Who says being a caddie lacks romance?
Two Zimbabweans, both alike in dignity, in the United States where we lay our scene: one a professional golfer, the other a hairdresser.
Ryan Cairns, a former number-one golfer in Zimbabwe, was in the United States when he came across Tammy Birkett’s profile on Facebook. He liked what he saw and thought he had met her before but when he made contact, it turned out they were complete strangers.
“The only reason I accepted [his friend request] was because we had 120 mutual friends,” says Birkett.
Their conversations became more frequent and, as fate would have it, on an auspicious day they were booked on the same flight from New York to Zimbabwe. They checked in together and after 16 hours there was love in the air. After the two began dating, Cairns popped the question: will you caddie for me?
Their first game together was at the Sunshine Big Easy Tour in 2012. Cairns played well, perhaps he was trying to impress Birkett, and landed his first professional win. It was also a first for Birkett as a caddie. She learnt that there was more to it than knowing the yardage, pin placements and which club to use.
“At the time I had run out of money and instead of me paying, she paid for herself. She sponsored her own trip down to South Africa from Harare… [We] ended up winning the tournament and my career turned around. She took a chance on me and that made a huge difference,” says Cairns.
Like any relationship the bond between caddie and player is developed through trials and successes on the green. When Cairns is struggling, Birkett knows just what to do.
“One thing that I always say is, ‘Imagine yourself in a couple of hours when we are watching a movie, chilling, and you’re not even going to have this bad feeling that you have right now, so there is no point in holding onto that.’”
Birkett, who is now in her second year as a caddie, says that her biggest problem—besides being one of the few female caddies—is getting in line with the pedantic.
“When I first started, there were so many rules around the green like walking on your lines… you can’t talk, whisper at certain times and moving the bag was such an issue.”
Across the Beitbridge border, in South Africa, another caddie shares his secret of success.
It was the summer of 1998 at the Nedbank Golf Challenge, also known as the million-dollar golf challenge. As the tournament came to a close Tiger Woods seemed the likely winner. But with a then course record of 24 under par, Nick Price walked away with the trophy. A few steps behind him, carrying his bag, stood Tiger Lekhulene.
“We had beaten Tiger Woods. How many people can say that they beat Tiger Woods?” says Lekhulene.
Beating his namesake was the end of a very long road for Lekhulene. At the age of 14, he began his career as a caddie at Randpark Golf Club in Johannesburg, to pay for his school fees. He matriculated and became a fulltime caddie for top players, including Ian Palmer, Sally Little and Des Terblanche. Of all the players he has carried for, none of them have won as many tournaments as Price. For the past 33 years, Lekhulene has carried for him and is proud to call him a friend.
“I met Nicky by chance. He came to practice at Randpark and asked me to pick up balls for him. After his practice he asked me to caddie for him… he won the first professional game I caddied for him [Asseng TV Challenge Series], in 1979.”
Although caddies advise the player on what club to use and how to play the shot, at the end of the day they know not to overstep.
“You can discuss how to hit a shot but the final decision is up to him, he is the one who is going to hit the ball. You can’t force him to play a shot that he doesn’t want to play,” says Lekhulene.
Although Lekhulene enjoys his career, he says that his biggest issue is in the politics of the game.
“Golfers are not giving professional caddies a fair chance as they used to. I feel white people no longer feel like they should be giving black people so much money. They would rather have their cousins, fathers or family members caddie for them and give them the money. This is placing our careers as professionally-trained caddies at risk,” says Lekhulene.
Both Lekhulene and Birkett agree that there are perks. You get to see the world, make a good living and on top of your pay you often get a very good commission. According to the Sunshine Tour in South Africa, caddies’ salaries differ from caddie to caddie, as it is an agreement between the caddie and the golfer.
Although Lekhulene and Birkett have taken different paths, they both became caddies to top golfers in Africa, proving that there is no set way to become a caddie. Sometimes it takes hard work; sometimes it’s a meeting on the green; and sometimes it’s a romance on a social networking site.

Will You Caddie For Me, Dear?

For a better part of the 1990s and the early 2000s, the mere mention of the name Sierra Leone conjured up images of amputees, brutal execution, abandoned children and fleeing refugees.
It is estimated that between 1991 and 2001—a mere 30 years after gaining independence from Britain—more than 50 000 people died in Sierra Leone and over two million were displaced in neighboring countries as refugees. Their country had fallen into the wrong hands of military juntas that had no regard whatsoever for human life, the constitution and accompanying freedoms.
So, few believed the optimism of African Union leaders, and United Nations’ Secretary-General Ban Ki-moon, who asserted that “a key benchmark for peace” would indeed be achieved on November 17, 2012, the day the six–million-people West African nation successfully took to the polls to elect a president, parliamentarians and local councilors.
Notwithstanding a few eyebrow-raising moments—among them the main opposition’s initial refusal to accept the outcome of the election—Sierra Leoneans have since shown a determination to put one of Africa’s most deadly civil wars behind them, and are now rolling up their sleeves getting ready for reconciliation, national cohesion, infrastructure reconstruction and economic development.
Some skeptics still doubt whether the mineral-rich country has put its past behind it and is now officially open for business. They will get their answer from the International Monetary Fund (IMF), who, following a staff mission to Sierra Leone towards the end of last year, found that economic growth had in fact already “strengthened in recent years, driven by expansion in agriculture, services and construction activities. Real GDP growth increased from 3.2% in 2009 to 6% in 2011. The coming on stream of iron ore production in late 2011 is expected to boost growth and exports significantly in 2012 and beyond. Inflationary pressures have trended downwards since mid-2011, aided by a sharp fall in non-food inflation, a tight monetary policy stance, and stability in the exchange rate. The external position is set to benefit from increased mining exports and reduced iron ore-related imports.”
On a continent that is fast getting global investors drooling, but frustrating them equally by making it tough to do business, Sierra Leone is among those countries that are trying to act fast to rectify that problem.
The recently released Doing Business 2013 report, published by the World Bank and its subsidiary, the International Finance Corporation, finds Sierra Leone to have improved its “ease of doing business” record, from number 148 in 2012 to 140 this year, out of a total of 185 economies surveyed.
But that’s not to say its all hunky dory. As the World Bank observes, “in spite of its remarkable strides and reforms since the war ended in 2002, problems of poor infrastructure—including roads and energy—low capacity, youth unemployment, high maternal and infant mortality, widespread rural impoverishment, impact of the global economic downturns, and lapses in public financial management and governance still persist.
“There is also the daunting challenge of enhancing transparency in managing the country’s vast natural resources,” World Bank economists say.
Following “candid and constructive discussions” with Sierra Leonean decision makers, IMF officials write: “The medium-term prospects are favorable. However, they are subject to downside risks related to the uncertain global economic outlook and potential adverse movements in commodity prices for Sierra Leone. To support broad-based growth and reduce the economy’s vulnerability to exogenous shocks, the authorities would need to sustain efforts to improve the business environment and address impediments to growth.
“Key among these are continued investment in infrastructure to support productivity gains in the private sector, increased economic diversification, and broader access to financial services, particularly for small- and medium-sized enterprises to create employment opportunities. The mission welcomed progress in the preparation of the authorities’ new poverty reduction and growth strategy, the Agenda for Prosperity, which outlines policies and reforms to address Sierra Leone’s developmental challenges.”
Citing as an example the performance of a program the IMF is sponsoring in the country, “the mission found that all quantitative performance criteria and indicative targets were met, and that progress was being made in implementing the government’s privatization agenda. With support from the IMF and other development partners, the authorities prepared legislation outlining fiscal regimes for natural resources.”
Diamonds from Sierra Leone is a Grammy-winning song released in 2005 by American rap musicians Kanye West and Jay-Z. It should be music to anyone’s ears that legislators are hard at work, trying to ensure that the erstwhile “blood” diamonds that the musicians sang about and which were once mined and sold ostensibly by warlords to buy weapons and fuel atrocities, will now benefit the country’s six million people, a great majority of whom remain dirt poor.
Sierra Leone is also endowed with some of the world’s best bauxite, rutile, gold and iron ore, but the country is also diversifying, moving away from a heavy dependence on minerals, although the pace of that diversification is still slow.
The economy is now being led by sectors other than minerals. The country’s official figures put agriculture’s contribution at 58.5% of the GDP, services industries at 10.4%, trade and tourism at 9.5%, wholesale and retail trade 9%, mining and quarrying at 4.5%, government services at 4%, manufacturing and handicrafts at 2%, construction 1.7% and electricity and water at 0.4%.
As to which of these sectors will take the lead in the drive to ensure that Sierra Leone no longer remains one of the poorest countries in the world, the answer may lie in whether the rest of the world sees the enormity of the challenge still facing the country as a hindrance, or an investment opportunity.

