One of the major driving forces of Africa’s growth is the widespread adoption of mobile technology. According to Groupe Speciale Mobile Association (GSMA), a global organisation unifying the mobile ecosystem, the mobile economy in Sub-Saharan Africa is set to contribute $184 billion to the region’s GDP by 2024. With over 800 million mobile phone subscribers and growing, mobile technology is revolutionising the way Africans live, work, and do business.

Africa and e-Commerce Growth:

Africa’s digital revolution has paved the way for new route-to-market strategies that leverage technology to reach customers more effectively. One such strategy is e-Commerce, which has seen significant growth in recent years specifically in the African region. The e-Commerce market in Africa is projected to grow at a compound annual growth rate (CAGR) of 25% from 2020 to 2025, according to a report generated by ResearchAndMarkets.

African Growth and Digital Marketing:

Another route-to-market strategy is digital marketing. With the growing adoption of social media in Africa, companies can leverage platforms such as Facebook, Instagram, LinkedIn, and Twitter to reach their target audience more effectively. Social media has become an essential tool for companies looking to build brand awareness, engage with customers, and drive sales.

In addition, the rise of digital payments has also created new opportunities for companies looking to do business in Africa. Digital payment platforms such as M-Pesa, Paystack, and Flutterwave have made it easier for companies to transact with customers in Africa. These platforms offer secure, fast, and convenient payment options for customers, which can help drive sales and improve customer satisfaction.

However, as newcomer companies navigate the digital landscape in Africa, they must also square up to face the continent’s unique challenges. For example, infrastructure and logistics can pose significant challenges for companies looking to distribute goods and services across the continent. Companies must also consider the complex regulatory environment in Africa, which is region specific and can vary significantly from country to country.

Despite these challenges, the digital revolution and the adoption of new technologies are driving African growth through offering significant opportunities for companies looking to enter and succeed in the market. By leveraging new route-to-market strategies and understanding the unique trends of doing business in Africa, companies can unlock the continent’s vast potential for growth and prosperity.

COMBINING OPPORTUNITY CAPITALISATION AND ROUTE-TO-MARKET STRATEGY TO DRIVE AFRICAN SUCCESS

• A developing economic environment

Sub-Saharan Africa is experiencing steady growth, with a 4% expected annual real GDP growth in 2025. Urbanisation is driving modern retailing, while traditional markets remain an important factor that cannot be ignored. The rise of Africa’s middle class is set to boost disposable incomes by an additional 4% compound annual growth rate (CAGR) until 2030. Key industries such as packaged food, non-alcoholic beverages, and alcoholic drinks can expect to see a rise in sales. The continued growth rate and developing economic environment are also due to the African Free Trade Continent Agreement which works hard towards reducing tariffs and standardising trade policies among member countries. Therefore, making it easier for companies to trade between African countries.

• Digital connectivity

The digital revolution in Africa is leading to targeted and innovative solutions that turn challenges into opportunities. With a surge in mobile subscriptions, connectivity is becoming a lifeline for many Africans, enabling them to make purchases and conduct transactions through secure mobile payment systems. The continent’s lack of legacy systems has become a “testing ground” for digital innovation such as the use of apps that provide farmers with commodity pricing and equipment training. Social media is also making it easier to target consumers and develop partnerships with local inhabitants, highlighting the abundant opportunities for those who understand the complexities of doing business in Africa.

• Localising route-to-market strategies

As this article mentioned afore, developing effective route-to-market strategies is as crucial as adapting to Africa’s ever-improving digital technologies. With 54 independent countries, each having its own cultural attitudes, it’s essential to respect local nuances and business requirements when selling products. No African country operates the same, the target markets and way of doing business vary with each country. To succeed in African markets, companies should consider connecting with informal markets. Through the creation of local partnerships along the supply chain, and by promoting social trust and relationship strengthening,  companies stand to inherit more value and rapport as these communities honour honest communication solutions and do not take word-of-mouth recommendations lightly. These recommendations will assist foreign companies entering the African market to overcome distribution challenges and respond flexibly to changing market needs, all while generating a positive consumer response and driving African growth.

In conclusion, Africa presents a range of opportunities for foreign companies willing to invest the time and resources to understand the complexities of the African business market. The digital revolution and growth in mobile connectivity have offered many Africans new avenues for companies and entrepreneurs to engage with consumers and sell products. However, it is important for companies to recognise the idiosyncratic nature of each market within Africa and to focus on developing local route-to-market strategies that respect the cultural attitudes and beliefs of each country into which they wish to expand into. Building local partnerships with market entry service providers such as InterGest South Africa will ensure that companies overcome market entry challenges and gain a greater stake in their business outcomes. With the right approach, companies can capitalise on the growth and opportunities presented by the African market in both the near and long term.

