The World Bank Funds Documentary on African Entrepreneurs; Progressive Nigerian Businessman is Hailed by His President; Kenya Becomes Part of the Credit Card Revolution in Africa
Aired March 19, 2005 - 12:30:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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ADENIKE OGUNLESI, FOUNDER, RUFF 'N TUMBLE: Forty percent of the 120 million of Nigeria's children, I have a potential of a huge market here.
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TUMI MAKGABO, HOST: Entrepreneurs on the continent send a message to the world that Africa is open for business. From Zambia in the east to Senegal in the west, we'll meet some of the men and women who are working to prove the potential of the African markets, as they reshape perceptions of their homeland. That's a look at the continent's emerging business class ahead on INSIDE AFRICA.
Hello, good to have you join us. I'm Tumi Makgabo.
This week, the Africa private sector. Many argue that it is the future of economic development on the continent, yet private sector growth in Africa is lower than in many others in the region due largely to the lack of foreign direct investment. In the 1990s, FDI in flow to Africa declined from eight percent to 3.4 percent. Today the continent accounts for about 2 percent of world trade.
The problem many say is Africa's negative image. In a documentary called "Africa Open for Business," journalist Carol Pineau profiles 10 entrepreneurs on the continent who seem determined to reshape that image. That film is funded by the World Bank. Carol, a regular contributor to this program, joins from our Washington studio to talk about the film.
But first, an excerpt, this one is about a Nigerian businesswoman, Adeniki Ogunlesi.
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OGULESI: Ruff 'N Tumble started out in 1996; really was an accident. My kids ran out of pajamas and I used to make clothing for women. So I decided that I'll just make some pajamas for my kids. And I told my girlfriend and she said oh, fantastic idea. Can I have five for my kids? So my husband then said why don't you just try some shorts, some skirts, some tops? And I took my car, my trunk of clothing, my kids, a cooler full of drinks, cold water. And we sold in every single bazaar that was going on.
I went to Italy and I sat in Benetton, and I said this is what I want to do in Nigeria. And I went to London and I sat in Gap, and I said this is what I want to do in Nigeria. I started going to the Lagos business store.
They were so helpful.
This is our mission statement. And our mission is to "Create and we cloth children to international standards in functional, durable and versatile clothing that gives comfort and value to our customers."
UNIDENTIFIED FEMALE: I'm sure my son is really going to like this.
OGULESI: We don't export now. Export to the West African coast, yes. All along the West African coast, yes. But to say America or to England, I'm not interested in it at all. If 40 percent of the 120 million people in Nigeria's children, I have a potential of a huge market here.
Made in Nigeria by Nigerians.
OGULESI: I will never forget the day I was in Zurich and I brought out my Nigerian passport. And I was treated so badly, so badly. And it hurt, you know? It really did hurt. And I asked why? And she said there's nothing good about Nigerians. And I said it is so untrue, you know? That this -- woo! Excuse me.
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MAKGABO: Well, we turn now to Carol Pineau, the producer of "Africa Open for Business."
And I guess the story that she just told, Carol, is indicative of the problem that many people on the continent have when it comes to dealing with perceptions, trying to grow business, trying to get people more curious about what's going on in Africa.
CAROL PINEAU, PRODUCER, "AFRICA OPEN FOR BUSINESS": Yes. I think it really is. This was really indicative of the kinds of issues that people are having. I have to say to have met Adeniki Ogunlesi was just an incredible experience; all 10 of them were. They really -- you felt as if you were sitting in front of the future of Africa. They really are amazing. And there are thousands more like them throughout the continent.
MAKGABO: Now, we certainly know and are aware of how they feel about the perceptions of the continent. Why did you decide that this was perhaps the story that was so important for you to tell?
PINEAU: I think it was sort of a growing frustration that in the media there are so few images like this out there. We only see of Africa, the wars and famines. But there is another Africa. There is the Africa of high rises and stock markets, and cell phones and internet cafes. And that Africa has to be shown too. And I think to not show it has really has a detrimental effect on Africa, because people don't know that it is a place for investment.
MAKGABO: All right. Carol, of course, we're going to ask you to stay with us. We're going to come back to you in just a moment.
But right now, we want to show you two more clips from the film. The first one is about a young man who's involved in the adventure-tourism business in Zambia. And the second is the story of two animation producers who live in Senegal.
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UNIDENTIFIED MALE: Tut Adventure is a very small dynamic company. We emphasize what we hardcore adventure activities. For example, the white water rafting, which happens to be our main product. And then we also have the soft-core adventure activities. People go on sunset cruises, elephant back rides, the flights over the falls in helicopter, micro-lights, ultra lights.
