There is no doubt that Africa has taken center-stage in terms of global investment and expansion of operations. The African economic growth story presents opportunities for a multitude of marketing and communications disciplines, including PR. However, exploiting the Africa business opportunities carries a degree of challenges, which need to be understood within the broader context of operating in Africa. At a PRISA networking breakfast, Trish Pichulik reports back on Vincent Magwenya's experiences on building the Magna Carta network on the continent with his knowledge of the general operating conditions in Africa.
In a burgeoning market in Africa of just over one billion people, with 300 million categorised as middle class, the world's eyes are focused on this continent, which is hungry for infrastructure, goods and services. The economic revolution in Africa has been the result of a long and painful journey, but it is now ready for growth as economies, democracy and fiscal management stabilise and become more regulated with governance put in place.
12 to 15 years ago, there were often 15 incidents of conflict happening simultaneously across Africa, and although this has reduced significantly, we still need to be cognizant of pockets of unrest and security issues in certain regions before we embark on providing our services.
The environment is perfectly poised for us to grow our businesses in line with the 2014 focus for economic growth sitting at 5.1 to 5.6% for Africa. If this opportunity is missed, the cost of entry will be a lot more challenging in the future. South African firms have gone a long way to integrate into the continent, although Chinese companies are far more aggressive in their approach, and the French remain well-entrenched in certain regions.
Nigeria remains poised to offer more growth opportunities, however, the pursuit of those opportunities will not be without challenges, as it has been demonstrated through the difficulties that have faced companies like Tiger Brands, MTN and Vodacom, to name a few.
With the big telecoms companies investing in infrastructure in Africa in countries like Nigeria and Ghana, the opportunities for business development are encouraging.
Infrastructure in many regions is still a challenge, and if you want to open offices in countries like Ghana and Nigeria, you need to ensure for example, that you install back-up generators because of constrained energy. Telecoms and technology companies like MTN are paving the way by investing in infrastructure development to reach remote areas by building roads and Google is extending access to broadband by rolling out and enabling infrastructure into remote areas.
There are also misconceptions about doing business in Africa. Many overseas' and local investors believe that if the market is under-developed, the services will be cheap. It works in an inverse way, as you need to invest more intensely, so it makes more sense to enter into partnerships with local agencies that are servicing the region. After doing our sums, we found that it would be cheaper to set up an office in New York than Lagos.
One also needs to be sensitised to the issues and pressures in the regions in order to do business successfully. For example, in many cities in Africa, transport is in dire shortage as well as telecommunications services, so you might need to subsidise the journalists in order to facilitate attendance at an event or a meeting to cover a story.
In addition, there is a huge capacity shortage of journalists in Africa, and there are very few specialists, so part of our reach into Africa as an agency is to invest in capacitating journalists to address the challenges that individuals and newsrooms face on the ground. If this is done correctly, there is no need for 'brown envelope' journalism.
We invest in relationships with the media in a meaningful way by up-skilling, partnering and facilitating growth and development. Remember that as South African-based PR agencies or part of a multinational group, we are still guided by the code of conduct and ethics of the Public Relations Institute of South Africa (PRISA) and other similar international bodies.
Some of the regions in Africa are challenging, particularly where the large majority of media are state-owned and not independent, and in many cases, the former serves to promote financial and political agendas and not fair and free reporting. This situation always mitigates the successful use of the media in PR, and means that you need to resort to other strategies, which most often include facilitating stakeholder relationships, supporting direct communication between clients and the key decision makers in that specific country.
In many African regions, the quickest route to failure in achieving meaningful engagement over policy and regulatory matters is to expose issues on public platforms. This works in a more stable and developed economy such as South Africa, where you can use the media as a channel to put pressure on government or authorities. Outside of South Africa the more successful route is for PR agencies to encourage diplomacy and facilitate direct interaction between clients and authorities.
A country like Kenya has a buoyant PR industry with over 40 agencies due to the good media landscape and large number of independent media houses, coupled with strong internet and mobile penetration and a good infrastructure. Kenya is seen as the gateway to East Africa for many PR agencies.
We are also finding that the awareness of environmental issues by communities and stakeholders has increased, so this needs to be addressed in whatever business endeavour your client engages in, be it mining, manufacturing etc.
The smaller economies in countries such as Namibia and Botswana don't present a big enough growth area for PR agencies in terms of opening offices, so it's advisable to partner with agencies on the ground, and usually on a non-exclusive basis as the market is not big enough.
In countries such as Mozambique and Angola, there are an increasing number of Portuguese companies or individuals setting up operations due to the economic slump in Europe.
As mobile penetration increases, so does the opportunity for PR and communication practitioners to skillfully use this platform to assist their clients. The Mpesa success story in Kenya, which is hailed around the world, bears witness to this.
Countries like Uganda and Zambia have their challenges from a PR perspective. With a lot of rhetoric against foreign investors in Zambia, PR plays an important role to assist clients to engage with the important stakeholders and build meaningful and sustainable relationships to promote the smooth running of their operations.
Ghana is a vibrant growth area for PR firms as development and construction projects abound everywhere, as the country stabilises and becomes more predictable.
We also need to look at the media landscape in Africa and understand where media in the communication mix plays an important role. We've found that BBC is still a trusted source of information in many regions in Africa, particularly where communities distrust state-owned media groups. Radio has strong reach, but most traditional media is limited to urban areas.
For PR agencies to successfully operate in African regions, they need to do a lot of research and understand the dynamics, the pitfalls and the opportunities. Each country has its unique landscape, so you need to be aware of what is happening on the ground, the infrastructural challenges, the security risks, the media mix, as well as the barriers and cost to entry. Partnerships with experienced agencies in the region are still the preferred route to success. The opportunities for South African firms to enter the market are plenty, and many lessons can be learnt from companies and other PR agencies that have paved the way.
About Vincent Magwenya CEO, Magna Carta
Vincent Magwenya has 20 years of combined journalism and corporate communications experience, working for companies such as Reuters Television, Worldwide Television News now known as Associated Press Television News, the Australian Broadcasting Corporation and the South African Broadcasting Corporation.
Vincent is also the former spokesperson to President Zuma and before rejoining Magna Carta, he worked as Director of Communications for Standard Bank Africa and Director of Group Stakeholder Relations Management for the Standard Bank Group.
Vincent has presided over the formulation of communication strategies for clients across sectors and geographies throughout Africa.
P and P Communications (P and P) specialises in public relations and communications in the business-to-business and business-to-consumer sectors across South Africa, SADC countries and select regions in Africa.
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