Monthly Archives: January, 2013

Understanding Business & Social Culture In Sub-Saharan Africa

images-3Sub-Saharan Africa consists of 48 countries and is more than three times the size of the USA. With the Democratic Republic of Congo as large as all of Western Europe, sub-Saharan Africa presents immense investment potential. Africa has 90% of the world’s cobalt reserves, 80% of the chrome, 50% of the gold, 50%+ platinum, 33% uranium. Nigeria is the fifth largest supplier of oil.

Social and business culture reflects the past colonial history, which divides this vast land into three groups:

  • Anglophone countries           (English speaking)
  • Francophone countries         (French speaking)
  • Lusaphone countries              (Portuguese speaking)

Social culture

Africans are warm and open to foreign visitors. Sub-Saharan Africa is home to innumerable tribes, ethnic and social groups and as a result the cultures are quite diverse and varied and not static, and like most of the world have been impacted upon by both internal and external forces. During colonialism in Africa, Europeans had a sense of superiority forcing locals to give up their African culture and adopt European ways in order to be accepted. The significant exposure to the West, and the adjustment of local cultural values to Western ideas is a continuing process.

Media coverage has emphasized Africa’s negatives – its droughts and famines, diseases and deaths, coups and wars. As a result much of the world has taken little interest in Africa, with the exception of the situation in Zimbabwe, tribal warfare in Somalia and other headline-grabbing news stories.

Business Culture

Conducting business in Sub-Saharan Africa requires cultural awareness and effective cross-cultural communication skills. What might be acceptable in Europe, for example, may be unacceptable in Africa. Do not expect French or Portuguese speaking business people to speak to you in English even if they understand it. Business objectives may be the same, but ways of implementation and communication differ greatly.

I remember working as a project manager for a global telecoms company in the UK and our focus was on producing quick and tangible results. My Experience in South Africa, on the other hand, differs. The pace of doing things is slower and the outlook is often long-term. Being used to the way I had always done business in the UK and not understanding local business practices, I was often frustrated. The African approach to decision-making does not mean that local business people are unable to make quick decisions. Far from it, what it shows is the cultural significance of consensus and consultation, which tends to guide the decision-making process in Africa’s group-oriented cultures.

Building relationships

Socialising is key and builds personal trust that is prerequisite to doing business and sometimes it’s difficult to see the dividing line that determines where socialising ends and where business begins. Sometimes it takes a backyard barbeque or a couple of visits to the golf course to chat and get acquainted before you can start discussing business. Some outsiders have misinterpreted the emphasis on leisure to mean African laziness. Fact is leisure and socializing form the foundation that is key to group solidarity that is important to Africa.

Newcomers to Africa need the advice of an intermediary or cross-cultural adviser.

Arnold Matimba | Avalanche Consultants Pty Ltd

Arnold Matimba is a generalist consultant with nearly 20 years hands-on experience in industries such as Telecommunications, Aerospace and Defence, Construction, Retail & Hospitality. Arnold has had exposure to diverse cultures making him highly attuned and aware to clients needs in different regions. Despite having lived and worked in the UK, his desire to promote a positive image of Africa led him to set up Avalanche Consultants Pty Ltd, whose main aim is to offer cross-cultural and consulting services to those keen to do business in Africa.

(Twitter @ArnMatimba) 

FOREIGN INVESTMENT IN AFRICA

arn2Much of the world has been led to believe that Africa is a poverty-stricken, disease-ridden continent from where nothing good comes and some believe that Africa is just one huge safari.

Thankfully Africa is rising and is shaking off the stigmas attached to it, breaking down the mental walls that are limiting. For years Africa has been treated like a single entity despite the fact that it is a vast continent with a billion people. It is strange that no one assumes that the British and the French share one culture or sees Europe as one country.

What’s happening in Africa today can be likened to what happened to the United Arab Emirates since its independence from Britain in 1971. The UAE has grown to be one of the Middle East’s economic centres. The late Sheikh Zayed, ruler of Abu Dhabi and president of the UAE at its inception, was quick to seize on the potential of the oil industry. He oversaw the development of all the emirates and directed oil revenues into healthcare, education and the national infrastructure. Likewise, Africa is full of natural resources, e.g. gas and oil, whose potential can be used to develop infrastructure. Africa can also seize on the foreign investment opportunities.

