Africa Presents Unique Challenges for Multinational Corporations

Thabo Mpelele, Sales Manager: Southern & Eastern Africa, Orange Business Services

Despite being plagued by economic uncertainty and socio-economic issues, Africa remains a promising long-term growth opportunity for business; with multinational corporations (MNCs) the world over continuing to enter into the region. When drawing up development and expansion plans any enterprise is faced with the fact that the African region presents unique challenges for those operating within its borders.

Consumer Growth

Consumer growth is a global phenomenon, and it most certainly has high importance for MNCs entering and operating in the African region. In two of Africa’s fastest-growing markets of South Africa and Nigeria, as well as other markets in Africa,  consumers are looking to acquire advantages in their everyday lives, such as mobile and online banking, making internet bookings and online shopping.  The enterprise is having to adapt quickly to the trends in this ever-growing market and by 2025 digital transactions are expected to account for 10% of African GDP growth.

Digital transformation drives the need for infrastructure and services that deliver more than just connectivity.  According to the Orange Business Services 2017 Africa Digital Transformation Survey, 74% of respondents cited digital transformation as ‘critical’ to their company ambition and strategy, with the other 26% citing it as ‘important’.

Further, Gartner’s 2017 Global CEO Survey found that 47% of CEOs reported being challenged by their boards to push for more digital business, while 56% reported that digital improvements had already delivered positive results – but that the response needs to be faster. MNCs entering into Africa need to be incredibly flexible and adaptable in order to thrive.

Digital Transformation

The digital revolution has created new expectations and fundamental challenges for today’s CIOs in Africa, who  must be able to re-evaluate traditional business models, and align their IT strategies with the needs of business operations and with the unique demands of varying markets in the Africa landscape. Rather than an enabler of connectivity ,networks need to become an integrated, seamless part of an overall flexible, secure infrastructure that delivers applications from wherever they run to users anywhere, at any time, and on any device.

Regulatory Issues and the Skills Gap

Africa has the advantage of a young and growing population and by 2034, the continent is expected to have a larger workforce than either China or India. One of the challenges facing African countries, including in South Africa, are skills shortages – not least in the ICT sector.

It is important that MNCs entering or currently operating in the region, make skills development a top priority – no matter what sector they operate in. Having a strong focus on skills development will deliver positively for the enterprise and economic development in the region Skills development is an integral part of building a sustainable business model that is able to adapt to local conditions and success in the ever-evolving African market.

Choosing a digital services partner with innovation and experience at the core is an incredibly important step for any business looking to enter and succeed in the region, since it means the difference between having an IT strategy and an integrated, flexible IT strategy that takes into account the human element in business.

Africa is currently at a crossroads with the strong adoption of reliable business grade broadband Internet services that are allowing enterprises to capitalise on new and important technologies and effectively implement successful digital transformation strategies. The region is undergoing an important shift in business mind-set, and businesses are waking up to the critical importance of this transformation for their success.