By Mitchell Prather, MD, Djembe Communications
Africa continues to be one of the fastest growing regions in the world. Investment is still pouring in and the many African nations are pushing ahead with business-critical infrastructure projects despite the global collapse of oil and commodity prices. An analysis of the African markets in May 2016 said that the “Islamic world is increasingly seeing Africa as a destination for foreign investment.” For Gulf-based private investors, the GCC has begun to offer fewer opportunities over recent years, which means that Gulf money is now increasingly heading to Africa. For communications companies based in the Gulf, now is the perfect time to follow the money.
The opportunities in Africa are widespread and varied – across multiple platforms and many high-growth industries. In the media and digital space, communications firms have enormous opportunities to deliver content and engage with stakeholders and potential customers. A January 2017 article in allafrica.com states that almost 76 percent of the population of sub-Saharan Africa has a mobile phone subscription. Another January 2017 article, in Africanarguments.org, says that “The growing use of social media in Africa represents a boon for civil society…” and that some nations have smartphone penetration as high as 25 percent – although Nigeria and Kenya have over 25 percent.
This growth is rapidly changing the regional PR landscape. Many Africans now rely on digital and social media as opposed to traditional media for their news content, which means that communications companies who are not even based in Africa can market digitally to African consumers. However, local African insights are critical for success. On the corporate side, there is an increasing appetite inside governments and multinationals for reputation management programs offered by consultancies. In some respects, the continent is experiencing the ‘eureka’ moment that the UAE went through many years ago, during the financial crisis – transparency and accountability are everything when it comes to reputation. PR firms that have cut their teeth in high-level consultancy in the Gulf will likely have a competitive edge when entering the African markets.
As more and more foreign (non-African) PR firms enter Africa, we are likely to see the trend of consolidation continue in 2017. There is enormous value in organically grown, African businesses – not only because they know the lay of the land, but also because Africans very often prefer to buy services from organizations they trust, which invariably means African. Any foreign company, irrespective of sector, must take this into careful consideration. Global companies that believe they can install a ‘one size fits all’ suite of ‘world class’ products into African markets will face cultural and professional challenges.
We are likely to see global corporations build networks through affiliate relationships – an ongoing trend. Many foreign marketing firms favor this easy route because it provides them with rapid scale. However, this approach lacks authenticity and in complex African markets, there is a premium attached to local understanding. This is especially important in countries with multiple languages, tribal histories and their own way of doing things. Communications companies in the GCC must take special care when entering Africa to ensure that they employ (as far as possible) locals and spend time and money in learning social and business etiquette in the countries they enter. In some of the fastest growing markets, such as Angola, Ghana, Mozambique and Nigeria, 2017 is likely to see an increase in competition in the communications industry, which whilst welcome from a value perspective, will certainly apply unwelcome pressure on the pool of human capital that is already stretched. It is extremely difficult for marketing and communications firms to find homegrown talent that meets global standards – and as the communications sector grows, so too will salaries and headhunting between companies.
As Africa attracts more businesses from the Gulf, it could well see itself become a hub that links Africa with the US, Europe and the Middle East. Agencies that are used to working in an emerging market environment are often used to working for companies whose leaders may not fully understand what strategic communications is or the value it adds to the organizations they lead. But those who have done well in the Gulf and choose to set up shop in Africa may well find themselves building a solid business in a new global hub.