On the eve of the Africa 2016 Meetings, at the Palais d’Iéna in Paris, where she will speak on the theme “What financing for companies” (Thursday 22, 2 p.m.), Isabelle Bébéar, Director of International and University at Bpifrance, delivers a preview to La Tribune of a few precious keys to understanding the diverse realities of a very promising continent. Including for French companies, whose know-how is in line with the new and enormous needs of the continent.
With a forecast for growth of African economies – the World Bank expects 2.5% for sub-Saharan Africa in 2016 – in line with global growth, Africa remains a development priority for French companies abroad. It is a social responsibility towards Africa but also towards Europe as a whole, and it is also a huge opportunity to create wealth and value. A demographic explosion is coming: according to UNICEF, a quarter of the world’s population will live in Africa by 2050 with 2.5 billion inhabitants. Today, an emerging middle class is estimated between 150 to 300 million consumers. All of this leads to accelerated urbanization, significant needs in the food industry, in the field of energy, transport infrastructure, water and waste treatment, but also in the health sector, distribution and consumer products. So many sectors where France has great assets to develop.
There are great things happening in Africa. Did you know, for example, that Nigeria is the second largest producer of films in the world, behind Bollywood and ahead of Hollywood? That Africa is the second mobile market after Asia, with 98% of internet connections being made on a smart phone? In the next ten years, the number of mobiles should increase fivefold, from 70 million in 2015 to almost 360 million in 2025. Africa is also the region of the world where money transfers by telephone are the most numerous, making it a global mobile banking laboratory…
A continent of 54 states, of great diversity
Above all, Africa is a continent full of successes of exceptional women and men. Remarkably, women are very present in South African entrepreneurship: according to a study carried out by the consortium The Global Entrepreneurship Monitor (GEM), published in February 2015, they represent 27% of entrepreneurs in this area.
But how do you approach this continent which both fascinates and worries?
First you have to go there! You have to dedicate time to soak up and meet the population. Empathy is necessary, but also the absence of prejudice and great humility. We talk about Africa, but Africa is diverse, made up of 54 sovereign states, with a mosaic of cultures and a heterogeneous economic development.
It is therefore necessary to approach the African markets country by country, and not to reason by geographical area. We don’t do business in Algeria like we do in Ivory Coast or South Africa. Finally, speaking the same language – in this case French in French-speaking Africa – although this is an undeniable asset, does not guarantee success in business. Because cultural codes, beyond the verbal, are often different from ours.
Identify cultural differences
The work carried out in the 1970s by the corporate sociologist Geert Hofstede is very interesting in this respect. He highlighted five criteria of cultural differences to take into account:
- Hierarchical distance – It varies from country to country. In order not to shock your interlocutor in business practice, you should know that the hierarchy in the Maghreb and in sub-Saharan Africa, in companies but also in commercial contacts, is much more pronounced than in Anglo-Saxon and other Western countries.
- Individual vs collective – African behavior is generally more collective and more respectful of social ties in work than in France, where we tend to cultivate individualism.
- Social harmony – It’s a ubiquitous value in business. Some African companies can employ three people to perform a task that requires only one, so as not to break the social bond at work. In sub-Saharan Africa, for example, performance is often put on the same level as harmony.
- Risk aversion – In other words, the ability or not of local workers to take risks in business: in some countries, entrepreneurship is not necessarily the priority; in others, there is a real entrepreneurial culture that can be stronger than ours.
- Dogmatism vs pragmatism – The last type of cultural difference is in the pragmatic or dogmatic approach to a foreign market, especially an African one. According to Geert Hofstede, the fault of the French would be to approach African countries in a too dogmatic way, in too compassed or conceptual schemes …
Once these cultural differences have been identified, it becomes obvious that one of the keys to success is to adapt to regional particularities: adapting your products to local markets (design, packaging, etc.) for an increasingly more demanding, in terms of quality, innovation and professionalism.
Anticipate to overcome certain deficiencies in the ecosystem
Another quality is the ability to anticipate. When Intelcia (an outsourcing group which has more than 3,000 employees spread over Morocco, France and more recently Cameroon) opened a call center in Douala in 2016, its leaders knew that there were risks of power cuts. power or telephone network. However, it is unthinkable to have several hundred conversations interrupted at once. They therefore anticipated and took a number of measures such as double international links and the installation of inverters and generators. Other difficulties can be detected upstream, for example the lack of roads and warehouses, or even faulty electricity, atomized distribution, or even insufficient skilled labor in certain sectors.
Finally, finding a good partner is key. In many areas France has technical expertise, but Africans have knowledge of their markets. So it’s about surrounding yourself with people who know the country well and its business environment. Taxation, legislation, the judicial system, procedures, customs costs are also subjects to be treated.
Several networks and Bpifrance support French entrepreneurs
To do this, you must build a network of quality people and do not hesitate to use the means made available to French business leaders: the diplomatic network of France, which is the first on the continent, the networks of French organizations. locally such as international CCIs or foreign trade advisers, as well as Business France. Many large French groups are also on site and fully prepared to play the network game.
Bpifrance, the public investment bank, has placed support for French companies in Africa at the heart of its strategic plan. The Bank is one of those reliable and committed partners on which French entrepreneurs can rely. It has been present in Africa for almost fifteen years thanks to its investment activity in the best private equity funds for African SMEs, and also thanks to its advisory and expertise mission with corporate finance institutions. from the continent.
It thus makes available to entrepreneurs its network, made up of private equity management companies, financial institutions and growth companies. Last but not least, it offers them suitable financing, both in equity and at the bottom of the balance sheet, notably thanks to the launch, in 2015, of its export credit.
You will understand, we must go to Africa now!
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