I have to say Africa's growth is impressive, it has allowed them to attract exporters from growing middle class continents. Which means more companies can expand to this continent. However I think there are quite a few challenges:
(Staff Writer, 2019)
Challenges
A challenge for foreign companies emerging to these countries would be the corruption in the countries. Africa loses $1.26 trillion per year to corruption (Christiaan Keulder, 2021). Furthermore, e African Union say Africa, is the “abuse of 2 entrusted power for private gain – is pervasive and one of the biggest barriers to Africa’s development.” (Corruption in Sub-Saharan Africa -The Missing 5%, n.d.). Companies expanding into the countries can organise partnerships with African businesses that are able to give advice and speak to expertises on these issues.
Some companies speak about the poor quality data, this is desperately needed for multinational business that are looking to enter the market.
I think it is important to recognise the that the African middle-class have different levels of disposable income, including developing nations such as India. Businesses need to come to terms with the fact they "need to earn more than twice as Indians to meet basic household needs" (Nigeria’s renewal: Delivering inclusive growth in Africa’s largest economy, McKinsey Global Institute, 2014)
Africa does have a fast growing demographic with disposable income - young people are eager to consume the same brands as Western parts. Multinationals need to understand that investing in Africa without understanding potential customers can lead to poor performance.
Solution
In order for companies to be successful, it is vital for companies to get in touch with local companies and local government before deciding which of the 54 countries they would like to expand to - preferably countries with a growing middle-class. Additionally, the company should look at the population dynamics, the GDP per capital and the internet penetration, this would help on how the company should interactive with their consumers, additionally it will help the company learn about adapting/diversifying their products to fit into the culture. The continent has a huge potential and can achieve a lot in the next few years, it is important to take advantage of it.
References
Finbarr Toesland (2017). Foreign firms learn lessons of Africa’s growth - Raconteur. [online] Raconteur. Available at: https://www.raconteur.net/global-business/africa/foreign-firms-learn-lessons-of-africas-growth/ [Accessed 22 Mar. 2021].
Christiaan Keulder (2021). Africans think their governments aren’t fighting corruption hard enough. [online] Washington Post. Available at: https://www.washingtonpost.com/politics/2021/01/29/africans-think-their-governments-arent-fighting-corruption-hard-enough/ [Accessed 23 Mar. 2021].
Corruption in Sub-Saharan Africa -The Missing 5%. (n.d.). [online] . Available at: https://thefinancialcrimenews.com/wp-content/uploads/2020/06/Corruption-SSA-2020-Pbd.pdf.