehend.Who can blame them? With Europe’s head in the toilet and the US avoiding the enema that has to come Africa with an Annual GDP per Capita rumoured to be higher than that of India and a fast emerging middle class in excess of 400 Million has opportunities a plenty for the astute business man. However, gone are the days of buying a product at your local store and selling at twice the price in Africa, at least as a sustainable business.

Yes we have clients making so much money from their African operation that buckets are too small for them to use, they had to switch over to the proverbial shovel and wheelbarrow system. However many fail and do so on a spectacular scale. Why then? Ignorance, greed and unwillingness? People believe Africa’s citizenship to be uneducated idiots walking around with pockets full of cash and that Africa is a cheap market to do business in. The truth cannot be more removed from this piece of fiction. Africa’s people are becoming more and more sophisticated daily and flights, accommodation etc is everything but cheap. Africa wants products and services that add value to their businesses and lives at reasonable rates and there are opposition companies in virtually every African country you go to. Greed or quick buck syndrome is also a big business killer with many entrepreneurs entering the market thinking they can go into a country make a fortune and retire in short space of time by selling at ridiculously high margins or acquiring assets, like land, at cheap rates. No true cost of delivery, market study or cost of developing the asset is taken into consideration. In Mozambique farmers flocked to large tracks of land that was virtually free, but they never looked at the massive lack of resources, spares and so forth. 

Normal business logic still prevails you have to tackle the pain before you can gain anything in business. You need to develop a business plan and make sure your facts are correct. You must be willing to commit to the country you work in and be willing to spend a lot of ”school fees”, time and sweat in learning how to do business the African way. 

Business opportunities in Africa are in abundance, solid business strategies will be rewarded 10 fold, it is truly that land of milk and money. That said, milk can go sour quickly if not taken care of in the proper way and honey can be sticky even if held in vast amounts. When obtaining advise it tends to more prudent to ask what not to do in Africa than on what to do in Africa. Also choose your partners wisely before that glow in your eye is in fact the light held to you by a hunter.

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