CAPE TOWN: The challenges are increasingly common ones for Africa’s largest companies, serving customers embattled by insecurity and economic turmoil.
Their home market, South Africa, is racked by joblessness and power blackouts. The economy that gave rise to major banks and telecom firms like Standard Bank Ltd. and MTN Group is now growing less than 2% annually.
They and their peers have pinned their hopes on Africa’s ascendant giant, Nigeria. But that country of some 170 million people is now wrestling with a tanking currency and Boko Haram. These are serious obstacles to its growth in the immediate future that the newly elected government of Muhammadu Buhari will have to deal with after his swearing in.
The troubles in Africa’s two top economies have left executives juggling cost-cutting and aggressive marketing pushes there, while plotting to boost their business in smaller but promising African countries like Angola and Kenya.
“These are risky markets but it would be riskier not to be there,” said Konrad Reuss, Standard & Poor’s Ratings Services’ managing director for sub-Saharan Africa. He acknowledges, though, that “there might be less money to go around for a while.”
“These are still relatively high-growth countries, and these experiences can be a long-term gain,” said Corneleo Keevy of Ashburton Investments, an arm of Johannesburg-based banking group FirstRand. “Expanding in Africa isn’t an overnight play.”
