[Part 1] Doing Business in Africa

This is a special feature on conducting business in one of the world’s top business frontiers from the November 2014 Black Enterprise magazine issue, written by Richard Spiropoulous and Derek T. Dingle.

For Jessica O. Matthews, Africa is a continent of great need and burgeoning opportunity. In recent years, she has applied entrepreneurial innovation to produce a solution to one of its most pressing challenges: power.

Matthews remembers the regular visits she made to her aunt’s home in Nigeria, the country her parents emigrated from more than three decades ago. It was common for her family there to deal with power outages, and in those instances, light came by way of a diesel generator.

That experience spurred Matthews, while a student at Harvard University, to co-develop an alternative energy source. The invention: the Soccket ball, a soccer ball that harnesses the kinetic energy generated during play to provide renewable, off-grid power. A single bulb LED lamp can be plugged into the ball to provide hours of light.

The 26-year-old Matthews traveled to the continent last year to give a demonstration of this revolutionary device to President Obama and Tanzanian President Jakaya Kikwete, at the Ubungo Power Plant–a public—private partnership between the Tanzanian government and General Electric Africa. Obama hailed Soccket as the type of tech innovation that can help advance Power Africa, his mass electrification initiative.

It was a momentous occasion for Matthews, co-founder and CEO of Uncharted Play Inc., a 3-year-old company that projects seven figure revenues for 2014 and received the 2013 Black Enterprise Innovator of the Year Award for using her creation to bring power to rural, off-grid areas of Africa and other underserved countries. A dual citizen of Nigeria and the United States, Matthews, who is also involved in global youth STEM programs, is currently preparing to bring to market the “Pulse,” an energy-generating jump rope.

Matthews has more ambitious plans about turning on lights throughout the continent: the development of a 30 megawatt hydro-power plant in the Nigerian state of Adamawa. “If you look at power access in Africa, specifically Nigeria, there are a lot of different numbers about what the power access levels are,” she says. “Recently, the government has allowed for the privatization of smaller power grids and opportunities. [The plant] I’m currently working on [is] nothing huge in terms of the vast needs of the country but something significant. It’s clean power and it’s going to have customers no matter what. And it’s one of those businesses that as long as you have the right people knowing exactly what they need to do, there’s no way that you won’t be able to find a market.”

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Matthews says her team is still in the process of raising capital so it can break ground, but “this is something that the government put forward recognizing that PHCN [Power Holding Company of Nigeria] as a public entity is not able to provide the power the country needs, and allowing private investors to come in and fill that gap.”

The young, bold innovator sees the entire region as a fount of economic growth and endless entrepreneurial opportunity, viewing Nigeria and all of West Africa as demonstrating the same advancement as BRIC countries–Brazil, Russia, India and China–”or at least the major countries there that have stable governments right now, and East Africa is just a couple steps behind.”

She adds: “Anyone who doesn’t get there within the next five years probably will have lost the wave of opportunity of being an early starter there–the next stage the returns will not be as high.”

Matthews represents one of a growing legion of entrepreneurs exploring the next frontier. In fact, many parts of Africa have already attracted big business as evidenced by the historic U.S.-Africa Leaders Summit in August in which hundreds of corporate executives and entrepreneurs descended on the U.S. capital to engage with roughly 50 heads of state and their trade representatives.

The message during the U.S.—Africa Business Forum, held during the summit and hosted by Bloomberg Philanthropies and the Commerce Department, was loud and clear: “Africa is open for business.” President Obama stated at the Forum: “American companies are announcing major new deals in Africa. Blackstone will invest in African energy projects. Coca-Cola will partner with Africa to bring clean water to its communities. GE will help build African infrastructure. Marriott will build more hotels. All told, American companies–many with our trade assistance–are announcing new deals in clean energy, aviation, banking, and construction worth more than $14 billion, spurring development across Africa and selling more goods stamped with that proud label, ‘Made in America.’”

The president also announced the $26 billion-plus commitment to bring electricity to roughly 60 million homes and businesses under Power Africa, as well as making available an additional $7 billion in new export financing as part of the “Doing Business in Africa” campaign.

Absent from the main-stage events, however, were African American businesses and small to mid-sized companies. Some were able to connect with administration officials, African trade ministers, and business leaders at private affairs or events such as the Dialogue with African CEOs, a gathering organized by Rep. Gregory Meeks (D-N.Y.) that included small and mid-sized firms as well as BE 100s companies such as Hightowers Petroleum and RLJ Equity Partners. Meeks, who also serves as co-chair of the Congressional Black Caucus Africa Task Force, said he wanted to use this platform, in part, to facilitate the process of minority firms “identifying and structuring projects, obtaining finances or guarantees, and building partnerships with African entities.”

Nigerian billionaire industrialist Aliko Dangote, who announced a $5 billion partnership with the private equity firm Blackstone to invest in energy infrastructure, stressed that as the U.S. and Africa seek to bolster commercial ties, there’s also room for a deeper connection between African companies and their African American counterparts. Dangote told BE: “Most African American entrepreneurs need to realize that Africa has changed, and it is not the same as it was 20, 30 years ago. They must visit. They must build relationships. We need to get to know each other better.”

In order for companies–like yours–to cut lucrative deals and hawk products and services on the continent, here are some planks of the game plan: gain access to markets and financing; identify the right niche; and recruit partners to help your firm avoid business, political, and cultural pitfalls. To find out the best way to execute, read on.

Be sure to check back tomorrow for Part 2.