Since 2000, sustained economic growth in Africa has led to a business boom, with global businesses setting up shop across the continent. Increased employee relocations and business travel to the area are inevitable as companies scramble to take advantage of new opportunities.
In fact, we've already looked at the role South Africa has played as Africa's global mobility hotspot. But what about the rest of the continent? What does global mobility look like everywhere else?
While the progress made in Africa has made it a more desirable place to send your employees, there are still quite a few significant challenges.
Let's look at some of those issues and how they affect assignees. According to an EY Global Mobility Effectiveness Survey, these are the top four challenges:
- Security issues (cited by 38% of respondents as the top challenge)
- Compliance issues (22%)
- Immigration issues (12%)
- Elevated compensation required as an incentive for assignments into Africa (12%)
Security issues in particular are a serious concern. They may be enough to hinder employee willingness to relocate to the area, but that's not the only factor. For those who do accept assignments in Africa, the amount of security needed to counteract threats to their safety can cause your costs to skyrocket.
Compliance issues are much more complicated than keeping track of one set of complex rules. With 55 countries and thus 55 different sets of rules and regulations, it can be difficult to keep track of everything. Having an advisor who is familiar with the governments, languages and cultures of the many unique African countries is important.
Similarly, immigration issues can cause headaches for global businesses in Africa. The different policies can be tough to navigate, and they are further complicated by corruption's hold in many regions. Sometimes following the letter of the law isn't enough to ensure a successful relocation.
The compensation issues that many face are usually rooted in the higher costs paid to employees for what may be considered a difficult assignment. Because of some of the issues discussed above, paying a little more to place a good candidate in the area may be necessary.
While the challenges of global mobility in Africa extend even beyond these four issues, there are still many reasons your company may want to do business on the continent. Many countries are making strides in counteracting these problems. And the overall economic benefits may outweigh the issues, making it a worthwhile venture.
As a matter of fact, the rate of return on FDI (Foreign Direct Investment) in Africa is widely judged to be higher than in most emerging markets.
So what is your company's take on the issue? Are you already doing business in Africa, or is it something you're exploring?
We've just released a new whitepaper on this subject, and the topics discussed here are just the tip of the iceberg of what we focus on in the paper. If you'd like to know more, click below to download it now!