Africa's endangered kings of capitalism

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RESEARCH REPORTISSUE 1: OCTOBER 2009

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AFRICA’S“ENDANGERED

KINGS OF

CAPITALISM”

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Entrepreneurs Africa is at the risk of losing

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Africa’s “Endangered Kings of Capitalism” Report © 2009 by ICR

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Africa's “Endangered Kings of Capitalism”

Published by Stakes Capital Limited's International Corporate Research (ICR) under the trade name Research Intelligence

Stakes Capital Limited P.O.Box 9170 Shomolu, Lagos, Nigeriawww.stakescapital.com e-mail: [email protected]

International Corporate Researchwww.icr.stakescapital.com e-mail: [email protected] Copyright © 2009 by Stakes Capital and ICR

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Research by: International Corporate Research

Report Authors: Sanyaolu Taiwo Sanyaolu Kehinde

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MEN AMONGST MENMEN AMONGST MENR

Research Intelligence

INSIDE

INSIDE

“The report is of the opinion that the

continent is at the risk of losing 50 of its

leading entrepreneurs”

“The report is of the opinion that the

continent is at the risk of losing 50 of its

leading entrepreneurs”

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At a time while carrying out several studies on some of Africa's most revered corporations and

in many cases the people behind them, we were exposed to the consciousness of working with the age of entrepreneurs. The age of entrepreneurs however did not really matter much for many reports. But while watching a slide show of a collection of pictures of African entrepreneurs who had featured on the Forbes™ 400 list and the rich list of other African countries, the number who wore grey hairs, had wrinkled faces and looked old made it occur to us that we might just be losing many of our celebrated capitalists sooner than we can replace them. After we convinced ourselves of the importance of exposing the possibility of Africa losing some of its top business founders sooner than we could expect, we spoke with Dr. Victor Ukpabi the ex-director of research and evaluation at the North Carolina Central University school of education and we started working on the Endangered Factor (a correlated function that compared individuals' age with the life expectancy in their respective countries).

This was in a view to come up with a uniform variable that will be used to determine how endangered a

capitalist is regardless of divergent life expectancy figures of countries.

The report which has an Africa wide scope drew more than One hundred and Fifty (150) entrepreneurs who have founded a company listed on a stock exchange in

Africa from Twenty (20) African countries out of which the “Men Amongst Men” who make up this report were drawn. However, the endangered list has only Eight (8) countries represented of the 20.

The report is of the opinion that going by Life Expectancy figures for African countries, the continent is at the risk of losing 50 of its leading entrepreneurs while another 5 could be lost in less than 10 years (60% of which is less than 5years) presenting a list of Fifty five (55) ‘Endangered Kings of Capitalism’

- A New breed of Endangered Species Pg 4

- Throne of the Capitalist Pg 5

LiteraturesThe List

- Main list of Endangered capitalists Pg 9-10

- How we came up with theList Pg 7

Results from a Pan African Research Pg 11

About International Cor-porate Research (ICR) Pg 12

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A NEW BREED OF ENDANGERED SPECIES

ENDANGERED SPECIES

Endangered, a word which would not find common use in regular conversations is popular with the phrase “Endangered Species” a c o m b i n a t i o n w h i c h describes a population of organisms that is at risk of becoming extinct because of a depleting population. When such a population is identified, an alarm is raised to preserve the surviving remainder. Measures are also taken to repopulate the population and increase their number when it is possible.


A NEW BREED OF ENDANGERED SPECIES

I n his famous treatise, The Wealth of Nations, Adam Smith argued that private competition free from regulation produces and distributes wealth

better than government-regulated markets. Since 1776, when Smith produced his work, his argument has been used to justify capitalism and discourage government intervention in trade and exchange. After years of colonialism (in some cases stretching as long as 150 years), Africa has a number of things it will blame on the west; some of it she inherited and is finding difficult to let go. One of such is capitalism which stemmed out of Adam Smith's belief that private businesses seeking their own interests organize the economy most efficiently, “as if by an invisible hand.”

