When people think of Africa, they often think of poverty and backwardness, as well asPrices are low and labor costs are extremely lowimpressions. However, the reality is much more complex than these simplistic notions. With globalization and regional integration, many countries in Africa are experiencing rapid economic growth, and prices and wages are rising accordingly, with many local goods** even one or two times higher than in China.
Regarding the high prices and high labor costs in Africa, the following three aspects are summarized, let's take a look:
OneIndustrial backwardness depends on importsPrices are extremely high
There is basically no industry in Africa, only a few simple factories and workshops. Many industrial products in Africa, such as mobile phones, toothbrushes, toothpaste, toilet paper, and towels, are dependent on imports, and countries such as China, the United Arab Emirates, and Turkey are the main importers of African goods. In addition, Africa is not easily accessibleThe cost of transportation is much higher than in China, and these will be included in the costImport tariffs in Africa and transportation costs are passed on to consumers, and it can be said that prices in Africa are equivalent to those in developed countries in Europe and the United States.
In addition, there is a huge disparity between the rich and the poor in Africa, there is basically not much middle class, many goods have no sales, in order to ensure profits, they have to increase the sales of goods**: in African supermarkets, converted to RMB, an egg is 6 yuan, an ice cream is 30 yuan, a pair of ordinary slippers is 50 yuan, a water cup is 60 yuan, a small Yunnan Baiyao toothpaste is 70 yuan, and a rice cooker is nearly 2000 yuan ......It can be seen that the local prices in Africa are extremely high. Recently, demonstrations with high prices and high cost of living have occurred in many places in Nigeria, and thousands of demonstrators have stormed the Nigerian National Assembly, **economic difficulties and cost of living**.
IIHigh-end talents are in short supplyLabor costs**
Due to the low level of economic development in Africa, the overall cost of flexible employment is relatively low. With the advancement of major energy projects and the development of renewable energy, the demand for labor has increased, on the other hand, the localization of employees has become a trend due to the entry of foreign companies into AfricaIn addition to salary and benefits, relevant foreign-funded enterprises may increase costs such as trainingTo a certain extent, it has increased the labor cost of enterprises.
Taking Angola as an example, its capital Luanda is considered to be one of the most expensive cities in the world for expats, with an average cost of living of around 3,259$32 (about 2.)20,000 RMB). The high cost of living requires workers to be paid enough to live on their feetAs a result, there are also high labour costs: a chef in Angola typically earns US$1,300 a month, while a reinforcing steel worker earns between US$1,300 and US$1,500 per month. The average plumber earns between $1,300 and $2,000 a month. Masons, tower cranes, forklift drivers and welders generally earn $1,500 a month, while carpenters and shifters also earn $1,800 a month.
IIIBackward infrastructure,restricting business development
Most of Africa has relatively poor infrastructure, including roads, bridges, electricity**, communication networks, etc. These problems affect the efficiency of logistics and business activities, increasing the operating costs of enterprises. For example,Due to the inconvenient transportation, the long transportation time of the goods, the logistics cost increases, which leads to the product ***At the same time, the instability of power has also brought trouble to production enterprises, which not only affects production efficiency, but may also lead to an increase in product costs in the manufacturing sector, which in turn pushes up prices.
In addition, some parts of Africa have problems such as political turmoil and frequent conflicts, and the laws and regulations of some countries are relatively lagging behind or imperfect, the legal environment is not sound enough, the enforcement is insufficient, and the judicial procedures are not transparent and fair, which also brings certain uncertainties and risks to business operations and investment. The deterioration of the investment environment affects economic growth and job creation, which in turn leads to structural prices**.
Summary
Despite Africa's abundant natural resources and potential markets, its business environment faces many challenges. Stereotypes about poverty and backwardness in Africa may have some basis in some cases, but they are far from representative of the continent as a whole. When entering the African market, enterprises need to comprehensively evaluate various factors, understand Africa from a more detailed and comprehensive perspective, and formulate appropriate strategies and measures to reduce business risks and ensure long-term sustainable development.