David Adjaye believes that African skylines are set for an explosion of growth as the continent’s resurgent economies look for new expressions of their increasing potency and self-confidence.
Speaking at his studio in North London, the architect says that the continent needs to define its own vision for urbanization and ensure that its architectural revolution reflects Africa’s cultural, geographical and climatic contexts.
Born in Tanzania to Ghanaian parents, Adjaye traveled extensively in his youth, following his father’s diplomatic career through Africa and the Middle East. It was that exposure that was to later inform his work when, after studying fine art, he found architecture and became fascinated by the relationship between buildings and their environment.
<div id="attachment_425" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-425" class="size-large wp-image-425" src="/wp-content/uploads/2017/03/js57_Peace-Centre0144_RT8-1024x682.jpg" alt="" width="474" height="316" />Nobel Peace Center, Oslo. The Canopy is a temporary installation by David Adjaye that serves as a gateway between Oslo City Hall, where the Peace Prize Ceremony takes place, and the Nobel Peace Center.</div>
“I realized that by having been brought up in very different contexts—cultural, religious and social contexts—I had somehow developed an appetite for learning more about how the built environment worked with that, and how it reflected that architecture in its human sense.”
Today, Adjaye is one of the world’s leading architects—in 2007 he received the Order of the British Empire for his services to architecture. His portfolio includes the Nobel Peace Center in Oslo and the National Museum of African American History and Culture in Washington DC, which is scheduled for completion in 2015.
For a 2010 exhibition at the Design Museum in London, Adjaye traveled to cities across Africa, photographing the buildings which, although in varying states of development or decay, show startling commonality.
Today Adjaye runs through his own potted history of African architecture: Colonial builders erased much of the pre-existing urban culture in Africa, replacing it with tropical versions of European architecture. Upon independence, new leaders embraced a vision of the future that was still largely European.
“I think the early leaders on the continent felt that modernity was the way to embrace or celebrate a sort of new world of empowerment for their nations. So you find a lot of modernist experiments, but modernist experiments that could not avoid the specificity of the geography and the climate. So you have what I call a kind of tropical modernism,” he says.
When the money and ambition began to wear thin, this modernism was replaced by economic pragmatism, driven by international donors who made their architectural choices based on their own financial imperative, and using their own approved contractors and designers.
<div id="attachment_426" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-426" class="size-large wp-image-426" src="/wp-content/uploads/2017/03/nma_b110127_f-1024x722.jpg" alt="" width="474" height="334" />National Museum of African American History and Culture in Washington DC.</div>
“So you have very odd late ’70s early ’80s buildings that sort of appear, that have nothing to do with the context; they’re just blips,” Adjaye says.
With debt relief and the mineral-driven boom of the late 1990s, which gathered pace in the early years of the new century, African leaders began a new drive for modernity. With this financial independence and growing economic self-confidence has come a stronger sense of cultural identity across the continent, which is manifested in the creative arts.
“I think you see it in literature, fine arts, performing arts and architecture, they’re all in line. They all lead the image of what nations want to project of themselves.
“This image of most of the countries on the continent getting rid of their debt and suddenly discovering vast minerals and negotiating this, means that there is an opportunity to really explore the idea of modernity for these nations. And architecture comes to the forefront of that, because architecture is the image of the city and the future. Architecture is the image of the city as it sees itself. The story of the city is written in books, but it’s also written in buildings.”
The notion of buildings-as-ambassadors has gained currency in the past decade with the successful reinvention of the Emirates of Abu Dhabi, Dubai and the state of Qatar.
“It totally worked,” Adjaye says. “It gave the Emirates a skyline. For my father’s generation, the Emirates was a horrible desert and a place you never went to.”
Where the Emirates initially failed, he says, was specifying what its own version of modernity was. It is a trap he is keen for Africa to avoid. Buildings need to exist in their context, rather than just mimic the current, internationally dictated interpretation of Western modernity.
“I think if there is much more criticality about the way in which buildings are built to their climate, you get a much more unique skyline,” he says. “That doesn’t require more money, it just requires more desire on the part of the patrons to insist on a response that makes things specific, rather than insisting on an approach which is just novel.”
