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A Colourful Landscape for Service Exporters

The Middle East and North Africa Region is a colourful landscape when it comes to market potential for service exporters.

The GCC (Gulf) is arguably the highest potential sub-region for this particular category of exports, most evidently in logistics, education, and business consulting. In each sector, the demand for services varies among markets and within the same market.  Human development related services such as education and training are highly in demand by government agencies; more so after the ill-fated Arab Springs. Governments realized that human development is far more critical than skyscrapers, fancy airports, or sunning golf courses.

Niche pockets of specialist opportunities are found in highly specialist sectors, however this is more so in technical areas such as aviation or military.

Challenges to concluding an export transaction of services are quite vicious, in that they come unpredictable and the impact is usually terminal. I believe the simple and obvious challenge is actually getting paid. As services are an intangible export, it is usually difficult to quantify and argue its delivery parameters. Additionally, reputation capital is always at risk for a services exporter. The client knows that well and will hold you ransom for it!

Ironically, over charging and stiff payment terms may occasionally reflect positively on your perceived value proposition. My recommended formula is 60/40 with flexibility to accept minimum 50% advance plus out of pocket expenses. It is also highly recommended to have a face to face meeting with clients prior to any final agreement. There is no alternative to eye contact.

North African markets are lucrative for services exports, with their own set of challenges and rewards. War zones such as Libya are no exception, training and development for example is taking place in neighbouring Egypt or Jordan, preparing government staff for a time when the oil-rich Libya recovers from its “Arab Spring” saga.

Be prepared to work on a longer business cycle than you may expect, decision making is a tricky and vague process.  Word of mouth is your best friend especially when it comes to services exporting. Your offerings will be evaluated in the context of your personal profile so make sure your profile is attractive and professionally impactful.

Finally, do your homework intensely before any client interaction. Knowledge is power. Double verify all the facts and avoid confusing gossip with research, which is always a fun practice but usually counter-productive.

Feel free to email me if you wish to explore market potential for your services export in the MENA region.  Hesham.Salah@Katabolt.com


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