As part of my partial fulfillment for the requirements for the MSc in Global Marketing degree at the University of Liverpool from 2012 to 2015, I undertook a research into “the role played by a country’s nation brand in investor decision making”. So I may comfortably conclude the validity of this study remained solid for the 2010 to 2020 decade since 2020 saw the outbreak of the COVID-19 pandemic in Africa – although it broke out earlier in China, Europe and the United States. So perhaps I should revisit the same study during this decade of COVID-19 (yes, it may not last a decade – though evidence shows it’s too adamant to be contained as it continues to mutate into new variants – but it has indeed ushered us into a new environment different from the past) but still use the same 40 variables I employed in my previous study. Then I will extend the sample of investor community beyond Italy to cover the European Union (EU), and back at home sample investment promotion agencies (IPAs) not just in the three sub-Saharan African countries but extend it to the five regional economic capitals – namely, South Africa, Kenya, Cameroon, Nigeria and Egypt. These demographics will also mean I’ll be covering the three biggest economies in Africa (Nigeria, Egypt and South Africa); and three biggest linguistic groups – Anglophone, Francophone and Arabic Africa.

The objectives of my past research were to understand how a country’s nation brand influenced investor decision-making by providing a list of variables that countries, particularly in the three sub-Saharan African focus countries relevant in investor decision making and which had to be considered in designing messages aimed at attracting foreign investors; and finally, produced a framework for investment promotion programme and reputation management plans to attract sizeable foreign direct investment (FDI) from Italy in particular, and the developed economies in general.

Just to put it succinctly, the study sought to establish the factors that inform global businesses when making a decision regarding an investment destination; and, furthermore, how these factors were ranked in order of importance or relevance to the investor community. So it intended to answer the following research questions:

• What attributes of a nation brand impact positively on investor decision making
• What investor perceptions of a nation brand influence decision-making?
• How does a nation brand impact on investor perceptions of a country’s competitiveness?

The research report opened with an introduction, as background, on the economies of the three sub-Saharan African countries that were beneficiaries of foreign direct investment from Italy. The section also looked at Italy’s internationalisation initiatives. A section on theoretical framework provided various theoretical perspectives, and identified the tools of nation brand analysis. After identifying the appropriate methodology for data collection, the report presented the data analysis, with conclusions drawn and a set of recommendations.

This research succeeded in producing a table of 40 ranked elements of a nation brand, in terms of significance and relevance, that impacted on investment decision-making. It also showed how wrong investment promotion agencies were in understanding and cascading in terms of importance, what factors investors considered and valued in deciding their investment destination. After evaluating critically the investment marketing space, the report concluded by developing guidelines on how investment promotion agencies could enhance their global marketing initiatives.

The findings lay bare the “mismatch… of perceptions” – to borrow a coinage from marketing thought leader, Wally Olins – between investors and investment promotion agencies. This became clear from sending the same list of variables to investors to rank them in order of relevance/significance in their decision making, and also to IPAs requesting them to rank them in order of what they thought was most relevant/significant to investors. The table below shows discrepancies between investor perceptions and what intended beneficiaries of FDI or IPAs think influence investor decisions (for a more detailed summary of my dissertation, please click here.

This therefore meant marketing campaigns undertaken by countries then were to a large extent misguided.

The findings indicated that this research study contributed positively to the existing body of knowledge since current literature on nation brand, which according to Blair, T.C., Kung, S.F., Shieh, M.D. and Chen, K.H. (2014) in their paper, “Competitive Identity of a Nation” published in ‘The Global Studies Journal. Vol. 8 (1)’, was rich in relation to providing case studies, but “fails to provide sufficient empirical methods on how to analyse nations in a way that can help us differentiate and isolate the variables that frame the competitive identity of a nation.” So my study closed that gap as it provided an integrated system, constituent of all the relevant factors, for countries to consider when undertaking a nation-brand project aimed at attracting FDI. This was consolidated into a model, which I dubbed “the Zebra paradigm”, which provided “a brand index for investment promotion (BIIP)”, thereby filling the void in current brand management studies.

The Top 10 variables

It is striking that investors considered the most important and relevant variable to be “rule of law”, which they ranked number 1, yet it did not even feature in the Top 20 rankings by IPAs: rather shockingly, they ranked it number 22. This proved wrong Trade and Investment South Africa (TISA) when in the article in Sunday Times on 28 June 2015 disputing the relevance of “rule of law” as an important or relevant variable in investment decision-making after the country’s then public protector, Adv Thuli Madonsela, had highlighted after her engagement with investors in London .

In addition to this being somewhat disconcerting, IPAs identified only four variables in the investors’ Top 10 list – a 40% success rate. The discrepancies included “political stability” – ranked as the second most important and relevant variable by the investor community yet at number 6 on the IPAs’ list and so not even in their Top 5 and yet these IPAs only had to look at how the investor community responded to the political instability in Zimbabwe to know that it was indeed a critical factor in investor decision-making. The other three variables in the Top 10 of the investors’ and IPAs’ tables were “macroeconomic stability”, “cost of doing business” and “economic growth rate”.

Also interesting was that four variables in the IPAs’ feedback shared two ranks: “economic growth rate” was regarded to be as important and relevant as “policy certainty”, and “size of the market” with “availability of electricity”. The first couple was ranked number 4 and the other at number 9.

