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Growing in Africa: Building for the future - EY - Global

Growing in Africa

Building for the future

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Questions to consider:

  • How can we inject pace into remediating control issues and demonstrate the need to change the game?
  • How can we foster strong relationships with local government to help future-proof our business?
  • Can we leverage our investment in corporate social responsibility programs to get closer to consumers and improve our insight?
  • How do we obtain visibility and confidence in the execution and management of our investments?
  • How do we sustain growth and performance into the future?
  • How can I account for and positively influence tax volatility?

Laying strong foundations for long term profitable growth is one of the toughest challenges in Africa.

Summary: Challenges to long-term profitable growth include diverse market conditions, speed of consumer change and unpredictable legislation and regulation. Companies need to focus on four key areas to safeguard their future.

Four areas to focus on

In our experience, companies are focusing on four key areas to safeguard the future of their operations in Africa:

  • Focusing on critical control areas
  • Retaining local talent
  • Fostering strong relationships with local regulators
  • Embedding strong corporate responsibility

Focusing on critical control areas: The recurring internal control problems in developing markets are usually in key financial and business process controls, uncoordinated remediation efforts and unmanaged control improvements. This means that parent companies tend to hear about everything, or nothing — neither of which is ideal.

To strike the right balance between local control and global oversight, sustainable change in the control environment requires increased training and awareness, continually reinforced through performance management.

Retaining local talent: Building a strong local team is a long term competitive advantage. It drives local market success and gives companies a talent pool to draw from when expanding the business. Some countries set laws about the proportion of local to international staff, putting even greater pressure on businesses to recruit and retain the right people.

Because of this, a key market consideration for many companies is education levels and availability of local workers.

Fostering strong relationships with local regulators: Governments look for job creation, training and development of small and medium sized enterprises (SMEs) and infrastructural developments as evidence that companies are going to work effectively in local communities.

In return, businesses have the opportunity to use closer community and government relationships to build understanding of the potential timing and scope of tax or regulatory change.

Embedding strong corporate responsibility: Corporate social responsibility takes many forms in Africa. Educational programs include the hospital programs run by P&G with the government, offering childcare education to mothers. In Nigeria, Unilever distributes a million free samples of products to mothers in maternity clinics.

Such partnerships deliver value for the local communities but also offer a highly valuable opportunity to enhance consumer understanding and to develop insights.

 Questions to consider:

Learn more about making your business work in Africa by reading Growing in Africa: capturing the opportunities for global consumer products businesses.

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