For too long Africa has seen itself as a victim, always getting the wrong end of the stick in global affairs. Africa rarely gets the chance or the opportunity to tell its own story or chart its own path. However, this is changing as there seems to be some light at the end of the dark tunnel for the former “Dark Continent”.
Business possibilities in Africa have provided this light, but it can burn brighter if African business owners changed their mindsets and stopped being mere traders or commodity peddlers to become brand builders. Brand building is about reaping optimal value for the long term and this is a game Africa has been missing out on, resulting in diminished economic growth and underdevelopment.
In Africa, branding people are generally accused of writing “fluffy stuff” and not having any concrete figures to prove whether they are actually making an economic contribution through their efforts. This is not one of those “fluffy” pieces; numbers and empirical evidence that can be found in the public domain supports it.
The evidence just needs to be correlated for Africa to wake up and smell the coffee we export so cheaply to the rest of the world. This piece aims to demonstrate the superior value of branding and the role of businesses can play to influence the perceptions and value of the African brand. Most of the data is obtained from the Common Market for East and Southern Africa (COMESA), which is a part of the larger scheme to create an African economic block. Therefore, this piece is about Africa with COMESA just being the chosen trading block to demonstrate the point that Africa really must join, redefine and win the brand building game globally.
By examining the results of three researches, Anholt-GfK Roper’s the National Branding Index, World Bank’s Global and COMESA GDP figures and the league of global brands by leading brand consultancy, Interbrand, logical conclusions of where true economic value in the global economy lies can be reached. In the end, the way forward for African businesses and their role in branding Africa will put forward for consideration.
Comesa — the big picture
To begin with, one needs to take a step back to understand why COMESA was set up and this is enshrined in the trading block’s vision: “a fully integrated, internationally competitive regional economic community; a community within which there is economic prosperity as evidenced by high standards of living for its people, political and social stability and peace, and a community within which goods, services, capital and labour are free to move across national borders.”
One of the six objectives of COMESA as outlined in the COMESA Treaty is to contribute towards the establishment of the African Economic Community. This big picture for COMESA calls for strong economic growth and this calls for a new paradigm of thinking because Africa, despite all its raw materials and production potential, has so far been unable to compete with the rest of the world.
Branding and the global economy
According to Fortune Magazine, “The more complicated the world gets, the more comforting the familiar will seem, and the better it will get for brands”. Brands are at the top of the economic pyramid when it comes to holding economic power. Brands are superior to raw materials, production and even the recent hype in Africa, value addition. Why is Africa not creating brands? Maybe Africa does not yet understand that brands are just a collection of perceptions in the hearts and minds of consumers. This makes products, services, organisations, persons or even places unique and therefore desirable to the target audience. Maybe Africa does not know that playing the branding game is pretty easy because it already has a wealth of raw materials and natural resources. They just need to be promoted to the level of brands through some intelligent strategising that Africans do have he capacity for. They are numerous may be’s one can think of but what matters is some urgent paradigm shift on this rich, bright continent.
Africa is running the wrong race and even if it wins, it barely matters. Africa must redefine, run and win the race for hearts and minds. As global supplier of raw materials, Africa has been playing the bottom of the economic value pyramid. As one goes up the pyramid there is more economic value with brands and branding having the most economic value. Using the tea example, at the raw material level, farmers grow tea and supply green leaves to a tea factory. The tea factory will handle fermentation, drying, and other processes in the production process to create tea as the consumer knows it.
Value addition will include packaging, labeling and other basics that will allow the tea to reach the market in a presentable form. Value addition doesn’t necessarily create brands and it doesn’t tap into the highest level at which a brand interact with consumers — emotions, hearts and minds. Brands create relationships with consumers. In the case of a tea brand, a combination of the tea quality, packaging, brand positioning, communication, experiential marketing and the sum of all other elements built into it through careful nurturing of brand stewards will create a tea brand with great economic value. It will have the power to attract premium pricing and command loyalty among the target consumers.
The Anholt-Gfk Roper Nations Brands Index
The Anholt-GfK Roper Nations Brands Index is arguably the most respected analytical ranking of the world’s nation brands. Each quarter since 2005, ANBI has polled its worldwide panel of over 25,000 consumers on their perceptions of the cultural, political, commercial and human assets, investment potential and tourist appeal of 38 developed and developing countries (now expanded to 50). The countries polled in ANBI at the end of 2006, whose data is publicly available, may only be 17 percent of the countries in the world, but they account for 70 percent of its population and 82 percent of its GDP. This index can safely be used to pick key learnings for the rest of the world. The nation brand is the sum of people’s perceptions of a country and its people across six areas of national assets, characteristics and competence. Together, these areas make the Nation Brand Hexagon, which consist of tourism, exports, governance, investment and immigration as well as culture and heritage.
Learnings for ANBI and GDP rankings
Below are some key learnings after comparing the ANBI and global GDP rankings:
- Most of the world’s top nation brands (70%) are in the top 10 GDP rankings
- There’s a direct relationship between GDP and the health of a nation’s brand
- A waning national will have an effect on the nation’s GDP
Interbrand League of Global Brands
Every year since 2001, Interbrand, the world’s leading brand consultancy, has ranked the top 100 brands in the world in real dollar values. The Interbrand methodology is recognized by LSE, NYSE, among other stock exchanges and global accounting standards. Brand Valuation measures the potential of a brand to create actual “shillings and cents” value for its owners over the long term and uses NPV (net present value) to discount future earnings from brand.
Made In Africa?
Different countries and regions of the world have been able to cut across national boundaries through their global brands. Mercedes has sold the German brand, Toyota has sold the Japan brand, Coca-Cola has sold the United States brand. Examples of global brands that have helped their countries of origin create real shillings and cents value for their people are many. What of our African nations? What of Africa? Which global brands can we boast of? Which brands can we say are uniquely African and positioned as African so as to create economic wealth for the continent on the global stage?
The way forward for Africa and its businesses
For Africa to compete, and win globally:
- Africa must climb the ladder from mere suppliers of raw materials to brand builders
- Africa must create centres of excellence within trading blocks and eventually, the continent so as to compete on the global market
- Businesses must work with Government and Marketing professionals to build National, Regional and the African continental brand
In the end, the business of business is to build brands and the brand’s is to build nation’s economic power. Businesses’ key role is in both building and branding Africa as it is the brands that help position the continent and also empower it economically. This translates into creating better regional trading blocks that will result in an “African Economic Community”.
This article originally appeared in the Mail & Guardian newspaper as an advertorial supplement