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Top tips for doing business in Africa

Businesses for sale South Africa: tips for doing business in Africa

1. Be aware of the cultural differences

It is extremely important to work with local people. To enable your business to thrive, it is also important to be aware of different customs and traditions.

For instance, in some African societies there is a matriarchal system of relations. This means that the uncle on the mother's side becomes a much more significant paternal figure than the actual father and is responsible for the upbringing of all his nephews.

In some cases the uncle might have a legal obligation to give a gift to each nephew once a year. If, for any reason, the uncle has forgotten to make the gift, the nephew might be entitled to come to his uncle's house and take any item that he wants. Amilcar Cabral, the founder of independence of Guinea-Bissau, had suggested considering nephews as a new and most dynamically developing class of modern Africa.

One experience was that of a good friend of mine who was engaged in the building industry in an African country. He and his local partner built a hotel together and supplied the rooms with air conditioning, refrigerators, TVs and satellite dishes.

One day, the nephews of my friend's partner came to the hotel, took all of the appliances. Reporting this to the police has proven useless - it seems that that particular year, the uncle had forgotten to comply with his "gift obligation" towards his nephews.

It's important to remember that many communities are built on a culture of mutual help and support and sometimes the lines between business, friends and family can be blurred

It's also important to remember that many communities are built on a culture of mutual help and support and sometimes the lines between business, friends and family can be blurred. 

Obviously, this does not mean that you should avoid working with local people, but this is a case against establishing a partnership with a member of a culture you do not understand - as this might create unforeseen consequences for yourself and for your business.

2. Do not base your business model on establishing "special relationships" with power

This is just a logical continuation of the previous tip. If your business is good for the country in which you work then you will succeed.

If you wish to do business in Africa, respect the law and the local customs and do not get involved in family politics. Of course it may be beneficial to build good relationships with influential people - as in any country - but the point is you cannot base the success of your business on this.

3. When somebody tells you "I am a son of the President and I can be a partner in your business", you should reply: "Thank you, but I am not interested"

Chances are you are simply being targeted by a common swindler.

Having said that, it is not unlikely that the person offering you a partnership is actually related to the political powers of the country. However, that does not mean it will be helpful to your business in any way. You have to remember that African families are very big and can have hundreds of members.

Polygamy is much extended even in those African countries about which you can read in the guides and directories that the main religion of the country is Christianity. A large number of wives are an important symbol of power and political alliances in a traditional society.

However, very few children, even if their mothers are the 'favourite' wives of the presidents, enjoy the real support of their fathers.

In addition, a big family of any politician (in particular if he is head of the state), is an amalgam of opposed, contradictory and constantly shifting positions between various groups of influences. My advice is simply to keep your distance from African family politics.

4. Be prepared to work with people at all levels

The organisation and authority of various African governments often do not extend to every level of society. At a local level, authority is often highly segmented - a fact which may cause new businesses a lot of headaches.

The best way to overcome this is to be prepared to make deals and cooperate with everyone. Regardless of how good your relationship may be with the governmental authorities, sometimes it may be just as important to negotiate with a local tradesman and other members of small communities.

5. Don't have tunnel vision - be prepared to help others

Extending the above point further, if you have decided to do business in Africa, be prepared to deal not only with the people to whom you are connected through your work, but with others too.

It is often the case that you may be asked to help people that you do no not know and who offer nothing in return. However, you should be prepared for this as even if there is no apparent political or PR gain, it will have a good impact on your business in the medium and long term. Put simply the more you help, the more favourably you and your business will be regarded by the society.

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