Business Opportunities In Printing In Africa

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Nkosazana Dlamini-Zuma, Chair of the African Union, said, 'We lit up Africa, the formerly dark continent, using hydro, solar, wind, geothermal energy, in addition to fossil fuels.' As printers, through our talents and skills, we can further contribute to ‘lighting up’ Africa.

WHAT ARE THE CHALLENGES?
According to some key print service providers in Africa, some of the challenges facing printers include:
• The lack of finance to invest in new technology.
• High import duties.
• Unreliable power supplies in some countries.
• Lack of availability of certain substrates and media.
• Slow or non-payment by customers.
• Government corruption.
• Lack of skills and education.

CONTINENTAL ECONOMIC DEVELOPMENTS

Despite the challenges stated above there are opportunities! In the past decade, the GDP of the continent’s 54 countries has expanded more quickly than the global average. At the end of 2013, The Economist and Harvard Business Review both stated that six of the world’s ten fastest growing economies are in Africa.

REGIONAL COOPERATIONS
• The African Union is backing a R300 billion (US $22 billion) project to develop a pan-African electricity highway by 2020.
• The African Development Bank (AfDB) and the World Bank are providing financing to support electricity exports from Ethiopia, including a R15 billion (US $1.5 billion) link to Kenya with the capacity to transport up to 2000MW of power.
• Kenya has signed a memorandum of understanding to buy about 400MW. Ethiopia is in talks with Tanzania for a similar deal.
• In South Africa, we have two of the world’s largest super-critical coalfired power stations, Medupi and Kusile. Each will generate 4.8GW of electricity.
• In West Africa, the AfDB awarded a (US $193 million) grant for a electricity generation projects during 2014.
• The development of hydropower resources in Ethiopia, natural gas in Mozambique, Tanzania and Nigeria, will likely create vibrant sub-regional and regional markets.

In 2013, at least 12 countries were identified as the main ones that were developing in the Digital Print industry in Africa, those were, and still are: Democratic Republic of Congo, Ghana, Ivory Coast, Kenya, Mauritius, Mozambique, Namibia, Nigeria, Senegal, Tanzania, Zambia and Zimbabwe.

These countries continued to buy digital printers so that they can print locally. They are also starting to make soft signage. There is also growth in the packaging industry across most countries with regards to food and beverages, in particular, canning.

Suppliers are seeing some growth in sales outside of South Africa, and indications are that they will grow over time as technology becomes more affordable and more reliable.

The BMi industry research in South Africa and my dissertation concurs with these points. Key findings are that majority view acknowledges the negative impact of information and communications technology (ICT's), but are optimistic that ICTs and print can at worst co-exist, and at best, benefit from each other as some skills are closely related.

THE DEVELOPMENT DRIVERS DRIVERS OF THE OF PRINT MARKET GROWTH ARE:
• Population growth.
• Economic growth.
• The growth in urbanisation.
• Regional cooperation initiatives.
• Developments on ICTs.
• Efforts by African leaders to overcome the energy issues.

THE MCKINSEY SCENARIO

In one scenario, regional integration produces a net saving of R1 trillion (US $63 billion), or 14% of total costs, on investments needed to quadruple electricity generation by 2040.

While there are challenges in doing business in Africa, the opportunities far outweigh the threats. The ideal time to invest depends very much on the country, but generally speaking, it is between now and the next seven years. Understanding the markets and finding the right partners will provide the investor with better prospects to succeed. Only businesses that are embracing new technologies are likely to succeed.