After greater than 20 years engaged on cross-border business tasks, Olu Abdulkareem argues that Western firms usually deal with the mistaken challenges when coming into African markets.
A number of years in the past, I used to be introduced right into a deal that was already falling aside.
A European producer had a multi-million-dollar contract in Central Africa, however negotiations had fully damaged down. On paper, the deal made sense for everybody. In observe, belief between the 2 sides had collapsed, and the corporate was near strolling away from an settlement price thousands and thousands.
What helped save the deal was not one other clause within the contract. It was going again to the individuals concerned, working with the fitting authorities and diplomatic contacts, and staying in tough conversations till the connection was rebuilt.
The paperwork had by no means been the largest drawback. The connection was.
I take into consideration that deal actually because it captures one thing I see repeatedly with Western companies taking a look at Africa: they dedicate huge consideration to the challenges which might be best to establish, whereas overlooking the components that usually decide whether or not a possibility really succeeds.
The entry drawback is changing into simpler
The UK has just lately modified features of its Growing Nations Buying and selling Scheme (DCTS), together with guidelines of origin that have an effect on how items could be sourced and processed.
From 1 January 2026, the brand new Africa Regional Cumulation Group permits qualifying items and inputs from collaborating African nations to be handled as originating supplies when figuring out eligibility for preferential entry to the UK market.
For companies working throughout a number of African markets, the modifications could make regional provide chains extra sensible and cut back a number of the complexity related to sourcing and processing throughout borders.
That issues as a result of one of many longstanding objections to doing enterprise in Africa has been the notion that the continent consists of 54 fragmented markets that should every be approached independently.
The regulatory image is altering. However regulation was by no means the one problem.
Entry was by no means the toughest half
Even with extra beneficial buying and selling preparations, most of what determines whether or not a enterprise succeeds in an African market has little to do with regulation.
A cargo nonetheless has to maneuver. A neighborhood associate has to ship — not simply as soon as, however repeatedly. And when a deal runs into issue, somebody must know whom to name.
I’ve watched firms with wonderful merchandise, aggressive pricing and real demand fail as a result of they chose the mistaken native associate, misunderstood the path to market or assumed that the best way they operated at residence would switch on to a brand new market.
That’s not distinctive to Africa. It may possibly occur in any unfamiliar market.
The distinction is that in a market you understand nicely, present relationships, infrastructure and institutional information can take in a few of these errors. In a brand new market, they usually can not.
In the meantime, companies from China, India, Turkey and the Gulf states have spent years constructing business relationships throughout Africa.
A shared language or historic connection will not be sufficient to compete with somebody who has invested the time to grasp how enterprise really will get performed on the bottom.
What profitable market entry appears to be like like
The companies I’ve seen succeed are likely to method market entry by a collection of sensible questions.
Which market genuinely matches what you might be promoting or sourcing?
Who’re the credible native companions, and have they been correctly checked?
What occurs if one thing goes mistaken with the contract?
Who will you name when a relationship or transaction is in danger?
None of those questions is especially glamorous.
A commerce mission or convention can open a door. It can not construct the connection on the opposite facet of it.
That work occurs afterwards, usually removed from the headlines. It’s the place companies both construct one thing that lasts or uncover that a possibility that appeared enticing on paper was by no means commercially viable.
Relationships stay a aggressive benefit
Africa’s rising financial integration and bettering commerce frameworks create alternatives for worldwide firms. However market entry alone doesn’t flip a possibility right into a profitable enterprise.
Firms want individuals who perceive native markets, dependable companions, sensible routes to market and the power to handle issues after they come up.
That requires time and presence.
For British companies specifically, the UK’s evolving commerce preparations with African markets present a possibility to rethink how they method the continent. However the firms almost certainly to learn might be those who mix the improved entry with a severe funding in native information and relationships.
The principles might make it simpler to enter a market.
They don’t take away the necessity to perceive it.
Concerning the Writer
Olu Abdulkareem is Senior Director, Markets & Enterprise Growth at Anglia Xchange. He practised worldwide regulation for greater than 20 years, together with as a associate, earlier than shifting into worldwide enterprise improvement throughout the oil and gasoline, metal and mining sectors.
He has labored on cross-border business tasks involving governments, multinational firms and personal buyers throughout Africa and Europe and based Anglia Xchange to assist British companies broaden into African markets by native partnerships, business constructions and on-the-ground assist.
