Africa Arrives!: The Savvy Entrepreneur’s Guide to The World’s Hottest Market

© Copyright 2018, Mark Byron, London, UK; Lagos; Nigeria

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To my Late Parents:

Emmanuel Olajide Byron & Josephine Olateju Byron

"Our children may learn about the heroes of the past.

Our task is to make ourselves the architects of the future."

— Jomo Kenyatta

TABLE OF CONTENTS

FORWARD

A Mutable Medium

We feel morally obligated up front to acknowledge a simple truth. Any book about Africa is—by nature—written on shifting sands. At this point and for the determinant future, it is the runaway mobile market in the world—dynamic, youthful and frighteningly subject to change. As such, it is a socio-economic rocket ride whose spirit we can only hope to capture on these pages.

In doing so, we know that the game, the continent and all statistics enclosed herein will risk being outdated by the time the ink dries on the page. But what we are going to do with this book is adapt.

Thanks to a new era of publishing technology this book will do its best to become a living document that will attempt to reflect with current mirrors the exponential energies and dynamic trends of the very subject we are about to cover: Africa and all, in terms of economics, that makes it the Final Frontier.

Africa! The very name inspires awe, a sense of mystery, and virtual volumes of misconception. It is still—after centuries—the undiscovered planet inside of our own. As such it is still a wonder! Capturing and understanding how to negotiate its markets—financial, retail, commodity and international trade—is a challenge even for the most sophisticated entrepreneur. So it is not presumptuous but merely accurate to observe that only those who truly comprehend the vast potential that this continent contains are capable of revealing it. And that takes a professional who not only understands market trends in the worlds of finance and marketing but also someone who is a dedicated student of international trade and the tectonic shifts that occur daily in world markets.

Mark Byron is such an individual. As Co-Founder of Barton-Heyman, Ltd. of London and Lagos, Mark is a business entrepreneur and investment director in the complicated world of finance who has mastered a unique ability to leverage current market trends and meld them into emerging markets such as Africa and Asia.

This book is a work of the heart for Mark, because like so many successful business entrepreneurs, he is a citizen of the world. Having lived in Europe, North America and Africa, Mark leads a group (out of London and Lagos) that has come together to form a financial vanguard in African markets. For that reason he has developed a unique strategy for navigating that wondrous world and helping others to do the same. That is why he has fashioned this unique model—what he hopes will become a living document that will change, adapt and update even as it becomes a constant in our lives.

That is why I got involved—to help Mark make this translation from his mind to the written page. It was my original intention to research and hone the message. But what happened was a kind of epiphany for which I will always be grateful. As this Continent has captured the imagination, hearts and minds of so many, soon enough it infused me as well—with a sense of awe and inspiration I would have never thought possible. This land on the other side of the sun contains that kind of magic. It warms and heals you even as it terrifies you to behold. For all these reasons and more I was determined help bring to this work a very special message, one I hope will lay its imprint on whatever comes next.

This is not a travelogue or a tourist guide or a smart shopper’s insight into the Mysterious Undiscovered Continent. Nor is this a geo-political decoder of the Rubix that is our second largest continent. But it is, in its encyclopedic approach, exactly what the subtitle implies: "The Savvy Entrepreneur’s Guide to the World’s Hottest Market."

That covers a lot of ground because, as you will soon discover, Africa is not a monolith. Geographically, it is the world’s second largest continent, after Asia. In terms of population, it is the world’s second most densely inhabited with 1.2 billion people. It contains more than 54 different nations with more than 300 diverse cultures and in excess of 1,000 different languages, ranging from Portuguese to Swahili. It has the most diverse and varied ethnic mix of any other part of the world. And 60% of the demographic is under 25 years of age. Those are the obvious statistics.

Then there is the subtext. In it we find an Africa so dense and so diverse that it is the proverbial sleeping giant … and in every sense of the word the elephant in the room.

In this book, we examine all African markets in every conceivable category—in finance, in commodity, in heavy industry, in consumer tendencies, demographics, psychographics and trends. In doing so, we come into the world that nobody sees: the different approaches to growth, how nations as well as international consortiums with diametrically opposed points of view have tried to woo the giant, and how visionary entrepreneurs have learned to leverage their peers. Ostensibly, if we were to revert to traditional means of research to cover the African mosaic in all its many facets it would doubtless consume volumes. And few if any publishers could afford to build or market such a tome.

What we offer as an alternative is a way to embrace the new paradigm and apply this flex model that addresses the multifarious changes as soon as they occur. That is the applied poetry of electronic publishing—of eBooks and print on demand. Only in this case, we choose not to leave well enough alone. Because as the ground shifts and new trends arrive, we will, as the African paradigm shifts, attempt new editions.

