It is widely accepted that for many countries on the continent gross domestic product (GDP) is understated. The question is by how much.
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Ghana created quite a stir when revisions to its GDP data announced in 2010 showed that the country’s economy was 60% bigger than previously believed. Ghana was thus transformed overnight from a low-income to a middle-income country. This happened as GDP per capita, an important measure of wealth, rocketed from about $550 to $1,100.
The news prompted the World Bank’s chief economist for Africa, Shantayanan Devarajan, to declare Africa a “statistical tragedy”. Granted, it is an overstatement. But his comment emphasizes the implications of this shortcoming – if the data is inaccurate, those governments and development agencies could be making poor decisions.
What happened was that Ghana changed the base year for its data from 1993 to 2006, taking into account the deep structural changes in the economy during that period.
The base year is the reference year in terms of GDP, expressed at constant prices, and it determines the importance which various sectors have for the economy. In Ghana’s case, the country’s registry of business was out of date and the national accounts failed to capture the output of these companies. According to the Ghana Statistical Service, the share of services in the economy rose from 36.1%  to 51.1%, while the contributions of industry and agriculture both fell.
Many economies in the region have base years which are more than a decade old – which compares poorly with the international best practice of revising the base every five years. This is particularly significant in the case of Nigeria, the continent’s second-biggest economy, which has announced it is in the process of changing its base year from 1990 to 2010. The new GDP figures will be announced next year. There is a general perception that after taking telecommunications and entertainment into account, the economy will be about 40% bigger than it is at present.
According to the regional research head for Africa at Standard Chartered, Razia Khan, the revision means that Nigeria’s economy will be just 10% smaller than South Africa’s. With its economy growing at around 7% a year, compared with South Africa’s pace of less than 3%, the Nigerian economy is likely to be the biggest on the continent by 2015. The revision will also affect the whole of sub-Saharan Africa. Nigeria’s economy already accounts for nearly one-fifth of the region’s total output, so an upgrade means that the combined economies of sub-Saharan Africa will be significantly bigger than estimated at present.
This poses the question: how many other economies on the continent are also bigger than the current data suggests? According to Kim Zieschang, the Division Chief of the Statistics Department at the International Monetary Fund (IMF), the Washington-based lender anticipates providing technical assistance to a “large number” of sub-Saharan African countries, and in fact is already doing so. This means that many countries have asked the IMF for help in upgrading their economic statistics, just as Ghana and Nigeria have done.
According to Lyal White, Director of the Centre for Dynamic Markets at the Gordon Institute of Business Science, there are two problems, one is the absence of data and the other is the poor quality of data presently available. Many sub-Saharan African economies have large informal sectors which are notoriously difficult to cover.
It is likely that that there will be upward revisions of GDP data in other countries in the region, but the magnitude of those changes are difficult to assess ahead of the conclusion of their processes, Zieschang says. What is certain is that the revisions will radically alter the ranking of sub-Saharan African countries by size.
So what do the changes mean for countries in the region? Global investors are likely to sit up and take note of bigger economies, which will be more attractive destinations for their capital. There will be more information on which sectors to invest in, and governments will have a better idea of what to do to foster development and growth. Some of the ratios which gauge the quality of a country’s economy will improve – debt to GDP ratios will fall, as will budget deficits, which are also measured as a ratio of the size of the economy.
On the downside this could encourage governments to spend a bit more recklessly. At the same time, the ratios of official revenue to GDP will fall, putting pressure on governments to increase their tax base. A significant drawback is that richer countries may no longer qualify for aid or concessional loans from international agencies. Nonetheless, IMF officials say there would be a good case to revise upwards the thresholds for this type of support.
On the upside the pending upward revisions to GDP data will present sub-Saharan Africa as a more significant player in the global arena.

Can Africa shrug off  the resource curse?

Is Africa a statistical tragedy?

When Michael Wood came to South Africa nearly a decade ago, it was to run the Gillette Company’s southern African business, after a 10 year stint in Russia. Gillette was eventually bought out by Proctor &amp; Gamble (P&amp;G). In 2009, Wood and two marketing directors left P&amp;G to start Aperio, a fast-moveable consumer goods (FMCG) focused business consulting company that helps companies find opportunities and develop businesses in Africa.
“Africa, from an outsider’s point of view can look a little bit scary because there are a lot of countries, a lot of complexities, obviously there are a few horror stories in there,” says Wood
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But, he feels that the continent, in some cases, is a lot easier to do business in than Russia, China and India when they first opened up.
Risk factors that may leave companies uncertain can be eased through partnering with established local businesses who know the market. Favorable FDI policies, like tax breaks, also make things easier. Effective trade blocs are another consideration for manufacturers.
African nations are far from the top of the list when the World Bank and International Finance Corporation ranked the ease of doing business in countries. South Africa is the highest African country at 39. Behind it are Rwanda, Botswana, Ghana, Namibia, Zambia and Morocco—placed between 52 and 97.
“If FMCG companies have the ambition for growth, the appetite for some risk and can get some expert help to define and develop their African business; the opportunities can be endless,” says Wood.
Investors beware! A one-size-fits-all approach will not work in Africa. The brand must relate to each specific market, and with 55 countries and thousands of languages, Africa cannot be mistaken for a single market. You’ve also got to make sure of what sells in each country. In Nigeria, for instance, the sachet format works better—be it powdered milk, washing powder or alcohol. This is simply for affordability purposes, not to be mistaken with being cheap. FORBES AFRICA can be bought while sitting in Nigeria’s notorious traffic, a testament to the fact that the country is big on “on-the-go consumption”.
“It’s [Nigeria] not an easy place to operate in and it’s quite complex, but if you get it right… you can build a very successful business,” says Wood.
Those who think that South African markets have come as far as they can, might want to heed Wood’s advice that, although there is generally more potential in other markets in Africa, the country still has a big enough emerging market—with a reported 67% of the population being lower income consumers.
According to a Unilever report, South Africa’s black middle class has grown from 1.7 million people in 2004 to 4.2 million in 2012. Its annual spending is estimated at R400 billion ($38.4 billion). This group is driving retail and vehicle sales, while also seeking affordable housing and education. There’s a view that marketers are not adjusting fast enough to meet the needs of this new market. An October 2012 report by McKinsey &amp; Company says that Africa’s consumer-driven industries will grow by more than $400 billion by 2020.
Spending pattern shifts in South Africa are said to be due to the emerging black middle class, urbanization and an increase in store credit, with the bulk of the country’s spending being on food and drinks.
South Africa’s GDP per capita of $7,750 and consumer expenditure of $4,697 is no comparison to the United States’ (US) at $49,940 and $34,723 respectively, but a growing population coupled with increasing spending capabilities is nothing to laugh at.
Although the US, United Kingdom (UK) and other established markets are large, their growth forecast has many companies turning towards Africa. The continent is gathering spending power. The US and UK’s average spending forecasts are each less than 5% a year, while South Africa’s expenditure growth is expected to increase to more than 10% a year.
Companies that have been on the continent for a long time have the advantage, but are they adapting fast enough?
Unilever has been in Africa for more than a century. The company’s second quarter results show a slowing of growth in the emerging markets—Brazil, Russia, India and China. The company’s underlying revenue rose by 5% year-on-year and developing market sales rose by 10.3%.
“The reality is that today there are very few developing markets left. That’s why Africa is currently generating so much interest as the next BRICS market for many companies,” says Wood.
An Economist Intelligence Unit report says, “A recent survey concluded by the Economist Group of 217 global companies based in 45 countries revealed that expansion in Africa is a priority for two thirds of them within the next decade.”
If the report is to be believed, the largest population growth between 2012 and 2028 will occur in Kampala, Dar es Salaam and Lusaka.
Not only does Africa have the world’s fastest growing population, but it also has the youngest. These youngsters are more brand conscious than their elders. Although brand loyalty and quality are important to African consumers, they are deemed to be highly price sensitive—depending on the country. Trust in a brand goes a long way, even if it means paying a little extra for a product.
It’s supposedly easier to change the habits of the youth, and with a young continent like Africa the possibility to create lifetime customers is endless.
“If you want to be a super-brand then you have to look like a super-brand,” says Wood as he gives examples of how Coke does it best in South Africa and how South Africa’s MTN is pulling it off in Nigeria.
MTN has a market capitalization of around $36 billion and revenue of $18 billion, with more than 200 million subscribers and access to 22 countries in Africa and the Middle East.
It faced some challenges when it began expanding into the rest of Africa.
“The company soon discovered that what works locally does not always work abroad.  Operating across the continent required adapting to local cultures and practices,” says MTN group chief human resources and corporate affairs officer, Paul Newman.
MTN has also come across limiting policies and legislation in some countries.
The opportunity to tap into Africa’s growth is not for international companies alone, but a wake-up call to Africans to take hold of their people and service their needs, but most importantly their pockets. We need to think beyond just agriculture and minerals.
Civil unrest and poor infrastructure aside, Africa and her people clearly have much more to show the world. As for Wood, he thinks that FMCGs will be the driving force behind a lot of countries’ growth.

