Johannesburg<\/p>\n
Marketers know that a strong finish colors the entire consumer experience.<\/p>\n
If that\u2019s the case, the South Carolina FDIB certainly planned this trip well.\u00a0 We concluded our business visits today, having come the 800 miles from Lusaka early this morning, with what might be the best visit of the trip. We went to Dimension Data, an IT subsidiary of Japan\u2019s NTC, the telecom giant, where we were hosted by Derek Wilcox, a South African who has been with company as it has grown to major global status, where it is now an $8 billion corporation, operating in\u00a0 58\u00a0 countries with 27,000 employees.\u00a0 Mr. Wilcox is the COO of Asian and Middle Eastern operations, and thus was in a position to enlighten us on the IT industry, his company, Africa and the Middle East, and South Africa.<\/p>\n
The company started in 1983 in manufacturing and gravitated to provide applications, installation, maintenance, and other services, which now provide 50% of sales and 75% of profits. (My students who have read \u201cGoing Downstream\u201d will understand the value of the shift!).\u00a0 It was at one time the exclusive distributor for Cisco, and is still one of its biggest partners.<\/p>\n
His outline of African business was especially interesting because it covered the entire continent; he divided the continent basically into regions: 1) the Mediterranean countries, which he said were still recovering from the Arab Spring; 2) the oil producers, particularly Ghana and Nigeria (he had a lot to say about Nigeria, which has the largest population in Africa, and by some accounts, the largest GDP, with Lagos being the business center); 3) the East Coast countries which are starting to discover gas, and 4) the African hub starting to consolidate around Kenya. Despite its political troubles with Somalia, he thought East Africa is an attractive area, rapidly developing, and noted that Kenya has a big agribusiness market in Europe (bear in mind, if it\u2019s winter in Europe, it\u2019s summer down here, ala Chile and Peru and the US market); and 5) southern Africa.\u00a0 He thought one of the countries to keep an eye on was Botswana, a potential model for sound government (not common on the continent), but with an economy still based on diamonds, cattle, and tourism.<\/p>\n
As for South Africa itself, he pointed out that South Africa contributes 40% of African income and 40% of that comes from two neighborhoods in Johannesburg, including Sandton, where our hotel is located; however, the country\u2019s strength is weakening both absolutely and relatively, having, he suggested, lost its political and social way.\u00a0 Like many business men, he chafed at the use of funds for addressing social needs, describing the state as having more social safety nets than many Scandinavian countries.\u00a0 At the same time he acknowledged the need to redress the inequalities that mark wealth distribution in the Republic. We\u2019d heard from others as well about some of the problems of the African National Congress, which has ruled South Africa since democracy emerged in 1994, and he, too, thinks the rise of an opposition party (which has taken over the Western Cape) will be a healthy step.<\/p>\n
He described South Africa as a relatively difficult place to do business, with exchange controls, an elaborate effort to promote Black Enterprises, and a strong labor force that supports and is supported by the African National Congress (and, in addition, one of our faculty noted that South Africa will start requiring in-person visits to a consulate to get a visa, making it more difficult to tour or work as an expatriate in the country) ; as evidence of the erosion of South Africa\u2019s global status, he noted the declining number of companies (from 95% to 80%, he estimated) that base their African operations in South Africa.\u00a0 Instead, many have located or relocated to the United Arab Emirates.\u00a0 He thought those governments had shrewdly expanded Emirates and Qatar airlines, which have some of the most extensive routes in the world, world class facilities, and a welcoming government.\u00a0 He did observe the disadvantages, though, such as that the UAE does not have a rule of law, while South Africa has a well-established judicial system.<\/p>\n
Some summary thoughts on my observations about sub-Sahara businesses:<\/p>\n