Africa’s modernity, Adjaye says, should be dictated by the same geographic features that defined its early cultures. This means ignoring the artificially imposed national boundaries and shaping regional identities from the unifying climates and cultures across the continent, but also avoiding the “colonial trap” of what he calls “Disney-fication” of culture.
For inspiration, Adjaye looks to New York.
“I love the Rockefeller Center. It’s not a cheap building, but it’s an efficient building. It’s a building that strove to understand the time that it was in, which was the ’30s… It talked about density in the city, it talked about networks, it talked about interconnectivity. It talked about living in the heart of the city. It gave a model which was not iconic in terms of imagery but iconic in terms of place, and it’s still a fundamental part of New York.”
That specificity of place and time has created a building that is more than functional—an artifact that helps to define the city it is in.
“There’s something compelling about coming over that bridge from Brooklyn or Newark, New Jersey, and seeing that skyline. It’s like… it’s so powerful. It’s original. That’s the vision we need in Africa. What is the model of living in Africa that nowhere else in the world you can have? The person who cracks that, cracks the game. Not the person who imports the model that we’ve seen before.
<div id="attachment_424" style="width: 610px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-424" class="size-full wp-image-424" src="/wp-content/uploads/2017/03/iStock_000015967621Small.jpg" alt="" width="600" height="800" />New York City, Rockefeller Center, GE Building, viewed from 5th Avenue.</div>
“You’ve got to make a model that makes people say ‘I want to go to that city in Africa because it’s just so great. The life there is something I can’t have in London. It’s contemporary, I can have my life there, but it’s completely unique.’ That’s a hell of a thing.”

The Quest For A True African Skyline

In December, party fever rocked Nairobi—a city already in a festive mood, despite efforts by squabbling politicians to dampen the spirit. From nightclubs to beach parties, the revellers were loaded and speaking with a twang acquired in London or New York. In Nairobi, people call them ‘summer bunnies’, referring to Kenyans living abroad back on holiday in the motherland, flaunting the trappings of success in the West: dollars, the twang and a superiority complex.
And if recent statistics from the Central Bank of Kenya are anything to go by, the economic muscle of the Kenyan diaspora is also growing, with more and more money being sent home by them. In 2011, remittances increased by 39% to $891.1 million. In 2010, they were $642 million, which is the equivalent of 2% of Kenya’s
$31.6 billion GDP. They are the fourth-largest source of foreign currency after tea, horticulture and tourism.
Diaspora Remittances, a new report by Stanbic Investments, a subsidiary of CFC Stanbic Bank, estimated that 14% of Kenya’s 18 million adult population receives money from abroad.
With this flow of money comes opportunity. Firstly, Kenyans are paying a fortune to send home a fortune. The report by Stanbic says the cost of sending money home is 10% of the remittance. At 12.4%, the average cost among banks is higher than the average 8.8% for money transfer operators.
This cost stems the flow of money, a fact that even world leaders acknowledge but look powerless to act. At the L’Aquila 2009 G8 Summit, leaders pledged to halve the cost of remittances by 2014. But according to an analysis by Thorsten Beck, a professor of economics and chairman of the European Banking Center at Tilburg University, and Maria Soledad Martinez Peria, a senior economist in the finance and private sector development team of the Development Economics Research Group at the World Bank, governments have little say on such costs.
Instead, the duo in the analysis titled What Explains the Cost of Remittances recommend that policymakers seeking to reduce remittance costs should focus on improving competition: a private sector-led investment in cheaper ways of remitting money. Some companies are taking up the opportunity. In addition to the traditional money transfer companies like Western Union and Moneygram that dominate the market, Nation Media Group, East Africa’s largest media house, is joining the fray. It is scheduled to launch Nationhela, a visa card that will allow those living abroad to send money directly to relatives in Kenya who will need to acquire the same card.
“More competition will lower the cost of sending money and thus increase remittances,” said the Central Bank of Kenya when releasing its recent report.
Investors need to set up a vehicle that the Kenyan diaspora can use to invest in their homeland. During a Kenya Diaspora Conference in the US, held in October last year in Washington DC, they demanded such avenues. And the government took up the challenge and was rewarded. Infrastructure and savings bonds sold to the diaspora last year raised $383 million.
