Sub-Saharan titans take on the world

Safaricom, which owns M-Pesa, recorded revenue of $1.25-billion last year. (Sayyid Abdul Azim/AP)

Safaricom, which owns M-Pesa, recorded revenue of $1.25-billion last year. (Sayyid Abdul Azim/AP)

While South African companies by and large continue to sit at home and wax lyrical about taking the plunge into Africa, within the sub-Saharan region there are already a large number of prominent home-grown enterprises simply getting on with business.

Dianna Games, the executive director of Africa @ Work and the author of Business in Africa, said that African companies that are big players in their own economies tend to be conglomerates with ­humble origins.

"Long before South African companies [were looking to Africa], there were so many market gaps. African entrepreneurs were the only ones willing to take the risk, and these companies gained critical mass.

"They grew in high-risk markets and so it was easy for them to expand into a wider range of markets," Games said.

They were then well positioned at a time of economic reform and growth. Financial services remain a big sector on the continent, a fact made clear by the Nigerian stock exchange, which is dominated by these kinds of companies, according to Games.

Typically, in lists of successful African companies, the top 10 is dominated by South African, Egyptian and Moroccan businesses.
And although these rising stars may not yet necessarily be able to compete in size with multinationals, or even state-owned companies, they are capturing the attention of business in Africa. The Mail & Guardian takes a peek at some of the most notable movers and shakers.

The Dangote group
Founded by Africa's richest man, Alhaji Aliko Dangote, the Dangote group is one of many rags-to-riches enterprises in sub-Saharan Africa, and the largest industrial conglomerate in West Africa.

Established in May 1981 as a trading business with a focus on cement, the group diversified into a conglo-merate that also trades in sugar, flour, salt and fish.

By the early 1990s, it had grown into one of the largest trading conglomerates operating in Nigeria.

It later transitioned into a fully fledged manufacturing operation, with interests extending to real estate, oil, gas and telecommunications.

Group turnover is in excess of $3-billion and Dangote plans soon to list on the London Stock Exchange. Dangote Cement alone, worth an estimated three trillion naira (R196-billion), accounts for more than a quarter of the total market capitalisation of the Nigerian Stock Exchange on which it is listed and remains the biggest quoted company in West Africa.

Mara Group
A Rwandan refugee living in Uganda, Ashish Thakkar, founded the first company of the Mara Group in 1996 when, at the age of 15, he ­borrowed $5 000 to set up an IT business and traded computer hardware between Uganda and the United Arab Emirates.

By identifying opportunities to build businesses in underserved markets, Mara has evolved into an international multisector business, with operations and interests across 19 African countries, spanning from IT services to cardboard packaging, real estate and agriculture.

According to Forbes, the group's annual revenue is estimated at $100-million.

In his newest venture, a London-listed cash shell named Atlas Mara, 31-year-old Thakkar will team up with ex-Barclays boss Bob Diamond, who quit his post at the bank amid the lending-rate rigging Libor ­scandal last year.

Originating in the small nation of Togo, Ecobank, which touts itself as a "pan-African Bank", has recently spread into much of West Africa.

It was first established as a bank holding company in 1985 at a time when the banking industry in West Africa was dominated by foreign and state-owned banks and, following an agreement with the Togo government allowing it to operate, commenced business in 1988.

It has since established operations in 33 countries across Africa, with a total of 1 251 branches, 1 981 ATMs and 5 249 point-of-sale machines servicing more than 10-million customers.

Ecobank reported in October that profit rose 65% to $250-million in the nine months through to September as its businesses in Nigeria and Ghana expanded. It now plans to enter the Angolan and Mozambican markets in 2014.

Nedbank has indicated its intention to take up its right to convert a $285-million loan made to Ecobank in 2011 into an estimated 11% stake, and a second subscription right allows Nedbank to increase its holding to as much as 20%. The Public Investment Corporation is Ecobank's largest shareholder, with a 20% holding it purchased in 2012.

Safaricom is Kenya's leading mobile network operator and, with 17-million subscribers, it is one of the leading integrated communications companies in Africa and the owner of mobile payment service M-Pesa.

The company originated as a department of the Kenya Posts and Telecommunications Corporation. Safaricom Limited was incorporated in 1997 under the Companies Act as a private limited liability company and was converted into a public company with limited liability on May 16 2002. Vodaphone holds a 40% stake.