The Greek philosopher Heraclitus once observed correctly that, The only constant is change.

With that in mind, let us help you discover how Africa Arrives! It is a journey in which you will graduate, accelerate and evolve with each new discovery. And your guide will be a son of Africa and an expert in international markets who lives and breathes the journey every single day.

— Robert Joseph Ahola

INTRODUCTION

The Formula

"If a man will begin with certainties, he is bound to end in doubts;

but if he will be content to begin with doubts, he will end in certainties."

— Francis Bacon

We are all informed by experience. It determines not only our life choices but also the commitment that goes into pursuing them. We are the Laws of Attraction in small, and all the things upon which we place our focus eventually become us.

My life pursuits as well as my profession have not only been informed but also infused with a passion for Africa and all that it implies. It has crossed my path a dozen times in a thousand ways and I could not be more grateful, for I am a citizen of the world…and a whole new world it is! And yet I am the first to admit that it was not always that way.

Since I was born in London, I am officially a citizen of the United Kingdom. And, because my father was a career diplomat with the Nigerian Consular Service, I also enjoy a Nigerian passport. So somehow I’ve always had a foot on two continents, a heart in two nations and a mind in two worlds.

Still, when I was very young—about 5 years of age—part of my upbringing entailed a departure from the Sceptered Isle back to Nigeria for my early education and upbringing. It was a respectable institution—rather public school in its itinerary. And yet I couldn’t help but feel like a stranger in a strange land.

Like so many would-be business boot-strappers on the Continent, I believed that my dreams of success were far bigger than the tiny urban African world where I spent the major portion of my childhood and my teenage years. Even though I grew up somewhat in privilege, I always felt the Africa that waited just outside my door was scorched with what can only be described as a colonial hangover, lost potential and an intractable attachment to the past; one that could not be remedied in my lifetime.

So as soon as I could, I left—for a fortune to call my own, for freedom from corruption, for the West, for the USA and all that it implies, for the UK and the quest for culture in the halls of higher education. I had no plans for coming back. But eventually I learned that plans for a return had me. Within a week of setting my two feet firmly on British soil, I saw I was not alone as I traveled along my expatriate path.

At business school in my university, I found myself surrounded by a circle of fellow travelers. There was George from Mombasa, Abdullah from Nairobi, and Kelechi from Lagos—my Lagos! There I was, a face in the crowd of a diaspora, weary of corruption and greed that could be escaped only by...well...escape.

By definition the term, diaspora, usually implies a mass exodus from one’s nation of origin either as a matter of flight from dire circumstances or as the social by-product of leaving a deprived world for a better one. That was my original intention when, at the age of twenty-one, I sought my higher education in several ways—doing a City & Guilds course in application programming.

The biggest challenge was signing onto a job in the first place. Upon completion of the course, my original intention was to learn all I could about the world-embracing technology that it offered. My firm belief was that this was a sure fire way to land a decent white-collar job. My hope was soon to be dashed with a plethora of rejections from IT companies. This was in the mid-1980s when the UK was still going through its share of ‘isms.’ It was impossible getting a foothold into any kind of position that met my career objectives. I knew the next best thing was to improve on my educational status. So I enrolled in a Bachelor of Science curriculum at South Bank University in London.

Seeking a Bachelor of Science degree at the very least, I soon discovered that this was to be the best move I would ever make. The course not only gave me a well-grounded, thorough knowledge of the world of information technology, it also helped me open the door to go on and work for a number of sophisticated shiny financial institutions. Barclay’s Capital, Fidelity Investments, Credit Suisse [First Boston] & PLUS Markets Exchange in the United Kingdom—these are some of the tier one institutions in which I earned my spurs. In equal measure, my journey into personal and financial discovery took me to some of the most sophisticated financial markets in the world—with firms in London, Brussels, Amsterdam, Paris, Boston and Chicago.

This job trail of high profile assignments in the corridors of high finance sent me on a high-speed journey and obsessions with success that occasionally came at the expense of complete perspective. On the way to discovering all these brave new worlds, somewhere along the way I had abandoned my roots.

I came to be convinced that Nigeria and Africa were merely ghosts from my past—a long, distant past in a far forgotten land—and destined to remain there. London was my home now, my headquarters where I was determined to make it in this business.

Intent on getting my professional acumen up to the next level, I even pursued an MBA at the University of Chicago (Booth) in the USA. While, there I came to acknowledge at last that you cannot escape your destiny.