Investment vehicles would attract even more remittances. The data in the Stanbic report is an indicator that many would want to invest, if only there were good channels to do so. Around 52% of total remittances are used as living wages by recipients, while 44% is invested. Approximately 36% is invested in small businesses, while 8% goes to Kenya’s previously booming, but now faltering, real estate sector, and only 4% to savings. Mama Mikes, a website that allows Kenyans abroad to buy various things for their relatives in Kenya, has recorded phenomenal growth.
Kenya’s dependence on remittances is expected to grow, thus providing more numbers, a fact that drafters of the country’s Vision 2030 economic master plan acknowledged. The plan, which is expected to catapult the country into a middle income nation by 2030, is targeting the diaspora to raise remittances from the current 2% to 5% of GDP by 2030.
The diaspora’s muscle is growing, not just in Kenya but also the continent. More than 3% of Africa’s population has migrated to other countries, including within the continent. Remittances to Africa reached $40 billion in 2010 and are the continent’s second-largest source of money inflows after foreign direct investment. Their impact on the population is also staggering. More than 120 million people receive money from 30 million migrants, with Nigeria, Egypt and Morocco being the top three remittance-receiving countries on the continent.
Summer bunnies are not only changing their voices when they leave their country, but our economies too.

Summer Bunny Money Comes On  In Leaps And Bounds

With austerity afflicting many Western markets, it may come as some comfort that so much of the money that flows into Africa from around the world each year comes from Africans. The members of the African diaspora remit around $40 billion back to their home countries every year. With interest rates in the West at historical lows and inflation still high, deposited money is losing value.
Guinean-American Eric Guichard grew up between West Africa and the USA. He worked in the international financial sector and then in the fund management industry. Now based in London, Guichard is working to position his latest venture—Homestrings— in the middle of remittance flows.
Global remittances reached record highs in 2012, totaling $351 billion. “Where it hit me was when I saw the actual global number in transfers and how disorganized that market is—no one is really looking at that mass as a potential source of patient capital,” Guichard says.
A George Washington University study showed that the majority of remitters wanted to use the money to invest at home. In fact, many already do through informal mechanisms—transferring the money to a relative, who then puts it into property or a small business.
Those informal structures work, but are inefficient and rely a great deal on trust. The remitter loses control over the money once it is out of his or her hands. There are a growing number of managed investment funds that target emerging and frontier markets, including in Africa, but few have subscription levels that are accessible to the average retail investor.
Defying the characterization of the members of the African diaspora as poor, the George Washington University report shows that many have above average incomes and significant annual investment portfolios, transferring tens of thousands of dollars each year. They are savvy and the majority use the internet not only for news about their home countries, but also to look for money-making opportunities.
“Being from Africa, and being one of those remitters, I knew that if there was a platform that gave me control and empowered me to choose where I wanted to put my money, I would potentially put all my discretionary capital in that platform,” Guichard says. “If I could choose to invest in this bridge, this healthcare clinic, invest in those sovereign bonds, partake in Actis’ real estate private equity funds at thresholds that are achievable by me, of course.”
Guichard built a platform to do just that. Homestrings is an online portal that connects the diaspora to opportunities back home.
Systems that collect and pool cash from individuals to pump into projects in the developing world already exist—Kiva, for example, has funded a large number of initiatives. However, it is still not permitted to gather cash for investment returns.
Homestrings allows qualified investors to sign up and see investment opportunities—initially projects for co-investment and private equity funds listed on an online portal. There are currently 18 funds listed, targeting Africa, the Caribbean and India. The first “Diaspora bond”, a local currency instrument for international investors, was added this year, with Kenya the first to list.
The result is a traditional mutual fund structure meshed with crowd-funding platforms and online retail systems like Amazon. When social media features are added to it in the next few months, users will be able to review investment opportunities much like Amazon users can rate and discuss their purchases.
“Ultimately, the ideal would be that there are deals that are proposed by the investors, vetted by the members, then organized by Homestrings—a completely self-directed investment platform,” Guichard says.
