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Doing business in Africa is not smooth sailing

Much has been said and written about the fortunes of doing business on the African continent or simply, in countries outside ones own familiar comforts. There is something to be gleaned from those who have gone before us and have gathered various insights into what it takes to make operating in Africa a success.
Evelyn Mahlaba during an interview
Evelyn Mahlaba during an interview
For a global tourism marketing organisation like South African Tourism, we are of the opinion that all these views and learnings are valid. Doing business on the continent is not smooth sailing and it's definitely not for those who aren't in it for the long haul.

To quote Mark Steinhobel, chairman of the VWV Group: "If you take the time to understand Africa, if you respect her many cultures and diverse needs, and if you cast off your own preconceptions, you will discover that she is the wonder and beauty of the rainbow, with a real pot of gold at its end."

Heightened interest

Opting to extend our business focus to the rest of the continent was a strategically informed decision backed up by years of sound research and tracking of trends. Global interest in Africa has heightened and our continent's status as a feasible and profitable investment hub has flourished. Economies are thriving and the perception of Africa as a whole is changing from one of despair to hope.

This, unsurprisingly, coincided with a burgeoning middle class and with that, a noticeable increase in outbound travel to South Africa. This prompted us to start marketing South Africa more aggressively and also, to increase our investment by having physical presence in most major cities and use those as hubs to better service the continent.

The time was now right to invest in our vision to grow the tourism potential of Africa. What was also becoming clear was the importance of inter-regional and inter-continental partnerships, as a critical success factor. There is still the misconception that a blanket approach to dealing with countries on the continent works.

The reality is, this is a dynamic continent, home to 54 countries, countless nationalities and even more languages, cultural and religious nuances that one needs to know about, understand and more importantly, respect. There is a different way of conducting business and engaging with people - and it differs with each individual country.

Navigating the way

We have had to learn these nuances and respectfully navigate our way into all engagements with an innate appreciation of the environment we were in and relationships we were building. The insights have helped inform our strategies and our campaigns, the tonality of our messaging and our response to issues.

More especially however, they have helped us to win the trust, the hearts and the minds of the people whose countries we visit, invest in and we support all year round. We now know that the African business culture is very much driven by relationships.

The result of our efforts, though not impermeable and definitely not the result of a singular effort, is far reaching. We are noticing how the global community is still interested in tourism products and destinations from our beloved continent. The positive impact of tourism in Africa is widely felt: there is economic growth and job creation; and wider investment in African infrastructure and skills. This is backed up by EY's attractiveness survey Africa 2015 which states that capital investment into the continent surged to $128bn, up 136%. And FDI created 188,400 new African jobs, a 68% increase.

Spurred by a handful of megadeals, the average investment increased to $174.5m per project, from $67.8m in 2013. Africa's share of global capital investment and job creation hit an all-time high in 2014. Only Asia-Pacific attracted more FDI funds than Africa last year.

Positive global image

All these contribute towards building a positive global image of an Africa that is capable, inviting, welcoming, friendly, stable, and thriving. Regional Africa in particular, has already proven itself as fundamental to the long term growth and sustainability of South Africa's tourism industry. Collectively as the African continent, we need to see to it that economies grow, that local talent is developed and that jobs are created on our continent.

Doing business in Africa is about knowing that ultimately, we are visitors in someone's home and the onus is on us who choose to invest to listen and in so doing learn more about our gracious hosts: what they value, what they dislike and how we can help them fulfil their unspoken dreams and articulated desires.

As earlier alluded, we want to form lifetime partnerships, it's the relationships and friendships which we form that will stand us in good stead long after the bells and whistles from opening an office have died down.

If organisations can understand this, master the basics, the potential for doing business in Africa will forever remain a highly attainable and lucrative goal. And what's more, it will unearth people who are passionate, knowledgeable, excited and committed to making business on the continent a success. Is it challenging? Definitely. Is it rewarding? If done correctly, it certainly is.

I believe tourism is a crucial driver of the second economy - it is one of the pillars that can help address poverty.

About Evelyn Mahlaba

Evelyn Mahlaba is Regional Director: Africa at South African Tourism

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