Market Intelligence for Africa · This Global Intelligence Alliance GIA Regional White Paper offers...

Quality information in Africa is mostly

unregistered or even considered

classifi ed in some areas. There are

no universal standards and protocols.

In many cases, local economic and

fi nancial reporting and information

systems are opaque.

EXECUTIVE SUMMARYIn contrast to fi rst world countries, Africa is a continent on the rise.

Development is rapid and dramatic, as Africa plays ‘catch up’ through

a vast array of industries including telecommunications, infrastructure,

energy, banking, housing and education. The challenge for Market

Intelligence (MI) practitioners is to stay abreast of these changes in an

environment where information is a highly perishable commodity and

communications infrastructures are often unreliable.

This Global Intelligence Alliance GIA Regional White Paper offers some

possible solutions to overcoming the inherent MI challenges in Africa,

through the combined expertise of two GIA members in Africa; RV

Conseil in the North and Butterfl y Effect Intelligence in the South.

It starts with an overview of the key economic indicators in Northern

and Southern Africa as well as some of the opportunities that abound

within them, and closes with a few MI best practices within the African

context. Four case studies provide further insight into these best

practices and demonstrate the unique environments that can be found

amongst Africa’s 53 countries.

GIA Regional White Paper 1/2009 Market Intelligence for Africa 1

Market Intelligence for Africa

GIA Regional White Paper 1/2009


TABLE OF CONTENTSEXECUTIVE SUMMARY............................................................................................................................................ 1

TABLE OF CONTENTS .............................................................................................................................................2

1. INTRODUCTION ...................................................................................................................................................3

2. OVERVIEW OF NORTHERN AFRICA .....................................................................................................................4

3. OVERVIEW OF SOUTHERN AFRICA .....................................................................................................................9

4. CHALLENGES IN CONDUCTING MARKET INTELLIGENCE FOR AFRICA ............................................................... 13

5. RECOMMENDED SOLUTIONS ........................................................................................................................... 15

6. BUSINESS CASES ............................................................................................................................................. 17

CASE 1: BUSINESS DEVELOPMENT AND NEW MARKET ENTRY FOR AN INTERNET SERVICES COMPANY

CASE 2: BUILDING A MI CAPACITY TO SUPPORT INNOVATION AND INTERNATIONAL GROWTH

CASE 3: DEVELOPMENT OF AN INTERNATIONAL PRODUCT RANGE FOR AN AFRICAN FOOD COMPANY

CASE 4: MI TO SUPPORT MARKET AND COMPETITIVE STRATEGY

7. CONCLUSIONS .................................................................................................................................................20

8. ABOUT GIA MEMBERS IN AFRICA .....................................................................................................................21

9. REFERENCES ....................................................................................................................................................22

The term “Market Intelligence” which is used in this paper refers to understanding the present and future business

environment by using the intelligence process to provide decision-making support. Terms such as competitor

analysis, technology analysis or customer insight will be used under the overarching term “Market Intelligence”.

“Market Intelligence” should be seen as synonymous with concepts such as Competitive Intelligence and

Business Intelligence.

GIA

Reg

iona

l W

hite

Pap

er 1

/2009

1. INTRODUCTION AND BACKGROUND

Africa is a world in itself. It is home to one billion inhabitants (around 15 percent of the global

population) and 53 countries covering more than 30 million square kilometers, each with

very different climates and environments. There are hundreds of ethnic groups and cultures,

approximately 2,000 spoken languages and stark contrasts in terms of political stability and

economic development.

It is a continent of growing local economies with important natural resources. The market

potential is tremendous, especially in the energy, consumer goods, telecommunication,

industrial equipment, logistics and services sectors. A Harvard Business Review article

(February 2009) entitled ‘Now’s the Time to Invest in Africa’ says that “reliable data show that

a number of sub-Saharan nations have emerged from confl ict in stable condition and that new

macroeconomic forces are poised to have a profound effect – despite the global economic

downturn… Our research on African companies indicates that the continent offers competitive

manufacturing sites, IT outsourcing, and construction services. There is real opportunity on the

ground in Africa.”

Challenges to conducting business in Africa however, do exist. These include poor

infrastructures, transport systems, unreliable electricity supply, logistical issues and the lack of

information for decision making, to name just a few. Arguably, the biggest challenge is the lack

of reliable information, both on a macro level as well as a micro level. Business and decision-

making networks are very specifi c to each area and can be diffi cult to identify.

“To do business in Northern Africa, you must know specifi c information about each area you

want to engage in business. And this is really complicated because of the lack of reliable

business Information. Even when you refer to secondary information sources, you must be very

careful and evaluate your sources, as there is often a problem in the way market research is

conducted,” says M. Karim Ben Bouzid, Directeur Général Adjoint, Industrie des Confi series de Tunisie.

This GIA Regional White Paper gives an overview of Northern and Southern Africa, highlighting

some of the challenges of conducting Market Intelligence on the continent, and provides

practical solutions based on real life case studies and experiences.


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

2. NORTHERN AFRICA: MAGHREB + EGYPT

IntroductionNorthern Africa is composed of 6 countries; Algeria, Libya, Mauritania, Morocco, and Tunisia

(collectively known as the Maghreb) as well as Egypt in the East. Together, they represent one

of the major entry points to the African continent. Each of these countries gained independence

between the twenties to sixties; Egypt (1922), Libya (1951), Morocco and Tunisia (1956),

Mauritania (1960), Algeria (1962).

Table 1. Economic Indicators of Northern Africa States

Sources: IMF - World Economic Outlook 2008 – Year 2007; * Trade Flows: WTO 2007.

Exhibit 1.

Countries in

Northern Africa

On February 17 1989, the Maghreb countries established the Arab Maghreb Union, aimed at

promoting cooperation and future economic integration between the members (a Northern

African Common Market). Due mainly to political reasons, the Union had very limited results to

date. According to a survey by the Morocco Ministry of Economy and Finances, local countries

have been exporting 51 times more to the European Union (EU), than to other Maghreb

countries. Internal exchanges represent only three percent of total local exports.

