5 Key Takeaways from our “Tapping into Africa: Your 2023 Hiring Blueprint” Webinar
If you have missed this webinar but still want to capitalize on the insights shared by Alex Daruty, Head of Commercial at Africa HR Solutions, you are in the right place! Here are 5 things you should know when considering a business expansion into the African continent.
You can also watch the webinar in VOD on our events page.
Takeaway 1: Africa is growing at record speed
Where other regions are lagging, slowed down by the pandemic and its repercussions, Africa continues to power forth.
“Several factors contribute to this positive trend,” Alex explains.
“This includes a growing middle class, increased urbanization, improved infrastructure, and a rising entrepreneurial spirit.”
All these factors and more have contributed to an average annual GDP growth rate of around 3.7%, with Foreign Direct Investment (FDI) – expected to keep increasing, reaching $83 billion in 2022, according to the United Nations Conference on Trade and Development (UNCTAD).
But which sectors are generating such investments?
Alex says that some key sectors that have been thriving in Africa include: “Mobile and Internet Technology, Renewable Energy, Consumer Goods and Retail and Financial Services.”
Takeaway 2: Understanding that every African country is different
There is this tendency to paint all of Africa with one broad brush, to rope in all African countries from North to South and West to East together, for better but more often for worse. But the truth is very different – and companies must learn to see Africa in all its diversity.
“It’s important for businesses to conduct thorough market research, understand local laws and regulations, and have a flexible and adaptive approach to navigate the specific nuances of each country.” Highlights our Head of Commercial.
Alex also encourages potential investors to: “Recognize that there may be cultural nuances, bureaucratic challenges, or unforeseen circumstances that can affect your plans. Take for example legislative changes in Africa. A staggering 60% of Africa has had legislative changes over the past 90 days, amounting to nearly one a day.”
Featuring anglophone and francophone countries, highly-developed and still developing nations, the true wealth of Africa is its diversity – one that investors like yourself can harness to write successful business stories.
Takeaway 3: Remote work is taking off in Africa
“Several African countries have emerged as attractive destinations for hiring remote workers due to various factors such as reliable internet connectivity, favorable time zones, and lower labour costs.” adds Alex.
“Based on our experience, here are a few African countries where we’ve seen significant growth in remote workers:
- South Africa – Known for its robust IT infrastructure and a large pool of skilled professionals, making it a popular choice for remote work.
- Kenya – Kenya has been steadily growing its reputation as a hub for technology and innovation in Africa. Nairobi, the capital, is home to numerous tech startups and a thriving IT sector.
- Nigeria – With a large population and a vibrant tech scene, Nigeria has become a hotspot for remote work in Africa. Nigerian professionals are known for their expertise in software development, digital marketing, and customer support
- Egypt – Egypt has a well-established IT industry, especially in software development and IT outsourcing. Cairo, the capital, is home to many technology parks and incubators, attracting skilled professionals in the field
- Ghana – Ghana is experiencing a surge in tech innovation, and its capital, Accra, has a growing tech startup ecosystem. The country has a reliable internet connection, English-speaking workforce, and a favorable time zone for collabourating with European and American companies”
Takeaway 4: Understanding the limits of modern technology
It is true that remote work and other modern ways of working are taking off in Africa — but businesses must also understand that they will face a number of limitations where technology is concerned in Africa.
“It is important to recognize that it is not a one-size-fits-all solution, especially when it comes to payroll processing in Africa.” Adds Alex,
“While technology can offer certain benefits, there are significant limitations that hinder its effectiveness in this particular context.
- Limited internet connectivity: Despite significant advancements, many regions in Africa still face challenges with internet connectivity.
- Infrastructure challenges: Many parts of Africa lack the necessary infrastructure, such as reliable power supply and hardware infrastructure, to support complex technology solutions.
- Diversity of languages and cultures: Africa is a continent with immense linguistic and cultural diversity – 21 French speaking African countries. Each country has its own languages, dialects, and unique cultural practices. Implementing a standardized technology solution across Africa would require significant localization efforts to accommodate these diverse needs.
- Limited digital literacy: While technology has made significant inroads in urban areas, many rural communities still lack the necessary knowledge and skills to effectively utilize complex payroll systems.
- Regulatory and compliance challenges: Each African country has its own unique labour laws, tax regulations, and compliance requirements. Adapting technology solutions to meet these specific legal frameworks and ensuring compliance can be a complex task
Takeaway 5: Choosing the right partner for your expansion in Africa
While Africa is growing as a land of opportunity, no amount of goodwill or opportunity can be of help when a country and its legislation remain foreign to you. Which is why picking the right expansion partner is so important.
“Make sure that you are comfortable working with a partner who understands the local tax regulations and payroll requirements.” advises Alex.
But what else should businesses look for in an EOR or PEO partner?
“Your EOR/PEO partner should be updating you and your employees about local laws, regulations, and policy changes regularly. The right EOR/PEO partner […] shall provide you with a thorough research of the labour laws and regulations of the specific country or countries you plan to expand into.”
According to Alex, they should also help you “to draft employment contracts that comply with local laws and regulations. Ensure that the contracts include all required terms and conditions, such as compensation, benefits, working hours, leave entitlements, termination procedures, and any specific provisions mandated by local laws.”
So if you find a potential PEO/EOR partner lacking in those aspects, you may be certain that they do not have the ability to support your progress in Africa.
But there is one partner who meets all these criteria and more: Africa HR Solutions. We understand the issues that companies like yours face as they expand to Africa – in fact, we have been helping businesses like yours succeed for the past 11+ years.
So if you are ready to embrace an efficient and 100% compliant expansion solution to Africa, get in touch with our team today.