Finally, the IPAs ranked “regulatory environment” as the third most significant and relevant variable even though it did not feature in the Top 20 on the investor table.

The Top 10-20 variables

Although the rankings were different, the investor community and the IPAs had 14 common variables in their Top 20s. What was glaringly absent from the IPAs’ Top 20 table, however, was “crime”, which was ranked 14 in the investor table.

Although the the exaggerated high prevalence of crime may appear normal to the IPAs, the issue of personal security is a significant consideration for the investor community. In my detailed interview with one of the investors, he emphasised that crime was a concern as they often seconded some of their executives (some with their families) as expatriates to the investment destination country, and so their safety was cardinal.

The key variable of interest, placed 17 by the investor community and 14 by the IPAs, was competitiveness. This is critical considering that the World Economic Forum publishes the annual “Global Competitiveness Report” which serves as a source of reference for investors.

Also critically important for the investor community was “education and training” which they ranked number 18 in addition to which they regard it as of equal importance to “regional stability”. Regrettably, this did not feature in the Top 20 of the IPAs’ table, where it was ranked number 23. This could be attributed to the majority of sub-Saharan African countries budgeting very little for education and as such having low levels of literacy, poor education and, therefore, poor skills.

Although the investor community ranked “investment promotion and protection agreements” in its Top 10 (at number 8), the IPAs ranked it at 14 in their Top 20 table.

The Bottom 20 variables

One of the most glaring discrepancies between the tables by the investor community and those of the IPAs is that while the former featured “corruption” as number 3, the latter put it in the bottom 20, at number 30. During one of my detailed one-on-one interviews, an investor indicated that “corruption” was worse than other economic indicators such as “cost of doing business” and “taxation” since it was difficult to manage in that besides the ethical challenges it posed, it could not be budgeted for since it could not be known how much it was to be. Many African countries are poorly ranked in the annual Transparency International’s “Corruption Perceptions Index”.

Worth noting from the research is that “innovation” was ranked in the bottom 20 in both investors’ and IPAs’ tables – the former giving it a lowly position of 28 and the latter 25. Perhaps from the investor perspective, more opportunities exist in foreign markets if innovation levels are low since it could provide them with a competitive edge over the locals. Anthony et al. (2015) argue that all innovations can be organised into two main categories – namely, the kind of innovation that extends current business through enhancement of current products and offerings, or by introducing efficiencies; the other is that which generates new growth by reaching new markets and new customer segments through new, creative and ground-breaking business models.

Despite such radical variations with regard to the most significant or relevant variables as described above, the two groups, the investor community and the IPAs, gave identical rankings for the two least significant and relevant variables in the Top 40 table: “citizenry lifespan” and “religion and tradition”.

An area for further study relates to the role of mass media in influencing my identification and choice of the relevant 40 variables to be studied. For instance, since power cuts are topical in sub-Saharan African mass media, this research introduced two inter-linked variables: “availability of electricity” and “infrastructure development”. This was done to bring a specific focus on the former even though it is inherently implied as part of the country’s infrastructure.

Recommendations from the study

This study had answered the three primary questions that I earlier alluded to that drove this research. The variables chosen represented elements of a nation brand which, through investors’ perceptions, could be identified, managed and even changed for the better through a concerted global marketing campaign. As indicated earlier, the findings revealed sharp discrepancies between investor perceptions and what the IPAs thought was significant and relevant to investors in their decision-making processes. So I was hoping the findings would help guide the IPAs in revising the content of their global marketing campaigns – by providing them with what elements to focus on, emphasise over others, and which new elements to bring into the prominence, and which elements to drop.

So my new research will utilise the existing variables and see how the outbreak of COVID-19 has changed the investor perceptions on what is relevant or significant, and furthermore, whether the IPAs have since learnt what is relevant or significant in investor decision making. IPAs have to know perceptions are key and that there’s a think line between perceptions and reality, and like I have said before in this news portal, perceptions are a reality!

I was privileged this week on Monday to be hosted in a panel interview on Village Square Africa programme on Nigeria’s News Channel television station. Provocatively themed “Public outcry over the monumental flag”, it was anchored by Sulaiman Aledeh and my co-panellists were Ismail Mahomed, Director of the Centre for Creative Arts; and Gogo Londiwe Mntambo, Project Manager at the Rivonia Circle. The essence of my intervention was that although the flag project was ill-timed, we still need as a post-apartheid country to erect progressive heritage monuments that resonate with our values to transform our cultural landscape as it is still dominated by apartheid symbols that we haven’t destroyed after attaining our national liberation and, furthermore, arts and culture sector is an economic tool which should be harnessed to contribute to socio-economic development and growth of our country. To watch an almost one hour programme, please click on the video below:

Before closing, those interested in listening to my interview on the AfCFTA with SAFM, please click here.

Let me also thank the Circle of Global Business Women for having invited me as one of the speakers at their Africa Month celebration yesterday on Thursday.

We have just produced an 11-minute Brandhill Africa group corporate video, please click here to join our entrepreneurial journey. I’m grateful to my 16 year old son, Tshiamo Molobi – whose stage name is “Maedei” and has music released on streaming services – has composed original music to score the video. I’m also grateful to the team at the film company, Noes Film Services – Ntsiki, Joshua and City – for the sterling work in producing this video.

Enjoy your weekend.

Saul Molobi (FCIM)
Tel: +27 11 759 4297
Mobile: +27 83 635 7773

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