It Looks Scary,  But Don’t Worry About It

A consortium of Ghanaian and foreign firms look set to transform Ghana into a modern, tech-friendly, hub for innovation in Africa.
Multi-million dollar information communication technology (ICT) schemes in the investment pipeline include the Ghana Cyber City, Appolonia City, King City and Hope City projects.
The $40 million Ghana Cyber City, Appolonia and King City projects are being promoted by Gateway Innovations (Ghana), Xalles Limited (Washington), Ernst &amp; Young (now EY, New York), Technolopolis (Finland) and Russia-based investment bank, the Renaissance Group. However, the Hope City project—a $10 billion technology park with residential and office accommodation including the tallest buildings on the continent—is the grand vision of one man: Roland Agambire, founder, chairman and CEO of Ghana and Dubai-based AGAMS Holdings.
An incurable optimist, Agambire, 39, is no stranger to ambition.
“This is turning out to be my biggest and most exciting challenge yet. We have a three-year plan to finish building Hope City. Any investor who invests in Hope City will recoup his investments within the first five years, including also making a projected turnover of over 250%,” says Agambire.
Hope City is expected to provide office and residential space and facilities for more than 50,000 people.
“I am extremely passionate about transforming Ghana into a knowledge-driven economy. My ultimate desire is to create opportunity for every African… we must also begin to explore the issue of how Ghana can begin to export services and ICT to the rest of the world,” he says.
Hope City will be located in the Dokuna district a few miles north of Accra, the Ghanaian capital. Agambire is optimistic he will raise the cash from the local and international markets to make his grand idea a reality. He will also add $2 billion of his own funds to the project.
His unwavering efforts have already made him one of Ghana’s wealthiest businessmen.
For a man whose early years were spent in poverty, Agambire’s current cozy lifestyle is a far cry from his humble beginnings. He shies away from any reference to his personal net worth. He, however, tells FORBES AFRICA that through AGAMS Holdings. He employs more than 500 permanent staff and 10,000 casual workers with an annual turnover of about $2 billion. AGAMS Holdings has interests in oil, construction, computing and telecommunications, financial services and trading.
His story proves it is possible to be lonely in the middle of a crowd.
Born in Sirigu, a farming community in northern Ghana, his father reportedly had about 50 children and his mother is the sixth of his father’s 10 wives.
For most of the seventies and eighties, Ghana’s economy was in the doldrums and village life was all about subsistence farming, fishing and survival of the fittest. Success was defined by the number of wives and children a man could muster. Agambire recalls how 10 people would sleep on the same mat, like prisoners in a crowded jail, wake up in the morning and eat from the same bowl. He says his success came from this start in life.
“At that time, going to school was a struggle, all they wanted you to do was to grow into a shepherd boy, to be part of the domestic services, but I broke out of that.”
By the age of six, his survival instincts led him to picking up coins dropped by much older folks, drunk on liquor, in the open air drinking holes in the market.
“I was going from one pito bar to the other to pick up money. This was how I made money to feed myself,” he says.
One day, his granddad accused him of pilfering. He told the old man that revelers obviously had too much money to spare. Why else would they throw it away every day and who would be identified as the owner of the money if he were to take the ‘lost and found coins’ to the village chief? The old man had no reply.
Soon, a few older folks noticed and joined him in the coin gathering exercise, so he changed tactic by going earlier to pick the pennies.
Soon, Roland the teenager was selling kuli-kuli (a local snack made from peanuts) and ferrying much sought after cigarettes, kerosene and petrol across the border between Ghana and Burkina Faso.
Agambire worked his way through the Navrongo Secondary School. He would often travel down south to Accra, during vacations, to push trucks and wash dishes in bars to make money to pay his school fees.
By the mid-1990s, his trading activities had expanded and he had dabbled into cash crops exportation. He completed various courses in export and marketing with the Ghana Export Promotion Council, put himself through a regime of Business Administration courses at the Ghana Institute of Management and Public Administration (GIMPA) at the University of Ghana and earned a Bachelor’s Degree in Business Administration.
A trip to Japan in 1999 opened his mind to the social impact and business potential of ICT. In 2000, he invested his first $200,000 into an internet café business in Accra; the dotcom age arrived and soon he was importing computers from the United States, and providing after sales support and computer networking services to Ghanaian businesses. He has never looked back since.
AGAMS’s leading subsidiary, RLG Communications, with offices in Gambia, Ghana, Nigeria, Dubai and China is helping to transform West Africa’s personal computing and mobile phone landscape. The firm has a technology training institute and a mobile phone assembly plant and will commission a $100 million facility, Ghana’s first PC and mobile device manufacturing center, in 2014.
The Ghana News Agency once described Agambire as “a personification of determination”. Having conquered poverty, he now wants to put West Africa’s second largest economy on to the global technology map, permanently.
Not bad for someone who used to pick up pennies.

Penny Picking On The Way  To $10 Billion

They grew up in different worlds: he in a Nigerian palace; she in Accra. Together, through their media group, this multicultural couple proves that inter-African relations are lucrative. An $8,000 investment has multiplied into millions in profits. Now, they have set their sights beyond Ghana.
Theresa and Iyiola Ayoade met in Accra, the Ghanaian capital, 17 years ago. Those were tough times—politically and economically in West Africa—with most of the sub-region under military rule or boiling with civil strife. Today, West Africa is an emerging economic bloc and the Ghanaian-Nigerian couple has found favor, fame and fortune in the land of Ashantes.
Theresa and Iyiola’s alliance began with friendly chit-chat, lunching and discussing business ideas, politics and football; they fell in love and got married. Today, these seasoned entrepreneurs exemplify the geo-political dynamics of their respective homelands.
“I saw a big potential in him. I liked his sense of discipline, his approach to work, the way he applied himself. I saw a lot of promise. Doing business with him was actually a gamble because we were just friends. I don’t think it was just because of love that I got involved with him,” says Theresa.
They make a succesful team.
“She is not a shareholder in the business because she is my wife. I tell you, even if we were not married we would still have been in business together. She made a cash investment and that obviously made me take her more seriously,” he says.
Iyiola left Nigeria for Accra in the early 1990s. He started his business with $8,000, years later. His lucky break came via two companies—Coscharis Automobiles Ghana, the Ghanaian subsidiary of the Nigerian-owned Coscharis Group, and the Agricultural Development Bank of Ghana (ADB).
“I had delved into management consultancy along the way and Coscharis had asked me to give them a market penetration strategy. They liked my plan, and I organized the first auto fair in Ghana in 1997.”
It was while organizing the auto fair that he met Theresa, who was then a marketer at Joy FM radio station, in Accra.
The ADB opportunity, in 1999, required him to present audio-visual content for a campaign. He delivered the winning concept—a television game show, the first of its kind in Ghana—within two days. Soon after, he opened Charterhouse Productions, a television production company and launched the Ghana Music Awards. His staff payroll grew from six to 18. Theresa quit Joy FM in 2000 to join him.
By all accounts, Iyiola, Theresa and their Ghanaian business partner Philip Ayensu, have done well. They have created jobs promoted cross-border business ties and built a multi-million dollar business that straddles the marketing, advertising, entertainment and media sectors in Ghana, Nigeria, Sierra Leone and Liberia.
The trio own Multiple Concepts Group—it includes Multiple Concepts, a marketing company; Charterhouse, an events management and audio-visual production firm founded in 1999; MediaEdge-gsm, a mobile content provider founded in 2006; and GhOne, a television channel launched in 2011.
Their story is one of risk, resilience and taking advantage of opportunities. Their reputation and bank balance are healthy.
“Those guys are involved in almost every event happening in Accra,” says Ben Arthur, a Ghanaian business journalist.
“We do about GHS15 million [$743,000] in revenue per annum averagely, I believe this is large for our industry,” Iyiola says.
The group employed around 120 people by December, and opened another office in Cape Verde earlier this year.
Iyiola was born and raised in Ife, in south western Nigeria.
“I grew up in the palace. My mum was the ninth born of the late king, the Ooni of Ife, Oba Adesoji Aderemi. I had over 500 cousins, so many role models to choose from,” he says.
Among his cousins were lawyers, bankers, accountants, doctors, lecturers, thespians and intellectuals. He studied economics and statistics at the University of Benin, in Nigeria, and worked as an investment and financial analyst in Lagos.
“I came to Ghana with almost nothing. But, at least, I knew I was not going to fail. I had my brains and I was lucky that a few people I’d met in Accra, during my early years in the city, believed in my ideas, my work ethic and my judgment,” he says.
He credits his success to strategic decision making, clients’ goodwill and Ghana’s tranquil environment.
“One thing, I think, I did very well is that I didn’t paint this business green-white-green. A lot of businesses come here from Nigeria and they are so Nigerian. There is market resistance, however subtle, to that kind of thing, but then again, Nigerians are not very easy people to deal with also. The average Ghanaian is somewhat reserved. They are generally peaceful people and it is that peace that gives us the security that we enjoy here.”
He is bullish about Ghana-Nigeria trade and the subject of Africans investing in Africa.
“We have a 250 million market in West Africa and the market is open to everybody, not just Nigerians and Ghanaians. In fact, I really don’t get it when people talk about Nigerian companies coming to Ghana to take away business from the Ghanaians. Then I ask, ‘Excuse me, is Standard Chartered bank a Nigerian company? Is Barclays bank Nigerian? Is Ashante Goldfields Nigerian? Is Goldfields Nigerian?’”
He says that while Ghanaians accept foreign companies doing business in their country, they resist Nigerians.
“Meanwhile, they stand to gain more from Nigerians because we are one of you, our cultural and geographical affinity should be a plus. There is plenty of opportunity for us all to grow and try to unify the West African market. We need to do more [business] between ourselves. That’s the only way we will develop and grow the region.”
Sometimes success comes when you look beyond your borders and team up with your African neighbors.

