Africa seen as one of the last frontiers of growth, need to understand nuances of risk and financial management

Towers Watson suggests it will become increasingly important to have leaders and partners tuned into the nuances of working in Africa, including those related to risk and financial management, as multinational businesses continue to seek growth opportunities on the continent.

Multinational businesses view Africa as one of the last frontiers of growth, notes a statement issued Tuesday by the global professional services company.

“It will become increasingly important to have leaders and partners that are tuned into the nuances of working in Africa, whether it is the risk and financial management required during new market entry, the execution of M&A activity, or the ongoing management of a workforce with rapidly developing needs,” Towers Watson reports.

Those able to navigate the changing landscape and build workable relationships with key stakeholders, will find they are better equipped to enjoy risk-adjusted returns from their African operations, the statement adds.

“Currently five of the world’s 10 fastest-growing economies are in Africa, and that number is projected to grow,” Tinashe Muyambo, who leads Towers Watson’s Consulting in Africa (ex-South Africa), said recently. Beyond the companies that historically have had a presence in Africa – predominantly in the energy, resource and agricultural sectors – “we are seeing keen interest from hi-tech, pharmaceuticals and financial institutions that are seeking to service the developing needs of a rapidly growing middle class.”

Towers Watson envisages that those multinational companies able to establish themselves in market leading positions early will, over the medium to long term, enjoy the benefits of being first movers as African economies continue to grow.

The company asserts that the strength building relationships with key stakeholders and depth of understanding in many markets will play a significant role in realizing the opportunities available. Multinational companies that are not adept at managing this dynamic, that fail to incorporate cultural nuances into their technical process, and are not agile enough to adapt to fast-moving markets, will experience a marked drag on returns from their African operations, it adds.