Do’s and Don’ts of Internationalizing in Africa

Africa is on the move. The future is there. But Africa hides many different realities. Its regions are diverse, and countries within each region are very different as well. So, if your company –whether indigenous or foreign – is considering expanding into an African country, how should it go about it? Here are some do’s and don’ts of internationalizing in Africa – or more precisely, in sub-Saharan Africa (SSA) – based on some of my research:

There are many different realities among African neighbours
There are many different realities among African neighbors
  1. “Mind the gap”: we too easily fall into the trap of thinking that the country geographically closest to us is where we should expand. But business opportunities may lie elsewhere. Consider “country distance” in a broad sense. I shared insights about different kinds of distance dimensions in previous posts: Cultural, Administrative, Geographic, and Economic distance in line with my colleague Ghemawat’s CAGE distance framework.
  2. The “toothpick test: you won’t get a full picture of reality by looking into official statistics. They give some guidance, but you need to be on the field to understand the true drivers of your business. This is what Mitchell Elegbe from Interswitch (Nigeria) calls the “toothpick test.” His company is in the electronic payment industry, so affluence is a key performance driver. When he considers expanding the business into a new country, he looks at whether people have a toothpick in their mouth. This is a way to show off in countries where good meat is scarce in the diets of certain population segments.
  3. Focus on social impact: this is not an extra, but an integral part of the business strategies of SSA companies. Someone told me “In the West, they say, ‘I am because I think.’ In Asia, they say, ‘I am because I become.’ In Africa, we say, ‘I am because you are.’ ” This translates into business strategies designed to benefit all parties, not just shareholders. Success goes beyond creating value for shareholders to encompass job creation and community development.

I wrote more extensively about internationalizing in Africa in the article “Strategies that go the distance in Africa” published in IESE Insight.

Any experience of do’s and don’ts for internationalizing in Africa?

3 thoughts on “Do’s and Don’ts of Internationalizing in Africa

  1. Hi Africa,

    I consider some relevants concepts to keep in mind always in Africa.

    – Africa is not small. Africa is different in every corner. Companies must consider the legal regulations of each country. Some countries have more strict legal conditions than others.
    – Depending of your kind of business you can choice different countries in Africa. Industrial and construction products fit more with countries like Nigeria, Mozambique, Angola and Congo. However countries with a higher level of consumption are Kenia, Ghana or Nigeria.
    – It is very important the colonialism factor. Countries that were colonizing have more facilities to get nowadays businesses.
    – Africa is not like the countries we normally are used to work. You need to consider the infrastrucutres that are extremely different in Africa.
    – Yur network in Africa is essential to succeed.
    – Don’t forget that talent recruitment is very different in Africa comparing with western activities.
    – Facing corruption in Africa consists in:
    a) Be patient
    b) Be transparent
    c) Accept the local and social rules

    Things like this and some others are essential to succed in Africa.

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