Challenges Facing Africa Businesses and Suggested Solutions


The entrepreneur revolution in Africa is stimulating growth creating fresh opportunities and increasing the number of jobs. But the revolution is not without challenges. This essay will therefore explore the challenges confronting Africa businesses and propose clear and concise solutions to the problems identified.

Exploring the challenges facing African businesses, five major challenges have been identified: inadequate and underdeveloped infrastructural network; unsystematic and disintegrated retail outlook; lack of staunch market research; complicated legal and government regulatory framework, and inadequate skilled professionals.

Touching on inadequate and underdeveloped infrastructural network, it is sad to pinpoint here that in Africa, business growth is hampered by frequent power outage. For instance in Nigeria, companies experience an average 26 power outage in a typical month. Worse still, in Ghana the erratic power outage has crippled many businesses over the past three years. In the year 2015 alone, about 13,000 businesses were affected by by the erratic power outage. This figure conprises of laid off by employers and folding up of some small amd medium scale businesses. In addition to the power woes, there is unrelaible transportation. This unrelaible and unfavorable road network as adversely affected African businesses as majority cannot catch up wth demanding deadlines to satisfy customers demand. Further, the shortage of water supply is another striking problem facing African industries that thrives on water to manufacture their products. Consequently, this has invariably desecrated the image of African businesses in the eyes of foreign investors.

Another challenge facing African businesses has to deal with the unsystematic and disintegrated retail outlook. Traditional, informal retail trade dominate the landscape even among the growing middle class. About 90 percent of of commerce in Africa occurs at these informal retailers, including small and independent stores, kiosks and non organised open air markets. Formal retail such as malls, shopping centers and other defined retail spaces- remains in the nascent stages in most Sub-Saharan countries, limited primarily to a handful of urban areas. Supply chain remains a massive challenge in Africa. Although urbanization is taking hold, much of the urban growth in Africa is informal and uncontrolled, putting overwhelming strains on delivering porducts and services with underdeveloped infrastructure.

Next, lack of staunch market research has bedevilled African businesses in our contemporary time. In Africa, there is a scarcity of data and insight about consumer needs and behavior, as well as the retail environment. The scarcity is even made more challenging because of the diversity of African consumers and markets. There are a host of related macro and environmental differences such as political and legislative issues, basic infrasturcture, cultural differences, social and market structure differences, communication and technology difficulties, accessibilty and many others.

Furthermore, the complicated nature of the legal and government regulatory framework is another challenge facing Africa businesses.It is no secret that the business environment in most Africa countries is hindered by bureaucracy, corruption, ever-changing regulation as well as mutiple currencies and protectionist measure that often result in high import costs. Public sector bureaucracy and licensing of new companies in the Africa continent is a major phenomenom. For instance “BBC (Monday ,13 November 2006) reported that in the Democratic Repubic of Congo, registering a business takes 155 days, while enforcing a contract in Angola involves 47 procedures and takes 1,000 days”. All this infuriate current and prospective businesses and discourages them from unleasing their full potentials.

Finally, the continent of Africa is widely noted for inadequate skilled professionals. This is mainly due to the nature of the educational system in most Africa countries, which is theoritically oriented instead of focusing on the practical aspect. A critical look at the Western world of education will reveal that they places much empahsis on “problem solving techniques” ranging from agriculture to industry to services.This is what make them unique. The problem of inadequate skilled professionals is compounded by the brain drain phenomena- the departure of the fewly skilled professionals in the country to the western world in search of lucrative businesses.The consequence of these brain drain effect is low productivity with its attendant slow pace of economic growth and development.

Now to address these perennial quagmire bedevilling African business, proposing the following solutions is indispensable:

In the first place, to address the challenges of inadequate and underdeveloped infrastructure, there is the need to: buy power generators to supplement the current power supply system in the country as this will lead to a steady flow of sustainable power in the economy; build water tanks to ensure the consistency of water supply;improve deporable roads and construct more roads especially those leading to commercial business centers to facilitate the smooth transaction of businesses in the economy. Further, business magnates should make it a priority to liaise with the government to initiate clear, cutting edge strategy to improve the infrastructures in the economy. This type of assistance can have a multiplier effect on downstream outcomes and impacts, because one new regulation or reform can lead to several new infrastructural projects.

Secondly, to address to challenge of unsystematic and disintegrated retail outlook, there should be a strike in partnership with third party distirbuters and wholesalers to maximize reach, collaborate with traditional retailers at the point of sale and help informal retailers formalize progessively to develop capabilities required to grow along side modern retail. Also, another approach to employ involves collaborating with traditional outlet directly to increase sales and improves distribution, and in the process professionalize the way storekeepers work. Further, establishing a network of trusted third party distributors and wholesalers to accelerate market coverage, teaming their own sales force with distributors to ensure a measure of control should be given topmost priority.

Thirdly, to address the challenge of lack of staunch market research, the best way is to establish programs to identify consumer preferences and behavior in each African market.

Fourthly, to address the complicated nature of the legal and government regulatory framework, current and prospective entrepreneurs need to collaborate with local business networks, develop a strong relationship wih local stakeholders to effectively influence local and government agendas and effect change.

Last but not least, to address the challenge of inadequate skilled professionals, one of the key strategy to adopt should be to launch a graduate recruiting and training program to procide clear career development to increase skills and retention to solve the problem of brain drain in the African continent. Among the lures; offering attractive transfers and sought after jobs rotations. Also, I will ensure that salaries are correctly benchmarked not just against direct competitors especially that of the western world, but also against companies in other fast growing sectors of the world. Further, implementing a monitoring system with quarterly feedback and guidance should also be considered.

In conclusion, it is very important to state categorically here that it takes a collective effort to remedy this challenges confrontng Africa businesses. Governemnt agencies, stakeholders as well as the business magnates in Africa need to corporate to ensure that sustainability and burgeoning of African businesses as this pave way for economic growth and development to take place.

Written by: Sampson Djomor

All questions and suggestions are warmly welcome.

Contact me/WhatsApp me on 0548628764



Ghana Campus News and Entertainment. follow on Fb, Twitter, YouTube and IG: @ugfile

What are your comments on this post?