Offshore companies drive sub-Saharan growth

Offshore companies have viewed South Africa as a business gateway into sub-Saharan Africa ever since the 19th century but the market potential has never been fully exploited and much of what business there has been came at the initiative of SA firms.

Recently, however, much greater volumes have been attained due to a spike in interest from firms in the UK, US and Europe. We are seeing a significant shift, both in the scale and volumes of deals and the manner in which they come about. Offshore companies are showing remarkable interest in Africa south of the equator, whereas before, we have had to approach them with proposals.

Tipping Point

We date the tipping point back to the third quarter of 2008, when the current worldwide economic crisis first took hold. South Africa and Africa in general have escaped the fallout to a degree, and so this is where the opportunity currently lies.

This interest in Africa is not a temporary phenomenon, since the problem of sustained growth in industrialised markets is an enduring one. Africa does still need to be developed as a market, in terms of its appetite for sophisticated technologies in high volumes, but the growth potential alone makes it attractive and it is not a very competitive market yet. The lessons that foreign firms have learnt in their domestic markets will stand them in very good stead in Africa.

All these factors point to the continent's sustainability as a business proposition for a rising tide of foreign businesses. It is a self-perpetuating force - the more we meet latent demand, the greater the demand for leading technologies will be. In time, Africa will be on a par with other developing regions in technological sophistication, and when that happens, the companies who got in on the ground floor will benefit the most.

Natural choice

South Africa has much going for it to make it a natural base from which to market to Africa. Our banking system is first-rate, and so is our transport and communications infrastructure. We have the benefit of physical proximity and existing business channels as well as direct trade relations into some African countries. It is relatively easy to do business with us, as English is the business language and we're close to European time zones.

In order to be reliable business partners to foreign companies on the continent, South African distributors, solution and service providers must take note of a few necessities. International vendors are looking for sufficient skills to sell and support solutions.

It is not always necessary to have a presence on the ground. Much of our company's African business is conducted via certified channel partners. In our call centre installations, our customers have basic training in maintaining systems. We also have remote management links from our Cape Town head office, making it unnecessary to be present or to have help on hand.

Where support beyond remote login is needed, and the scale and number of installations justifies it, the company may establish a local in-country office.

Mobile and other opportunities

There is definitely a mobile focus to current African demand. Mobile operators and suppliers of wireless technologies can capitalise on this trend. There is also an opportunity to act as strategic advisors to in-country operators, given the relatively high level of experience of South African firms. The challenge is to identify on area of strength that can add strategic value to African customers and to go in with that as a unique selling proposition.

The recent African trade missions of the Zuma administration have done much to open African doors for SA firms. Angola, currently in the process of rebuilding its infrastructure on a massive scale, offers considerable opportunities in that regard.

There has seldom been a better time to enter Africa, whether with an existing portfolio or new solutions for which opportunities exist. Armed with adequate capacity, well-chosen solutions and the requisite skills, local firms can benefit immeasurably from this shift in the international commercial landscape.