Jump to content

Fortune 500 companies are still hesitant about settling in Africa

Platinum Wealth
 Share

Recommended Posts

Platinum Wealth Apprentice

Platinum Wealth

Posted
Posted

Investor interest in Africa may have been piqued since the start of the 21st century, but many of the world’s Fortune 500 still seem reluctant to actually move to the continent. And if they do, they rarely stray from the beaten path.

 

Last year, 196 companies on the Fortune 500 had a dedicated entity covering the region, an increase from 167 in 2015. Still, 305 companies had no such entity, while 226 had no significant business in the region, says a report by Infomineo which tracked business settlement in Africa and the Middle East

 

Johannesburg, the economic capital of Africa’s most advanced economy, was viewed as the most attractive African city to Fortune 500 companies. International companies have a well-established presence in South Africa: German carmaker Bosch first entered the South African market in 1905, and opened a subsidiary in 1985, according to the report. Similarly, pharmaceutical giant Merck established its Africa headquarters in Johannesburg in 1971.

 

AAEAAQAAAAAAAAoFAAAAJDJjN2Y3ZmZjLWIxMzQtNGY3Ny1hNWQ3LWE4NDA1ZTE0OWY5MQ.thumb.png.95a097d852d1f57bbf00d46bb65594fa.png

 

Johannesburg’s popularity, however, is increasingly under threat from Casablanca. The north African city has become a hub for northern Africa, more than doubling its count of regional headquarters. The automotive and tech industry have shown the most interest in the Moroccan city, along with Swiss multinationals. That growing popularity is attributed to an investment in physical infrastructure like ports and business parks, investing in its local talent pool through higher education programs and tax breaks and tax exemptions on exports, according to Infomineo.

 

Lagos and Nairobi still dominate their respective regions as the most popular destination for the regional headquarters of Fortune 500 companies, with Nairobi gaining popularity especially for consumer goods companies. In southern African the next most popular destination is Cape Town, with two headquarters opened there in the last year. Luanda the capital city of one of Africa’s largest oil producers, Angola, has also become more attractive to energy companies.

 

“When settling in Africa, it is important to diversify your presence because you will always have one country that is performing better than another,” Francois Marchal, general manager of the Ghana offices of French financial services firm Société General, told researchers.

 

162756557_Fortune500companiesarestillhesitantaboutsettlinginAfrica.thumb.png.9b7ee1ae83a82750dd83da421f757d9f.png

 

Despite this, many Fortune 500 companies still prefer to oversee their Middle East and Africa operations from outside of the continent. London has recently eclipsed Paris, and has seen more new interest than Dubai as a base for regional headquarters. The British city is still seen by many Fortune 500 companies as a stable gateway into the region.

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Restore formatting

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
 Share
Go to topic listing

  • The JSE Investment and Finance Forum

    Platinum Wealth is a leading financial forum with an eye on the future of our country and the citizens of South Africa.  Even though the era of trading exclusively with physical goods is in the distant past, we as a civilization have always looked for new ways to prosper. Simply put, ways to get a better deal.  To have more, for less.  At Platinum Wealth we have created a bigger platform for you to do exactly that - a connected network of your peers giving the tips and tricks that have helped them reach their financial and investment goals.

    From personal finance and creating wealth, to financial news and small business, we cover it all at Platinum Wealth.  Pose your money and investment questions in our money and investment forums, we'll make sure they get answered.  We want to guide a new generation of money conscious readers.  We are here to share tips and practical knowledge that will help you live large without sacrificing your financial independence.

  • Tell a friend

    Love Platinum Wealth: The JSE and ZAR X Financial and Investment Forum? Tell a friend!

  • Topics

×
×
  • Create New...