Love And Business  Across The Divide

Sam Jonah has broken rocks miles underground and brokered deals over the boardroom table. He’s advised world leaders and discovered a passion for parrots. He is probably one of the few men in the world to be knighted in London nearly 30 years after sweating as a miner in the searing heat, miles beneath the country of his birth.
It all began in 1949, Jonah was born in a military camp in Kibi, Ghana; his father—a sergeant major and World War II veteran, served in the Royal West African Frontier Force. Soon after, Jonah Senior left the army and set up a construction company. The family moved to Obuasi where Jonah went to school. It was after high school that Jonah made the surprising decision to work underground at Ashanti Goldfields Corporation’s (Ashanti) Obuasi mine, the only mine in Ghana. Jonah’s classmates were going into law and medicine, while he was going to work shoulder-to-shoulder with men who had barely gone to school.
“My business was breaking rock,” he says.
Jonah saw that mining was run by whites and wanted to change it. There were tough days underground. Jonah calls it his most humbling experience and with merely a high school certificate and no experience, he had to sink to the bottom of the barrel to learn to survive.
“You learn quickly how to get what you want from people who are better equipped, who are better skilled, who are better experienced, who are much older than you are,” he says.
In his quest for more, Jonah won a scholarship to study mining engineering at the Cambridge School of Mines, in England, which later awarded him an honorary doctorate. He returned to Ashanti and moved up the ranks. Then he returned briefly to London to study business at Imperial College, now the University of London.
It was during these exciting days at Ashanti that tragedy struck. One day, Jonah was underground when the chamber’s ceiling fell in, trapping and killing miners. It was time for quick thinking. Jonah saw a man trapped under rubble who showed signs of life by muttering softly. Under Jonah’s guidance, a team worked to pull the man free and carry him to the lift. The miner, whose legs were crushed, drew Jonah close and thanked him. Four hours later the miner was dead. This was the life Jonah chose as a young man; a life he likens to that of a soldier.
Jonah’s life was moving apace. In 1979, air force officer Jerry Rawlings, then 32, led a coup in Ghana and nominated Jonah, who was the same age, to be Ashanti’s vice president. In 1986, the late Tiny Rowland, the founder of Lonrho, which owned Ashanti, appointed Jonah as managing director. This was at a time when production at the company’s single mine had deteriorated and the industry had yet to see a black man at the helm.
Jonah’s father had once said that the day Ashanti was run by a black man, would be the day he left town. Jonah had the pleasure of telling his father that the day for him to pack his bags had come.
In his new position, Jonah introduced his ‘Africanization Policy’. He wanted to change an industry that was run by whites. He wanted to attract his countrymen to the industry to prosper like he had, by forcing expatriates to fulfill their contractual obligations to impart skills. Moreover, Jonah wanted to cut the expense of expatriates. Why pay a foreigner four times what you would pay a Ghanaian to do the same job?
This policy was unpopular among expatriates but it was all about the big picture in a growing company.
“Glass ceilings were punched through,” says Jonah.
Jonah considers business to be all about people. He feels that it is a leader’s responsibility to identify talent and harness it, to set aside one’s ego and surround oneself with the very best, to make one look good.
“Wisdom does not reside in the head of only one person,” warns Jonah.
Jonah says his parents taught him all he knows about leadership. They encouraged humility, told him that good days are not forever and that he should never give up.
In 1999, Jonah needed all these skills when Ashanti faced a liquidity squeeze. It came at a bad time for the company as it was trying to raise $125 million to build a mine in Tanzania.
The root of the problem was hedging done by the company when the gold price was low. This was viewed as a risk management tool and a price protection mechanism. Unfortunately for Ashanti, a decision taken by global central banks saw a sharp increase in the gold price. The market price was greater than the hedged price and the company did not have enough cash for margin calls because it had pumped a lot of money into new mines. Jonah says this was a bruising time for the company and the most difficult of his career. The company’s share price fell to the point that the New York Stock Exchange was considering delisting it. It took eight months to recover and years to prosper.
Jonah, the driving force behind Ashanti’s growth, sees opportunities where others don’t. In his time, Ashanti grew from a single mine in Ghana to the second largest gold producer in the world.
The company was public until the Ghanaian military government under General Acheampong, took 55% share in 1972—making it a partnership between the government and Lonrho. In the quest for growth, Jonah and his team convinced the partners that better days were ahead if the company went public again. Once Ashanti listed in both Ghana and London, the government held 17% of the company and Lonrho 27%. Between 1994 and 2004, Ashanti went on the acquisition hunt in an attempt to be both an entrepreneurial as well as a conservative company. It extended its operations in Ghana, Australia, Zimbabwe, Guinea and Tanzania. In 1996, Ashanti became the first African-based company to be listed on the New York Stock Exchange.
There is a saying that goes: “No good deed goes unpunished.” As Ashanti grew, the hunter became the hunted. Success attracted the interest of numerous companies.
Jonah felt the choice was to grow from within, or agree to be part of a bigger outfit. It proved difficult trying to convince partners that issuing shares, thus diluting power, was best. The government was faced with a competitive demand for its money, while Lonrho wanted to focus more on platinum. With no other defense, a merger was the only option.
The $1.48 billion merger between Ashanti and AngloGold, then the seventh and second largest gold producers respectively, was far from a merger of equals.
“We were punching beyond our weight,” says Jonah.
Despite this, Ashanti’s management secured key positions within AngloGold Ashanti, with Jonah becoming the executive president of the merged entity.
After his time at AngloGold Ashanti, Jonah became a serial director. Some junior mining companies approached him to guide them to success, as he had done for Ashanti. Equinox Minerals, a mining exploration company based in Zambia, was at the feasibility stage when it approached Jonah. Years later, in 2011, the company that had a market capitalization of $63.1 million in 2006, was sold to the Barrick Gold Corporation for $7.4 billion. Moto Goldmines, in Ghana, grew from a $50 million market capitalization company and was sold to Randgold Resources and AngloGold Ashanti in October 2009.
Since AngloGold Ashanti, Jonah has sat on at least 18 boards of companies.
Jonah currently sits on the boards of a few companies, including Vodafone Plc. He is also the founder and chairman of Jonah Capital, a private investment holding company, based in South Africa, with interests in mineral resources, real estate, agriculture, construction materials, financial services and oil and gas services.
His counsel has extended beyond the business world. When former South African President Thabo Mbeki set up the International Investment Advisory Council in 2000, Jonah was the first and only African to sit on it. He has also been an advisor to Nigerian Presidents Olusegun Obasanjo, his successor Umaru Musa Yar’Adua and Goodluck Jonathan. He was a founding member of Ghanaian President John Kufuor’s investment advisory council and advised the late president of Zambia, Levy Mwanawasa, on investment promotion. Jonah was also on Kofi Annan’s UN Global Compact Advisory Council. Three years ago he helped the president of Togo put together a team that would formulate strategy for the country.
According to his biography, Sam Jonah and the Remaking of Ashanti by Ayowa A. Taylor, Jonah turned down the position of Ghanaian vice president twice.
On June 25, 2003, Jonah received an Honorary Knighthood in recognition of his achievement as an African businessman at St. James’ Palace, in London. Knighthoods conferred to foreign citizens are done so on the advice of the Foreign and Commonwealth Office. They are bestowed on those who have made an important contribution to relations between their country and Britain.
It came from the blue. Jonah took a call from the British high commissioner in Ghana who, after making sure that he had sat down, told him that he had received a call from the British prime minister’s office informing him that Jonah’s name had been put forward for a knighthood. The high commissioner asked Jonah if he would accept the honor, should the Queen approve. The final word came two weeks later, while Jonah was in Guinea. Since Russian President Vladimir Putin was on a state visit on the day of the ceremony, the knighthood was conferred by Prince Charles.
In 2006, Jonah received the Order of the Star of Ghana, the nation’s highest award, and the Commonwealth Business Council Lifetime Achievement Award in 2010.
More recently, Jonah has been appointed—along with 12 other internationally recognized business, academic and public policy leaders—to sit on the newly formed Bank of America Global Advisory Council.
A lifetime away from his days of breaking rock underground, Jonah says: “I saw no barriers. I was determined to get to the highest [level] in anything that I did.”
This sentiment is echoed in his biography where Taylor writes: “Jonah was determined to build a ‘First’ World company, to dispel the unspoken belief that coming from the ‘Third’ World implied that he would be a third-rate businessman.”
Jonah acknowledges the big part that mentorship played in his success and feels that it is important that those that have found success pass down their knowledge and not have the arrogance to think that they did it all on their own. Jonah has, through the years, been approached by those seeking guidance and says that there is nothing more fulfilling.
“You must be humble enough to know what you know and to appreciate what skills you don’t have, and to have a plan.”
Jonah says it’s sad that young people are no longer as keen to serve apprenticeships.
It hasn’t all been smooth sailing for Jonah. In 2008, a conflict of interest arose when Jonah became a non-executive director at Metropolitan Holdings Ltd while on the board of the Standard Bank Group’s Liberty Life. He stepped down after holding the position for a month. Jonah refers to this as the shortest directorship in South Africa and says he failed to see the conflict from the onset as Liberty Life had a separate board to Standard Bank.
Also making it into the news that year were claims of insider trading and the resignation of senior staff in a company chaired by Jonah. Sentula Mining was accused of misdeeds worth R242 million ($29.7 million).
Jonah says he was approached by the family with the controlling interest in a company called Scharrighuisen to become the chairman and shareholder, buying in on concessionary terms, at around R2 ($0.25) a share. Jonah went to distressed shareholders, and some potential ones, and sold them his vision to rebrand Scharrighuisen as a new mining services company to be called Sentula Mining. Jonah Capital and Coronation Capital were the two largest shareholders when they sold some of their shares, at around R21 ($2.60). The combined sales were reported to amount to R680 million ($85.4 million). The share price subsequently fell to around R1 ($0.12) before recovering slightly.
The parties were thought to have had knowledge that the market did not. The Financial Services Board opened up an investigation into the possible insider trading and trading was suspended for a few months. During this time Jonah resigned as chairman of the company but maintains that there was no wrong doing and that they were cleared.
With his focus on the many possibilities the future holds Jonah’s Iron Mineral Beneficiation Services (IMBS) is using industry changing technology for processing super scrap, metallic iron, from the waste dump at Phalaborwa Mining Company, in South Africa’s Limpopo Province. The super scrap replaces traditional scrap in steel making.
Jonah says that when he told Lakshmi Mittal, of ArcelorMittal—the world’s largest steel making company—the chairman and CEO asked: “Sam, what do you mean? I have 77 PhDs in Chicago and New York looking for this technology, and you’re telling me that two South Africans have found the technology?”
Jonah is proud of the fact that while big companies around the world were writing off lots of money in search of this technology, two South Africans beat them to it. Jonah Capital has the largest stake in the company, with South Africa’s Industrial Development Corporation (IDC) and Russian company, OAO Severstal, as partners. The R120 million ($15 million) pilot plant will be up and running by May.
Despite all this success Jonah maintains that he is not a wealthy man and that he is merely comfortable. He has been reported, by African journalists and bloggers, as having a net worth of between $500 and $600 million and has been celebrated as the richest man in Ghana. His worth remains a mystery but Jonah says that he is appalled by the speculation, adding that his father would be upset by people saying such things about him.
“We were not brought up that way,” says Jonah.
Evidence of this is the inscription by Jonah’s father placed on the house he built for his family in 1950. It read: Wobisa wo din enye wo sika, which translates to: They ask about your name, not your money.
“I’d like to be defined more by what I have done, than what I have…” he says.
Jonah says that having earned a monthly salary from the age of 19 until his retirement from AngloGold Ashanti, at 58, and sitting on boards and owning shares, means that he has done well for himself but he denies being the richest man in Ghana.
Jonah may not be pleased by some of the reporting about him, but what pleases him is the way business is going on the continent.
“Africa is all about entrepreneurship,” he says.
Jonah feels that people are now being given the space to grow, that businessmen like Aliko Dangote, Mike Adenuga and Patrice Motsepe, are world-class.
Jonah is also adamant that the world’s attitude towards Africa has changed. He feels that Africa’s potential is now being appreciated and harnessed, which, he says, is coming on the back of political and social change.
The world’s eyes and markets were on South Africa when the Lonmin mine workers’ strike in Marikana turned violent. As the longest serving director of Lonrho, Jonah doesn’t want to weigh in too heavily on the matter but points out that there are philosophical differences in the style of management and his own, influenced by his time underground.
“I came to appreciate the roles of these people [miners], how backbreaking the job was, how hardworking they were, how committed they were,” says Jonah.
He believes there will always be a future in mining as long as there’s a demand but that miners’ living conditions are shocking and that South Africa needs to focus more on the social aspect of the business.
Jonah has enough thoughts to fill a book but jokes about not being literate enough to write it.
Jonah does, however, have a more relaxed side. The jet-setting entrepreneur enjoys fishing. His eyes light up as he talks about it. He took up golf once again, four years ago. It brought back memories of a battle around the golf course nearly 40 years earlier. Jonah challenged the exclusively white Obuasi Golf Club, where he was not welcome. He was determined to learn the game and when none of the other members would teach him he went to the caddies. After 10 lessons, no-one wanted to play with him. Jonah used to go early to the golf course and play slowly, deliberately, to irk the white golfers backed up behind him. It worked and eventually the invitations to play grudgingly arrived. On the other side of the coin, some of his fellow Ghanaians couldn’t see the victory and sneered that Jonah now thought he was white.
It is no surprise that decades later his children tease him about becoming obsessive about his hobbies. When Jonah discovered squash, playing twice a day was not enough so he built a court at his home. When he took to the gym, he was there every morning at 5AM and then built himself one.
You could have guessed that buying a parrot in Guinea would lead to an aviary being built back home. It is now filled with a collection of parrots from South Africa, Ghana and Brazil.
An avid reader and big fan of Rudyard Kipling, Jonah recommends the poem If.
In a speech to inspire leadership Jonah closed with an extract from Henry Wadsworth Longfellow’s A Psalm of Life: “Lives of great men remind us that we can make our own lives sublime and departing we can leave our footprints in the sands of time.”
At the very least, Jonah proves that if you can keep your head while others are losing theirs and blaming it on you… you can be a man, my son.

