Tuesday, December 4, 2012

How Africa’s richest made their money

Aliko Dangote 

By KAMAU MUTUNGA dn2@ke.nationmedia.com

The usual suspects dominate Forbes’ 2012 list of the world’s richest. Mexican Carlos Slim Helu sits pretty at the top, followed by America’s Bill Gates and Warren Buffet, who once said he never “had doubt in my mind that I would rich”.

Completing the top five are France’s Bernard Arnault and Spain’s Amancio Ortega.

To make it on the annual list, one must make at least a billion dollars (Sh85 billion) in quantifiable, legal, traceable and verifiable investments. Of the 1,226 richest, only 16 are from Africa.

The majority of the world’s richest coined their fortunes in many ways: beer, banking, brakes, ball bearings, chocolate, cars, candy, casinos, cement, coal, commodities, coffee, construction, electronics and ethanol.

Then there were those who foundered theirs from metal, media, mining and manufacturing. Still others spilled fortunes from oil, palm oil, pipes, pipelines, plastics, the Internet, shipping, steel, software, sports, sugar and, in the case of Phil Knight of Nike, shoes.

Money was made too from food, tobacco, transport, retailing, real estate, paper, packaging and in the curious case of one American lawyer, lawsuits.

To recognise the emerging role of Africa in global business, Forbes Magazine, which has been tracking the wealth of the richest for 25 years, launched the African version last year.

The 2012 Africa’s 40 Richest includes 11 Nigerians, eight Egyptians and five Moroccans. Here are the top 10 of Africa’s 40 Richest, 32 of them self-made:

Aliko Dangote, 54

Nigeria

Net worth: $12bn (Sh1 trillion)

Source: Cement, sugar, flour, diversified, self-made

Runs Dangote Group of companies which has interests in sugar, flour milling, salt processing, cement manufacturing, textiles, real estate, oil, gas and large-scale millet farming.

Dangote Sugar Refinery — the world’s third largest — is the most capitalised company at the Nigeria Stock Exchange, while his Obajana Cement is Africa’s largest cement company.

Dangote is 76th richest in the world.

Nicky Oppenheimerand family, 66

South Africa

Net worth: $6.5bn (Sh552bn)

Source: Diamonds, inherited and growing via De Beers, the world’s largest diamond concern. Nicky, the only person with a license to fly over London city (to escape traffic) also owns South Africa’s largest game reserve, the Tswalu Kalahari Reserve.

Nassef Sawiris, 50

Egypt

Net worth: $4.75bn (Sh400bn)

Source: Construction, inherited and growing

Sawiris runs Orascom Construction, Egypt’s most valuable publicly quoted company with interests in the Middle East and Africa, including a 13 per cent stake in Lafarge, the largest shareholder in Bamburi Cement, Kenya’s largest cement company

Mike Adenuga, 58

Nigeria

Net worth: $4.3 billion (Sh360bn)

Source: Oil, telecom, banking, self-made

“The Guru” runs Conoil, Nigeria’s largest oil exploration firm, gushing out 100,000 barrels a day. He also owns Globacom, his country’s second largest mobile phone operator.

Mike made his first million at 26 by selling lace and distributing sodas, before hitting the Mother Lode with contracts to erect military barracks and oil prospecting licenses during the regime of Ibrahim Babaginda.

Naguib Sawiris, 57

Egypt

Net worth: $2.9bn (Sh240bn)

Source: Telecom, inherited and growing

The eldest son of Onsi Sawiris, patriarch of Egypt’s richest family, built Orascom Telecom, whose over 60 million subscribers make it one of the world’s largest mobile phone service providers.

Johann Rupert and family, 61

South Africa

Net worth: 4.7bn (Sh390bn)

Source: Luxury goods, inherited and growing

Rupert runs Richemont, a Swiss holding company with interests in brands such as Cartier watches, Montblanc pens, and Chloe. And if you smoke Dunhill, you make Rupert smoky rich.

Miloud Chaabi, 82

Morocco

Net worth: $3bn (Sh250bn)

Source: Real estate, self-made

“The red capitalist” began his financial ascent with brick and mortar in 1948 before expanding to hotels, supermarkets and renewable energy.

