South African Companies Unlock Sub-Saharan Africa

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Standard’s Tasker: “We have seen a dramatic increase in political stability” Marc Shoul/Getty Images

Florentino at the giant South African store she runs in Maputo, Mozambique Henner Frankenfeld/Redux

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says Florentino, who as a child fled the former Portuguese colony on the eve of a brutal civil war that lasted from 1975 until 1992, making Mozambique one of the poorest countries on the planet. Rather than depending on the local phone network, she transmits sales and inventory data to headquarters via satellite. It's challenging to manage personnel in a country where many have never held regular jobs. Workers must learn such basics as the importance of laundering their company-issue red-and-white striped shirts—and skipping the traditional two-hour midday siesta.

The role model for many South African companies is SABMiller. The brewer was active in neighboring countries for decades, then began expanding aggressively after the end of apartheid, when the U.N. lifted economic sanctions. Betting that its experience in such places as Angola and Zimbabwe suited it for other emerging markets, SAB acquired beermakers in Eastern Europe, Asia, and the Americas.

The brewer, now based in London, proved South Africans could compete internationally. "SAB has been an inspiration," says Peter Wharton-Hood, chief operating officer of Standard Bank. He and his colleagues are trying to do for banking what SAB did for beer, though they admit they were slow to appreciate the opportunities on their doorstep. "We didn't take Africa as seriously as now," Wharton-Hood says. "There was significant pessimism about the prospects for the continent."

That's an important point. News reports about Africa tend to be dominated by war in the Congo, pirates in Somalia, or chaos in Zimbabwe. In fact, Angola, Mozambique, Uganda, and other countries have grown markedly more peaceful recently, even if government institutions still leave a lot to be desired. "In the last 10 years we have seen a dramatic increase in political stability and a reduction of conflict," says Clive Tasker, CEO of Standard Bank's Africa operations.

The opportunities aren't lost on outsiders. Standard faces competition from the likes of London-based Barclays (BCS), which took over Johannesburg's Absa bank in 2005. Companies from other emerging markets are bringing to Africa their own experience in dealing with difficult environments. In telecommunications, MTN and Vodacom often bump up against Zain, from Kuwait. Brazil-based builder Odebrecht and oil company Petrobras (PBR) have been expanding in Angola, exploiting the fact that both nations speak Portuguese. And a Chinese outfit is building Congolese roads and other infrastructure in exchange for access to mineral deposits. From within Africa, Nigerian institutions such as United Bank for Africa are proving to be worthy competitors outside their domestic market.

Executives in Johannesburg, however, see the growing competition as just another hazard of doing business in the region. "South African businesspeople have managed enormous risk over the last 20 years," says Michael Spicer, a former executive vice-president at Anglo American who is now CEO of Business Leadership South Africa, an industry group. "They are incredibly flexible."

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Ewing is BusinessWeek's European regional editor.