© Global Intelligence Alliance

US $ bn

134.3

70.0

2.5

75.1

35.0

316.9

128.0

444.9

Country

Algeria

Libya

Mauritania

Morocco

Tunisia

Total Maghreb

Egypt

Total N. Afrcia

m

34.4

6.1

3.0

31.0

10.2

84.7

73.6

158.3

US$

3,903

11,484

952

2,422

3,423

3,741

1,739

2,810

%

4.6

6.8

0.9

2.2

6.3

–

7.1

–

US $ m

30.6

23.8

-0.3

-0.1

-0.9

–

1.9

–

US $ bn

60.2

47.0

1.4

15.1

15.0

138.7

19.2

157.9

US $ bn

27.6

7.8

1.5

31.8

19.0

87.7

37.1

124.8

GDP POPULATION GDP/CAPITA GROWTHRATE

CURRENTACCOUNTBALANCE

EXPORTS WORLD*

IMPORTSWORLDS*

Tunisia

Morocco

Mauritania

LibyaEgypt

Algeria


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

In total, Northern Africa is a leading economic region in Africa, with gross domestic product

(GDP) of US$444.9 billion. Its population of 158.3 million has a GDP per capita of US$2,810.

Maghreb on its own has a population of 84.7 million, and a GDP per capita of 3.741 US dollars.

Inside Maghreb, Algeria is the third largest African economy with a GDP of US$134.3 billion.

Egypt is the fourth largest African economy, with a GDP of US$128 billion. The latter is the most

populated Northern African country (73.6 million),

in contrast to the largest Maghred countries, Algeria

(34.4 million) and Morocco (31 million).

GDP per capita also varies largely from one country

to another. Libya and Algeria are in the lead, thanks

to their energy revenues (US$11,484 and US$3,903),

followed by Tunisia, Morocco, Egypt and Mauritania

(US$3,423, US$2,422, US$1,739 and US$952)

respectively. Egypt has been growing rapidly with a

GDP growth (7.1%), followed by Libya, Tunisia, Algeria,

Morocco and Mauritania. Algeria, Libya and Egypt

rely on oil and gas production, while Morocco and

Mauritania have thriving mining industries.

Other than the contrast in economies, Northern African countries have remained, for various

reasons, very independent from each other. This makes the customization of Market Intelligence

approaches in each country compulsory.

Regional highlightsStrategic position

The proximity of Northern Africa to Europe across the Mediterranean Sea, and to Asia with their

common borders with the Middle East area, endows the region with many strategic advantages

due to its position.

Transport between Northern Africa and Europe for example is relatively easy. Travel by air

between the two regions ranges from one to fi ve hours at considerably affordable prices.

Tourists and cargo can travel from south European cities to Northern Africa in a matter of two

days. This helps facilitate just-in-time management and effi cient supply chains. Today, between

25 and 30 percent of all high value-added global cargo fl ows through the Suez Canal in Egypt

and past the Strait of Gibraltar above Morocco.

“There is almost no place in the world, with two groups of countries (South of Europe and

North of Africa), so close geographically and culturally - and yet so different at the wealth level.

This represents a big potential threat together with a major opportunity! Economic actors have

a key part to play in building a positive evolution, by taking advantage of the huge potential

generated by this unique situation,” says Mr. Zyad Limam, Publisher of the Afrique Magazine.

This proximity has resulted in enhanced mutual understanding, cultural closeness and

communication, which in turn, has enabled Northern African countries to position themselves as

effi cient intermediaries between their neighbours and Sub Saharan countries.

Euro-Mediterranean Partnership (Euromed)

On July 13 2008, the “Union for the Mediterranean” was formed with the aim of fostering joint

projects. Its members include all 27 member-states of the European Union and 16 partners from

the Southern Mediterranean region and the Middle East, including six Northern African countries.

The rotating Co Presidency is now shared between Egypt and France.

“There is almost no place in the world, with two

groups of countries (South of Europe and North

of Africa), so close geographically and culturally

- and yet so different at the wealth level. This

represents a big potential threat together with a

major opportunity! Economic actors have a key

part to play in building a positive evolution, by

taking advantage of the huge potential generated

by this unique situation.”

Mr. Zyad Limam, Publisher of the Afrique Magazine


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

This Euro-Mediterranean Partnership (Euromed) identifi ed six priority projects at the heart of the

Partnership’s efforts. They involve:

• The de-pollution of the Mediterranean Sea;

• The establishment of maritime and land highways;

• Civil protection initiatives to combat natural and

man-made disasters;

• A Mediterranean solar energy plan;

• The inauguration of the Euro-Mediterranean

University in Slovenia; and

• The Mediterranean Business Development

Initiative focusing on micro, small and medium-

sized enterprises.

The 2008 Gaza crisis had stalled some commercial initiatives, but progress is now being made

on concrete joint projects, with key roles likely for Northern African Countries.

Bilateral trade agreements

Bilateral trade agreements within the Arab Maghreb Union have sought to promote exchanges

between Northern African countries. There are free trade agreements between Tunisia and Libya,

Tunisia and Morocco (1999), Morocco and Egypt (1998), Egypt, Jordan, Morocco and Tunisia

(2004 Agadir agreement). In 2009 alone, a preferential trade agreement has been signed

between Tunisia and Algeria, an investment agreement between Libya and Mauritania, and a

maritime agreement between Mauritania and Algeria.

In addition, Morocco has signed a free trade agreement with the US (2004) and Tunisia signed

the fi rst total free trade area agreement with the EU (2008).

Exhibit 2.

Members of the

Euro-Mediterranean

Partnership


Members from the

European Union

Members from the

S.Mediterranean

region and the

Middle East


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

Relative fi nancial stability

Thanks partly to local rules that prevent local banks from investing in some structured fi nancial

products, the local banking industry has not been too severely impacted by the international

fi nancial crisis. Euler Hermes Sfac, a global credit insurance company, even rates some Northern

African countries quite favourably. Tunisia has been given a BB rating, Morocco a B rating,

Algeria a C rating, Libya a C rating and Mauritania a D rating (Scale: AA, A, BB, B, C and D).

