Why global companies are betting on Africa
Amid the COVID-19 pandemic, ever-changing lockdown regulations and travel bans for countries in sub-Saharan Africa, the continent has held firm with a positive outlook for its tourism and hospitality sectors. This has been further reinforced by the increase in the number of large global companies setting up shop in Africa or expanding further across the continent.
Tech hotspots for a growing ecosystem
Zoho, the global technology company with the industry’s most comprehensive suite of business software, has announced the opening of its South African office in late 2021 – the company’s flagship – in Cape Town.
“Zoho strongly believes that its growth is closely tied to the growth and development of the broader community it serves, a strategy we call ‘transnational localism’. As part of this vision, we are focused on contributing to the creation of self-sufficient economic clusters across the world,” says Hyther Nizam, President MEA at Zoho Group.
In South Africa, Kenya, Nigeria, and Egypt, Zoho offers its products in local currencies. Additionally, Zoho has hired people in all of these countries for customer-facing roles. And the company is committed to building partnerships that will help local businesses in their digital transformation efforts.
SweepSouth, SA’s leading on-demand home services brand, recently expanded its pan-African presence by launching in Egypt. Already present in Kenya and Nigeria, they acquired the Egyptian start-up Filkhedma, the first Egyptian home services market which operates in three cities and serves tens of thousands of customers with cleaning, maintenance and beauty.
“Africa has enormous growth potential for us as a business,” says Aisha Pandor, CEO and co-founder of SweepSouth. “We already operate in three key markets and the acquisition of Filkhedma means that SweepSouth will be one of the few African start-ups operating in the continent’s four key tech ecosystems of South Africa, Egypt, Kenya and Nigeria.
“Egypt has a strong and growing middle class that has been underserved in home-based domestic services, which can also be said of many other parts of the continent. With a compelling track record and outlook for economic growth, and an economy that has weathered the tough times well, it made sense for us to target this market for our next big leap. Our presence there now prepares us to continue our expansion into other parts of Africa and the Middle East.
“We are entering a phase of rapid growth and executing a number of additional new country launches in 2022,” adds Pandor. “Having the Filkhedma team on board is particularly exciting as this is an intra-African acquisition by two companies in the same vertical. This acquisition nearly doubles our addressable market on the continent and enhances the products and services we already offer. »
An expansion plan in Africa
Ramsay Rankoussi, Vice President, Development, Africa and Turkey for Radisson Hotel Group, said that while Radisson Hotel Group will continue its organic growth supported by domestic and regional travel, the group will also explore other avenues through inorganic growth. which might be a little less conventional and would include different types of partnerships, joint ventures, co-branding and potential equity approaches.
One of them – Radisson Individuals, a conversion brand that offers small hotel operators the opportunity to become part of the Radisson family without losing their identity – has already materialized in 2021.
“Africa holds immense potential in various segments and product types – from resorts and city hotels to serviced apartments and boutique offerings. debts, as well as the high cost of capital remain the biggest burden on the continent.
“Inorganic growth will certainly not only help us mitigate materialization risks, but should also unlock synergies and economies of scale with other local and regional channels for the benefit of local communities,” he said.
Thus, the Radisson Hotel Group has set its sights on Africa, strengthening its African portfolio with 14 signings and five hotel openings in 2021, putting it on track to achieve its ambitious goal of more than 150 hotels by 2025.
A recognized business hub
South African serviced office provider The Business Exchange (TBE) recognized the Mauritian potential and in April 2021 the company launched its second investment opportunity in Mauritius – a serviced office space as a section.
Beyond the white sand beaches and the exotic lifestyle, Mauritius is increasingly recognized as one of the most fashionable business centers on the continent. In fact, the island paradise is currently the highest ranked economy in sub-Saharan Africa, according to the World Bank’s Ease of Doing Index.
“Mauritius presents a healthy environment, both politically and economically. Major international brands, including Samsung, Broll, Expedia and NBA (North America’s National Basketball Association), have already set up shop in our serviced offices, which speaks to the location’s potential as a premier business center.” , says David Seineker, Founder and CEO of TBE.
Mauritius’ proximity to South Africa – just a four-hour flight from Johannesburg – is an added bonus, as the City of Gold remains the continent’s main business hub. Mauritius is also perfectly positioned on the route from Asia and the Middle East to the tip of Africa, making it ideal for expansion into Africa as well as from Africa to the rest of the world. While strategic suitability of location was key to TBE’s expansion plans, others are looking for opportunities in regions that face the same challenges as the company’s key operating area.
Cheapflights, a global travel search site that compares flights, hotels and rental cars, reports that searches from South Africa to the rest of the continent increased by an average of 67% between September and December last year. last year compared to the same period in 2019. Zimbabwe, Tanzania, Mauritius, Namibia and Mozambique were the most searched countries in the region.
Additionally, the site recently launched its Work from Wherever Index, which provides travelers looking to work away from home or while on vacation with a definitive list of the top countries that are easiest to work from while enjoying a new country.
Index results are based on popular searches on the Cheapflights site as well as each country’s results in six categories. Nigeria ranks 95th in the world and 14th among countries in the Middle East and Africa region, with its highest scores in price, travel and weather categories.
Mauritius, which ranked fourth globally, beating many European heavyweights, tops the rankings for the Middle East and Africa. The island nation offers great weather, a low crime rate and a fairly low cost of living in addition to a remote work visa (also known as a digital nomad visa), which is travel authorization for workers on the move. , allowing them to work independently while in a country.
Other African countries on the list include Seychelles ranked 26th in the world and 2nd in the region; Reunion (at number 69); Kenya and Tanzania (ranked 80th and 81st respectively); and Tunisia (ranked 84th); among others.
The Work from Wherever index, as well as the increase in searches for flights to the mainland, could be additional indicators of renewed activity and growing traveler confidence.