Business in Africa

Although it is the poorest continent on earth with majority of its population in extreme poverty, Africa is becoming a place where there is quite a bit of business potential. Even though the percentage of population is small, the actual numbers can still make it worth while for some companies to expand there. For the people that do have some money, there is a need and demand for almost everything.

As is the case when expanding to any new market, physically going there is always useful. However, it is understandable that many people are not particularly enthused about traveling to Africa. Luckily, it is not an absolute pre-requisite to doing business there. By exhibiting at trade shows throughout North America and Europe, you can meet business people from all over the world that can take on a new product. It is actually highly recommended that you work with a company that already does business there and/or is from there because business in Africa is very different from North America and other parts of the world.

Trade shows can be great places to meet business people from overseas, but before spending the thousands of dollars on one, make sure that they generally attract people from international locations. You can ask to see statistics from the previous year’s attendees and make sure they have advertising in other countries. They generally keep extensive records of their attendees which will allow you to pick and choose which shows will be best for you to meet the people you are looking for.

In North America, we are used to having contracts in place, especially when dealing with distribution, large amounts, fixed prices, etc…However, executing a contract with an African company may not be worth the paper it’s written on. The fact is that even if the African company does something against the contract, your remedies are much more limited than if the company was located in North America or even Europe. Instead, just make sure you set up the operation in a way that minimizes risk. Things such as payment in advance of shipping, in-house printing of packaging (if you are building a global brand) and not taking responsibility for shipping within the continent of Africa are all very useful and important factors to agree on.

By doing the things I mentioned, doing business in Africa can be successful for North American companies. It will also position you to benefit from the eventual growth and development that the continent will see over the next decades. It took many years (and it is still growing in to it), but Africa is slowly becoming a new frontier for potential business expansion.