That tipping point came for me in the form of the last modules I was taking at business school when the ex-wife of the Citadel Hedge Fund President Kenneth Griffin—Anne-Dias-Griffin—came to lecture us on the potential of global markets.

Posting up a map of Africa, she suddenly challenged us to think about this market: You see these nations? She pointed to a map of that Continent, raking her pointer across the belt of what is popularly referred to as the Sub-Sahara, isolating a band of three specific nations—Ethiopia, Kenya, Nigeria—all three, color-coded red. As an investor, why do you think I’ve got my eye on them?

Because all the corruption is a warning to avoid building a business there? I thought to myself, skeptical about hearing anything good about these geographical specters of my childhood. As it turned out, I could not have been more wrong.

You may find it hard to believe, a wry smile flashed on her face, "but these nations of Africa are the final frontier of venture capitalism, corporate investment, and entrepreneurship. These three nations—especially Nigeria—I call the ‘Lions of Africa.’"

For a moment, I started with a shock. And then the truth of it hit me. Here was the wife of the head of a major international hedge fund worth more then $25 billion in capital investment, not only touting the world I had left behind but also announcing it to be our last best hope for exponential growth.

That was the moment when reality bit! And I came to the realization—that all my field experience, all my education and training, all my cultivated expertise had taken me full circle. I was being led up to this, and to the very singular place I knew so well. This was also 2008, the height of the sub-prime debacle, and local financial streams had been tainted with uncertainty and graft—which meant institutional investors looking for alternative markets to invest in would have their eyes fixed on the continent of Africa.

Challenge mastered and met, masters degree in hand, I returned to the United Kingdom, where I continued to study and work. But by that time, the new course was set. And I was forming a game plan to make the biggest change in my life.

I was leaving the safe haven of London and Europe for a place familiar yet strange. I was leaping out of my comfort zone to the place where true progress occurs. I was returning to Africa where my fortune lay all along. I was coming home to a whole new world of adventure.

I had learned a lesson, and yet the greatest one was yet to come. Africa was no longer the world I remembered. It had become that red zone on the map that Anne Dias-Griffin had shown us…and so much more. Africa was blowing up, and I had arrived just in time.

The rest of the journey I share with you now. So let’s take this ride together. I promise you it will be anything but dull.

— Mark Byron

THE KEY

A Few Financial Terms

The subtitle of this book is, The Savvy Entrepreneur’s Guide to the World’s Hottest Market. And it is used in that context because Africa Arrives is at its core a business and financial guide. So we will be taking a business approach to this fascinating, socio-political maze of a continent and grading its 54 Nations from time to time in very familiar stock market terms. We do this with the full understanding that a good many of our readers are bottom-line people, and like to cut to the chase. So we offer that option.

For our purposes in this book it is slightly arbitrary and, at times, subjective. World financial markets may see a country in terms of economic viability and risk to Foreign Direct Investment. Our breakdown on one of our covered nations, you may anticipate the fact that there will be a buy/sell/hold evaluation at the conclusion. It will be listed as a CMI (Current Market Indicator). This is a common term on Wall Street, and is always followed by one of four ratings, which are essentially self-defining.

1).Buy — indicates that all the fundamentals are in place for the investor (or in this case the entrepreneur) to consider immediate plans to put stock in this country, including marketing and Foreign Direct Investment (FDI) capital.

2).Sell — indicates that this is too high risk to invest in, and if you have holdings in this (country) you should consider getting out as soon as possible. In national terms, it indicates that a nation’s fundamentals—political stability, human rights, infrastructure and national debt structure—are very shaky and should be avoided until further evaluations can be made.

3).Hold — is the stock market version of an amber alert. As such, it indicates a company (or country) where you may already have holdings or be considering investment. What it also references to you is that you need to be ready to move on it quickly when the certain points of critical mass arrive—either sell quickly if you own it, or watch for a rating that moves to a buy should the fundamentals start to shift to an upturn. For the purposes of this book, it also refers to a company that bears watching. Accompanying this CMI is also a sub-indicator called Buy and Hold. This recommendation is self-limiting in that, though the pundits recommend that you buy an equity, you may need to hold it for a long time in order to achieve the desired results.