Most major local currencies have been quite stable, compared to the Euro. In 2008, the

Egyptian currency increased in value by over 10 percent, the Morocco Dirham by three percent,

the Algerian Dinar by fi ve percent. Only the Tunisian Dinar decreased in value.

While exports may be temporarily affected, Northern African countries are still able to woo

investors from developed countries looking to lower production costs and to benefi t from

growing local economies. Energy producers, Algeria, Libya and Egypt expect a decrease in

income due to the current crisis.

Educated workforce

Northern Africa is by far, the most developed region in Africa. The Human Development Index

(HDI) by the United Nations Development Program combines normalized measures of life

expectancy, literacy, educational attainment, and GDP per capita. It rates Libya 0.84, Tunisia

0.762, Algeria 0.748, Egypt 0.716, Morocco 0.646

and Mauritania 0.557. According to United Nations

research, there is a high rate of literary amongst adults

over 15 years in Northern Africa, especially in Libya

(87%), Tunisia (78%), Algeria (75%) and Egypt (72%).

Qualifi ed employees are therefore available at very

attractive prices. On average, the cost of a local

engineer is about one third that of a European engineer. For instance, Tunisia and Morocco

support information technology businesses, healthcare services (Tunisia), Aeronautics (Airbus

investment in Tunisia) and automotive manufacturers (Renault Nissan plants in Morocco).

Moreover, many people speak French and other European languages, and a large number have

studied in Europe or in the States.

Infrastructure projects

Northern Africa has several massive infrastructure projects in the pipeline. A new international

airport is being built in Enfi dha, Tunisia, 80 kilometers South East of the capital. The fi rst

high-speed train line in Africa, linking Casablanca to Tangier, is being built by Morocco. Other

ambitious projects include the border-to-border East-West Algerian Highway (1,216 km) and a

similar one in Libya (2,000 km) as well as the Tanger Med project, a spectacular harbour being

built in Morocco. In refi ned energy production and storage, eight major refi nery projects are

being planned in Assiout (Egypt), Ras Lennouf and Mellita (Libya), Skikda et Tiaret (Algeria),

Skhira (Tunisia) and Jorf Lasfar (Morocco) at a combined cost of US$25 billion.

Mobile phone networks now cover major areas and the Internet is taking off. Morocco is the

most advanced with 20 percent Internet penetration (2006 UN fi gures), followed by Tunisia

(13%), Mauritania (10%), Egypt (8%), Algeria (7%) and Libya (4%).

Investment friendly measures

Northern African countries have made great strides in attracting foreign investments. Morocco

and Tunisia have been especially active, offering Free Trade zones and tax-free areas, tax-free

benefi ts, capital and earnings repatriation incentives and other fi nancial advantages. These

measures have also been effective in attracting investors from “non-traditional” countries such

as the Middle East, China and Japan.

With a growing population of 160 million and

rising GDP levels, Northern Africa will face growing

demand in numerous sectors; from consumer

goods, public services and healthcare to transport

links, construction and telecommunications.


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

Other initiatives have caught the attention of investors. In March 2009, Algeria launched a 1.7

billion Euro investment fund, while the African Union and African Development Bank (AfDB)

Group have been fostering infrastructure-related programs to attract international investors.

Domestic market development

With a growing population of 160 million and rising GDP levels, Northern Africa will face growing

demand in numerous sectors; from consumer goods, public services and healthcare to transport

links, construction and telecommunications.

GIA predicts that other sectors likely to face favourable growth prospects include e-trade (back

offi ces, warehouses and logistics), mobile-commerce (mobile phone payments) and other high

tech businesses. Opportunities also exist in tourism, especially along the Algerian and Tunisian

coasts, and in agriculture where tensions surrounding food supply should stimulate local

agriculture developments. Organic agriculture and food distribution for instance, can also be an

interesting opportunity.


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

3. SOUTHERN AFRICA

IntroductionThe Southern African region in this GIA Regional White Paper includes all the members of the

Southern African Development Community (SADC), which was established in 1992 to foster

common political interests and greater trade and investment fl ows between Member States.

They are Angola, Botswana, Democratic Republic of Congo, Lesotho, Madagascar, Malawi,

Mauritius, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe.

Exhibit 3.

Members of the Southern African Development Community



GIA

Reg

iona

l W

hite

Pap

er 1

/2009

Uganda

Tunisia

Togo

Swaziland

Sudan

SomaliaSierra Leone

Senegal

Sao Tome & Principe

Nigeria

Niger

Mozambique

Morocco

Mauritania

Mali

Malawi

Madagascar

Libya

Liberia

Lesotho

Kenya

Guinea-Bissau

Guinea

Ghana

Gambia

Gabon

Ethiopia

Eritrea

Equatorial Guinea

Egypt

Dijbouti

Cote

d'Ivoire

Congo

Chad

Central African Republic

Cape Verde

Cameroon

Burkina FasoBenin

Zimbabwe

Zambia

Tanzania

South Africa

Rwanda

Namibia

Dem. Rep.

of CongoBurundi

Botswana

Angola

AlgeriaWestern Sahara

(Occupied by Morocco)

Mauritius

Sources: World Economic Outlook 2008; *Trade Flows: TIPS Database 2006, except Lesotho 2003, Swaziland 2004,

Export fi gures for Angola and Madagascar, 2007.

Table 2. Economic Indicators of SADC Member States

The combined income of the SADC market is approximately US$431 billion and comprises a

total population of 247 million (2007). South Africa is the biggest SADC economy with a Gross

Domestic Product (GDP) of US$283 billion, representing 65 percent of the total SADC market.

The largest SADC country in terms of population is the Democratic Republic of Congo, with

a population of 61 million. In contrast, Botswana, Mauritius, Namibia and Swaziland have

populations of 2 million or less. GDP per capita also varies widely. GDP per capita in Botswana

is US$7,694 per annum while it is estimated to be US$369 in Mozambique and US$166 in the

Democratic Republic of Congo.