THE MAN  WITH THE  GOLDEN TOUCH

Accra has a lot to offer. From the warm Akwaaba that greets you at the capital city’s Kotoka International Airport, to the great service extended to visitors; hospitality is at the heart of Ghana. This realization didn’t escape Paul Ansah when he returned home a few years ago to expand the Marriott Hotel Group’s African presence.
After weeks of traveling across the continent and a few brief telephonic conversations, the well-spoken, Ivy league graduate welcomed me to his offices overlooking the city.
Paul Ansah is vice president in charge of international hotel development for the prestigious Marriott brand in Africa. The title carries more emphasis on delivery than his business card suggests. He afforded me clarity on how this came to be.
Born and bred in Accra, Ansah isn’t any less Ghanaian than he was before he left. He reminisces fondly about his formative years in Ghana, with a hint of an American accent. He moved to the States to pursue a qualification in civil engineering at the University of Maryland College Park. The innate business acumen within Ansah led him to pursue a Master’s in business administration, finance and real estate at the Wharton School of the University of Pennsylvania.
His career began in Washington D.C., where he spent a few years building mixed-use commercial real estate. He moved into hospitality when he joined Marriott as a senior financial analyst on development and asset management deals around the world, and subsequently rose through the company. This gained him a global perspective on the financial side of the business and on the company’s developmental efforts. After an extensive stay in the States, which he considers his second home, Ansah returned to Africa in 2010.
“The decision came naturally to me as I simply followed two of my passions—real estate and African development. I was determined to be physically located within my region in order to fully experience and understand its nuances. In order to provide successful business solutions to the abundant opportunities in Africa, it is essential to personally experience the attending challenges presented by living and working in today’s African environment.”
Upon his return, Ansah opened Marriott’s first development office in Africa and became in charge of the development of all Marriott Hotels in Africa.
Speaking on the regional growth of the industry, Ansah says: “The West African hotel landscape is in its nascent stages and is brimming with opportunity. The nature of each opportunity varies widely, depending on the country and city under consideration. The unifying theme across the region is the stark imbalance between demand and supply of quality international-standard hotel accommodations. Now is the time to be developing hotels in West Africa.”
With the recent emergence of finer hospitality institutions in West Africa and a growing demand for relative affordability, it is important to question whether or not international-standard hotel accommodation meets the demands of local clientele and if there is indeed room for prosperity in this industry. Whether the industry is lucrative, one can draw a conclusion by considering the challenges or ease of establishing and running hotels on the continent.
“Business development yields [in Sub-Saharan Africa] are particularly low and the gestation period on ultimately successful projects tends to be extraordinarily long. This translates to higher development costs that further aggravate the key problem of financing. It takes a well-resourced and skilled team to avoid the many pitfalls,” he says.
Despite the prevailing challenges, the Marriott team has recorded some great achievements.
“We most recently announced the signing of a multi-billion naira deal with Quantum Luxury Properties Limited, led by Jim Ovia, for the development of a 150-room, five-star Marriot hotel to be located in Lagos, Nigeria.”
While Ansah is responsible for the development of the brand on the continent, he is particularly focused on West, Central and Southern Africa.
“My goal is to make an indelible mark in the African built environment&#8230; African cities are experiencing a renaissance and in 10 years, our built environment will be leagues ahead of the status quo. I’m determined to be at the forefront of Africa’s development.”
The Marriott Hotel in Accra promises to be a pivotal impetus for increasing hospitality standards in Ghana.
Just like any hotel, Ansah isn’t about all work and no play. He describes himself as an “all-in” type of guy.
“I live my life with passion and I try to make every minute count.”
This is the kind of passion that, coupled with his first-hand experience of the region, will drive success and growth for Marriott.

Go West!

In the 1800s, Europeans referred to Africa as the “dark continent”, although the Victorian term has fallen from usage, until recently it accurately described the approach of foreign investors to Africa. Risk was thought to be too high, returns too low. A decade ago, the region’s share of FDI was less than one-tenth of the amount flowing into Asia or Latin America. Until a few years ago, a single company, Exxon Mobil, was worth more than all of Africa’s listed companies put together, excluding those of South Africa.
But what a difference a few years can make. Since the financial crisis hit in 2008, there has been a dramatic shift in how investors view Africa. One of the markets that has best epitomized this change is Ghana.
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The West African county was near the top of worldwide tables in 2011 in terms of GDP growth with a rate of more than 14%. 2012 figures were equally robust, coming in at above 8.5% buoyed by strong growth in the non-oil sector of 8%. While the country is largely dependent on commodities for export revenues, increased activity in housing, construction and banking has spurred an expansion of the services sector, which makes up more than half of GDP.
Last year saw a gradual depreciation in the cedi, which fell by around 14% against the dollar, driven by increased demand for imports. While the country’s robust growth also stoked inflationary pressures, at least over the short-term, the CPI fell to 8.8% in December—its thirty-first consecutive month of single-digit inflation.
The country benefited from a statistical rebasing a few years earlier, which dramatically improved data collection and accuracy. As a result, the country was catapulted into middle-income status.
The biggest recent watershed moment for the country is as a result of its newfound oil and gas reserves. The offshore Jubilee field, discovered in 2007, began production in record time, with the first barrel being lifted at the end of 2010. The speed with which Ghana went about capitalizing on its new oil wealth, 42 months from discovery to production, led to a few hiccups. For four months, light, sweet crude flowed without a regulatory framework to determine how the revenue would be channeled and how future production would be handled. Eventually, the Petroleum Revenue Management Bill was put in place. It allocates a proportion of revenue to future generation funds and price stabilization funds and some $444 million worth of oil revenue flowed into government coffers by the end of 2011. The production, in relation to the country’s overall economy, is modest and by some estimates will work out to around $50 per capita annually but the rush of investment into the sector—and ancillary industries, such as construction and services—helped ensure the country was one of the largest FDI destinations in Africa last year.
Associated gas deposits in the field brim with equally promising potential, particularly in terms of domestic industrial and electricity production, although timing has been problematic. Currently, with a ban on flaring and no offtake infrastructure, gas has been re-injected into the deposits but at a certain point this will negatively affect oil production. As a result, the country has been racing over the past year to finalize infrastructure for its gas master plan, which will see the construction of more than $750 million worth of new processing and pipeline infrastructure by China’s SINOPEC. Gas is due to begin flowing to the newly-built Aboadze power plant over the next month or two—and none too soon, given the blackouts last year when the country’s alternative gas supply, the West African Gas Pipeline, experienced supply shortages.
While hydrocarbons dominate the headlines, Ghana’s traditional commodities have provided the bulk of revenues in recent years. Cocoa, which indirectly supports more than one-sixth of the population, had a successful year with an estimated production figure of 860,000 tons, down slightly from the previous year but enough to make it the world’s second largest producer. The distribution of more than 20,000 new hybrid seedlings and efforts to improve the ability of small farmers to tend and replace their crops, looks set to strengthen output over the medium-term.
Similarly, gold, which accounts for roughly 40% of exports, grew by double-digit figures over 2012. Although production fell slightly, higher prices on international markets helped keep prices afloat and fund new exploration in marginal deposits. Ghana has revamped its regulatory scheme, introducing a new bidding system and increasing the fiscal burden for operators, including a windfall tax and higher royalties.
Of course, with all this laudable growth comes a note of caution. This rapid change must be managed carefully, for the downside risks facing the country are sizable. Ghana was the third-largest recipient of FDI in Africa last year, but it remains worryingly dependent on commodities. Gold, cocoa and oil dominate exports and while Ghana is not as sensitive to price fluctuations as it was in the 1980s, when the economy seesawed according to international prices, volatility still impacts overall performance. Furthermore, labor-intensive activities such as manufacturing remain marginalized, exacerbating unemployment and weakening the balance of payments. The benefits of the economic boom have been disproportionately concentrated in the south and development in the north lags significantly.
However, Ghana has the ideal foundation for future growth. It has natural resources, policy stability and reasonable infrastructure and it has benefited accordingly. But exporting raw materials, by sending gold and cocoa elsewhere for processing, is a short-term solution. The country has begun aggressively encouraging increased value-added production in the secondary and tertiary sectors, to improve the sustainability and inclusiveness of growth and to ensure that the country’s current performance is not a temporary blip.

