“Africa is like 3 – 4 continents in one.” That’s what an international investor said to me once and it’s he exact reason business developers have to prioritize markets for business growth on the continent.
Africa is huge with 54 countries, 2000+ local languages, and 3000 tribes. You cannot have a one-size-fits-all strategy across the continent.
To expand successfully, you need to prioritize the markets that will give you the best returns on investment.
Prioritization is choosing the countries/regions to begin operating in that give you the best chance to hit your immediate business goals.
There’s a 5-step framework that shows you how to properly frame and rank countries to help you allocate your resources and time more effectively as you build your business across the African continent.
Before we begin the prioritization process, you have to start by clarifying your goals.
Clarify your goals:
Tapping into Africa’s growth opportunity depends on the business and sector that you’re in. Every business is quite unique, so being clear about your goals is your next step in capturing these opportunities.
Clearly define your short (6 – 12 months), mid (3 yrs), and long (5+ yrs) goals.
Having concrete commercial goals simplifies your prioritization and expansion process. Once you know where you want to be along your short and long term forecast, you can then reverse-engineer a well thought-out strategy that will help you get to those goals effectively.
This is very important as you choose the markets to prioritize. A few major things that successful business developers consider when prioritizing are (but not limited to) these 5 factors:
- Biggest Markets
- Business & Industry Specifics
- Regional Placements
- Language Consideration
- Professional Network
1. Prioritize by Biggest Markets
Let’s start with the obvious.
To make an economic impact on your business and in the countries you choose to focus on, you want to go to countries that present the biggest market opportunities. These are markets that have a high population, GDP, purchasing power, and have regional leverage as a hub.
These big markets are South Africa, Nigeria, Kenya, and Egypt. These four countries will account for over 50% of the total household consumption in Africa by 2030. If you are looking for the biggest opportunities, these
markets are always a good place to start.
Keep it in mind that these markets have more competition, and sometimes slower routes-to-market, especially when you don’t have the right network and local operating capabilities.
2. Business & Industry-specifics
Your priority markets will depend on your business and industry too.
Every business is unique, so it is important to know what important metrics you need to see that pertain to your business before prioritizing markets.
You and your team need to get clear on the top 3 metrics that are important to finding a sizable and addressable customer base in your new market.
Examples of metrics could be:
- Countries with high number of automotive vehicles for an automotive OEM.
- Markets with high population growth rate for a baby diaper manufacturer.
- Ease of doing business for registering new technology solutions.
- Stable political landscape particularly for business sales to the public sector.
- High social development focus for educational and health services and products
The cases vary by business and industry, so it is up to you and your team to get clear on these market metrics, then do some desktop research to narrow down on the countries to focus on.
3. Regional Placements
Business developers usually approach regions in Africa in two ways based on geographical orientation.
The first way is the five coordinates that split the continent into five regions – northern, southern, western, central, and eastern Africa.
The second way splits the continent into two – Northern Africa and Sub-Saharan Africa. With the regional orientation, it becomes easier to clump markets together to make prioritization easier.
Depending on your goals and outlook, you could take a regional approach to your expansion. You can decide to expand by region or choose the biggest market in each region that gives you a strong regional foothold.
This sets you up to expand to other countries within each prioritized regions.
4. Prioritize with Language
There are 2000+ languages spoken in Africa.
Don’t panic just yet, most countries conduct business in either English or French, with two countries speaking Portuguese.
Not being able to communicate in one of these two languages could be a huge communicative barrier to entry.
Consider prioritizing markets where you and your team can easily speak the language. If you have a team member that can speak French fluently, then you can prioritize the French-speaking countries.
If English is the common language on your team, then you can focus on the English-speaking countries.
Although some local professionals can switch between both languages (particularly in some French-speaking countries), it is best to keep this language factor in mind as you prioritize.
5. On-ground presence and network
Business in Africa is relationship-driven.
Things are not quite as transactional as some other places in the world. Because there’s generally low-trust in the business landscape, people usually do business with people they know and trust. So it is very important for you to know people and have a professional network in the local market that you want to prioritize.
Choose countries where you have connections and a network in. This is how most people start prioritizing certain countries over others – based on who they know within each market.
The short-coming, however, is that you may know people in a country or market but that does not really move you closer to your business goals. You want to develop a professional network that can actually assist with strategic partnerships and facilitate business deals and developments.
A few tips:
- If you don’t have a local network in a market that you want to prioritize:
- Go to country-specific conferences and trade shows to build your network.
- Attend Africa-focused webinars to make new business contacts.
- Seek out business development agencies and consultants that can help you meet the right stakeholders faster than you would if you did it on your own.
There are other metrics to keep in mind as you prioritize markets across the African market, however these 5 ways presented above provide the groundwork to begin your prioritization process. It is very important to align your business goals with the prioritized markets to make sure you are taking a pragmatic approach to building your business.
Once you are done with the prioritization process and you are confident about the markets that will provide the best ROI for your team, it’s time to develop a local strategy and localize your solution for each market, so you can have the best go-to-market approach for expansion.
