November 30, 2020

AfricaTopForum

AfricaTopForum – News Around Africa

Africa doesn’t embrace its young, black entrepreneurs – Molai

31 min read

Adam Molai, is an Zimbabwean industrialist and founder of TRT Investments which manages a diversified sector portfolio and operations in Nigeria, South Africa, Zimbabwe, Zambia, Mozambique and Botswana, and whose latest interests have seen a foray into the US and European markets. In this interview with FESTUS ERIYE he speaks about his entrepreneurial journey, challenges African entrepreneurs face, why FDI isn’t the solution to the continent’s economic problems and why COVID-19 is a once-in-a-lifetime opportunity for the continent.

 

You are fairly well known in Zimbabwe and, I guess, in South Africa, but speaking to a Nigerian audience, can you tell us about your entrepreneurial journey?

Mine is a bit of a strange one because it didn’t start formally, it started really as a child. My father was a retailer back in the days before the independence of Zimbabwe, it was still Rhodesia and I, unlike the other children who were playing soccer in the townships, on the streets, used to spend my time standing on a Coca-Cola crate selling over the counter. And why Coca-Cola? It’s very strange because today we have taken 60 per cent of the market from them, when it used to be the stool upon which I started my entrepreneurial journey. There were always shortages in Africa and the greatest one I remember is there were shortages of matches and the big brand then was Lion Matches. We’d get two big boxes of matches to sell in my father’s supermarket. They’d put it in the store to sell. I’d say, okay, sell it to me. And 200, 300 metres away was a big district bus station where everybody going to the rural areas went. I’d go there and start selling each box: they had five cents written on them – and I remember I’d sell them 20 cents each, make my 15 cents, go back to my father’s supermarket, give them their five cents and keep my 15 cents. So that’s when I learnt arbitrage. I was still 10 years old. In high school I never got pocket money. I used to run a little feeding business. You know the food on Sundays at high school – I was a boarder – it was terrible. I never used to like it. I started asking the guys from my father’s shop again to bring in meat, baked beans and we started doing barbecues or braais as we call it here. And all the other students were now buying meat, buying baked beans, buying rolls every Sunday. So, I was running a flourishing braai business whilst I was in high school and that’s how I survived.

When I got to the university, it was the same. I ran a network marketing venture when I was in the UK and within one summer, we made a considerable amount of money, so much that I decided I didn’t want my father bothering me about what I was doing in the UK. I then said okay, I’m off to Canada and I went to university in Canada, paid for myself from my money that I made and also paid my way through working again. Across Canada they used to have what they call small businesses consulting services. It was a service where they were trying to train young Canadians to be entrepreneurial and offer their business skills to small businesses and municipal governments. The one at the university I went to had been closed. We restarted it, grew it to an extent where we rebranded it from small business consulting to management consulting services because we started offering services not only to small businesses, to municipalities, to the provincial government and even to the Federal Government. Up till today there is a scholarship of my alma mater in my name, because I left a $50,000 annuity. I left there in 1996 and up till today a student gets a scholarship annually from the annuity we created.

From selling chicken, to tobacco business, to mining

When I moved to Zimbabwe my first business was the chicken business. It was the joke of the family to say that ‘This young boy, what has happened? What has gone wrong? We sent him to the United Kingdom, we sent him to Canada and he’s come back to grow chicken and sell chicken! But they didn’t understand the vision behind everything, what we were trying to do. We really created chicken and moved it from being a special occasion meal. At that time chicken were sold as full chicken or, in some instances, half chicken. So, coming from the experience of selling in my father’s supermarket butchery, people would come and say ‘I’ve got $1. I need meat.’ You would cut up a little piece and wrap it in paper and they’d go.’