Gas And Cocoa Oils Ghana Growth

Perched on a stool with a spotlight sculpting her fine face with light and shadow, Nneka strums her guitar and melancholically sings lyrics with both religious and political undertones.
“Your phrases are highly majestic, I am amazed by your great linguistics, yet your words are placed together, to sell dubious manifestoes,” says Nneka.
The audience sits in silence as the stars shine in the dark sky spanning above the auditorium in the Ghanaian capital of Accra.
Tonight, Nneka casts a fragile form—her signature sprawling afro is pulled back, her diminutive figure is shrouded in layers of grey, and she is awkwardly reticent throughout the performance. But if Nneka’s music has a central theme it is that appearances can often be deceptive. The German-Nigerian singer’s delicate beauty and soft voice belie the anger, the confusion and sense of injustice threaded throughout the lyrics of her songs.
For the past two years Nneka has been touring Europe, East Africa and her motherland to promote her third album Soul is Heavy, which was released last year . Written and recorded over three years in her home city of Lagos, the album is both thematically and stylistically eclectic with reggae, hip-hop, soul and afrobeat influences. Her songs address corruption, neo-colonialism and oppression, as well as more introspective matters of the heart and soul.
Nneka has made her way from being a little-known singer-songwriter to an internationally acclaimed artist who has toured with the likes of American singer Lenny Kravitz and New York rapper Nas. But gaining recognition in her homeland was difficult, at least until her big break in 2010 when she performed her hit single “Heartbeat” on the David Letterman Show and later appeared on CNN.
“Before Letterman, before CNN nobody wanted to hear my stuff in Nigeria. It was quite difficult for people to relate to my music because the topics are quite heavy: I talk about corruption, I talk about hypocrisy and things that I deal with on a daily basis that we Africans and Nigerians deal with on a daily basis. Many people are very scared of facing those issues they would rather you entertain them,” she tells me during an interview at a restaurant in Accra.
Nneka says the popularity she gained in Nigeria, due to her overseas success, was an example of the “colonial mentality”, which is still pervasive throughout Africa.
“It’s an inferiority complex that we are not very aware of. We are really not proud of ourselves.”
But the singer says that while Nigerians are often drawn to the shiny and superficial; “political” music is becoming increasingly popular in Nigeria, as shown during the Occupy Nigeria protest movement last year, which was sparked by the removal of fuel subsidies and inspired by the Arab Spring.
“There are lots of musicians and artists who are becoming more conscious about their surroundings and courageous in speaking out their minds, when it comes to speaking out about our state and our condition and the system,” says Nneka.
While the singer describes her homeland as divided and corrupt, she says the Occupy Movement, at which she performed, gave her hope that things in Nigeria can change.
“A demonstration like that hasn’t been done in my lifetime. It was a peaceful demonstration—people of different tribes gathered, Christians and Muslims were praying together. Seeing so many people in one place having the courage to speak their minds helped connect us amongst ourselves.”
The artist was inspired by the pain and injustices she saw in Warri in the Niger Delta, a city where economic division and ethnic conflict are rife.
“When you grow up in that area, you either become a militant or maybe a musician. There is so much grief and tribal war and so much conflict,” she says.
But Nneka says Nigerians continue to hold on to the hope that their country can change and that some kind of revolution will take place in the future.
“We need proper leadership, selfless politicians who are not in power looking to profit, we need government to be more concerned about the youth and we need more rich people that are concerned about the poor.”
On what inspires her creatively, Nneka is endearingly bumbling and inarticulate. She cites spiritual figures such as Gandhi, Jesus and Saint John the Baptist and iconic African leaders like Thomas Sankara, Kwame Nkrumah and Patrice Lumumba, as figures who have informed her ideas and lyrics. Like these great men, Nneka sees herself as a spokesperson of the poor and the oppressed.
“Seeing the many people who are sick in the Delta due to the pollution, and the deaths… being from that area alone has made me into who I am. I feel it is my responsibility to be the voice for those who don’t have the courage,” says Nneka.

Nigeria’s Nightingale

Nana Akufo-Addo, the presidential candidate for Ghana’s main opposition New Patriotic Party (NPP), takes to the lectern in a theater packed with university students wearing the party colors of red, white and blue. Dressed in a white shirt, wearing his familiar round glasses, that accentuate his equally round face, the British-educated lawyer, turned politician, outlines his vision to transform Ghana, a nation dependent on the export of raw materials, into a thriving industrial economy.
“We have to make a deliberate, conscious effort to modernize our economy, industrialize our economy and make it a value-adding economy,” he says at the University of Ghana, in the capital, Accra.
“There are many countries in the world, [which] had similar backgrounds [to] ours that undertook this transformation, and succeeded, especially the nations of Asia—Japan, Korea, Thailand. If the Asians can do it, can we not do it here in Ghana, in Africa?”
“We are capable of doing it!” the students roar.
Ghana’s December polls are expected to be the most closely contested in West Africa, with the ruling National Democratic Congress and opposition NPP shaping their policy platforms around industrialization and social welfare. This ideal of a modern industrial African society has existed since independence, when Kwame Nkrumah, the nation’s visionary first socialist leader, followed the then popular model of import-substitution industrialization and set up a slew of state enterprises and manufacturing companies that eventually collapsed and weighed the country down with debt.
Decades later, Ghana boasts a fast growing economy that is diversifying. Close to 50% of GDP is generated by the services sector, according to Ghana Services Statistics. But despite this growth and economic shift, 60% of Ghanaians are employed in agriculture. Since 1996, manufacturing has plummeted from 26% of the economy to a mere 3% today. Ghana’s economy may be booming on paper but like many African countries, it is stuck in a pattern of exporting raw commodities and importing manufactured goods.
Socialist sentiments underscore the ruling National Democratic Congress (NDC) party’s political rhetoric, yet both major political parties view the private sector as a driving force behind economic growth. The NDC believes the state should play a stronger role in development. By contrast, the more capitalist NPP—led by President John Dramani Mahama, the former vice president who replaced the late President John Atta Mills—argues for social goods and protection against market forces.
“You must find a way of regulating the market so that it doesn’t create a class of society that loses out because everything is left to market forces,” said Mahama, in a recent interview with The Africa Report.
Both parties are committed to education and health, with free senior high school being the centerpiece of the NPP’s campaign.
From the perspective of the Ghanaian business community, the differences are subtle.
“The manifestoes are similar—they are speaking the same language with just a little color,” says Prosper Adabla, a businessman and vice president of the Ghana Chamber of Commerce.
“We have a mixture of socialism and capitalism and that is making us move well… The businessman is free, basically, to do what he wants.”
The creation of industries that process Ghana’s raw commodities, are policy platforms for both parties, with a particular emphasis on agricultural modernization. The NDC’s manifesto promises an agricultural industry strengthened by subsidies. Both parties argue that entrepreneurship is also key to economic growth and jobs.
But leaders in the business community say that while progress has been made in the way of policy, the government needs to do more to boost local business and protect it from the influx of imports from China and elsewhere.
“The government needs to do more to protect local industry through building local capacity, helping provide better access to finance and funding arrangements and improving technology,” says Seth Twum-Akwaboah, the executive director of the Association of Ghana Industries.
While positive policy developments have been made, among them the launch of an industrial policy last year, Twum-Akwaboah says that there must be more focus on implementation. Electricity offers a significant challenge for industry with erratic supplies and the recent closure of the West African Gas Pipeline, reportedly due to technical faults.
The presidential elections are expected to be close, but independent pollsters say that it is too early to determine who will claim victory in December. The NDC government will have to work hard to prove it can drive the economy forward. Ghana’s economic growth rate, which soared to great heights last year, has fallen to 7.1%, short of the projected growth rate of 9.4%, according to the Ghana Statistical Services. This along with the sharp depreciation of the Ghanaian cedi against the greenback by 17% in the first half of the year, a failed multi-billion dollar government housing project deal, and millions of Ghanaian cedis paid out in judgment debts for abrogated government contracts, pose hurdles for the NDC government.
Both parties face rising youth unemployment, poverty, underdevelopment in the northern regions, and accusations of corruption and financial mismanagement. Ghana ranked 69 out of 182 in Transparency International’s Corruption Perception Index in 2011, down seven places the previous year.
Vitus Azeem who heads the Ghana Integrity Initiative (GII), the Ghana chapter of Transparency International, says both parties have the political will to tackle government corruption.
“One of the issues is the lack of commitment of the people in power to take action against those who are alleged to be responsible for corrupt acts, especially when it involves people who are involved with and tied to the party.”
Florence Dennis, executive secretary of Ghana Anti-Corruption Coalition, of which GII is a party, echoes this sentiment, adding that while legislation is in place, allegations of corruption too often become politicized.
“For the past years our concern is that a lot of these corruption issues are politically handled and it doesn’t allow a fair sort of support from the public in terms of dealing with it.”
Ghana is among the few African countries that economists say will likely achieve the Millennium Development Goals. But the economic disparities between the arid north and tropical south pose a major challenge for Ghana, according to development economist Jeffrey Sachs. This development divide is starkly illustrated in the slums of Accra, hidden away by the city’s construction boom, where thousands of northerners flock in search of work.
In Old Fadama, Accra’s largest slum, men and women toil: dragging clumps of metal scraps and waste on rickety wooden trolleys, carrying loads on their heads, sending money back home to their families in the north, saving so they can start their own small businesses.
Inusah Sayibu, a 36-year-old tailor and father of three, has lived in Old Fadama for more than 10 years. With the small money he saved from cleaning out wood shavings from a sawmill, he gathered enough money to pay a master to train him to be a tailor. Sayibu earns ¢100 ($50) a month, well below the national average of $1,400 per annum, according to World Bank figures.
“If I could go back home, I would, but there are no companies, no jobs,” says Sayibu.
When I ask him who he will vote for, he says President Mahama and flicks his right thumb up. Mahama is from the northern region and many in Old Fadama expect that as a son of their soil, he will develop the north.
Nkrumah’s vision of a modern industrialized society has been a vision for Ghana throughout its political history, but some argue that the government ought to be more skeptical about this ideal.
“None of these two parties have questioned the idea [of] industrialization and whether it is the right form of development for an African country, particularly given the problems associated with industrialization in the advanced industrialized world now,” says Michael Whyte Kpessa from the Institute of African Studies at the University of Ghana.
“The question is, should we be industrializing now? Or should we be looking at alternative forms of development that are more sustainable, that are more germane to our particular socio-cultural circumstances.”
For the Ghana Chamber of Commerce agricultural industrialization is the way forward. “We are an agrarian economy. It is going to be difficult for us to industrialize because of the competition,” says Adabla.
Adabla adds that it will take a number of years to achieve this vision.
While Ghana may be touted as the ‘rising black star’ by some, there is still a long way to go.