“Our experience since the launch in August has been quite uniform. We’ve seen registration rates of about 50-100 per month, and that’s with no social network push,” Guichard said. “That’s pretty remarkable for us, the level of interest is that high, and it’s primarily reflective of the three major diaspora groups—Kenyans, Ghanaians and Nigerians, working mainly in professional jobs as doctors, lawyers, financiers.”
Those professionals—of which there are now around 500—have an average of $25,000 to invest per year, according to the company’s own surveys of them.
With the first diaspora bond now listed, and two more—Ghana and Ethiopia—in the pipeline, Guichard is excited about the prospect of financing much-needed infrastructure in Africa, and about offering individuals access to bonds that are normally the preserve of large institutions or local high net worth investors. For their part, governments in Africa have increasingly turned to local capital markets to raise finance for specific projects.
For an international buyer, the process would be long and arduous, requiring regulatory clearance in the destination country and a brokerage account.
“There exists no formal network where people can systematically do due diligence and then invest in their own country’s sovereign bonds targeted at specific projects without going through all kinds of bureaucratic difficulties,” Guichard says.
Homestrings has set up the requisite accounts in Kenya and interested parties just need to register on the platform.
Real estate will be the next step. Guichard hopes to connect developers and investors on Homestrings, systematizing what is already a major use of remittance money. Currently, the process of buying and building at home is long, costly and relies heavily on trust. By allowing professional developers to link up with diaspora capital, and then allowing the diaspora to buy units once they are built, Homestrings takes a great deal of risk out of the system.
“I think the basic proposition is an empowerment proposition,” Guichard says. “You can sit here and look at real estate in Notting Hill, plug in your laptop, use your wi-fi and choose what real estate company you want to select, and look at their catalogue of investments.”
At the heart of the prospect, Guichard claims, is a whole new way of profiling customers in the financial industry.
“We started out with the fact that the way the current financial industry is organized, you are looking at individuals based on age, based on zip codes, based on professions, and based on levels of income, which we see as being a horizontal definition,” he says. “But if you were to look at people in terms of their affinity, in terms of their ethnic allegiances, in terms of their desire to stay connected to where they’re from, then you have a whole new definition of financial services.”
There is also, he says, the potential to change the way that development is financed—crowdsourcing, for profit, long-term capital to drive economic growth in Africa.

Bringing It All Back Home

<h3>Jide Zeitlin</h3>
<h3>Country of origin: Nigeria</h3>
<h3>Industry: Finance</h3>
om Jide Zeitlin’s office, on the 44th floor of a sleek building on Manhattan’s Fifth Avenue, you can see the soaring skyscrapers and iconic New York City landscape stretching out ahead of you. Standing self-assuredly, hand in one pocket, the man himself cuts a dashing figure in a sharp black suit over a white shirt.
<img loading="lazy" decoding="async" class="alignleft wp-image-413 size-medium" src="/wp-content/uploads/2017/04/Forbes_01_034R-200x300.jpg" alt="" width="200" height="300" />
Zeitlin isn’t even 50 yet. But, he has spent 20 years at Goldman Sachs, rising to partner and global operating officer of investment banking. He owns a telecommunications outfit in India, has his own investment firm, The Keffi Group, and is a director of Coach Inc, one of America’s premier luxury brands. He also sits on the boards of various philanthropic, educational and commercial organizations. He looks like a man who has always been destined for success.  Zeitlin’s life could have turned out very differently.
He was born in Ibadan, Nigeria, to a young single woman who worked in Lagos as a domestic servant. Her employers were a foreign family who were working in the bustling, dense city. While his mother was working in the city, Zeitlin lived in the Nigerian countryside with relatives.
By luck—which Zeitlin says is a major thread in his life—one of his mother’s jobs was with an American family. The father, who was a journalist, was there with his homemaker wife and their two young daughters.
One weekend, Zeitlin went to spend the weekend in Lagos with his mother and her employers. There, he met the American family and quickly formed a friendship with their eldest daughter, who was roughly the same age. Encouraged by the good relationship between Zeitlin and their daughter, the American family came up with an idea. Rather than send the young boy back to live with relatives in the countryside, they proposed that he live with them and that they place him in the same school as their daughter. His mother agreed; and the boy went to live in with the American family, the Zeitlins, and was put into a new school in Lagos.