That’s what we did with this chicken. We froze them, cut them up into little pieces and then people would come and say I’ve got a dollar I want chicken and you’d give them half a piece. You gave them whatever. At least they’ve got the taste of chicken in their food. That’s when we started and got into retailing from my father’s old shop… my father had now passed on. We opened another one and then bought a foundry. We then got into tobacco, started our own tobacco ventures, created a migration from auction system of tobacco where there was only 4,500 former white farmers, and when land reform came I approached government and said guys, this industry is going to die. If you don’t allow us to do contract farming where we capacitate the farmers, we give them seed, we give them knowhow, we give them fertiliser, the industry will die. Fortunately, they listened. They were very brave because I was 29 at that time and I don’t know if today I would listen to an unknown 29-year-old who is presenting a proposal, but they listened and it went from 45 million kg – 200 million was the height in Zimbabwe when there were all-white farmers, it then went down to 45million. But it then created over 14,000 small scale local farmers, who up to three years ago would grade 250 million kg of tobacco, 25 percent more than what the former white farmers had ever produced. So, that went well and we then said ‘Look, we can’t continue to be exporters of raw materials.’ I knew nothing about tobacco, but what I know is we must value-add, beneficiate and hence started investment in producing cigarettes and from there we started going from Zimbabwe to South Africa, to Zambia, Mozambique, into all the other countries around Southern Africa. But it then took us to, of all places, Jamaica. So, we even set up a factory in Jamaica.

But unfortunately we closed it last year because the criminal activity that started coming into the industry was more than we were willing to bear and what is BAT in Jamaica, their employees were shot dead by some drug players because they were now trying to come into the industry and that’s when we said, ‘Look, it’s too dangerous for our staff, we’ll never put our staff at risk.’ That’s when we exited Jamaica. So, from there we invested in all sorts of industries, we bought a mine from Anglo-American – the second largest chrome smelting, mining business which had six per cent of the world’s chrome ore, and I’m happy to as of today, we finally got our last payment and I’m now officially out of mining. We then got into several other industries; from financial services to, now through the pandemic that came, we then got into manufacturing of the PPEs, of masks, all sorts of masks, and manufacturing of protection kits which we are now selling in the Americas and in Europe, from online. Then we started getting investments into smaller things, we invested in an airline in Botswana, logistics; we have probably the largest liquid logistics business in Zim, moving from Mozambique, Zimbabwe, Zambia, DRC. We are the biggest distributors of lubricants for Fox, which is the biggest German manufacturer of lubricants. So all Mercedes, BMW, John Deere tractors, they use Fox lubricants and we are the distributors in this part of the world. So, in a nutshell, that is my journey.

What’s the nature of your business in Nigeria and West Africa?

