Businesses within a trade and investment environment have spent most of the last fifteen months attempting to adjust to unusual conditions. While the struggle against the pandemic is far from over, there is now a glimmer of hope and optimism in the air. The reality of things now is that companies or individuals that want to trade and invest in Africa must adjust their approach in order to survive.
Various reports suggest that economic recovery from the pandemic could take 2 years, or more. The Africa’s Pulse report which was recently released by the World Bank, suggests that economic growth in sub-Saharan Africa will decline from 2.4% in 2019 to between -2.1% and -5.1% in 2020 and beyond, depending on the success of measures taken to mitigate the pandemic’s effects.
The pandemic has presented a challenge for businesses to reinvent themselves in order to survive and take advantage of prevailing economic opportunities; the main way of achieving this is by restructuring themselves and their business operations. Adaptability is the key to solving this conundrum, and any entity that is not able to adapt and be agile within a short period of time is unlikely to survive in the long-term. The inability to adapt quickly or become agile and take advantage of economic opportunities in the post pandemic environment is one of the key challenge’s businesses are facing in Africa. So how do businesses that wish to take advantage of trade and investment opportunities in Africa navigate the new post pandemic world, and what are the economic opportunities?
The Do’s and Dont’s of Trade and Investment in Africa Post Pandemic
The Do’s
Technology is now a game changer for businesses – The rapid adoption of technology, digitisation, and new ways of working will continue to accelerate. Most of the businesses that did not embrace technology at the onset of the pandemic are nowhere to be found today.
The name of the game is surviving rather than economic efficiency – To secure survival in the post-pandemic environment, contingency planning should be integrated into every link of the value chain. Businesses will have to be much more strategic in deciding which alliances are vital and which are transactional, rather than building relationships based on leverage and getting the better end of the bargain wherever feasible.
Trade and investment initiatives need to look inwards; hence the strengthening of intra-regional and Intra-Africa trade is critical. Regional partnerships are critical for businesses. There needs to be concerted efforts to harmonize trade-related regulations, customs controls, and reduce both tariff and non-tariff barriers. The implementation of the African Continental Free Trade Area (AfCFTA) provides opportunity for this to become a reality.
The Don’ts
Don’t be stuck in your old ways – Companies that hurry back to old ways of trading in Africa may very well stumble and stagger in the decade to come. The pandemic has given companies that want to trade and invest in Africa the opportunity to transform and prepare for a more turbulent world. First, they must be able to fully reimagine the boundaries of their company from an African trade and investment perspective.
What do you want inside vs. outside? In other words, post pandemic environment (the outside) dictates that companies that revert to business as usual (the inside) will not survive for long, the way businesses must now function are dependent on the adoption of a set of different rules and skills. These emerging post pandemic rules and skill sets are going to be based on two key principles, namely the ability to be agile and quickly adopt change, and secondly, the mindset to understand the importance and necessity for change.
Don’t assume anything – Don’t take your existing clients for granted, post pandemic you should throw away old assumptions: The raw customer needs that will define your industry may be drastically different. What are your customer’s needs? Be resilient and adapt as you progress, responding to your customers’ evolving needs. And beware of new entrants that could leapfrog you to meet those needs faster, cheaper and better.
In conclusion, your Africa trade and investment strategy post pandemic will be less about beating your economic opponents and more about how businesses can help to battle a bigger, common adversary, such as climate change, pandemics, or maybe socio-political ills such as inequality.