Christoffel Wiese, 70

South Africa

Net worth: $2.7billion (Sh220bn)

Source: Retailing, self-made

“Christo” is the head honcho and single largest shareholder of Shoprite, Africa’s biggest, low-price supermarket chain.

Onsi Sawiris, 81

Egypt

Net worth: $2.6bn (Sh220bn)

Source: Construction, self-made

Founded the Orascom conglomerate, which has interests in construction , telecommunications, tourism, science and technology. His businesses are run by his three sons, Naguib Sawiris, Nassef Sawiris, and Samih Sawiris.

Patrice Motsepe, 49

South Africa

Net worth: $2.5bn (Sh210bn)

Source: Mining, self-made

South Africa’s first black dollar billionaire owns African Rainbow Minerals with interests in platinum, nickel, chrome, iron, manganese, coal, copper and gold. A beneficiary of South Africa’s Black Economic Empowerment also owns Mamelodi Sundowns Football Club.

The richest in East Africa

Although Kenya is the region’s economic and business giant, the richest East African doesn’t emerge from down these shores. Here are Forbes’ estimates:

1.  Sudhir Ruparelia, 56

Uganda

Net worth: $900 million (Sh76.5billion)

Source: Real estate, assorted, self-made

East Africa’s cash king is in position 18 of Africa’s Top 40 Richest, according to Forbes. Born in Mengo, western Uganda, Ruparelia went to the UK with his parents when Idi Amin, in a spell of psychosis, expelled all Asians from Uganda in ’72.

He returned in ’85 with $25,000 (Sh2.1 million at current exchange rates) as seed money.

“I’m successful, but I don’t own half of Kampala. Reports of my property holdings are grossly overrated,” Sudhir told Forbes when asked about his 300-plus residential and commercial properties in Kampala’s upscale addresses, “There are properties I acquired between 1984 and ’91 for $50,000 (Sh4.2 million). They are worth $12 million (Sh1bn) today.”

According to the Uganda Land Alliance, Sudhir is Uganda’s largest single property owner, who had President Yoweri Museveni joking that Sudhir’s rental income equals Uganda’s entire earnings from tea coffee exports, at $400 million (Sh34bn) a year.

Besides real estate, Sudhir’s Ruparelia Group also has interests in finance, insurance, education and hospitality industries.

2.  Said Salim Bakhresa, 64

Tanzania

Net worth: $520 million (Sh44.2 billion)

Source: Manufacturing, self-made

Owns Bakhresa Group, a conglomerate with operations in grain milling, packaging, beverages, petroleum, ferry services and manufacture of the Azam brand of chocolate and ice cream.

Tanzania’s richest man dropped out of school at 14 to sell potato mixes before opening a restaurant and venturing into grain milling in the ‘70s. Bakhresa Group, with a 2,000-strong labour force, is East and Central Africa’s largest producer of wheat flour.

In fact, Rwanda depends on Bakhresa’s Kipawa Flour Mills — one of three — for its annual 120,000 metric tons of wheat flour.

The wheat, rice and maize mills were acquired under a privatisation programme by the Presidential Parastatal Sector Reform Commission and successfully turned around.

East Africa’s second richest person is 30th on Forbes Top 40 Richest in Africa.

3.  Naushad Merali, 61

Kenya

Net worth: $410 million (Sh34.8bn)

Source: Diversified, self-made

“The seer behind Sameer” is the only Kenyan who made the cut in 2012. He is ranked 39th in Africa’s 40 Richest.

The man who was not adept at nosing business opportunities, but over the years, managed to mix business with the pleasure of high-altitude politics, runs Sameer Africa — named after his son — a 15-company conglomerate with interests in, among others, construction, banking, manufacturing, agriculture, energy, transport, information technology and telecommunication.

The companies include Ryce Motors, franchise holders of Isuzu and Daihatsu besides being an agency for Opel vehicles, Yansam Motors, franchise holders of Komatsu Folk lifts and ITMCO tractors and Ryce Engineering, franchise holders of France’s SDMO generators.

Through Yana, Meralli has a majority shareholding in Sasini Ltd, a publicly quoted company with over 2,000 hectares under cultivation. When you have such an operation then you need a bank, and Equatorial Commercial Bank it is, which merged with Southern Credit in 2010.

The Sameer Group employs 30,000 people, directly and indirectly.