We came to Nigeria in 2018. In fact, I sent a two-man delegation, my CEO and our operations director. I’ll explain later why I sent them. But they came and they met with your Federal Minister of Housing. It was just before elections. When you look at Nigeria, 206 million people, and in fact it’s a lot more than what’s been recorded. But Lagos, 21 million plus, and Lagos alone has a housing backlog of up to five million houses. Seeing that, and seeing the system of construction we are using, which allows us to build top quality housing, extremely efficiently three and a half times stronger than the standard brick. So we use a cast in situ process where we have forms that basically create cast in situ bricks. So we’ll create a form of within a four-storey, 10-storey apartment block, and you then have forms that are created out of it. And from those forms, effectively, it’s like having a cookie each day we put a form, we pour concrete, by the next day, you’re removing the form, the concrete is set, the conduit is already in the concrete. So you’re not chasing the walls like we do in standard where you’re chasing the wall, put the electrical conduit in, put the plumbing into the wall. We do it all as one process. So within the space of literally 28 days, we can go from ground to occupation, and we implemented that effectively. It’s a system that’s used in South America a lot. In Jamaica, they use it a lot. It’s hurricane-proof. It’s extremely robust and it allows fast-paced implementation. But what is most important, it allows us to use local labour. So, we don’t have to bring skilled bricklayers. We can just find people from that community in Lagos; the development we’re looking at right now is in Ikoyi… so we go and to find people who are within that environment in Ikoyi, train them within a week or so, and they will be able to come and work from their own local environment and implement that construction project. The tradesmen that we only then need are electricians, the plumbers, and the carpenters, but in terms of the actual construction process up to getting the unit to roof level, we use unskilled labour from the local community. So that’s what we brought and the first project we are working with a gentleman called Chris Oshiafi, he is head of the PanAfrican Group. He’s an old friend of mine and that’s who we are working with in terms of the first development. But we are also at a very advanced stage of a 2,000 housing unit development also in Lagos as our second project, because the first one is this one with PanAfrican, but as the first project that we’re going with on a different level, which is pure housing. The one in Ikoyi is more luxury accommodation. But the 2,000 one is the lower, more affordable housing; but at a quality level that we’ve not seen in terms of affordable. So, we’ve spent almost three years, heavily investigating the market in Nigeria. We’ve been invited to Abuja, we’ve been to Anambra State, and we’ve been to Lagos, we’ve looked at quite a few different areas. We’ve said to ourselves, let’s start for now in Lagos, logistics are easier, skills are more available and then once we’ve developed our model, and perfected it within that environment we can then roll it out. But what we really interested about is, we believe we’ll be able to facilitate the creation of many Nigerian entrepreneurs in the housing space, because our system becomes almost like a franchise. Once you provide the forms, and the development of the training, and we have over 750 quality checks within each house. So it’s a properly highly documented and highly, almost like a manufacturing process. It’s easy to then trade locals, and they are then able to go and implement in Anambra, while we are in Lagos. They’ll be able to go and implement in a different state, whilst we’re in another state. It allows a roll out almost on a franchise mode, because we can provide them with the skills, and then that creates the success. What we’ve learned is in Africa, we should never go to them. We should always work with locals, they know the landscape better, they understand the landscape better and if we partner together, we’ll be able to get much better results. So that’s basically what we’re looking at in Nigeria and we’re hoping by the end of the year, next year, we would have been able to invite you to come and see some of the developments and actually get a touch and feel of what we’re doing. But it’s really different and it’s at a different quality from what we’ve seen in Nigeria and we hope to really excite the market with the product. We’ve obviously had to make some modifications, and that’s the beauty about coming into the market. When you look in South Africa, when you look in Zimbabwe, our practices in terms of cuisine are very different. So if you come with a product that’s working in Southern Africa and you go and try and implement that in Nigeria, and you don’t take cognizance of the need to actually close up kitchen space, which… South Africans and Zimbabweans, you leave an open flat for the kitchen into the living room. Now in Nigeria, we can’t do that. So we’ve had to modify, make sure that we build it so that as the kitchen and cuisine has been prepared, it doesn’t affect anything else happening in the rest of the house. But now we’ve got a product that we’ve been very happy with, and which we expect will be rolling out in earnest during the course of next year.

You are obviously making a lot of progress going into different African countries. An entrepreneur who might be reading this would like to know what kind of experience you’ve had going into these different countries. What kind of welcome have you received?

If you remember I said I would tell you another story when I spoke about sending two people coming to Nigeria, an advance party. One of the greatest challenges I’ve seen is that we struggle as Africans to embrace each other. The two gentlemen were of a different ethnicity to me. The CEO and Operations Director were Caucasian. They were well embraced and welcomed in a manner that I would not be welcomed. And it gives me an example of another country within this region of Southern Africa when we went in with our tobacco business. We had a meeting with the Minister of Finance. It’s an excisable product, so the Ministry of Finance had a lot of interest. We had a meeting and the perception created was they were very excited and we’re looking forward to our investment. But a month, two months passed, nothing. We then had employed a new CEO for that business, he was a Caucasian. The next week, he went there, he met the same minister. In the one meeting he’s phoning is to say, “Please, minister, can I phone my chairman to ask if he can come so that we find can finalise this agreement?’ Two days later, I was there. And the minister was shocked when he saw the chairman that was coming, for this occasion was the same man who had come two months ago. They didn’t believe it.

