Local Partnerships: A Key Strategy for Doing Business in African Markets
Working with the right local partner can dramatically increase a business’ likelihood of success in African markets. Not only can having a local expert on your team help businesses navigate country-specific regulations and policies, but it can also facilitate important relationships and a keen understanding of politics surrounding international investment. In addition, using local partners in a business or manufacturing supply chain can have dramatic effects on production costs and help spur job creation and economic development in emerging economies. With many African governments legislating local content requirements for international investors, developing local partnerships to advance business practices is truly a win-win strategy.
Examples of Local Partnerships in Action:
Procter & Gamble in Nigeria: In 2014, Procter & Gamble, one of the world’s leading fast-moving consumer goods corporations, announced a fundamental realignment of its global supply chain strategy, emphasizing optimizing supply and product fulfillment within developing markets as key to its overall growth strategy. By streamlining production and more efficiently using human capital and resources near its developing market production facilities, P&G predicts it can cut $10 billion in overall costs by 2016.
Beyond profit implications, P&G’s new supply chain strategy has powerful implications on the ground. In Nigeria, the corporation has invested heavily in the country’s manufacturing sector, with a $300 million plant representing the largest non-oil U.S. investment in the country. Using a deliberate local content strategy to harness Nigerian human and resource potential, the plant created over 3000 direct and indirect jobs with its offices and suppliers and has engaged over 200 Small and Medium Enterprises (SMEs). Its firm commitment to employing Nigerian citizens and using locally-sourced raw materials has not only solidified P&Gs bottom line, but has attracted local support and helped stimulate the Nigerian economy.
Symbion Power in Tanzania:Symbion Power is an American power company focused on developing complex turnkey electric power infrastructure systems. Its name, echoing the term symbiosis, reflects the company’s deep commitment to and reliance on local partnerships to operate in underserved regions of the world. While Symbion designs and executes construction of power plants and transmission and distribution lines, it relies on local contractors and employees to construct and deliver the product.
In Tanzania, partnerships with local workers help implement Symbion projects and build local capacity. Its Train the Trainers program teaches experienced Tanzanian linemen how to train local labor to construct transmission and distributions systems up to U.S. standards. The company’s many projects throughout the country demand skilled labor, and in training local workers, Symbion demonstrates it commitment to growing sustainable, Tanzanian-driven operations. This strategic initiative not only builds a capable workforce and minimizes cost, but Symbion’s strong use of Tanzanian workers and programs to promote skills transfer helps fuel new business opportunities working with local governments.