4).Strong Buy (or High Buy) — not surprisingly is the rating everyone looks for. It means that virtually all the metrics one might apply to new market or a new country are positive and offer a solid long-term horizon. Whether you are an individual investor, an international consortium or a small corporation, this is the Foreign Direct Investment (FDI) cue to move and do so with a good business model going in. That leads us to the other significant acronym that appears regularly throughout the book…

FDI (Foreign Direct Investment) — This indicates investment that comes directly from independent financial institutions, industries, technology companies, retailers and individual investors going into an African country with intentions to achieve B2B (Business-2-Business) or B2C (Business-2-Consumer) transactions, market-making and infrastructure investment. As such it is the vanguard of capital investment and capitalism itself. Not to be confused with foreign aid or foreign loans that might come from altruistic groups such as UNAID and USAID, or longterm lenders such as World Bank or the International Monetary Fund (IMF), FDI is the magic word—the SHAZAM!—that rising economies in Africa want to hear.

AA, A, B, C and Junk Bond Ratings — These ratings exist, and they exist for countries. Yes, AAA bond ratings are given to some corporations and a few nations, but countries or companies that rate them seldom request outside investment, nor should they. As for the others, these bond ratings, on the occasions that they appear in this book, are current assessments by major financial institutions, the World Bank, and the IMF.

Fair warning as well, you will be hit with numerous acronyms and abbreviations. They are not inserted in the book to bombard people reading this with nomenclature, but rather to apprise you of the fact—in every imaginable incarnation—that we live in a world of codes, affiliations and umbrella organizations. It is the way of things. And we will try to keep it simple by making sure you understand, every step of the way, what and with whom you are dealing.

CHAPTER 1

Everything African:

Myth vs. Reality

"Truth is like a lion. You don’t have to defend it.

Let it loose. It will defend itself."

— Saint Augustine

There is a shiny new video camera technology called the IM 360 (IM for Image Matrix). And it does what the name implies: it gives us an image that covers all 360 degrees of its environment, recording virtually everything that goes on 24 hours a day, 7 days a week.

It was revealed in all its glory as part of a global network setup as it kicked-off to US audiences on February 24, 2016 on ABC’s Good Morning America. This virtual reality segment was a delayed broadcast in the US as a part of the (7 a.m.) morning drive time hour, to show animals in their natural habitat as never seen before.

It came in the form of a series special being filmed to cover three things: 1) the indigenous wildlife in the southern Serengeti plain and the idyllic Ngorongoro Crater where (you guessed it) the elephants and antelope, zebras and lions cavort; 2) what is referred to as an experience like the Garden of Eden (the official title of the show); and 3) as a part of show-host Amy Robach’s broader report uncovering the imminent danger that poachers pose to the rapidly vanishing wildlife on the African continent. (And of course, to create the perfect media moment, it had been carefully prearranged for her to hang out with some cute little lion cubs.)

So, in the ultimate well-intended media cliché, there was Good Morning America’s Amy in her brand new white Range Rover skipping through the savannahs of the Serengeti while a sky-cam did a chopper fly-by to capture the scope and majesty of the pristine African dusk.

There—in one fell swoop—we got to bear witness to all that is right and wrong, real and unreal, insightful and overgeneralized about the Africa in front of us now. Brought to elevated thought and reduced to the constant cliché, it is both beautiful and simplistic that we, the public-at-large, get to immerse ourselves in this good old Earth Mother Africa that everyone sees.

Of course, it’s just as we’d hoped it would be. It is. And yet it isn’t.

The best thing about this ABC/GMA moment is that an entire new 360˚ imaging format—the very cutting edge of technology—had been conceived and designed in anticipation of just such an event, an infusion of the most futuristic technology almost culture coated specifically to fit into the African vibe.

The most expected thing—that is neither terrible nor wonderful—is that, all in that very same moment, it embraces the false notion that this is everything Africa represents. In that way, it is very much like everyone believing that all Texans wear cowboy hats, ride horses and own oil wells…or that all Mexicans eat tamales, dress like charros and play mariachi music.

In the first place, the Serengeti Plain inside Tanzania is, in itself, about the size of West Virginia. Rich in natural wonders—golden rolling savannahs and the snow capped peaks of mountains like Kilimanjaro—Tanzania is a lush piece of real estate that approximates the total square area of Texas and Oklahoma combined (or if you’re Eurocentric, that of France and Germany combined). It is also, quite surprisingly, one of Africa’s poorest countries.

With an annual GDP of $49 Billion it is—by comparison—less than 50% of the gross annual revenues of Apple Computers. And the per capita average income for its 48 million inhabitants sits at just over $1800 a year, or slightly more than half that of the annual average of other African nations. Tanzania has, at present, nearly 40% unemployment, and half of its citizens are under 15 years of age.

