Africa’s beauty industry continues to soar and reach new heights. However, amid this laudable growth comes a myriad of challenges that are especially exacerbated by the weak international relations among African nations. According to a paper by the African Economic History Network, the roots of weak international relations among African countries can be traced back to the colonial era, when the arbitrary borders drawn by colonial powers did not reflect the continent’s ethnic and cultural boundaries, leading to numerous conflicts and a lack of cohesion. Post-independence, many African nations began to prioritize national sovereignty and economic self-reliance over regional cooperation, further entrenching the divisions.

According to Open Knowledge Repository by the World Bank, trade among African nations is low, at about 16% of the continent’s total trade volume, which is much lower than the intra-regional trade levels in Europe (68%) and Asia (59%). This lack of a unified approach to trade and development has persisted, with many African countries maintaining protectionist policies to safeguard their nascent industries.

These strained relationships create significant obstacles for industries and businesses, including the beauty sector, which depends on seamless cross-border trade and robust economic cooperation. This was one of the many challenges brands like Uncover Skincare, based in Kenya, had to face when looking to launch into other African countries, even though the country has proven to be a hotbed for growth. “We did face multiple challenges when launching, but being unable to do a seamless transaction with countries you share borders with [due to their weak relationship] was definitely one of the most frustrating,” Sneha Mehta, co-founder of Uncover Skincare, says to BeautyMatter.

As these challenges that come in a myriad of ways persist and as industries such as beauty are not isolated from them, brands continue to grapple for ways to mitigate them. One of the most significant challenges for the African beauty industry is the lack of a unified trade currency. With 54 countries using different currencies, businesses face high transaction costs and exchange rate risks. For example, a beauty company in Nigeria trading with South Africa must navigate the fluctuating exchange rates between the Nigerian naira and the South African rand, complicating pricing strategies and profit margins. However, one key way brands have managed to navigate this is through using the popular legal tender, dollars, although that in itself is proving to be extortionate especially for brands in low-income countries, due to currency exchange rates.

Border control issues and inconsistent trade regulations further stifle the beauty industry's growth. “The border control within Africa’s internal trade is also not friendly to brands, especially those that are growing at a steady pace,” Mehta says, bringing to the fore the issues that exist within cross-border trade alignments in Africa. Customs procedures can be cumbersome and unpredictable, with goods often delayed or subjected to arbitrary tariffs. For instance, a beauty product manufacturer in Kenya might find it easier to export to Europe than to neighboring Tanzania, due to more streamlined European Union trade agreements compared to the bureaucratic hurdles within the East African Community (EAC). Beauty brands like Uncover Skincare have told BeautyMatter that they often find it easier to do this.

Different regulatory standards like the acceptance and importation of products based on company size across countries pose another significant barrier. Also, countries accept varying amounts of ingredients in products before allowing importation, causing brands to be unable to create a single product line due to inconsistency between countries. Countries like Nigeria, South Africa, and Kenya, which boast substantial beauty markets, each have distinct regulations concerning product safety, labeling, and marketing. A product approved in one country might face rejection or require significant modification to meet the standards of another. Similarly, product development and approval can differ from country to country. Ifeoma C. Kamalu of Aku Organics, a burgeoning skincare brand, recently announced that she had to cancel plans to register her business with the National Agency for Food and Drugs Administration Control (NAFDAC), Nigeria’s regulatory body, which would enable her to enter into the Nigerian market, due to a requested $10,000 fee per SKU. Aku Organics is registered with the FDA in Ghana, and for a much smaller amount. This lack of harmonization not only increases costs but also deters smaller companies from expanding their market reach. To offer an overview of the complex requirements of the region, BeautyMatter rounded up the largest African beauty markets and their regulations.

Nigeria

Nigeria’s beauty market, one of the largest in Africa and projected to reach $9.71 billion in 2024, is regulated by the National Agency for Food and Drug Administration and Control (NAFDAC). NAFDAC imposes certain requirements for product registration, including safety and efficacy tests.

South Africa

South Africa's beauty industry is similarly robust, and is governed by the South African Health Products Regulatory Authority (SAHPRA). The country has relatively advanced regulatory frameworks, often aligning with international standards. However, the complexity and cost of compliance can be prohibitive, especially for smaller enterprises. Its beauty industry is expected to grow to $4.19 billion by 2028.

Kenya

Kenya's beauty sector is regulated by the Kenya Bureau of Standards (KEBS), which mandates rigorous testing and certification processes, including radiography testing, pre-export and import verifications, and market surveillance. Although these measures protect consumers, they can also delay market entry and increase operational costs for businesses, especially for its beauty industry, which is expected to generate a revenue of $2.99 billion in 2024.

Despite these challenges, though, several initiatives aim to improve inter-Africa relations and foster a more conducive environment for business, including the beauty industry. Here are the enterprises fighting for improvement in the future.

African Continental Free Trade Area (AfCFTA)

The AfCFTA, launched in 2021, is a landmark agreement designed to create a single continental market for goods and services. By reducing tariffs and harmonizing trade regulations, AfCFTA aims to facilitate easier and more cost-effective cross-border trade. For the beauty industry, this could mean smoother export processes, reduced costs, and a broader market reach.

Pan-African Payment and Settlement System (PAPSS)

The PAPSS, developed by the African Export-Import Bank, was built to streamline intra-African trade by providing a unified payment system. This system allows for transactions in local currencies, mitigating the risks and costs associated with currency exchanges. For beauty businesses and the beauty industry, this means more predictable financial planning and reduced transaction costs.

Regional Economic Communities (RECs)

Various RECs, such as the EAC, the Economic Community of West African States (ECOWAS), and the Southern African Development Community (SADC), are working towards greater economic integration within their regions. These communities aim to harmonize regulations, improve infrastructure, and facilitate free movement of goods and services. Successful implementation of these initiatives could significantly benefit the beauty industry by creating larger, and more accessible markets.

Public-Private Partnerships and Industry Associations

Public-private partnerships and industry associations play a crucial role in addressing regulatory challenges and promoting best practices. Organizations like the Cosmetics Association of Nigeria (CAN) and the Cosmetic Export Council of South Africa (CECOSA) are working to address and advocate for regulatory reforms, and provide a platform for industry collaboration. These bodies help streamline compliance processes and foster innovation within the beauty sector.

The weak international relations among African countries present substantial challenges to the beauty industry, from trade currency complexities and border controls to regulatory discrepancies and infrastructural deficiencies. However, initiatives such as the AfCFTA, PAPSS, and efforts by RECs are offering a system where a more integrated and collaborative future is possible. By addressing these systemic issues and fostering stronger inter-Africa relations, the continent’s beauty industry stands a chance at unlocking its full potential, contribute to economic growth, and fully enhance the continent’s global competitiveness in the beauty sector.