Eighteen months later, the Zeitlin family was due to be posted to Pakistan where the father was going to work as a correspondent for the Associated Press. They asked the young Jide if he would like to go with them. If he did, they would become his legal guardian, providing him with the opportunity to have a much better education than he would get if he stayed behind with his Nigerian mother.
“She was an amazing mother who just didn’t have a lot of resources,” he says.
“My American family did not have a lot of money. They were solidly middle-class—but the one thing that they both had was they both came from strong educational backgrounds. On my mother’s side was a long line of university professors and even though she was American she had been born in China and lived there until she was a teenager because her father was a professor there. So the family was very big on education.”
Jide left Nigeria when he was just five years old and moved to Pakistan, which was going through the Pakistan-India war, with his new American family, and became Jide Zeitlin. Five years later, the family moved again to the Philippines—which was under martial law at the time—where they lived for three years before being given 48 hours to pack and leave the country because of critical articles that his adopted father had written about the then premier, Ferdinand Marcos.
By then, his American mother had decided to go back to graduate school and was admitted to Boston’s Massachusetts Institute of Technology (MIT) to get her PhD in biochemistry. The family moved yet again, this time to America, to Cambridge, Massachusetts. Although he’d paid some visits to the US during vacations, this was the first time that Jide, then 11 years old, had spent any real time in America.
On the recommendation of a friend who’d advised his parents that public schools in Massachusetts were not very good, Zeitlin was sent to Milton Academy, a top boarding school where the Kennedys were educated.
Having spent the previous 10 years of his life in developing countries that were going through political and social upheaval, he suddenly found himself thrust into the very traditional elite world of Milton Academy. It was something of a culture shock, but he survived. He is still proud that on graduation from the school, he was awarded a prize for being someone who most epitomized the school’s strongest values.
Then it was on to Amerhurst College to study economics and English. To this day he is still very much involved in his alma mater, sitting as chairman of the board of trustees. In his role, he has helped transform it into one of America’s most diverse and selective colleges.
It was in his sophomore year at Amerhurst that his journey into the finance world in New York City began. Summers spent washing dishes at McDonalds to pay his college fees became boring and he decided an office job would be nice. One of his father’s cousins, who had gone to Harvard Business School and was working at Morgan Stanley, gave him the names of some firms to write to. He wrote to them. Every single bank wrote back, turning him down.
Zeitlin was unperturbed. He’d known from the age of three or four that he liked business and would pursue a path in that arena.
“When you grow up in Nigeria, you have it in your blood—it’s a very commercial kind of environment. I didn’t know what kind of commerce or business but I knew that I enjoyed negotiating for things and trying to create things. I’d always had little businesses, like shoveling snow for $5 per hour. There was always that commercial side to me.”
One day while visiting his father’s sister outside Philadelphia, he was told that her neighbor’s best friend was a partner of a firm that Zeitlin had never heard of. That firm was Goldman Sachs.
He wrote to the partner at Goldman Sachs, receiving a response which said that while Zeitlin basically seemed like a nice kid, there were no jobs available for him. However, the partner added, should he ever be in New York, he would take him for tea.
On receiving the letter at his room in Amerhurst, Zeitlin immediately, not recognizing it as a brush off, decided to board a Greyhound bus to New York City. He showed up in New York, at Goldman Sachs’ offices, and ended up going for tea with the shocked partner who eventually decided to give him a chance, offering him a summer internship at the investment bank. When, decades later, Zeitlin became a partner of the firm he was shown the original letter that he’d written.
After that first summer, he ended up going back to Goldman Sachs every summer while he was an undergraduate student and then while he was at Harvard Business School after graduating from Amerhurst. When he earned his MBA, Goldman Sachs offered him a full time job.
Starting out as a Merger and Acquisitions banker, a pure generalist working across multiple industries, one of the first people that Zeitlin got to work with was Hank Paulson, who later became the chairman and chief executive officer of Goldman Sachs, and then 74th United States Secretary of the Treasury.