The Journey Of A Thousand Miles

William Duk had every reason to be pleased with himself as he strolled along the lovely, long pristine beach at St Lucia in South Africa’s KwaZulu-Natal province. He had celebrated the spectacular turnaround of his once-doomed business, by hiring a hotel, inviting 110 guests and marrying his bride, Briggie, in wild and convivial weekend in Umzumbe on the
south coast.
“We had a record sales month in April and I thought, ‘Great, I can I get married and have a honeymoon in peace,” says Duk.
“It was a nightmare. The honeymoon, wasn’t really a honeymoon.”
As the scores of guests clinked glasses in a final farewell at the hotel in Umzumbe, on the south coast of KwaZulu-Natal, little did Duk know that tens of thousands of transport workers in ports and depots across South Africa were going on strike for more pay. For thousands of business people like Duk, who rely on imported materials, this was going to prove a cut to the jugular.
It had been a short career as an entrepreneur for Duk, who had graduated in accounting from the University of Cape Town in 1999. He left to cut his teeth in the one of the world’s liveliest financial markets.
“I went to London for two years to work with South Africans, Kiwis and Australians in banking at Lloyds and the Royal Bank of Scotland (RBS). We were all on contract and partying every night, you had to have a South African passport to get into Fulham and Putney in those days. On bank holidays we would spend five hours in traffic just to get to the M25,” he says.
“At the end of the two-year holiday visa I was marched out of RBS—they had a change of human resources and they said I had worked longer than my time. On these holiday visas you are only meant to work 50% of your time in your chosen profession. So, I got a part-time contract in a small technology services company. I was meant to leave the country after that, but my new employers convinced me to stay for another six months and then another six months and then I rolled out four- and-a-half years later. That time was pivotal; the London business was going into Europe, employing 200 people, and I was financial director. I was opening offices in Madrid and Paris for voice and data services like PABX and call centers.”
Duk flew home to Cape Town in 2006, with a pocket full of pounds, determined to invest in his future. He had always wanted to be an entrepreneur, like his father and grandfather, this was his chance and in many ways it bore out the Chinese proverb: Be careful what you wish for.
It all began with an investment in property. Duk went to Atlantis, a small town a short drive from Cape Town, to buy a factory from the Plantation Shutter Company, which made wooden louvered shutters for windows out of rare imported hardwood. The company was going into liquidation.
“I bought the building and spent the next few weeks looking for a tenant. I got a phone call from the silent partner, who I bought the building from, he said he was coming to Cape Town and wanted to meet. I looked through the financial information he showed me and thought this shouldn’t have happened. Working in a European company, you know how much working capital can be stretched. It was down to mismanagement, more than fundamental problems with the business,” says Duk.
“I bought in for a rand and took over the debts and liabilities. I didn’t have any cash—that was all tied up in property—I used the cash I had paid into the business for the building to finance a rescue plan. This was February 27, 2006: the doors of the business had been closed; 40 people hadn’t been paid for three months; suppliers were in the courts trying to get their money; there were 49 clients who had paid 50% of their deposit and expected their shutters to be installed before last Christmas. The business was a million rand in debt. It was as bad as it can get.”
It got worse from day one, as Duk tried to salvage what he could amid angry customers. He needed every ounce of his affable nature.
“My first job was phoning my clients and saying, ‘Hi, I am William from the Plantation Shutter company’ and they were saying, ‘Have you got our lawyers letters?’ I calmed them down and said, ‘Let me explain.’”
Duk was encouraged by the fact that 39 clients still wanted shutters, even though they had already waited for five months. It took nearly six months to placate the angry 39 and fulfil their orders. It took 18 months to turn around the business and by April it was selling a 1,000 sets of shutters-a-month and turning more than R40 million-a-year ($4.6 million). It was a dramatic turnaround that helped Duk win the Sanlam Business Partners Entrepreneur of the Year Award for 2012.
So Duk could be forgiven for feeling replete as he walked on the beach in St Lucia, on his honeymoon, on a sunny May afternoon. This warm feeling evaporated in a heartbeat as the strike by tens of thousands of dock and transport workers, in support of a 15% pay rise, hit home.
“I got an SMS saying we have got a problem with our timber supply,” says Duk.
In many ways, timber was the Achilles’ heel of the business. The shutters have to be made from durable Obeche hardwood, that will not warp, from the forests of Ghana. It has to be shipped from Accra to Cape Town and then transported by truck to Atlantis. In 2010, this supply line proved highly vulnerable in the face of a strike that was to cost South African business an estimated R7 billion ($803 million).
The upshot was that the factory in Atlantis ran out of wood and angry customers once again lurked in the wings. So, Duk was on the phone, on the beach, day in day out, in a frantic bid to keep the wheels of his business turning.
“So, it was all about buying time and putting a plan in place. If we were a smaller company we could have gone down the road to buy, but we were no longer a small company. We were consuming 320,000 kilograms of timber a year. I spent the entire day phoning timber merchants and suddenly the price had gone up 25%. I ended up negotiating with a few of these, but we couldn’t get enough, soon enough. We are a 21-day turn around operation. I ended up trying to juggle production and speaking to my clients around the country. I spent the entire day on the phone trying to put a plan in place. The worst moment of that day was realizing that everything we had worked for to restore credibility, in an industry not well known for its reliability, was at risk. We couldn’t afford to make excuses. For us it was going out and getting whatever timber we could at the best prices, paying 20% more than usual,” says Duk.
To make matters worse the supply of wood that Duk needed so badly was so near, yet so far. As the strike wore on, three 40-foot containers of hardwood from Ghana bobbed in Cape Town harbor, with no one to unload it. An email from the clearing agent said it all.
“Wait, hope and pray…. Here’s hoping the comedy of errors turns into that romantic comedy with a happy ending,” says the email.
The strike ended on May 27, 2010 but that wasn’t the end of the troubles for Duk and his timber. There was a scramble to see which of the tied-up freighters was to be unloaded first on the docks of Cape Town, as frustrated customers gathered on land. Duk says the problem was that the clearing agent didn’t have the captains’s cellphone number, so there were more delays as he had to wait for information through the shipping line.
“It went from bad to worse, the strike broke on the 27th and then we had to wait another two or three days for our containers to arrive on land,” says Duk.
“After two-and-a-half weeks of uncertainty. It was absolute relief. The ball was now in our court so we could put a plan in place….”
Duk took his wife to their favorite restaurant that night, a little older and wiser than they had been when they married just a few weeks before, after the strike that could have pulled down the shutters on his business.

Wait, Hope And Pray: How A Strike Can Ruin Your Honeymoon

You have probably watched Nigerian movies and marveled at the common theme of African magic. If you have lived in Africa long enough, you have heard those who claim to be victims or beneficiaries of witchcraft, declare its supernatural powers.
From Malindi in Kenya to Balagaza in Nigeria, magic is a way of life, its mythical powers verge on religion. In Kenya, someone who suffers from a twisted mouth or a businessman who loses a client is likely to blame an envious neighbor or relative for the misfortune.
And witchcraft is big business and not just in Kenya. Before modern religion, magicians and witches were consulted for all ailments and circumstances. They doled out, and still do, curses and blessings for believers and decided who became wealthy and who became poor.
Never mind that most witch doctors and magicians have little or no money. African communities have a common saying: a doctor cannot be his own doctor.
Kenyans who believe in witchcraft use it to seek revenge, wealth and power and to keep their marriages alive. Many associate the practice with the impoverished masses who visit witch doctors in pursuit of an ever elusive change of fortune. But in Nigeria and Kenya, as with many African countries, the prosperous too look for fame and fortune through magic.
A local television station in Kenya recently ran a series on witch doctors. At a witch doctor’s shrine, on the outskirts of Nairobi, expensive cars drove in and out—politicians were looking to bewitch their electorate and contractors were looking for charms to win huge tenders. All over Africa, people battle remotely by using charms. The affluent, worried about losing their wealth or seeking to suppress rivals, will pay a fortune for protection from their enemies or to improve their luck.
This witch doctor was clearly not the kind found in the villages, who is paid in animals and food. So it’s little wonder that she owns a huge compound in an area that the middle class would need some magic to afford.
Politicians are some of the biggest consumers of black magic, some pay up to $10,000 per visit. With elections on the horizon in a good number of African countries, magicians and witch doctors are looking forward to an even bigger boom in their business. At Kenya’s last polls, presidential contenders were rumored to fly out to visit the most potent witch doctors south of the country.
In the fiercely competitive market, it’s a battle of the witches. Shopkeepers, hotel owners as well as livestock traders go to shocking lengths to attract customers. The success of Indian retailers is often attributed to charms—a cat jumping over an Indian shopkeeper’s counter at the close of business may mean more business the following day. For hotel owners who believe in the powers of magic, rinsing an undergarment in cooking water is a business strategy. Football teams are known to hire the services of expensive magicians to increase their chances of winning.
A Pew Research Center survey, conducted in 2010, showed that a quarter of Kenyans believe in witchcraft despite being deeply religious. Kenya was ranked as being the 11th most religious nation in Africa and 16th in the world—78% of Kenyans are Christian and 10% are Muslim. Close to nine out of 10 people stated that religion played an important role in their lives, but most of them forget the Bible or Koran soon after worship to seek solace in shrines and witch doctors’ dens.
Despite their belief in one God, heaven and hell, the survey found that sub-Saharan Africa leads the continent in the worship of witchcraft and evil spirits; sacrificial offerings to ancestors and religious healers as well as the belief in reincarnation.
The study ranked Kenyans 15th in Africa most likely to believe in witchcraft, a few points behind the Democratic Republic of Congo and way ahead of Ethiopia, Nigeria, Zambia and Rwanda.
According to the report, “A quarter of Kenyans, both Christians and Muslims, confessed they believe in the protective power of juju (charms or amulets) and that they consult traditional healers”.
A number admitted to revering their ancestors and treasuring animal skins and skulls or knowing people who did. Tanzania leads the pack in believing in witches and superstitious objects, with six in every 10 Tanzanians confessing to making sacrifices to spirits and dead ancestors. Rwandans, according to the poll, are the least superstitious people in Africa, with only five out of 100 people interviewed saying they believed in juju.
These results from across the continent would make any televangelist or fast-moving consumer goods manufacturer drool, as witchdoctors are not taxed. Maybe the receiver of revenue has been bewitched too.

