With the saturation of markets in North America, Europe, and Asia, more and more investors are attracted by Africa. According to the 2018 UNCTAD World Investment Report, foreign direct investment (FDI) in the region has remained at more than $10 billion over the last three years.
Moreover, the institutional framework lends itself well to it. At the State level, the member states of the ECOWAS continue to intensify their efforts to make sub-regional economic integration useful. At the level of the Private Sector, with the establishment of the African Trade Insurance (ATI) in Côte d'Ivoire in 2017, West Africa benefits from a system of securing investments made in the region. In this article, we will present some keys that will allow foreign SMEs to succeed in the West African market.
The first key is not specific to West Africa but to any business environment where you want to invest. It is crucial to know the business stream in which a company plans to invest. West Africa is a very complex area but also full of opportunities. Even if there are millions of opportunities, the most buoyant sector remains the processing of raw materials. While Africa has the most substantial amount of natural resources in the world, the rate of transformation remains very low. The export of raw material strongly dominates the economy. Investing in the processing of raw materials is, therefore, a large opportunity.
Another key much more specific to Africa is proximity to the population. In the African tradition, actions count for much more than promises. For example, an SME marketing a cosmetic product that has unique features will be more likely to reach its target with local campaigns and tests in real situations than through ads on television or in newspapers, and this is one of the mistakes non-African companies generally make.
Of course, West Africa is a relatively poor area of Africa. However, its population still prefers high-quality products despite their low incomes. For SMEs, it is no longer a question of offering low-end and low-quality products as it may have been before, but to find the right balance between quality and affordable price. This balance has been found the Chinese companies. For example, offering mobile phones almost as powerful as those of major brands such as Apple, Sony, Samsung, or Huawei, but markedly less expensive. It is also the major challenge for all SMEs wishing to conquer the West African market.
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