3 Business Mistakes Africa Is Making

The Continent Africa is most times mistaken to be a single country with one central government. A close study will show that there are 54 countries each independent on its own, with its own people, language, belief and culture and other dependent states within the borders of the continent.

Africa in this 21 century, has become the business hub of most countries and companies because of its vast resources and growing population. In this article, I will categorize all African Nations as one because they all are making almost the same mistake.

In today Africa, starting a business as an entrepreneur without adequate funding is quite hectic and stressful. That is why many of its inhabitants are migrating to other countries. But the big question is “how long will they keep running off?” Most countries now have strict laws on the immigration of foreigners especially those from Africa.

ALSO READ:  How to Invest In Bonds in Nigeria [Detailed Guide]

So how can we make Africa with its vast resource and population to be the business center in the world not just in terms of consumption but in terms of production and manufacturing. The same way Asia is dominating the world, remember that Asia was once regarded as a poor continent.

Below are some of the challenges that African countries are passing through and have refuse to admit it or find a solution to it and thus making it easy for any country to exploit it.

Neo-colonialism

Despite the fact that colonialism is long gone in Africa, we still undergo a different kind of colonialism called NEO-COLONIALISM. Neo-colonialism can be defined as the control or domination by a powerful country over weaker ones (especially former colonies) by the use of economic pressure, political suppression and religion.

In all African country especially Nigeria, Rwanda, Senegal you can see the influence of other country especially in its economy.

Industrialization

Let me take Nigeria for example with its large reserve of Oil, it still doesn’t refine its products in the country but have to export it for processing and then import it and other petroleum products at a higher cost, its impact on the economy is not visible because it is able to keep the its budget afloat from the selling of the “black gold”.

CHECK OUT:  How to Start a Small Scale Diesel Distribution Business in Nigeria

Dependent on Import

Africa is considered as a consumers’ continent because it barely produces anything it needs apart for some agricultural products. Because of this, it relies so heavily on import on things it could have locally produce.

Most economic analysis will say Africa is a dumping site for most foreign goods. That may be true. Let me give an example using Senegal for example. The country main importers are China and the European Union, the import trade between these two countries and Senegal is estimated to cost at 351 Billion West Africa Franc (CFA Franc) -as at when this article was written. The highest the country has ever had was 524.40 Billion West Africa Franc (CFA Franc) in January 2017, but how much does this country make from export to others countries? The amount of export is 163.30 Billion CFA Franc. With a negative balance trade of (-) 187 billion CFA Franc meaning that it is approximately loosing 187 Billion CFA Franc from its trade.

VISIT:  How to Invest in Treasury Bill in Nigeria.

Lack of Innovation

This is a serious issue in Africa, because of Africans heavy reliance on import, the local factory barely tries something new. Most factories are either owned by foreigners or by extreme wealthy business tycoons which are sometimes managed by foreigners.

Only a few countries in Africa such as Nigeria, South Africa, Angola etc. that has an active manufacturing sector that are indigenously owned but the level of the patronizing (purchasing) power of the citizens is very low when it comes to buying on local produces as many of term prefer to buy foreign products.

Though some African countries such as Rwanda, Kenya are gradually becoming more seriously on making it economy to be self-reliance, there are other internal threat that slows its economic activity down such as corruption of politicians and government official, terrorism especially in Somalia and North East of Nigeria and high illiteracy rate among its populace.

I am still optimistic that Africa will be great again, if its inhabitants are ready to take issues on their hands rather to wait for external solution from abroad.

Leave a Reply

Your email address will not be published.