Look to Africa first, then overseas
An appropriate month to push regional growth
THE continent celebrated Africa Day on Thursday May 25 — a date chosen to commemorate the founding of the Organisation of African Unity in 1963, today known as the African Union. In South Africa, we have had several activities to celebrate May as Africa Month.
Beyond the celebrations, this month should serve as a reminder of the wealth of growth opportunities that lie across the continent.
Not so long ago, sub-Saharan Africa was one of the fastest-growing regions in the world, despite the global economic slowdown. International players continue to seek ways to enter African markets, whereas we are privileged to be so close to where the heart of the growth is.
As Africans, we need to constantly look for ways to make the most of our growth potential. We should be prioritising intraregional growth across Africa at least as much as we prioritise growth into other continents.
We need to get out of this mentality of perceiving growth across Africa as being less important than growth into other continents. That is a completely outdated way of looking at pockets of growth, and partly contributes to why Africa continues to have some of the lowest levels of intraregional trade.
As much as the world has moved past the era where Africa was merely perceived as a forgotten continent, a region of famine and poverty, many of us Africans still carry around these inferiority complexes about African economies — whether we admit it to ourselves or not. This comes from centuries of this mentality being ingrained in our brains. It is a complicated mentality to overcome.
It will take a while to reverse longstanding misconceptions about the progress and potential of African economies. Until we get there, we have to be proactive about challenging our own stereotypes and take notice when our inferiority complexes start getting in the way of how we prioritise decisions on growth opportunities.
Otherwise we risk missing out on the growth opportunities that have everyone eager to find innovative ways to successfully enter Africa.
Imagine if the likes of the MTN Group of South Africa or Dangote Group of Nigeria had chosen to initially prioritise expansion into non-African markets over expansion in Africa. They would have missed the opportunity to exploit the continent’s growth opportunities as well as they have.
Instead, they continue to benefit from the synergies that come from serving customer bases that have similar economic dynamics and behavioural patterns.
Each African economy is unique in its own right, and this should not be discounted.
However, let’s lean on the strengths that come from leveraging the similarities across African markets, as do other regions in the world that have been successful at tapping into intraregional growth.
MTN and Dangote continue to succeed because of their expertise in navigating the complexities and challenges that come with doing business in multiple African economies.
Complexities that, once successfully navigated, make it harder for new entrants to compete, especially if they do not have a long-term view.
For example, as much as MTN suffered from the unregistered sim card fine saga in Nigeria in 2015, the situation could have been even more detrimental had Phuthuma Nhleko and his team not had much experience in dealing with Nigerian regulators.
The value that comes with understanding the local dynamics of each African market can go a long way towards ensuring continued business success. In addition, it can also be used to inform growth strategies into the rest of the world, as MTN did after expanding into the rest of Africa.
Case studies like these should also serve as a wake-up call for the new businesses we are building today. Some African entrepreneurs are still more obsessed about designing solutions for other continents instead of creating solutions for Africa, leaning on their understanding of and expertise in the local market.
Similarly, they need to get out of this mentality of believing that solutions that are oriented to the international market will somehow give them more street cred than ones that work for African markets. We should be measuring our success based on an innovation’s ability to solve problems and drive profits.
Look at M-Pesa, the East Africaborn cellphone money transfer solution. It was originally designed to solve a problem that affected the local environment. It has done so well that it spread through Africa before expanding into overseas markets. I was reading case studies about it at Stanford business school, alongside notable innovations from the developed world.
South Africa’s Department of Arts and Culture chose the theme for this year’s Africa Month to be “The Year of OR Tambo: Building a Better Africa and a Better World”.
Let’s be true to our word and focus on building a better Africa for the benefit of Africans and the rest of the world.
Sikhakhane is a global speaker and strategist on leadership, entrepreneurship and doing business in Africa, with an MBA from Stanford University