The region includes several dynamic economies. Angola is the fastest growing economy, with an

estimated growth rate of 21 percent, followed by Malawi, Mozambique and Tanzania with growth

rates of about seven percent each.

Regional highlightsThe SADC Protocol on Trade

In January 2008, 12 of the 14 SADC Member States established an SADC Free Trade Area

(FTA), committing members to phase out existing tariffs, harmonize trade procedures and

documentation within SADC and to reduce other barriers to trade within the region. The 12

members of the FTA include Botswana, Lesotho, Madagascar, Malawi, Mauritius, Mozambique,

Namibia, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. Together, they make up a

regional market worth US$360 billion with a total population of 170 million. Member economies

US $ bn

61

12

10

2

7

4

7

8

7

283

3

16

11

1

432

Country

Angola

Botswana

DRC

Lesotho

Madagascar

Malawi

Mauritius

Mozambique

Namibia

South Africa

Swaziland

Tanzania

Zambia

Zimbabwe

Total

m

16.3

1.6

61.1

2.4

17.0

13.4

1.3

20.5

2.1

47.9

1.2

39.0

12.2

11.7

247.7

US$

3,764

7,694

166

667

431

264

5,354

369

3,524

5,900

2,450

415

915

55

1,743

%

21.1

5.4

6.3

4.9

6.3

7.4

4.6

7.0

4.4

5.1

2.4

7.3

5.3

–

–

US $ m

–

548

–

92

–

208

160

455

1.126

5.304

131

290

1.306

–

–

US $ m

44.320

4.479

1.587

474

989

665

2.168

2.381

3.393

58.596

1.781

1.536

3.694

–

–

GDP POPULATION GDP/CAPITA GROWTH RATE

EXPORTS SADC

EXPORTS WORLD*


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

have been growing by up to 7 percent a year. Angola and the Democratic Republic of Congo are

set to join the FTA, adding a further US$71 billion and 77 million people to the SADC market.

Comprehensive consultations within the private sector across the region have shown that

deeper regional integration is expected to lead to:

• Increased domestic production,

• Greater business opportunities,

• Higher regional imports and exports,

• Access to cheaper inputs and consumer goods,

• Greater employment,

• More foreign direct investment and joint ventures, and

• The creation of regional value chains.

“If the likes of SADC are effective in removing trade barriers within Africa then whoever moves

fi rst and gets it right, will win Africa,” says Mr. Pieter Spies, Cadbury Managing Director

for Central & East Africa. This theory applies across a myriad of different industries where

successful, fi rst-mover advantage in the region could spell success across the African continent.

Amongst member states, South Africa has been

actively seeking greater trade relationships with

fellow SADC states. The South African Minister of

Trade and Industry, Mandisi Mpahlwa, has embarked

on an aggressive strategy to pursue greater trade

relationships with SADC members to increase further

development in Africa. South Africa has signed a

memorandum of understanding (MoU) on economic

cooperation to strengthen trade with Mauritius. Mauritius is currently one of South Africa’s

largest trading partners with exports to the island amounting to US$242million in 2007.

Digital revolution

Until recently, Internet access in Southern Africa had been slow and expensive. This is changing

rapidly as Southern Africa rapidly acquires the infrastructure required to make high-speed

Internet connectivity assessable and affordable to the masses. Underwater cables being laid

by privately funded companies will connect Southern Africa to the world. Universities will be

able to facilitate research with other institutions, medical facilities may make bigger strides

in improving healthcare, small businesses can compete in the e-economy, and the rise of call

centres could facilitate job creation.

The infrastructure will also make Southern Africa considerably more appealing to foreign

investors, in terms of the ease and effi ciency of doing business in the region.

Benefi ts of reforms

Africa’s gross domestic product (GDP) growth is expected to hold up well even while

global growth deteriorates, as the structural reforms that many African countries have been

implementing over the past few years continue to pay off, says a research paper by South

Africa’s Industrial Development Corporation, entitled “Africa And The Global Economic Crisis:

Opportunities And Challenges”. It predicts that while GDP growth in Africa has moderated

considerably, the continent will continue to experience growth in excess of 3% in the face of

global economic slowdown.

“Widespread economic reforms and notable improvements in overall governance have borne

fruit and attracted foreign investment, while several long-standing confl icts have come to

an end, enabling reconstruction in those countries to begin. This has contributed to vastly

improved macro-economic management, rising incomes and spending, increased investment

in physical and social infrastructure and foreign investment activity in productive sectors,” the

research report states.

“If the likes of SADC are effective in removing

trade barriers within Africa then whoever moves

fi rst and gets it right, will win Africa.”

Mr. Pieter Spies, Cadbury Managing Director for

Central & East Africa


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

2010 FIFA World Cup

Decades of negative news coverage have often presented a one-sided view of Africa in

general. The 2010 FIFA World Cup, to be held in nine cities across South Africa, will offer a

great opportunity to change the image and perception of the continent internationally. During

coverage of the event, the world will be presented with a different view, one of bustling cities,

world-class facilities, speeding highways and an affl uent people.

Widespread media exposure and focus on Southern Africa will enhance the region’s brand as a global

tourist destination and a sophisticated emerging market of choice for foreign investment.


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

4. CHALLENGES IN CONDUCTING MI FOR AFRICA

While Northern and Southern Africa are very different regions, they share many common

obstacles when it comes to conducting Market Intelligence.

Diversity

One cannot paint African countries with the same brush. Their histories, cultures, geographies,

languages, fi scal policies, and legal and administrative systems differentiate them immensely.

For example, Namibia in Southern Africa is a vast country but with a small scattered population.

A large portion of the population lives in the Northern Region of Namibia. Here, fast moving

consumer goods (FMCG) manufacturers face the challenges of containing distribution costs,

maximizing return on investment, and developing effective ‘go-to-market’ strategies with

products that will meet the needs of a largely cash strapped population. Competition in

the capital, Windhoek, is fi erce. There, FMCG

manufacturers need to understand the local

market and consumer dynamics in order to avoid

producing another ‘me-too’ product.

