Africa-to-Africa Internationalization: Future Trends and Research Avenues

Abstract

The push and pull factors that have led to the rapid, unprecedented internationalization of African firms are likely to continue in the near future. Sensing immense market opportunities in the region, many African firms will proactively expand or follow the lead of their corporate clients and partners. Drawn by the success of firms that have grown phenomenally through internationalization, many firms will be unable to resist the opportunity to acquire a share of Africa’s one billion consumers. Firms in economies or sectors with limited growth potential will be tempted and eventually ‘forced’ to diversify geographically. Several companies will have easier access to capital and resources, providing them with large war chests for cross-border acquisitions and greenfield investments. For others, interestingly, the mere ambition of becoming a pan-African or international firm will override other apparently important (economic) considerations. Beyond these factors, more regionalization activities are likely to occur as economic integration at the sub-regional and regional levels progresses. The proposed commencement of the African Continental Free Trade Area in 2017 will most certainly trigger greater intra-African trade and investments.