Doing business in Africa – 15 insider’s tips

by Tania Wannenburg
Doing business in africa

Henning Rasmuss from Paragon Architects shares insights from his personal experience of doing business in Africa.

Henning Rasmuss, director of international projects in Africa and Brazil at Paragon Architects, has been doing work in Africa since 2001. Talking at Architecture + Interior Design Africa, he shared some valuable insights from his personal experience of how business works there. WALLS & ROOFS highlights 15 points:

1.    Be serious about it.
Treat each African client as you would treat your local, platinum clients. Success will not arise from doing the international work in your spare time or during periods of less pressure between local client deadlines. Commit senior leaders in the business to the continental African work.

2.    How do you learn?
Go. If you want to know how to really do business in Africa, you’ve got to go there to build up knowledge. There is nothing like knowledge that you have gained yourself. A lot of knowledge is anecdotal and personal. It is about developing a feeling of comfort for a place and its people. Rasmuss also refers to mentors like Greg Pearson (now of Delta Fund), who would board up to 450 flights per year in pursuit of African business.

3.    Don’t assume.
The best advice Rasmuss received from Pearson is: “Have every conversation, finish every conversation, and never flinch.” You can’t talk about how business works, if you have not talked through the details. Find out how transactions are actually done. Find out how processes are enabled. Find out how to get past the gatekeepers and the obstacles. Don’t pretend that there is no corruption. Don’t assume that it will not cross your path.  

4.    Talk to your taxi driver.
Taxi drivers are worth a fortune in information about how the local economy really functions and how ordinary people live. Ask as many questions as possible and tip them well. Use the time in traffic to squeeze local information from taxi drivers.

5.    If it smokes, it’s a gun.
The world is not a nice place, things really are as opaque as they seem and probably worse. If you start wondering about it, you are going to get into a debilitating freeze. Look the beast in the eye and get on with it. Being cynical helps, but be careful not to unpack everything through cynicism.

6.    Governments.
In African countries, politicians control business access and are the single most enabling or blocking factor for projects. Choose whether you want to work with government clients or private clients – don’t mix the two.

7.    The Red Dragon.
China’s influence in Africa is on par with governmental influence – so either get on the China Boat or get off. Don’t waste your time tendering against a Chinese company in government contracts. We have only seen the start of the real reach of China into Africa.

8.    Consider election cycles.
Don’t start a big building project a year before an election or in an election year. If you kick off a project the year after, you’ll have three to four years to pull it off. Elections are massive business interrupters.

9.    It is corrupt.
The upside of endemic corruption is that you don’t have to guess where it sits. It is in your face. People are amazingly open about how influence functions, and who has to be included in a project’s success stream due to entrenched cultures of patronage and nepotism.

10.    It is tribal.
Business is tribal around the world, not only in Africa. In Rasmuss’ experience business is strongly flavoured by tribal currents in East Africa, while in West Africa it is more subtle. Trying to make projects happen, he has wasted time and energy by arranging meetings between people who would never do business together due to tribal allegiances. Find out where people come from by virtue of their surnames.

11.    Business as usual – not the point.
Why would you leave and go to Lagos to try and make it feel, look, function, smell and taste like home? While it might seem easier to use all your trusted local partners, try to be choosy about the parts of your business logic that you export. The entire point is not about ‘business as usual’. Get friendly with Business Unusual.

12.    Post-conflict countries.
Pertinent to post-conflict countries is the real loss of knowledge about how business should be working. Often the whole point of a project is never to finish it in order to keep the window of opportunity open for as long as possible for as many people as possible.

13.    The value lies in trust.
The question is not what you get paid. It is how and when. The value lies in getting people to trust you and depend on you.

14.    Morals challenged.
You will find yourself in challenging situations and surprising conversations – you need to know your personal limit of what you are prepared to do, and you will say both yes and no to amazing opportunities. You will learn how the world works, but you will need a strong personal constitution.

15.    The great love triangle of construction.
Architecture is the same the world over, everyone wants high quality at a low price in a short time (with only two being viable). This conversation can be held in any language in any country. The key is to figure out whether it is quality, price or time that your client wants really bad and which one of the three can be manipulated.

Final advice: “Stop being afraid. Get on the plane and get on with it.”

Full thanks and acknowledgement are given to Henning Rasmuss from Paragon Group – Architects for the information given to write this article.

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