Below is an interview I had with Venture Capital News Africa in April 2019. In the interview, I shared some tips on how entrepreneurs can successfully compete in the African market.
What has worked and not worked for you in the African market. Share your thoughts…
Interview with Winfred Oppong-Amoako, author of ‘How to Succeed in the African Market: A Guide for the 2020s for Businesspeople and Investors’
Apr 28, 2019
- How would you contextualise the African business opportunity?
Africa is home to some of the world’s fastest-growing economies and a hot investment destination. More than 75 per cent of companies and investors in Africa are successful. Business opportunities on the continent is like going into a village where every farmer needs some kind of service from you so they can increase their farm production. Then you realise that every farm you visit has some kind of treasure; product that you can export to other markets. This is the opportunity landscape in Africa.
In my book, I present a detailed picture of Africa’s investment environment, outlining the risks, challenges, misconceptions and opportunities, and providing a step-by-step guide for approaching the African market. There is no shortage of interest in doing business and investing in Africa.
- Investments in African startups in 2018 was $725.6 million according to WeeTracker and PitchBook reported startup investment in America startups at $130.9 million. How in your view can African startups and entrepreneurs go about attracting international venture capital investments?
For African startups to attract more funding from international investors, they must have a winning product. A lot of international investors gravitate towards products that provide innovative solutions and impact people in a positive way. Your product and service should be in-touch with reality; able to solve real-life problems, user-friendly and forward-looking, at the same time. The product should be solving problems using future technology but simplified for the average person. You do this by knowing your market’s ecosystem which includes customers, operating environment, opinion leaders, suppliers, competitors, etcetera. It is very important to build your brand for the people; build people up as you build your business in Africa. Otherwise your business growth will be all about money. Be a social entrepreneur.
Few of the many questions I will ask you when you come to me are; Is your business relevant to the community or country you are expanding to? Will your product or service create jobs, protect the environment and improve the overall wellbeing of the people? Is it talking to the national strategy or agenda? The latter doesn’t mean you should change your vision or goal to fit every country you expand to. However, part of your strategy should contribute to the national agenda. Every country or investor values and appreciates businesses that contributes to national growth and reflect the ethos of the investor. If you follow the above tips and others in my book, you will be well on your way to attracting international venture capital investments.
- In your book you explore misconceptions about doing business in Africa. How do African economies go about changing mindsets of potential investors on a large scale?
Misconceptions are not formed overnight. They are a collection of events, news and perceptions. To change misconceptions about doing business in the continent, African governments must allocate budget to market countries investment prospects and tourism opportunities, globally. Governments must also document and share current economic achievements and success stories with the rest of the world. Such economic data must be timely and non-biased. I will also encourage more Africans to write about the continent’s development and economic growth, while holding leaders accountable for areas of misappropriation. If Africa’s economic reporting is timely and widely available, misconceptions about doing business in Africa will be drastically reduced.
- Our belief is that African companies should position themselves to scale within the continent, to be really successful. However a lot of businesses are built to be successful in their country and regionally. What’s your view on this?
To overcome the challenges of doing business in Africa, entrepreneurs must adopt proactive strategies for their businesses and investments. This should include developing solutions five to ten year ahead as countries, businesses and customers explores ways to embrace mobile and digital technologies as the norm. Adopting this strategy will always put entrepreneurs ahead of competition.
Entrepreneurs must be open-minded and dare to take risks. This includes taking bold steps to visit other African countries to learn, experience and know their competitors and potential market for their products. They must also build good networks in the continent so they can reach their customers timely and efficiently. Potential networks can be in the form of local representatives, consultants and local companies who could be distributors for their products and services. When hiring a consultant, it is important to go for someone who is familiar with entering new markets, one who knows the business and investment ropes in the African region with extensive business contacts to assist where possible. For more, get a copy of my book.
- Your book also reviews ease of doing business in Africa. Do you feel that African countries are doing enough in terms of leveraging technology and digital platforms to catch up with the rest of the world? If not, what are the barriers?
Governments and businesses in Africa are confident about the continent’s long-term economic prospects and are creating conducive environments and institutional framework to harness the critical role of technology. With a good foundation and upskilling of young people, the continent stands a chance to lead the technology revolution in the fourth industrial revolution and beyond. The launch of Google’s Artificial Intelligence (AI) lab in Accra, Ghana is a typical success story in Africa. The lab which will be Africa’s AI research centre will house a new generation of AI developers from the continent.
Experience in many African countries shows that governments are creating technology hub and increasing access to computers and mobile technology for young people. Creating enabling institutions and frameworks ensures that young people and entrepreneurs have enough room for creativity and innovation. More study scholarships will be good incentives to generate interests in information technology. Industrial policy aimed at encouraging and protecting a data-driven society can facilitate the technology and digital takeoff. For Africa to be known as an innovation-driven economy, governments must create robust technological environment that promotes new technology and increases the pace of innovation.
- In your book you stress conducting market research before investing in Africa. We find that information is often limited, especially for desktop analysis. How do investors go about this practically? Have you got specific resources you often refer to?
Conducting thorough research before taking a business decision is crucial to one’s business success on the continent. Unfortunately, African markets data is scarce. Because of that some businesspeople and investors make decisions to expand to Africa based on a trip feedback of a friend or family member. They don’t take time to visit the country, talk to potential customers and distributors, see the roads on which their products will be transported, and speak to their competitors, etcetera. Desktop research is usually for initial selection of geographic or commodity preference. The next step will be to do some on-the-ground digging by hiring the services of a consultant who may have the required information at hand or arrange a fact-finding trip. If you have the time, it will be a good idea to do the trip yourself or go with the consultant. Whatever you do, don’t make business decisions based on news ‘Headlines’. Headlines will change before your product or service gets to your customers.
I have gathered knowledge and material over the years from working in the continent and advising businesspeople, investors and leaders. I am therefore able to offer African market and country-specific research services to businesspeople and investors. I also have a network of in-country teams depending on the size of request.
- Lastly what role do you think entrepreneurship will play in growing the African economy in the 2020s?
The potential of African entrepreneurs to grow the continent’s economy has barely been scratched. Support for women and young entrepreneurs in particular continues to be critical to unlocking Africa’s business boom in the 2020s. To harness the potential of entrepreneurs and small businesses to create the millions of jobs for the unemployed and revitalise the continent’s economy, African governments must build the skills of the entrepreneurs through business advising programmes and workshops sponsored by the state and private sector. Governments must also create enabling environment for small businesses to grow and thrive in the 2020s.
When all the above support is given, I foresee entrepreneurs playing the following roles;
They will find solutions for the challenges faced by businesses in the African business ecosystem and supply chain. This could be closing gaps in the distribution channels, proving after-sales service for customers and business clients. They will also provide local footprint for investors by acting as local partners or host companies during acquisitions.
In the 2020s, entrepreneurs will challenge available data and share business success with fellow entrepreneurs, governments and investors. These entrepreneurs will engage and share information on peer-to-peer platforms and collate such data for business decisions.
For more information on doing business and investing in Africa, get a copy of my book ‘How to Succeed in the African Market: A Guide for the 2020s for Businesspeople and Investors’ from bookstores near you or from Amazon Kindle, Google Play and Apple Books.
Source: Vcnews.Africa Team