A NEW study for global courier and logistics group DHL Express finds that small and medium African companies engaged in international markets are prospering in the "global village".
Of the companies surveyed, 26% of companies trading internationally "significantly outperform their market". This compares to 13% of those with operations only in their home country.
But the continent’s aging infrastructure, high customs duties and poor-quality data on trade were found to hamper small and medium enterprises (SMEs). They also cited difficulty in establishing contacts with foreign partners, and in creating an overseas customer base.
Conducted by multinational information company IHS, and released on Monday, the study showed international trade had become a "key driver" of the success of SMEs.
It also found there was a growing focus on promoting Africa’s international trade.
Charles Brewer, MD for DHL Express sub-Saharan Africa, said the study reflected the outlook for SMEs in Africa.
"The possibilities opened up by new technologies, the internet, and modern transportation means that there are many foreign trade opportunities out there for African businesses," he said on Monday.
SMEs cited the key benefits of an international approach as "access to new markets", as well as access to "know-how and technology", and "diversification" of their products or services.
The macro-economic analysis and survey of 410 SME directors in Group of Seven (G-7) countries and Brazil, Russia, India, China and Mexico indicated that SMEs engaged in international markets were twice as likely to be successful as those that only operated domestically.
The study, conducted between September and November last year and based on three-year average annual growth rates, focused exclusively on businesses with between 10 and 249 employees, and annual turnover of less than €50m. It excluded "micro enterprises" with less than 10 employees.
Most of the better-performing SMEs identified in the study employed more than 50 people, underscoring the importance of human resources in overcoming barriers to international growth.
SMEs in Africa were increasingly being recognised as drivers of economic growth. While the study said no data was available for the number of SMEs operating on the continent, they made up more than 90% of formalised business in countries such as Ghana and South Africa.
The research also found that SMEs founded in the last five years were more likely to have international business operations than older SMEs.
Significantly, the study said the majority of SMEs who had outperformed their markets indicated they also planned to further increase exports over the next three years, despite the uncertain economic environment.