It was Paulson who encouraged him to run Goldman Sachs’ global healthcare business. It was also Paulson who, after being promoted to CEO of Goldmans, asked Zeitlin to come and work in the company’s executive office along with himself and the company’s co-presidents which he did for three years, cutting costs and helping rationalize after the dot com bubble exploded.
After Zeitlin was promoted to Global Operating Officer, Paulson came to him yet again. Remembering that Zeitlin had lived in Pakistan as a child, he asked him to go and figure out what the company’s strategy should be in India.
While in India, Zeitlin met with a number of Indian government officials and business people including Sunil Bharti Mittal, owner of one of the largest telecommunications companies in the country. Zeitlin noticed that Mittal still owned large parts of his physical infrastructure whereas in the US and some parts of Europe, they’d mostly been sold off to third parties. Spotting a tremendous business opportunity, Zeitlin asked Mittal if he’d be willing to sell some of his assets to Goldman Sachs. Although Mittal didn’t give a firm answer, Zeitlin began looking further and put a team on the case. Over three months, he attempted to convince Goldman Sachs to do it but having never invested at that scale in India before they ultimately declined.
Spotting a tremendous business opportunity, Zeitlin told Paulson that since Goldman Sachs wouldn’t invest, he was going to leave to go and do it himself. “It was an interesting opportunity, given my childhood, and where I could see the global markets going. I didn’t want to just be in New York with contacts in the west. I wanted to start reaching out into the emerging world more.”
Zeitlin eventually retired from Goldman Sachs in 2005, although retirement is hardly the right word. He went on to build a wireless infrastructure business in India, a place in which he’d never done business. He also had no experience in telecoms. However, over a period of three years, he built out a “modest” sized business. Bharti Mittal eventually decided not to sell his assets but endorsed Zeitlin’s business concept.
His company, The Keffi Group, currently invests in wireless infrastructure, life sciences, and financial services in India, Israel and West Africa, respectively. Since leaving Goldman Sachs, the father of two, has also been asked to use his finance experience in wider roles. He spent some time on President Barack Obama’s economic transition team and was ultimately offered a role as a representative of the United States of America to the United Nations for UN Management and Reform. Although he eventually turned the role down, he was pleased to have had the experience of Washington, especially as he increasingly acknowledges the intersection and convergence of business, civil society and politics.
Zeitlin is proud of his African roots and his Nigerian mother. He is equally thankful about the opportunities that were afforded to him by his American family. Whether it’s being adopted early on or meeting Paulson when he started at Goldman Sachs, he says about his life: “It is just a huge amount of luck from one step to the next.”

The Lucky One

It was 2001. Billions and billions of dollars were up for grabs in what South Africans call “black economic empowerment” deals. That is, swift deals, selling black South Africans equity, often at a discount, in a bid to redress the imbalances of the past in white-dominated industries like mining. They are worth a fortune and were taking place right under Sipho Nkosi’s nose.
Standing by, while others prosper, is not quite the mark of a man who is ambitious by nature. Growing up, he says, he never thought he would do any job other than that which was the preserve of blacks at the time—being a clerk, teacher, priest or something like that. It took other people to persuade Sipho Nkosi to throw his hat in the ring.
<div id="attachment_430" style="width: 310px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-430" class="wp-image-430 size-medium" src="/wp-content/uploads/2012/03/AV_00014794-300x200.jpg" alt="" width="300" height="200" />Sipho Nkosi, CEO of Exxaro Coal at Inyanda Coal mine in Witbank, South Africa</div>
Once he made that decision, though, he never looked back. Eleven years later, he is an astute, if not shrewd, captain of industry leading a cash-flush $9 billion conglomerate. To say nothing of the estimated R1.6 billion ($208 million) personal fortune he has amassed in the process.
It all started when Anglo American, the mother and father of mining in Africa, together with Anglo-Australian multinational BHP Billiton—the biggest miner in the world—put some of their South African coal assets up for sale.
Having occupied some of the most senior positions a black person could occupy at both companies, at the time, Nkosi thought he was the ideal person to lead a consortium, a diverse group that included some of the best black brains in mining, among them the country’s foremost nuclear physicists, geologists and mining engineers.
