The World Bank has forecast economic growth of 3.6% in sub-Saharan Africa for 2019-20, making Africa home to some of the fastest growing economies in the world. Rapid development, a growing middle class, and business-friendly market reforms are generating welcome opportunities for regional small and medium-sized businesses (SMBs).
Here are some of the emerging trends, and a look at how businesses can benefit:
The ease of doing business is set to improve
As governments across Africa see the economic growth and job creation potential of the SMB sector, they are making it easier for entrepreneurs to register and operate their companies. According to the World Bank Group’s Doing Business study, both Nigeria and Togo have shown remarkable improvements when it comes to ease of doing business.
A pilot portal, allowing business owners to register a company online in a single day, also recently launched in South Africa.
While many African countries have a long way to go in terms of minimising red tape and upgrading infrastructure, they are certainly taking steps in the right direction.
What business owners can do: Get acquainted with the digital tools available in your area of operation that can help you to streamline processes like business registrations, filing tax submissions, and opening business bank accounts.
Admin loads are lightened by automated software
Tools that were previously too complex and expensive for smaller businesses are becoming more affordable and accessible. These days, most businesses in Africa have the budget to automate their payroll and accounting with a cloud subscription software solution.
Small businesses are even considering advanced tools such as artificial intelligence (AI) to automate processes like:
- Email marketing
- Data entry
- Customer service
What business owners can do: Look for automated software solutions for manual processes, like making calculations and keeping records. The hours you free up can then be used to focus on sales or billable work.
Connected customers are information seekers
Modern customers use their mobile phones as portals to knowledge and information. Whether they are researching big-ticket purchases, making enquiries, posting complaints on social media, or providing user reviews on Google platforms, consumers use digital channels to access what they desire from companies of all sizes.
With over 525 million Internet users in Africa – approximately 40% of the population – small businesses cannot afford to ignore this trend.
What business owners can do: Use digital technologies for marketing and customer services. Chatbots can answer customer queries in real time; you can create interesting web content using tools like Canva or Piktochart; and you can use a Google My Business Account to create a free online listing, which makes your business searchable.
Trade to expand
With the Continental Free Trade Area (CFTA) intending to simplify importing and exporting across the continent, Africa is set to experience more intra-Africa trade. Over 40 countries have signed the agreement, and those not yet part of it are still likely to join. This could aid continent-wide economic growth while reducing costs as we start to use products from neighbouring countries as opposed to ones from other continents.
What business owners can do: Consider the opportunities of cross-border trade and how it will affect your supply chain. Look to build relationships with suppliers and customers in other countries, and contact their chambers of commerce and international trade departments to take advantage of any opportunities they might present.
Fourth Industrial Revolution – why the hype?
There has been much hype around the “Fourth Industrial Revolution”, also known as “Industry 4.0” or “4IR”. This industrial revolution is driven by connected devices and sensors, known as the Internet of Things (IoT), advanced robotics, intelligent software, cloud computing, AI, virtual and augmented reality, 5G, 3D printing, and a host of other technologies.
While some African cities still face challenges with reliable electricity supply or fibre access, technologies are becoming more and more affordable and accessible to small businesses, allowing them to compete effectively with larger companies. Knowing when to come on board is where the trick lies – not too soon for your customers, but not so late as to miss the wave.
What business owners can do: Investigate how small businesses in Africa are using technology. What kind of opportunities could AI and cloud-based solutions offer you? Could robots enable new manufacturing options for your company? And most importantly, what effect could this have on your customers and workforce?
Leading Africa’s growth
Small and medium-sized businesses in sub-Saharan Africa are known to be resilient, making this time of fluctuating economic and social trends, changing consumer behaviour, and evolving technology burst with opportunity for your small business.
With Africa on the rise, it’s a great time to be an entrepreneur.
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