Companies missing out in Francophone Africa

FRANCOPHONE Africa remains a bridge too far for most risk-averse South African investors. Only a handful of SA’s sizeable corporates have made the journey to countries in this complex but promising region, kept at bay by the invisible barriers of language and foreign business culture.

Also at issue is the perception that business in these markets is still dominated by France, with slim pickings left for countries that don’t have ready access to a “special relationship” resulting from former colonial ties. This leaves a large swathe of Africa wide open to investors from elsewhere who are prepared to take the plunge into unknown waters.

Some Francophone countries are dogged by conflict and suffering from serious underdevelopment, but some of Africa’s biggest and fastest growing economies are also Frenchspeaking. They include Ivory Coast, which is expecting growth of 11% in 2016, Cameroon (6%), and Democratic Republic of the Congo (7%).

According to Africa House, France was only the third biggest exporter to Cameroon between 2010 and 2014, the second biggest to Ivory Coast and fifth biggest to the DRC. The DRC, the closest Francophone country to SA, is one place where South Africans have engaged and in the period described above it was the biggest source of imports, mostly to the mining industry.

Proximity and direct flights from Johannesburg to both Kinshasa and Lubumbashi are key drivers of this engagement in the same way they are for Angola, which is also not English-speaking and is one of Africa’s more challenging markets.

Rwanda and Mauritius are also popular with South Africans, although both are also Englishspeaking nations. But that leaves just under 20 other relatively unexplored markets. Many of the more recent investors are from non-French jurisdictions — China, Thailand, India, South Korea, Germany, United Arab Emirates and others. English-speaking African countries, including Nigeria, Ghana and Uganda are also active in French-speaking markets.

The issues were discussed at a forum in Johannesburg last week. Hosted by the French embassy, it aimed to address some of the myths about doing business in the region, improve the understanding in SA of the Francophone region and encourage more people to learn French as a business tool.

Despite SA’s strong business ties with the continent, there is still pervasive ignorance about so much of Africa — including the geography. At the Francophone event, the 200-odd participants were told that Gabon is not in West Africa. We were told this was a common misperception. Gabon is, in fact, a member of the six-member Economic Community of Central African States.

Decisions are often based on perceptions of risks and challenges. High-profile market failures confirm these perceptions, even though this is often more about the failure of strategy than about the market itself. This can prevent people seeing the opportunities. Francophone Africa is awash with market gaps South Africans can fill. There are other advantages, for example stable common currencies across West African and Central African countries, and a common system of business laws, known as Ohada.

To succeed in Francophone markets requires, like anywhere else in Africa, understanding not just the technical and practical issues about doing business, but the considerable nuances. There is a tendency to think of the region as one large homogenous zone, but of course it is a group of highly diversified and culturally specific nations — and even the French spoken in each may be slightly different.

There is no doubt that a strong stomach is still required for investment in most of these countries, where reform of the regulatory and business environments has been slow, where SA has limited influence, and where language and different legal systems present added barriers. But as competition for business increases across Africa, Francophone countries present a good future opportunity.