Ecobank CEO, Albert Essien, has encouraged investors to view Africa as 54 independent growth areas instead of a single investment opportunity.
This is because each country has their own unique political and fiscal system, one country cannot be treated the same as another.
Essien emphasized the importance of maintaining a long-term strategic relationship with African countries, and warned that changing investment strategy when the country is experiencing vulnerability, is short-sighted.
Essien encouraged managing risks associated with doing business in Africa, such as fiscal and monetary policy issues, foreign exchange restrictions, transparency and compliance, political instability and corruption and resource and infrastructure challenges.
Those responsible for market entry strategy in Africa were offered six imperative factors to consider. The importance of:
- understanding the local business culture
- assessing which markets represent the best balance of risk and reward
- finding and vetting appropriate local partners
- understanding local market regulations
- considering local environmental factors
- levels of technological development
Several market entry risks were highlighted:
- Political risk,
- Reputational risk,
- Operational risk
- Physical risk to staff and assets
Essien said it was important keep abreast of market trends and changes by scanning the environment regularly.
“Whatever risks are identified, they are best viewed holistically rather than in isolation. New market entrants will need to develop a clear risk appetite and weigh the opportunity against the cost of risk mitigation, which can be expensive”, Essien said.