Recently, I browsed through Forbes magazine's 2008 annual ranking of the top 2000 companies in the world. As always, the list was dominated by American, European and Asian companies like HSBC, Bank of America, JP Morgan Chase and Exxon Mobil.
Only 17 African companies (all South African) made it to the list. They included Naspers, a diversified media conglomerate, Standard Bank, First Rand, both financial institutions, diversified conglomerates Remgro, Barloworld and Bidvest group among others.
While it's a good thing that at least, Africa was represented in the list, the continent could do better still. For the fact that only 17 companies in the whole of Africa could make it to the list of 2000 mega corporations, I think we still have a long way to go. I could not help but ask: Where's Africa's place in big, global business?
Many companies that topped the lists were multinational corporations; companies which decided not to limit themselves to doing business in their countries of origin but braved venturing into the uncharted territories of other countries. Citigroup, for example, a financial services institution founded in the United States, became a global corporate and financial services giant because its managers dared to think beyond America, and ventured into the financial markets of other countries of the world. Today, Citigroup has operations in about 100 countries of the world, employs 385,000 people and ranked 24 in the global ranking of the world's biggest companies.
Citigroup, just like Microsoft, Walmart, Procter & Gamble, Toyota, and Home Depot among others are where they are today because their founders and managers had a global mindset. They went beyond their local markets and ventured into uncharted territory in other countries. The companies have become global brand names whose success stories are being told even by the least informed persons.
But it's a different scenario here in Africa. Most African companies are content with dominating the markets in their local countries and regions. While it may be argued that at times, some companies' business model may be peculiar to just Africa and hence going global might not be a smart move, it can also be argued that many times, company chief executives prefer to remain in their comfort zones, ignoring growth and expansion opportunities in foreign markets. The Chief executive officers are either too content with being local champions, or are too chicken-hearted to venture into other markets and explore foreign opportunities.
Many times, foreign companies establish their presence in Africa and sell their products and services to us. We have several foreign banking institutions such as Citigroup, Barclays and Standard Chartered who are dominating our African banking markets. How many African banks have thought of launching branches elsewhere apart from Africa and probably in markets such as Europe, Asia or the Americas? Nestle, a Swiss food manufacturer feeds Africa with lots of their products. When will a Kenyan, Tanzanian or Nigerian food company establish presence in Europe or America and feed them with its own uniquely packaged products? Microsoft, SAP and Oracle have offices in Africa from where they sell a diverse range of software services to us. When will a Nigerian or Ugandan software company dare to expand, launch an office in U.S.A and sell African-made software to the Americans?
Going global offers numerous benefits in the long run. It reduces dependence on traditional markets; takes advantage of booming export markets and exposes a country to new ideas, new approaches, and new marketing techniques. Furthermore, companies which have established global sales have a higher value than strictly domestic companies.
Africa needs more companies with a global outreach. If Africa is ever going to find a place among the global powers that be, we need to market more African ideas and businesses to the rest of the world. It would be a good thing for Africa to have corporations and brands that would be recognized around the world. I look forward to good times when a Kenyan Biscuit company would be selling Kenyan-made biscuits in the United States and Europe, and software made by an African software company being sold in various countries.
It could happen. All we need are visionary CEOs who would go back to the drawing boards, strategize, damn the consequences, take their companies to the next level, and take on the rest of the world.