Magic Spells Money

Argyropoulos was used to the vagaries of the luxury cruise business that had made him his fortune. Born in Athens, in 1962, the son of an engineer, Argyropoulos spent his life working in the luxury cruise business, including a spell in New York.
In 1991, came an assignment that was to change his life. The Greek cruise line employing Argyropoulos sent him to South Africa in search of new business. It proved an eye-opener for Argyropoulos and he saw a South Africa on the cusp of freedom where the shackles of uncertainty and sanctions were about to be cast aside. The country was about to be a booming emerging market full of people with money to spend, who wanted cruises, but didn’t know where to buy them.
Argyropoulos smelt cash and within a year had told his employers, politely, that he was setting up on his own. From a desk and a telephone in the corner of a Johannesburg office, Cruises International was born. His nose for business didn’t let him down and more than 20 years later he employs 20 people and turns over more than $17 million by sending Africans around the world on the finest ships.
On April 17, 2010, Argyropoulos had every reason to be pleased with himself. Business was bearing up, despite the recession, and he had just packed off 60 employees of a big South African pharmaceutical company on a dream cruise to Croatia and the Greek Islands—a break on the blue Mediterranean, in the gentle spring sunshine. It was even more pleasing for Argyropoulos that this cruise was a reward for people, like himself, who had beaten the recession by exceeding their targets. The tour group was to fly from Johannesburg to Istanbul, in Turkey, then on to Venice for a few days of cruising in the sun to the clink of ice over cocktails in frosted glasses. Even the name of the ship sounded promising: Splendor of the Seas.
Over this happiness loomed a dark, swirling, ash cloud.
Argyropoulos was sipping coffee quietly in the Johannesburg suburbs and making plans for the weekend when the telephone rang.
“Turkish airlines can’t land in Venice because of the ash cloud,” said the tour operator bluntly from Istanbul.
“We are now hiring a bus to drive through to Venice.”
This was a journey-and-a-half to Italy, via the Balkans, that would take 20 hours.
“At that moment I was quite calm, until I heard it was going to take 20 hours.”
Argyropoulos worked it out that by the time the group drove into Venice the cruise ship would have left. He phoned the group and told them to head for Dubrovnik, in Croatia, instead so they could meet the ship on Sunday night. That was that, he thought.
Then, at the crack of dawn on Sunday morning, Argyropoulos woke, with a start, and unable to sleep, went check his e-mails. To his horror, he saw that the Splendor of the Seas wasn’t going to Dubrovnik, the very place he had directed the unlucky 60 from Johannesburg. It turned out the cruise ship had waited in Venice for its missing passengers and ironically was going to skip Dubrovnik to make up time.
“So after 11 hours on a plane and 20 hours on a bus, with a driver who doesn’t speak English, they were going to miss the boat anyway. I had to inform the tour leader,” he replied, with something that you would find very difficult to print in this article.
“Now, this was a cruise that was supposed to be a thank you for working hard throughout the year. Now, here you had people [who had done] more than 30 hours of travelling, who were sweaty, dirty and uncomfortable, upset, anxious and angry.”
The only course of action was to send the bus back the way it came. The next chance of catching the Splendor of the Seas was in Corfu.
“I contacted my port agent in Dubrovnik on ways to get them to Corfu. I explored the option of chartering a flight and quite quickly this became impossible as they wanted letters of credit needed to hire an aircraft. With the ash cloud there weren’t many planes. The second option, was to charter a ship to sail to Corfu, which is about 12 hours. They would have made it, but we couldn’t find a ship.”
There was nothing for it. The bus had to go back the way it came towards Corfu. Argyropoulos had organized a hotel for the tourists and they were feeling a bit better. Even so, the tour operator waited until everyone was settled on the bus, before he informed them of the grueling journey ahead. It was to be a journey through Montenegro to Albania, then on to Greece and by ferry to Corfu—a trip of more than 11 hours. That was the plan before another setback struck. The bus driver said he had reached his driving limit, stipulated by law, and had to take a rest. The tour operator tried to find a new driver and bus, but, as it was a Sunday, this was impossible. It was decided to wait for the driver to rest, meaning another delay.
While they were waiting, panic went through the 60-strong group over whether everyone had a valid visa for the trip. Luckily, everyone had a Schengen visa in their passport.
“At the very least this was a dim light at the end of the tunnel,” says Argyropoulos.
“They left Dubrovnik at 5pm on the Sunday and at 10pm I had my last communication from the tour leader and she said the roads were very winding and narrow. It was raining, so the speed was about 40 kilometers an hour. Then at 6am on Monday, we tried to get in touch with the bus, unfortunately there was no cellphone reception. Eventually, at 8am in Johannesburg, I had an SMS to say they had crossed the border into Skopje in Macedonia and they would need another eight hours to reach Igoumenitsa to catch the ferry to Corfu.”
“I then calculated their estimated time of arrival in Corfu, which at best would have been five in the afternoon, which again would have been too late because the ship would have left Corfu by then. The ship couldn’t wait because of the cost of port fees, keeping up with schedule and available berths at the docks. I didn’t want to alarm the clients on the bus any further, so I allowed them to reach the border with Greece and once they were through the border I spoke to the people on the bus again and informed them of the situation.”
The tired and frustrated travelers took the bad news with remarkable aplomb.
“At that point, I was informed that the group didn’t want to chase the ship any further and wanted to enjoy the rest of the time in northern Greece. I gave some time to allow them to come to terms with the idea, then I called back and told them they had five days left, so it didn’t make financial sense to stay in northern Greece, where there wasn’t much to do, so I advised them to meet the ship in the next port of call in Santorini,” says Argyropoulos.
They drove to Thessaloniki, in northern Greece, where Argyropoulos had booked them flights on to Athens, luckily Greece had not been affected by the ash cloud. The group spent the night in a hotel at the airport in Athens and next day flew on to Santorini where—finally— they caught up with the Splendor of the Seas. There were four days left and they settled onto the cruise liner for a trip to Venice via Dubrovnik.
“Once they were on the ship they were totally spoiled and the crew went out of their way to do everything from cocktail parties to free laundry. They had a very, very, good time on board ship,” says Argyropoulos.
By the time the cruise ship arrived in Venice the ash cloud was gone and all flew back to Johannesburg.
“The feedback that we got once the group was back was that they understood the situation and as much as it was unpleasant they knew that everyone had tried their best to reunite them with the ship. We had done everything humanly possible.”
The cruise liner gave the group a complete refund for the days missed.
“Earlier this year they contacted to go another cruise!” smiles Argyropoulos.

Ashes To Ashes,  Port To Port

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If you haven’t been to Lusaka for a while, prepare for a shock. The last time I was there in 1999, the Cairo Road was grubby and rundown; there were cars on the road that should have been pensioned off in the 1970s and everywhere there were the signs and scent of pungent decay.
The Lusaka of 2012 couldn’t be more different. Shining new shopping malls are springing up on once barren land; gleaming new office parks are everywhere. Investment and trade are brisk and the roads packed with brand new cars. Indian and Chinese investors have helped breathe life back into the once moribund copper industry and it is tipped to achieve record production this year. Resurgent agriculture means Zambia is enjoying surpluses and exporting everything from maize to yoghurt.
Zambia, free from exchange controls, is reaping the rewards of more than 20 years of working towards becoming one of the most liberal economies on the continent. The country has set up the Zambia Development Agency to find ways to ease business. This year, it looked at 517 of the plethora of licences business needs to operate in Zambia and abolished 170 of them. Many of these licences can take months to acquire and have seen off many a frustrated investor.
All appears lovely in the garden, but there are clouds overhead. Uncertainty is a word used often these days by bankers and business types in Lusaka these days. The new government, formed by the ruling Patriotic Front (PF), led by President Michael Sata, is under pressure to ease the suffering of the poor. More than half the country lives below the poverty line. One of the bitter lessons of the Arab Spring was that governments cannot risk allowing the young to be restless and unemployed for too long. Zambia, with a population of 13.6 million, has 10.2 million people under the age of 35, with a mere five million jobs to go round.
Economists, government officials and bankers alike accept that Zambia’s growing economy, which has sustained a healthy 6 to 7% GDP growth for 10 years, has hardly made a dent in the country’s poverty. This cold fact is forcing the government to budget and regulate in the cause of the poor, which is creating disquiet among those in business.
One of the most recent and talked about regulations is the increase of the minimum wage, from around $75-a-month to around $110. This has caused consternation among cost conscious employers, who warn there could be job losses and a reluctance to hire.
This was one of the many issues at the “Growing Zambia” debate, held in a Lusaka hotel, as part of business channel CNBC Africa’s launch of its live TV crossings from the country.
“Let me ask you how many of you in this room can live on a $100-a-month?&#8230; You have to give an individual a reasonable wage to live on,” says Zambia’s pugnacious minister of commerce, trade and industry, Robert Sichinga, to the well-heeled audience at the televised debate.
The panel also debated the other new regulation causing waves, the so called SI 33. This statutory instrument bans the quotation of prices of goods and services in foreign currency.
Sichinga says the measure was to revive the kwacha, follow a plunge in its value. At the time of the world financial crisis in 2008, the kwacha was 3,300 to the US dollar, according to Sichinga, and has not recovered, standing at around 5,500 to the dollar.
“If you deal in foreign currency you are increasing demand for the dollar, which is decreasing the value of your currency,” he says.
David Kombe, the CEO of D&amp;C Saatchi &amp; Saatchi, said otherwise it was like building a house with kwacha and being allowed to rent it out in dollars.
“Today sales are made and tomorrow the revenue is sent out of the country,” he says.
Economist Trevor Simumba disagreed with the policy to defend the currency saying that it was akin to some of the protectionist policies of the 1970s and could hurt investment.
“My prayer is for the government not to regulate the private sector too much. If you squeeze it, you squeeze the life out of it,” says Simumba.
Despite these concerns, Sichinga believes Zambia can beat last year’s foreign investment of $5.4 billion. He says he travelled to Australia, Dubai, Doha, Turkey, India and the United States this year in search of more, but warned these trips could take a year to five years to bear fruit.
“We will use policy to entice business,” says Sichinga. Simumba countered that government policy should concentrate on growth as well as redistribution of wealth.
Growth is the name of the game on the streets of the new Lusaka. Where once was wasteland, now loom giant shopping malls, doing brisk business, with packed car parks. The familiar South African franchise names are all there, but inside there are Zambian produced goods from jewelry to food. Even the state has jumped on to the bandwagon. A spanking new shopping mall, in the heart of the city, opened in November. It cost $200 million and was named the Levy Shopping Centre, after the late Zambian President Levy Mwanawasa. The government’s pension scheme partnered with Liberty Properties in putting up the money.
In many ways, Mark O’Donnell is the father of the shopping mall in Zambia. He is a born-and-bred Zambian, the son of an entrepreneur, who emigrated from Britain in 1948, in search of a new life. More than half a century later, O’Donnell is chairman of Union Gold, a family company that owns three brands in Zambia: Protea Hotels; Spar and MICA Tools.
O’Donnell has also had a hand in marshaling millions of dollars in investment in the building of three shopping malls. The new SI 33 regulation, calling for all domestic transactions to be carried out in kwacha, concerns him.
“The resources are not available in the country. If I want to build a new hotel it is going to cost $10 to $20 million and that kind of investment is not available in kwacha… I think there is a lot of emotion around wanting to support the currency,” he says.
“I think there is a bit of inconsistency and different views from different ministers. What we in business are saying is: could there be no capital controls and no exchange controls in an economy where foreign investors can repatriate their profits?… I think the economy faces, many, many challenges.”
The next morning it was the wide blue sky of a winter’s morning in the capital as warm as a welcoming kitchen. Why can’t all winters be like this? I breezed into the Finance Ministry past friendly waves. One of Zambia’s most valuable national assets is its relaxed informality—I swear, I have felt less welcome in the reception of a tin pot South African company, than in making my way to the office of the top decision maker in Zambian economic policy, Alexander Chikwanda, the finance minister of Zambia.
Chikwanda was born in Kasama, in northern Zambia, the son of an ex-soldier, turned district magistrate. He was a young turk in the United National Independence Party around independence in 1964 and left the country for Sweden, where he qualified as an economist in 1968. To say he is a veteran politician is almost an understatement. Chikwanda has climbed the political ladder from the job of district governor to junior minister and into high office in the cabinet. In the 27-year rule of Kenneth Kaunda, Chikwanda was minister for everything from agriculture and health to local government, finance and planning.
Nine months ago, Chikwanda took over the job of finance minister, when Michael Sata’s PF party won the elections, steering economic policy and batting away criticism from uneasy business types.
Chikwanda’s first budget was hailed by the masses for being pro-poor, putting a bit of money back into the lean pockets of struggling Zambians. At the same time economists, like Simumba, worried that the budget didn’t address growth. The next budget will be in October.
“The PF policy of pro-poor budgets will continue,” he says.
Chikwanda believes business and government should join hands to grow the Zambian economy. He dismisses concern over the new SI 33 regulations, which he drew up.
“Every country has its legal tender. How can you spend anything but rand in South Africa? How can you pay other than in dollars in the United States? This is not a new policy, it is something that is carried on all over the world… Funds are available in kwacha for investment, in fact a lot of money is on offer… Those guys who talk about this are not right at all, they are protecting narrow interests,” he says.
Chikwanda accepted one of the criticisms by business of Zambia’s plodding bureaucracy.
“The bureaucracy has a history and leaves much to be desired. It moves at a snail’s pace and not as fast as we would like,” he says.
Another criticism is that Zambians are not seeing enough value for their tax dollar.
Chikwanda hopes to address this, in his fiscal legacy, by restructuring the country’s budget in favor of spending more on education, Zambia’s pounded roads and parlous rails. He says that 70% of the country’s 27.5 trillion kwacha budget (around $5.6 billion) is allocated to recurrent expenditure, while a mere 30% is earmarked for capital expenditure; Chikwanda hopes to change this to a 50-50 split by the end of his time at the helm of the country’s economy.
“It will not be done overnight,” he says.
Few could argue with the need
for change and the time it is likely to take.

