German economic exchange with Africa today lags behind its potential. Only around 2% of German foreign trade is with Africa and German investment on the continent stands only at a fraction of that from many of its’ European neighbours. Over the past years various players in the German economy, from corporations to government entities and associations, have taken steps to enhance this engagement. The German “Mittelstand” (small and medium sized enterprises) as the backbone of the German economy will also have a crucial role to play. In order to support this drive, africon contributed to the development of the “Mittelstandsindex Afrika” and presented it as part of a panel organised by the “Agentur für Wirtschaftliche Entwicklung (AWE)” in Berlin on Oct 24, 2019. Erik Deitersen, Senior Consultant with africon, thereby represented the development team of the index (BRS Institute, BVMW and Nexia) on the panel and shared perspectives on the “Mittelstand’s” engagement in Africa.
We thank the organisers for providing us with the platform to share our tool and perspectives.
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 have 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.
https://www.africon.de/wp-content/uploads/Untitled-design-28-1.png788940Jean Wandimihttps://www.africon.de/wp-content/uploads/africon-Logo-2017-300x138.pngJean Wandimi2019-10-30 12:20:102019-12-11 11:52:18How to successfully enter the African Market: “Mittelstandsindex Afrika” launched
There are numerous business opportunities and potentials that exist in Africa which companies can take advantage of. With our sole focus on the continent, we have looked into the African markets to see what sort of products are mostly imported in each market. For the past year 2018 we were able to come up with the following findings.
Over the last five years, Africa has been recording trade deficits. Data trends show that imports to and exports from Africa started increasing in 2017 after a decline in 2015. China, France, USA, Germany, and India have remained Africa’s top export partners over these years.
In 2018, Africa’s total imports were worth approximately 549 billion USD. 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 that year.
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 (worth 10.6 billion USD), motor vehicles for the transport of goods (worth 6.3 billion USD), rice (worth 6.3 billion USD), and parts & accessories for motor vehicles (worth 6.1 billion USD).
The largest importers on the continent 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) and Ghana (imports worth 12 billion USD i.e. 2.2% of Africa’s total imports).
In South Africa, the top three import categories 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.
https://www.africon.de/wp-content/uploads/image-3.jpg8911207Jean Wandimihttps://www.africon.de/wp-content/uploads/africon-Logo-2017-300x138.pngJean Wandimi2019-10-16 17:16:192021-03-02 10:50:40Slide of the month (SOTM) July. Africa’s top imports in 2018
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 a conference exclusively paneled by experts from the continent. It is dedicated to develop trade and investment ties, as well as to open doors into francophone Africa with a focus on Congo. Attendants will get first hand access into the markets in terms of investment profiles and macro trends.
africon CEO and Partner Marc-Peter Zander will be speaking at the African Investment Day on 29th November 2019. The event 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 very active in francophone Africa. africon has consulted 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 would like 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.
https://www.africon.de/wp-content/uploads/Untitled-design-5.jpg788940Jean Wandimihttps://www.africon.de/wp-content/uploads/africon-Logo-2017-300x138.pngJean Wandimi2019-10-04 10:12:542019-12-12 17:07:12African Investment Day opens doors into francophone Africa focusing on Congo!
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) and Mr. Gilles Komi MAGLO (Entrepreneur of the African Diaspora).
africon GmbH partner & CEO Mr. Marc Zander will 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 of this 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 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?
https://www.africon.de/wp-content/uploads/Untitled-design-12-1.png788940Jean Wandimihttps://www.africon.de/wp-content/uploads/africon-Logo-2017-300x138.pngJean Wandimi2019-10-01 10:17:472019-12-12 17:10:02africon CEO Marc-Peter Zander to speak at the mitafrika Business Forum
africon CEO Marc-Peter Zander is an external PARLA expert on Africa’s cultural and economic sector and has decades of experience with the continent. If you have followed us for a long time, you may know that he has spoken on many occasions as a keynote speaker, panelist and moderator on culture in Africa. See more from our news section.
He has vast experience in market entry consulting, regional focus Africa, Africa´s economy, banking IT, FMCG, steel and packaging. He is also a member of the International Advisory Network for Africa and has been working on Africa since 2002.
Since 2016, Parla and africon work together in consulting international firms on their cultural understanding with the key regions of Nigeria and Kenya.