In Mauritius, an island in the Indian Ocean, FMCG

manufacturers face a different set of challenges.

Here, managing logistics, forecasting and inventory plays an important role in ensuring that

products are always available. Mauritius is a French speaking ex-colony of France that enjoys

strong links to French culture. It is one of the wealthier Southern African countries and has a

relatively high GDP per capita. Until recently, it also had a preferential trade agreement with

the EU on sugar and textiles, which has since lapsed. The Mauritian government is now trying

to transform its economy to a knowledge-based one, with a focus on information technology

and seafood. The challenges of generating quality intelligence in Mauritius revolve around

understanding the European infl uences that have intrinsically shaped the distinct Mauritian

consumer behavior.

Lack of structured and reliable information Internet penetration in Africa in 2008 was 5.6 percent, compared to the world average of 23.5

percent. Evidently, online and other advanced communication infrastructures to house and

transfer information in Africa are not as available as in the developed world.

Quality information is mostly unregistered or even considered classifi ed in some areas. There

are no universal standards and protocols. In many cases, local economic and fi nancial reporting

and information systems are opaque. In some places, money can still be a taboo subject and

families who own private businesses are not eager to disclose information. Sources will also be

different from one country to the other.

Information is often only available through networks of people. It is typically those who are well

placed or who are in positions of power that are able to extract reliable information that can

support foreign investment decisions.

Doctor Hennie Brummer, Head of Marketing Assessment & Strategy at Kumba Iron Ore, says that

there is a strong correlation between the level of economic development in any country and

One cannot paint African countries with the same

brush. Their histories cultures, geographies,

languages, fi scal policies, legal and administrative

systems differentiate them immensely.


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

the level of quality information available. It is for this reason that high quality information can

be very diffi cult to acquire in Africa, particularly in the poorest economies. “In these countries,

quality information is not easily accessible because there is no infrastructure that can support

information collection” explains Dr. Brummer.

CorruptionIn many African markets, bribery and corruption can be rife.

Mozambique was ravaged by a war that ended in 2002 and by subsequent massive fl oods that

displaced millions of people. Unemployment, poverty and malnutrition levels are very high,

with 70 percent of the population living below the poverty line. Informal markets account for

60% of the retail trade in Mozambique, with Mammanas (informal hawkers) controlling the

retail market, bypassing duties and value added tax. This makes obtaining reliable, accurate

information through legitimate channels very challenging. Market Intelligence professionals must

have a local network of trustworthy and informed people they can rely on.

BureaucracyFormal or informal agreements must often be obtained for important matters. No large project

can be developed without the support of key personnel at the administrative or political levels.

Even where corruption is not particularly high, there seems to be a strong tradition in Africa on

knowing the right people in order to gain access to direct or indirect knowledge.

Rapid change Due to rapid market changes on a global level and Africa’s increasing globalization, the need for

valuable Market Intelligence is becoming even more pressing.


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

5. RECOMMENDED SOLUTIONS

While Northern and Southern Africa are very different regions, they share many common

obstacles when it comes to conducting Market Intelligence.

Permanent in-depth local knowledgeIn Africa, it is crucial to work with people who have been operating for some time in and

who have deep knowledge of local markets. This includes being attuned to the local history,

current operating environments, supply chains, market strengths and weaknesses, threats and

opportunities, information sources and stakeholders.

In many African countries, it is simply impossible to rely solely on Secondary Data sources in

the public domain. In South Africa for example, Tiger Brands, Nestle, Kraft and Cadbury only

account for 41 percent of the Sugar Confectionery market, while the balance of the market is

proliferated with many small manufacturers and local distributors that trade largely through the

wholesale channel. These local manufacturers and distributors fl y under the radar without even

a website from which to gather basic competitive information.

Local networksIn Africa, being able to go rapidly to the right place and/or to the right person to gather the

relevant qualitative information and support is key. It is imperative to always know whom to

speak with for specifi c types of information. The risks of going through intermediaries include

time ineffi ciency and receiving inaccurate information.

With a large percentage of confectionery products being distributed through the wholesale

channel, Cadbury makes use of a network of contacts within the wholesale trade to establish a

more precise picture of the size of the market and key competitors. “Data from some consumer

research companies can be very unreliable,” explains Mr. Geoff Whyte, Cadbury Commercial

Director for Africa and Middle East, “these researchers don’t read the bottom-end at all.”

Pieter Spies, Cadbury Managing Director for Central & East Africa, stresses the importance of

‘walking the beat’ in Africa. “If you don’t have feet on the ground (in Africa), don’t expert to be

successful” said Spies. Often, fi rst-world information suppliers are unable to provide accurate

data on local markets for this reason.

Choose to work with partners who have operated on the ground for a long while and

who have built large, effi cient and reliable networks of information sources.

Choose to work with partners who have rigorous reconnaissance processes to build

a bank of information on the market using cross-functional teams of experts. Other

than knowledge of the local industries, they need to have constantly updated sources,

cartographies of local stakeholders and concrete access to key people.

Information investigation and validation processes: In opaque and fast moving environments, setting up systematic and rigorous Market Intelligence

processes in Africa is a must. Investigative and validation processes must be used to ensure

you make truly value-added decisions on sound and tested parameters.


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

As a result of the heavy reliance on primary information from expert sources, it is necessary

to employ methods such as the triangulation model shown above, to cross check all your

information. For example, hypotheses may be generated on a company’s key competitors

from expert interviews, followed by a structured process of gathering suffi cient evidence to

convincingly support or refute these hypotheses.

Exhibit 4.

Cross-referencing

Triangulation Model

Confi dentiality and ethicsIn geographies that can sometimes be described as lawless, operating along clear lines of

ethical standards is even more critical.

Choose to work with a partner who is also capable of getting involved in and assisting

you through your operational details with local administrations, customs, suppliers,

partners, potential employees etc. This is one aspect that is quite unique to operating

in Africa. Often, it helps to have a local partner that has deep local Market Intelligence

experience in order to keep things moving in the right direction.

Choose a partner that relies on customized Market Intelligence approaches, validated

surveys and systematic checks.

