Why Africa Is NOT One Market: how to actually win over African markets

Is Africa one country?

Across the world, we tend to refer to Africa as one homogenous entity, lumping all 54 African countries together into one mega-country. This notion not only does a disservice to each country’s individuality, but it also creates a false understanding of each country’s characteristics, needs, and culture. This leads to strategic missteps, regulatory pitfalls, and cultural blunders.

In this article, our Africa experts highlight the different ways in which African countries differ, and how you can best adapt your understanding to win over African markets:

1.    Africa’s regulatory diversity

All rules don’t apply the same across Africa. Regulatory differences exist from region to region and from country to country in Africa. Where some countries have established more flexible frameworks, others have firmly-set regulations that need to be respected exactly as stipulated. Other core differences exist in the origins of these regulatory systems, namely whether they are of French or British origin. With a considerable percentage of Africa having been colonised by France or Great Britain, these stages of history have left legacies, including on tax and labour laws. Where Francophone countries like Côte d’Ivoire (Ivory Coast), Senegal, Ghana, and Mali are more likely to offer greater worker protections and require more annual leave for staff, anglophone countries like Nigeria might side more with businesses.

So, a “one-size-fits-all” compliance approach won’t work — businesses must localise their understanding of the law if they want to succeed.

2.    Africa’s layered cultural wealth

It is estimated that Africans all over the continent cumulatively speak about 3,000 languages! Equally, it is estimated that there are several thousand ethnic groups spread across 54 African countries, which suggests incredible diversity within one and the same country, as well as within its cities and districts. But if one were to step in and assume that the entirety of Africa shares one culture, one could not be farther from the truth. Because these cultural differences come hand-in-hand with certain values, habits, and customs, they change the way in which Africans approach certain products and services.

For example, expanding to a Muslim-majority like Mauritania or Morocco with food products that are not halal certified may be a misstep that costs you dearly. Additionally, in Ethiopia for instance, Christians make up a majority of the population, and they regularly partake in fasts that require abstention from meat and dairy products. So, expanding in the dairy business there would not make much business sense.  

3.    Africa’s climate extremes

The goods and services you offer will surely vary according to a country’s climate and weather all year round. In Mali for example, temperatures regularly reach 40°C in some locations, making it one of the hottest countries in Africa. In winter, temperatures only drop to around 15°C to 20°C. South Africa, on the other hand, has a unique climate and witnesses chilling winters, with temperatures going as low as -16°C. So whether you are in the textile and clothing industry, the medical industry, or even the food and beverages industry, these climate differences impact the market’s needs – and consequently, your response to these demands. Besides, climate extremes also impact your ability to run operations, and prompt the question: can you reasonably operate under these conditions?

4.    Africa’s complex history

Like all other continent’s, Africa’s history is complex and is still shaping today’s minds and societies. With most of Africa having been colonised by European countries like France, the United Kingdom, Belgium, and Portugal, African countries each have a unique present identity. This complex history informs values, perceptions of the world and aspirations. Understanding how different African people think and why will lead to a greater understanding of the market you are targeting.

5.    Africa’s diverse economies

Not all economies are built the same, whether that is in Europe or Africa. Where some African economies like Kenya, Rwanda and Tunisia are thriving and have reached certain heights, other African economies are still making progress, beginning the transition from a primarily agricultural economy to a more diversified, technology-led economy. This is the case for countries like Madagascar. So before expanding, understanding just how the economy works, and who supports it in an African country will help you refine your market entry strategy, as well as determine just how well your product or service fits into this particular economy.

6.    Africa’s varying infrastructure

Some African countries have better developed infrastructure than others. This includes roads, ports, air transport systems, storage areas, as well as buildings, factories, machinery and more. Most businesses’ operations depend in one way or another on how good the infrastructure in a particular country is. For instance, if you operate in the food and beverages industry, maintaining the cold chain may be of utmost importance – but can the country you are looking to expand to help you maintain it? Doing the research prior to expansion and understanding how different African countries are will help you adapt your product to market fit.

7.    Africa’s differing payment systems

Africa houses different countries, each with their own access and relationship to technology. Where in Kenya, for instance, mobile payments through the M-Pesa platform are routine and common use, a number of African countries still only use cash for payment. Additionally, banking access may also be limited, such that in many African countries, cash is still king. As you plan to expand to Africa, have you considered how these different payment methods may affect your business, or the way in which clients are able to pay for their purchases?

Choose an African expert

There is no workaround: localisation and understanding every specific African country is key to a successful expansion in the continent. Africa HR Solutions is just that: your human-first, African partner in navigating Africa’s possibilities. Through our Employer of Record (EOR) solutions in Morocco, Tunisia, Mozambique and 43 other African countries, we take on administrative tasks like onboarding, payroll, tax calculation and remittance, and compliance – all so that you can focus on your core business.

Curious to find out how an African EOR can work for you? Chat with one of our experts today.