UNIDENTIFIED MALE: When we talk about the adventure activities, the hardcore you are looking at very, very adrenalin-orientated sports.
UNIDENTIFIED FEMALE: She's still shaking. '
UNIDENTIFIED MALE: Within government, when they see tour operating companies, they immediately think well, U.S. dollars. So we're going to task them quite heavily. Suddenly, park entry fees are changing without prior warning, but that is all starting to change. We're starting to see a lot of tax incentives, which I think is a very good approach to assisting more and more development of tourism.
UNIDENTIFIED MALE: Three, two, one. There he goes.
UNIDENTIFIED MALE: Aye-aye.
UNIDENTIFIED MALE: Adventure-tourism certainly besides the obvious, brings global exposure that Africa not as non-functional as some people perceive it. You can actually come out here and do have a glass of champagne if you'd like one.
PIERRE SAUVALLE, ARITISTIC DIR., PICTOON (through translator): Pictoon is the only animation studio in Africa that produces television series in featured films. Our goal is to produce for the international market, while respecting the international standards for quality, just like the studios in Asia, the United States and Europe.
AIDA NDIAYE, EXEC. PRODUCER, PICTOON (through translator): At the end of Pictoon's first year of existence, we decided to make our own production. It will be the first series totally made in Africa.
SAUVALLE (through translator): The number of people who work at Pictoon varies according to our production. We have 20 to 30 that can go up to 50, even 80 according to the amount work.
When we present something that Pictoon has done, the first thing people think is it doesn't come from Africa. Behind the term "African" is hidden a vague idea that the production from Africa must be a bit thrown together, badly made, badly finished. And this is not the goal of Pictoon.
Africans are not given sufficient opportunities to express themselves and to show their culture. With that one could give the rule an African viewpoint without Africa ever saying a word.
NDIAYE (through translator): We were very proud of our first film. But now for us it is something accomplished. And the mission has been done in Africa. It's a reality.
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MAKGABO: And now we're going to turn our attention once again to Carol Pineau. She's joining us from Washington.
And Carol, certainly in the last story we heard a very clear sense of frustration from those animators, saying that it's not just a question of people saying is it credible? But is it good enough?
PINEAU: Yes. And I think that that's true that there is the impression that Africa doesn't produce world-class goods. And what I found was that Africa really is viable. It has capacity on the ground. And that not only can it compete in the global economy, in some places it already is.
MAKGABO: One of the big frustrations that many people who try to invest or do work on the continent they say that yes, it's all good and well to say the quality is good enough. That the opportunity is there, but getting things from Point A to Point B can be a huge frustration; lack of infrastructure.
PINEAU: This is very true. And all of the entrepreneurs talk about how they deal with this investment environment. I think the things that is most fascinating is how do they really do find African solutions to African problems. You look at the example of the man in Somalia that started an airline. He said there's no one to maintain the airport so he does it himself. In each case, they figured out how to go about the problem.
MAKGABO: All right. Let's just turn the question to who the onus is on to try to rectify the situation. I'd like to play you a sound bite from the World Bank's Vice President for Africa Callisto Madavo. Here's what he says about that.
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CALLISTO MADAVO, V.P. FOR AFRICA, WORLD BANK: Growth is only going to come to Africa if Africa's entrepreneurs are given a chance and an opportunity to make a contribution. So when we heard that, you know, we could have an illustration of the other Africa, the entrepreneurs were hard at work creating jobs, creating opportunities, I was very, very excited to be able to support that because it basically supports the core of the bank's mission in Africa.
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MAKGABO: All right. You've got some investors saying they're willing. You've got the entrepreneurs saying they're willing. I guess the question is: are governments willing, Carol?
PINEAU: Well, I think that they all do want to support investment. I think that they don't always know how to go about it. We're hoping that this film will be an educative tool for governments in Africa. We're hoping that it will be an educative for policy makers outside of Africa, as far as what Africa's private sector needs.
What we're really hoping to do in the film is to screen it around the world, so that people will change their perceptions on Africa. It will encourage investment. And it will show people what Africa's private sector needs.
And in fact, anybody who's watching today, please log on to our Web site. It's africaopenforbusiness.com. And send us a note if you want to have a screening where you are. We want to get this out there. We want Africa's entrepreneurs to have their voices heard.
