African business opportunities are being lost to China and India
Utrecht/Rotterdam, 17 January 2013. The position of European corporations in Africa is under pressure. They are so much focused on emerging markets in Asia and Latin-America that they hardly notice that China and India are in the meantime rapidly extending their influence in Africa’s growth markets. At least half of the 49 countries in sub-Saharan Africa are commercially interesting for Western firms. Doing business in these countries is in various respects easier than in the BRIC countries. A new business approach towards Africa is needed. This is the conclusion of a Berenschot / RSM Erasmus University Rotterdam research amongst 110 Dutch companies.
In the past years, the political and economic stability in many African countries has strongly improved. Countries like Nigeria, Kenya, Ethiopia, Rwanda and Tanzania have become emerging economies. There is virtually no product or service for which there is no demand. Chinese and Indian firms need not to be convinced: they have entered these markets with a clear determination to stay. The share of Europe in the worldwide trade with Africa has dropped from over 50% in 1990 to less than 25% today.
In the Netherlands, however, a missing sense of urgency, gaps in the diplomatic framework and limited access to finance deter many entrepreneurs from investing in Africa. This conclude Berenschot and the Rotterdam School of Management, who developed together with the Netherlands-African Business Council the book ‘Doing business in Africa - a strategic guide for entrepreneurs’. The research comprised interviews, case studies and a survey amongst 110 companies.
An overly negative perception of Africa distorts the view of Dutch entrepreneurs on the commercial potential of the continent. That is a pity, says Marjolein Lem, consultant at Berenschot International: “Companies that are active in Africa, have good returns. 65% of the firms we have interviewed and surveyed is satisfied with their performance and 95% is considering to expand their business in Africa.”
Dutch entrepreneurs are, according to Rob van Tulder, professor at the Rotterdam School of Management, excellently equipped to profit from the opportunities in Africa. “The Dutch expertise and our socially responsible and collaboration-minded way of working well befits the new business approach that a changing Africa requires.”
Key success factors, as identified in the research, for doing business in Africa include: a local presence, a willingness to invest, adaption of products and services to local needs, a long-term perspective on the market and collaboration with non-market parties.
Doing business in Africa - a strategic guide for entrepreneurs can be ordered at Nabc. Look at our 'Publications'-page for more information.
The book is presented to minister Ploumen for International Trade and Development Cooperation on Thursday 17 January around 7 pm. Location venue: Heineken Experience, Stadhouderskade 78, 1072 AE Amsterdam.
If you would like to attend this event, learn more about the research, or obtain a copy of the book, please contact Marjolein Lem, senior consultant at Berenschot International:
0031-655364821 / firstname.lastname@example.org .
If you would like to receive more information, you can contact:
- Marjolein Lem
senior consultant at Berenschot International
06 - 55 36 48 21