If Asia Can Do It, So Can We

It’s a scorching afternoon in the busy commercial hub of Osu, in Accra, Ghana. Nelly Hagan Aboagye is at her flagship outlet, working dilligently on her exclusive collection for the upcoming Ghana Fashion week, to be held in the first week of October. It is every Ghanaian designer’s dream, but for Aboagye, there is more to it all than meets the eclectic eye.
It all started a few months ago, when Aboagye—a trained surgical nurse, with a love for fashion— heard an advertisement for young, creative entrepreneurs in fashion, on the radio. After being shortlisted as one of the finalists, she worked on a few pieces, which were showcased at the final runway show. The judges awarded Aboagye the title of Young Creative Entrepreneur of the Year in fashion.
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The timing couldn’t have been more perfect. In recent years, she had hoped to monetize her skills in making bespoke fashionable pieces, which are dinstinguished by her trademark beading work. Each bead is delicately woven, by hand, into the fabric in a variety of elegant designs. This isn’t so much a time-consuming process as it is, the bane of a designer working on a shoestring budget with limited time. She made her first two pieces with only 30 Ghanaian cedis.
“I am a self-taught designer. Everything I know, I taught myself and I keep striving towards learning more to improve the quality of my work,” she says.
Runways welcomed Aboagye as she went on to showcase her pieces at the Young Creative Entrepreneurs tour of London and Africa Fashion Week in Johannesburg.
Following an astounding response to her collection, Aboagye, returned to Ghana to employ some man power and invest time in her fashion label—Duaba Serwa.
“Duaba Serwa, is simple sophistication. I prefer understatements to extravagance and believe there is beauty in simplicity. This is what you see, in every piece I make,” she says.
At 26 years old, this half Fanti, half Akuapem, high fashion enthusiast is very optimistic about the future of her infant business.
“I have always been against the idea of angel investors and believe in growing my business organically. Every item purchased for my work is drawn from money that has been re-invested into the business from my own funds, which are generated from sales,” she says.
At the moment, Aboagye and her team have at least 20 dress orders a week with each bespoke, hand-beaded piece, costing nothing less than $300.
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“My clients just love the beading work—the quality and attention to detail you get, when you buy any of my pieces—and are willing to pay for it. The sewing itself, takes about 15 hours. It’s the beading that occupies the bulk of my time and requires the most of my creativity. I take great pride in my work and devote all the time I can give to each piece.”
Months after her break, Aboagye, still finds it somewhat hard to take in.
“I was a nobody just a few months ago and now, the response to my work is just amazing. I’m working round-the-clock with my team and there is no room for anything else but taking Duaba Serwa to newer heights and I want to do it differently.”
She is already planning for the future of her brand. Aboagye, who currently runs a small team of six, is working towards having a bigger factory, stores in major fashion hubs around the continent and opportunities to showcase her unique, contemporary African work on more international platforms.
“I’m thankful for my opportunities. I welcome new challenges and hope to be competing with much bigger names in fashion in the near future and I know it is possible,” she says.
Aboagye’s label has a thriving market on the ground. Ghanaian women are very fashionable and brand-conscious. The streets of Accra lend credence to this with beautiful fabrics and tailored garments visible in most of the metropolises. With her new recognition, aesthetically-pleasing work and business acumen, domination of the Ghanaian market could be as easy as threading her needles; however, Aboagye has fine intentions of bursting through the seams of her home country.
“I hope to have my brand doing just as well in many other countries very soon,” she says.
“On entrepreneurship, I believe in the future of any society that helps empower its youth. This is more than just making clothes,” says Aboagye.
She has employed a couple of orphans in her workshop, teaching them bead weaving.
“I want them to learn this skill and be able to run their own businesses in the future,” she says .
On her background in surgical nursing, she says: “Nursing has taught me to be very humble as it gave me a good perspective on how to treat and handle different people respectfully. This has translated quite well for the manner in which I run my business and deal with my clients”.
From holding scalpels at the cardiothoracic center, to turning heads at international runway shows, Aboagye is weaving her way into fashion aficionados’ hearts, one stitch at a time—all from a little outlet in the heart of Accra.

There’s Something About  Threading The Needle

Ghana was thrown into the international spotlight just months ago with the sudden death of President John Evans Atta Mills. The nation’s peaceful handover of leadership to the former vice president, John Dramani Mahama, underlined why the nation has long been regarded as an exemplar of democracy in the region. While the official mourning period has ended, campaigning is underway in what is expected to be one of the closest election races of the year between the two main contenders, the ruling National Democratic Congress (NDC) and the rival New Patriotic Party (NPP).
Social welfare provision and economic policy, coupled with the traditional emphasis on party politics and personalities will define the upcoming presidential and parliamentary elections to be held in December.
Boasting one of the fastest-growing economies in Africa and having achieved (low) middle income status last year according to Word Bank figures, the continent’s newest oil producer is among the few Sub-Saharan African countries likely to achieve the United Nations Millennium Development Goals by 2015, according to leading economist Jeffrey Sachs.
“[The government] has been investing for a long time in health and education, gender equality, and it has made a lot of progress. But there are parts of Ghana that are extremely poor and really need a lot of accelerated investments,” said Sachs in an interview earlier this year.
This is the challenge that lies ahead of presidential candidates Mahama and opposition candidate Nana Akufo-Addo: managing the economy in a way, which ensures that growth stimulated by oil, mining and cocoa production, benefit all Ghanaians.
But with oil production far lower than projected, Ghana’s economic growth rate, which skyrocketed last year, is expected to halve to 8.2% this year, slowing further to 7% next year, according to a Reuters poll. This coupled with the sharp depreciation of the Ghana cedi against the greenback by 18% over the past year; a failed multi-billion dollar government housing project deal and millions of cedis paid in judgment debts, will mean the NDC government will have to work hard to prove it can drive the economy forward.
The 58-year-old incumbent Mahama, fares from Ghana’s northern region, served as the minister of communications for the government of Jerry John Rawlings and has supported development initiatives in Ghana’s poor and deeply underdeveloped northern region. Mahama will come up against opposition leader Akufo-Addo, 68, a British-educated lawyer turned politician who served briefly as the attorney general and the minister of foreign affairs under the NPP government of John Kufuor. Both candidates have picked senior officials in Ghana’s central bank as running mates for the vice presidency to bolster their credibility.
Akufo-Addo was defeated in 2008 in the second round vote by less than 1%. While tensions were high during the run-off, Ghanaians accepted the results and there was a peaceful handover of government. But civil society groups have expressed concern that acrimonious debate between rival candidates—for which Ghana’s political culture is notorious—could flare up conflicts, particularly in the north of the country where tribal, ethnic and land disputes persist.
“My biggest concerns are the politics of insults and vindictive language, at all levels. We are afraid that might influence people to act violently,” says Justin Bayor, the national coordinator for the Ghana Network for Peacebuilding.
While the distinctions between the major political parties are minor—the NDC is generally regarded as more social democratic, placing a greater emphasis on the role of state institutions, than its counterpart, that is regarded as more “business friendly”. Both parties have the goal of lifting Ghana out of its economic dependency on revenues generated by natural resource concessions and creating a middle-class industrialized society through using oil revenues to jumpstart the manufacturing sector.
The NPP has kicked off campaigning throughout the country and has outlined its goals for industrialization and trade policies that will encourage the growth of domestic business and industry. Mahama just finished a tour of the region and has hit the campaign trail, but the NDC is yet to release its policy document. With only two months left it is either party’s election.
“We are expecting a very close race. At this stage it’s difficult to know who will win,” says Selorm Branttie, a researcher at the Accra-based policy think tank IMANI.
&nbsp;
Clair MacDougall is a journalist who is based in Monrovia and covers West Africa.