Our challenge is that I’m too young, and too dark for the size of my vision. Our continent doesn’t embrace us, as young, black entrepreneurs. They don’t believe that a young Festus can go and do the things we are talking about. They don’t believe that a young Festus can become an investor. I have not considered foreign direct investment. I am investing across our continent. There is no recognition that that is investment, it’s treated as something that just happened. We haven’t started to take our own seriously yet, that’s one of the major challenges that I’ve found is that we have to send our employees of other races to go and drive our agenda, because we will not get the seriousness that we require in terms of the investments that we are looking at. That’s a major mindset obstacle that I think we need to overcome.

Two, I think there’s a need to make sure that we embrace our partners and our brothers and sisters in the other countries, because we should never drive any level of investment without ensuring that the locals are an important and integral part of that development.

Going it alone and going the old, arrogant and greedy way of saying “I’m going to go it alone,” I’ve seen many tears going that route. And to see success, you have to have vibrant locals who understand the landscape.

But again, you also have to get an appreciation of the political landscape, because our continent is still very politically-driven. You need to make sure you understand that the people you are partnering with are not viewed negatively from a political perspective. That could have a major impact on what should be a great investment, because I’m partnering with somebody who’s part of the former ruling class, not part of the current incumbent ruling class, which then limits the longevity of our investment, because politics always results in change. So when that change happens, and your partner with people who are part of an establishment, that is the status quo now, and that status quo leaves, it creates its own issues. So it’s always trying to find people who somehow have a level of political ‘agnosticness’, they’re politically agnostic, they kind of have multi-political relationships, so that they’re never seen under one particular umbrella. And I think that was a major lesson that I’ve got, in that if somebody is identified with any particular political establishment, it’s a big threat to your investment and your business.

Still talking about politics intersecting with business was your relationship with the regime of former President Robert Mugabe a kind of help to you climbing up? Perhaps you want to talk to us about that, because not everybody will have that kind of relationship?

I’ve always laughed at that question, because you would have had to know me as a student who was able to create a scholarship fund that up till today enables Canadians. You would have had to somehow subliminally have been able to control what I was doing in Canada, what I was doing in the United Kingdom. My entrepreneurship did not start in Zimbabwe. My entrepreneurship started even when I was on my educational journey in the United Kingdom, even when I was on my educational journey in Canada. By the time I came home to Zimbabwe, I was investing funds which I made from these entrepreneurial exploits during my days living in the Diaspora. So, I didn’t get any bank loans in Zimbabwe, there’s no bank that can say they gave me a loan when I got back to Zimbabwe. I came back with capital that I deployed into the businesses that I established when I got back to Zimbabwe.

And that was way before I got married. I only got married years after I was already in business, and, unless we were able to do some miracle business, within a year of my having gotten married, I had already been given the title of Zimbabwe’s National Business Person of the Year. This was for businesses that had been developed pre-my getting married. This was from businesses that had been developed pre my getting married. I’ve always said to people if there was an albatross that was actually a big hindrance to an ability to drive business to the level and scale you want to, it was that political expectation. If you look at all the businesses we’ve embarked on, we’ve never had one tender in any country in the world and we don’t do government business. We’ve never been tenderpreneurs – doing tenders I call tenderpreneurship; it’s like hunting in a zoo. Where’s the fun? The animal is caged, right? And you say I went hunting. The animals already caged.

So, for me, the hunt is what we enjoy. If that had been the case the growth of our businesses post ‘his’ departure from the political scene could have meant our business would have crumbled. But instead they’ve grown. We’ve grown phenomenally since his departure from the political landscape. So if you look at one thing in common with our businesses, other than the one which I was talking about, they were all startups. The first business I talked to you about, the chicken business, was a startup, the tobacco business was a start-up; it didn’t exist. The housing business was a startup; it didn’t exist. The protective wear business I was talking to you about? Startup, it didn’t exist. The bottling business I was talking to you about was a startup, it didn’t exist. We started from the ground.  If anything, I can say, our growth was marred in many cases because certain of our brands as we developed them, when people associated them with your relationship with a certain politician who they either didn’t feel happy about or whatever, actually had negative consequences. So, we have actually had to work harder because of it, rather than it been something that made life a lot easier for us.