Choose to work with a partner who adheres strictly to professional standards such as

the Society of Competitive Intelligence Professionals’ Code of Ethics or GIA’s Research

& Analysis Quality System, to ensure integrity throughout the process of information

gathering and generating quality intelligence. You partner should also have in place

concrete training programs for their local staff on how to operate on the ground in an

ethical manner.

A comprehensive approachConducting business in Africa requires knowledge not only of the industry but also of how

things work in general. Those new to any African market may be unfamiliar with the processes

needed to get things moving in the right direction and the right people to get in touch with in

order to avoid delays or interruptions. Achieving real results can be challenging when dealing

with what may seem an administrative labyrinth to outsiders.


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

Triangulation1. Data Collection

Collect all data from Secondary and Primary sources

3. Hypothesis CheckingNote evidence that support or refutes

Identify and gather more data, as needed

Choose promising hypothesis

2. Hypothesis DevelopmentMake observations with data sets and across data sets.

Note trends

Develop hypothesis to answer key questions

Source: Corporate Radar: Tracking the Forces that are shaping your business. By Karl Albrecht

NEED

An international Internet services company, supplying Web sites & online stores to small

& medium sized businesses, faced decreasing markets and aggressive competition, and

sought solutions to be more competitive and to open new developing markets.

APPROACH

GIA member RV Conseil helped this company assess different ways to become more

competitive, identify current business development scenarios and fi nd new markets. After

the recommendations were agreed upon, we also closely managed the implementation of

the recommendations.

SOLUTION

Through our in-depth involvement, we were able to help the company successfully set up

a unit in Maghreb for local production, telemarketing and sales with qualifi ed staff, good

incentives, competitive costs and an optimal location. The company can now also tap the

domestic market potential.

6. BUSINESS CASES

Here, we present four case studies that demonstrate some of the best practices to be applied

within the African context, to suit its unique sets of opportunities and challenges.

Case 1: Business development and new market entry for an Internet services company Industry: Information Technology

Geographic scope: Investigation of various developing areas, Northern Africa.

Methods: Internal interviews, secondary research, expert interviews, analysis, recommendation, local implementation.

Case 2: Building a Market Intelligence capacity to support innovation and international growth Industry: Mining and Chemicals industry

Geographic scope: Northern Africa and International markets

Methods: MI Audit, secondary research, expert interviews, organizational implementation, training, investigation plan, ad hoc researches, workshops.

KEY BENEFITS

A new production and commercial unit that enhances competitiveness

Ability to enter new promising markets

NEED

This large mining and chemicals company needed targeted up-to-date knowledge about

existing & new markets, competitors, public opinions, laws & norms, in order to support

the development of value-added innovation. To be effi cient, a number of company people

had to be involved.


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

NEED

A large diversifi ed Central African company, with access to local fruit production, was

unsuccessful in manufacturing and selling fruit based products (mainly jams), due to poor

local demand and lack of adaptation to international markets. They wanted to turn this

project around to achieve long term sustainable success, especially on international markets.

APPROACH

GIA member RV Conseil worked together with the company’s in-house team to gather

validated and high quality information for decision making. Following a quality

assessment, and internal audit, we analyzed the markets, competition, target market

needs and helped defi ne and build the offers.

SOLUTION

We helped the company develop a portfolio of fruit-based products for local and international

markets. This included close assistance in marketing and developing the commercial mix,

consultant “chefs”, food machinery, expertise management and commercial strategy support.

Case 3: Development of an international product range for an African food company Industry: Food ingredients industry

Geographic scope: Central Africa, and International markets

Methods: Quality testing, secondary research, expert interviews, strategy building, concrete project implementation

APPROACH

Starting from internal & environmental studies, GIA member RV Conseil worked closely

with the company to build its own customized and effi cient Market Intelligence Culture,

Structure & Processes.

SOLUTION

We conducted an internal & external audit and provided general MI training for the

company’s key stakeholders, before structuring a MI cell in the group. This included

setting up an investigation plan, processes (collecting, analysis…), specifi c training &

assistance to build intelligence collaboratively. We also continue to deliver regular support

and MI studies, trainings & workshops when required.

KEY BENEFITS

Ability to capitalize on and monetize large stocks of local fresh fruit.

Ability to launch am international range of fruit based products.

KEY BENEFITS

An ongoing Market Intelligence process that delivers key up-to-date knowledge about the

business environment

Ability to build sound sustainable strategies based on this MI process


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

KEY BENEFITS

Ability to identify competitor behaviour and strategies.

Robust business strategies based on market and competitive insight.

Case 4: Market Intelligence to support Cadbury’s market and competi-tive strategy Industry: Fast moving consumer goods

Geographic scope: Southern Africa

Methods: Secondary research , expert interviews, analysis and scenario planning.

NEED

Cadbury wanted to develop an effective understanding of their competitors in the Sugar

confectionary market. They sought to understand their competitors’ likely strategies and

use this insight to develop more effective strategies for Cadbury.

APPROACH

GIA member Butterfl y Effect Intelligence worked closely with Cadbury and facilitated a

process of gathering information from Primary and Secondary sources, analyzing the

information and developing various scenarios of potential competitive behaviour.

SOLUTION

The process culminated in a two-day workshop where various competitor scenarios were

identifi ed and used to create effective strategies for Cadbury based on holistic competitor

insight and understanding.


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

7. CONCLUSIONS

Many of Africa’s countries have sound economic fundamentals and offer largely untapped

potential. The African landscape however, is constantly progressing and changing. As a result,

information in general is a highly perishable commodity.

It is critical to monitor news and signals in order to identify the trends that will shape the future

of business in the continent. Numerous progressive companies have learnt to overcome the

challenges of doing business there, with the right Market Intelligence support, to enjoy positive

return on investment.


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

8. ABOUT GIA MEMBERS IN AFRICA

Northern Africa – RV Conseil® (Real Value Consulting®) RV Conseil® (Real Value Consulting®) is a Management, Strategy and Competitive Intelligence

Consulting, with offi ces in Paris (France) and Tunis (Tunisia). It is the GIA Member for France

and Northern Africa. Created in 2004, the company’s consultants have a total of 26 years of

experience in Market Intelligence.

