With strong historical, linguistic and constitutional ties to the UK, a number of countries on the African continent offer lucrative opportunities for Scottish businesses with international growth ambitions.
The world’s second largest continent is diverse in terms of politics, economics and culture, but geologically it has a number of common traits, most notably a wealth of natural resources including oil and gas.
Scotland already enjoys a reputation for innovation among oil and gas providers across the globe, so businesses with growth aspirations should look to capitalise on the opportunities that exist in Africa.
The sub-Saharan region in particular is renowned for having a high volume of natural resources, as are the north African countries of Egypt, Algeria and Libya. In recent years a number of new oil and gas reserves have been discovered in some of the continent’s “safer” trading countries, including Ghana, Kenya and Uganda.
With a population of more than 162million, Nigeria boasts the largest natural gas reserves in Africa and has around 37.2billion barrels of proven oil reserves.
It already imports £2.5million of goods and services from UK companies every year.
Farther down Africa’s west coast, Angola is the region’s second largest oil trader and also one of the continent’s fastest-growing economies. Producing close to 2million barrels of oil a day, the country’s oil industry is enjoying rapid expansion with some of the world’s largest multinational companies present there.
The oil and gas industry in sub-Saharan Africa is still relatively undeveloped with an abundance of opportunities for Scottish firms. A number of countries, including Tanzania and Mozambique, have only recently discovered natural energy reserves and businesses with expertise in the sector should look to move into these fast-growing markets and obtain a competitive advantage over overseas providers.
In addition to the potential trading partnerships that exist for Scottish firms operating in the energy sector, Africa offers considerable opportunities for ambitious businesses in other sectors too, particularly in education, IT, food and drink and life sciences.
Many Scottish businesses are already reaping the rewards of extending trade operations to Africa, and those who are yet to start are being supported by Scottish Development International (SDI).
The organisation – a joint venture between the Scottish Government, Scottish Enterprise and Highlands and Islands Enterprise – has been working with UK Trade and Investment (UKTI) to encourage Scottish firms to consider trading in the region.
Andrew Monaghan, SDI’s Africa expert, said: “Africa may not be the first region that comes to mind for Scottish firms looking to export their products and services overseas. However, it is an extremely varied region where a number of industries are thriving, and others are preparing for significant growth over the coming decades.
“While the oil and gas industry there is undergoing rapid expansion, there is still an ongoing demand for products and services that can help the sector develop. Generally speaking, if there is a product or service that has been designed for the oil and gas industry in Scotland, then there will be a place for it in the African markets too.”
Countries such as Nigeria have a reputation as dangerous places to work – engineers Christopher McManus and Franco Lamolinara were killed in the country earlier this year as UK special forces and Nigerian troops tried to save them from kidnappers – but Mr Monaghan said it is more secure than people believe.
“Contrary to what many people think, trading in Africa need not necessarily be difficult or risky,” he said, adding that SDI could help companies prepare to enter new African markets.
SDI also runs the Smart Exporter initiative, which provides workshops, online learning tools and other support to encourage more exports to the region.
For further information about Smart Exporter, call 0800 019 1953 or visit www.smartexporter.co.uk
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