WHERE Do I Start My African Business or: Are You Taking The World Cup Approach?

WHERE Do I Start My African Business or: Are You Taking The World Cup Approach?

Is there something African businesses and entrepreneurs can learn from the World Cup?

I am sure many of you agree: The World Cup is simply not as much fun anymore now that Africa left. When Nigeria lost, Africans mourned around the globe. We want the world to see Africa’s talent, pride, and spirit. It could have been Ghana, or Cameroon, South Africa or even Madagascar – and we would have cheered. The truth is, when Africans play in the world cup we all feel the unity and the love. Africa becomes one with the last team standing.

(Well, my son still needs to get the hung of things: He could not care less who was who – as long as they scored)

But when the world is looking at Africa as the last emerging market frontier, things get a little more competitive among the countries. Welcome to Africa’s Business Cup !


South Africa fears that Kenya will snatch its status as Africa’s tech hub away, and Kenya thinks it already has scored 1-0.

In 2013, Uganda attracted more Foreign Direct Investment (FDI) than Kenya, which veteran player Kenya did not take well, in the meanwhile Rwanda is marching ahead as the best country in the region in the World’s Bank ‘Ease of Doing Business’ Report.

Nigeria snatched South Africa’s trophy as ‘Africa’s biggest economy’ last April….

And there seems to be a new front opening…..Nigeria-Kenya: The economic leaders of the East and West and who is best.

Oh yes, and then there are of course Ghana and Nigeria playing each other and while Nigeria shoots multiple scores as Africa’s major business hub, Ghana is confidently sitting back smiling: It got the world’s approval as being one of the safest and most democratic countries – US government delegations under Obama were heading to Accra.

I actually think this market competition is great. It is a wonderful driver for African governments and the private sector to become better – or face the risk of falling behind. This will create markets that will become more efficient in time. 

But where are you in the competition?

While big international corporations and investors closely follow the African Business Cup putting their money on team Kenya, Nigeria, or South Africa….African startup entrepreneurs are less emerging themselves in it. For many, home is best – even in business. In the meanwhile, many Africans in the Diaspora and non-African business owners who want to move into the continent are still pursuing approaches that are outdated: “I am looking for a partner in Africa. Please get in touch.” (that’s another World Cup Approach in business….as long it is Africa it’s great…) others state: ’I thought….maybe Tanzania?’

I think Africa entrepreneurs on the continent and across the world need to be urgently empowered to make more informed decisions on so many levels. Today, let’s look at how you can improve your decision making process regarding your business location.

Which are the factors that make a location a strong candidate for your African businesses? Take these steps when considering location:

STEP 1. Choose a growth country

If you are flexible I would start with choosing one of Africa’s top growth countries to do business in. Simply, because they have the most enabling market conditions and that will usually accelerate your business success. You can visit our ‘Featured Countries’ Page to get an idea of the countries that are among Africa’s top (ok, we got to take out South Sudan for the time being and could add a few more). Unfortunately, last month, June 2014 one of Africa’s top destinations – Ghana – was reported to be struggling from increased inflation, which affects many businesses, in particular in retail. This may subside, but during the time of posting this here on Africa Business JumpStart, it is a development you should currently be aware of.


STEP 2. Choose a country that really positively enables your industry

africa business location 2

You have chosen a certain industry for your business, be it agriculture, hospitality &  tourism, or the creative industries. Now you need to know in which country out of the list of Africa’s top growth countries (STEP1) you will find the best market and enabling environment for your particular business concept.

Here are some factors that you should consider in Africa. Ask yourself: Where do I find…..

–          High level of demand/need locally for your product or service

–          Enabling government policies towards that industry

–          Low competition for your particular venture

–          Favorable government regulations

–          Adequate access to ICT systems for your particular undertaking

–          Local acceptance and/or understanding towards your products and services

Do your research, read through old blog posts here on Africa Business JumpStart, or get in touch if you need help with that.

STEP 3: Do a risk assessment

africa business location 1

You may have read my recent post ‘Avoid These 4 Risks When Doing Business in Africa’ and if you haven’t please have a look, so you understand some of the risks that you may simply not be aware of. They can cost you so much. It is absolutely crucial that you assess the risks you may face with your venture in your top country of choice  in Africa. And keep in mind that different industries will be very differently affected. If you spot high risk, you should start in another country. It will be a better strategy to choose a lower risk country to get you started, even if your high-risk country seems to offer a better market. Set up shop where you face lower risk – ideally in a neighboring country – and then you can penetrate the riskier market from there.

Hope this helps, and it would be nice to hear on which basis you have chosen your business location in Africa or how you get on with the decision-making process. Drop us all a line below!

Dr. Harnet
Dr. Harnet Bokrezion is the Founder of africajumpstart.com and co-author of the book '101 Ways to Make Money in Africa'. She coaches individuals and consults existing companies assisting them to make smart and strategic business decisions in Africa’s new emerging markets faster and more confidently. Dr. Harnet also regularly writes for the renowned DHL powered publication howwemadeitinafrica.com. Get in touch to inquire how she can be of assistance to your own Africa business endeavors: harnet@africajumpstart.com

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