Ghana, Make Your Mark

Herman Chinery-Hesse is piloting an orange Porsche sport utility vehicle around the hairpin bends leading up a mountain to his house in Aburi, in the misty hills just outside of Accra. “Put your seat belt on,” he warns, and screeches the tires.
These days, Chinery-Hesse’s racing hobby mirrors his life in the fast lane. He is the founder and CEO of SOFTtribe Limited, a company that provides business development software to African companies. On the Accra business scene, he’s known as the “Bill Gates of Ghana”—a title the 47-year-old shrugs off. The unabashed Pan-Africanist would likely prefer a Ghanaian nickname than one borrowed from an American software developer.
<div id="attachment_343" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-343" class="size-large wp-image-343" src="/wp-content/uploads/2017/04/Bill-Gates-1024x757.jpg" alt="" width="474" height="350" />Herman Chinery-Hesse</div>
“Africa is it,” he says. “It’s the next big wave. It’s waiting for development—every place else is so saturated, and people are finally spotting it. And they’re coming to us.”
Chinery-Hesse’s goal is to ensure Africa doesn’t miss the global information technology (IT) boat. His client base includes Nestlé and Unilever, and he has a regional development partnership with Seattle-based technology pioneer Microsoft. But despite the influx of global companies coming into Africa, he says there’s not yet a homegrown technology brand name synonymous with the continent and hopes that his company, SOFTtribe, working from offices in an understated two-level house near Accra Airport, could be the first. The company has just launched what it calls a “virtual mall”: an online hub where you can buy everything from a cinema ticket to a sweater from Angola.
“We want an African Google, an African Facebook. And it’s possible,” he says.
Despite Africa’s weak technology infrastructure, Ghana, at an estimated 20%, boasts the highest penetration in the region. He sees more potential in Africa than any other technology market in the world.
“Africa is where the richest need is,” he says. “If we get even 1% or 2% of African companies to buy our products, we [will be the next] Google.
“You should be able to access Africa from wherever you are in the world,” says Chinery-Hesse, mentioning his company as being “the gateway, the highway. I want something stable that makes people money.”
At SOFTtribe’s headquarters, there’s a decidedly mellow vibe—in his trademark khakis, rubber sandals and bright button-up, Chinery-Hesse maintains the casual style of Silicon Valley. Staffers mill on the balcony and walls are adorned with large canvas paintings of the beach.
On a recent day, the boss was in his favored work position—lying down on the sofa, four computers humming on the nearby desk. He dictated to his Hong Kong-educated Ethiopian assistant as she typed on a small pink laptop.
Chinery-Hesse paused to answer calls on his wireless mobile headpiece, a confusing move that causes his colleagues to joke: “Is he still talking to me?”
The space to sprawl is an achievement for Chinery-Hesse. When he first founded SOFTtribe in 1991, its programmers sat side-by-side in an outhouse—remodelled as a cramped office—behind his parents’ house in the same neighborhood.
“We were doing an international contract with Nestlé’s head office, and we would say ‘don’t come visit’ because they wouldn’t believe that this [cutting-edge software] was coming from the bush.”
A few years later, when the team had swelled to 28 people, Chinery-Hesse, unable to afford rent on the kind of space he needed, bought a freight container and piled in his operation. It housed the entire team and two air-conditioners for six years.
Today, from the comfort of its new home, the company is expanding at a clip that rivals one of the orange Porsche’s tight turns. By providing the internet bandwidth, hosting and software development capabilities to African companies—and the regional branches of multinationals—it has amassed more than 250 clients.
Chinery-Hesse is an unabashed Africa enthusiast who hopes to use technology and the internet to aid the wide spectrum of African business, from the Ford Foundation to a craftsman in Mali looking to sell his work overseas.
“We help clients with delivery, logistics; we make sure the merchandise is working. A lot of the time, we’re dealing with ordinary folks who may just have a mobile phone. We’re hand-holding,” he says. “My team is from everywhere—here, Ethiopia, Kenya. We see Ghana as a springboard to expand further into Africa.”
He speaks from experience—his home country provided the springboard for his own ambitions.
Born in Dublin, Herman’s mother is Dr Mary Chinery-Hesse, the former deputy director general of the International Labor Organization and the vice chairman of Ghana’s National Development Planning Commission. Her son was schooled in both Ghana and the United Kingdom and attended Texas Tech University, where, with the first computer boom underway, he discovered a talent for software coding.
Ever the pragmatist, he began his professional life as an engineer at a UK plasterboard manufacturer.
“If everything went wrong, I’d have a fallback,” he says.
The pay packet from the plasterboard manufacturer helped buy a computer costing 800 British pounds, and Chinery-Hesse began tinkering with it at home. At work, bosses took note of Chinery-Hesse’s interest in technology, and his American education, and moved him from mechanical to computer engineering.
Returning home for Christmas in the late 1980s, inspiration struck in an unlikely spot – an Accra nightclub, where friends were complaining that they didn’t have jobs.
“I made a 100 pound bet that I could find a job here by Monday morning,” he says. “Monday I woke up, jobless, and said ‘ouch.’ Then I remembered I had done programming in the UK, went onto the street, found a travel agent with a broken computer, fixed it, and…”—as word of mouth spread in a society that knew next to nothing about technology—“… I was inundated with offers.” A few years later, he founded SOFTtribe.
If the company’s original hurdle was to introduce software to a nation that didn’t know what it was, today its challenge is a bit more complex—figuring out how to incorporate traditional software with the growing influence of the internet.
In a sign he’s been successfully able to navigate Web 2.0, Chinery-Hesse was invited to speak at tech conference TEDGlobal in Tanzania in 2007, where he introduced SOFTtribe’s most advanced venture, Black Star Line (BSL), an e-commerce business which coordinates trade carried out via mobile phones and the internet, a model “combining transaction brokerage and a virtual marketplace”.
Funded by an angel investor, it’s a system of technology that’s a cross between eBay and PayPal, both of which are scarce in Africa, but are booming in the US, Europe and Asia.
“Africa can’t trade with the world, hence our poverty,” he says. But before it can open its gates to the world, the tech czar would like to see a businessman in his country transact with someone in Nigeria or the Congo or Malawi—without the usual red tape. “We can use technology to bypass borders and bureaucracy and unleash inter-Africa trade,” he says, “where someone in Kenya would be able to buy something from a man in Ghana.”
SOFTtribe is being recognized globally. The TED platform was a sign of acceptance from the international tech community, as were invitations to speak at the US’s top two business schools, Wharton and Harvard, and at Cambridge in the UK.
Chinery-Hesse’s profile in Ghana continues to rise; he is currently an Assessor at Ghana’s Commercial Court and his homes—and office balcony—are more popular among Ghana’s elite than nightclubs.
On a misty September night at his weekend home in Aburi, the deck was filled with the usual motley crew—business associates, locals, friends in from London. Everyone drank good wine. Mist swirled in the distance. Someone asked about road directions, inciting a spirited discussion. Chinery-Hesse, of course, was ready with the only answer that made sense—maps, after all, are for a world before technology.
“Use GPS,” he said, and the discussion was over.

Life In The Fast Lane With The Bill Gates Of Ghana

Kofi Mensah, a partner at the law firm ABM Attorneys at Law, is in a back corner at a bourgeois dive bar in Accra, drinking vodka and discussing the evolution of legal practice in Ghana—specifically, the centuries-old tradition of wearing robes and white wigs to court.
“Why,” laughs the 34-year-old, “is a black guy wearing a white wig?”
The legal game in Ghana has long been dominated by old established firms headed by older, venerated attorneys. The rapid success of Mensah and his partners at ABM—all foreign-educated and under 45—heralds a new generation of cosmopolitan, business-savvy, attorneys.
<div id="attachment_274" style="width: 235px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-274" class="size-medium wp-image-274" src="/wp-content/uploads/2017/04/Forbes-ABM-shoot-054-225x300.jpg" alt="" width="225" height="300" />Alfonso Amorin, Kofi Mensah, Richard Boateng</div>
Not that the three-man shop, with an estimated cash value of $2.5 million, hasn’t been met with scepticism.
“There’s a general perception of us as: ‘three young guys, what will they be able to do?’” Mensah says. “Most people still want to see their lawyers as 55-year-old men with grey hair. The legal landscape here is still conservative. And we’re young guys who are transaction-focused.”
Mensah was literally born to be a lawyer. His father, DK, is a legend—at 86, he is Ghana’s oldest practising attorney.
In 2007, Mensah met Richard Boateng, 44, and Alfonso Amorin, 37, in class at the Ghana School of Law. He had just returned from law school at Syracuse University in New York, the other two from England.
“We had established outside of Ghana; we had a certain way of doing things—we were used to a fast-paced environment and used to providing innovative legal solutions as opposed to just doing the same thing over and over again,” Mensah says. “We thought with our common background it would be easy to put together a firm. At the time most of the older firms were sort of moving at a snail’s pace.”
They also identified a gaping hole in the legal market. As investment and land development soared in Ghana, there were few firms to deal with the many contracts.
“There was a void, and we’d all returned with one objective: to plug that void,” Boateng says. “We had new ideas, we wanted them to actually breathe. At that time clients were unable to get what they were looking for and the whole system was very archaic. Five years ago, lawyers would elongate cases, clients would be frustrated. Our opening coincided with a new directive from the Ministry of Justices that said lawyers needed to be more accountable. No longer could you just go to court and get an injunction.”
Each man invested $33,000 in the company. The aim was to act as legal and business counsel. Their first client was a woman who had been unceremoniously fired and needed legal help to recover her salary. She paid the upstarts at ABM a grand total of $60.
“Six months from that day, we had a client who paid us six figures,” says Mensah.
On a given day the three lawyers balance 30 cases. Seventy-five per cent of the firm’s work is transaction-based, whether corporate, securities, real estate or commercial. The rest is geared to litigation that comes out of those transactions.
“It is still primarily a litigation shop. We don’t go for the obvious high-paying deals. We like the challenge,” says Mensah.
They go for the big fish too, including: Ghanaian-American investment bank Frontline Capital Advisers; 2GIH, the developer of the Radisson Conakry; the soon-to-open Accra Marriott; Maersk Line; and Waratah Investments, an Australian company which owns substantial stakes in publicly-traded mining companies.
Their youngest client is Aisha Obuobi, the 25-year-old design prodigy behind Ghanaian clothing label Christy Brown, which ABM is helping to open a flagship store in Accra.
That youthful energy is on display at the ABM offices, off a quiet street in the well-heeled suburb of Osu, not far from where Mensah was raised. Amorin is from the Volta region and Boateng grew up in Britain. The trio prefers custom Savile Row suits with colorful silk pocket squares and fast cars. Conference room walls are lined with golf trophies and books on sports law, the desks stacked with legal journals, alongside issues of Vanity Fair and John Grisham thrillers. Boateng, an avid golfer, invites clients to take a crack at the portable putting range in his office, before he sits down to tackle the case.
They play hard and work hard. Boateng was in the office the day after his daughter was born in October. Mensah pauses several times during a dinner to take calls from clients.
“We don’t have ‘bankers’ hours,’” he says sheepishly. “We’re available at 2 AM.”
These law geeks take glee in watching the country’s legal system modernize.
“Intellectual property has never been more respected,” Boateng says. Behind his desk hang both his long black court robes and a custom suit jacket—“it’s three button, double-breasted”—with a purple pocket square.
“We have a case in court right now in which the defendants don’t understand how they could be in court. We’ve had to explain intellectual property.”
Accra’s rapid expansion has also created a lot of problems in terms of litigation, says Amorin, the resident real estate specialist in the firm.
“Because when there are land shortages, you have people buying land that’s already been sold to other people. We’ve seen a big increase in land disputes and I’ve been conducting due diligence on real estate transactions. We’ve seen a rise of more than 10 new cases a week in the last three years, due to due diligence on real estate,” he says.
Just four years after its first case, ABM is working on transactions for the developing Radisson hotel projects in Benin and Guinea and plans to expand further afield. Their mission is to stay at the forefront of legal innovation as growth in West Africa skyrockets.
“You don’t want to be the firm that did well for its first four years and then is irrelevant,” Mensah says. “The client goes to bed, and their problem becomes your problem. We worry about failing the client or not being able to represent the client in a way that’s good for them.”
He’s asked if he ever loses, and scoffs. “Never,” he says. “Never.”

