46
also said that a better understanding of African business cultures and assistance from legal and fi nancial advisers would help to mitigate these risks. Perhaps not surprisingly, three-quarters of those respondents
whose companies do not do business in Africa said they had a limited understanding of the opportunities present in the region. Interestingly, 40 percent of respondents at companies that currently operate in Africa said their knowledge of Africa was limited. A lack of understanding may be the key reason behind many companies’ reluctance to do business in Africa—73 percent of respondents at companies not operating in Africa said their companies had no plans to initiate business there.
Conclusion
Based on our survey, many companies have yet to fully rec- ognize the growth potential that Africa represents. Concerns related to corruption and transparency into African business, along with uncertainties related to regulatory processes and local partners, seem to have discouraged many multination- als from investing there. With so many macroeconomic and demographic factors on the upswing, there are good reasons for companies to consider ways to overcome the actual and perceived hurdles to doing business in Africa. We would like to thank those professionals who participated
in our survey for providing valuable insights into their business objectives and experiences in Africa. T e survey results tend to confi rm other anecdotal evidence that suggests that despite progress, Africa continues to be plagued by negative perception and a limited understanding of its investment prospects. T is
DIVERSITY & THE BAR® SEPTEMBER/OCTOBER 2013
situation may represent a lost opportunity for all sides. Perhaps as important as those concerns related to cor-
ruption and other challenges associated with doing busi- ness in Africa is the notion that many companies may not be aware of tools that may help in addressing them. Our experience indicates that there are excellent risk-reward returns for those informed companies that are able to take a diff erentiated view and adopt the practices needed to manage legal, fi nancial, and operational risks. As companies seek to capitalize on these opportunities, they will need reliable information from trusted partners to help guide them through business decisions. In addition to sound legal and fi nancial advice integrating international expertise and local insights, they will also need compliance mechanisms tailored to operating within Africa’s diverse contexts. D&B
1 International Monetary Fund, Regional Economic Outlook, October, 2012,
http://www.imf.org/external/pubs/ft/reo/2012/afr/eng/sreo1012.pdf
DISCLAIMER The opinions expressed are those of the authors and do not necessarily reflect the views of Dentons US LLP, AlixPartners LLP or its affiliates, or any of its or their respective other professionals or clients. This publication is not designed to provide legal or other advice and you should not take, or refrain from taking, action based on its content. Please see
www.Dentons.com for Legal Notices.
By T omas W. Laryea, Partner, Africa & Public Policy and Regulation Practices, Dentons, Washington, D.C.
Michelle J. Shapiro, Dentons, Partner, White Collar and Government Investigations Practice Dentons, New York
Charles Laurence, managing director, AlixPartners, LLP, New York
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