Rethinking Expats: Who Are They And Do African Businesses Even Need Them?

Rethinking Expats: Who Are They And Do African Businesses Even Need Them?

One of the biggest challenges companies face when entering African markets is hiring key executives but despite the short supply of local talent, many multinationals find the traditional model of deploying expats in Africa unattractive, according to an AfricanBusinessReview report by Nye Longman.

Instead, some are looking at alternatives such as hiring Africans to work in other African countries or recruiting Africans returning from the diaspora.

“The local skills shortage is acute mainly because many African businesses have not operated on a multinational scale for long enough, with the result that even qualified people do not have the necessary international experience,” said Leon Ayo, CEO of Odgers Berndtson Sub-Saharan Africa. The U.K.-based company claims to be the U.K.’s largest executive search firm.

The appropriate skills for multinationals are typically sought among the expat communities in developed economies. However, many companies are actively reducing the number of expat executives that they deploy across Africa, according to a recent Odgers Berndtson white paper.

One reason is the extremely high cost of living in many African cities, Ayo said. Luanda, Angola, was the most expensive city in the world for expats, followed by N’Djamena in Chad, according to Mercer’s 2014 Cost of Living City Rankings. Johannesburg, Cape Town and Windhoek ranked among the 10 cheapest cities in the world for expats in 2014. Angola held the No. 1 spot in 2015, while N’Djamena fell to No. 10. Joburg didn’t make the 10 cheapest in 2015.

Who is an expat anyway?

An expat is a person temporarily or permanently living as an immigrant in a country other than that of their citizenship, according to Wikipedia.

The Wall Street Journal has a blog dedicated to expat life and in 2014 featured a story, “Who is an expat, anyway?” It concluded that “some arrivals are described as expats; others as immigrants; and some simply as migrants. It depends on social class, country of origin and economic status… Anyone with roots in a Western country is considered an expat … Filipino domestic helpers are just guests… Mandarin-speaking mainland Chinese are rarely regarded as expats … It’s a double standard.”

Top African professionals going to work in Europe are not considered expats, according to social activist Mawuna Remarque Koutonin writing for SiliconAfrica and picked up in TheGuardian:

They are immigrants. Period. “I work for multinational organisations both in the private and public sectors. And being black or coloured doesn’t gain me the term ‘expat’. I’m a highly qualified immigrant, as they call me, to be politically correct,” says an African migrant worker.

Here are some other reasons companies are rethinking sending expats to Africa, according to AfricanBusinessReview:

• International travel has become easier, so the appeal has diminished for moving to an emerging market for three to five years as a way of seeing the world.

• Africa still has a negative image around the world, what with press reports of Ebola and fundamentalist terrorism.

• Infrastructure in most African locations is lacking for executives and their families in the West. Enticing foreign expats to live in many African countries is expensive for companies, involving added costs such as paying for drivers and international school fees.

• Many African governments have made it difficult for companies to get work permits for expats, hoping instead to fill executive positions locally.

One way around this is to hire Africans to work in other African countries. “African executives often make better expats in other African countries because they are more accustomed to the difficulties other international expats may struggle with,” Ayo said.

Kenyans, Cameroonians, Zimbabweans are especially mobile and ready to take on assignments elsewhere in Africa, according to Ayo. “They help these executives to broaden their horizons and climb the corporate ladder.”

Another alternative is to recruit Africans returning from the diaspora. This will also align with the push in most African countries for indigenisation – a policy to use local people to fill senior positions rather than going expat. “With increased stability and growth across Africa, many in the diaspora are interested in returning to the continent to take advantage of opportunities that didn’t exist before they left.”