Get in to Africa
James Hedley discusses SMEs and corporates looking to expand into Africa.
The US, Europe or Asia are all enticing markets for many SMEs and corporates looking to expand, but the barriers-to-entry in competition, never mind cost, are in many cases insurmountable.
Dig a little deeper and what’s evident is the smart money is actively prospecting and breaking ground on the content of Africa. As to why there is a growing appetite to invest where many have failed before all comes down to a combination of timing, technology and broad-based innovation.
With its rapidly growing population, coupled with the fact that it's getting younger – in 10 to 15-years-time the business sector opportunities to break into this market will equal those of today’s most competitive markets.
The pace of investment is ramping up fast already. So much so that five-out-of-10 of the world’s fastest-growing economies will be well-entrenched in Africa before 2024, and by 2034 Africa will have a bigger working-age population than India or China.
The impending arrival of the African Continental Free Trade Area (AfCFTA) agreement, is also another compelling reason to ready a business for continental growth. Add to that the fact that labour costs are one-third of those in the lowest-cost European countries, and all signs point to the continent as an attractive destination for businesses looking to scale, reduce overhead, and grow bottom-line returns.
Savvy South Africa-based SMEs are reading the signs and many have begun their journey north. James Hedley, co-founder and co-director of Quicket, one of South Africa’s most dynamic and pioneering businesses is one such company looking to expand its African ticketing footprint.
Africa’s Business Revolution, published by Mckinsey, has been a further inspiration for Quicket’s commitment to embracing all things African in the months and years ahead. “I think what you have to be most excited about is the exponentially growing, young up-and- coming population,” Hedley enthuses.
Historically African expansion has been hindered by logistical realities. Today, due to technological advances, the bigger challenge is more operational than it is competitive.
“This creates a massive opportunity for people who can innovate to come up with uniquely African solutions,” Hedley says. “The best example here is Mpesa, which flourished in Kenya because there was no proper banking infrastructure. There are however countless other examples in every sector from electricity to agriculture.”
As with any new market, what’s enticing is its potential to scale. “It's essential that we can be super-efficient and innovative in rolling out our solution,” Hedley says of Quicket’s new-market considerations. “This all about creating systems, building partnerships and solving payments in a way that simultaneously works across all of the most important markets.”
“The challenge is to set up a viable operation that works for a lot less money,” he adds. “Key to this is using existing hardware (Android phone, web applications, etc.) and making things easy to use and self-managed, so you don't need to invest vast amounts in training and support.”
Rapid expansion is possible with digital solutions, compared with the traditional bricks and mortar requirements of old. With even the most basic of smartphones getting into the hands of more and more African’s the opportunity for engagement and conversion is ripe.
The caution, before entering any new market,however, is not to assume that one size fits all. A classic example of success, sighted in Mpesa’s case earlier, is not a guarantee that it will necessarily travel well. In the case of Mpesa, Vodafone looked to capitalise on its north African success in South Africa, and the market simply didn’t embrace it. Not even after two failed attempts, supported with strong marketing support.
Innovation is absolutely key, but on the ground knowledge and respect for the audience you intend appealing to is equally critical. “Companies that can adjust to these challenges, and innovate around them, should have enormous potential to tap into the world’s most significant growth market,” Hedley concludes.
The famous quote from the Chinese philosopher Lao Tzu, founder of Taoism, reads: ‘Give a man a fish and you feed him for a day. Teach him how to fish and you feed him for a lifetime.” Simply put, in an African reality, before you venture into new markets, make it your business to know if he even eats piscis first.
For more information on business topics in the Middle East and Africa, please take a look at the latest edition of Business Chief MEA.
G7 Summit guide: What it is and what leaders hope to achieve
Unless you’ve had your head buried in the sand, you’ll have seen the term ‘G7’ plastered all over the Internet this week. We’re going to give you the skinny on exactly what the G7 is and what its purpose on this planet is ─ and whether it’s a good or a bad collaboration.
Who are the G7?
The Group of Seven, or ‘G7’, may sound like a collective of pirate lords from a certain Disney smash-hit, but in reality, it’s a group of the world’s seven largest “advanced” economies ─ the powerhouses of the world, if you like.
The merry band comprises:
- The United Kingdom
- The United States
Historically, Russia was a member of the then-called ‘G8’ but found itself excluded after their ever-so-slightly illegal takeover of Crimea back in 2014.
Since 1977, the European Union has also been involved in some capacity with the G7 Summit. The Union is not recognised as an official member, but gradually, as with all Europe-linked affairs, the Union has integrated itself into the conversation and is now included in all political discussions on the annual summit agenda.
When was the ‘G’ formed?
Back in 1975, when the world was reeling from its very first oil shock and the subsequent financial fallout that came with it, the heads of state and government from six of the leading industrial countries had a face-to-face meeting at the Chateau de Rambouillet to discuss the global economy, its trajectory, and what they could do to address the economic turmoil that reared its ugly head throughout the 70s.
Why does the G7 exist?
At this very first summit ─ the ‘G6’ summit ─, the leaders adopted a 15-point communiqué, the Declaration of Rambouillet, and agreed to continuously meet once a year moving forward to address the problems of the day, with a rotating Presidency. One year later, Canada was welcomed into the fold, and the ‘G6’ became seven and has remained so ever since ─ Russia’s inclusion and exclusion not counted.
The group, as previously mentioned, was born in the looming shadow of a financial crisis, but its purpose is more significant than just economics. When leaders from the group meet, they discuss and exchange ideas on a broad range of issues, including injustice around the world, geopolitical matters, security, and sustainability.
It’s worth noting that, while the G7 may be made up of mighty nations, the bloc is an informal one. So, although it is considered an important annual event, declarations made during the summit are not legally binding. That said, they are still very influential and worth taking note of because it indicates the ambitions and outlines the initiatives of these particularly prominent leading nations.
Where is the 2021 G7 summit?
This year, the summit will be held in the United Kingdom deep in the southwest of England, with Prime Minister Boris Johnson hosting his contemporaries in the quaint Cornish resort of Carbis Bay near St Ives in Cornwall.
What will be discussed this year?
After almost two years of remote communication, this will be the first in-person G7 summit since the novel Coronavirus first took hold of the globe, and Britain wants “leaders to seize the opportunity to build back better from coronavirus, uniting to make the future fairer, greener, and more prosperous.”
The three-day summit, running from Friday to Sunday, will see the seven leaders discussing a whole host of shared challenges, ranging from the pandemic and vaccine development and distribution to the ongoing global fight against climate change through the implementation of sustainable norms and values.
According to the UK government, the attendees will also be taking a look at “ensuring that people everywhere can benefit from open trade, technological change, and scientific discovery.”