1)\u00a0\u00a0\u00a0\u00a0\u00a0 The role of the United States. The African Growth and Opportunities Act, recently renewed by Congress, is generally praised as a positive contribution to the African economies, reducing tariffs on African products imported into the United States.\u00a0 Ambassador Taylor gave high marks to the US\u2019s anti HIV campaign, too, and it\u2019s obvious, from the visits we\u2019ve had, the embassies are promoting American investments and non-government activities.\u00a0 Still, as Wilcox pointed out, there\u2019s a belief that Americans are the latest exploiters, who simply want to make short-term profits for shareholders.\u00a0\u00a0 He noted that US AID gives money\u2014which must be spent in the United States.<\/p>\n
2)\u00a0\u00a0\u00a0\u00a0\u00a0 There was a copy of the China Daily in the lobby of our hotel today, an indication of the importance of the topic that keeps surfacing: the presence of China.\u00a0 China has supported a lot of the independence movements in Africa from the beginning, and has continued supporting many African governments and economies with no strings attached.\u00a0 Chinese build dams and roads and railroads\u2014and mushroom \u201cfactories.\u201d\u00a0 They give grants to send African students to Chinese universities.\u00a0 However, the relationship is becoming a little frayed. The Chinese are disappointed with some of their \u201cinvestments,\u201d such as Mugabe in Zimbabwe, and Africans are concerned about the cliquishness of overseas Chinese and the traders who are perceived to be stealing African jobs.<\/p>\n
3)\u00a0\u00a0\u00a0\u00a0\u00a0 South Africa sometimes thinks of itself as a big brother especially to its neighbors.\u00a0 If it\u2019s going to be a model, it needs, I think, to behave better.\u00a0 The Joburg newspaper today had the defense of the president\u2019s $21 million expenses for his house: he needed, it stated, the visitor center to protect his privacy, and the cattle corral to keep the cattle from interfering with the security infrastructure, etc.\u00a0 If I had a big brother like that\u2026. Still, South Africa is further along the development curve than the rest of the continent, and has a hand in lots of business on the continent. It has also played peacemaker on occasion.<\/p>\n
4)\u00a0\u00a0\u00a0\u00a0\u00a0 As for what we\u2019ve seen overall, the metaphor that comes to mind was at Kafue. That small town in Zambia, on the main North-South highway from Lusaka to Livingstone, had a sign advertising the opening of a mall, with retail space available.\u00a0 At the time we passed by, we could see that some of the foundation for some of the buildings had been started.\u00a0 That location is business Africa for me: the foundations have started in some places, but the mall is still a distance away from being built.<\/p>\n
<\/p>\n
In 24 hours, most of us will be on an airplane back to the US, with a lot of experiences to share with our classes.<\/p>\n","protected":false},"excerpt":{"rendered":"
Johannesburg Marketers know that a strong finish colors the entire consumer experience. If that\u2019s the case, the South Carolina FDIB certainly planned this trip well.\u00a0 We concluded our business visits today, having come the 800 miles from Lusaka early this morning, with what might be the best visit of the trip. We went to Dimension … Continue reading “Some thoughts on South African businesses”<\/span><\/a><\/p>\n","protected":false},"author":36,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[],"class_list":["post-1474","post","type-post","status-publish","format-standard","hentry","category-south-africa-may-2015"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blogs.iwu.edu\/factrack\/wp-json\/wp\/v2\/posts\/1474","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.iwu.edu\/factrack\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.iwu.edu\/factrack\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.iwu.edu\/factrack\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.iwu.edu\/factrack\/wp-json\/wp\/v2\/comments?post=1474"}],"version-history":[{"count":5,"href":"https:\/\/blogs.iwu.edu\/factrack\/wp-json\/wp\/v2\/posts\/1474\/revisions"}],"predecessor-version":[{"id":7312,"href":"https:\/\/blogs.iwu.edu\/factrack\/wp-json\/wp\/v2\/posts\/1474\/revisions\/7312"}],"wp:attachment":[{"href":"https:\/\/blogs.iwu.edu\/factrack\/wp-json\/wp\/v2\/media?parent=1474"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.iwu.edu\/factrack\/wp-json\/wp\/v2\/categories?post=1474"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.iwu.edu\/factrack\/wp-json\/wp\/v2\/tags?post=1474"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}