How to successfully enter the African Market: “Mittelstandsindex Afrika” launched

Africa is one of the world’s largest and most diverse continents: 54 countries, rich cultures, stunning landscapes, and hundreds of ethnic groups speaking a total of more than 2,100 languages. Africa is considered an emerging continent that offers businesses various opportunities to invest successfully. In order to help German small and medium sized enterprises (the “Mittelstand”) to enter the African markets, the BRS Institute at the Bonn-Rhein-Sieg University of Applied Sciences (H-BRS), africon GmbH, the Federal Association of Medium-Sized Enterprises (BVMW) and Nexia International released the “Mittelstandsindex Afrika” (SME Index Africa).

It was presented to the public on October 15, 2019 at the roadshow “Successful to Africa” ​​organised by BVMW in Korntal near Stuttgart and received a very positive response from the participants in the SME sector.

The “Mittelstandsindex Afrika” provides a rating for 34 African countries, which cover 96 percent of the continent’s economic output. Based on a variety of weighted criteria, the index summarizes the attractiveness of African countries in an overall rating specifically tailored to the needs of German SMEs. The ratings allow companies to estimate the attractiveness of business activity in the respective country.

The An-Institut of the H-BRS is not alone in its assessment that Germany is currently not among the frontrunners in terms of investment in Africa. “At the EU and UN, G8, G20 and many other international organizations and industrialized countries such as China and Japan, Africa has long been at the top of the agenda,” says Professor Dr Jürgen Bode. The German Federal Ministry for Economic Cooperation and Development (BMZ) has recognized the “unique opportunities” and the “great potential” and wrote in 2017: “About half of the 20 fastest growing economies are located there. By 2035, Africa will have the largest workforce worldwide. This is where the global markets, the customers and the employees of the future are growing.” The Federal Ministry of Education and Research (BMBF) has also been pursuing a focused “Africa strategy” since 2018. The “Mittelstandsindex Afrika” aims to support the German “Mittelstand” (SME sector) in its own quest to expand in Africa by raising awareness about opportunities, creating transparency at an early stage by providing a guideline for a structured approach to the African markets.

The “Mittelstandsindex Afrika” draws its information from 55 input factors consisting of specifically gathered primary data and existing secondary data sources. These are summarized in 16 “indicators” for SMEs, which in turn are condensed into three “key indicators”. These “key indicators” – “Scale and Scope of Opportunities”, “Getting into the Market” and “Navigating inside the Market” – give rise to a country rating that allows a mid-sized company a quick overview of each country’s business appeal. A special feature of the “Mittelstandsindex Afrika” is the evaluation of factors and indicators against the background of qualitative expert interviews with medium-sized companies, state institutions and chambers and associations.

The key indicators

Scale and Scope of Market Opportunities

Before a medium-sized company from Germany concretely examines a market entry in an African country, it has to find out whether the market offers the necessary demand for its products or services. The first key indicator “Scale and Scope of Market Opportunities” helps: It measures the size, growth rate and share of interesting market segments of B2B (industrial, agricultural, services) and B2C sectors, while keeping in mind the strengths and weaknesses of the German “Mittelstand”. In addition, this key indicator examines the potential of an African country to serve other countries in its vicinity as a hub. Overall, the company gets a very good first impression of the relative market opportunities that can be expected from each rated country.

Getting into the market

Once a company identifies a country with promising opportunities, it has to plan how it can actually enter the market. Many factors can make it more difficult or easier to do so. The second key indicator “Getting into the Market” measures the conditions in the respective African countries with regards to the question “what does a firm need to enter a market and how easy are these factors obtainable in the country?”. With this information, a business can gain a first comprehensive view of what to expect in terms of resource requirements and complexity when entering the respective market.

Navigating inside the market

After entering the market, it is crucial for success to prove yourself in the competition, to work efficiently and to expand. The third key indicator “Navigating inside the Market” showcases how easy or difficult it is to do exactly that: grow successfully in the market, taking the perspective of the “Mittelstand”. This key indicator thereby helps to better assess the situation on the ground.

At africon, we are convinced that this index can tremendously support German – and other – SMEs or the “Mittelstand” to reduce complexity in entering African markets.

To learn more about the index check here www.mittelstandsindex-afrika.de

Slide of the month (SOTM) July. Africa’s top imports in 2018

There are numerous business opportunities and potentials that exist in Africa which companies can take advantage of after further market research as well as designed entry strategies. With our focus being on Africa, we have looked into the African markets to see what sort of products are mostly imported in each market, and for the past year 2018 we were able to come up with the following findings.

Over the last five years, Africa has been recording a trade deficit when it comes to total annual imports and exports of goods. Data trends also show that imports to and exports from Africa started increasing in 2017 after the decline in 2015. Also, China, France, USA, Germany, and India have remained Africa’s top export partners in these past years.

In 2018, Africa’s total imports was worth approximately 549 billion USD, and the largest imported product (using the 4-digit category) was petroleum and mineral oils which was valued at approximately 60 billion USD, that is, 11% of Africa’s total imports in 2018.