The Three Musketeers In Law

According to the landlords, contemporaries, teachers and neighbors who have lined up in front of the media in recent weeks, Kweku Adoboli was a sociable, intelligent and overwhelmingly ‘nice guy’.
The financial community in London remains awash with speculation about how that nice guy from the industrial coastal town of Tema, in Ghana, came to be in a position to lose the Swiss bank, UBS, more than $2 billion as well as its CEO.
Adoboli’s background speaks of privilege, but is unremarkable amongst his peers in the City. The 31-year-old son of a UN staffer was schooled at the fee-paying, Quaker-run Ackworth School in West Yorkshire, where he was deputy head boy.
<div id="attachment_193" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-193" class="size-large wp-image-193" src="/wp-content/uploads/2017/04/125271682-692x1024.jpg" alt="" width="474" height="701" />UBS Trader in court</div>
He studied computer science and business at the University of Nottingham before joining UBS, where he worked until 3:30 in the morning on September 15, when the City of London police arrested him at the offices of UBS in Finsbury Avenue. Later that morning, UBS announced that it had made a loss of $2 billion due to “unauthorised trading”. It later revised the figure upwards to $2.3 billion.
Adoboli remains in custody in London on two charges of fraud—for the periods October 2008 to December 2010, and from January to September 2011; plus two charges of false accounting—from October 2008 to December 2009, and January 2010 to September 2011.
Facing charges, Adoboli told a court that he was “sorry beyond words” and called his vast trading losses “disastrous miscalculations”.
Those miscalculations have called into question the survival of investment banking at UBS, as the bank decides whether to cut off a division battered by poor performance and scandal. Oswald Gruebel, the bank’s CEO, resigned over the affair on September 25.
As Adoboli’s LinkedIn profile shows, he worked on the investment bank’s European equity desk in London, trading “Delta One” strategies.
“Delta One” refers to the ‘delta’—or marginal difference—between closely correlated asset classes. By buying equities and hedging using derivative products or baskets of other assets, these computer-driven strategies mop up money through the inefficiencies in the market. It is highly complex, but is also supposed to work within tightly controlled risk limits. For every position the trader takes, he or she is expected to take a counter position—or hedge—of almost equal size.
The Swiss and British authorities are now investigating how Adoboli was able to evade the systems that monitor these limits to place directional bets. The results of those probes are likely to be months away, but the investigators will no doubt have seized on Adoboli’s CV and its startling similarity to that of the last headline-grabbing rogue, the French trader, Jerome Kerviel. Kerviel cost Société Générale, the French bank, $6.6 billion in 2008.
Starting in the bank’s “middle office”—the risk management IT department—in 2000, Kerviel made the jump up to trading in 2005, also on a Delta One desk. The bank’s comprehensive “Mission Green” report into the incident charts his activity from that point. He began to take directional bets that same year, probably to cover up the fact that he had been consistently losing using conventional strategies, the report said.
Kerviel used his knowledge of the bank’s risk systems to hide the fact that his positions were not hedged, creating fictitious counter trades by buying securities with deferred start dates or with counterparties that did not require immediate confirmation. Using passwords from other SocGen employees, he was able to go back into the system and remove the trades, fooling the risk monitoring tools. It worked for more than two years and reaped a fortune.
In January 2008, though, Kerviel was found out. He had amassed directional positions in European stock indices totalling almost €50 billion ($6.6 billion). The day that the bank began to unwind these positions was “Black Monday”, January 21, when UK, European and Asian markets fell dramatically.
That he was found out in a period of acute market stress is not a coincidence. The hedge fund, Long Term Capital Management, collapsed after the Russian sovereign debt crisis in 1998. The world’s most famous rogue, Nick Leeson, whose limit-busting trades out of Asia brought down Barings Bank, was shaken out in the aftermath of the 1995 Kobe Earthquake. Both events saw highly volatile markets with large price movements.
Like Kerviel at SocGen, Adoboli began his career at UBS in the bank’s IT department, maintaining and managing those same risk systems that were supposed to keep traders in check. Whether he used that knowledge will likely be a thrust of the investigation against him.
While systems and practices differ between banks, traders often admit that limits really are flexible. There are often subtle ways for traders, with good reputations, to go around the risk management practices that, while they reduce the potential for losses, also constrain a trader’s ability to take educated punts when they have a strong conviction.
This, cynical traders say, is why rogues can get away with deceit for long periods: no-one gets fired for winning. It is only when they lose that they have to “go write the book”—that is, be escorted out of the building by security at best, or the police.
Kerviel was, according to SocGen, at it for years. Leeson began his rogue activity in 1992, initially winning big before his fortunes turned and he began to hide his losses in the now infamous account number 88888. Adoboli’s charges—for which he has not entered a plea—cover almost four years.
Traders are understandably reluctant to go on the record about their peers who ‘go rogue’, but as more than one hinted, if you are considered good enough, hard boundaries get softer. If you break the rules and lose, though, you are on your own.

From Ghana, To London, To A Cell – Africa’s Rogue Trader

The gray concrete slabs dominating a construction site, a stone’s throw from Kotoka International Airport, don’t look like much right now. By June, they’ll be the foundation of the first Marriott Hotel in sub-Saharan Africa—a symbol of the progress of Ghana’s economy. A brand like Marriott “will put Ghana on the map”, says Nii Ampa-Soware, chief of research at Databank in Accra, who says he “would not be surprised” if other luxury global hotel brands like Sheraton are already planning their own entrance, seeing Marriott as an example of the success to be had in Ghana. “It cements the country’s position within a certain class. Having those international brands gives the country a sense of credibility that it has ‘arrived’.” 
It’s the baby of 62-year-old entrepreneur Eissame Halabi-Ahma, who was raised in Damascus and educated in Scotland. He owns half of African Hospitality Ltd (AHL) and has spent 11 years on the Marriott project. 
The half-Ghanaian, half-Syrian son of a textile factory owner, he lives near the site in a home overflowing with expensive Persian rugs. 
Speeding through the streets of the capital in a sleek BMW, clad in a flowing Arab robe, Halabi-Ahma describes Ghana—the continent’s fastest-growing economy, with government predictions of a 14.5% GDP growth in 2011—as the “Wild Wild West”, a place where any businessman with vision and capital can make a fast return. 
While South Africa’s hotel industry suffers from oversupply in the wake of the 2010 World Cup, an influx of business travelers into Ghana has created the opposite. More than 800,000 visitors came to Ghana in 2010 and this year, that number is expected to rise. 
Halabi-Ahma estimates a shortfall of 10,000 hotel rooms. 
“There’s been a tremendous growth in the hospitality sector in Ghana in recent years,” says George Ayittey, a Ghanaian economist and author. “Oil and gas discovery, a daily non-stop flight service from North America and turmoil in neighboring countries have contributed to the tourism boom. So has Ghana’s political stability, especially as compared with government dysfunction and poor social services in the rest of West Africa.” 
The Marriott, which will have cost $120 million to develop by its opening day, is the first major project under African Ventures, a subsidiary of AHL, and its equity value is put at nearly $200 million. 
Halabi-Ahma says he’s looking for the Marriott to turn a profit of $200 million within 10 years through 221 rooms and a casino. 
A self-made entrepreneur who came to real estate and hospitality development late in the game, Halabi-Ahma is a risk-taker who forewent a university education to follow his father into the textile business. 
At one point, he tried his hand at rice farming and lost his entire $2 million investment. In 1981, he was left bankrupt in the aftermath of a military coup and sought a new venture. 
“I was always looking at Howard Hughes, how he had to fight to succeed,” he says. “If I’d had the knowledge I have today, 40 years ago, I’d be the richest person in the world.” 
He focused on real estate development, scooping up cheap land and watching it appreciate. Then there was a fortuitous meeting with a friend, who suggested he try his hand at hotels. As foreign investment swelled, business—and businessmen—poured into Ghana. But those who landed at Kotoka faced a dreary landscape of guesthouses and supposedly brand-name accommodation luxurious for Accra but considered budget-class in the West, ill-run and in need of facelifts. 
“I would never have believed Ghana would be what it is today,” Halabi-Ahma says. “People are waking up. Chinese, Koreans, Lebanese, Americans. Ghana has opened up, the whole place has become a magnet. 
When you go to Johannesburg, you see 10 people standing by the side of the road doing nothing. You come here, you see everyone running and selling by the side of the road. People want to work.” 
On a rainy August morning, not far from his home, Halabi-Ahma strolls the warren that is the Marriott building site, currently at 80% completion. More than two weeks into the Ramadan fast, he’s weak but climbs five flights of stairs with ease to a hall of rooms with glass-walled showers and bold red-orange finishes designed by Cape Town designer Les Harbottle. 
Standing near the lip of the building, he admires the view. As the urban sprawl below continues to grow and stretch, his business—bolstered by his crown jewel—will look to keep up. Halabi-Ahma is looking to put a substantial amount of his return-on-investment from the Marriott into developing other hotels in the city, along with Radisson projects in Benin and Guinea. With his showman’s flair” and the casino site below us, it’s not hard to imagine him as West Africa’s Donald Trump. 
He’s interrupted by a plane roaring overhead on its way out of the nearby airport. Accra is the rare city where proximity to the airport signals prestige—and safety for travelers more accustomed to European boardrooms than West African highways. Down the street, a dwarfed Holiday Inn—which stands to lose a healthy chunk of its business to the Marriott—seemed to shudder.
<h3>Too Much Room At The Inn</h3>
The boom days of the World Cup are over and across South Africa the hotel industry is facing closures and reality. The Grace Hotel, in the smart Johannesburg suburb of Rosebank, is the latest of many to close. 
The average occupancy rate of South Africa’s hotels is hovering around 48%, leaving a massive oversupply. Other hotels that have had to shut their doors in Johannesburg and Cape Town: the Alphen Hotel, Hotel Le Vendome and the Green Dolphin. The Southern Sun Grayston and the Lakes Hotel are to close by the end of the year. 
There are just too many hotels in Africa’s biggest economy. The reasons: ambition and pride. When FIFA named South Africa as the host of the 2010 World Cup, the wheels started turning. There was money to be made. Millions of visitors needed a place to stay and hotels mushroomed. 
The signs were good. According to a report by PricewaterhouseCoopers (PwC), overall spending in the hospitality industry grew by 16.7% to $1.9 billion in 2010. The number of overnight foreign visitors grew by 15.1%, while domestic visitor numbers grew 14.3%, giving a total of 15.33 million visitors in 2010. 
A year later, most of these visitors have gone and revenue has collapsed. 
African Sun Limited has blamed the closure of The Grace Hotel on fewer travelers, escalating costs and the recession. The company declared a $1 million loss in the first half of this year and blames the surplus of rooms. 
The strength of the Rand hasn’t helped, making South Africa more expensive for foreign visitors. 
The future looks a little brighter, with numbers expected to improve. 
“The market will definitely pull through; it’s just a question of how long it will take. It’s going to be a tough two years, but the following three will be very interesting,” says Brett Dungan, CEO of the Federated Hospitality Association.

Tag: Ghana

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