Africa Is Not One Market. That Is Not the Most Dangerous Assumption.

Correct, but insufficient

Every conference discussion about Africa now opens with the same corrective: Africa is not one market. It is 54 countries, each with its own regulator, currency, political economy and commercial logic. Heads nod. The slides move on. The room feels a little more sophisticated than it did a moment earlier.

The statement is true. It is also no longer enough.

Acknowledging diversity tells leaders to differentiate. It does not tell them what to differentiate. Too often, they segment demand by country, adjust the forecast, appoint local advisers and commission another regulatory review. The analysis becomes more detailed, but the assumptions most likely to determine the outcome remain untouched.

Those assumptions concern how institutions function when a decision becomes difficult; how authority moves when several agencies are involved; whether a partner’s incentives remain aligned after the introductions; and whether attractive demand can be converted into a business the organisation is equipped to run.

These are not secondary considerations. They are the machinery of execution.

The assumptions that sound prudent

The assumptions most likely to survive a board discussion are not the reckless ones. They are the ones that sound sensible:

1. The law provides for an approval, so the approval can be obtained within the planned timetable.
2. A respected local partner has access, so the partnership will reduce execution risk.
3. Strong demand means the business case is executable.
4. A ministerial endorsement indicates institutional commitment.
5. A model that worked in a neighbouring country can be adapted with limited changes.

Each statement may be true. None should be promoted into a fact without testing.

Across three decades of work – from observing African decisions from a trading desk in the Far East, to building and operating a business across African jurisdictions, to advising in the engineering and development-finance environment – I have seen ventures lose time and money because a plausible assumption passed through a market study and board paper without anyone identifying who had to make it real.

That distinction matters. Opportunity is an economic proposition. Execution is an institutional achievement.

Formal rules and operating reality

Every market has two architectures. The first is visible: laws, regulations, organisational charts, published mandates and approval procedures. The second is operational: who is consulted before a formal decision, which institution can delay another, where discretion sits, which approvals are sequential, and who carries the consequences of saying yes.

Serious due diligence must examine both.

A regulator may be legally independent but financially dependent on a ministry. An agency may have authority on paper but lack the people or budget to exercise it. A treasury may support a project in principle while refusing the guarantee on which it depends. A state-owned enterprise may have a commercial mandate while being required to deliver social policy through the same balance sheet.

This is not an argument that formal rules do not matter. They matter enormously. It is an argument that form and function must be tested separately. The question is not only, “What does the law allow?” It is also, “What has this institution been able to decide, fund and sustain in comparable cases?”

That distinction is well established in serious governance work. The World Bank has argued for attention to institutional functions, not only forms, and to the incentives and power relationships that shape implementation. The IMF’s public-investment methodology similarly distinguishes what institutions provide on paper from how effectively they operate. The practitioner’s task is to bring that discipline into the entry decision.

Similar opportunity, different machinery

Morocco and Kenya illustrate why country differentiation must go beyond market statistics. Both have attracted renewable-energy investment, built institutional credibility and worked with development and private capital. From a distance, they could sit in the same regional opportunity portfolio. In practice, they created executability in different ways.

Morocco built a specialised institutional container. MASEN was able to coordinate difficult interfaces around the Noor Ouarzazate solar programme. In Casablanca, I remember a European financier describing his surprise that land, grid connection and water had been dealt with as parts of an integrated structure. The decisive asset was not sunshine. It was an institution able to carry coordination.

Kenya’s route was more distributed and adaptive. Progress came through pragmatic regulation, repeated transactions and institutions learning by doing. Standardised arrangements and an accumulating track record reduced uncertainty over time. The system was less centralised than Morocco’s, but it created momentum through repetition.

The lesson is not that one model is superior. It is that similar opportunities can become executable through different institutional mechanisms. Copying Morocco’s organisation chart into Kenya, or Kenya’s transaction documents into another market, would miss the point. The document is not the system.

I have seen that mistake in the energy sector. One country completed a renewable tender with substantial donor and development-finance support. Officials from another market studied the process, retained similar advisers and used similar documents. The second process stalled. It had copied the transaction, but not the credible offtaker, regulatory capability and treasury alignment that allowed the first transaction to move.

Access is not alignment

Partner selection contains the same trap. Companies are told, correctly, to find a strong local partner. They often translate “strong” into “well-connected.”

A well-connected partner may open doors. It does not follow that the partner is aligned, operationally capable or accountable. The partner who can secure the first meeting is not automatically the partner who will do the difficult work after the relationship becomes costly, slow or politically inconvenient.

My partner-selection lesson is simple: select for the work that must continue after the introductions have been made.

Before appointment, define what the partner must invest, deliver and risk. Clarify decision rights, reporting, performance measures, conflicts, funding obligations and exit conditions. Ask whether the partner’s economics depend on the same long-term outcome as yours, or merely on reaching an early milestone. Test demonstrated behaviour under pressure, not status or access alone.

A partner should reduce a defined execution risk. “Local knowledge” is not sufficiently precise.

Demand is not an executable business

I learned a related lesson early in my career on a rural water scheme. The need was real, community willingness to pay exceeded the cost, the technology was straightforward and donor funding was ready. The district council was expected to maintain the handpumps and collect fees. We recognised that its capacity was weak, recorded the concern and pushed ahead.

I assumed that a sound model, simple technology and committed funding would compensate for the operating weakness.

They did not. When I returned two years later, half the handpumps were broken. There was no dependable budget for spares and no functioning collection system. The assumption that proved wrong was not about demand. It was that an identified owner would become a capable operator because the project required it.

Demand can be urgent and still fail to become collectible revenue. A favourable tariff does not help if it cannot survive political pressure. A signed contract is not sufficient if the counterparty cannot perform. Between need and a functioning business sit logistics, energy, staffing, payment discipline, maintenance and the small systems that keep an operation alive.

Leaders should therefore separate four questions: Is the need real? Can it be converted into collectible demand? Can the organisation deliver reliably? Can the surrounding institutions sustain the model when conditions change?

Questions before commitment

Before approving entry or substantial project preparation, I would ask:

1. Which three institutions can materially accelerate, delay or change the proposition, and how have they behaved in comparable cases?
2. Where do formal authority and practical influence differ?
3. What must the local partner still do after access has been secured, and what evidence shows it can do it?
4. Which assumption depends on an institution acting outside its normal capacity or incentives?
5. Who owns each critical decision, and who carries the cost if it is delayed?
6. Can demand be collected, served and sustained under the proposed operating model?
7. Which assumption have we quietly chosen not to test because testing it would slow us down?

A practitioner’s perspective

Africa’s diversity is real, but diversity alone is not the diagnosis. The deeper work is to understand how each market converts intention into decisions and decisions into performance.

I no longer ask only whether a country is attractive. I ask whether the proposed business is compatible with the way that country’s institutions, counterparties and incentives operate. That does not make the analysis more pessimistic. It makes commitment more disciplined.

For leaders considering an African market or reviewing a stalled project, the next action is practical: run an institutional and partner pre-mortem before approving more capital. My book, Why Projects Fail When the Numbers Work, develops the execution lens behind that exercise. For the book, advisory work or a direct conversation, visit click here.