As a GIA member, RV Conseil can effi ciently combine the GIA worldwide network experience

and capacities in high quality customized Market Intelligence in more than 100 countries and all

major industries, with its experiences and local involvement.

In the last few years, RV Conseil® has worked with many companies on African projects,

focusing mainly on Northern Africa, Western Africa and Central Africa in industries such as food,

consumer goods, information technologies, B-to-C and B-to-B services, mining and chemicals.

RV Conseil has helped African companies to build world-class offers, international companies to build

sound businesses in Africa, and many organizations to build effi cient Market Intelligence operations.

RV Conseil relies on strong action and a results-oriented culture, rigorous approach and creative

capacities, as well as senior resources with strong operational background in large and middle

sized companies, mixing Market Intelligence ability with international industry and market expertise.

Southern Africa - Butterfl y Effect IntelligenceButterfl y Effect Intelligence is the Southern African GIA member. Butterfl y Effect Intelligence

specializes in Market and Competitive Intelligence specifi cally in Southern Africa and has a

diverse client base, ranging from fi nancial services to engineering; petrochemical to FMCG companies.

Butterfl y Effect Intelligence offers customized ongoing monitoring of the Southern African

market and competitive landscape; workshops and training and industrial research & analysis.

As a partner with GIA, Butterfl y Effect Intelligence has access to GIA’s best-in-breed information

management tools. Butterfl y Effect Intelligence leverages over 15 years of GIA global best practice

in market and competitive intelligence applied with local insight in the Southern African region.

Butterfl y Effect Intelligence prides itself in developing customized Market and Competitive

Intelligence that can easily be converted into action. Butterfl y Effect Intelligence has worked

with many companies from large multinationals looking to assess new markets and develop

their Market Intelligence capabilities, to small companies looking to understand their

competitors or their market more effectively.


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

9. REFERENCES

Abref : plus de 100 projets. Les industriels montrent la voie - Antoine Labey

AFP -16/04/2009 : Un fonds d’investissement pour aider l’agriculture en Afrique

Afrique Magazine 01.03.2009 : Le Maroc face à la crise - Olivia Marsaud

An alternative to annual gas fi ghts with Russia may lie in North Africa - FRANCIS GHILÈS

Bizcommunity.com 3/2009: 2010 - Africa’s greatest brand-building opportunity

Business Day 3/2009: Seize the World Cup as an opportunity to overcome crisis, urges Business Trust

Business Report 3/2009: 2010: getting Africa involved

Business Report 3/2009: Seacom eyes investment in West Africa

Business Report 4/2009: SA fi rms to spread footprint in Africa

Engineering News 2/2009: Big power investment opportunities emerging in SSA – energy analyst

Engineering News 3/2009: SA will see a ‘new breed’ of telecoms operators in ’09

Harvard Business Review 2/2009: Now’s the time to invest in Africa

Internetworldstats.com 12/2008: Internet Usage Statistics for Africa

Interview Reuters 3/2009: Africa can survive global crisis – IMF - Hereward Holland.

Jeune Afrique 15/04/2009 : L’Egypte se rapproche de la Chine

Jeune Afrique 26/01/2009 : EGYPTE, La France, premier investisseur étranger

Jeune Afrique 25/01/2009 : L’envol du dragon égyptien

Jeune Afrique 06/01/2009 Industrie pharmaceutique : Pendant ce temps, chez les voisins. Faïza Ghozali

Jeune Afrique - AFP 19/02/2009: LIBYE - Appel d’offres pour une licence de téléphonie fi xe et mobile

Jeune Afrique 31/03/2009: Le Maghreb résiste au choc de la crise - Jean-Michel Meyer

Jeune Afrique 15/04/2009 : Aide au développement : A la recherche de 15 milliards - Pierre-

François Naudé

Jeune Afrique 26/03/2009 : TUNISIE - FINANCE : A la recherche d’un champion - Samir Gharbi

Jeune Afrique 31/03/2009 : L’Afrique se met au vert : L’Afrique du Nord tire le marché. Faber /

Jeune Afrique 06/01/2009 : Maroc: les industriels au secours de l’éolien - Frédéric Maury

Jeune Afrique 06/01/2009 : Après Pétrole : Lancement d’un fonds africain - Frédéric Maury

La Tribune 08/01/2009 : L’Afrique émerge en Europe avec l’ETF Pan Africa de Lyxor.

La Tribune.fr - 08/04/2009 : Risque-crédit : Coface dégrade quarante-sept pays. maintient en

revanche ses notes pour. l’Afrique du Nord.

L’Economie de l’Afrique, 25/02/09 - Philippe Hugon, Editions La Découverte,

Les Echos 09/04/09 : Alger la Blanche voit la vie en gris - Daniel Bastien

Les Echos 24/03/2009 : Nilesat et Eutelsat signent un nouvel accord stratégique sur le Moyen-

Orient et l’Afrique du Nord

Les Echos 12/03/2009 : L’Afrique enjoint les pays riches à tenir leurs promesses

Les Echos 10/03/2009 : L’Afrique ne veut pas être l’oubliée de la crise

Les Echos 18/02/2009 : Pékin profi te de la crise pour consolider ses liens avec l’Afrique

Les Echos 17/04/2009 : Eclats d’Afrique - Les fantasmes et les tabous de l’Afrique

Le Figaro 08/04/2009: France Télécom à l’assaut du continent africain - Sébastien Acedo

Magharebia in Algiers 1/2009: Algerian report show rise in inter-Maghreb trade – Achira Mammeri

Mail & Guardian 2/2009: Oil-rich Angola looks to diversify economy to avoid slump


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

Moneyweb.co.za 2/2009: Chronic uncertainty

Moneyweb.co.za: 4/2009: How can the developing world respond to the global crisis?

