Sweeping
economic reforms in many African countries have turned the
world's attention towards Africa as conditions in many African
countries are beginning to become more conducive to business
development. Positive moves and policies adopted by many
African governments have played a significant role in promoting
Africa as a viable business partner in the global market.
Exchange rates have been liberalised; restrictions on imports
have been removed; tariffs are being reduced; price controls
on agricultural products and manufactured goods have been
removed; steps have been taken to address the financial
stress on banks; and economic growth has picked up to around
4 per cent overall for the continent. All these factors
have contributed in the development of a thriving local
and international business community within Africa.
The United Arab Emirates, a traditional trade partner of
Africa, has been one of the main beneficiary of the economic
rennaisance sweeping through Africa. Geographical proximity
and well established business contacts have helped UAE-based
companies to establish a niché for themselves
in the African market, specially in East and Central Africa.
The success of the UAE in promoting its services and products
has been seen as a threat to the monopoly of European and
South African businesses which have dominated the African
market for a long time. The UAE is well positioned to provide
a healthy competition to European and South African products
because of its well established links in the Far East. Goods
manufactured in Far Eastern countries of China, Taiwan,
Korea, Malaysia, Indonesia and Japan are now being introduced
in the African market by UAE-based enterpreneurs. The European
and South African goods are unable to compete with the pricing
of these products and are losing their traditional markets
to the UAE. Kenya, for example, had been a permanent market
for South African and British goods for the last two decades.
Yet, the UAE has emerged as one of the top three trade partners
of Kenya in the last five years. Other countries in Africa
are also slowly realising the benefits of doing business
with the UAE and are emerging as major markets for UAE-based
traders and manufacturers.
As
the United Arab Emirates establishes itself as a reliable
supplier of goods, there is an urgent need to provide
more exposure for UAE-based companies in African countries.
Trade fairs like the upcoming 3rd Afro Business Trade
Fair which is being held in Kampala, Uganda can play a
vital role in attracting more business from Africa. United
Arab Emirates has taken positive steps to emphasise its
presence in Africa - Department of Tourism and Commerce
Marketing (DTCM) has opened offices in Kenya and South
Africa; Emirates Airline has also started operating flights
to Dar-E-Salaam and Entebbe to add to its already flourishing
sectors to Nairobi and Johannesburg; a large number of
Dubai-based companies will also be participating in the
forthcoming Afro Business Trade Fair to be held in Kampala,
Uganda later this year; not to mention the Afro-Arab Trade
Fair that was hosted in Sharjah.
With
so much happening between Africa and the Middle East,
it is only natural that trade
between the two regions will register an impressive
growth in the near future. East Africa has already emerged
as one of the fastest growing markets for Dubai and there
is talk that UAE companies will be entering the East African
market in a big way once the political and economic situation
stabilises in countries like Kenya, Congo and Eritrea.
AFRICA
The
Market of Tomorrow
As
a new frontier and the next emerging market, Africa is
a continent that GCC firms cannot afford to ignore. From
Tunis to Cape town and from Dakar to Mogadishu, African
societies exhibit unparalleled dynamism and changing attitudes.
Several countries are currently linked to the information
superhighway; some of them even have CNN or other European
networks. This is a market ripe for picking by business.
But the Gulf-based businessman must understand that they
will have to compete with Europeans who have several centuries
of historical relationship with Africans, as well as South
Africans who currently are aggressively pursuing developing
African markets.
The future of UAE's business with Africa is bright, provided
the efforts made by the public and private sectors to
provide information and support are maintained. The GCC
countries must intensify their efforts to provide information,
support, and guarantees to local businesses in order to
encourage them to do business with Africa. Publications
like the Business Guide to United Arab Emirates have been
instrumental in filling up this void. After all, even
the US Department of Commerce has concluded that Africa
is the most 'profitable place in the world' for business.
