Singapore ICT firm's success story in Africa

SINGAPORE is the home of CrimsonLogic, an information and communication technology (ICT) company with a singular history. It was founded in 1988, and within six years it took its first steps on the African continent. In 1994, CrimsonLogic opened an office in Mauritius, the first move of what has become a series of successful stories in the e-government and ICT sectors in Africa.

The company has conducted projects in nine countries in Sub-Saharan Africa, including Kenya, Namibia, Botswana, South Africa, Ghana and Mauritius, and has set up offices in Rwanda and Botswana to better oversee local projects.

Mike Yap, CrimsonLogic's senior director for Africa & Middle East, explains the company's main goals: "Our solutions streamline processes and bring efficiency to public administration through the reduction of the cost of compliance. Specifically, on trade facilitation solutions, we transformed how the trade community interacts with government agencies for cargo clearance by adopting modern techniques and initiatives promoted by the World Customs Organization and the World Trade Organization. This resulted in the creation of a conducive environment for trade and investment that greatly improves government revenue collection and transparency."

CrimsonLogic noticed that many countries in Sub-Saharan Africa were trying to reach a gold standard on efficiency for government processes found only in Singapore: "There is a clear interest from the governments to learn and emulate the Singapore experience." With close to 30 years of expertise in providing a range of solutions for trade, legal and digital government, CrimsonLogic can adapt and perfect Singapore's best ICT practices to fit emerging markets. According to Mr Yap, "we help emerging markets to leapfrog their growth and meet their aspirations to have world-class solutions".

What makes CrimsonLogic's trajectory different from other Singaporean companies is that it gained a large footprint in Africa before venturing into Asia. "We sold in Africa first before landing our first sale in the South-east Asian region," says Francis Huan, head of corporate communications.

The company is very sensitive to the particular challenges of working in markets with very different cultures. Says Mr Yap: "Having been exposed to diverse cultures and different maturity levels of the environment that we work in, we learnt not to enter a project with any preconceptions. It is important to assimilate into new cultures and environments, while maintaining the key principles and intent to stay on the right course."

One of the main challenges the company faces when expanding in Africa is the precarious logistics and intra-regional transport infrastructure. "The main challenge is the lack of inter-trade between African countries, which is reflected in the current financial & banking network, and logistics and transport infrastructure," says Mr Yap. "Thus, you will find it common that you can do business in only one African country at a time."

In this sense, Asia has an advantage with its range of well-connected metropoles. This integration helps to lower the start-up cost when a company expands to the next country. For CrimsonLogic, four countries in Sub-Saharan Africa feature as the bright spots in ICT in Africa: Rwanda, Nigeria, South Africa and Kenya. These countries are considered the African hot spots for startups and small and medium enterprises (SMEs) in the ICT sector and they attract entrepreneurs for different reasons.

"The availability of qualified human resources and a good logistics network create an exciting environment for service-oriented ICT companies," says Mr Huan. "In the last decade, many African countries introduced various incentives to attract investors. The challenge is to scrutinise these incentives and pay more attention to the unspecified. To us, it is interesting to note that we have not had any challenges in collecting money."

GOOD CAREER CHOICE

Africa is indeed a continent where the entrepreneur mindset is very common. The 2015 Global Entrepreneurship Monitor survey covered 60 countries around the world, assessing the characteristics, motivations and ambitions of entrepreneurs. In most of the African countries, over two-thirds of adults think entrepreneurship is a good career choice and a large share of the population is involved with entrepreneurship at some level.

However, the rate of success for startups is lower in Africa when compared to other continents. While Africa has, on average, less than six established business owners for every 10 entrepreneurs, this ratio rises to 8:10 in the other continents. The survey also indicates that 8 per cent of entrepreneurs of developing countries in Sub-Saharan Africa discontinued their business in the year before the survey, while developed countries in other continents register a lower percentage of failure. African countries generally also have the highest proportion of female entrepreneurs; however, the reason is more related to necessity rather than genuine gender equality.

Hence, it is no surprise that growing a business in Africa comes with many challenges and, for small companies, this decision must be made with proper planning. "Africa is not Asia. Foreign companies need to be prepared for a slightly different level of comfort. For an SME to thrive in Africa, it will need people with a sense of adventure and not pampered employees who are used to luxury comforts," Mr Yap says.

Setting apart the personal challenges, regulatory compliance is a work-in-progress for small and medium foreign investors in Africa if they plan to adhere to similar ethical principle practices adopted in Singapore. Another challenge is the expatriation of funds, which can become expensive when considering exchange rate risks.

However, for CrimsonLogic the opportunities compensate for the risks. "The potential to develop unique Africa-specific solutions really excites us and has catalysed our investment in manpower, a graduate training programme and operations and sales offices in Rwanda and Botswana," Mr Huan adds.

CrimsonLogic is tapping into the digital revolution taking place in Kenya and Rwanda. Says Mr Yap: "One thing that had it going for Africa is the great mobile connectivity and the relatively cheap cost of using mobile data. Kenya is taking the lead with mobile money and payments, and building infrastructure to support the digital economy. Similarly, Rwanda has rolled out a citizen e-services portal - iREMBO - where a significant number of transactions, ranging from renewing drivers' licences to getting a birth certificate, can be carried out with mobile money."

The company also implemented other sector specific e-government solutions such as trade facilitation and e-judiciary projects across seven countries in the Africa region.

For small and medium companies planning to venture into Africa, he has some advice: "Sufficient time should be given and you need to be there on the ground to understand, interact and make things happen. If things happen too fast, you need to know why. If it takes too long, move on. Lastly, plan how much you are prepared to invest and have the discipline to walk away."