Though the position of Africa as it concerns capitalism may be described as confused, corporations have contributed in no small way to organizing the economies of individual African states. Corporations have for many years been the drivers of international trade amongst countries and generating income in various ways for their respective countries. Their corporate social responsibility strides have also contributed immensely to improving living standards and conditions in African societies. Also in many African countries, the combined number employed in the private sector is more than the government employs, this means corporations contribute more to sustaining the population. Behind capitalism are capitalists. They are the founders of these corporations who while seeking their own self interests ensure that it tends towards the common good. Africa also has its own crop of die-hard capitalists who for years have put their respective countries on the world map. Some of these entrepreneurs have been responsible for the positive competitiveness ratings their country's economies get in international reports because of their huge multi-

sectored investments. They have helped g o v e r n m e n t s c o n c e n t r a t e o n providing the critical hard infrastructure a n d t h e s o f t infrastructure needed to ensure a good standard of living for their populace.

Irrespective of were African civilization was heading before the colonialist came, capitalism is one path Africa should be comfortable it has adopted. Significant contributions already highlighted above

would suffice to defend this thought. Tens or even hundreds of awards have been initiated just to recognize the strides of entrepreneurs and founders of corporations around the world and Africa has never been left out.On the continent, we do not have a lot to be proud of in our political leaders and the way they have managed the polity but Africa's negative appearance in the media has been well neutralized by the respectable activities of African kings of capitalism.

If sentiments are left out, it is not doubtful that citizens of African countries would find it more painful to lose a business founder than a president. Losing a business founder may put his enterprise at risk of extinction and the ripple effect of such corporate disappearance is definitely not good for the continent; the negative fallouts (if there are any positives) are better imagined.

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Around the world, corporations are established according to t h e e x i s t i n g n a t i o n a l

guidelines and laws. Limited liability companies are corporations whose ownership is separate from its management and many more people have subscribed to registering and operating as Limited Liability companies over sole proprietorships or partnerships. To separate the men from the boys, a universally acceptable standard is the capital market. When a company (Ltd) Lists on the stock exchange, it transits from been a private company to being a public company.

F o u n d i n g a c o m p a n y a n d successfully listing it on a capital market has become the height of e n t r e p r e n e u r s h i p g l o b a l l y. Companies listed on stock exchanges are the basis for most rankings and corporate reports around the world and they obviously have more reckoning and public respect than non listed companies.

The experience is not different in Africa as there are twenty four stock exchanges in Africa serving as official capital market for over thirty countries and with over 1,200


companies listed. The renowned Forbes® global rich list (which measures wealth by the value of equity in public companies) now has ten Africans included since O n s i S a w i r i s a n d N i c k y Oppenheimer made the first

African appearance on the list in 2005. A listed company is then a dream every entrepreneur is expected to savor and is the official ‘throne of the capitalist’.

Throne

of The

Capitalist

Throne

of The

Capitalist

Throne

of The

Capitalist

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the listthe listHow we came up

with the listStakes Endangered

Factor (SEF)

The List of Endangered Capitalists

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U sing the results from; previous research projects, the Sunday times rich list (SA), the BT100 of Egypt, the top 10 richest men in Morocco et al involving

hundreds of entrepreneurs, we short-listed fifty five persons - who have crossed the age of sixty - and arranged them using their endangered factors in descending order. This formed the basis for this report Africa's Endangered Kings of Capitalism code named Endangered Report.

The Endangered Report is not and should not be considered exhaustive. Like many other reports of this nature, the Endangered Report is limited in its scope as it focuses only on founders of companies that are listed on at least one Stock Exchange in Africa; though founders of non listed companies may be more or equally as endangered.

One major limitation to this work is that endangered factors could not be generated for entrepreneurs (within the sample frame) whose ages could not be confirmed and therefore were not included on the list. We however produced a list of possible members of the 'endangered capitalists list' but whose ages could not be confirmed.

Another limitation of the report is the assumption that an entrepreneur's country of nationality is his country of residence.

HOW WE CAME UP WITH

THE LISTTherefore, nationalities were considered strictly and no attempt was made to verify the country of residence of the entrepreneurs that appear on the list. There could be variations in the life expectancy of a person's country of nationality and his country of residence which would generate different endangered factors. However, the possibility of having the founder of a company resident in a country other than that were his company is headquartered is slim.

Life expectancy figures were gotten from the 2008 estimates of the CIA fact book, the Africapedia life expectancy for African countries 2008 and the 2006 revision of the United Nations World Population Prospects report. The ages of entrepreneurs are their expected age in 2009.

Entrepreneurs Who Made This “Endangered List”

Must be aged sixty years (60) or older.

Must have displayed exceptional entrepreneurial prowess.

Must be involved with a company listed on a stock exchange in Africa.

Must be an African national.

