If you’re looking for reliable food importers and distributors in Africa and for advice about doing business in this highly promising but also risky region, BestFoodImporters comes to your aid with a comprehensive guide.
Africa has a rapidly growing population of over 1.3 billion people, a massive and largely untapped consumer market that is attracting the attention of more and more western companies that are trying to make sure that they don’t miss the opportunities that are emerging.
The demand for consumer goods especially is high and most African economies rely on imports to satisfy the needs of the population. Due to a number of reasons most African nations are also net importers of food products, importing almost US$35 billion annually, despite a vast agricultural potential. Some of these reasons include the inability of the production to scale to the demands of the ever-expanding population and the mismanagement of local agricultural industries.
Reasons to Consider Exporting to Africa
Africa’s economic situation is improving, the political environment is stabilizing in many regions and a vast middle class (estimated at 500 million by 2030), eager to discover global brands, is starting to emerge in the more developed countries.
Here are some other aspects why Africa is a hot prospect:
- Africa hosts the majority of the top ten fastest-growing countries in the world
- The IMF estimates economic growth in sub-Saharan Africa of over 7% by 2025
- The World Bank believes that most African countries will reach “middle income” (at least US$1000 per person a year) by 2025 if current growth rates continue.
- Brands that will be able to establish a footing in a market have major profit opportunities as competition is still relatively low
- Major investments from the European consumer businesses
- Improving infrastructures and access to the internet
One Continent, Diverse Scenarios
When we talk about the African continent, we have to keep in mind the major discrepancies between its over 50 countries, created by the impact of various foreign influences, numerous diseases, wars, hunger and movements of liberation.
Based on recent data, the largest African importers are: South Africa (imports worth US$93 billion i.e. 17% of Africa’s total imports), Egypt (imports worth US$81 billion), Morocco (imports worth US%51 billion), Algeria (imports worth US$47 billion), Nigeria (imports worth US$36 billion), Tunisia, Kenya and Ghana.
South Africa represents a perfect starting point for the Sub-Saharan region. The country is an excellent potential for importers, having already western ties and a solid industry and infrastructure. Business meetings tend to be relaxed and informal with South Africans. They are straightforward and their approach to business is pragmatic. It is not common practice for business cards to be exchanged at the start of a meeting.
Nowadays, more and more companies are looking at this country to export food and agriculture products and the demand of the population is also high, having import partners mostly from Europe and Asia, such as Germany, Spain, Russia, China, Saudi Arabia, but also the USA.
On the other side of the continent we have Morocco and Algeria, being separated from the European continent only by the Mediterranean Sea, which makes these countries important trade partners of the EU. Due to their history with France, these countries are economically tied with the former “mother country”.
Risks to Consider
Africa can be a gambler’s dream, as it sometimes rewards high risks with high rewards. A conservative approach, however, ideal for those new to the continent would be to start with a less volatile region like South Africa or Nigeria. But let’s see what are some of the main difficulties that you are most likely to encounter in an African country:
- Corruption and bureaucracy are endemic in most countries an hard to avoid. Be prepared to work with locals to help you navigate these aspects
- Shipping delays and serious logistics and storage problems
- Poor or no internet connection in some regions can make marketing and communications difficult
- Import taxes can be significant
- Unfortunately, there are many scammers and companies that cannot be trusted so extra security measures regarding payments, background checks and extra insurance are recommended
- Despite periods of explosive growth, countries are very volatile and the situation can turn problematic quite fast as many rely on a limited number of industries. Angola is a recent example
8 Tips for Success
- Like in any expansion, make sure you do your research thoroughly before you commit to any investments
- For starters you should travel to Africa and meet people face-to-face in order to build proper relationships. Ask questions, test their credibility and professionalism but also make sure that you learn about the culture in order to avoid any potentially embarrassing situations. Once started you can have an agent who can travel to your target region on a regular basis and expand the network of contacts there
- Some countries, such a Nigeria offer both complimentary and fee-based market research tools to help possible exporters from other countries to analyze the market and gain insight into specific sectors.
- Look at duty structures, freight rates, currency fluctuations and then you will have a better idea of whether you have a marketable product
- Look at each country profile and decide which type of agricultural product could be needed. For example, in Morocco, there is an opportunity of exporting wheat, as well as in South Africa. Generally, meat, ranging from poultry, being the most searched for, to beef, plus cereals and rice are the products always in demand.
- The countries that make up the African continent are very different and the purchase behavior and power and consumer preferences may differ. A food product that could work in Kenya, -may not be so popular in Egypt so do local product research and don’t forget about Muslim regions
- The legal regulation may differ from country to country, as well as tariffs. Each country has its own independent taxation system.
- Register your product and comply with the law, even if red tape is expensive
How to Find African Food Importers and Distributors
With a less-developed internet infrastructure and lack of access to web developers, many of the African companies that import or distribute food don’t have a web presence and a working website, so classic web research will return only a very small number of leads. The options are meeting the people who make purchases at various expos and events or using dedicated platforms that gather and verify information about the importers.
BestFoodImporters, for example, offers contact data for a few hundred active importers from Africa, an ideal start for most exporters looking to get started on the continent.