I was just trying to develop this thought about the kind of welcome that African entrepreneurs get when they go to other countries. Recently, Nigerian traders had challenges in Ghana where they were required to deposit a million dollars to open shop. In South Africa, sometime last year, we had cases of Afrophobia or xenophobia? Have you had those kinds of experiences? What do you think governments can do to make it easier for entrepreneurs from across the continent to do business in territories that are not ordinarily their own?

That’s the reason why I’m saying, for me, the greatest lesson is partner with locals. Once you’ve got locals on board, you’re able to better traverse those complexities, because when there’s a gridlock and the local is appealing to their own local leadership, they have a higher propensity to be listened to than you as a foreigner. So this is why in our models, we always say let’s work with locals, because locals will always be a considered first in the environment. They can go and appeal to their own members of parliament, they can go and appeal to their own local political leadership, they can go and appeal to their own local civil servants, in terms of trying to manoeuvre and work through whatever challenges you face. But as a part of the hurdles you need to get over, especially as an African, a black African, are at an unprecedented level. We don’t have the same kind of diplomatic interventions that our Western colleagues would have, where, if an American is going to invest, the American Ambassador would be very bold, the American Embassy would be very bold. And our governments would be running, really literally running, to do whatever they can to meet the needs of the Western investor. In the same way, if it’s a British investor. In the same way if it’s a Nordic investor. But as an African investor you actually face the opposite, you actually face obstacles rather than the doors being open for you. I always finding it very strange a young Chinese or Western entrepreneur coming into Africa will find it so easy to go meet with our local leadership to try and discuss an investment. An established African entrepreneur or business person will face great difficulty getting the same audience. Those are the contradictions.

Would you say that has to do with either a complex, or a sense of competition, or a sense that the political leadership feel threatened by these economically empowered young people?

It’s two things. Normally, in our own environments of origin, once you get to a certain size or scale, the politicians are threatened by you, because they feel that the next thing is you’re going to go after political power, and maybe become a threat to them. But within the greater context of the continent, it’s more a lack of self-belief. It’s more a lack of belief that another black African… how does a Festus come and tell me he’s going to get investment? I grew up playing soccer on the streets with Festus. He grew up like me, comes from the villages like me, why does he think he can do this? I have a story of one who said when I said we’re going to be making cigarettes, they told me 10 years later, Adam, when you told us that story we pretended to be supportive. We pretended as if we believed, but we just thought it was another one story from a young boy, just very ambitious but it’s going to among to nothing. So there isn’t a great level of self-belief between ourselves that our own young people have the capacity to do what we were conditioned as growing up, could only be done by Caucasians, Indians and people of other ethnicities who came to our countries.

2020 forever will be known as the year that COVID-19 came and scarred everything. How has the pandemic affected your businesses in the different countries where you have been operating?

Some countries took more drastic measures than others. I’ll give you an example. In Zambia there was no lockdown, so it had no impact on business. But in a country like South Africa, it was a total lockdown at one stage and that had a significant impact on our businesses in that environment. You go to countries like Zimbabwe they had different levels of lockdowns. So, it was a smorgasbord of impact.

But I think the greatest impact was more in terms of our investments in the tourism industry. I mean, we had a small airline which we literally had to put everything to the ground, because the aeroplanes were carrying tourists to various tourism sites, and with no tourists coming, then there is nothing for them to do.

Housing, you know, in South Africa, particularly, with the levels of lockdown, I think housing only came back at the third level, there was level five, when nothing was up. Level four, certain businesses were open. Level three is when now construction was able to come back. And then when you look at things like cigarette business, it only came back at level one. So, it went through the whole six months of total shutdown where the business was closed, and you weren’t doing anything.

