More and more companies look at the opportunities in Africa. Not only the fast economic growth of the continent in the past with more than one billion people, but also the expectation that the next 5 years 11 of the world’s fastest growing economies will be in Africa, drives the interest. But opportunities go together with challenges if you want to benefit from the advantages of Africa.
“It is with reason that Africa is called the rainbow region”, comments Josefien Glaudemans, Partner at Buck Consultants International, who is involved in a wide variety of investment projects in Africa. Across the 54 countries there is a large diversity in more than 2,000 languages and regional cultures”. Due to the colonial past, some countries have strong English, French and German languages skills, which makes it an option for Europe servicing customer support center. Costs of an agent in sub-Sahara Africa vary for the different locations, but can be as low as euro 300,-- to 500,-- per month, which is almost half of the cost in South Africa and about 1/3rd of the cost of an agent in Central & Eastern Europe. New recent customer support centers of outsourced services companies like Sitel, Stream, Sykes proof the growing attractiveness, just like the new centers of Amazon, Ericsson and Airtel.
Leading industrial companies experience also the advantages of investing and producing in Africa. Glaxo Smith Kline, Unilever, Procter & Gamble, Nissin Food, Kia Motor, General Electric and Tata Motors all announced new plants in Africa in the last 5 months. Further analysis of investments shows a wide variety of industries as well as origin of the investors: a.o. Europe, US, Japan, Korea, China and India.
Despite all this good news Africa still has its challenges: poor infrastructure, political instability and strict regulations. Glaudemans: “The improving political and economic stability, the increasing democracy, reforms to ease the path of investors doing business and a growing middle class attract the attention of international companies. They want to capitalize on the growth opportunities and the low costs and mitigate the risks”.