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Presenting the “Mittelstandsindex Afrika” in Berlin, Germany. Event Recap 2019.

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.

Learn more here

Slide of the month (SOTM) October. Construction sector performance in South Africa

South Africa’s construction sector is one of the largest in Africa and currently worth about 15 billion USD while contributing 4% to the country’s GDP. Unfortunately, it has been in recession since 2017. The overall growth rate in the past decade has been relatively low at only 2.47%.

A struggling economy and a 12% reduction in spending on infrastructure by the government have negatively affected the sector, and even in the current year 2019, some players report that business is shrinking further.

africon completed a local research project in this sector, which was aimed at achieving a detailled market understanding as well as identifying suitable business partners in South Africa for our client.

Despite the current situation, a short to medium term upturn is likely as there are still many planned projects. Additionally, the government has recently established a 27.5 billion USD infrastructure fund and targets infrastructure spending of 59 billion USD over the next 3 years.

Slide of the month (SOTM) September. Consumer goods distributors in Ethiopia

The impressive growth of Ethiopia over the past decade has put the country on the map in the consumer goods business. In this project, africon identified and recommended potential distribution partners for the client locally. After meeting approximately 20 consumer goods distributors, africon rated and ranked the firms according to key performance indicators previously agreed upon with our client.

Even though East Africa Holding did not make it to the shortlist of the most interesting potential partners, africon was impressed by the company’s strong local networks and standing in the market. Its focus on own manufactured goods provide a strong asset in times of Ethiopia’s forex crisis – even though it (at least presently) reduces the company’s priority on imported foreign brands.

If you would like to know more about consumer goods and FCMG in Ethiopia or other parts in Africa, do not hesitate to get in touch with our team.

Enormous potential for Africa’s wire industries. Africa Wire, Cable & Tube Conference.

Africa boasts enormous potential for increased trade in wire & cable, tube & pipe related industries. Market observers have noted that in many African markets the business environment is improving, and the implementation of structural reforms is leading to increased business confidence.

Those were some of the topics discussed at this year’s Africa Wire, Cable & Tube Conference.

CRU and the Southern Africa-German Chamber of Commerce and Industry (AHK), along with leading global trade shows, Wire & Tube as lead sponsor, held the Africa Wire, Cable & Tube Conference, on 11-13 November in Johannesburg, South Africa.

This important inaugural event is an opportunity for the local industry and stakeholders to meet with the international supply chain, and discuss the main trends impacting the global market and how they can be applied to the opportunities and challenges being faced across the continent.

To see the agenda, check here

The event brought together people from all over the globe with an interest in the wire, cable and tube industry.

Some of the topics addressed included

  1. Understanding Africa’s wire & cable, tube & pipe production, trade and supply chain
  2. The importance of the industry’s reliance on wire, cable, tube and pipe for African development
  3. Update on the expected consumption trends in Africa, of high wire and tube consuming industries: Mining, Utilities, Oil & Gas, Construction & Infrastructure
  4. Latest global technological advances in wire, cable, tube and pipe manufacturing, and how they can be applied in African operations
  5. Key considerations for the global wire, cable, tube and pipe supply chain when considering investing in African operations/distribution
  6. Technical agenda dedicated to technical showcases that highlight wire & cable or tube & pipe technology advances relevant to African operations

The africon team was very present as a supporting sponsor. CEO and Partner Mr. Zander also spoke about the Potential for growth in Africa in wire and cable or tube and pipe industries.

To see more insights about topics, speakers and the overall conference, see here

Slide of the month (SOTM) August. Real estate projects in South Africa

The real estate industry in South Africa has been growing steadily in the last few years. Looking at the industry’s three main segments, i.e. residential, commercial, and additions/alterations, it is apparent that South Africa´s residential developments have increased the most in value, at a growth rate of 11.37% between 2015 and 2018. Similarly, additions and alterations have increased at a growth rate of 7.92% in the same period. The growth in these two segments can be accredited to the country’s growing urban population.

Although commercial projects are the second largest in South Africa’s real estate industry, there has been a decline between 2017 and 2018. Commercial projects increased in value from 1.15 billion USD in 2015 to 1.8 billion USD in 2017 and declined to 1.3 billion USD in the year 2018, making this the slowest growing segment in the last few years. The main reason for this decline is the current economic performance of the country which is currently quite low after recovering from a recession in the year 2017.

For more questions and comments, do not hesitate to contact us.

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 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.

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. 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.

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 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. 

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) 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?

Learn more here

International dialogue on creativity and innovation from Africa The Forum de Saint Louis

International dialogue on creativity and innovation from Africa The Forum de Saint Louis / Senegal in Berlin from 19.09.-21.09.19

Held annually in different countries, the Forum de Saint Louis is a conference that brings together representatives from Africa’s creative industries, politics and science with multipliers from around the world. Founder and president of the forum is Amadou Diaw, who also founded 1992 very successfully the first private business school in West Africa, the Institut Supérieur de Management (ISM Dakar). At this year’s forum panels and presentations discussed what makes Africa strong and how this affects the future development of Africa.

Particularly noteworthy are the examples of successful entrepreneurship, such as the company of the Senegalese top chef Pierre Thiam. He cultivates the almost forgotten crop type “Fonio” that is healthy and robust against drought. The product is already very successfully exported to the US. Also examples of sustainable architecture were impressive. Filmmaker Volker Schlöndorff presented his documentary on the agricultural scientist Tony Rinaudo, who has developed a method for reforestation of dehydrated soils in the Sahel region. Speakers such as Rama Yada, former French Secretary of State and UNESCO Ambassador to France, or Andre Azoulay, advisor to the King of Morocco, and Mouna Kadiri, Director Africa Development Club of Attijariwafa Bank, provided further insights into the political and economic developments on the continent.

 Monika Gerdes, (africon), talking to Inge Herbert, Head of Sub-Saharan Africa and Middle East North Africa at Friedrich Naumann Foundation for Freedom.
Monika Gerdes (africon ) speaking to Ingo Herbert, German Ambassador of Bukina Faso