From: Christopher Onwuasoanya <chris81964@yahoo.com>
Date: Wed, Mar 5, 2014 at 4:00 AM
Subject: [Naija_IT_Professionals] 6 Reasons Why African Entrepreneurs May Fail In The West, But Hit The Jackpot in Africa.
To: Christopher Onwuasoanya <chris81964@gmail.com>
6 Reasons Why African Entrepreneurs May Fail In The West, But Hit The Jackpot in Africa. #1 Should already convince you. West, But Hit The Jackpot in Africa. #1 Should already convince you. I wished I could remember what exactly I was searching for in the Internet in August 2012, but it had something to do with my newly found summer-ambition to change gears in my professional career. After 13 years in a career that I loved, I hit a dead end. No, I did not want to coordinate short-term funded community projects in Africa anymore that helped a few and often died out together with the aid money. But deep down there was more to it: I did not want to depend anymore on a monthly salary and an employer either. I felt the limitations of it all. And suddenly I realized that I wanted to be fully in charge of what I desired to contribute to Africa and build for myself. And for the first time in my life I contemplated opening a business, something in Africa that enabled me to change my life around and that of others…I wanted this to be the start of a new journey. So I was browsing the Internet, and stumbled on an article that was written in2011 by David Rowan, the editor of the Wired Magazine. It was titled “Want to become an Internet Billionaire? Move to Africa.” How newly found awareness can change your path I never forget the title of this article, and although I was neither interested in such great riches nor in e-commerce (I was still very much an international development worker at heart) it completely struck me. And the reason is that it never even occurred to me that you could do much with the Internet in Africa at all, let alone do business and get rich with it. All I had known so far were slow loading servers and power cuts. So I read. I read the article in complete amazement, I read about Africa’s new generation of entrepreneurs about global brands heading towards the continent, and successful Africa tech companies leading ahead in many ways. Wow, I had been working in Africa on the ground, yet it was a simple article through which I received a completely new insight that left me with the urge to find out more. Immediately. And since August 2012 I have been searching and researching…Ok, almost a little obsessively, I have to confess. But then I asked myself: How many Africans and others are out there just like me? Who have no idea or just a vague picture about the dynamics and how, if at all, one smartly fits in? Have you or are you contemplating starting a business, but have never really thought of Africa? Or you thought of Africa, but you were driven more by your own ambition with little knowledge about the regional market outlook and certain industry prospects? Or are you simply not yet convinced about doing business in Africa? I think lack of knowledge is a key obstacle that is hindering many of us to strive towards success in Africa one way or the other. If you want to become successful you need to know Africa’s market dynamics better. Of course there is so much information out there, and we will tackle much of it on Africa Business JumpStart. Let’s start with some basics. Have a look at 6 amazing benefits Africa can now widely offer you, but what you will not find in the West.
1) Low Competition The level of market competition is your biggest challenge in the West and, right now, your greatest opportunity in Africa, because there is simply an overall lack of competitors! Let’s be random: Take bottled water, for example, or baby diapers, sportswear, or make up. The store shelves in the West are filled with a huge range and variety, but above all, with leading international brands that are hard or sheer impossible to beat. Now in many African countries you will only find one or two brands of bottled water – and I have come across local shop owners in Sudan who filled them up with tap water and sold them anyway; maybe the company was unable to deliver in time. Baby diapers are imported from abroad in several African countries. You are lucky to find a shop in the city that sells them, and then the quality can be very poor and the price unaffordable for the masses. The case is similar for decent quality sportswear or make up. Let me give you just one example: Look, while the opening of a pharmacy in London or Chicago may seem like a very costly and possibly financially risky business undertaking, a South African pharmacist who opened a pharmacy in Soweto reported on CNN that his business was seeing a 50% increase in sales every single month! The reason was convenience: the next pharmacy was a full five miles away and customers were prepared to pay more to come into his shop for instant medical advice which they could otherwise only get in overloaded state-owned hospitals. Ok then, here is another one: Patrick Ngowi. Tanzanian. Just 29 years old. Ten years ago, aged 19, Patrick received a small loan from his mother to start a business. He started off selling Chinese mobile phones, but then he discovered that only a tiny fraction of Tanzanians enjoyed access to electricity, so he saw a gap he wanted to fill. He continued travelling to China, but now bought small solar supply and installation systems. To make it short: Last year, his company Helvetic Solar Contractors did more than $5 million in revenues and KPMG East Africa recently valued the company at $15 million ! Yes exactly, let’s repeat: he had no real capital, no investors, no prestigious position or friends in the government, and not even experience and today Patrick belongs to the richest under 30 CEOs in Africa. These are just 2 examples, but it just demonstrates so clearly why some Africans who are just like you and me celebrate ueber-successes in such a short time. Getting my message already ? Great. Let’s, get started in Africa while this amazing and rare window of opportunity is still open ! But here are a few more benefits for those of you who are not yet convinced.
