Nigerian consumers tend to favor imported brands. Kenyans prefer to buy local. Both are Anglophone countries with increasingly progressive and familiar institutions, but with vastly different market dynamics.
Africa’s rich diversity of 54 countries with more than 1,000 spoken dialects and ever-changing social, political and economic rules poses the greatest challenge to doing business in Africa, according to an editorial in IndependentOnline.
Despite the euphoric growth of the past decade, Africa remains the world’s most underdeveloped region. About 60 percent of the population still lives on less than $4 a day, the report says.
This demands a nuanced approach to business focused on local dynamics for multi-national companies, says Lyal White and Christine Barrow. They the lead Business of Africa executive program at the Gordon Institute of Business Science in South Africa, Kenya and Nigeria.
In Africa, a single Africa strategy will prove ineffective, White and Barrow say in IndependentOnline.
They cite East African regional leader Kenya, and West African giant Nigeria, as examples. Both are Anglophone countries with increasingly progressive and familiar institutions, but with vastly different market dynamics.
Even though U.K.-based Diageo owns the controlling share of East African Breweries, it still markets its primary beer brand, Tusker, as Kenyan, according to the report.
Another contrast is scale. Kenya is smaller than Nigeria and relatively insignificant in
the global context, pushing it to improve connectedness, driving the East African regional agenda and positioning itself as a hub between East Asia and Africa.
Nigeria, by contrast, has the size and the numbers but is less concerned with being connected and more into pan-African and global ambitions, the report says.
Such dynamics have helped individuals and companies from Kenya and Nigeria shape their distinctive outlooks and approach to business and management.
These differences illustrate that investment decisions cannot be based on data from a
spreadsheet, say White and Barrow. Investors must match statistics with geography, socio-political and cultural insights, and on-the-ground experience. Data must be generated from being there or through experts who understand individual African markets.
While identifying key markets based on macro-economic attributes is a good starting
point, single-factor theories are not that useful in understanding African markets, say White and Barrow. Countries may have similar growth trajectories and even share a common language or historical past, but in reality they are vastly different.
Kenya, Tanzania, Nigeria and Ghana are examples. Despite their Anglophone association and impressive growth, their cultures of business, consumer behavior and general systems and practices are vastly different.
Deciphering the African business terrain is far more complicated than it seems, say say White and Barrow.
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