Merali is said to have made $20 million (Sh170 million) in less than two hours in 2004 when he bought a 60 per cent stake in Kencell from Vivendi for $230 million (Sh19.5bn) only to flip it to Sudanese-born British businessman Mo Ibrahim’s Celtell Africa for $250 million(Sh21.2bn.

Mo Ibrahim sold Celtel to Bharti Airtel, which Merali holds a five per cent stake.

The dropouts, class of 2012

There were eight dropouts from Forbe’s Africa’s 40 Richest, including two Kenyans. The reason was that small matter of upping the threshold of entry from $250 million (Sh21.2bn) to $400 million (Sh34bn).

That meant flamboyant businessman Chris Kirubi’s $300 million (Sh25.5bn) coined from real estate, manufacturing and investments, according to Forbes, was $100 million (Sh8.5bn) shy of entry for one of Kenya’s most expensively dressed businessmen.

Just so you know, Kirubi buys his suits from Brioni, the high-end Italian fashion house whose other clients include former American President George W Bush, Prince Albert II of Monaco and American property impresario Donald Trump. And the owners know Kirubi in person because he has been a regular client for 25 years.

The woolen material for his suits is bought in England and America. And not just any wool, but one with a weave of between 150 and 180 spins, the finest in the market, which is then shipped to Brioni.

With a scarcity of laundry outlets to handle the suits locally, “DJ CK” often has them dry-cleaned whenever he travels abroad.

Kirubi once told Going Out Guide magazine that his chief talent was “making money”. “It is the only thing I know how to do best,” he said, and indeed that talent saw him plunge into property ownership in the ‘70s and on to becoming the largest shareholder in Centum, a publicly quoted equity firm, the International Life House, Capital FM, DHL, UAP Insurance and, having ceded his majority shareholding, now has a 49 per cent stake in Tiger Haco brands, which in 2010 chalked $33 million (Sh2.8 billion) in annual sales, according to Forbes.

“In a way, I feel like I am part of every Kenyan’s life. Ninety five per cent of all Kenyans or anyone who comes to Kenya has at one time or the other used a product that is manufactured by me,” Kirubi told Forbes when he debuted in the 2011 list of Africa’s richest.

But he will have to try his luck in 2013.

The other dropout is Uhuru Kenyatta as Forbes could not draw a line between family fortune — largely through land ownership — and his own.

Manu Chandaria could have graduated into the list, but the Chandaria fortune operating in six continents is held, says Forbes, by assorted blood relations.

Africa's wealthiest women

There are only two on Forbes List for 2012:

1.  Folorunsha Alakija, 61

Angola

Net worth: $500 million (Sh42.5bn)

Source: Investments

The daughter of Angolan president Jose Eduardo dos Santos sits at position 31 of Africa’s 40 richest.

2.  Isabela dos Santos, 39

Nigeria

Net worth: $600 million (Sh51 billion)

Source: Oil, self-made

Alakija, a former fashion designer, runs Famfa Oil that began exploration in ’93. Famfa co-owns the Agbami oil fields with Chevron. Nigeria’s richest woman is 24th of Africa’s 40 richest.

World's top four richest

1. Carlos Slim Helu &family, 72

Mexico

Net worth: $69bn (Sh5.9bn trillion)

Source: Telecom, self-made

Richest for the third year back-to-back via America Movil, South America’s largest telecommunication company, but also has interests in mining, heavy industries and real estate.

2. Bill Gates, 57

America

Net worth: $61bn (Sh5.2 trillion)

Source: Software, self-made

The most generous billionaire. Through the Bill & Melinda Gates Foundation, he’s given away $28 million (Sh2.3bn) for vaccination efforts in Africa, including Kenya, besides building better toilets for those without sewerage facilities.

3. Warren Buffet, 82

America

Net worth: $44bn (Sh3.74 trillion)

Source: Stocks, self-made

Donated $1.7bn (Sh144.5bn) to the Bill & Melinda Gates Foundation. Still lives in Omaha, Nebraska in the same 92-year-old gray tucco five-bedroom house he bought in ’58.

4. Bernard Arnault, 63

France

Net worth: $41bn (Sh3.48 trillion)

Source: Luxury Goods, self-made
Europe’s richest man. Owns the Indigo Island in the Bahamas whose rent is pegged at $300,000 (Sh25.5 million) per week.

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