A Fight For The  Business Soul Of Zambia

It’s refreshing when you come across a foreigner passionate about Africa. The continent has become the new big market for multinationals all over the world. But Ewan Cameron, CEO of Lonrho Hotels is not jumping on the bandwagon, he’s had his sights set on Africa for a long time, and not only for business, he’s also ardent about the continent and its people.
“My interest in Africa came at an early age, I’ve always been interested in the people and the culture,” says Cameron.
<div id="attachment_979" style="width: 810px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-979" class="size-full wp-image-979" src="/wp-content/uploads/2017/04/test.jpg" alt="" width="800" height="533" />Lansmore Masa Square, Garborone, Botswana</div>
Cameron has a long history in the hotel industry though he’s only 39. Born and raised in Glasglow, Scotland, he started out waiting tables and cleaning rooms at the Swallow Hotel and Conference Centre in Dundee, while he studied Business Sciences at the University of Dundee. After graduating in 1992, the Swallow Hotel Group offered him a position as front house manager of the hotel. His keen interest in hotel management won him a transfer to the Glasglow Swallow Hotel, where he became the business development manager. Then the United Kingdom’s two biggest hotel groups, at the time, Thistle Hotel Chain and the Forte Hotel Group, noticed him. Cameron went with Forte, because of its international exposure. Thistle is the biggest hotel chain in the UK but had no hotels outside the region. Forte has hotels all over the world. Cameron’s portfolio included some heavyweight clients like UBS, the Ford Motor Company and PricewaterhouseCoopers. He later took over new business development at Forte. In 1999, Forte bought the Holiday Inn franchise. And in 2002, Cameron moved over to head up franchising. This is where he got his real feel for Africa. He travelled extensively overseeing operations in the Middle East and Africa. Cameron worked closely with Southern Sun, which at the time was running some of its hotels under the Holiday Inn brand. But in 2008, Southern Sun cut ties with the Intercontinental franchise and dropped the use of Holiday Inn.
Cameron also decided it was time to cut ties.
“I tried for years to convince Forte to expand in Africa, but they were not interested, they wanted to expand in Asia and the Middle East, I wanted to grow Africa. I drew up a strategy for Africa and Lonrho liked it,” Cameron recalls. The Lonrho Group has been operating in Africa for over 100 years. It is invested in luxury hotels across Southern Africa. It also runs airlines and is involved in the agricultural sector. The group took Cameron’s strategy and made him CEO in 2010. Since then, he has wasted no time in implementing his ambitious plan. Lonrho has partnered with easyHotel Group to roll out 50 new hotels by 2016.
“There is growing demand in Africa especially for the business traveler,” notes Cameron. Lonrho has five-star luxury hotels in 16 countries in Africa. The group is now moving towards building more business-friendly hotels.
“These hotels wouldn’t have the luxury that our high-end hotels offer, but they’re comfortable for the business person going on a quick trip,” he says. His strategy is to open hotels with a fresh and modern design. They will offer all the services a businessperson needs, like a conference venue, gym facilities, a coffee shop for meetings and full Wi-Fi. Hotel managers are also being trained.
“Our managers should be able to link travelers to local businesses and help link them to potential clients and vice versa; the hotel needs to become a one-stop shop,” he says.
The new low-cost easyHotels have opened in some countries with rooms from $35. In June, Lonrho opened a hotel in Gaborone, Botswana. Another hotel opened in Beira in Mozambique in July. There are plans for new hotels in Nairobi in Kenya, Dar es Salaam in Tanzania and Accra in Ghana.
<div id="attachment_981" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-981" class="size-large wp-image-981" src="/wp-content/uploads/2017/04/lonrho-head-office-photos-033-681x1024.jpg" alt="" width="474" height="713" />Ewan Cameron, CEO of Lonrho Hotels</div>
Later this year, Lonrho will also open its first hotel in South Africa in the Johannesburg city center. The hotel will be situated outside the new Gautrain rail link from O.R. Tambo International Airport. In recent years, several international hotel groups have opened hotels in the affluent Sandton area, but not many have ventured into the city’s center.
Cameron is not one to follow the herd; he believes that not everyone travelling to Johannesburg wants to go to Sandton. He is also not too worried about going into areas that pose political and social risks. Lonrho recently purchased a second hotel in Kinshasa in the Democratic Republic of Congo (DRC). For decades, the country has been torn apart by war and civil unrest. This has not deterred Cameron who believes there’s rich tourism potential in the country’s capital. Cameron is certainly a risk taker but he does his homework and says he has an exit plan for every hotel the group owns. He works closely with the Mckinsey research group for facts, figures and other data on Africa. According to Mckinsey research, the DRC will be the fastest growing economy in Africa by 2026.
But not everyone has an appetite for risk. Tsogo Sun Holdings, Africa’s biggest hotel and gaming group, is not convinced there is a real demand for hotels in Africa. It already has a strong footprint in Africa with its Southern Sun hotels and feels more confident in South Africa than the rest of Africa.
“There are no volumes in Africa,” says Tsogo Sun CEO, Marcel von Aulock.
“African economies are small and there’s still very little corporate activity to propose new hotels.”
Tsogo recently posted a solid set of annual results. The group raised earnings 39% to R9 billion ($1.1 billion). Von Aulock is also no newcomer to the industry. He joined Tsogo’s finance department in 1999. Ten years later, he took over as the group’s CEO. He believes he understands the hotel industry and while he does see opportunities for further expansion on the continent, he feels the timing needs to be right.
Tsogo’s approach to the hotel industry differs from Lonrho’s. The group is focused on taking full ownership of hotels; it doesn’t just take over the management and operations.
“We want to own the land the hotel is standing on, we want to manage and operate it and own the brand, and it’s not always easy to do that. But we are not about taking the easy approach,” adds Von Aulock. The group recently closed its famous Southern Sun Grayston Hotel in Sandton after 30 years, because it didn’t own the land. The tenants raised the rent and Tsogo felt it was no longer feasible to remain on the property.
“This served as a lesson for us, that’s why it is more important now that we stick to our business model,” says Von Aulock.
But he concedes this is one of the main reasons it’s hard to penetrate Africa.
“Land is still a very controversial issue, the operating costs are very high. If we build a hotel in Africa, we have to set up our own power generation, our own water purification and sewerage systems—it requires a massive cash injection,” says Von Aulock. This is where Tsogo and Lonrho differ. Lonrho takes over existing hotels, rents the properties and provides the management and operational expertise to run the business.
Tsogo has also done well with its gaming business in South Africa, but says it has no plans to open casinos anywhere in Africa.
“Again there’s no market for gambling in Africa. The South African market is very different—our casinos here are doing very well, even in tough economic times, there’s still spending capacity in South Africa, not in Africa, there’s no middle-class in Africa and unfortunately that’s where the spending comes from.”
But Tsogo Holdings is not staying away completely. It’s still positive about future growth and says it will continue to look for opportunities. It owns 95 hotels in southern Africa, most of which are four- and five-star hotels. But last year, it ventured into the business traveler market opening a two-star StayEasy hotel in Lusaka, Zambia. The hotel is a nice fit for corporate travelers looking for tourist activities. It is attached to a shopping mall, another strategy Tsogo is exploring.
“We want our guests to have quick and easy access to any services they may need,” says Von Aulock.
Tsogo has also taken over distressed hotels successfully. The group recently bought The Grace in Johannesburg’s northern suburb of Rosebank for R85 million ($10.12 million). The iconic boutique hotel closed its doors in August last year after the operating company ran into financial difficulty. Tsogo Sun has spent over R20 million ($2.4 million) on refurbishing the hotel. The new 54 on Bath hotel opened its doors in July.

