African markets remain one of the most promising for the supply of timber industry products. However, in order for business to be successful here, it is necessary to understand the socio-cultural characteristics of the region. Aleksei Liapunov, Head of Sales in the Africa export market at Sveza, shared his experience on the African continent.
One of the key cultural features to consider when working in Africa is the tendency of local clients to avoid unambiguous answers to questions about their material interests. To get more accurate information, it is better to ask the same question to several clients and, comparing their answers, form a general picture.
From a business point of view, one of the simplest customs is the length of negotiations. In Egypt, negotiations can last for several hours and be accompanied by tea and oriental sweets. At the same time, in South Africa, Tunisia and Morocco, where the influence of Western European business culture is noticeable, negotiations are usually brief and substantive.
In any case, it is crucial to try to honour commitments made both verbally and in writing. This is the basis for building a reliable export relationship, especially in the face of geographical remoteness and cultural differences. Honouring one's commitments also encourages counterparties to follow through.
As an example, Aleksei Liapunov cited a case when, in early February 2022, a new customer from South Africa placed an order for the first container of plywood and made a one hundred per cent prepayment. However, in February it became known that the logistics channels had been closed without the right to return the money. When the opportunity to ship the plywood arose, it turned out that the cost of transport had tripled. Despite the increased costs, Sveza fulfilled its obligations. The counterparty appreciated the company's customer-centricity and became a reliable partner.
Business in Africa is strongly influenced by the colonial past. For example, in South Africa, the business elite still consists of descendants of British and Dutch colonists, heirs of immigrants from British India. In turn, a large number of immigrants from British India can be found in the business communities of Kenya, Tanzania and Nigeria. In West Africa, there are many Lebanese among the business elite. This is due to the fact that for four decades from the end of XX to the beginning of XXI century there was a civil war in Lebanon, which forced the local population to migrate. Representatives of Turkish business also work in this region, which is connected with the activities of Turkish construction companies.
When working in markets on the African continent, it is very important to speak the language spoken in a particular country. For example, for Libya, Egypt and Sudan, this would be English or Arabic. For Tunisia, Algeria, Morocco and the Economic Community of West African States (ECOWAS), it would be French. In Angola and Mozambique, Portuguese is common. For the remaining countries, only English will suffice.
In order to build a competent cross-cultural communication with business representatives, it is worth referring to the experience of world-renowned sociologists and psychologists. In particular, it is useful to consider the typology of cultural dimensions developed by Gert Hofstede. It is generally accepted that his research development helps to better understand the business environment. A comparison of these indices for Russia and African countries may be useful in the course of building productive interaction.
For example, the power distance index reflects people's attitude towards its bearers. The higher the index, the more piety and respect people have for their leaders. In Russia, the power distance index is high, as well as in Africa. That is, there should be no cultural shock and cultural differences here. This is especially true in North and West Africa, where there is a great influence of Arab countries on business culture. Often in these countries, business is built around the family, and the last decision is usually made by the head of the family. There have been many cases where the decision has changed 180 degrees after the father of the family has expressed his opinion.
The next cultural dimension is uncertainty avoidance, which characterises the degree of perception and response to unfamiliar situations. Countries with this high indicator are often characterised by a detailed description of business processes, norms of large contracts, rules and customs. In countries with low uncertainty avoidance, risk in business is perceived more calmly. Here other points of view are accepted, which contributes to the growing importance of personal initiative. In Russia, this index is quite high because of the tendency to bureaucracy. In Africa, this index is much lower because it is part of business life. In countries such as Morocco, Tunisia and Algeria, which constantly have to work with European companies, there is also a desire to avoid uncertainty and to spell out important details of the deal in contracts.
The next cultural dimension to take into account is individualism and collectivism. For example, in individualistic cultures, people tend to see a business or company as something separate. In collectivist cultures, a business is perceived as part of an association. In Africa, due to the rather aggressive external environment, the individualism index is quite low. From a practical point of view, this means that when entering a new market, you will have to convince not just one customer, but an entire association, whose members often consult and make collegial decisions. This approach is found, for example, in Egypt.
Another cultural dimension is motivation to achieve success. For states with a high value of this indicator, such qualities as rivalry, self-confidence, determination, and commitment to material values are characteristic. Countries with low values tend to respect human relationships and cultural values, as well as concern for the quality of life. Masculinity and, consequently, motivation to achieve success are quite high in African countries, again, due to a rather aggressive environment. In Russia, on the contrary, this indicator is lower than on the African continent. In terms of motivation for long-term or short-term benefits, business in most African countries is focused mainly on short-term success due to the high risks associated with the security and political situation.
For example, in Africa, in an election year, business and investment activity may stop due to a change of government team. As another example, Mexico can also be mentioned, which, in terms of the motivation index, is focused on short-term achievement of results. So, after the elections in 2018, the president stopped the construction of the first private airport in Mexico City, which was already 30% built at that time. Since then, work at the facility has not resumed. Similar situations can occur in many African countries.
To summarize, it is important to understand several key points in order to successfully build export channels in Africa. Firstly, the attitude towards the leadership here is as respectful as in Russia, while the level of avoidance of uncertainty is lower. It is not necessary to overly bureaucratize customer interaction. Secondly, from the point of view of individualism, it is better to work with groups or associations. The motivation to succeed in Africa is much higher than in Russia, which sometimes leads to a revision of the terms of delivery, even after the completion of the transaction.