But what it did, I think it was a great opportunity for reinvention. I think what I saw from the COVID era was we were really able to go and reinvent all the businesses. We were able to go look at them and look at the opportunities that COVID also presented. When I speak to you about this factory that we created in Johannesburg for PPE, it was because of COVID. We realised that as a continent we can’t continue to import everything that we need. There is COVID, so all of us are rushing to China to go and buy. Does that mean we don’t have capacity to make our own? We said, no, we’ve got capacity, let’s make our own. So we created a business, bought equipment, brought people in; we created employment where everybody else was closed. And that business was allowed to operate, even at the highest levels of lockdown, because it was an essential service. We then looked at it and we said to ourselves, for Africa to be taken seriously, it also needs to start providing solutions to the world. And because of the business we do, I do a lot of travelling. So, I said the first thing we need to do is travel kits. If I was to travel tomorrow what would I need? We created a travel kit and had it manufactured out of China initially. But now we’re bringing the production back to Africa because now we’ve created the facilities to be able to do this thing. But we were able to provide the solution and we actually launched it in America, not even on the continent because the continent mostly was closed. The second market we launched into was Europe because that’s where a lot of the travelling was still happening. Now, with Africa starting to open up more in terms of airspace and travel, we’re now starting to look at bringing people across here too.

Every adversity creates opportunities and like anything else COVID has created its own fair share of opportunities. We’ve gone and pursued them and we’ll continue to pursue them.

When people talk about COVID and its impact in Africa, the narrative has always been job losses, companies going under and so on and so forth. How long do you think it would take for the continent to recover from the losses? What kind of interventions do you think needs to be made? I understand your argument about opportunities that COVID has created, but aren’t there some interventions that governments should be making to hasten recovery from the damage that has been done?

Before I go there, let me take us back to provide a framework for my response. If we look at the 1929 Great Depression, it created the largest number of millionaires in America than ever in the history of America. It created double digit number of billionaire families. Right? Why? Because they allowed that Great Depression to spawn solutions to what was happening. My view is, if we, as Africa are ready to grow out of this, we’re going to have to really have an entrepreneurial-led revival, not a politically led revival. Unfortunately, when things happen like this one of the first things I hear from most governments is to go and recapacitate some state-owned entities which are dinosaurs that deserve to be dying anyway. But that’s where our focus goes. It’s literally like going into a mall with a lunchbox and a spoon to feed a corpse. Where is the wisdom in that? I think what we need to do is to let the entrepreneurs be working with government to help lead the recovery. The 1929 Great Depression why did it spawn so much success? It is because America allowed it to be an entrepreneurial-led recovery.

What governments should do is now create an environment where the same way they have incentives for anybody who calls themselves FDIs, they should offer those same incentives to us as Africans, to allow us to do what they want FDI to do. Right now, what we normally look at as FDI is focusing on investment in their own markets. We’ve seen a 20 to 25 per cent decline in FDI on the continent. So, our solutions are not going to come from FDI. They’re going to come from us, internally, on the continent, from the continent’s entrepreneurs. Unless our governments start to recognise us, start to give us the same level of incentives… because how do I compete if my Chinese counterpart who is investing in the same industry is getting a 10-year tax holiday, is getting a duty-free importation of capital equipment, is getting a holiday on employees or income tax for 10 years? But me investing in the same industry, I get none of that. I can’t be as competitive. All those incentives go towards creating a lower cost of production for the foreigner who is investing than me who is a local investing in the same industry, at the same level, to achieve the same objective. So, we as Africans become less competitive because we are literally given a higher cost of production by our own governments. So one of the most important interventions I think we need is to level the playing field, so that African entrepreneurs have the same opportunities as a foreigner and are able to be matched at a cost of production level and an incentive level as a foreign investor.

I am particularly interested in that thought about foreign direct investment and what you call domestic direct investment, because speaking from a Nigerian perspective, you get politicians who make a big song and dance about travelling overseas to go and get FDI and that is something they brandish as some big achievement. So, would you say we are going to see a situation where – because you’ve talked about a 20 to 25 percent decline in FDI coming to Africa – there’s going to be an increase? Maybe there’s something about Africa that will cause an increase in this investment coming from outside? What do you think is going to happen that will trigger this domestic investment increasing?

