Published On: June 20, 2022|Categories: News|

As multinationals scan the globe for emerging markets to invest in and the continent of Africa comes under their radar, international executives are faced with a double bind: some of the most promising African countries present the highest risks. The continent is rich in untapped natural resources, a sizable labour force, and new and unsaturated markets. However, political instability, poor infrastructure, natural disasters, lack of regulatory frameworks and policies, lack of skilled talent, famine and disease are all factors that may slow down investment.

Last week, Strathmore University Business School (SBS) hosted 22 graduate students from the Global Network for Advanced Management (GNAM) affiliated business schools for the Global Network Week (GNW) 2022. The participating students were pulled from across the globe with 10 nationalities represented. On the other hand, 29 SBS MBA students had the opportunity to attend the GNW program in other GNAM-affiliated business schools.

The GNAM is a collaboration of top graduate schools of business in the world that seeks to foster intellectual ties among business schools, students and deans from both economically strong regions and those on the horizon of economic development. It was founded by a consortium of 21 schools and launched on April 27, 2012. The Global Network has since expanded to include over 30 member schools. In Africa, only four top business schools have managed to join the prestigious network, and this includes Strathmore University Business School.

The Global Network Week is an annual program organised by GNAM. It gives participating MBA students and Faculty an opportunity to pursue intensive study at another GNAM-affiliated business school in a focused course that leverages the perspectives, programs, and faculty expertise of that school. The network provides an organisational structure to facilitate connections among participants, exchange of ideas, collaboration on data collection and the promotion of research in areas of interest to global commerce.

The theme SBS focused on for this year’s GNW Program was Business Opportunities and Challenges in Emerging Markets with a focus on Africa. The course enabled students to learn about the underlying challenges in these markets and interact with experts and professionals from multinational and local companies that are doing business in Africa. Developing countries are becoming important political and economic forces. They present a wealth of opportunities for entrepreneurs, multinational corporations and investors but also pose a threat to local products and resources.

Unfortunately, many multinational companies have fared poorly in developing countries by adopting cookie-cutter approaches that do not factor in the local context and unique challenges affecting the region they are investing in. Emerging markets are affected by market volatility that can stem from political instability. Investors will then be exposed to fluctuations in exchange rates and price volatility as supply and demand dive during turbulent times.

Despite the challenges, Africa is still a prosperous region and now is the best time to invest. As African economies shift from agriculture-based economies to developed economies, foreign investors can reap high returns on investment by participating in this shift. Emerging markets can experience high rates of economic growth as governments support policies that favour industrialization, which leads to higher disposable income per capita, lower unemployment and better infrastructure. Investors can take advantage of the paucity of infrastructure in these countries by leveraging private and public partnerships, which are good investment opportunities.

Besides infrastructure gaps that may pose challenges, investors need to be wary of institutional voids that may derail their efforts to successfully penetrate emerging markets. An example of an institutional void is the lack of intermediaries like market research firms and credit card systems to efficiently connect buyers and sellers. Absent or unreliable sources of market information may hamper decision-making. Depending on the lens from which a savvy investor looks at the situation, these voids can be viewed as threats or opportunities. The opportunity lies in becoming part of the solution that could make doing business easier for other investors and even local companies.

Political and social systems are an important part of an economy. Investors should be aware of political and social trends that may complicate business operations. If political leaders do not follow the rule of law and are susceptible to corruption, then it would not be advisable to start a business in that country. However, in countries with democratic, stable political systems, investors can forge partnerships with influential local people that can help companies navigate cultural barriers and norms. By giving local companies or individuals a stake in the success of their business ventures, international companies can incentivize cooperation and collaborations that can lead to long-term success.

The emerging African mid-class should be considered by consumer-oriented companies targeting customers at the bottom of the income pyramid. The number of middle-class Africans has tripled over the last 30 years to 313 million people. The reasons for the increase in size and purchasing power of the African middle class include strong economic growth and an increase in available jobs. Besides international brands catering for low to middle-income populations, luxury brands are entering African markets targeting wealthy Africans with more disposable income. Luxury retailers are increasing their outlets to cater for the growing appetite for designer brands.

Africa has a youthful population, which the World Economic Forum recognizes as an untapped opportunity that can fuel economic transformation and growth. Furthermore, Africa has the highest rate of digital adoption which can unlock enormous opportunities for digital software and hardware businesses. The rise of the gig economy has fuelled the popularity of fields such as data analytics, programming, content, mobile and search engine marketing. This digital-savvy labour force can be employed by international companies looking for these skill-sets. Indeed, the African tech ecosystem is vibrant and fast-growing. Some of the African countries with the best tech ecosystems are Nigeria, South Africa, Egypt, Kenya and Rwanda. The sub-sectors that are thriving include; fintech, health tech, edtech, and agritech. The burgeoning tech sectors provide lucrative opportunities for smart investors.

The population boom and rapid rate of urbanisation are fuelling investment opportunities in real estate. Real estate investors that address the need for decent and affordable housing will be able to realise a good return on investments.

The African continent contains 10 per cent of the world’s natural oil and gas reserves. Africa’s natural gas reserves predict 80 per cent expansion by 2035, making the continent a hotspot for investors. The continent is rich in gold, diamond, platinum, uranium reserves and many more natural resources. Currently, only 10 per cent of Africa’s arable land is being cultivated, yet it holds 60 per cent of the world’s cultivable land.

Smart multinational companies are busy planting their stakes in the ground with companies like Coca-Cola with strong distribution networks in practically every African country. Companies that enter Africa can take advantage of the continent’s growth trajectory. The last two decades witnessed many first movers capturing market share before their rivals wised up to the untapped opportunities in Africa. The rise of indigenous entrepreneurs and fast-growing African-owned businesses may soon give foreign businesses a run for their money. Foreign investors can partner with these African pioneers and help them to expand their footprint and support local innovation.

The ‘Africa Rising’ narrative is optimistic and backed by evidence, however, it is important for investors to learn to mitigate the risks they will face. SBS aims to fill this gap by providing local insight gained through experience and access to knowledgeable professionals that understand the African context. Africa is one of the world’s most difficult places to do business and also the one with the most potential. Companies playing transformative roles in solving the continent’s biggest challenges will inevitably reap the biggest rewards.

About the MBA for Executives Programme

Our MBA for Executives Programme is best suited for individuals with at least 2 years of managerial experience and are looking to broaden their knowledge and expertise. This Programme helps them develop their talent and harness competencies necessary for the next level by unlocking their inner potential to discover new horizons. We offer two modes of learning for the MBA for Executives Programme: Evening and Modular. Learn about the MBA for Executives Programme here. Learn more about the MBA for Executives Programme here

Would you like to share an article? Write to us at

Article by Shailja Sharma, Executive Fellow and Coach