Leading Through Volatility in Africa

AFRICA Barely two years ago, foreign businesses and analysts were hailing Africa as the world’s economic miracle. With economic, political and social reforms sweeping the continent, a burgeoning middle class and growth rates hovering around the 6% mark, people were queuing up for a slice of a $1 trillion opportunity.

Today, that picture might appear less appealing to some. Epidemic challenges have swept various countries, especially in West Africa. Across the continent, instability and conflict are either simmering just below the surface – or worse, bursting out into the open. Between strikes, extremist activities, economic turmoil and political unrest, the African dream might be looking a bit threadbare right now.

Nobody said it would be easy. But for the businesses that are prepared to face the storm and manage the volatility afflicting the continent, there are still huge rewards to be had from doing business in Africa. You just have to be alive to the opportunities and avoid the pitfalls.

As the head of a multinational company that is deeply committed to Africa and its people, I believe firmly that this phase will pass. What is needed at times like this is the ability to manage volatility – something that companies in commodity markets are already familiar with. You do this by having an ear to the ground, solid relationships with your partners and customers, and as much real-time information as you can get your hands on to make informed predictions and decisions.

The most important component to understanding the continent and its ways is time. When foreign businesses go into a country or a region with preconceived templates and notions, chances are they will miss the opportunity to truly understand how to work and collaborate with governments, potential partners, and potential customers.

Here’s the best-kept non-secret to always consider – Africa is a large continent. One size does not fit all. Business is done very differently in Ethiopia than in Nigeria. You will never know Africa based on a PowerPoint presentation. You must immerse yourself into the continent and experience business on the ground, face to face. Choose a few key destinations; spend time there: not just for business, but to learn and experience. Engage people in business and on the street – this is the only way to understand the rhythm of the region and understand how business is conducted on the continent.

Of course there are challenges. In many regions, the lack of infrastructure and political instability means that cash is king. This will have a fundamental effect on the way you are paid, or intend to pay, for products and services. You need to stay hands-on. C-suites need to own relationships on the ground. If you’re going to try and manage the business by remote control because you think a region is unstable, you’re looking at a sure-fire recipe for failure.

I’m often asked about the best country on the continent regarding opportunities and stability. There are many options. South Africa will always be right up there, and remains a key launch pad into the continent for many businesses. Angola’s a great gateway not only into Lusophone Africa, but into Portugal as well. Nigeria, in spite of its challenges, is the largest economy on the continent and is immensely strategic importance to West Africa and the continent as a whole. Ghana is stable, and a relatively easy place to conduct business. While Kenya is experiencing some political unrest, it remains a well-structured country with a strong political agenda. Morocco is emerging strongly as a gateway to West Africa for many European businesses and has created some promising partnerships with English- and French-speaking West African companies. Again, each area has its own regional rhythm of business engagement.

Leadership through volatility requires you to think beyond borders. From an African perspective, we need to drive growth across the continent, and start producing home-grown goods and services that our own people will use. We need to think about how we accelerate industries that impact larger geographic areas, thus uplifting more people, communities and smaller businesses that can capitalise on the downstream economic growth. It’s Africa doing business with Africa, supported by the many foreign investments who want to contribute to our prosperity.

For us, this means delivering a succinct value proposition – and for Africa right now, the cloud is adding considerably to this task. Cloud doesn’t require any huge upfront investment. It allows us to be flexible and scalable in what we offer our customers, and what they in turn offer to their customers. It opens doors to locally-relevant, locally-built and locally-developed innovation. Most of all, the cloud is a great platform to deliver fast, accurate business information and analysis that helps businesses chart their way through unpredictable waters. The cloud can truly enable Africa to become a connected, networked economy one day.

Feet on the ground, heads in the cloud. That’s the way to do business in Africa right now.

About SAP
As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 253,500 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com.

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