This is a cross-post appearing also at http://www.afribiz.net
As Africa transforms, one of the major industries that will lead the way is information communications technology (ICT). According to Brian Herlihy, Executive Director of SEACOM, “We had a McKenzie report done which showed that the current ICT spending in Sub-Saharan Africa is approximately $70 billion today and it will nearly double by 2015…”
As a whole, Africa is operating on more of a pay-as-you-go, or transaction-based, revenue model and major corporations are starting to mold their business practices to incorporate this. According to Herlihy, “When we start looking across all of the businesses, from banks to insurance to energy to telecom, we’re all realizing that this transaction style of business is becoming a front runner in how we are pursuing our businesses…We think that the African market is unique, and a front runner in the fact that transaction-based businesses are doing very well.”
The transaction-based business model is also contributing to the next stage of economic development in Africa concerning access to credit, “…with the combination of technology and this transaction style of business, is the capacity to start building credit reports and mining data on how people are consuming,” observes Herlihy. “So, a lot of the sophisticated marketing tools that you’re seeing in America or Europe are actually becoming available in Africa, particularly with the emergence of ‘micro credit reports.’ That opens up another merchant opportunity because you are starting to have data that proves that people are good payers and that’s a fascinating opportunity for Africa to continue to expand.”
One of the quickest and most efficient ways to take your business and move it from one country to another is to work with another company in your field that is already in your destination of choice. The obstacle is that a competitor can view your presence as threat to its business.
To avoid this obstacle, you have to demonstrate that your presence can be mutually beneficial and that co-opetition can exist. A good example is sharing the cost and development of core infrastructure in a sector as this tends to be a bottleneck to the market. Herlihy adds, “If you look at any of the emerging markets in the world, they get to a stage where infrastructure becomes a bottleneck and to really get to that next stage of development, infrastructure on a mass scale is an absolute must. I think most countries in Africa are now at that point.”
Herlihy has noticed that business practices in Africa are starting to trend this way, “You’re seeing a new dawn in Africa where people are willing to partner, as opposed to the former mentality which was protecting your own turf.”
Initiative for Global Development (IGD) provides a series of white papers on successful strategies employed by CEOs in Africa.