The other top products imported by Africa are: Motor cars for persons (worth 17 billion USD), Medicaments (worth 11.4 billion USD), Telephone sets (worth 11.2 billion USD), Wheat and Meslin (worth 10.6 billion USD), Motor vehicles for goods (worth 6.3 billion USD), Rice (worth 6.3 billion USD), and Parts & accessories for vehicles (worth 6.1 billion USD).

The largest importers in order are: South Africa (imports worth 93 billion USD i.e. 17% of Africa’s total imports), Egypt (imports worth 81 billion USD i.e. 14.8% of Africa’s total imports), Morocco (imports worth 51 billion USD i.e. 9.3% of Africa’s total imports), Algeria (imports worth 47 billion USD i.e. 8.6% of Africa’s total imports), Nigeria (imports worth 36 billion USD i.e. 6.6% of Africa’s total imports), Tunisia (imports worth 20 billion USD i.e. 3.7% of Africa’s total imports), Kenya (imports worth 16 billion USD i.e. 2.9% of Africa’s total imports), Ghana (imports worth 12 billion USD i.e. 2.2% of Africa’s total imports).

In South Africa, the top three imports excluding petroleum and mineral oils are: motor cars, telephone sets, and medicaments. For Egypt, they are: motor cars, wheat and meslin, and telephone sets. Nigeria’s other top imports are: light-vessels fire-floats etc, wheat and meslin, and motor cars, while in Kenya, the other top imports are: motor cars, medicaments, and flat iron.

African Investment Day opens doors into francophone Africa focusing on Congo!

Francophone Africa focus Congo – Ready for Business!

Patroned by the ministry of foreign affairs of Congo DRC and chaired by Experts of the African continent, the African Investment Day DE is the first conference exclusively paneled by experts from the continent and dedicated to open and develop strong trade and investment ties, open doors into francophone Africa with a focus on Congo and a proactive approach by the panelists to further promote francophone Africa and its virgin markets. Investors and Experts will get first hand access into the markets in consideration to investment profile and macro trends.

africon CEO and Partner Marc-Peter Zander will be speaking at the African Investment Day in 29th November 2019. The African Investment Day will provide attendees with pragmatic insights, market entry strategies and in-depth expertise from panelists currently engaged on the continent as well as in Europe. The discussion will also focus on why the German “Mittelstand” is not yet in Francophone Africa. africon has consulted for more than 60 clients with their Africa strategy. Within various projects the services varied from market research up to a full development of an Africa strategy. africon CEO and Partner Marc-Peter Zander will share extensive insights and the potentials for the German Mittelstand. He will also share his view on why German companies are still hesitant on making entry to Africa. If you really want to deep dive in the African potential particularly Francophone Africa, then you cannot afford to miss this.

The African Investment Day (Deutschland) brings together African CEO’s, political, social leaders and entrepreneurs with Germany’s private investment sector to share ideas and network on potential trade and investment opportunities on the African continent. This year’s particular emphasis is placed on Congo.

Attendees will have the chance to forge long standing bonds for cooperation to de-risk projects, generate win-win results and positive impact for all stakeholders in a thriving economic environment.” These African CEO’s, politicians, influencers, entrepreneurs and non-governmental organizations will help to develop and guide attendees to create fresh commercial bonds to shape business and further increase the commercial cooperation.

Read about africon at the Africa Investment Day in 2018 which also brought together African CEO’s, political, social leaders and entrepreneurs together with Germany’s private sector investors to share ideas and network on potential trade and investment opportunities on the African continent. Register here

If you really want to attend this event, we are happy to inform you that you can use our code Africon2019 to get 80% discount on tickets for the event. We have 4 discount codes up for grabs so make sure you are among the first to redeem it!

africon CEO Marc-Peter Zander to speak at the mitafrika Business Forum

The “mitafrika Business Forum” will take place on 20.11.2019 in Nuremberg. mitafrika is an initiative of NIfA (Nürnberger Initiative für Afrika), which was called upon to do educational work so that the full potential of Africa can be exploited by German companies.

mitafrika would like

  • to contribute to strengthening the role of the African diaspora in Germany in order to position it as a bridge-builder for sustainable trade relations between Africa and Germany.
  • to bring German SMEs and African entrepreneurs together in the diaspora and promote a common approach to the African market.

The forum will be moderated by Mrs. Miranda OBEN, Founder and CEO of “The returnees Project“, Mr. Georg ESCHER (Editor/Foreign Policy commentator at Nürnberger Nachrichten and Expert on Africa), Mr. Gilles Komi MAGLO (Entrepreneur of the African Diaspora).

africon GmbH partner & CEO Mr. Marc Zander will also be speaking at the event. With more than 20 years of living, working and doing business experience with Africa in international organization such as the MAN Group and Wincor Nixdorf, Mr. Zander developed a strong understanding for a highly interesting market. His believe in the continent’s potential, the increasing interest of companies who are hesitating but willing to enter business relations with Africa as well as his entrepreneurial spirit led him to found africon Ltd. as a startup company in 2010.

Mr. Zander will be sharing his knowledge on insights about strengthening the relationship between Germany and Africa.

Some of the questions that will be addressed are:

  • Why Africa?
  • How do we tap Africa’s potential efficiently?
  • Which business areas are particularly attractive for German companies?
  • What needs to be done to provide better access for German companies in Africa?

Learn more here