Months later, Eyesizwe Coal—Nkosi’s company—would win an open tender for an assortment of underground and open cast coal operations.
The consortium would quickly raise R600 million ($78 million) for the business, but as Nkosi and the company would soon discover, raising money was only the beginning.
The hard part would come when he had to appease disbelievers, including “rebel” white workers and their “skeptical” black counterparts.
“They all thought black folk, no matter how educated, would find it extremely difficult, if not impossible, to run a mining company,” says Nkosi.
The FORBES AFRICA team meets media-shy Nkosi in his makeshift office, at the Mining Indaba in Cape Town. More than 7,000 delegates, including the richest and most famous names in mining, are here for the annual gathering, where major decisions are made.  In between deal-making meetings and the consideration of proposals from prospective suppliers, Nkosi recalls how he got here.
He still vividly remembers Eyesizwe’s first strategy session, after taking over the Anglo-Billiton assets. He was chairing the company’s SWOT analysis session when one of the (white) mine managers stood up and said: “Sir, with all due respect, you guys know nothing about mining. We suggest that you go to Johannesburg and allow us to run the mine for you.”
It was the first time in the new environment, that Nkosi’s trademark calmness was put to the test. While his partners thought the white guy needed to be reminded of who was the boss now, Nkosi didn’t think it was the time, or the occasion, to take offense. So he didn’t.
Months later, at a year-end function, Nkosi was standing next to a (white) CEO of one of the vendor companies when a (black) worker approached, proceeded to greet the other CEO and asked him: “How could you give this business to these guys? What do they know?”
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In both instances he didn’t take offense, but said to himself: “My job is to win these people over. I will focus on excellence. All the time.”
Nkosi first silenced his critics in 2006 when, a mere five years into the challenge, he was one of the chief architects of the successful merger of Eyesizwe Coal with Kumba Resources’ non-iron ore assets to form Exxaro. The transaction was hailed as the deal of the year, singled out for being head and shoulders above the rest in terms of black management participation, the level of economic interest held by black people, as well as the extent of voting rights held by black people.
The following year, Nkosi took over the running of the merged entity and, five years on, it is not only the second largest coal producer in South Africa but also the biggest diversified domestic mining company in the country. Yet Nkosi is still not satisfied.
He now wants Exxaro to be up there with the world’s mining greats: Rio Tinto; BHP Billiton; Xstrata and the Anglo Americans of this world.
Ambitious as he admits all this is, he wants to start by growing Exxaro—which already has a presence in the continents of Europe, America, Asia and Africa—into a $20 billion market cap world player by 2020.
He already has shareholder approval for spending R9.5 billion ($1.2 billion) on a mine in Limpopo, in the north of South Africa. The Grootegeluk mine will supply over 14 million tons of coal a year to Medupi, a new coal-fired power station being built by the country’s electricity utility, Eskom, in response to the electricity shortages of recent years.  That’s apart from another R2.4 billion ($313 million) power station project in South Africa’s east coast province of KwaZulu-Natal, as well as a handful of beneficiation projects and new coal mines.
Nkosi wants to double Exxaro’s coal output to 80 million tons a year, while increasing the company’s portfolio of non-coal interests.
In January, Exxaro announced that it intended to pay $338 million in cash for a takeover of Democratic Republic of Congo iron ore company, African Iron.
Suggested to him that he seems to be moving, well… rather aggressively, he quickly retorts: “I used to have a boss, (former Kumba Resources CEO) Con Fauconnier, who used to say ‘Sipho, don’t ever grow yourself to death. At the end of the day you must cut your cloth to fit you.’”
Nkosi, it would seem, has indeed taken Fauconnier’s advice. Last year he closed down the company’s zinc plant, Zincor.
“It was not making money at all,” he says. The unions, and the government, were not impressed.
South Africa-based mining research company Avior’s senior analyst, Clinton Duncan, is one of those who believe that Exxaro is in fact “undervalued” and is “bullish” in terms of its share performance. Hence, he doesn’t think Nkosi will have a problem fulfilling his driving ambition.