Staying In Hotels

When, let’s call him Robert S, the CEO of Dutch multinational IT firm X, decides to open a branch in Kenya, he is enthusiastic about expanding into an emerging market that promises substantial return on investment. His firm teams up with a local shareholder to ease transition into the Kenyan business environment. With primary experience in developed markets, the choice of partner is largely financial, neglecting the shareholder’s political connections or ethical track record.
The local partner helps with raising finance, acquiring trading licenses, registering premises and managing the operational set-up including the supply chain. Issues like nepotism, fraud and bribery don’t cross Robert S’s mind until his company successfully tenders for a big contract and is promptly accused of corruption by the losing party. An internal investigation brings severe irregularities to light. Company X finds itself faced with reputational damage, threats from the local shareholders’ political connections and liability of hundreds of millions of dollars.
Two years later, Company X still operates successfully in Kenya, but Robert S wishes he knew back then what he knows now.
Bribery, theft, corruption and other types of fraud cost African governments and companies at least $11 billion last year, the first Africa Fraud Barometer, recently published by auditing firm KPMG, found. That’s a good 10% of the roughly $100 billion in foreign direct investment made on the continent in 2011.
The actual cost of fraud is likely to be much higher, since the barometer only takes into account cases reported in English-language media, and access to police and criminal justice statistics are unavailable in most African countries. More reliable corruption trends will emerge as KPMG updates the fraud barometer every six months.
“It’s very difficult to estimate how high corruption really is. The $11 billion might be quite understated,” admits the firm’s global forensics manager, Petrus Marais, who developed the barometer.
It’s a sobering reminder of the challenges facing the continent, which has, in recent years, attracted massive foreign investment due to impressive economic growth rates of up to 8%. Some of the continent’s largest economies—South Africa, Nigeria and Kenya—have the highest incidence of fraud, according to the barometer, showing clearly that with more economic activity and investment comes increased risk.
Everywhere on the continent, governments and the public sector were hardest hit, claiming about 40% of all fraud cases, closely followed by businesses with 17%. This shows that African business operations have practically experienced “a breakdown in the ethical and moral environment”, warns KPMG.
Investors need to be prepared for this. “It’s extremely difficult to turn the tide. If you don’t have a moral base to operate from, you will have to waste lots of money on checks and balances, on jacking up processes and systems to manage risk,” says Marais. That’s the tradeoff any company wanting to operate successfully in Africa needs to make.
The main culprit of fraud is white-collar crime. Almost every third employee commits some form of fraud, the study found, ranging from junior staff to top management. Perhaps unsurprisingly, the highest value of fraud—$3.3 billion in 2011—was committed by managers, who are generally in positions with authority to approve large transactions and override controls, followed by professional advisors.
“Fraud occurs most where money enters and exits a company or institution. At the interface of financial transactions, perpetrators tend to be most successful in defrauding funds,” says Marais, identifying procurement, recruitment and contracting as the biggest risk areas.
“We hear a lot of anecdotal evidence of corruption,” confirms Thomas Schultz, chief operating officer at Sanlam’s investment management arm in its Africa division, which has branches throughout the continent. But if companies plan well, they can avoid being drawn into corruption, even in Africa, he believes. Choosing a trustworthy local shareholder or auditing firm with the right code of ethics is therefore key.
That means expanding into Africa is not a simple step. Investors need to do a lot more homework before they decide to invest; be better connected to access inside information; consider weak infrastructure, from roads to electricity; and be aware that setting up operations, from administration to licensing, might take longer. “All those issues raise the cost of doing business. It’s not a bandwagon you can jump on,” says Schultz. “You have to be sure your profit margin is sufficient to cover those costs.”
But it’s not all doom and gloom. A 2011 Ernst &amp; Young survey predicts that Africa’s economic growth will outpace its Asian counterpart over the next five years due to increasing foreign direct investment. Africa has remained an attractive investment destination throughout the global downturn and stayed high on the agenda of global investors, with 42% of businesses considering investing further in the region and an additional 19% of executives confirming they will maintain their operations on the continent.
“Although the overall perception of Africa remains quite negative, investors recognize that the continent has a window of opportunity because of its economic growth potential,” says Marais. “Whoever wants to see good returns simply has to go to Africa. It’s a great place to invest if you have the ability to assess the risk involved.”
Another plus is that African governments have shown greater willingness to address fraud, and be more transparent and accountable by passing anti-corruption laws. But for now, this trend needs to be viewed with caution, as it remains mainly a commitment on paper, with little implementation and enforcement of those regulations. “Very few anti-corruption regimes have gone beyond rhetoric. There is lack of political will to implement them and they remain under-funded,” says Charles Goredema, a corruption expert at the Institute for Security Studies in South Africa.
Businesses should choose to invest in countries with regulatory and legal frameworks they can rely on to enforce contracts, says Goredema. That means taking a close look at a country’s real situation, not just skimming the paperwork. Rwanda, Mauritius and Nigeria, for example, have made “huge strides” in fighting corruption, he notes, while the situation in countries like the Democratic Republic of Congo and Zimbabwe remains “very bleak”.
In the end, investors must be careful not to tar the whole continent with the same brush.

The Truth About Fraud In Africa

Igugu is the horse that stole the hearts of many and cost those who failed to believe.  An Australian filly sired by an Epsom Derby winner, Galileo, Igugu has sent waves through the racing industry and was named “Horse of the Year”. Igugu was bred by Kia Ora Stud and bought at a yearling sale for $65,000 by Livestock Traders in 2009. It was then sold to Andre Macdonald—a former electrician and now principal officer at Lido Electrical’s East Rand branch, in South Africa—from the Summerhill draft in 2009 at the Ready-To-Run Sale for $127,530. Macdonald had gone to the sale with the secret intention of buying both of Galileo’s fillies in order to up his chances of owning a champion, only to be outbid for the first horse by South Africa’s top trainer Mike de Kock at $255,060. Luck was on his side when the second horse turned out to be the champion.
Macdonald’s love of horses began when his family moved to the northern suburbs of Johannesburg at a time when horse riding was popular with children. His daughter took an interest and joined a stable. He then bought a horse each so they could ride together on their property. His daughter grew up, got married and Macdonald sold the horses.
“Before I knew it a friend of mine said they had a horse for sale and asked ‘do you want to buy it?’ I said ‘I don’t want to buy it but I’ll think about it.’ Twelve o’clock that night they phoned me and said ‘your horse is standing in the stables.’ But I didn’t say no, I said ‘okay I’ll take it.’ It was the biggest mistake I probably made,” Macdonald recalls. Sitting with a dud, Macdonald then got serious.
Igugu is now co-owned by the Macdonalds and Sheikh Mohamed bin Kalifa Al Maktoum—who also co-owns the 2010 Vodacom Durban July (the July) winner. The royal family clearly has a love for the sport. Years ago, in the United States, Sheikh Mohammed bin Rashid Al Maktoum is reported to have bid $10 million for a horse at a yearling sale. Sheikh Mohamed bin Kalifa Al Maktoum‘s share came about when he took interest in Igugu and went into talks with Mick Goss, CEO of Summerhill Stud, about acquiring his 25% stake. Not one to be satisfied with a minority share, the sale was in jeopardy unless the Macdonalds, who owned 75%, sold 25% shares to Sheikh Mohamed bin Kalifa Al Maktoum to ensure an equal partnership.  Macdonald says this is something he would only have done for Goss.
It’s common practice in the industry to have more than one owner of a horse. As much as this can be seen as spreading the winnings, having more than one investor means spreading the risk as well as the costs. These costs include training fees, farrier fees, veterinary care, insurance, race entry fees, jockey fees, ownership registration fees and transport.
For most this is a business after. For Macdonald, it’s a sport.
And as with any business, there is money to be made and Igugu has made more than her fair share for her owners.  She’s a Triple Tiara Princess, winner of the 2011 Vodacom Durban July as well as the 2012 J&amp;B Met (the Met). She is only the second horse to have ever won both the July and the Met. The only other horse to have done so is Pocket Power, who also holds the record for winning the July three times. The prize money for the July and Met alone were $361,600 and $301,330 respectively.
The industry is big and money is no problem for those looking to be a part of the thrill. There are seven sales that take place every year and they work the same as any auction. Potential buyers get a catalogue beforehand and the bidding wars begin. The aggregate price at the Emperors Palace National Yearling Sale held in April was $10,576,311; it was $564,713 at the Milkwood Stud Sale in May and $922,184 at the Cape Mare &amp; Weanling Sale in the same month.
Macdonald laughs as he remembers how he first tried to pick horses at sales. Not knowing what he was doing, he’d shadow the trainers while they checked out the horses.
“If he wants to turn his head left, I turn my head left and if he goes right, I go right.”
You must remember that these buyers take risks on untested horses. De Kock does not shy away from the fact that this is a risky business and is all about luck. He admits that picking up a horse at a sale is not an exact science but reiterates Macdonald’s advice of having a professional around to help.
If it’s so risky, why get into it?
“There is a 1% chance of a horse being a champion from a sale but that’s the intrigue. It’s a sport that becomes a part of your life,” he says with a hint of excitement in his voice.
For de Kock, it all started with two years of military training at an equestrian center and then moved on to work for a number of trainers. In 1988, the trainer de Kock worked for died and since he already had a good working relationship with the owners and staff, he took over the late trainer’s string. He is now the top trainer in the country and is also an owner. Having won the July four times, he’s three wins short of the record for trainers.
Training a race horse takes a hell of a lot of patience says the expert. Purchases would occur when the horse is around 18 months old. If you buy one from a Ready-to-Run Sale it can be ready to race by 24 months, provided it suffers no injury or illness. The monthly cots will average somewhere between R7,000 ($840) and R8,000 ($960), but the rewards for a great runner are tremendous. The industry consists of owners, trainers, breeders, racing operators, insurers, transporters and blood stock agents. Racing operator, Golden Circle, stages both the Vodacom Durban July and the J&amp;B Met. The company has numerous operations and reports an annual turnover of more than $216.8 million. Racing operator Phumelela’s glory comes from staging the Triple Crown and the Triple Tiara. The Triple Tiara’s spoils are $783,151, including the bonus for the horse that wins all three legs. The Triple Tiara—won last year by Igugu—has a combined prize of $270,911, not including the $120,366 bonus.
With this amount of money on the line, it’s no wonder these fine creatures are insured.  The way that the insurance works, is that the horse’s value is established by looking at its track record, breeding and other attributes.  If the horse is a filly, its value will be higher as it can be used for breeding. An unknown horse that’s just been bought at a sale will be insured at the fall of hammer price. As the horse develops a track record and its value increases, so will its insured amount.
The international scene is also a potential money maker for the lucky few. The Dubai Carnival in January has nine events, with $27.25 million to be won.  Unfortunately, the export protocol needs reform. Australia requires 60 days quarantine in the African Sickness Free Zone in Cape Town, South Africa, followed by another 60 days in Europe. Dubai involves 21 days of quarantine in Johannesburg, 90 days in Mauritius, 30 days in Europe and two weeks in Dubai. This means that a horse competing internationally not only has to forgo most of the South African season but it also loses training time and so will run at a disadvantage against other horses on the track.
This is all due to the fear of the African Horse Sickness (AHS). Paranoia, de Kock calls it. He claims that this is the one thing holding the industry back from being a major export industry that creates jobs and adds to government revenue. What we need, he says, is to get more aggressive and let the trading partners know that this is not a major threat. The fact that South African horses competing internationally are doing so well, is a testament to how strong the industry is.
Igugu is geared to start her international career in Dubai. As for her chances for this year’s July?
“Some people don’t win the Met or the July. I was lucky enough to win both. I don’t know when that will ever happen again,” says a realistic Macdonald. He feels that his horse has already done more for him than he could have asked for.
Horse racing has a tradition of being elitist and de Kock says that the image that the sport portrays, along with that of a lack of transparency, is another one of one of the industry’s problems. Syndication, however, is one way to get around this as it makes the sport accessible to more people but de Kock says that it is up to people to educate themselves and the industry to demonstrate the available opportunities. Nonetheless, de Kock is, as he puts it, “bullish” about the future of the South African horse racing industry and expects an explosion if it were to get it right.

