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SME's - The attractiveness of Africa

Written by: Dr. Rob Smorfitt

Article Overview: Is Africa, or will Africa, be attractive to SME's?

SME's - The attractiveness of Africa

I believe it is a growing opportunity for SME's. The USA created the AGOA Act which should have created many opportunities for SME's in the USA and in Africa. I know that it also created opportunities for many Chinese SME's/entrepreneurs, who have set up shop in Africa, in some cases purely to take advantage of the AGOA Act.

I have seen many Chinese all over Southern Africa. Some are in retail while others are in manufacturing.

So what are the likely inhibitors for USA and EU SME's entering the local markets. Corruption is the first thing. Over the past 2 years as I have entered new markets within Africa, I have found that corruption is rife. Every deal requires an additional 2 or 3 people to be cut in, in order for the deal to happen. No cut, no deal. Quite simple. The more cheeky operators even want their cut in advance.

Customer service is also low on the local agenda. Everyone believes they are doing you a favour to simply do their job. A smile is not a prerequisite to customer service in Africa. I recently attempted to make a booking at a hotel in another African country, on what happend to be a public holiday in their country. They answered the call, and when I tried to make a booking I was told to call back the next day as they were not taking bookings as it was a public holiday.

This is closely linked to a poor work ethic. There is no sense of urgency, and a week or two to acquire simple information is not unheard of. There is a distinct lack of hunger for success in Africa. I have also experienced this with local manufacturers. I have had UK organisations contact me for products. I have found manfacturers who are "keen" to export, but they seldom even get to the quoting stage.

Africa must seize the opportunities on the horison, and address these issues as a matter of urgency.

Rob Smorfitt

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Article Tags: Africa, entrepreneur, entrepreneurship, service, SME, SME failure, SME opportunities, SME success, SMME, Smorfitt



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Re: In-House or Outsource? - Unfortunately, in the South African context, very few SMEs see outsourcing as an option. They believe it is too expensive, and they are paranoid that someone will "steal their ideas". I believe that the three main functions that cannot be outsourced are marketing, sales and strategy. These must be done in house I believe. If you do not have the marketing skills then get them. Hire a consultant or attend a course, but get the skills. Even if you use a consultant, you need to understand what marketing is about, as no one knows your market like you do. Marketing is made to seem difficult and complex, but everyone who really understands their markets, can easily learn to do their own marketing. In South Africa, labour legislation is extremely inflexibile, and consequently labour broking is a large industry. This is an ideal starting point for SMEs in South Africa, as it is a legally complex area, whih comes with severe penalties. I say do it! Rob Smorfitt
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Re: Newbie from Africa - [quote="Evan":22gvtxlq]Welcome to the forums Biiyke! You asked if we know any sellers who were trying to reach the African market... I think you'd honestly have more luck going the other way - try to find sellers in Africa and sell to the rest of the world.[/quote:22gvtxlq] Hello Evan, You are absolutely correct.Thank you for your advice.That's actually the whole idea,Africa to the world and the world to Africa. So I will throw more weight on that area.


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