Business Opportunities and Challenges in Africa

When a firm want to start a local business, it starts with making research and study of place, the area around the project, services and the possible clients in the area. Same steps but in broader and deeper way apply when a firm want to do business abroad. There is a cultural, geographic and climate differences when doing projects abroad. The new economy developments in Africa attracted international firms to open new branches there. Africa is like any business destination, it has opportunities and challenges. This paper discusses some of the opportunities and challenges that face international firms in Africa.

Opportunities

In business researches and study, retail business is very important indicator for costumers’ purchasing power. The retail market in Africa is witnessing a boom as the middle class level is expanding and getting bigger. Middle class expanses mean more spending on products of lifestyle and food. The other important opportunity is that Africa has a young population with more than 40% less than 30 years old. Which will also need more disposable income.

Challenges

The challenges in Africa market for international firms is represented by the distribution as in general African countries have a weak infrastructure. There is not high roads or roads network to deliver the commodities to the rural areas. In fact, some cases the distributers provide cars and give extra money for people to deliver the product by walking or using old methods of transportation. The other factor night effect consumption is that there is a high rate of illiteracy among the continent. That leads to hardship to attract such a slice by advertisement or other motives. Euromonitor International report note that people in some areas doesn’t know the name of the product, they know from the color of cover. In such a case the manufacturer, will lose costumers is decided to do advertisement a change the look of the product.

Conclusion

Africa like all continents around the...