I remember reading somewhere that in order to be successful in business in Africa you need deep pockets, patience, resilience and nerves of steel. Having worked in this space I cannot agree more.
By Evita Nyandoro, Sub-Saharan Africa Regulatory Reporting Head at Citibank and SAICA Top 35-under-35 finalist 2015.
The one aspect I can talk to is patience, especially when it comes to building successful teams. The recent announcement of Barclays' disinvestment in the continent after over 100 years of being in the region, as well as the Old Mutual break-up, shows how difficult the financial services regulatory landscape has made it for international companies, especially banks, to justify having subsidiaries outside of their own markets without significantly higher returns. For any major international company, the regulatory costs of adhering to new regulations, for example Basel, Solvency II, and FATCA, now far outweigh the benefits derived from continued participation on the continent, especially given the diminished growth outlook and rapidly depreciating currency valuations for most countries in Africa.
That said, I think that to disinvest due to a short to medium-term downturn is a short-sighted view because, despite all the economic headwinds the continent currently faces, in the long run the continent still has a lot to offer and even more to look forward to - such as a young population, a growing middle class and agricultural potential, among other factors.
For those who are looking to grow with the continent, these tough times are a good opportunity to build successful teams. As I mentioned earlier on, patience is a major element in doing this successfully. Those in the financial services sector would surely agree that finding the right skills in Africa is difficult. Furthermore, in many of the instances where you do find the correctly skilled person they are quick to be offered an even better role for a ludicrous amount of money which most companies could never afford to match. A few have even attempted importing the skills via expatriates but this means that the costs eventually end up outweighing the benefit that person is providing. And in quite a few instances the aforementioned expatriates end up leaving anyway.
So what is the most sustainable way to ensure that you have the best equipped teams? First thing is to ensure that companies have adequately considered the costs of upskilling the personnel when they perform their due diligence when moving into a country.
This is a significant item which many companies who venture into the continent inadequately consider, and it leads to their subsequent demise after having to dig deep into their pockets and losing out anyway. Constant training for whole teams is required to ensure that similar standards are maintained as are found in any other country.
Should a company decide to bring in a large number of expatriates the costs and cultural impact associated with this decision need to be considered and managed upfront. From a cost perspective, the outlay as far as the importing of skills goes needs to be factored in. The cultural impact aspect should not be overlooked, as in some instances this might be misconstrued as an indicator of having a short-term prospects of the company in the country.
For Africa to develop and for companies to thrive in the long run on the continent I believe there needs to be a commitment to developing local talent, as they may be better equipped to navigate the local landscape.
It is always important to define to your teams (the whole team, not just management) the regulatory environment by which they are bound. If a company is a US/UK/RSA entity it is imperative that the entity is very clear and deliberate in communicating the regulatory requirements that your Africa teams are now bound by, as it takes a small oversight from one person in the company to find the company facing scrutiny from their home country regulators.
There have been several instances reported in the media where companies have found themselves on the wrong side of local regulators. The consequences of this are severe, and lead to reputational damage, loss of revenues and payment of massive penalties. The local regulators at this point seem to have progressed and are stricter in enforcing their regulations. As much as global regulations are respected and adhered to, the same regard should be upheld for local regulations. For most companies it is essential to have a compliance team that ensures all regulations are adhered to.
Women in Africa are the most easily undervalued asset that the continent holds. Ensuring that the work environment is conducive for both work productivity and maternal responsibilities guarantees that the company which perfects this will certainly have a long-term loyal workforce that will elevate its agenda.
Although Africa has a patriarchal system according to the OECD, women in Sub-Saharan Africa provide approximately 70% of agricultural labour and 90% of all food. With that statistic in mind it is immediately evident that, given a different opportunity, women in Africa potentially hold the key for many companies' success in building long-lasting and successful teams on the continent.
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