Blame Tanzania’s slow rise to world prominence on a rather wicked mash-up of Colonialism from, not one but four nations—Portugal, Germany, an Omani Sultanate, British Colonial rule after World War II, and finally (once it gained its independence in 1961) a rather unfortunate experiment with socialism and a predatory trade pact with the Red China of Chairman Mao that lasted for more than 20 years. Even though this all took place over about 500 years, it left Tanzania with a legacy of cultural confusion and bureaucratic hangovers from five different types of government. So in its way it is the poster child for the stunted growth of several African nations.

Finally digging itself out of the morass in the last thirty years to form something of a one party Republic (the ONC), Tanzania still has a rather complicated issue of border disputes and the administration of more than 30 regions including the island territories of Zanzibar, plus North and South Pemba that it very recently plucked away from Omani Arab rule.

As a key member of the East African Community (EAC) along with Kenya, Uganda, Rwanda and Burundi, Tanzania has currently embraced a system of rebuilding its fragile infrastructure in a couple of ways: 1) with the United Nations Development Programme (UNDP), and 2) with an internal anti-poverty program called MKUKUTA. Many pundits believe that most interactions a nation takes with the UN to help in its recovery come at too great a political cost and offer little benefit in return.

And in the ultimate irony Tanzania—this rich varied land source, which contains the world’s second largest body of natural lakes after the United States—also suffers from a water shortage. (So, if you’re someone who believes the glass is indeed half full, imagine what kind of market opportunity this presents.)

Perhaps not surprisingly, two of Tanzania’s primary industries are tourism and conservation. In fact, 38% of its entire national landscape is set aside for national parks, natural preserves and safe havens for wildlife. And those two enterprises alone have combined to employ nearly 3 million people…or over 16% of the nation’s active workforce. The third major industry in the Tanzanian trifecta is construction—which now contributes to 22.2% of its GDP.*

Some of Tanzania’s other rapidly growing enterprises include electronics and telecommunications because, with more than 72% of the entire population under 30 years of age, there is a rising tide of Millennials…and they will have their apps! So guess what brands of foreign tech companies are jumping into Tanzanian marketplace, locked and loaded and very credit friendly? (And they are doing it in a country where credit is hard to come by.)

In all these ways and more, Tanzania is the classic misconception of what Africa represents to the world. Beautiful, lush and fraught with creatures roaming along the landscape, it is the picture postcard that everyone sees in the Oscar winning film Out of Africa—primordial, mysterious and somewhat oversold.

To be sure, this snapshot of Tanzania is the African paradox in a nutshell—because everything we have just told you summarizes everything about this rich, robust phenomenal young Continent. And yet it does not. Just as it begins to reveal itself, at the same time it tells us nothing…because there are 54 other nations with financial, cultural, environmental, sociological and economic stories of their own—all of them similar and yet every one unique, all of them blowing up into a whole new world of opportunities for the savvy entrepreneur.

At the same time, to help everyone better understand this complex mosaic, we need to get real about what really goes on in this dynamic hidden universe … and shine the light of understanding on the Myths so that we are able to discover the Realities that lie beneath.

Dateline Africa: A Reality Check…

MYTH Africa is a Country. On the surface this seems like a no-brainer. Of course, one would assume that only uneducated, uninformed people—or clueless Millennials—would have anything resembling such an opinion. (In fact, about 12% of all Millennials questioned in the USA believe this. But America’s under 30’s are notoriously clueless where the rest of the world is concerned.) There is, however, more to this than meets the eye, because there is this preconceived notion of the African monolith—the belief that Africa is the same cultural continuum with the same ethnic uniformity separated only by borders, natural boundaries and slightly divergent laws and systems of government.

It is an irritating truism to note as well that citizens of Nigeria or South Africa or Botswana are all referred to as African. As such they are tarred with the same ethnic brush. This brand of cultural bias is also true, to some degree, in Asia. And the Asian label is also primarily racial—implying the yellow man. References to Europeans are more cultural and describe a sensibility that is sophisticated, urbane and well traveled. Seldom do you hear a reference to North American or South American to describe an entire culture.

Almost without fail, to be called African is to imply that one is black, tribal, possibly undereducated and either aristocratic or poor, either of money or else definitively on poverty’s edge. Blacks in the US and Canada are (politely referred to as) African American, or they prefer to be called that themselves. Expatriate Nigerians or Namibians or Zambians or Ugandans are almost never referred to by their country of origin, but are lumped instead into the African melting pot.

In less sensitive times, Africa was often referred to Black Africa, which used to be the umbrella term for what is now the Sub-Sahara. It also had the unmistakable connotation that this part of the world was untamed, dangerous, dark and troublesome. So, in the apocryphal world-view of virtual generations, the Africa everyone knew was a continent was a country was a race