Get to know more about him as well as his speaking portfolio here .
https://www.africon.de/wp-content/uploads/Untitled-design-59.png788940Jean Wandimihttps://www.africon.de/wp-content/uploads/africon-Logo-2017-300x138.pngJean Wandimi2019-07-31 15:51:512020-07-26 14:48:32africon CEO Marc-Peter Zander is PARLA expert trainer of the month
African and German firms discuss market potential in
Africa
Key players from Africa and Germany exchanged ideas on how to do business in Africa at the METEC 2019 Sub Saharan Africa Workshop. This workshop focused on the challenges and opportunities of the African metallurgy market. Speakers from a variety of African and European countries and companies were invited to hold presentations and participate in panel discussions thus giving the international audience an excellent insight into the African markets. The METEC Sub Saharan Africa Workshop took place for the first time on June 26th, 2019 during the METEC trade fair in Dusseldorf, Germany. It was initiated and organized by africon GmbH in close cooperation with Messe Düsseldorf and “The Mechanical Engineering Industry Association” in Germany (VDMA) represented by Dr. Timo Würz, Managing Director of VDMA Metallurgy. More than 50 attendees participated in the high-level workshop.
The Event
The event was characterized by an open and lively exchange
between all participants and panelists. Opinions were exchanged, similar and
differing ones debated, and many conclusions drawn. Several key challenges not
only to European firms, but to African nations and industries were identified.
The following recommendations arose:
European
firms should consider Africa as a market. Although often small and
sometimes challenging, some African markets can be very profitable and provide
huge long-term growth opportunities. Many Africans already appreciate European
quality.
International
firms have to understand that Africa is a huge and diverse continent.
Especially smaller firms will not be able to deal with all countries at once. Clear
priority countries have to be defined early on.
Skills
are a critical bottleneck locally. Training and education for staff is a
key to success. Organizations like the German VDMA are in a position to support
here as well.
Providing
adequate aftersales service is key for EU machine suppliers to African
customers. To achieve this at reasonable costs, teaming up with other suppliers
or utilizing locally present external service providers can be beneficial.
Creating service hubs in certain countries can be equally help. E.g. Kenya can
be used as a hub for East Africa.
German
firms often have to show flexibility in their commercial terms and
conditions, as well as showcase cultural understanding for the other involved
parties.
German
firms – wherever possible – have to check on their pricing models as
this is still a huge issue. In that context, modular/scalable solutions are
often highly appreciated. Offering German solutions made in lower cost
countries like India can be interesting entry level options as well.
“As africon, we were very pleased to see a lively event with valuable insights for both existing market players and new entrants. We hope the valuable contacts exchanged on the event will bear fruits in future”, summarizes Mr. Marc Zander CEO and Partner africon GmbH.
More
Details about the Programme
Panel 1
addressed: Needs and expectations of German/international metals production,
metals processing and metallurgical machinery sectors when looking into doing
business in Africa (e.g. technology, education & training, competition,
etc.)
The
Panelists included Dr.
Tim Nikolaou (Managing Director, Frech Group, Germany), Mr. Cedrick Lusaka
(Area Sales and Project Manager – Africa, Maschinenfabrik Herkules GmbH &
Co. KG, Germany), Mr. Solomon Mulugeta (Director, Ruhe Consult and
General Manager, Ethiopian Association of Basic Metals and Engineering Industries), Dr. Norbert Völker
(VDMA department of educational policy / Skilled workers for Africa Project
Manager), Mr. Glen Dikgale
(President, South African Institute of Foundrymen (SAIF), South Africa. The
Panel was Moderated by Marc
Zander (CEO & Partner, africon GmbH).
Panel 2 addressed: What the African markets offer to and
need from German/international metallurgy, steel casting and metal companies
willing to start business in Africa? (e.g. market potential, financing, local
support)
The panelists included
Mr. Till Schreiter (Managing Director, ABP Induction Systems GmbH,
Germany), Mr. Bobby Johnson (Sector Chairman, Kenya Association of
Manufacturers KAM, Metal & Allied Sub Sector as well as Director, Steelmakers
ltd, Kenya), Mr. Ime Ekrikpo (Director Steel & Non-Ferrous Metals
Department, Ministry of Mines & Steel Development, Nigeria), Mr. Gupta
Gagan Santosh (Chairman, Kamal Steel Group, Tanzania), Mr. Dieter Brandstätter
(Managing Director, ANDRITZ Maerz GmbH, Germany ). The panel was moderated by Friedrich
Wagner (VDMA department of foreign trade).
We are proud to announce that africon GmbH and Wolk After Sales Experts are joining forces for Africa.
Both German consulting companies are leaders in their respective fields, namely global automotive after sales industry and African business environment. Together Wolk and africon will be able to provide clients with comprehensive information and consulting support across the continent.
Since the beginning of its operations in 1994 Wolk After Sales Experts has grown into a consulting powerhouse well known to both vehicle manufacturers and independent aftermarket operators. Thanks to carefully built network of partners across Europe, Wolk monitors automotive markets in 35 countries – from Portugal to Russia and from Norway to Turkey.
