At the 2014 US-Africa summit President Barack Obama pledged support for the continuation and enhancement of the African Growth and Opportunity Act (AGOA).
This was welcomed by South African delegates who were eagerly awaiting the president’s stance on the matter.
Renewal of AGOA for the next 15 years would mean long term investment and collaboration between businesses in South Africa and the United States.
These are three questions the American businessman should consider before exploring prospects in South Africa.
How do I understand the South African market?
Being the top Design and Tourist destination of the world for 2014, South Africans are extremely trend aware and progressive, the same goes for the businesses they run. If you can spot the trend you can find the customer and adapt your business to offer a relevant product.
It is not easy for an outsider to quickly understand local culture and to relate that to potential business opportunities. In order to navigate these challenges I would suggest using a local company that specializes in this kind of analysis. One example of such a company would be Future Collective, a Cape Town based business that will coach your organization on how to stay relevant in terms of your business practices and product and ultimately find and understand your customer.
What is the ease of doing business in South Africa?
Setting up shop in a foreign country can be logistically challenging in terms of import, export, access to essential services and exposure to a potential customer base. In reference to a previous article, “South Africa Poised for Industrial Boom”, is the designated Industrial Development Zones (IDZ). “These zones specialize in specific industries, clustering relevant businesses for synergy and supply chain integration. Tax benefits are enjoyed by both foreign and local stakeholders. An IDZ is characterized by either being close to or including ports and airports, thus creating the platform to effectively expedite the export of manufactured products.”
Effectively, situating a business in one of these zones gives you the geographical ease-of-access to most of the essential suppliers, customers and services a business needs to succeed.
Will I have the necessary financial services?
South Africa’s financial sector is transformed, well developed, and an industry leader, built on a foundation of strong regulatory and legal frame work. South Africa is often seen as a stepping stone to the rest of Africa and financial institutions have grown to support this. A prime example is Standard Bank that was formed in South Africa and grew to operate in 17 other African countries. Standard Bank is Africa’s largest corporation and where selected as “Best Bank in Africa 2014” by global finance magazine.
If you are looking for a familiar face, Citibank operates from three South African cities as well as 15 other African countries.
US-Africa collaboration creates the potential for exciting new business prospects.
We eagerly await the arrival of the next African-American enterprise.
Matthew Klynsmith earned a business administration diploma at CTI in Cape Town, South Africa. He now works at Strategic Options as an associate partner. To read more reports from Matthew Klynsmith, Go Here Now.
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