I think we’ve been given an opportunity like will not come back in our lifetime. This pandemic has shown the weakness in global supply chains. There was a global concentration of risk in the global supply chains, everybody was looking, and starting to look at China as the solution for all supplies to the world. Now the world has realised that it’s funny, they’ve realised the mistake of everybody – you saw what happened with masks, everybody was in trouble with masks, yes, because everybody was looking at one supplier, right? That’s the risk concentration that the world has created. That needs to be solved. And that will be solved by people now looking at other destinations as supply sources. And that is what we have as Africa. We have an opportunity to become an alternative supplier to the world. If you look at our labour rates, they are now where China used to be. China’s labour rates have now started to go up. In the 1950s, when production started shifting away and America was now shifting to the next level of their development, you had China emerging, but it really came later down in the 80s. That’s when there was a significant shift in employment coming from the Americas going to China. And the way we were in the 80s, when it was migrating from America to China, is where we are today, where it now needs to migrate from China to somewhere else. That somewhere else, who better than us as Africa? We’ve got everything that they need. We’ve got the raw materials that we send to China to be made into products. We’ve got a young population, younger working population than any other continent. And we are now able to leapfrog the technological advancements in productivity because we can start with more productive carry equipment than they were using when they had to keep migrating and getting to a newer technology. So, it sets up in a space where we could very quickly leapfrog and become the alternative supplier to the world. But, for that to happen, we need to show we are serious and have our own industrialization plan. Now, with that industrialisation plan, that’s what is going to also then make FDI start to take us seriously, where we say “FDI please come along with us, and invest alongside us as locals in this industrialisation of Africa as the alternative source of supply to the world.” That’s how I see it being able to work. If we are able to exploit this opportunity, we will have the greatest growth we’ve seen in the history of Africa. But if we treat it like business as usual, if we continue to ignore our local skills, if we fail to see the signal of what the world requires, then it would be another bus that just drove past our station and goes to another station.

Your big break was with tobacco. Where is that business now in terms of success, in terms of market share in Zimbabwe and in that region?

We’ve done extremely well with that business. We’ve managed to really grow our franchise. When you enter a business, you enter normally into the general level of the population. So, we were providing the value for market segments with different brands that met that expectation. We have now started our next phase of our journey where we are now started going into the premium segment; so, we are no longer now producing only for the lower end of the market. We are now directly going after those brands that are the top end of the market. So, the big brands that people pay a premium for on the continent is what we are now creating our own versions of, to now start playing in those leagues. So, before we were going for market share, now we started to migrate to value share. One great lesson that I learned from here, there was a stage we had more than 60% of the market in Zimbabwe for cigarettes, but when I looked at the value share, we only had 32%. That was a great awakening moment to say, we’ve been busy being busy, we’ve busy providing products but that of low value. We now need to be providing even a higher value product. So now we’re saying, we ‘ve got 20 to 25% of the market share, but we have 50% of the value share. That’s where we are now migrating that business to say, let’s now focus on building value share more than we’re building market share. We now have also decentralised our production. We used to centralise our production in Zimbabwe and then export to all the other regional countries; we’ve now set up factories where we are now manufacturing in all these other regional countries, so that we are now locally domiciled entities within most of the jurisdictions where we are selling the cigarettes. So, yes we’ve had great success, thank you in terms of that business and I think we continue to see opportunities in it. The big development that happened – it took us nine years – but it told us a story in terms of being true to your convictions, remaining principled and aligned to your true north. We’ve been talking to the Chinese, and they wanted us to sell their brands across Africa. We said, certainly we are willing to do that but on two conditions. One, your brand we’ll produce under licence here in Africa, and then sell in Africa. So, we’ll create the jobs in Africa and sell in Africa. Two, you’ll allow us get a quota to sell into China. As I am talking Africa is the only continent that doesn’t have a quota to sell cigarettes in China and I think it speaks to our leadership and our priorities. We are too busy negotiating for goods to come from China, so much so that we don’t see a need to develop our own goods going back to China.

