Growing Your Business in Africa: Tips form Industry Leaders

Duo Marketing hosted a breakfast this week where Rean van Niekerk from Matacom and Vahid Monadjem from Nomanini spoke on their different experiences of doing business within Africa.

Van Niekerk, who is the founder and MD of Metacom, who provide machine-to-machine and business-to-business communication services for their clients spoke on how they have entered 12 different African markets in order to provide solutions to their clients.

The main point he felt was important when it comes to doing business in Africa is to not treat Africa as one homogenous market. Every country is different and will have different challenges, and it is essential to make sure that your business model will work in each of the individual countries you are thinking of entering.

He also mentioned that it is important to remember that even though Africa is poised for major growth, there is still a lot of work to be done. The GDP forecasts are so high because they are starting from a low base and political stability is still an important issue in many countries.

According to van Niekerk, some common mistakes around working in Africa include:

  • Discounting the local culture and local business practices. This can affect your success, and it is always advisable to partner with locals who can guide you around the local working environment.
  • Underestimating the costs. Setting up business in a new African market will invariable cost more and take longer than anticipated. It is essential that your business can absorb the costs of set-up.
  • Not considering possible infrastructure problems. There is a good chance there will be a lack of necessary infrastructure, be it reliable electricity, roads and transport, telecoms, or some other essential business resource. You must be prepared to work around these shortfalls and make alternative plans.
  • Not being able to get money in or out of the country. Before setting up business in an African country make sure you find out the regulations around getting money in and out of the country, can you receive payments from that country? What are the bank transfer fees across borders? Etc.

Monadjem, who is the founder and CEO of Nomanini, a mobile POS solution which enables the sale of airtime in informal markets such as minibus taxis and spaza shops, also spoke on their experiences in Africa.

Starting as a way for minibus taxi drivers in South Africa to sell airtime Nomanini have spread to Kenya, Nigeria and Zambia and are seeing interest in several other African markets.

Monadjem spoke on the importance of adaptability and listening to what the local client wants. By engaging intensively with the people on the ground that are actually using their product they were able to get a much better idea of what features would make the product successful.

He also highlighted the importance of not relying too heavily on traditional business practices. A traditional approach to market research and product testing may not be as effective when trying to gain insight into Africa’s informal sector. One must therefore be open to new ways of engaging the market base and getting feedback on what it needs.

He also stressed the importance of partnering with local organisations. You cannot go into a new market assuming you know how it works. Local insight is essential if you want to break into a new market.