Africa’s “Model T” Business Model

Africa’s “Model T” Business Model

The narrative about the challenges of doing business in Africa needs to be revised. Given the myriad products and services that remain unattainable, opportunities for market-creating innovation abound.

BOSTON – Africa is often regarded as a risky place to do business. There are success stories, like Safaricom, Flutterwave , and Kobo360 . But investors tend to view them as anomalies: the fact that they are thriving, despite pervasive poverty, political instability, and widespread corruption, is a matter of luck, not proof that Africa is a “safe” investment destination.

These perceptions explain why, though Africa is home to 17% of the world’s population, its innovators received just 4.4% of global foreign direct investment in 2020. Unless they change, Africa will continue to suffer – and investors will miss lucrative opportunities.

It is true that the African business environment is challenging. But that is true of all low- and middle-income countries, including the United States at the beginning of the twentieth century. When Henry Ford proposed his Model T – an affordable car for the masses – many of his investors balked. The US lacked the necessary infrastructure, including paved roads, gas stations, and repair shops. And the average American couldn’t afford a car, anyway.

We hope you’re enjoying Project Syndicate . To continue reading, subscribe now.

or

Register for FREE to access two premium articles per month. Support High-Quality Commentary

For more than 25 years, Project Syndicate has been guided by a simple credo: All people deserve access to a broad range of views by the world’s foremost leaders and thinkers on the issues, events, and forces shaping their lives. At a time of unprecedented uncertainty, that mission is more important than ever – and we remain committed to fulfilling it.

But there is no doubt that we, like so many other media organizations nowadays, are under growing strain. If you are in a position to support us, please subscribe now .

As a subscriber, you will enjoy unlimited access to our On Point suite of long reads, book reviews, and insider interviews; Big Picture topical collections; Say More contributor interviews; Opinion Has It podcast features; The Year Ahead magazine, the full PS archive , and much more. You will also directly support our mission of delivering the highest-quality commentary on the world’s most pressing issues to as wide an audience as possible.

By helping us to build a truly open world of ideas, every PS subscriber […]

Stay in the Know!

Sign up for the latest news and information on African Companies and Economy.

By signing up, you agree to receive MoneyInAfrica offers, promotions and other commercial messages. You may unsubscribe at any time.

Leave a Reply