Looking to get into business in Africa? South Africa may be the best gateway to the continent, according to Prof. John Luiz. Why not go directly? Infrastructure, Luiz says.
“The biggest opportunity for South Africa is on the back of the rest of the continent,” Luiz said. “South Africa can capitalize as being the gateway to Africa.”
Companies tend to use Johannesburg as a base to invest in the rest of the country because of South Africa’s strong legal system, low costs of business, and already-thriving service sector. They can get banking services from banks already established in South Africa, he says.
Many new companies seek investments from Japanese or European firms, in part because their regional offices already have established relationships on the ground. Those relationships are valuable, Luiz says.
“That’s attractive,” he says. “They can offer services throughout the continent—the same accountants, lawyers, etc.... It’s a risk-adverse strategy.”
Matthew O’Rourke is blogging this week from the University of Cape Town’s Global Network Week module on emerging markets.