Making inroads into Africa

If Sub-Saharan Africa is not part of your global business strategy, consider this: growing infrastructure and commercial development needs, combined with economic growth and an expanding middle class, means the continent is rife with opportunities. Learn how to make the most of them from one Canadian business veteran.

Photo: Darrell Gulin

With projected annual growth rates of more than five percent, Sub-Saharan Africa has outpaced Brazil, Russia, China and India thanks to years of market reforms. The continent now hosts six of the world’s ten fastest growing economies. The middle class is growing and the region has massive infrastructure and commercial development needs.

WHERE TO START

Like most emerging markets, Africa requires commitment, patience, resilience and local support. That’s the advice of Ottawa’s CPCS, an infrastructure consulting company that has operated in Africa for 30 years. Today, the firm does 40% of its international business in Africa.

CPCS partner Carolyn MacKenzie says the continent is rife with opportunities for Canadian exporters and investors. “Our company gets involved at the front end of planning for infrastructure development, including transportation, railways, ports, roads, transport systems, power, urban development and Greenfield projects. What we are seeing is that Sub-Saharan Africa’s needs are absolutely huge in two areas: power and infrastructure development and operation.”

CPCS has been involved in developing the Lagos, Nigeria light rail project, privatizing ports in Sierra Leone, creating a business plan for Uganda’s national railway authority, and more.

“The lack of power and system-wide inefficiencies in Sub-Saharan Africa are posing huge constraints to developing African economies. We see power as an opportunity because it will bring greater economic development, such as mining interests,” says MacKenzie. “The other main area of opportunity is in the commercial development of infrastructure right across the continent. The private sector can play a huge role in developing and operating power, transportation and other key infrastructure. It’s critical to Africa’s social and economic development given that these industries will create jobs and help power the development of Africa’s most productive sectors.”

Although CPCS operates in 80 different countries, its deep involvement in Africa means that the company has learned some key lessons along the way:

• Be on the ground: Open local offices or establish relationships with strong local partners, either corporate or individual consultants. This helps manage relationships with clients and bring the local context into your work so you can better understand client needs.
• Know the risks: Do your homework and identify projects that will be attractive to governments looking to grow their economies and to investors who want to grow their returns.
• Work with Canada’s Trade Commissioners Service: Trade commissioners are there to help and support you as you plan your growth into Africa or if you need assistance with problems along the way. They have strong networks and relationships—make good use of them.
• Plan for the long-term: It takes time to develop relationships, understand needs and grow your opportunities in Africa. It’s also an investment. Be prepared to go into Africa for the long-haul.

As MacKenzie points out, “Going into these African markets is not necessarily for the faint of heart, but it’s very rewarding work and we see tremendous opportunity there.”

For more information on doing business in Sub-Saharan Africa, visit the Canadian Trade Commissioner Service website and connect with the Canadian Council on Africa.

Reprinted with permission from Canadian Trade Commissioner Service’s CanadExport on-line magazine.