For more information on the services rendered by InterGest South Africa, please send an email to contact@intergest.co.za

Source:

• Digital revolution and route to market strategies will drive African, growth –https://www.euromonitor.com/article/digital-revolution-and-route-to-market-strategies-will-drive-african-growth
• Mobile economy of Sub-Saharan Africa – https://www.gsma.com/mobileeconomy/sub-saharan-africa/
• South Africa eCommerce market size forecast – https://www.researchandmarkets.com/reports/5504330/south-africa-e-commerce-market-size-forecast

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InterGest South Africa is listed as a consulting firm under the Bundesamt für Wirtschaft und Ausfuhrkontrolle – BAFA Consulting Vouchers Africa. This means that our market entry consultations and services are funded in the following countries:

• Southern Africa (South Africa, Namibia)
• East Africa (Kenya, Tanzania and Uganda)
• West Africa (Nigeria)

The content below explains the qualification categories that German companies need to meet in order to qualify for funding, the application process as well as the rules and regulations around obtaining the funding.

1.  Aim of the “Consulting Vouchers” Funding Program

1.1   The aim of the program is to use needs-based consulting services to make it easier for German companies to enter the African market, to increase the competitiveness of the companies to be advised and thus to make an effective contribution to maintaining as well as creating jobs both in Europe and in African target markets Afford.

1.2   The funding is intended to assist German companies in correctly assessing possible economic risks associated with entering the African market.

2.  Subject of the Business Network Funding

2.1   The subject of the funding is external consulting services for the preparation and implementation of economic projects in African target markets by listed consulting companies/organizations.

2.2   The funded advice can relate to questions about specific industries or economic sectors, African target markets, and legal framework conditions about foreign trade and/or foreign investments and economic studies for the prospective project in Africa.

• • Funding will not be granted if:
    • If consulting services were already carried out before the decision on the grant was made.
    • If consulting services for market entry in Africa that have already been funded or promised by other aid from the EU, the federal government or a country.
    • If services are provided to partner or affiliated companies or where the consulting company/organization has a corresponding economic self-interest in generating income for the consulting company, e.g. B. a profit sharing.
    • Companies in difficulty under Article 2(18) of the General Block Exemption Regulation.

• • The advice is not eligible if:

• • • The company to be advised has not complied with a recovery order based on an earlier decision by the EU Commission to determine the inadmissibility of state aid and its incompatibility with the internal market.
    • The company to be advised has concluded the consulting contract with the consulting company/organization before the decision on the donation (consulting voucher) has been made, the consulting has started or agreements for future consulting have been concluded in a legally binding manner.
    • The consulting company/organization is no longer listed at the time the contract is concluded with the company to be advised.

3.  Who can Apply for Funding:

3.1   The funding for consulting services is aimed at legally independent small and medium-sized commercial German companies with a permanent establishment or branch in Germany who are interested in entering the African market.

3.2   A German company is considered to be medium-sized German if it employs fewer than 500 people at the time of application and generates a maximum of EUR 50 million in sales annually.

4.  Funding Amount:

4.1   For a consultant day, a maximum of 1,200 euros net are eligible per day, depending on the consulting issue.

4.2   A maximum of 15 consultant days are funded per consultation. The eligible daily maximum rates for the respective consulting topics are as follows:

4.3   A consulting day consists of at least eight hours. Preparation and follow-up of the consultations, travel expenses and other ancillary costs including the costs of financial transactions are compensated with the respective daily rate.

4.4   In one calendar year, a maximum of three advisory vouchers of a maximum of 13,500 euros each can be used. The annual maximum amount that can be paid out is therefore 40,500 euros. This corresponds to a funding rate of 75% when using three times 15 consulting days at a maximum of 1,200 euros net.

4.5   Only activities in the same category (maximum daily rates) can be applied for each consultant voucher. It can e.g. For example, advice on customs/import regulations and logistics and transport can be combined, but not customs/import regulations with the development of a sales structure or financing.

4.6   The service provided is taxable at the full rate of sales tax applicable in the country in which the service was provided. The expenses not covered by the consulting voucher are to be paid by the company to be advised (beneficiary) as a personal contribution.

5.  Application for Consulting Vouchers

5.1   Interested companies first find out more about the target market and eligible projects on the website of the “Business Network Africa” office. The office staff are also available by telephone for non-binding advice on the basic feasibility and eligibility of the advice project. With the information from the homepage and, if necessary, from the discussion with the office, please look for a listed consulting company/consulting organization and contact the consulting company/organisation.

5.2   Important! Please note that a consulting contract may only be concluded after the consulting voucher has been approved.

5.3   After you have chosen a listed consulting company/consulting organization from the list, please submit an electronic application for funding for consulting services.

5.4   A total of three applications can be submitted per year. The applications can only be submitted one after the other, i.e. the second application can only be submitted after BAFA has checked the proof of use of the first application.

