Op-Ed: If Africa wants sustainable growth it needs localisation

PUBLISHED: Tue, 29 Aug 2017 06:49:44 GMT

By YPO Africa Member, Vishal Agarwal, Senior Leader, ex-PwC & GE Africa. Driving Infrastructure Outcomes in SSA.

Summed up, localisation to me means: having a global mindset with a local heart. True economic growth isn’t achieved by superficially working towards localisation.

Localisation is critical for businesses wanting to achieve sustainable growth in Africa. Yet, when we talk about localisation we must be careful not to approach it superficially, as I mention in my interview below and in this article.

One might look for examples of localisation in contexts such as black economic empowerment like in South Africa, achieving quotas set by affirmative action. There’s also an understanding of a type of localisation that seeks to appease the political class in a particular country. Not to take anything away from those approaches but to copy them (in other African contexts) may be missing the point.

An all-rounded and whole-hearted approach must be taken. Only when companies see localisation as efforts to making local strategic partnerships, or investing and empowering locally, are we creating a runway for sustainable growth.

Hire local, partner local, and empower local!

Today, having a representative on the ground as a company, but having three layers of bosses sitting in headquarters far away is something that customers, suppliers and talent can see through. For a company to genuinely contribute towards localisation it must understand the local business ecosystem. The majority of the hands in a company need to be on the ground for effective decision making to happen.

Likewise, localisation must involve investing in the supply chain on the ground. This means that it not only falls on governments to invest in local infrastructure; but the private sector as well. There’s a lot more work that needs to go in from both parties in terms of will and intention.

CEOs have pressure to achieve company growth, but there’s only so much success they can enjoy in an environment with structural inefficiencies. To be on the ground also means that companies must collaborate and learn from customers, while at the same time empowering and investing in native talent.

Doing all this creates the next generation of customers and supply chain, and for foreign companies to find the balance between investing in the next generation and the now, is vitally important for their own sustainable success.

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