The business environment in Africa is considered by many entrepreneurs in Scandinavia hard and difficult to navigate. Hence, the need for help and advice for foreign entrepreneurs is greater than in many other places. This might be good news for a consulting company like ours but we do not agree with all the difficulties. It is true that business culture is different from our own here in Scandinavia but our economy is built on our ability to both sell and buy from everyone worldwide. When looking at some markets in parts of Africa, we can see a lot of bureaucracy, detailed regulation and government injunctions for businesses regarding the ethnic composition of the staff you have in place. Some regulation are more targeting large business and officials are more flexible with smaller business. In many places it is not more difficult to start a business in Africa than here in Sweden.
Personal safety can be a factor in some markets, but many exaggerate the risks on a purely personal level, yet often underestimated cost and time before you get that first order. Corruption can also sometimes be a problem, but many government are actively working on this because they want to increase transparency and create a more efficient and enhanced organization which drives down transaction costs at all levels, both in the private and public sectors. This is the case in Northern Europe as well.
The leadership used in Sweden and Scandinavia is perhaps not exactly what you copy and adapt if you run a business on the African continent. Many times it is also very similar as management many times is about trust and relationship. If you build both you can usually get good result. We have met many Swedes that say they felt unprepared for the workload necessary, in terms of management, business control and general governance. However, this is someone that many adapts pretty quickly. What you do need to understand is that the financing alternatives you are used to in Europe are not available in Africa. Margins of 50-80% might be necessary as interest rate can be 20% or more if you need external local capital. If you only produce to sell in other markets, for example Europe, you might be better equipped to handle financial cost in Africa. Liquidity are perhaps even more important in Africa than in other markets and in terms of securing the payment streams and find the right payment solution, do not expect that you can copy everything from working in Europe.
Our renowned Swedish professor Hans Rosling says we will probably not become more than 10 billion people on our planet and our population will be adjusted as the economy and communities are growing. If we are to believe some forecasters Africa’s share of global population over the next 80 years can increase fourfold, to about 40% percent. Some say that as early as 2020 we find as many middle income earners in Africa as in Europe. If we look some 80 years ahead Africa’s population will be almost as big as Asia and four times as large as North America and Europe together. Many people’s expectations in the Western world is based on that rising population generates ever-growing demand. If politicians and business leaders only keeps on “fuelling” the economy in each market this will be the natural result. We don’t know and we have to wait and see as the rest but no one should ignore this business opportunity.
As we travel in Africa we can see a lot of investments in education and programs to train young people to enter the job market, but many expect it to work with new technologies and services today, not traditional engineering or in agriculture. The challenge is perhaps to create more entrepreneurs that can create their own opportunities as many young academics have difficult to find a suitable job fitting their long education (and personal investment). Some initiatives is the Chamber of Commerce, here in Rwanda. There is a need for good Chamber of Commerces, business incubators but also access to seed capital. This is not unique to Africa as we have same or similar problems in Scandinavia. This reallocation of labour force to more high-tech and service driven differ from country to country in Africa, but it is always important to take advantage of talent and creativity. Maybe we will see many global headquarters move from USA, Sweden, UK, France, Germany and China to be found in Accra, Lagos, Kampala or Nairobi? We do not know but what we do know is that it must be possible to develop more business between Scandinavia and Africa.
We are a business consulting company that help companies establish themselves in new markets and we work with both the commercial and legal side of international business. We have been involved in several sustainable business projects and currently we are involved in the coffee industry in East Africa. Besides trade and international business development we are also specialist in intellectual property issues. There are also many interesting business opportunities within agricultural, ICT, medtech, biotech and other life sciences now in sub-Saharan Africa. We can help to identify and develop those partnerships and joint ventures.
Please don’t hesitate to contact us regarding business to and from Scandinavia, send your request to our e-mail