East Africa is one of the world’s fastest-growing markets – with its own challenges

Construction News

East Africa is one of the fastest-growing areas in the world with its own problems for doing business: As well as the political risks, lack of familiarity with local ways of doing business can be a significant stumbling block.

Consequently, when firms decide they want to enter the market afresh or look to increase their presence, as in the case of Atkins, joint ventures and acquisitions are the most popular route.

Procurement procedures for projects backed by government can also be tricky to navigate, with some government agencies being especially restrictive in their application of the rules. “A very minor deficiency or non-compliance with a procurement procedure could result in the entire tender being invalidated,” Mr Sarkodie adds. “You have to be careful with compliance and that’s across those countries.”

Foreign companies must also register with each nation’s respective business licensing agencies or investment authorities. As with the procurement system, this can be a lengthy process that takes months to complete, Mr Sarkodie says.

Similarly, due to the involvement of development banks – such as the African Development Bank – in a significant number of public sector projects, the bureaucratic processes can adversely affect payment for work too. “There’s complexity around how the money gets in and then gets distributed,” says Atkins’ Mr Shepherd-Smith. “But it all gets done – it’s just a matter of it taking time.”

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