Horsing Around

There was one issue at the Hotel Investment Conference Africa (HICA) that had everyone shaking their heads. The big question was: why isn’t there one visa that can get you across Africa? Its lack is choking business and progress.
If you have ever wondered why travelling in Africa is often so expensive and painful—blame it on rigid government policies.
Even though it makes business sense, the idea of a visa that will get you across many borders is as far away as a single currency in Africa, or Europe for that matter.
They call it the UNIVISA—the passport to an entire region—but not even the SADC region (Southern African Development Community) has managed to get one, the conference in Durban heard.
In 14 years there have been many talks, but no fruit. In that time, North Africa has seen three revolutions, East Africa has forged an economic community and Mozambique has built a gas industry.
The first countries which took up the gauntlet were Botswana, Mozambique, Namibia, Swaziland and Zimbabwe. South Africa—the most powerful country on the continent—has joined in, but hesitancy all round is leaving the industry frustrated.
According to Marthinus van Schalkwyk, South Africa’s Minister of Tourism, the issue is close to being settled with merely a few countries—which he could not disclose—still needing to sign the agreement. He said that 80% of the countries were for it. Fernando Sumbana, Mozambique’s Minister of Tourism agreed.
There is more business travel than ever on the continent, so why is it still so difficult to navigate Africa? It is cheaper and simpler to fly to London than it is to Addis Ababa.
Elize Petersen, Namibian Airways’ Manager of Government and  Protocol Relations, says government process is very slow when it comes to expanding regional routes. Allan Moore, CEO of Board of Airline Representatives (BARSA), says getting politics out of aviation is not easy as government policies are rigid.
When it comes to accommodation it is even worse. Hotels are scarce and expensive. Investing in new ones is often prone to fears over political instability and the high cost of infrastructure.
“Expanding out of South Africa is not easy, it is expensive, but it is not impossible. It is a different environment,” says Graham Wood, Managing Director of Tsogo Sun.
South African economist, Chris Hart, says if Africa was an easy place to invest, people would have done so years ago.
“Political risk in Africa is coming down and rising in the western world. Difficult obstacles are not nearly as bad as uncertain ones,” says Hart.
It is a sign of the times that Lonrho Hotels, which has hotels in Botswana, DRC, Mozambique and Zimbabwe, are also stakeholders in a Kenyan airline.
“Hoteliers are more optimistic than airlines, aviation is not moving fast enough [and] we want to boost regional business travel,” says Ewan Cameron, Lonrho Hotels CEO.
One of the biggest stumbling blocks is likely to be the absence of a UNIVISA. Last year there were reports that a SADC UNIVISA would be established by 2013. Most people at this conference hoped there would not be subsequent reports predicting 2020.

More Freedom, Fewer Visas, Please

At the beginning of last month, social networking giant Facebook filed for a $5 billion initial public offering (IPO) with the Securities Exchange Commission (SEC). Facebook is earmarked to raise about $10 billion from the offering, making it the biggest technology IPO ever. In 2004, Google managed to raise $1.9 billion and was valued at $23 billion. Only three companies have breached the $10 billion barrier: Visa Inc, General Motors and AT&amp;T Wireless.
Facebook is being valued between $75 billion and $100 billion, and if all goes to plan, the stock is expected to commence trading in May. The offering will make many of the internet company’s 3,000 employees Silicon Valley’s newest millionaires.
Chief executive officer and founder Mark Zuckerberg, aged just 27, owns 28% of the company. This IPO will propel him into the multi-billionaire league, making him the fourth-wealthiest man in the United States—remarkable for a guy who started the company in his Harvard University dorm room in 2004. Despite going public, Zuckerberg will retain effective control of Facebook through his holding of 57% of voting shares.
Investment banks will also be laughing all the way to the bank. They stand to make $100 million in fees, which will be a welcome boost for revenues, given the currently tough trading conditions being experienced by banks around the world. Morgan Stanley, the number one underwriter of US IPOs for three consecutive years, will lead the offering and will share the spoils with Wall Street’s usual suspects: Goldman Sachs; JP Morgan; Bank of America; Merrill Lynch and Barclays Capital.
Facebook boasts more than 845 million active subscribers, with over 10% of the global population using the platform to chat, play games and swap 250 million pictures daily. In 2011, the company reported revenues of $3.7 billion, 85% of which was generated from advertising. In the same year, the company reported profits of $1 billion. In a letter that accompanied the filing to the SEC, Zuckerberg said: “There is a huge need and a huge opportunity to get everyone in the world connected, to give everyone a voice and to help transform society for the future.”
The Arab Spring, which started in 2011, is testament to the transformation Zuckerberg talks about. Protests were co-ordinated through Facebook and social networking sites.
In the aftermath of the Arab Spring, many African leaders and governments are only too well aware of the power that the electorate wields through social media. In fact, China blocked Facebook in 2009 following riots in Xinjiang which the authorities attributed to Facebook.
African governments will be wary of social unrest following the Arab Spring and their broken promises to their electorates. However, African governments are unlikely to go the China route and block Facebook and other social networking sites.
South Africa’s president, Jacob Zuma, recently opened a Facebook page to allow voters to communicate with him directly to voice service delivery concerns, which were taken into account during the state of the nation address last month. This was a welcome development and hopefully, many more African leaders will follow suit.

Facebook  Friends Finance

Robert Okubo switches on his vacuum cleaner and blows a cloud of dust from the boot of a grey BMW outside his office in Hurlingham, a suburb west of Kenya’s capital, Nairobi. This is his third car to clean on this hot January afternoon and he has four orders to steam-clean floor carpets in the bustling city.
Many Kenyans may dread the choking dust that comes with this drought season, but Okubo is clearly making money out of removing it from cars, carpets, offices and houses.
Besides cars and furniture, Okubo, through his company aptly named 200Degrees, cleans the grout between floor tiles, kitchen and bathroom tiles, concrete (terrazzo), roofing tiles, pavements, mattresses, pillows and car interiors. It is a business he has run on both sides of the Atlantic Ocean.
Okubo, who runs an identical steam cleaning business in New York, returned to Kenya in 2011 to open a subsidiary of 200Degrees. He is among an army of Africans who have made the Western world their second homes, but who are now returning home to invest their earnings. For many like Okubo, it’s a matter of survival—running away from the US, which was worst hit by the financial crisis that began in 2008.
He read in many reports that the business environment in Kenya had improved markedly and decided to try it out.
“Things have improved,” says Okubo, 43. “I registered the company in a day and getting licenses wasn’t much of a hassle.”
According to the 2011 Doing Business report by the World Bank, which tracks the ease of operating business globally, Kenya’s rank has been falling over the past three years, although it was among the top 10 reformers worldwide in 2008.
In last year’s report, East Africa’s biggest economy with 40 million people came in at 98, dropping four places since 2010, out of the 183 countries studied. It is this kind of optimism that is attracting hordes of entrepreneurs.
The report says Kenya made only two reforms: reducing the time it takes to get the memorandum and articles of association stamped and harmonizing tax. Registration procedures were cut and records at the registrar digitized. It also implemented an electronic cargo tracking system and linked it to the Kenya Revenue Authority’s electronic data interchange.
These, among other reforms, are luring Kenyans in the diaspora with money to spare to invest back home.
Okubo left Kenya 16 years ago to chase the American Dream after his tour and travel business was snuffed out by travel advisories issued by Washington in the wake of the bombing of US embassies in Nairobi and Dar es Salaam in 1998. In the US, he landed a job with Stanley Steamer, a carpet cleaning conglomerate, where he was paid on commission.
“What caught my eye was that my truck was giving this company about $400,000 a year and we were six trucks in my station, and I was getting only $4,000,” he says.
So after three years he started 200Degrees, named after the high cleaning temperature used, which earned $6,000 in the first year. In the second year, turnover jumped to $100,000 and doubled last year. He quit his full-time job to focus on his new business. “I realized I was living the American Dream,” he adds.
But when the economic recession struck, revenues dropped 15%. Paying staff on commission saved 200Degrees from the pain of a hefty payroll, but that wasn’t good enough to keep the business profitable. So to grow revenues, he cut his prices.
In 2009, when Okubo visited Kenya to see his relatives and friends, he was impressed at the way the economy was being run. But he discovered something else: there were no professional cleaning companies. “I decided to give it a shot,” he says. “Kenya is warm all year round, as opposed to US where most of our work is in seven months of summer.”
In just over a year, the Kenyan subsidiary of 200Degrees, is turning over $40,000, and retains more than 15 workers.
Professional cleaning is a new concept in Kenya, making Okubo’s business a little hard because he has to do more in terms of marketing and creating awareness about his service and why it comes at a higher price. “The biggest mistake that people make is using too much soap and failing to rinse it out completely,” he says. “What many people don’t realize is that if you don’t completely rinse out the soap, it keeps cleaning and suds a lot. Worse still, many vigorously brush out stains from a carpet, pushing the dirt even deeper.”
The marketing response has been improving, growing from a handful of clients to over 100. “It’s not easy,” Okubo said recently, as he waited in the lunch-hour traffic jam on Uhuru Highway, the main artery road to Westlands, a Nairobi suburb where some of Kenya’s richest reside.
After 20 minutes, the car has barely moved 10 metres. Then the phone rings. He twists his nose and grins. “Oh, no!” he exclaims, banging the steering, which unleashes a horn that rattles other motorists in the gridlock. “The client just postponed the job, man.”
Traffic jams are a major issue here, burning fuel worth $50 million every year. This has forced the government to intervene, and it is investing about $1.5 billion on infrastructure to revamp roads and establish a modern commuter train in the capital. Upgrade of the key 40km road connecting Thika, an industrial hub east of Nairobi, into the first regional superhighway is almost complete.
When I first interviewed Okubo in August 2011, he was serving clients in just few sections of Nairobi. Six months later, he has spread his business to major towns, including the coastal city of Mombasa, where he opened a branch in early January. “Business is not bad,” he says. “We are getting inquiries from neighboring countries and we are really thinking about going regional.”
The rains are expected in Kenya from March and Okubo will have nothing to lose. It will be business as usual, he says, or even more because of the mud. “Cleaning is a basic need. No one wants to stay in a dirty environment. Those who do so pay the price through higher medical bills.”
The job has turned into a passion and as Okubo sees me off, he remembers something. “Chief,” he signals as I turn the car ignition keys. “I forgot to tell you our slogan. ‘We don’t cut corners, we clean them!’” <img loading="lazy" decoding="async" class="alignleft size-large wp-image-458" src="/wp-content/uploads/2017/04/Robert-4-1024x683.jpg" alt="" width="474" height="316" />

