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African Globalizers Report 2017: African firms taking the world stage


African Globalizers Report 2017: African firms taking the world stage

African Globalizers Report 2017: African firms taking the world stage
Photo credit: AfroChampions Initiative

Over the past two decades, an impressive group of homegrown African companies have been expanding beyond the shores of Africa, and taking on global markets. This report – by Konfidants – is the first ever attempt to map the global journeys and global ambitions of African companies.


Africa’s expected emergence as a global powerhouse will, among other things, require the continent to create its own global giants – the ‘African Samsung’, the ‘African GE’, the ‘African Toyota’. Yet, despite a decade of “Africa rising” and the advent of fast-growing big African corporations, there is still no African company in the Fortune Global 500. However, this could change within a decade – thanks to the emergence of an extraordinary group of African companies that are increasingly taking the world stage. They are the African Globalizers.

This report – by analysts and scholars at Konfidants – is the first in a series of studies designed to understand the global journeys and global potential of African firms. How can Africa produce its own global giants? And why are they important to Africa’s global emergence?

This maiden report focuses on 30 companies with $118.6 billion in combined revenue. It provides a first-hand big picture view – a snapshot – of the geographical reach of African firms in global markets. While future reports will delve into other metrices like the foreign assets, employment and sales of African Globalizers, this maiden edition is deliberately focused on geographical reach – first as a conversation starter, and second as a baseline mapping exercise to enrich the conversation. The report focuses on four main questions: Who are the African Globalizers? Which global regions are they expanding into? What are the prospects of these firms growing into Africa’s global giants? What should be done to create a more a diverse group of globalizers from all parts of the continent?

To be included in the study, a company is required to be headquartered in Africa and have trans-continental footprint – it should have at least two operational subsidiaries (or at least 50% holding in two foreign entities) in another global region other than Africa. There are obviously more than 30 such African globalizers; the 30 firms should thus be seen as a representative, but by no means an exhaustive list.

The Good News

The study has both good news and bad news for the continent. The good news is that African firms are indeed very active in global markets. The 30 African companies profiled have between them over 200 operations or major investment holdings in all major global regions – not just in other emerging markets, but in every advanced market on the planet: Europe, North America and Australia.

South Africa’s Datatec operates in more than 60 countries across 5 continents, and Aspen Pharmacare, the largest pharmaceutical in the southern hemisphere, makes 69% of its revenues from outside the continent. In fact, the globalizers have more operations or holdings in advanced markets (113) than in emerging markets (97). This is remarkable because historically, emerging market companies tend to first expand into other emerging markets before venturing into more advanced markets. The trajectory of global expansion by African firms thus deviates from the conventional models of global expansion by other emerging market firms – from China and India for example.

Crucially, this trajectory is indication that African firms may be far more sophisticated than usually perceived.

The Bad News

The bad news is that outside of South Africa there are very few globalizers from the rest of the continent. 22 of the 30 firms are South African. A few North African firms – like OCP of Morocco, Cevital of Algeria, and Elsewedy of Egypt - have noteworthy footprints in the Middle East, Asia and beyond. And while there exist other non-South African globalizers not covered in the report, major African Globalizers are indeed a rarity especially in the rest of Sub-Saharan Africa.

This raises questions: Why are there few globalizers outside of South Africa? What can be done to improve the situation? How do we use the experiences of South African globalizers to inspire globalizers to emerge from other parts of the continent? Addressing these and other related questions will remain the essential focus of the 2018 and subsequent editions of the African Globalizers reports. The rest of this maiden 2017 report will highlight the key findings and attempt to make sense of the numbers.

But first and foremost, why is any of this important? Why is it important for African companies to globalize?

Much has been said about the emergence of homegrown African multinationals in recent times. For good reason, the discussion is mainly focused on their regional expansion within the continent – especially its impacts on intra-Africa investments and cross-border trade.

But there is another dimension to the African multinational story that recieves less attention – the global dimension. There are several reasons why it matters.

First, Africa needs its own global giants – its own champions and brands on the world stage. Having more African companies expanding beyond the continent is the only way to birth Africa’s global giants. For all emerging markets, the rise of global giants is both a driver and marker of a region’s global competitiveness. Lenovo and Bharti Airtel respectively drive China and India’s global competitiveness in ways African nations should envy and desire.

Second, local companies need to look beyond the continent because growth markets within Africa are still limited despite a growing middle class. In spite of impressive economic growth during the last decade, African economies are not growing and lifting populations fast enough into the middle class to support the growth ambitions of the continent’s companies. The true size of the continent’s stable middle class is less than 10% of the adult population.

Third, competing in global markets is one of the best ways for African firms to acquire world-class technical capabilities and the managerial dynamism required to remain regionally and globally competitive.

Fourth, diversification through global operations is a way for African firms to better mitigate their risks and continue to grow. At some stage in a company’s evolution, local or regional diversification isn’t enough. Companies will need to invest beyond the continent to better withstand shocks and risks that are too closely correlated with African economies such as commodity cycles.

But globalizing comes with risks. When companies are insufficiently prepared for global expansion, venturing into unfamiliar territory outside of the home region could spell doom. Even highly capable global players have suffered casualties while diving deep into distant regions. To succeed in distant regions, emerging African global players must define a unique selling point, develop criteria for partnerships, understand local regulatory and policy environment, and not underestimate even small local incumbent firms.

This report was prepared by Michael Kottoh, Aaron Baneseh, Ahomka Mills-Robertson, Emmanuel Dadzie, Steven Odarteifio, Jacqueline Chimhanzi, and Francis M. Mulangu. Konfidants is a diversified international Advisory Firm supporting companies, governments and international organizations to achieve impact across Africa and other global regions.


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