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COUNTRY FOCUS
financial services and infrastructure,” African brands Group Digital Marketing Manager at PHOTOS: ISTOCKPHOTO, GETTY/GALLO IMAGES
says Chelsea Markowitz, Visiting don’t get their Adclick Africa Media Group.
Researcher of the Economic Diplomacy marketing right
Programme at the South African Institute “Expatriate communities want
of International Affairs. says. “There are many opportunities products they are used to. You won’t find
here; for instance in the security industry, Nigerians queuing up to buy KFC, for
On the flip side, the economy has banking, finance and agriculture.” example, because they prefer their own
some work to do in terms of the ease food. People from the rest of Africa love to
of starting a business. The WEF report Importing African products to cater for sell in South Africa because it’s the most
ranks the country 94th globally in terms the African migrant and expat community developed economy.”
of the time it takes to start a company. makes sense, too. The most recent
Other stumbling blocks include the census suggests that 71% of 2,2-million Hair-care products are hugely popular
burden of government regulation (117th) resident foreigners in SA were born and hair salons run by African immigrants
and troublesome labour relations (140th). elsewhere in Africa. That amounts to are booming. “South Africans have a
“While the new FDI Act is intended to 1,6-million people. different way of treating their hair compared
ensure that foreign investments speak to to other parts of Africa. A Ghanaian woman
South Africa’s socio-economic objectives, An examination of African cross-border living in South Africa will struggle to find
many fear that its onerous regulations trade shows a thriving market. According a proper salon. Many Congolese are, as a
will drive away investment altogether,” to research company SBP, the majority result, catering for this growing market,”
observes Markowitz. of cross-border traders and shoppers says Kenneth Hammond-Aryee, General
are from Zimbabwe, followed by Nigeria, Manager of Ghanaian creative advertising
Excessive red tape Kenya, Zambia, Angola and Mozambique. agency InnovaDDB.
While most traders bought goods in South
Again, Roodt says he is not surprised. Africa to sell in their home countries, Resistance to foreigners
Whilst strict legislation and solid regulatory those traders who sold goods in South
frameworks are important when wanting Africa largely brought with them furniture Whilst Markowitz agrees that South Africa’s
to lure investors from overseas, these and kitchen accessories (such as wooden informal economy may be easier to access
aspects can also deter potential suitors, bowls, spoons and so on), intended for the then the mainstream economy, there are
he says. “South Africa’s cumbersome tourist trade. factors that African entrepreneurs need to
labour legislation, the fact that you require bear in mind. “There is resistance against
all sorts of licences, and that you need to Indeed, expatriates in South Africa foreigners from other parts of Africa, which
register your workers and everything else love to receive products from home. is a big impediment,” she says.
makes it difficult to enter the market as a “The African expat market in South Africa
newcomer, particularly when you are from is huge. Zimbabweans, for example, The real problem of anti-foreigner
elsewhere in Africa.” are looking for traditional pork pies, violence is that it goes beyond large
Mazoe Orange Crush, Tanganda tea and outbreaks. The African Centre for Migration
According to Roodt, business owners Zimbabwean butter,” says Joseph Neusu, and Society’s Xenowatch tool reveals
and aspiring entrepreneurs from other that African migrants face threats and
parts of the continent are often not used xenophobic violence on a daily basis, and
to the excessive red tape. “Elsewhere that a thousand foreign-owned businesses
in Africa you can often open a business
overnight, with fewer limitations.”
How do businesspeople in Africa find
the SA business environment? Colin
Emeka, spokesperson for the Nigerian
Union South Africa (NUSA), believes the
regulations are a problem for newcomers.
But there is more. “A major challenge is
that foreign companies wishing to open
shop in South Africa need to have no less
than R5-million (US$346 000) in their
bank accounts,” he says. “Nigeria is more
relaxed and more accommodating towards
foreign companies.”
That said, once these and other
hurdles are dealt with, South Africa is an
interesting business destination, Emeka
54 strategicmarketingafrica Issue 4 2016
