Business Daily (Nairobi)
Mfonobong Nsehe
7 May 2008
opinion
Truths must be told: Most African companies are only local champions.
Recently, I browsed through Forbes magazine's latest rankings of the top 2,000 companies in the world. As always, the list was dominated by American, European and Asian companies. These included HSBC, Bank of America, JP Morgan Chase and Exxon Mobil.
Only a handful of African companies made it to the list, and they were all South African.
They were 17 in total: Naspers, a diversified media conglomerate; Standard Bank and First Rand, both financial institutions; diversified conglomerates Remgro, Barloworld and Bidvest group among others.
While it's a good thing that at least, Africa was represented in the list, I would argue that Africa can do better.
But the fact that only 17 companies in the whole of Africa could make it to the list of 2000 mega-corporations convinces me that we still have a long way to go.
I could not help but ask: "Where's Africa's place in big, global business?"
Many of the companies that topped the lists are multinationals; companies which decided not to limit themselves to doing business in their countries of origin and braved venturing into uncharted territories in other countries.
Citigroup, a financial services institution founded in the United States, became a global mega - corporation because its managers dared to think beyond America, and ventured into the financial markets of other countries.
Today, Citigroup has operations in about 100 countries, employs 385,000 people and is ranked 24th among the world's biggest companies.
Citigroup, just like Microsoft, Walmart, Procter & Gamble, Toyota, and Home Depot among others, achieved all this because their founders and managers had a global mindset.
And they have reaped the rewards, becoming global brand names. Today, their success stories are told even by the least informed people.
However, it's a different scenario here in Africa.
Most African companies are content with dominating the local markets in their countries and regions. It may be argued that at times, some companies' business models may be peculiar to Africa hence going global might not be a smart move.
On the other hand it can also be argued that many times, CEOs prefer to remain in their comfort zones, ignoring growth and expansion opportunities in foreign markets.
Many times, foreign companies establish their presence in Africa and sell their products and services to us.
We have several foreign banking institutions such as Citigroup, Barclays and Standard Chartered, which are dominating our markets.
How many African banks have thought of opening branches elsewhere?
Nestle, a Swiss food manufacturer feeds Africa with lots of their products.
The same can be said of Microsoft, SAP and Oracle which have offices in Africa, from where they sell a diverse range of software services to us.
When will a Kenyan, Tanzanian or Nigerian food company establish a presence in Europe or America and feed them with uniquely packaged products?
I might be mistaken, but I tend to think that CEOs are either too content with being local champions, or are too chicken-hearted to venture into other markets and explore foreign opportunities.
Needless to say, the benefits of a company going global are numerous in the long run.
For one, there'll be a reduction of dependence on traditional markets. Companies that market internationally can take advantage of booming export markets.
Often, new ideas, new approaches, new marketing techniques learned from exposure to the global marketplace can be successfully applied domestically.
Furthermore, companies which have established global sales have a higher value than strictly domestic companies.
We need more companies with a global outreach. If Africa is ever going to find a place among the global powers that be, we need to market more African ideas and businesses to the rest of the world.
It would be a good thing for Africa to have corporations and brands that would be recognized around the world.
I look forward to a time when a Kenyan Biscuit company would be selling biscuits in the United States and Europe, and software made by an African company being sold across the globe.
It could happen. All we need are visionary CEOs who can go back to the drawing boards to strategise and take their companies to the next level.
Nsehe is a communications student at Daystar University, Kenya.
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