Mybroadband.co.za 3/2009: Broadband strategy for South Africa

Mybroadband.co.za 3/2009: MTN boosted by resilient African market

Sadc.int 2009: SADC Free Trade Area (FTA) growth, development and wealth creation

Sadc.int 2009: FTA Brochure

Sagoodnews.co.za 2/2009: “There’s more to Africa than famine”

Southafrica.info 2/2009: Africa investment ‘will rebound’

Southafricadirect.com 3/2009: SA telecom giants hit the trenches

Sowetan 2/2009: Keeping an eye on the continent

Thedti.gov.za 2009: Why invest in South Africa?

The Herald 2/2009: Africa powering through economic slowdown

The North Africa Journal, 14 February, 2009 : Merger of Tunisian and Libyan Banks in the Offi ng

The North Africa Journal, 15 February, 2009 : Maghreb Economic Performance: A Fair 2008, But

Uncertain Outlook - Arezki Daoud

The North Africa Journal, 15 February, 2009: Is Libya Ready for the Private Sector?

The North Africa Journal, 19 January, 2009 : Pierre Fabre, French Drug Maker Opens Tunisian Unit

The North Africa Journal, 16 January, 2009 : The Faces of North Africa’s Capitalism - Arezki Daoud

The New York Times : February 13,2009 : Solar Power and Geopolitics in the Mediterranean -

JAMES KANTER

The Financial Times, March 11 2009: Algeria turns to Chinese know-how - Eileen Byrne

The Financial Times, March 18 2009 : Libya in move to lure foreign banks - Heba Saleh

The Financial Times, April 8 2009: Algeria set for improved oil licensing - Heba Saleh

The Financial Times, March 2 2009 : France looks to its neighbours in the south - Ross Tieman

Tradeinvestsa.co.za 2/2009: South Africa seeks greater cooperation with Mauritius

Wall Street Journal Europe, January 8, 2009 : Europe’s Southern Escape

Interviewed for this GIA Report were:

Mr. Geoff Whyte, Commercial Director Africa & Middle East, Cadbury

Dr. Hennie Brummer, Head of Marketing Assessment & Strategy, Kumba Iron Ore

Mr. Karim Ben Bouzid, Directeur Général Adjoint ICT - Industrie des Confi series de Tunisia

Mr. Pieter Spies, Managing Director Central & East Africa, Cadbury

Mr. Zyad Limam, Chairman and Publisher of “Afrique Magazine”


GIA

Reg

iona

l W

hite

Pap

er 1

/2009

Global Intelligence Alliance Group

Global Intelligence Alliance Australasia Level 12, 95 Pitt Street, Sydney, NSW 2000, Australia

Global Intelligence Alliance Latin America Rua Joaquim Floriano, 466 cj 306 – Itaim Bibi CEP: 04534-002 – São Paulo, SP, Brazil

Global Intelligence Alliance Canada 174 Spadina Avenue, Suite 302, Toronto, Ontario, M5T 2C2, Canada

GatewayBaltic Elizabetes 51, 1010 Riga, Latvia

Global Intelligence Alliance China Unit 2602, United Power International Plaza, 1158 Jiangning Road, Shanghai, 200060, P.R. China

Global Intelligence Alliance Finland Itämerenkatu 1, 00180 Helsinki, Finland

RV Conseil 48, rue des Moines - 75017 Paris, France

Global Intelligence Alliance Germany GmbH Dorotheenstraße 1, 45130 Essen, Germany

Global Intelligence Alliance Hong Kong 31/F, Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong

McRBC Nogizaka Lilien Heim 601, 1-26-16, Minami-Aoyama, Minato-ku, Tokyo 107-0062 Japan

3mecca 6th F. Kyungjae Tongshin Bldg, 111 Junghak-dong, Jongno-gu, Seoul, Korea 110-150

Americas Market Intelligence (Mexico) Pestalozzi 923, Col. Del Valle Mexico, D.F. 03100 Mexico

Growth Setting Avenida Engenheiro Duarte Pacheco, Amoreiras, Torre 2, Piso 5, sala 9, 1070-102 Lisboa, Portugal

ALT Research & Consulting 105122, Tschelkovskoe shosse, 2, bld.1, Moscow, Russia

Global Intelligence Alliance Singapore 8 Eu Tong Sen Street, #23-81 The Central, Singapore 059818

Butterfl y Eff ect Intelligence North Block, Sheldon Place Offi ce Park, 5 Lone Close, Lonehill, South Africa

RV Conseil Tunisie 11, avenue 02 mars, Manouba, Tunisia

Global Intelligence Alliance UK 55 Old Broad Street, London EC2M 1RX, United Kingdom

Global Intelligence Alliance USA Inc. 1 Penn Plaza, 36th fl oor, New York, NY 10119, USA

Americas Market Intelligence 166 Alhambra Circle, Suite 200, Coral Gables, FL 33134, USA

Global Intelligence Alliance USA Inc. 8770 West Bryn Mawr Avenue, Suite 1300, Chicago, IL 60631, USA

+358-(0)[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

+86-21-6279 [email protected]

+358-10-613-2000fi [email protected]

+ 33-1-42 29 56 [email protected]

[email protected]

[email protected]

[email protected]

+82-(0)[email protected]

+52-1-55-4345 [email protected]

+351-210-480 [email protected]

+7-495-788 59 [email protected]

[email protected]

[email protected]

+33-1-42-29-56-72 [email protected]

[email protected]

[email protected]

+1-305-458-2493usafl [email protected]

[email protected]

For more information, please visit www.globalintelligence.com or contact the GIA representative closest to you:

International

Australia

Brazil

Canada

Central & Eastern Europe

China

Finland

France

Germany

Hong Kong

Japan

South Korea

Mexico

Portugal

Russia

Singapore

South Africa

Tunisia

UK

USA East Coast

USA Florida

USA Midwest

© 2014 Global Intelligence Alliance. All rights reserved.

Glob

al In

telli

genc

e Al

lianc

e

Market Intelligence for Africa · This Global Intelligence Alliance GIA Regional White Paper offers...

Documents

Transcript of Market Intelligence for Africa · This Global Intelligence Alliance GIA Regional White Paper offers...