Rethinking strategies for the African market: A roadmap for multinationals in 2025 and beyond

Introduction

For over a decade, Africa has been a beacon of immense opportunities, captivating the attention of global businesses. Its rapidly growing youthful population, dynamic cultural diversity, and abundant natural resources present an unparalleled potential for economic growth and business expansion. Yet, despite these favourable factors, many multinationals are struggling to sustain their operations, with some even withdrawing from the continent altogether.

The exits of Unilever from Nigeria in 2023, Nestlé’s scaled-back production in South Africa, and Diageo’s decision to sell its Guinness Nigeria stake signal a recurring pattern. While these decisions are often attributed to economic instability or operational challenges, they also highlight a deeper issue: a failure to adapt to Africa’s unique and diverse business environments.

With Africa projected to house a quarter of the world’s population by 2050, the time is ripe for multinationals to rethink their strategies. For businesses to thrive and contribute meaningfully to the continent’s growth, a shift from imported strategies to localised solutions is imperative. This article explores the gaps, opportunities, and roadmap for sustainable business success in Africa, emphasising the need for multinationals to align with the continent’s realities.

Western models and the African reality

Many multinationals enter Africa with strategies rooted in Western business practices, often without tailoring them to local contexts. Africa’s economic, cultural, and infrastructural diversity makes it impossible to apply a one-size-fits-all approach.

The continent consists of 54 nations, each with distinct languages, customs, political structures, and market philosophies. Within individual countries, disparities between regions further complicate operations. For example, in Nigeria and Ghana, there are pronounced north-south divides, with variations in economic activity, religion, and infrastructure development.

Africa’s informal economy dominates, with over 80 percent of the workforce employed in this sector. In this environment, traditional Western frameworks for talent management, centralised manufacturing, and corporate oversight often fail. For instance, while multinationals typically rely on formalised employment structures, African markets are heavily skewed toward early-stage talent and entrepreneurial ventures.

Moreover, global investors often target high-income segments, neglecting about 30 percent of the 1.515 billion, according to 2024 estimates of Africans living on less than $2.15 per day. This focus on affluent consumers has led to missed opportunities in critical sectors like healthcare, education, and affordable housing—areas ripe for innovation and essential for societal development.

Lessons from localised success stories

While some Western multinationals struggle, others have found success by adapting to Africa’s unique challenges. Uber’s expansion into Africa is a notable example of localisation done right. Recognising the continent’s cash-reliant economy, Uber adapted its payment model to accept cash. Additionally, it partnered with local vehicle providers, bridging the affordability gap for drivers. This pivot not only ensured operational success but also strengthened its brand as a locally attuned player.

Similarly, the rise of Asian companies in Nigeria demonstrates the value of localised strategies. Unlike their Western counterparts, Asian businesses have been more flexible in adapting to fragmented markets, local costs, and decentralised operations.

Movemeback, an organisation that partners with companies expanding in Africa, emphasises the importance of enabling an entire value chain rather than focusing solely on end consumers. This approach involves empowering suppliers, distributors, and consumers alike, creating a thriving ecosystem that benefits all stakeholders.

“While some Western multinationals struggle, others have found success by adapting to Africa’s unique challenges.”

The role of talent: Building leadership from within

Leadership is pivotal for navigating the complexities of Africa’s markets. Unfortunately, many Western companies rely on expatriate managers who operate with limited understanding of local contexts. This disconnected approach often leads to strategic missteps and missed opportunities for sustainable growth.

To succeed, multinationals must invest in identifying and nurturing local talent. Africans with deep cultural and market insights are better positioned to navigate the nuances of their environments. Companies should also focus on creating robust middle management structures to bridge the gap between executive leadership and on-the-ground operations.

For example, the Rwandan government’s Vision 2020 plan demonstrates how policy can facilitate talent development and business success. By investing heavily in ICT infrastructure and fostering partnerships with the private sector, Rwanda has positioned itself as a regional tech hub. Multinationals can draw lessons from this model by aligning their strategies with local talent development initiatives.