Southern Africa: The Next BRIC

April 21, 2011. Southern African Development Community nations welcome foreign direct investment, proclaimed South African Deputy President Kgalema Motlanthe in March 2011. The first step for foreign investors is to invest in market entry research to evaluate the business potential of Southern Africa markets verses concerns over local governments, intellectual property rights, business practices, partners and possible market barriers. Best practices in such market intelligence are discussed in the Market Intelligence for Southern Africa webinar.

We speak with Stuart Maclachlan, Managing Partner at Butterfly Effect Intelligence, an M-Brain (formerly GIA) Member of the M-Brain (formerly Global Intelligence Alliance) network and co-presenter of the webinar.

What global role do you see for Southern African nations?

“South Africa’s admission into BRIC and its seat on the United Nations Security Council will ensure that Africa has a voice in all key global affairs. It will also accelerate reform and global financial, developmental and trade architecture.

The number one challenge for governments, consumers and businesses around the world remains the quest for more environmentally sustainable societies and economies. South Africa played a key role in rescuing the 2009 climate change summit (COP15) in Copenhagen. The next critical session of the COP17 will be held in South Africa in November 2011.

And in a world where there is growing consensus that future wars will be fought over food and water resources – rather than territory or ideology – Africa is well-placed to play a key role with its huge water reserves and vast tracts of arable land.”

Tell us a little about the Southern African Development Community.

“Members of the Southern African Development Community (SADC) are in the process of implementing a Free Trade Area (FTA), a grand intra-regional trade liberalization program which is intended to phase out existing tariffs, harmonize trade procedures and documentation and to reduce other barriers to trade within the region.

The FTA in its second phase of development aims to establish the region as a common market by 2015, and achieve a monetary union by 2016.”

Intellectual property rights protection has been cited as a concern for many investors. Please share your thoughts on this.

“We have not had any issues with intellectual property in South Africa ““ now and then there are issues with companies importing fake products but this is not a major concern. In my dealings with companies and working in a number of companies, this has never been a big threat.”

How can companies deal with corruption in general?

“When it comes to conducting market intelligence in Africa, it is critical to choose to work with partners who have experience operating on the ground and who have built large, efficient and reliable networks of information sources. They will have a better understanding of the circumstances of the market and will be able to work with you to design African solutions for African problems.

There are many concrete examples of how companies cope. For example, the Kellogg Company in South Africa had to identify agents in many sub-saharan countries to ensure that they get brand exposure, listings in retail stores and distribution cost effectively. They had to ensure that the agents they chose had a strong reputation and an ability to deliver. Market Intelligence helps companies like the Kellogg Company ensure that they are partnering with the right businesses and avoid expensive mistakes.”

What can we expect from the Market Intelligence for Southern Africa webinar?

“The Market Intelligence for Southern Africa webinar will start off with an overview of the key economic indicators in the region as well as some of the opportunities that abound within them. It will also present a few market intelligence best practices within the African context. Three case studies provide further insight into these best practices and demonstrate the unique environments that can be found on the African continent.”

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