Business
relations between Africa and the United Arab Emirates
are historical, dating back to several centuries. As the
21st century approaches, these relations will become more
strategically important. With a population of nearly 700
million, Africa is a continent with enormous physical
resources. As a sizeable potential market, it is a continent
that UAE-based
companies cannot afford to ignore. However,
one of the keys to successful business with Africa is
a good understanding of African business culture. How
does African business culture differ from the Middle Eastern
business culture? How should Middle East companies introduce
themselves to the African buyers? These are important
questions for the local entrepreneur because success or
failure in Africa will depend on the ability to understand
and adjust to Africa s dynamic market. The complex
and changing African environment requires businessmen
to have a degree of flexibility. The potential for turbulence
requires businessmen to monitor and assess the political
risks in the countries with whom they are doing business.
Here
are some examples of what you should note:
i) People are sensitive about how you pronounce their
names
ii) They do not want you to be patronising
or to show prejudice,
bias, or stereotypical beliefs
iii) You should avoid condescending behaviour.
Among
the Wolf of Senegal and in Ghana, children are trained
not to look adults in the eye since this is considered
an act of defiance or a total lack of respect. This means
that eye contact, considered a mark of trust or truthfulness
in the Middle East, may not occur when some Africans are
talking to their superiors. In many African countries,
using the left hand to receive or give a gift is considered
impolite and therefore, unacceptable. In most African
cultures, greeting is very important, so it is not unusual
to see the same greeting, such as welcome, repeated several
times. Handshaking is very common in Africa, but it could
range from simple handshake to prolonged, and sometimes
vigorous forms. It is not unusual to find younger people,
women, or subordinates offering both hands as a mark of
respect. In most cases, women are expected to accept a
handshake, not offer one.
Africa's
considerable cultural diversity, if understood, is not
an impediment to successful business. To manage these
cultural differences, one must understand the need for
personal relations and the role that connections play
in African business and the African respect for hierarchy,
titles, and age. One must also comprehend the concept
of African Time and recognise it in arranging
business meetings, as well as ensure that there is considerable
follow-up.
The
UAE entrepreneur needs to realise that certain practices
that are not tolerated or permitted in the UAE may be
rampant in Africa and must draw a line, making a decision
from the start and sticking to it. The rule of thumb is
to do what is legal and avoid what is illegal. He needs
to know how the rules operate and that often laws are
openly broken because of lack of enforcement. Further,
the entrepreneur must understand that although African
workers have a positive work ethic, they may lack the
motivation and the skills for high productivity and that
Africans tend to be communal, emphasising collectivism
instead of individualism. Likewise, the UAE businessman
must note that there is often a clear definition of gender-based
roles. The tendency to take decisions more slowly, looking
for unanimity before acting, creates a reluctance to contradict
or challenge the system. Inter-cultural business is always
a challenge; African business is no different. But with
the cultural knowledge presented here, the UAE businessmen,
if they keep an open mind, should be able to proceed with
confidence that they will reap the many profitable rewards
the dynamic African
market offers.
EMERGING
MARKETS
Where
to do business in Africa
If you are considering entering the burgeoning African
market, where would you begin? Which countries are most
likely to be on your top ten list? The World Economic
Forum has answered that question for you in its comprehensive
Africa Competitiveness Report, published in collaboration
with the Harvard Institute for International Development.
Here is the list of Africa's top performers in their order
of ranking:
1. Mauritius, 2. Tunisia, 3. Botswana, 4. Namibia,
5. Morocco, 6. Egypt, 7. South Africa, 8. Swaziland, 9.
Ghana, 10. Lesotho, 11. Cote d'Ivoire, 12. Zambia,
13. Kenya, 14. Uganda, 15. Burkina Faso, 16. Tanzania,
17. Ethiopia, 18. Mozambique, 19. Cameroon, 20. Zimbabwe,
21. Malawi, 22. Nigeria, 23. Angola.
The
report measures the competitiveness of 23 countries in
Africa based on estimates for their medium-term economic
growth and their control of income levels. The index is
based on national economic characteristics of most interest
to business, such as transparency in national decision-making,
good governance, financing, labour, infrastructure and
institutions. As one of the continent's most vibrant economies,
Mauritius ranked number one on this list.