So who is investing in Africa? Since the global economic downturn several U.S. companies are moving into Africa. To show how broad-based foreign investment is in Africa, here is a sample list compiled by WSI research:

GAP

In March 2012, The Gap opened its first store in Johannesburg with two more opening in 2013 (one in Cape Town and another in Pretoria).

PORSCHE

Porche operates dealerships in South Africa (selling 800 cars a year), Angola, Ghana and in the midst of the world’s largest concentration of millionaires – Nigeria’s Victoria Island.

DIAGEO

Africa is Diageo’s biggest emerging market. 40% of all Guinness brewed and consumed in Africa. Diageo announced last year that it would be expanding into Angola, Mozambique, and DRC. Africa contributes 14% of Diageo’s total net sales and the company paid $225m for Ethiopia’s state-owned brewer Meta Abo.

H.J. HEINZ

Heinz operates production facilities in South Africa and Egypt and is making a strong push into Nigeria.  The company enjoys 21% sales growth in Africa and 10% growth in South Africa.

MONEYGRAM

Africa is Moneygram’s fastest growing geographic segment due to the huge number of Africans in the diaspora who send money back to the continent to support family or local businesses. The company added nearly 6000 locations in 2011 and now has 267,000 agents in Africa.

GE ELECTRIC Co.

With its first aircraft-leasing office in Ghana for Central and West African airlines, GE has a stronger focus on Africa.

We Africans need to keep rising up and come up with African solutions to African problems. We are well able and capable, what we need is a sense of oneness. Yes we do need foreign investments, but we too must invest on our continent and support our own products. Yes We Can!!!!

Arnold Matimba is a generalist consultant with nearly 20 years hands-on experience in industries such as Telecommunications, Aerospace and Defence, Construction, Retail & Hospitality. Arnold has had exposure to diverse cultures making him highly attuned and aware to clients needs in different regions. Despite having lived and worked in the UK, his desire to promote a positive image of Africa led him to set up Avalanche Consultants Pty Ltd, whose main aim is to offer cross-cultural and consulting services to those keen to do business in Africa. (Twitter @ArnMatimba)

DIVERSITY & INCLUSION

 

Women of Africa!

The global financial crisis continues to have a huge impact on the business environment, while political and environmental problems add on to negative business pressure. Diversity and Inclusion (D&I) plays a key role in the development of African businesses. Unfortunately, many leaders do not realize that they are failing to be inclusive while others know that equality of opportunity for all regardless of age, ethnicity, religious belief, sexual orientation and disability creates business benefits. According to a study by Berenice Kerr-Phillips and Adèle Thomas, organisational culture and employment equity led to talent loss amongst identified top talent (micro issues) in South Africa during the period 1994 – 2006. 

Women make up over 50% of Africa’s growing population but are under-represented in social, economic and political spheres. Africa’s private sector is increasingly attracting investment making Africa the most sought after destination for global investment. The women of Africa play an important role in the growth of Africa and so it is vital that these inequalities are addressed. Africa must harness the power of women to drive economic growth and social development.

Across the globe it is very apparent that without the skills, talents and capabilities of their people, businesses simply cannot succeed. And to do so there has to be a substantial investment in diversity and inclusion, for example: 

  • Developing programmes to increase women’s success at work because it has positive impact on both business and society.
  • Balancing representation of previously disadvantaged ethnic groups
  • Integrating Diversity and Inclusion into Human Resource systems to ensure that they recruit and retain the right talent.
  • Holding senior management accountable for Diversity and Inclusion
  • Delivering on Corporate Social Responsibility through sustainable community partnerships.

It is worth pointing that diversity by itself without inclusion erodes employee engagement. Talent is on the top of many CEOs shopping list, with many fearing that a limited supply of candidates will adversely affect business success. The reality is that the talent already exists and just need to be identified.

Women of Africa are the untapped economic force and their participation in decision-making has a proven positive impact. Leaders must address inequalities and harness the power of women to drive economic growth and social development.