MAKGABO: OK. You say that the sense that you get is that there are governments are willing. But realistically, one of the fundamental problems that governments have is that they have to divvy their resources. There's education questions, there are health issues, jobs to be created. And as far as people just having ordinary lives, there isn't necessarily much less to do major investments in entrepreneurial projects.
PINEAU: Well, but I think that that is really not the issue to look at. The private sector needs to be aided. But more than anything, they just need to have more of a route that is easier. When you look at an average number of days for setting up a business in Africa, 63 days. In Canada it's two. Those are the kind of problems that really, with the stroke of a pen of signing some legislation could things. That doesn't cost anything.
The problem, I think, is governments don't know what entrepreneurs need to succeed. And there needs to be more of a dialogue between the private sector and government.
MAKGABO: All right. Now, we're going to leave it there. Thank you very much.
And INSIDE AFRICA continues in a minute.
MAKGABO: Welcome back. You're watching INSIDE AFRICA.
The United Nations Conference on Trade and Development says the rate of return on investments in Africa has averaged 20 percent since 1990. That's higher than any other region. One Nigerian who's taking advantage of this relatively lucrative market is Alhaji Aliko Dangote. A man whose business ventures have made one of Nigeria's -- has made him one of Nigeria's wealthiest.
Jeff Koinange has the story.
JEFF KOINANGE, CNN LAGOS BUREAU CHIEF: The president of Nigeria calls him, "The engine room of Nigeria's economy." Forty-eight year old Alhaji Aliko Dangote has built his fortune on food; or more precisely, importing it. His businesses read like a supermarket grocery list: sugar, salt, pasta, flour.
Nigeria may be Africa largest oil producer, but it is heavily reliant on foreign goods. Sugar and salt from Brazil, flour from the Far East. Nigeria also buys a lot of cement from Indonesia and India. In fact, it is the world's second-largest cement importer after the United States.
Dangote wants to change all that. He wants to turn Nigeria into a manufacturing powerhouse. Recently he bought a 28,000-hecta-sugar plantation in Nigeria's rural north, and has refurbished this multi-million dollar sugar mill to help meet local demand.
ALHAJI ALIKO DANGOTE, DANGOTE GROUP: I believe in working very hard. You know? And I always set targets -- once I set those targets, unless I achieve my target I don't rest at all.
KOINANGE: But on this day, he's boarding one of his three private jets with prospective European investors to visit his most ambitious project yet; a cement plant in central Nigeria.
DANGOTE: I really have a lot of confidence in Nigeria and I believe so much in Nigeria. So it really doesn't bother me one bit. I mean I'm very, very confident. And that is why I went to the jungle and put up a plant worth $100 million.
KOINANGE: Set on 4.5-square kilometers of land, the Obajana Cement Plant is the largest of its kind in Africa; complete with a conveyor belt that spans eight kilometers from the limestone mines all the way to the plant.
(on camera): To give you an idea of just how massive this project is, I'm standing atop of one of these cement silos about 250 feet above the ground. Around me, a bevy of construction workers scrambling to beat a September deadline. Now, when this project is completed it will be able to produce about five million metric tons of cement a year, which is about half of Nigeria's annual consumption.
(voice-over): Not only will Obajana make Dangote Nigeria's biggest cement producer, thanks to this 90 kilometers long natural gas pipeline, it will generate surplus electricity, enough to help light up federal capitol of Abuja, some 200 kilometers away.
DANGOTE: We will then be so far less than two years. So in the next six months this line will be working. And the next three months again, the other line will work.
KOINANGE: The investors from one of Portugal's leading cement firms are impressed.
JOAO SALGADO, CIMPOR CIMENTOS, TURKEY: It's very, very well constructed. I think it will be a very good project.
KOINANGE: Several hours and a change of clothes later, the group is back at the Dangote Group headquarters in Lagos. But the day is far from over. The CEO has local bank officials and yet more prospective investors to meet.
Dangote comes across as a shy and unassuming man. But underneath this veneer is a fiercely determined businessman aiming to turn Nigeria into Africa's workshop, one investor at a time.
Jeff Koinange, CNN, Lagos.
MAKGABO: Hello again. You're watching INSIDE AFRICA.
Well, so far we've seen stories of African entrepreneurs who are helping to create an emerging business class on the continent. But what about foreign investors? This week, our producer in Kenya met one U.S. citizen who owns a small but growing business in the capitol Nairobi.
KEVIN ASHLEY, CHAIRMAN, NAIROBI JAVA HOUSE: My name is Kevin Ashley and I'm the chairman of Nairobi Java House. We didn't really know what we were doing when we started, but we had the will. And we were a group of friends who all had particular skills that we brought to the table and we just went for it. It was a lot of fun. And we've certainly we must have been on the right track because we've done well.