Cleaning Up

Trevor Ncube, 49, a Zimbabwean publisher, looks a hard nut to crack. Perhaps he is tough as nails after navigating the murky waters of Zimbabwean politics to set up private papers that have clashed with President Robert Mugabe and given an alternative voice to state-owned media.
It has made Ncube rich, with an estimated fortune running into millions of rand. He prefers to keep this figure under lock and key, the legacy of humble beginnings.
Ncube was born into a poor household in colonial Zimbabwe in the 1960s, when there were few opportunities for black men. His father was an amazing cook, in his words, and his mother, Alima, a domestic servant, later an entrepreneur, who sold clothes to send six children to school.
“Our upbringing was tough&#8230; we struggled quite a lot. There were times when I didn’t have shoes, walked to school barefoot; there are times when I didn’t have a uniform, and friends would borrow me shirts. We would run out of things like Vaseline to oil our body and used margarine instead, so we would look good,” says Ncube.
To raise school fees, Ncube often worked as a gardener at the home of a white family, the Johnsons, where his parents worked, in the suburbs of the country’s second largest city, Bulawayo.
“It is this background that has made me humble,” Ncube said.
His mother gave Ncube a taste for making money, his background the motivation.
“I never wanted to live the kind of life we lived, I wanted my life to be different. The life of lack, the type of hand-to-mouth existence I endured, not because of my parents’ fault or anything. It is a life I said I didn’t want to endure. It’s fear of being poor, the fear of the hand-to-mouth existence,” he said.
Achieving this hasn’t been easy in the rough-and-tumble of Zimbabwean politics. Ncube has been in and out of police cells, starting with his student leader days at the University of Zimbabwe in the 1980s. Once, while detained at a police station in Harare, the former head of intelligence threw a pistol in Ncube’s face in anger over a student demonstration.
When he became a journalist, the cells awaited Ncube yet again, as his newspaper, The Financial Gazette, the country’s business weekly, trod on a few powerful toes.
“The discomfort of being in a room with 14 other suspects, with a toilet close by—the stench was awful. Sending us to prison was a way of showing us they could do anything they wished, that they were in charge. It was uncomfortable, it makes you very angry and think of a way to treat these people in kind for what they are doing to you. It was very frightening. I had never been in prison and I didn’t know what would happen next, given the unexplained disappearances of others in similar circumstances by the state,” says Ncube.
These days, Ncube is merely disappointed with Zimbabwe’s leaders whom, he says, had plenty of opportunities to turn things around since independence, but have little to show for it.
Beneath Ncube’s often acid look, as he narrates a painful past, is, in his own words, “a loving and caring man who fears God”.
Ncube also needed guts to set up a company now running three papers in Zimbabwe: a daily, financial weekly and Sunday paper. This, in addition to publishing South Africa’s second most popular paper, The Mail&amp;Guardian, selling just over 51,000 copies every week. He holds 76% equity in the Mail&amp;Guardian.
“Nothing happens at the M&amp;G when I don’t want it to,” he says.
A climb down from chairperson to deputy chair of the M&amp;G group raised whispers that he was being bought out.
“I’m not a CEO. I provide strategic support, wisdom, oversight. I’m not a manager, I’m terrible at management. I’m a leader, I’m not an entrepreneur. There are much smarter, better managers out there. I thought, ‘Well, let me stick to what I know best… I love making babies, I don’t like taking care of babies, so, well, I like conceiving ideas and projects, and letting them happen’.”
Ncube won the German Africa Award, from the German Africa Foundation, for press freedom, human rights and democracy in Zimbabwe and Southern Africa, a journalistic milestone on the road to riches.
Says Andy Moyse, a journalist who heads Zimbabwe Mass Media Monitoring Project, which scrutinizes news in the country for fair and professional coverage of events: “He (Ncube) is an astute businessman. He has created one of the biggest print media businesses the country has ever witnessed. He has brought his business acumen into the media environment. To be fair, he has created a very dominant single media house. We need this to deal with the repressive media climate.”
Ncube’s career has been eventful and often rocky, to say the least. It all began with a job as assistant editor of The Financial Gazette in 1991. He got fired by the publisher years later for not toeing the editorial line.
“It was a tough time. If you have never been fired, then you have no business being in business. Being fired is a university in itself. It toughens you, it makes you realise how life is like.”
Ncube got fired with a mortgage hanging over him and a family to take care of, despite the fact that he was once nominated Zimbabwe Editor of the Year.
Within months, Ncube had scouted for a financier to set up a private paper, The Zimbabwe Independent. Clive Murphy, a serial entrepreneur, got wind of that; a meeting was set up, and the rest is history. He was initially offered a 2% stake, but increased it to 5%. He paid it off when the business returns looked good.
“I’m scared of debt. When the first dividend of equity came, that was it, I became a capitalist. I never looked back,” Ncube said. After almost a decade, he took over the controlling shareholding of The Zimbabwe Independent.
From The Zimbabwe Independent are two off-shoots: a weekly, The Standard, and a daily, NewsDay, part of a media empire called Alpha Media Holdings.
Ncube smiles at the memory of the next step. When he lost The Financial Gazette job, Ncube applied for a job at South Africa’s Sunday Times and Mail&amp;Guardian. He was turned down by both. The rich irony is that he now owns Mail&amp;Guardian.
This is how it happened: During a trip to Cape Town, Govan Reddy, the previous owner, approached him, having caught wind that Ncube wanted to expand his media business portfolio into the region.
“They wanted someone with a pedigree, who would withstand political pressure but who is also even-handed to both government and opposition,” Ncube said.
Negotiating the deal wasn’t easy. Ncube had to shrug off the challenge from big-hitting potential suitors like Zwelake Sisulu and Anthony Harper. After acquiring it, Ncube says the challenge was to turn it around. The M&amp;G, at the time, was making over R15 million ($1.95 million) in losses every year. “For me, it was the biggest test being in a foreign environment where the players are complete strangers,” he says.
Ncube applied for a New York-based foundation funding loan for media development. It provides seed capital, is run professionally, and they charge interest.
“We have since repaid the loan,” he said.
It’s not an easy job. At the time, the establishment was accusing the M&amp;G of pandering to white interests.
“Naturally, we are bound to irritate the political establishment. That doesn’t worry us, it doesn’t concern us, it happens here in Zimbabwe. That is the nature of the beast. We would worry if the politicians weren’t complaining.”
What bothers the publisher is the politics of South Africa.
“The situation in South Africa is now beginning to approximate what happened here 20 years ago. That’s where South Africa is after 16 years of a new political dispensation—the intolerance around the media, this new secrecy bill. For me, watching South Africa play out is watching Zimbabwe play all over again. I know a lot of South Africans get irritated when you say that. South Africa is Zimbabwe again in slow motion in certain instances,”
says Ncube.
It could be tricky for Ncube, when it comes to speaking out about politics. He is known as a journalist who speaks his mind and has an analytical insight into the political machinations of Zimbabwe and South Africa. On the other hand, he is a man with media interests—which can often be vulnerable—both sides of the Limpopo River. This year, he is likely to field a flurry of questions, about the politics of the land of his birth, as Zimbabwe is expected to hold elections.
Referring to Zimbabwean politics, he says: “It is going to be turbulent. I don’t think the Movement for Democratic Change (under Morgan Tsvangirai) has a clue about governance. But (should it win an election) it will only provide that environment necessary for stability.”
A journalist at Alpha Media Holdings, who declined to be named, said: “His (Ncube’s) commitment to democracy and media freedom in particular is not driven by corporate or business interest. It is an ingrained conviction for him. He has this deep-seated belief that people must be free… his downside is his failure to create a balance between the workers’ interests and enlightened self-interest. He would do well if he became more sensitive to our remunerations; otherwise, he is a great guy.”
<h3>New Randela Notes 
Cause A Stir</h3>
With South Africa’s rand under pressure, word on Friday afternoon that there would be an announcement of national importance on the following day, February 11, caused consternation in the markets.
The rand lost 2.5% of its value as traders got the jitters ahead of the mysterious announcement in Pretoria. The invitation said the South African President, Jacob Zuma, Reserve Bank Governor, Gill Marcus and Finance Minister, Pravin Gordhan were all going to be there—something highly important, surely? Journalists stayed glued to their phones and laptops—maybe exchange controls were about to be abolished. Imagine?
In the end, it was merely an announcement that former President Nelson Mandela was to replace the big five game animals—lion, buffalo, rhino, elephant and leopard—on the front of South Africa’s bank notes.  “It’s the Randela!” joked one journalist.
The announcement was to coincide with the 22nd anniversary of the release of Mandela from Victor Verster Prison, near Cape Town, on February 11, 1990. The notes have improved security marks and  features to help the blind. They will be put into circulation before the end of the year and the  existing notes will remain legal tender.
Marcus apologised for the confusion around the announcement and quipped: “It shows how little we look to good news.”
As for the losses to the rand during the confusion? The CNBC Africa markets team assures FORBES AFRICA that most of the 2.5% loss to the value of the rand was largely down to the economic woes of Greece, rather than the PR clumsiness of the government officials behind the new face on the notes.
<div id="attachment_445" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-445" class="size-large wp-image-445" src="/wp-content/uploads/2017/04/0000155868-1024x683.jpg" alt="" width="474" height="316" />LVDbank05.jpg</div>

