While more executives are finding Africa a more attractive location for direct investment, one of the key findings of the Ernst & Young survey was a significant difference between the impressions of those who had not done business in Africa vs. those who have. The perceptions of those who do not have a presence in Africa were quite different from the reality seen by those on the ground.
PERCEPTIONS VS REALITY
GENERAL TONE FROM E&Y NOTICEABLY POSITIVE
COMPANIES DOING BUSINESS IN AFRICA ARE MORE POSITIVE THAN THOSE WHO ARE NOT
AFRICANS THEMSELVES ARE INCREASINGLY UPBEAT ABOUT THEIR OWN CONTINENT
The unfavorable impressions are largely due to concerns about political risk and corruption.
What will bring these perceptions closer to reality? Focus on the facts. For example, the trend toward democracy in which most countries are moving toward some form of democracy, with peaceful changes of government becoming less and less exceptional. Despite the occasional growing pains (in Mali most recently), the degree of democracy in Africa compares well with other emerging regions. As the E&Y study reports, only two African states have been classified as autocracies–(Eritrea and Swaziland) Yet three countries in South East Asia – China, North Korea and Vietnam have that designation.
Why is it continually necessary to reemphasize the true nature of Africa’s political and economic environment? It is possible that the negative impressions are rooted in the past when Africa still hamstrung by its colonial legacy and knocked around by cold war politics. Meanwhile western media and academia seem to have a hard time giving us a deep understanding of the good the bad and the vast gray area in between.
Those doing business in Africa are focused on the current reality that they see in front of them. That reality is about growth and development and emphasizes trade and investment over dependence on foreign assistance. It is up to these businesspeople, especially Africans themselves to give us the accurate, factual and nuanced story of the African business environment.