Coal accounts for 33% of Exxaro’s earnings, the analyst points out. Nkosi’s battle plan, on the other hand, includes doubling Exxaro’s coal output to 80 million tons a year—a good move, Duncan says, considering the fact that about 77% if South Africa’s primary energy needs are provided by coal.
The day after our interview, Susan Shabangu, South Africa’s minister of mineral resources, announced that coal was a strategic resource for the country and that the government would do everything in its power to help its miners. Days later the president of South Africa, Jacob Zuma, announced a range of support initiatives his government had come up with, including the provision of rail transport connecting coal fields to power stations.
Add to that the fact that populous nations like India and China’s ever-increasing energy demands are going to continue for some time, and you will certainly realize that Nkosi’s plan makes a lot of sense, says Duncan.
But what about environmental concerns, I ask? Put to him that the marked rise in environmental awareness and activism, across the globe, could restrict the world’s use of coal, Nkosi responds: “We know that at some point the world is going to insist on clean energy.”
So what’s the plan?
Exxaro’s venture into solar, wind and methane gas was only a matter of time, he says, although all he’s prepared to disclose, for now, that the outcome of the company’s commissioned feasibility studies into the possibility of Exxaro setting up renewable energy companies has pointed in one direction: that Exxaro would be able to “make huge sums of money in renewables”.
“By the way, South Africa’s search for alternatives started a long time ago,” Nkosi says, relating the story of how, back in the seventies when faced with an oil crisis, the country started manufacturing oil from gas. Worldwide too, mining has been constantly evolving, he adds, citing examples of countries like Japan and France, which had long started moving away from coal to gas.
Looking into alternatives, though, does not mean Exxaro will abandon coal anytime soon, Nkosi says: “South Africa will, for all intents and purposes, continue to use coal. We don’t have gas. We have coal in abundance, and it’s cheap.”
Reminded of recent incidents where Greenpeace activists upped the ante with Eskom and mounted a campaign against the electricity utility, Nkosi is unperturbed. Exxaro is hard at work trying to find environmentally friendlier ways of mining and utilizing coal, he says calmly, insisting the business was working hard at ensuring that it was carbon neutral and would be able to mitigate its carbon footprint.
It’s all part of Exxaro’s commitment to doing business differently; by showing that it cares as much about profits as it cares about its people and the environment.
In December, Exxaro paid out R1 billion ($130.5 million) in bonuses to 9,694 members of its staff, 90% of whom were black low-level workers and managers. The employees were rewarded because they “worked very hard and pushed the company to where it is today”, Nkosi said at the time, adding that the company wanted to debunk the myth that “the fat cats at the top” only cared about making money for themselves.
Frans Baleni, the general secretary of South Africa’s National Union of Mineworkers, is at the head of South Africa’s most powerful union with hundreds of thousands of members, which has had many industrial disputes with Exarro. He says there aren’t many captains of industry out there who are able to stay true to themselves and be as mature, tactful and down to earth as Nkosi.
“You can’t fault him on that,” Baleni says, “unlike other mining bosses who can be abusive, arrogant and self-absorbed”.
“Nkosi makes you wonder whether you are not the one who is wrong—even when you know you are so right. Even when he says go to hell, he says it in such a manner that it doesn’t hurt,” says Baleni.
Nkosi is not so gentle about saying it in a gentle manner when it comes to the belligerent pro-nationalization lobby that is the ANC Youth League. When Nkosi once commented that nationalization was “antiquated” and “discredited”, the governing party’s youth was very hurt, publicly berating him for his “misleading, pathetic” lies. But Nkosi, who was president of the Chamber of Mines of South Africa at the time, took the rebuke in his stride.
If it so happens that he crosses paths with the youngsters again, he would still tell them.
It has got a lot to do with his mantra, the one that carried him through those first days, weeks and months of his foray into the tough life at the top of mining, where reputations can be lacerated in the board room.
“People had quite a lot of nasty things to say about this Zulu boy who knows nothing about this industry,” says Nkosi.
“When there’s negativism, always kill it by massive success.”
And there are few companies on the African continent that can claim to be as massive and successful as Exxaro.

Tag: March 2012

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