Analysis

There are various examples of companies doing thriving business in Africa’s rural areas. Through innovative sales, marketing and distribution tactics, they are overcoming common rural challenges such as under-developed infrastructure and low purchasing power. This report examines some of the strategies companies have employed to capture the opportunities in the continent’s hinterlands.

Hot on the heels of China’s US$1tn Belt and Road Initiative (BRI) Conference earlier in May, Indian Prime Minister Narendra Modi launched an equally ambitious ‘Asia-Africa Growth Corridor’ (AAGC) at the India-Africa Summit in Ahmedabad. The continental project, unmistakably a challenger to the BRI’s forays in Africa, will be developed in consultation with think tanks from India, Japan, Singapore and Africa, and will draw funding from India and Japan. The wooing of Africa and the range of options now available to African economies demonstrate their growing leverage on the global stage.

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Synopsis

In the wake of controversial picks for Trump’s cabinet, the spotlight turns to his appointed choice for Secretary of State, the highest diplomatic rank in the United States government. After a brief interlude with Mitt Romney, which would certainly be a favourite pick among Republicans, Donald Trump showed that he would continue with his anti-establishment agenda and decided instead to recommend Rex Tillerson for the role.

More than 640 million Africans, or about 60% of the continent’s population, don’t have access to reliable and affordable grid-connected electricity, and are therefore dependent on energy sources such as kerosene, charcoal and diesel. Likewise, many businesses also suffer from poor power supply. For example, it is estimated that some 95% of the mobile tower sites in the continent’s off-grid regions run on inefficient diesel generators, which significantly drive up costs.

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Franchising can be an effective route for Asian companies to grow their businesses into various African countries. Franchising mitigates many of the financial risks of expanding to a new territory, and the franchisor also benefits from the franchisee’s local knowledge and networks needed to make the business a success.

South African beverage company Soda King Franchising has managed to expand beyond the country’s borders, and is now active in a number of African countries, most of which differ dramatically from its home market. This case study unpacks Soda King’s experiences of building a pan-African franchise business.

 

 

 

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