2) Fast Growing Demand In Multiple Industries While consumers in the West have almost everything that their hearts desire, the African consumer is just waking up to new spending power abilities. According to the McKinsey Global Institute, by next year Africa’s consumer spending will be in the region of $1 trillion, driven by Africa’s exploding new middle class of over 300 million people. In fact, analysts fear that the demand for many products and services cannot be sufficiently met. [Note: Are you seeing also seeing that cartoon in your head where thousands are storming your shop or office and you are standing behind the counter with a big smile, calling ‘Next please’? J].
3) Affordable Management Costs Office, storage, utility, service, and labor costs are so much cheaper than the West in most parts of Africa, allowing you to start with smaller capital. However, make special expenditure calculations if you are packing and heading for Luanda – Angola’s capital city is currently the most expensive on the continent !
4) Super Returns on Investment Depending very much on the industry sector and the country you are operating in, returns on investment in the West, and in many Eastern countries too, lie somewhere in the range of 6-12%. Foreign investors in Africa widely report ‘super returns’, many making 15-25% return on their investment. The figures speak for themselves and are not based on stocks (I still got to do some research on those), but on direct investment into local companies. Tom Speechley, a senior partner of Abraaj Group, a leading private equity investor in global growth markets, said at an event at the end of 2013: “The interesting thing about Africa and emerging markets is you can make a lot of return just with equity—you don’t need to use leverage to generate return. We typically don’t use any […] We just put in equity and hope the business grows three or four times over three or four years and you make three or four times your money.”
5) Embracing African Diasporans Although some of those who have returned to Africa report of the personal challenge to fit into the society, but I believe that this will probably only be temporary. It may sound like generalization, but I think that it can be said that the lack of social acceptance or integration of Diaspora Africans into the societies of their new home countries poses often a socio-economic and psychological obstacle to a lot of Africans. This is why so many overly talented and skilled Africans work for years and decades in underpaid positions (and this may even be somewhat more the case in Europe than in the United States). While you may face some societal challenges when returning back to Africa after a long absence, fact is that people there will usually welcome you and look up to you admiring the skills and experiences you are bringing into the community after a life on far away shores.
6) Purpose The success of your business depends vastly on the passion you have for it, of course, and on your own determination and creativity. Operating in Africa has many challenges (patience is a virtue!), but having worked in Africa myself, I know nothing can beat the level of appreciation, personal engagement, and fulfillment you get when serving the needs of Africans. While your attempts in the West may go unnoticed and you can be replaced only too easily, any venture you start in Africa can be turned into one with a purpose. You are someone who makes a difference and people notice you, respect you, and appreciate you for it. And I think we can all do with a little of that! There are so many products and services Africa needs right now. You will find that many of your business ideas may even meet basic needs, and chances are, that it will be very easy to turn any business model into one with purpose.
So here you go, these are some of the most important facts that accelerate your chances of doing business in Africa – the gates are open. Of course, truth is that many entrepreneurs and businesses in Africa still fail or just make enough to get by, so it’s still very important you do your research properly, know your industry market, and plan accordingly in order to be successful. That’s what Africa Jumpstart is here for. How ready are you? What is missing for you? Please feel free to share any thoughts below. P.S. BTW, I am just finalizing my E-book on How to JumpStart your Africa Business. You will find all the latest info you need to know conveniently packaged for you, which will allow you to make decisions faster and more confidently. Stay tuned!
Be part of Africa’s renaissance. Build a grand lifestyle for yourself. And make a positive impact on the lives of others. Today.
Yours, Dr. Harnet Bokrezion Christopher J. Onwuasoanya The information contained in this e-mail is intended only for the individual to whom it is addressed. It may contain privileged and confidential information. If you have received this message in error or there are any problems, please notify the sender immediately and delete the message from your computer. The unauthorized use, disclosure, copying or alteration of this message is forbidden. |
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