So I’m happy to say as of last year, we finally signed the agreement where we are now the exclusive manufacturer for the Chinese tobacco monopoly. We’ve started manufacturing Chinese brands here in Africa, and to supply the Chinese Diaspora. So, we are effectively now targeting the Chinese across Africa, with their own Chinese brands but made in Africa, not made in China.

So for us, that was a great victory in terms of conviction to say, the easiest route would have been to quickly accept those brands to be made in China, we import, we send our scarce foreign exchange to China, and we create nothing for our people. But we said no. If our reason for entering the tobacco market was value addition and beneficiation and creation of value on the continent, what we were looking at doing in terms of importing would have been anathema to that whole idea. So we said we would rather not do business with them than break the mission of why we established this business. So we stood our ground and we managed to achieve it nine years later last year and now we are the exclusive manufacturer of the brands on the continent.

So what next for that little boy who stood on that Coca Cola crate all those years ago? What next for you?

As I look today, I say 2050, Nigeria will have 400 million people. 2050, Africa will have 2.2 billion people. What are we doing today to start getting ready for that growth? It won’t be provided overnight. When you have 2.2 billion people, how many loaves of bread are going to be required? How many pints of milk are going to be required? How many houses are going to be required? How many bottles of Coca Cola are going to be consumed? Who today is planning for that growth? So unless we as entrepreneurs are planning today for that growth when people are going to be moving in their droves… Look at Africa today, got a 3.5 per cent urbanisation rate – faster than any place in the world. We’ve got 60 per cent people still living in rural areas. So, can you imagine with a 3.5 per cent urbanisation rate, all these people now moving into the urban areas. I mean, they say 3,000 people move into in Lagos every day. Now, when you consider all these statistics, and the requirements we have for that, the major issue we have is to now start building the infrastructure that delivers for what’s coming. We need to stop thinking as Africans for the next year. I know because of poverty, you’ve always think about today. We’ve always gone to the market, sold whatever we saw today to come and feed the family today. And that’s what created our very short term thinking. But now, where we are we now need to be thinking in terms of decades, we now need to be thinking in terms of centuries, in terms of what are we doing to ready ourselves for what’s coming? We had a strategic planning meeting with my team on Friday. And that was what I was sharing with them to say, guys, we’ve got a growth, we’re going to have almost a doubling of the population on our continent over the next 30 years. What role are we going to play? What role are we going to play in our existing sectors? What role are we going to play in terms of creating the ecosystems that support each of the sectors we’re already in? Which sectors are we going to exit because they’re not going to be relevant as we go into the next decade? And which sectors do we now need to start investing in to be ready for the growth that’s coming in the next decade? So, right now we are at a stage where we’re really planning for the next big leap of Africa, when we now have the largest population, and we are now able to leverage on our population like China. China’s growth has been has been driven by the population, it’s been driven by the numbers – whatever you produce, because of the billions of people that are there. I mean, you can never produce enough, you will always have demand. With what we now have, that’s where we’re going. So, we are now at the cusp where we are readying ourselves for the explosion of Africa; infrastructure, what is going to be required? Transport systems? How are all these people going to travel around? How are they going to be provided? What is the plan going to look like? Where do we need to be accessing land? And where do we see each of the cities developing to? How are we making sure that we’re already starting to create a land pipeline that is able to deliver the accommodation for the future in terms of where we see each of these cities growing? That’s where we are now in terms of our planning. That’s where we’re looking at investing to make sure we capacitate the continent for the growth that’s coming. ENDS

 

QUOTE

“Our challenge is that I’m too young, and too dark for the size of my vision. Our continent doesn’t embrace us, as young, black entrepreneurs.”

“My view is, if we, as Africa are ready to grow out of this, we’re going to have to really have an entrepreneurial-led revival, not a politically led revival.”