Dear SME entrepreneur,
Are you interested in doing business in Africa? We think that out of all southern African countries Namibia, Botswana and South Africa are a good place to start. They all are democratic countries and English is one of the official languages in all of them.
During the last decade Africa has been performing extremely well in terms of economic growth. There is an expanding middle class and growing population of well-educated young adults with excellent digital skills. On the other hand, the key challenges of the area are challenges with local bureaucracy, current economic difficulties after rapid growth for many years, unemployment and low skills levels.
High-end solutions have a market in these countries. There are plenty of opportunities in the Smart City fields of off-grid solar solutions, renewable energy and energy efficiency, cleantech, waste management, climate change mitigation, health tech, eBanking, education and infrastructure. Nordic technologies and business cultures are highly regarded due to the quality of the services and products and to Nordic business ethics. We have also learned that local authorities appreciate if you are willing to involve and transfer skills to local people and to get young people involved.
Since our SME2Go project is coming to an end, we would like to share some learnings from our and SME’s business trips to Africa.
- Whenever someone tells that you are going to meet their “brother”, don’t assume that you’re going to meet relatives. Brother can be any friend related or not.
- From the Nordic perspective it’s sometimes hard to remember that yearly seasons are upside down from us. For example, in southern Africa summer vacation is during our winter time. This means that during our active working months like December and January, your African contacts might be unreachable.
- First of all, the Africans typically think what they can personally get out of the deal. To avoid any problems, make sure that you work with well recognized, reliable and committed local contacts and authorities and make sure that your business deals are not too much dependent on one or few people, in case some individual disappears from your radar suddenly.
- Yes is not always yes. It can basically mean anything. For example, MoU is not always enough to establish yourself in the country and after signing nothing may happen.
- In investment projects it’s important to bring your own financing solutions to African business deals. Finances are often more easily available through Nordic and European investors and institutions than from the African ones.
- Use of social media for business is much more common than in Europe. E-mail is not such a routine as we have it here.
- Small companies do not necessarily have websites, but they can still be credible partners.
- Due to a long history Finns and Finnish companies are especially appreciated in Namibia, but in most other African countries as well.
- In the sub-Saharan Africa the concept of time may be different from ours – meetings get delayed and long term planning is not so evident.
Good luck and patience!
Matti Herlevi, Project Manager, SME2Go, Posintra
Heli Koskenniemi, Project Expert, SME2Go, Posintra
SME2GO is a EU funded growth project running between 2016-2018 to increase exports of smart city solutions from the Central Baltic region to new markets like Africa and Asia. SME2Go focuses on improving the competitiveness of these solution provider SMEs. The project brings together SMEs and their know-how, provides market intelligence and potential business leads and helps individual companies to enter those new markets. Read more on SME2Go website.