We used to roast green coffee beans on our stove in our house in Westland and thought why, you know, for Christ sake there has got to be better coffee bean in this town. I mean Kenyans grow the best coffee beans in the world, but you can't buy a good cup of coffee in this town.
So after a successful venture in aviation, we decided to use some of the money from that to start this concept. Which was buying a roasting machine, roasting the coffee ourselves, learning how to brew it properly. And it certainly struck a cord because there's a coffee revolution happening in Kenya now.
So here we are in the capitol of Kenya, Nairobi. We have five coffee shops. We are about to open three more. And all of that has been basically self-financed by the very first coffee shop. So the first coffee shop, we invested about $350,000. And today, as we speak, we're a $5 million a year company. So -- oh, thank you.
People talk about corruption in Africa. People talk about bureaucracy. But in the end, we had a concept. We registered out company. We invested our money. We got our work permit. And we started our business and we got a return. So I mean I don't see that it was that difficult. There was no real stumbling blocks along the way.
And people really find it hard to believe when I say we didn't pay bribes to start our company. We actually just invested and started our business.
Before you invest in Kenya, come and make sure that you love it. Africa in general, that you love it and you want to be there. And you want to stick in for the long haul and put up with the potholes. And put up with all the problems that you have in an emerging nation. And you'll get your returns.
But if you don't have that heart for Africa, you will not succeed. That's what I believe anyway.
MAKGABO: American Kevin Ashley talking about his investing adventures in Africa.
Well, credit cards companies are among a number of businesses that are now heavily investing on the continent. They've introduced credit and debit cards to consumers in several countries, including Kenya.
As Gladys Njoroge tells us, the arrival of the card is changing the way many consumers Kenyans shop.
GLADYS NJOROGE, CNN CORRESPONDENT (voice-over): Caroline is part of Kenya's plastic revolution. She's among well over 1 million Kenyans who now either use credit or debit cards to pay for their groceries. The rest of the 50 million adults still rely on cash.
CAROLINE NDEGWA, SHOPPER: Well, I feel safer not having to carry cash around. Most basically, that's the main reason. And sometimes when you don't have exact budget, you don't limit your purchases if you carry a credit card.
NJOROGE: Only about 80,000 Kenyan's carry credit cards. Debit cards are much, more popular. Visa International says Kenya is its fastest growing African market, off set by South Africa. And industry figures suggest the number of users is fast approaching a million.
MIKE BRISTOW, COMMERCIAL BANK OF AFRICA: Debit cards are much higher in volume. Many of them are used simply for accessing cards from ATM's. But increasingly they are being Visa branded, for example; and replacing cash in local purchases, everyday shopping. And that's a trend that we encourage and that we find our customers welcome. And when they know more about how convenient it is, we see transaction volume grow quite quickly.
NJOROGE: Volume of more than $200 million in 2003; the last year for which figures are available. In fact, use of debit cards is growing so fast that a new issuing and processing center is being built to help banks offer Visa cards.
MUTHONI KURIA, KENYA CREDIT CARD ASSOS.: In Kenya, we are already turning around 18 billion initially per annum. I think that's quite significant. And this is growing.
NJOROGE: It's difficult to get cards into the rural areas and there gaps in legislation. Customers are frustrated by an unreliable talcum system that can make some transactions time consuming.
SWALEH KANYECK, LAWYER: The problem with the debit cards is that they take a little longer for the transaction to go through. But the credit is tricky yet.
NJOROGE: And that's not the only challenge. Credit cards are magnets for criminals.
CHARLES KUTALA, FUEL ATTENDANT: Sometimes during a day you can get three cards in a day. Sometimes you can spend a whole month, you get only two or three. But sometimes, like right now, the cards are on the increase and we are getting very many cards.
NJOROGE (on camera): Nonetheless, there's a surge in the number of Kenyan's going plastic, with more of them paying for their utility bills, shopping in supermarkets, like this one; and filling up their gas tanks by simply swiping a card or charging it.
Gladys Njoroge for CNN, Nairobi, Kenya.
MAKGABO: And as always we like you to share your thoughts about the reports that you see on the program. And we'd like you to send them to firstname.lastname@example.org. Do let us know which country you're writing us from. And your response could be used on a future broadcast. Also, give us a hand when it comes to the pronunciation of your name.
That's our look inside the continent for this week. Thanks for joining us. I'm Tumi Makgabo.
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