Have you ever wondered how to export African products?
I am always happy when you contact me with your questions, THIS is what Africa JumpStart is all about: Receiving guidance, tips, and instructions to the challenges you face to start doing business in Africa successfully.
A couple of days ago I received the following question from a Kenyan: I want to sell my products – how can I find an export market in Europe? (He was in the fish industry replying to my recent post on fish farming)
One thing is for sure; Africa’s governments are pro-actively trying to minimize imports and maximize exports. So your approach to focus on export (rather than import) is a good long-term strategy. Here are my suggestions if you want to export from Africa :
#1 Consider Intra-African trade first
I repeatedly see on social media channels that many small or medium sized business owners hope to export into the West. Understandably, you are looking for possibilities to increase revenue, either by getting a better price for your product, or by finding new markets into which to expand. If your local markets are weak or volatile, you may even look for more market stability. Maybe you need earnings in foreign currency.
Fact is that Intra-African trade and related export are growing at a much faster rate than African exports to other continents. This means that the current business trend is to market your products regionally, within Africa.
In the period from 2007-2011 for example, the average share of intra-regional exports in total exports was 11 per cent in Africa, compared with 50 per cent in Asia and 70 per cent in Europe. I think it stands currently around 14%, but it means that Africa will catch up and this is a good time to become a regional exporter.
To market within Africa has several benefits for you: Demand is often greater, competition relatively low, business links can be more easily established, you won’t face strict import regulations at the target marker, and African governments are busy reducing regional trade barriers.
#2 Study the demand-supply gap abroad
Is there really a strong export market for your product outside of Africa? Europe, North America and Asia are much, much more competitive and unless you have a product of great quality and are able to sell reliably in mass it can be difficult to get in.
You need a product that is highly in demand, of good quality, competitive in price, and large enough in volume. Or you need to look for a rare niche market selling products that are difficult to source globally or attract a certain small market segment. Luxury leather bags from Africa for example are finding a lot of interest in the West recently or gluten-free flour is great for growing health food market.
I believe that there is scope for entry for you even if you want to export very prominent goods such as coffee as long as there is clear demand. Europe’s coffee, for example, is still imported in greater amounts from South America, although Africa is right at the door step. Having said that, you may be more successful focusing even here on a niche: Speciality coffee for example, selling directly to foreign buyers instead of getting your beans shipped in mass into Africa’s ports and stock markets for sales.
#3 Don’t look for a buyer, look for a local African Diaspora partner
This may not be the most profitable advice, but it is very often the most practicable and sustainable way to sell in a new market.
If you regularly travel to Europe and the US, then you may go for the direct route. But this is not the case most of the time.
Look for a countryman/woman in the Diaspora. So many Diaspora Africans are longing for opportunities or a way of doing business with Africa. Partnering with you and facilitating the import abroad is a great chance for Africans in the Diaspora to get their foot into the door.
#4 Get professional advice
There are several offices, institutions, and organisation that are a great source for advice regarding export opportunities in a particular market. Here are a few:
– The US Embassy and USAID in Kenya, Ghana, Nigeria, and South Africa provides commercial services if you are trading with the US. See if European or Asian embassies offer similar services and simply get in touch.
– There is usually an export promotion agency locally in almost all countries in Africa, such as the Export Promotion Board Uganda or the Nigerian Export Promotion Council. They have a diverse range of information and support services available. Their objective is to boost the country’s export numbers, they are under a lot of pressure in this regard to deliver, so if you have a great product, I am sure they will be very happy to assist. Just pass by their offices!
– Visit the websites of the associations that represent your particular product in your particular target market, e.g. for your coffee – the British Coffee Association, and contact them to find out more in regards to possible trade links.
– Contact the Chamber of Commerce in your particular target market, they usually have a list of companies that fit your requirements or they can provide further guidance how to get in touch with potential partners.
#5 Know the import regulations in your target market
The West has strict import regulations and currently even stricter regulations are being discussed in Europe. To get a better insight please read: African Food Exports: Why a Ghanaian in the UK lost a lot of business, a recent guest post by Nahum Kidane. It addresses some of the possible pitfalls if exports are not properly monitored at your end.
#6 Hang out with the right crowd
Hanging out with the right crowd is a key advice given by successful entrepreneurs, and it applies to you as an exporter, too! This is so important and a step many simply do not utilize enough: Go to the places where the people gather who can bring your business forward! It won’t be at your home, your office, or your favorite restaurant.
Make an effort and invest a little to attend relevant local industry events such as conferences, trade shows, expos, and get known at your local export promotion council. You can visit those in your home country or your target markets, it’s one of the best places to be to build new partnerships!
But you can really connect at different places where business people gather such as hotel lobbies (have your tea there and ditch Grandma’s coffee house around the corner), at certain meeting places where expats who have links abroad meet, or even at the airport (yes, indeed one of my potential clients is a German who I met during my last flight from London Heathrow, he is an engineer who wants a new start after having worked at the same company for 20 years. He was absolutely fascinated and thrilled when I told him about the vast opportunities in Africa and is seriously looking into this).
You can even hang out on Africa business LinkedIn groups. So make sure you revisit where and with whom you spend your time!
Be ready to connect!
African governments want to advance export in their respective countries, so the export sector is an actively supported growth sector to tap into. Are you interested in African export and what are the challenges you or other Africans face?
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