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Looking beyond geographical borders: Building a cross-border business in Africa!

Author

Tawanda Forgive Dube
October 02, 2023

Hello Hustler

We recently launched a Facebook form to capture the ambitions of the hustlers within our community. Out of 100 respondents, 21 shared a common interest.

21 young Africans from South Africa, Kenya, Zambia, Nigeria and Zimbabwe requested guidance on exporting to different countries.

Are you one of the many young, ambitious Africans looking to showcase your work to the world?

Intra-Africa trade is a priority even for the African Union., as shown by the establishment of the African Continental Free Trade Area (AfCFTA). African countries are working on improving trade, and if you strategically position yourself, you can ultimately benefit from this opportunity.

Although trade has the potential to spur economic growth and development, it has not served as a potent instrument for the achievement of rapid and sustainable development in many African countries. While African exports of goods and services have seen their fastest growth in the past decade, the volumes remain low at just 3% of global trade. You can help change this narrative!

The core purpose of the AfCFTA is to create a single market for goods, and services, facilitated by the movement of persons to deepen the economic integration of the African continent.

The AfCFTA is a vehicle facilitating the economic liberation of the continent and ensuring that Africans take full advantage of the trade potential on the continent to create jobs, increase the income and improve the lives of every African while positioning the continent as a force in global trade.

It is mandated with harmonising trade rules and empowering African countries to trade easily by providing a platform for negotiating trade agreements and addressing matters of concern to each Member States.

54 African Union member states have signed the AfCFTA agreement as of September 2023.

You can be an exporter! If you do not know where to start, we suggest you revisit our previous articles on SCAMPER and SWOT Analysis to help you identify opportunities in your neighbouring countries and globally.

Sub-Saharan Africa accounts for 70 per cent of all African goods and services exports. You are in the right place to leverage trading opportunities to achieve success for yourself.


What can you TRADE?

Here are some things you can consider trading:

Regionally:

Agricultural Products: Africa has vast arable land, and regional trade in crops like maize, rice, cassava, and vegetables can be highly profitable.

Processed Foods: Value-added products such as canned fruits, packaged snacks, and processed meats can find a ready market within the region.

Textiles and Apparel: The textile industry is growing, and African entrepreneurs can manufacture and trade clothing, fabrics, and accessories.

Renewable Energy: Solar panels, wind turbines, and other renewable energy solutions can address the growing energy demand across African countries.

Construction Materials: Demand for construction materials like cement, steel, and bricks is high due to infrastructure development. You can be the next Dangote!

Consumer Electronics: Importing and distributing electronics like smartphones, tablets, and accessories can be a lucrative venture.

Healthcare Products: Medical supplies, pharmaceuticals, and health equipment are in demand, especially with the ongoing focus on healthcare infrastructure.

Services: Offer professional services such as IT consulting, logistics, marketing, and financial services to other businesses in the region.

Tourism: Invest in tourism-related services, including hospitality, tour operations, and cultural experiences to cater to Africa's growing tourism industry.

Art and Crafts: African art, crafts, and traditional products have international appeal and can be marketed to tourists and global consumers alike.

Globally:

Minerals and Natural Resources: Export valuable minerals like gold, diamonds, copper, and oil to international markets.

Agribusiness: Export high-quality coffee, cocoa, tea, and exotic fruits to global markets where there's a demand for premium agricultural products.

Technology Services: Offer software development, IT outsourcing, and digital marketing services to international clients.

E-commerce: Sell unique African products, such as handmade crafts, textiles, and jewellery, through global e-commerce platforms.

Renewable Energy Solutions: African entrepreneurs can export renewable energy technologies and expertise to regions looking to transition to clean energy.

Education and Training: Provide online education and training services to global learners, leveraging technology and expertise in various fields.

Fashion and Apparel: Create and market African-inspired clothing, accessories, and textiles to a global audience interested in fashion with a cultural flair.

Film and Entertainment: Promote African films, music, and cultural events on the international stage through distribution and promotion.

Healthcare Tourism: Develop medical tourism services, offering top-quality healthcare services to international patients at competitive prices.

Organic and Sustainable Products: Export organic foods, natural cosmetics, and eco-friendly products to global consumers who prioritize sustainability.

We are assuming that you have an appreciation for the diverse markets, abundant resources, and growing consumer base in Africa. These present a wealth of opportunities for hustlers looking for new challenges.

Now let’s discuss some key strategies and considerations for those looking to embark on this journey.

Key Strategies & Considerations

Market Research and Entry Strategy:

  • Begin by conducting thorough market research to identify promising sectors, countries, and target demographics.

  • Collaborate with local experts and consult relevant trade and investment organizations to gain valuable insights into the regulatory environment and business culture.

  • Develop a comprehensive entry strategy tailored to the specific market conditions, including legal requirements.

Build Local Partnerships:

  • Partnering with local businesses or entrepreneurs can be instrumental in navigating regulatory hurdles and establishing a strong presence in the target country.

  • Consider forming joint ventures or strategic alliances to leverage local expertise and resources.

Compliance and Regulatory Considerations:

  • Africa has 55 countries hence a diverse range of regulatory environments. Ensure that your business complies with local laws and regulations.

  • Where necessary seek legal counsel with expertise in international business to guide you through the regulatory landscape.

Logistics and Supply Chain:

  • Efficient supply chain management is crucial. Assess the logistics infrastructure and transportation networks in your target country.

  • Establish robust distribution channels to ensure timely delivery of goods and services.

Technology and Innovation:

  • Embrace technology and innovation to enhance your business operations. Mobile payment solutions and e-commerce platforms are gaining popularity across Africa.

  • Adapt your products or services to cater to local preferences and needs.

Risk Management:

  • Be prepared for potential risks and uncertainties. This includes political instability, currency fluctuations, and economic downturns.

  • Consider securing insurance and developing contingency plans.

Cultural Sensitivity:

  • Africa is a continent of culture. You need to understand and respect its cultural diversity. Tailor your marketing and communication strategies to resonate with the local population.

Financing and Funding:

  • Explore various financing options, such as crowdfunding, loans, grants, or partnerships with investors.

  • If you are starting big, then seek financial institutions experienced in international transactions.

Starting a cross-border business in Africa can be a rewarding endeavour. It offers not only financial growth but also the opportunity to contribute to the development of the continent. It requires meticulous planning, resilience, and a commitment to building sustainable, mutually beneficial relationships.

Cross-Border E-commerce

Africa is forecast to have the largest number of digital buyers’ growth worldwide.

According to a report by Statista, African online retail has been growing fast in recent years, and the continent is expected to have over 388 million online shoppers by 2027. The report also highlights that Africa has the youngest and second-largest population in the world, which presents a vast digital audience.

Mobile e-commerce dominates the online shopping scene, and various digital payments are becoming more widespread in African countries, which is certainly a key aspect of e-commerce.

A survey conducted by Statista in Nigeria, South Africa, Morocco, Kenya, and Egypt indicated that consumers prefer to purchase clothing, shoes, and consumer electronics online.

Be on the lookout for our next blog post and newsletter as we will be discussing how to start an e-commerce business in Africa

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