Business Problems & Commercial Risks In Africa
We work with buyers, sellers, importers & exporters to avoid business problems & commercial risks when doing business in markets such as Benin, Burkina Faso, Cameroon, Cape Verde, Equatorial Guinea, Gambia, Ghana, Gabon, Guinea Bissau, Guinea Conakry, Ivory Coast, Liberia, Nigeria, Senegal, Sierra Leone and Togo.
Just as the potential advantages of setting up a business in Africa have been widely acknowledged, so too have the perils of doing business there. The only proviso is that intensive due dilligence must be carried out on every factor prior to implementation.
Import Export Due Dilligence In West Africa
There is the assumption that business investments in the emerging markets of Africa are risky and despite recent progress, several hurdles remain.
- Political instability and conflict. Wars and authoritarian governments continue to adversely affect business and policy in many countries. According to world freedom indexes, which measure political and civil liberties, of 54 African nations only 10 are considered free, 22 are considered partially free, and 22 are considered not free.
- Poor infrastructure. Although many African cities now have modern road systems, only about one-third of Africans live within two kilometers of a paved road that is usable year-round. Travel within the continent is prohibitively expensive and difficult, with transportation costs five to eight times that in markets such as Brazil or Vietnam. About 70 percent of the population has no access to electricity. These problems constrain not just consumer demand but supply as well; ports in many African nations are characterized by capacity issues and high costs.
- Linguistic diversity. To communicate effectively with African consumers, companies need to deliver their marketing messages in a plethora of languages. Nigeria has only one—English—but Nigerians speak more than 500 local languages. Further complicating consumer communications is the continent’s low literacy rate of 62 percent. In some countries, including Burkina Faso and Niger, the literacy rate is below 30 percent.
- Differences in consumer behavior. Not only do Africans in different countries speak different languages; they also make buying decisions differently. Price sensitivity is a major issue and opinions about brands differ by country and region as well.
- A fragmented retail market. Africans buy groceries primarily from neighborhood kiosks or independently owned convenience stores; in many countries, the percentage of groceries bought in supermarkets is in the low single digits.
- Low data availability and quality. Historically, there’s been a dearth of economic data and market research about most parts of the continent except for the largest cities. Companies sometimes extrapolate existing data on big cities to the national or regional level, but such an exercise only yields inaccurate insights.
Starting Or Developing A Business in Africa?
We advise international buyers, sellers, importers and exporters on the best bank instruments and payment terms for the profitable export, import, marketing, sales and distribution of products and goods in West Africa.
Please contact us for a no obligation discussion regarding starting, set up or develop an import export business or to discuss trade investment opportunities in West Africa.
- Bank Letter of Credit (L/C)
- Standby Letter Of Credit (SBLC)
- Bank Guarantees & Counter Guarantees
- Bank Payment Obligation (BPO)
- Documents Against Bank Payment