Can we improve this relationship?
The purpose of this article is to show some key points that can help companies interested in the African market to understand the particularities of this continent, and access great business opportunities.
Trade relations between small West Africans entrepreneurs and European companies are still modest, despite the strong historical connections.
As an African, with experience in the West-African market, my goal is to focus on some of the factors that contribute negatively to this situation, why, and how we can improve them.
Why not make this relationship profitable for both continents?
On the one hand, we have Europe, a developed continent, with less natural resources, standardized operative modes and more expensive labor. On the other hand, Africa, a developing continent, rich in natural resources, a low-priced labor force, and a modus operandi in need of a major reform.
Cooperation between both continents to overcome barriers, especially in the gold and agriculture industry, holds interesting potential.
Through personal experience, it is very difficult to maintain a business relationship with some of the West African countries because there are no large companies and infrastructures that allow quick and efficient responses to the European standards. This ends up worsening business relationships between companies in these two continents.
The technical European way of negotiating diverges with the more ‘disorganized’ form by small African entrepreneurs with less experience.
Furthermore, despite the ‘common’ history of the two continents, they end up being different in many aspects, notably concerning their respective cultures. What we can often consider important in the negotiation rules for a European company, in many cases turns out to have little value for the Africans and vice versa.
Generally, it is easier to look for very practical business opportunities, using the old proverb, ‘time is money’, and take advantage of the supposed fragile business capacity of Africans and try to win more and effortlessly.
But as in any normal commercial relationship there are ‘risks’ and not understanding the procedures of the exporting countries, or lacking experience of west African business culture can lead to costly errors for the buyer.
How to avoid mistakes?
Instead of exchanging emails, talking on the phone or exchanging documents proving the purchase capacity or the existence of the product to sell, a field research and analysis of the West African market is a must. This could vary from contacting, liaising and actual visits to factories and business owners, as Middle-Eastern and Asian companies are doing.
Of course, it is something that cannot be done in a short period of time, the most effective way should be to find someone with knowledge of the region, good in negotiations and can explore new opportunities. The relationship must always be advantageous and profitable for all parties involved in order to simplify the process. Will this method cost extra in staff investment? Yes it will but it can help to prevent costly failures in the future.
Best practices (what, how and who)
To take the gold industry in Guinea as an example, artisanal miners do not have the infrastructure for efficient mineral exploitation, which lowers the extraction amount they have per month, but there is always someone who can collect the production from several mines to gather a large quantity that can be sold for a good price.
However, the interested buyer needs to find the people with market knowledge and field connections so that he or she can convince the collectors to follow the process through of collecting the merchandise from several miners.
This involves an increased responsibility from the collector. In this case, the potential buyer has to assure them that there is such an intention to maintain a healthy trade relationship and long-term gains for both parties.
In my point of view, concerning the trade relations related to the above example, these two continents have much more they can improve on. But it will not develop if both sides don’t try to reach a common agreement on a very profitable business relationship between all the parts involved, based in mutual respect and understanding of the differences between them.
Photo credit : drian_ilie825 via fotolia.com
Pretty good article! I'm just asking myself: don't you think that relative political instability in certain parts of the African (such as Maghreb or Mali) continent also contibutes to the unwillingness of European entrepreneurs to invest in Africa?
Thank you Zandonaide, a well articulated article! Understand a people's culture and therefore business culture from both sides is key. There are many assumptions made by all parties that are not favourable to advancing business to fruition! I believe addressing this important aspect of businesses, then there will be hope for meaningful businesses to all stakeholders!
Good analysis! Thanks for sharing your experiences. As an African living and working in Europe, I wish there were more business exchanges and collaboration between Europe and Africa. A lot of domains of mutual interest. Why not? We must overcome the differences and begin to see what we have in common.