Bench Events, organisers of the Africa Hotel Investment Forum has released new research revealing what the essential principles are for doing business in Africa.
The main findings were that African markets are progressively being seen as open for business and regardless of perceptions of eminent risk, the continent is not considerably different from others.
Yet the continent’s complexity and rich diversity point to the need for flexibility when it comes to business strategy.
Three main factors considered most likely to distinguish success from failure when doing business in Africa are: appreciation that every country in Africa is unique; the importance of receiving support from local experts; and placing a high value on relationships.
To the first point, several executives agreed that it is vital to remember that every country in Africa is unique, and in order to do business successfully, every single country needs to be understood in its entirety.
Kofi Adomakoh, head of project finance and export development, African Export Import Bank, recently said: “The time has come for everyone doing business in Africa to take time to understand all of Africa and not just view it as one block.”
To the second point, there was a strong consensus that appreciating local players, receiving support from local experts and building strong local partnerships are critical for business success in Africa.
Kevin Underwood, global leader of leisure and culture, Aecom, stated: “Any development project must have a local sequence and one must understand the culture of the African countries.
“There are no shortcuts.”
The third major theme that emerged from the research was the importance of collaborating with various organisations: co-operate with all levels of government, join forces with the investment world and build strong relationships with all of them - perhaps more than in any other continent.
Lourie Kruger, vice president or marketing and treasury, Kingdom Hotel Investments, stated: “The only way to grow your business effectively is to have really strong relationships.
“When you don’t have the infrastructure like you do in other markets, those relationships make everything much more efficient.”
Other general success factors that emerged from the study included: invest in people, focus on positives, be patient and persistent, have realistic expectations and be prepared for any hidden costs or surprises.
Also, experienced foreign investors repeatedly note that nowhere else is there such a direct correlation between careful planning (and flexibility about plans once formed) and a successful outcome.
All of the above named executives will be present at AHIF, taking place at the Sheraton Hotel in Addis Ababa, the capital of Ethiopia, on September 29th-October 1st, where they will be discussing these issues and many more questions in depth.