Further information pertaining this process, find out how to Receive Government funding for your business activities here: BAFA Funding presentation.

With InterGest South Africa’s reputable name in the industry of international consulting vouchers and particularly consulting vouchers for Africa, clients are reassured of our services and often will choose to work with us. Our experts hold unique knowledge with regard to consulting vouchers and are always eager to assist. With 20 years of service behind us our team is well accustomed to any funding queries you may have. For more information on how we work or to get in contact, visit our website: https://intergest.co.za/

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Kenya has become a popular destination for foreign companies entering the African Market as an alternative to South Africa. The country boasts with substantial private sector, including a significant number of foreign investors.

As the leading economy in East Africa, Kenya’s’ strategic location and its well-developed business infrastructure make it a natural choice for investors and many international firms have made it their regional hub.

Business in Kenya – business environment & ease of doing business

Kenya is largely regarded as the financial and logistics hub of East Africa. The country is well positioned to maintain and expand its status as an African business hub as government reforms continue to improve the business climate. The most commonly spoken business language is English.

The considerable size of the local market, with over 55 million people in Kenya and over 300 million in the entire East African Community (EAC), offers good opportunities for companies wishing to enter the market to sell their products in Kenya and neighbouring countries.

Kenya’s young, growing and well-educated population, which is very familiar with technology, is also a major advantage. Companies should take this explosive growth into account when planning their business venture into Africa.

According to a report released by the Kenya National Bureau of Statistics in October 2021, Kenya’s real GDP grew by a robust 10.1% in the second quarter of 2021, compared to a 4.7% contraction in the same quarter of 2020. East Africa, with Kenya as their anchor economy, was the only African region that avoided a recession in 2020, when the region’s economy was growing by 0,7% (average in Africa = -1,8%).

Kenya is one of the top intra-African exporters, mostly exporting to countries within the EAC. The fact that the EAC is viewed as the most integrated block of Africa’s regional economic communities shows the regions’ good basis for taking advantage of the African Continental Free Trade Area (AfCFTA), which came into effect on January 1^st, 2021, and aims to create a single market for goods and services and a continental customs union. Kenya-based companies are well positioned to take advantage of the opportunities associated with the AfCFTA as cross-border trading is very common within the EAC.

Top performing industry sectors in Kenya

Currently, Kenya is the third-largest economy in Sub-Sahara-Africa, ranking only behind Nigeria and South Africa. The top performing industries in Kenya include agriculture (including forestry and fishing), mining, manufacturing, energy, and services (including financial services and tourism).

The largest contributor to Kenya’s GDP by far is the service industry, which stands at around 63% of the GDP. A large part of this is the tourism sector, as Kenya is a top destination for tourists from around the world, due to its national parks, safaris, beaches, and sunny weather. The government has implemented tourist-friendly regulations like visa on arrival for tourists from certain countries.

Agriculture is the second largest contributor to the economy, with half of local produce being exported. The biggest contribution to the sector comes from tea, coffee, and horticultural crops (including flowers, potatoes, vegetables, and fruits).

Another large part of Kenya’s economy is the manufacturing sector, which amounts to around 15% of the GDP. Most of the country’s manufactories are in the major cities of Nairobi, Kisumu and Mombasa. Most are centred on the food sector, including beer production, grain milling and sugar. Other portions of the sector include automotive (mostly car assemblies), oil refineries, cement industry and the informal sector (manufacturing mostly household goods). The government has enacted favourable tax conditions to boost the manufacturing sector. Some industrial equipment and raw products are tax-free.

Kenya has a long-term focus on digitalisation. The Information and Communications Technology sector is growing fast and offering opportunities for companies to tap into the countries emerging potential.

The growth of the economy is also assisted by the government’s commitment to infrastructure development. It continues to invest in the development of public infrastructure, including the upgrading of roads, railways, energy, ports, and airports, and prioritises investor-friendly reforms, such as a review of public-private partnership policies and legislation, to deliver more infrastructure projects.

The Kenya National Bureau of Statistics’ report said economic activity and growth in the last years were driven by policy easing and supported by sectors such as information, communication, and technology (ICT, which recorded 25.2% in the second quarter of last year), transport and storage (16.9%), finance and insurance activities (9.9%) and manufacturing (9.6%).

Interested in doing business in Kenya / East Africa?

InterGest South Africa has a local presence in Kenya, Nairobi and have assisted many foreign companies with setting up their business activities in East Africa. We offer you unparalleled support every step of the way – from company registration to monthly administrative services.

As a part of our company policy, we offer our first consultation to you free of charge. Our team of professionals are ready to be of service to you. So, if you are considering expanding your business into East Africa. Contact us today!

contact@intergest.co.za

Sources

• GTReview
• WorldAtlas

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