Safaricom recorded revenue of $1.25-billion for the 2012 financial year, and net income of $300-million.

According to research by Old Mutual Securities, Safaricom has the highest-priced stock among its peers in Africa and the Middle East, with a price-to-earnings ratio of 18.89.

Safaricom reported net earnings of $130-million in the half-year to the end of September, an increase of 45% compared with the same period last year.

Zambeef was incorporated in 1994, with 60 staff slaughtering 180 cattle a month in a small abattoir, delivering the meat in a Land Rover, and selling it through two rented butcheries.

The company is principally involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, edible oils, stock feed, flour and bread, and Shoprite has chosen Zambeef as its strategic partner to run and manage its own in-house butcheries in Zambia, Nigeria and Ghana.

The group now has one of the leading distribution and retail footprints in Zambia, with 91 retail outlets, three wholesale centres, fast-food outlets and 20 Shoprite butcheries.

Zambeef, listed on the Lusaka Stock Exchange and the Alternative Investment Market of the London Stock Exchange, aims to become the largest food producer in the region. It recorded revenue of $300-million in 2013, up 18% on the previous year.

The privately held Nakumatt supermarket chain was started by the Atul Shah family in 1987 and it began as a humble mattress shop.

Mangalal Shah migrated to Kenya from India in 1947 and, after declaring bankruptcy when his clothing company went belly-up, he went to work for his brother running Nakuru Mattresses.

Mangalal's sons opened a store where they sold bed sheets. The retailer now has 42 branches across East Africa, 650 000 loyal customers, 5 500 employees and ­turnover of $450-million.

Managing director and one of Mangalal's sons, Atul Shah recently told the Financial Times that Nakumatt's valuation had risen two-and-a-half times from about $160-million four years ago to $400-million today.

Zimbabwean businessman Strive Masiyiwa first came to prominence when he fought a five-year constitutional battle that led to the removal of Zimbabwe's state telecommunications monopoly.

His flagship business, Econet Wireless, is now a global group, with operations, investments and offices in more than 15 countries across five continents.

Activities include mobile cellular telephony, fixed networks, enterprise networks, fibreoptic cables and satellite services.

It also provides payment solutions for banks across Africa. Other activities include operations and investments in some of Africa's leading businesses in areas such as financial services, insurance, renewable energy, bottling, hotels and safari lodges.

Econet Wireless Zimbabwe, is listed on the Zimbabwe Stock Exchange with an estimated market capitalisation of $554.6-million and is Zimbabwe's largest provider of tele- communications services. It is also the country's first operator to launch data services using 3G technology.

Equity Bank
Equity Bank was founded as Equity Building Society in 1984, a provider of mortgage financing for low-income earners, but was declared technically insolvent in 1993.

The company transformed itself, first into a microfinancier and then into a commercial bank that now has more than eight million customers and is the largest East African bank in terms of number of accounts.

It has subsidiaries in Kenya, Uganda, South Sudan, Rwanda and Tanzania, and its shares are listed in both Nairobi and Uganda.

Equity bank registered a net profit of 8.9-billion Kenyan shillings (R1-billion) for the period ended September 2013, and has a market capitalisation of 115-billion shillings, up from 77.5-billion a year ago, according to

Oando, a Nigerian oil trading company, has grown to be one of Africa's largest integrated energy solutions providers, with a primary listing on the Nigerian Stock Exchange, a secondary listing on the JSE, and a third on the Toronto Stock Exchange.

It has a market capitalisation of R6.1-billion and in August reported $4.34-billion in revenue.

The group comprises six market leaders: Oando supply and trading; Oando Marketing; Oando Gas and Power; Oando Energy Services; Oando Terminaling; and Oando Exploration and Production.

As an oil trader in Nigeria, the group has access to 159.5-million litres of physical storage in major markets, knowledge of regional market dynamics and access to trading lines in excess of $1-billion.

Oando Energy Resources recently acquired the Nigerian oil and gas assets of Conoco Phillips for $1.79-billion.

Lisa Steyn

Lisa Steyn

Lisa Steyn is a business reporter at the Mail & Guardian. She holds a master's degree in journalism and media studies from Wits University. Her areas of interest range from energy and mining to financial services and telecommunication. When she is not poring over annual reports, Lisa can usually be found pottering about the kitchen. Read more from Lisa Steyn

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