“In one world economy our clients need support not only in Europe, but on the other markets as well. Our cooperation with africon will allow us to include data from Sub-Saharan Africa into our AFTER SALES ACCESS aftermarket business intelligence tool. This will be a major asset for any automotive company aiming at creating or improving its distribution network in Africa” explains Zoran Nikolic, Managing Director at Wolk After Sales Experts.
africon GmbH, established in Germany in 2011, currently has offices in Nigeria, Kenya, Tanzania and South Africa. The company employs a team consisting of 7 nationalities speaking more than 10 local languages while running a network of more than 50 consultants in the African region. Over the past 5 years africon conducted more than 20 automotive projects in Africa.
“The African automotive markets have been growing with more than 6% over the past years and offer great chances for global operating companies. After various independent aftermarket projects in Africa, africon could obtain significant data and know-how on African markets like Nigeria and Kenya which we are happy to offer to the excellent network of Wolk After Sales Experts” states Marc-Peter Zander, CEO & Partner at africon GmbH. Mr. Zander will be also a keynote speaker during upcoming Aftermarket Forum 2019: Going global! It is a top-level automotive industry event taking place on April 17th in Frankfurt am Main, Germany and organized by Wolk After Sales Experts. This year’s edition will focus on market snapshots of different regions of the world and Sub-Saharan Africa will be covered by the representative of africon.
In day-to-day business operations Wolk After Sales Experts and africon together will provide clients with exclusive market research, market intelligence and consulting projects in African countries.
https://www.africon.de/wp-content/uploads/Untitled-design-38.png788940Jean Wandimihttps://www.africon.de/wp-content/uploads/africon-Logo-2017-300x138.pngJean Wandimi2019-06-24 14:51:092019-11-04 09:32:01africon and Wolk After Sales Experts join forces for Africa
africon GmbH was contracted by one of our clients and we successfully conducted a research on the aluminium industry in Kenya. We found out that the key drivers of this industry are the construction and real estate sectors in Kenya. Findings revealed that these sectors have experienced positive growth rates within the last five years and are expected to expand even further.
Kenya’s construction sector expanded by 8.6% and contributed approximately 6% to the country’s GDP in 2017. It is also one of the major sectors attracting foreign investors to the country.
According to Deloitte’s construction trends report, Kenya has remained the leading country with the highest number of projects in East Africa for four consecutive years, with projects increasing by 78% from 23 projects in 2017 to 41 projects worth $38.2 billion in 2018. The major construction projects are in real estate, energy and power, and transport, sources also reveal that the Kenyan government is spending billions of dollars on transport projects as Kenya is expected to become the logistics hub of East Africa.
Challenges to this Kenya’s construction sector include: the frequent use of substandard materials, long procurement procedures, low project completion rates, and low technological knowledge. Despite these apparent challenges, continuous growth is expected in the sector as the Kenyan government plans to build 500,000 houses by 2022, and also to reduce corporate tax for developers who construct at least 400 units per year.
Kenya’s real estate sector is the 6th largest contributor to Kenya’s GDP, and was valued at $5.5 billion in 2017. The sector expanded by 6.1% in 2017 compared to 8.8% in 2016, and this slowed growth rate is due to the elections and reduced credit supply (as a result of capped interest rates). The construction of new private residential buildings in Nairobi increased from 9,054 in 2015 to 10,002 in 2016, while new public residential buildings rose from 45 in 2015 to 1,062 in 2016. Some of the challenges faced by Kenya’s real estate sector include inadequate sources of funding, high land costs, and infrastructure development costs. However, government initiatives such as digitization of the land ministry, removal of land search fees, and inclusion of affordable housing as part of Kenya’s big four agenda is likely to boost real estate development over the next few years
https://www.africon.de/wp-content/uploads/sotm.jpg7831042Jean Wandimihttps://www.africon.de/wp-content/uploads/africon-Logo-2017-300x138.pngJean Wandimi2019-06-12 07:10:442021-03-02 10:51:56Slide of the month (SOTM) March. Kenya’s construction and real estate sector
last October africon published its first editorial addressing the future of the Steel industry in East Africa at the 3rd journal edition of the International Tube Association. The article started by highlighting how East Africa distinguishes itself by economical growth and political stability in the region and being the least dependent on primary commodities such as gold or oil in comparison with other african regions. The East African region was projected to capture the highest regional economic growth over the past year in Africa. The article then went in depth to analyse those macro-economic factors and focused on the drivers of steel industry that promote economic growth in Africa and especially in East Africa.
Now you can read the full version of the editorial here or download it as a white paper
https://www.africon.de/wp-content/uploads/ITA.africon-e1558526858259.jpg281500Jean Wandimihttps://www.africon.de/wp-content/uploads/africon-Logo-2017-300x138.pngJean Wandimi2019-05-22 14:00:522019-06-14 13:56:58africon’s editorial publication in the ITA journal
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