How Fear Can Make You Rich

Record breaking albums; sold out concerts; endorsement deals worth millions and screaming fans. This is the stuff dreams are made of, but in this day and age Africans are finding it elusive.
<div id="attachment_183" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-183" class="size-large wp-image-183" src="/wp-content/uploads/2017/04/39_Asa-680x1024.jpg" alt="" width="474" height="714" />Asa at Arts Alive, Johannesburg</div>
Many young hopefuls fall for the allure of the music industry. They want to be the next Lady Gaga, 30 Seconds To Mars or Lil Wayne. Unfortunately, very few will make it and even those who do will find the cold reality that Africa’s mighty music market, South Africa, is not as lucrative as its American counterpart.
The reason? It is a small market, plagued by lagging technology and mismanagement.
The global economic downturn has hit industry sales. According to the Recording Industry of South Africa (RiSA), sales dropped by 6.9% between 2009 and 2010 and 14.7% between 2008 and 2010.
An artist who appears to have bucked this trend is newcomer, Zahara, a guitarist and vocalist from a small town near East London in South Africa’s Eastern Cape. She made news when it was reported that her debut album, Loliwe, sold more than 100,000 copies in just 19 days.
With the market where it is, the sceptics scoffed and there were whispers of cooked numbers. Zahara is managed by TS Records and distribution is handled by EMI Music.
Tyson Mqomo, a manager at EMI, refutes these allegations.
“We were also taken by surprise, but this has happened before, we did not make this up,” he says.
No matter how many Zahara sells, album sales alone will not sustain a music career or pay for lavish lifestyles, according to Clive Hardwick of Bula Music.
Hardwick has simplified the maths. If you have a compact disc (CD) that retails for $10, the retailer keeps 35% and pays the remaining 65% to the distributor. This wholesale price of $6.50 is divided up even further. Six per cent is for the manufacturing, 10-20% is kept by the distributor, and an artist could earn anywhere around 15%, depending on their contract. Five per cent pays for the producer and 6.76% is allocated for copyright. In the end the record label receives anywhere between 25% and 30%.
The average recording cost is $7, 269 and making a music video, marketing and CD sleeves pushes up expenses further.
There are currently around 1,500 record companies registered with RiSA, these include the big boys; Sony Music, Universal Music, EMI and Gallo Records. An estimated 50% of South African music releases come from these major recording companies. Across all recording mediums, 2010 sales in South Africa reached $43,770,901 for homegrown music; against $51,178,161 for international music.
The numbers don’t lie. It’s clear that there isn’t enough money going around. However, there are alternative sources of income. It just takes selling power, but unfortunately that does not come with star power.
John Langford, CEO of Big Concerts, says live performances are “the bread and butter”. FORBES AFRICA investigated how much. A certain hip-hop group asks anywhere between $3,632 and $9,685 for South African performances and $15,000 internationally. A South African male RnB singer earns $4,843 per performance and a songstress recently charged $11,637 for performing at an awards show.
To make matters worse, a good recording artist does not necessarily make a bankable performer. If you thought that local artists rake it in as supporting acts for visiting big shots, think again. The worldwide industry norm is that the locals sing for free, or even pay promoters for the privilege. This is known as “tour support” in Europe and it is the price you pay for a link with a big name.
Endorsements, sponsorships and merchandising can help boost profiles and bank accounts, only if managers are busy and sell their artists. Look at Lira, The Parlotones and HHP in South Africa.
Unimaginative management is not the only problem hampering the growth of the industry. Digitally, Africa is behind the rest of the world. Most people do not have broadband and South Africa is yet to establish an iTunes equivalent. The continent’s studios are also technically not on par with the international ones, which is one reason one why African artists fly to the States and Europe to record an album. The recording fees fly with them.
Everyone in the industry that FORBES AFRICA spoke to feels that government has failed them in ensuring effective laws to fight piracy.
From Johannesburg to Lagos you will see them at the traffic lights. Ten dollars can get you 10 CDs on the street before they even hit the shelves. Every now and again the police will round up the traffic light buccaneers and confiscate the copies—in the time it takes to memorize a Chris Brown song, the guys are back selling on the streets.
The South African Copyright Act of 1978 states that; “You may not make a copy of a sound recording without the permission of the author.” The onus is on the author to prove that such permission was never given and that is the problem for artists.
FORBES AFRICA has contacted South Africa’s Department of Trade and Industry for comment, several times, but so far has had no response.
There is so much talent among African artists, surely a celebration of home grown music would help add scarce money to the pot. Hardwick says there are boundless opportunities for African musicians to collaborate and conquer continental markets.
“Africa has a very unique sound. What Africa needs is a focal point for the African music industry,” he says.
For now, there are two lessons to be learnt. First, do not get into the music industry for the money. Second, an artist worth a buck needs a big hit and a hardworking team around them. If it were that simple everyone would be making money.

$43 Million And They Still Can’t Make Money!

In Hotel Continental’s restaurant along the bay of the Angolan capital Luanda, Russo Flora exudes energy, enthusiasm and a deep-seated faith in his country. “Angolans have a natural talent for business and commerce,” is the first thing he says. “During communism and the civil war, food here was very, very scarce.
<div id="attachment_131" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-131" class="size-large wp-image-131" src="/wp-content/uploads/2017/04/Russo-15x22.5cm-0029-683x1024.jpg" alt="" width="474" height="711" />Flora Russo</div>
We’ve learned to improvise and survive under all circumstances. To me, being an entrepreneur is to create.” Thirty-three-year-old Flora, married with one son, was born and raised in the Angolan capital of Luanda. After studying English in South Africa, he won a sponsorship from the Angolan Fishing Ministry to study civil engineering in London. In 2002, he accepted a job as a senior property consultant at English estate agency, Bairstow Eves, and soon became the best salesman at their northern office. In 2003 he became senior land investment advisor at English Land Partnership.
“All that was part of my strategy to become a property entrepreneur,” he says. But then his father, George Flora, fell ill. Flora decided to move back to Angola, where in 2006, at the age of 26 he took over his father’s small consulting-engineering firm, Gabeng. George Flora became Angola’s Construction Minister in 1984 and founded the business in 1990. Russo Flora now owns Gabeng together with his mother.
“I had to decide whether to remain a small company, or to take Gabeng to a different level and transform it into the group of companies that it is today.” Three months later, Flora closed a contract for an infrastructure and sewage network in Luanda, called Projeto Morar, worth $600,000. It was a tall order for a company with few engineers. “I used to wear the contractors’ boots in the morning, take a quick shower, and then put on my engineers’ suit.
I was also our consultant and commercial director.” His hard work paid off. “When I took over in 2008, Gabeng was turning over between $120,000 and $300,000 a year. Six years later, my group of four companies is turning over between $700,000 and $2 million annually.” Flora’s early success further triggered his entrepreneurial creativity. “In 2006, I founded LF Construction.” After roughly four months, Flora closed a contract of $900,000 to do major excavation works in Viana and Barro do Dande, for the construction of two municipal hospitals.
<div id="attachment_157" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-157" class="size-large wp-image-157" src="/wp-content/uploads/2011/11/RTR2EG45-1024x595.jpg" alt="" width="474" height="275" />ANGOLA-CENBANK</div>
That same year Flora set up a topographic engineering company, TopoEng. In 2008, LF Construction closed a partnership with Chinese company AC-YAUNG Group. Angola receives huge, oil-backed loans from China to help finance postwar reconstruction projects, carried out mostly by the Chinese. Flora “decided to catch the wave rather than swim against the tide”, which paid off. They built a large logistical base for TeleService in Soyo province for 300 “low-income, decent-sized” houses for Angola’s war veterans. Flora is confident about the potential of his company: “I believe LF Construction is our future.”
Flora’s fourth company, ITO, is not yet officially registered. “With big construction projects, I often ended up managing small construction works such as kitchens, done by others. So I decided to do that myself.” ITO comes with important side benefits, he explains. “In Angola, people don’t know who to call, who to trust. That’s where ITO comes in. You never know whose door you might walk into. It might be a successful businessman who offers you a big contract, which has already happened.” Condominium management, an upcoming market in Angola, will become one of ITO’s focus areas.
Being an entrepreneur in Angola is not a picnic. In the World Bank’s Doing Business in 2011 report, Angola ranks 163 out of 183 economies for Ease of Doing Business. “We have great problems in terms of electricity and water supply. So first buy a generator and a water reservoir,” says Flora. “Then there is a lot of bureaucracy involved in importing goods via the harbor. Road access and traffic jams are problematic, the latter mainly in Luanda… I believe in time management. One of my most innovative ideas was to have a fully-equipped mobile office in my car.” Finding skilled Angolan labor is also extremely difficult, according to Flora.
“If you want properly trained people, you’re often forced to employ expats, and they’ll cost you three or four times more. Our solution is to outsource work to other foreign companies in Angola.” At the same time, Flora uses 70% Angolan labor. On Transparency International’s Corruption Perception Index, Angola ranks among the world’s 10 most corrupt countries—168 out of 178. “Corruption is still a big issue in developing countries,” Flora says, “Competition here is tough and often unfair. But at least it’s transparent. People tell you: ‘Listen, if you don’t have good connections here, forget it.’entities.
“Everything we’ve done is thanks to sweat and hard work. If I had strong ties with the truly influential people here, then maybe we would be having this conversation in my private jet.” According to him, Angola is entering a new era. “The government is tackling corruption,” he says. “And I do not foresee any new civil war or political instability.” With Flora’s positive outlook, the sky is the limit. “Within LF Construction I’m opening a food division. We want to buy big quantities of fish and transport those to the most remote rural areas of Angola, where fish prices are extremely high.”
<img loading="lazy" decoding="async" class="alignleft size-large wp-image-158" src="/wp-content/uploads/2011/11/AM3A64-680x1024.jpg" alt="" width="474" height="714" />
“The fishing industry is one of Angola’s monopolies,” he explains. “Foreign ships come in, suck up huge quantities of fish and transport them back to their own countries. But the fish you find in Angolan supermarkets has all been imported.” Flora encourages all entrepreneurs to take a close look at Angola. “Angola is a rich country, and there are dividends to be made. Anywhere you go you can either plant, build, or mine something.”

Tag: Business

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