IMEA essentials: Africa

From 11 - 18 April NZTE's Trade Commissioner to Africa, Haylon Smith, and Business Development Manager M'Hamed Bahhar, are visiting New Zealand and talking all things Africa in a series of workshops around the country. Find out why Africa is a rapidly growing business environment with opportunities for New Zealand companies by registering now.

Africa connected and ready for business

The African continent is our fifth biggest export market, and despite its size, this is exactly how many New Zealand companies think of Africa - as a single, giant opportunity.

In reality, Africa is a variety of wildly different markets.

Egypt is one of the most developed and diversified economies in the region. Here, there are some exciting, but challenging, opportunities outside the enormous infrastructure developments. These opportunities include areas like clean technology, ICT, food processing and manufacturing.

Nigeria is the most populous nation in Africa with 190 million people and growing. It is set to remain a strong market for New Zealand commodity products like milk powder and butter, and surprisingly, it is a promising market for frozen seafood.

As well as the 'Three Giants' (Egypt, Nigeria and South Africa), NZTE is focused on 13 other countries across Africa, which are most promising for New Zealand exporters.

Forget what you think about Africa

Across Africa, nations are skipping credit cards and moving straight to mobile payment solutions, and bypassing solid-state storage to access the cloud. Jumia, sometimes called the African Amazon, has revolutionised e-commerce on the continent and is now available in 23 countries.

Among New Zealand's own innovators on the continent are Blackhawk Tracking Systems and AranzGeo. Blackhawk Tracking Systems provides GPS software that helps lenders locate vehicles bought through car loans and even disable them remotely if needed. Christchurch based AranzGeo has developed 3D geological modelling software that is now supporting construction and mining exploration in many emerging African markets.

The majority of retail sales happen through independent sellers and store owners, where customers buy what they want, when they need it from a single razor blade, to a sachet of shampoo or ketchup.

Internationalising is rarely easy

Doing business in an African country can be challenging. There is corruption to contend with, as well as bureaucracy and challenges in managing logistics and securing payment.

However, one of the biggest hurdles is getting to grips with the sheer scale and diversity of Africa. Success in Africa requires a healthy dose of realism combined with plenty of optimism. Yet New Zealand success stories are happening all the time in dairy, software, security, agritech, construction and we will see more of them in the future.

Learn more about this diverse and dynamic region with our Africa market profiles.

Register now for our April Africa market updates.

Hear the latest market insights from our Trade Commissioner to Africa, Haylon Smith, and Business Development Manager for Africa, M’hamed Bahhar, on the ever-evolving African landscape, key industry developments and what it takes to be successful in the market.

Hamilton
Wednesday April 11th, 2-3pm 
NZTE, Waikato Innovation Park, 1 Melody Lane 

Auckland
Friday April 13th, 9-10am
NZTE, Level 6, 139 Quay Street

Christchurch
Monday April 16th, 11am–12pm 
NZTE, 5 Sheffield Cres, Burnside

Wellington
Wednesday April 18th, 10-11am 
NZTE, Level 15, The Majestic Centre


Out of Africa: A guide for Kiwi exporters

How do New Zealand’s export firms tackle Africa's vast and complicated market opportunity? ExporterToday put the questions to New Zealand’s Trade Commissioner for Africa, Haylon Smith.

As a whole, Africa's economy is valued at about $US6 trillion, with 3.5 percent GDP growth.

The economies of Egypt, Nigeria and South Africa, known as the ‘Three Giants’, are together worth US$3 trillion. These countries have surprisingly high disposable incomes, strong population growth rates, relatively stable governments, well established distribution networks and long standing multinational presence.

In markets like Tanzania and the Ivory Coast household consumption expenditure is increasing by 10 percent or more, which goes hand in hand with an increase in demand for higher quality products, such as what New Zealand can provide. While Mauritius, a small island to the east of Madagascar, ranks relatively highly (25) in ease of doing business globally.

 

Watch Haylon Smith, NZTE's Trade Commissioner for Africa talk about the realities of doing business in this unique and hugely varied continent.

Video transcript

So, Africa’s a very diverse continent. You’ve got 1.25 billion people living across 54 different countries; you’ve got one billion of those living in Sub-Saharan Africa. The average age in Africa is only 19-years-old. You’ve got 40 percent of the population living in urban areas. You have over a thousand languages. You have 24 Francophone countries. You’ve got one of the fastest-growing regions on the planet, so it’s a hive of activity, it’s a hive of change; there’s a lot of opportunities across the board in Africa.

So, that said, there are still some negatives. Obviously 41 percent of the population in Africa still lives in poverty. The economic downturn and particularly the commodity downturn in recent years has had a significant impact on the exporting countries within Africa, some of those will be well-known to our New Zealand exporters, and that downturn has had an impact on the ability of those markets to get access to foreign exchange and that, in itself, has made trading with those countries far more difficult.

So, very much like New Zealand businesses NZTE is really just starting its entry into Africa. New Zealand currently has three embassies on the continent; in Victoria in South Africa and Addis Ababa in Ethiopia and Cairo in Egypt. NZTE provides trade support from Dubai where we work very closely with our embassies, but more importantly we work very closely with our honorary consuls throughout many more markets on the continent and we work with a range of advisors, consultants, and Beachheads advisors to support New Zealand businesses entering Africa.

One of the key questions that we get is “Where do you start in Africa?” There’s 54 markets broadly split into four regions of north, east, south and west. But it can be a challenging question to ask a new company coming into the market. What we generally do is cut out some of the macroeconomic factors that can significantly impact the ability for a company to do business in those markets, so factors like corruption, factors like foreign exchange, factors like ease of doing business, crime rates; all of those negative factors play a role in where we focus our efforts. And so, NZTE is targeting 16 markets at the moment across a range of Francophone and Anglophone countries and that’s where we put our primary emphasis in supporting New Zealand businesses.

Africa is a significant market. In total it’s a six trillion-dollar market. The three big players are South Africa, Nigeria and Egypt. Together they make up over 50 percent of that six trillion. Africa is generally for those companies that have spent some time in other markets that are looking to expand a successful export strategy. Countries like South Africa, like Egypt and like Nigeria do offer significant opportunities for the right companies.