WHY 60?The cut off age for this report is Sixty (60) years old. Sixty years was chosen because perception suggests that this age (60) will be the life expectancy of the average human if official life expectancy figures are ignored.

In many cultures across Africa, a person is perceived to have spent a fair enough time on earth when he lives up to the age of sixty. Incidentally, the average life expectancy for the eight countries represented on the Endangered List is 60years.

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T he Stakes endangered factor is a correlated function that compares the age of individuals with the life expectancy figures of their

countries. The SEF helps impress the need for succession planning and

the STAKES® ENDANGERED FACTOR® (SEF)

entrepreneurial development in Africa. The SEF, which creates a uniform variable to determine endangered capitalists across board, also seeks to improve the culture of taking companies public in Africa.

To determine a persons endangered factor, two independent variables are considered; the person's age and the life expectancy in his country of nationality. Understanding the variables we are dealing with, a simple arithmetic function is employed:

Life Expectancy in Country of Nationality (LE) - Age of the Capitalist = Stakes Endangered Factor (SEF)

Summary: SEF = LE - AGE

Positive values for SEF implies that the entrepreneur has not yet crossed the life expectancy in his country and shows how many years more he has to equal the LE figure. A negative SEF on the other hand means that the entrepreneur has crossed the life expectancy figure in his country and shows by how many years he has lived beyond the LE. In essence, if SEF is +3, the person has three more years before he reaches his countries life expectancy and if SEF is -5, the person has lived five years more than the life expectancy in his country. As explained above, the probability of death peaks at the Life Expectancy age so the longer a capitalist live beyond the LE the more endangered he gets.

the STAKES® ENDANGERED FACTOR® (SEF)

LIFE EXPECTANCYLife expectancy from birth represents the average life span of a newborn and is an indicator of the overall health and quality of life of a country. It is the average number of years to be lived by a group of people born in the same year, if mortality at each age remains constant in the future. Life expectancy can fall due to problems like famine, war, disease and poor health. Improvements in health and welfare increase life expectancy. The higher the life expectancy, the better shape a country is in.

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The List


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The ListThe ListThe ListThe List

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Rank Name CitizenshipAge in

2009SEF Company Name

1 Donald Gordon South African 79 -37 Liberty Holdings

2 Mr. Raymond Ackerman South African 78 -36 Pick ‘n’ Pay Holdings

3 Neil Ian Jowell South African 76 -34 Trencor

4 Dr Bill Venter South African 75 -33 Allied electronics

5 Mr. Eric Ellerine South African 75 -33 Ellerine holdings

6 Alec Wapnick South African 75 -33 Octodec Investments Limited

7 Johannes SPANJAARD South African 72 -30 Spanjaard Ltd

8 Michael Ibru Nigerian 77 -29 Oceanic Bank

9 Brian Graham Holmes South African 71 -29 WBHO

10 Brian Buckham South African 71 -29 ADvTECH

11 Alan W. Gooderson South African 71 -29 Gooderson Leisure Corporation

12 Subomi Balogun Nigerian 75 -27 FCMB group

13 Allen Ambor South African 68 -26 Spur Corporations Ltd

14 Chevalier John Sherry South African 68 -26 Jasco

15 F C Ndhlovu Zambian 65 -26 Investrust Bank

16 Hans Enderle South African 67 -25 City Lodge group of Hotels

17 Desmond Sacco South African 67 -25 Assore Limited

18 Wolf Cesman South African 67 -25 Madison property fund

19 G A M Ravazzotti South African 66 -24 Italtile Limited

20 Edward Emary South African 66 -24 Jasco

21 Brian Gilbertson South African 66 -24 Pallinghurst Resources

22 Michael Ade Ojo Nigerian 71 -23 RT Briscoe

23Jacobus (Koos) Essaias

RaubenheimerSouth African 65 -23 Raubex

24 Laurie Chiappini South African 65 -23 Mr. Price

25 Simon Malone South African 65 -23 Metorex Ltd.

26 Terrence Moolman South African 65 -23 Caxton and CTP group

27 Pascal Dozie Nigerian 70 -22 Diamond Bank

28 Stewart Cohen South African 64 -22 Mr. Price

29 Johannes Mouton South African 63 -21 PSG group limited

30 Samuel I. Adegbite Nigerian 69 -21 Oasis Insurance plc

31 Julius Adelusi Adeluyi Nigerian 69 21 Juli Plc

32 Brian Joffe South African 62 -20 Bidvest Ltd

33 Arnold Garber South African 62 -20 Compu-Clearing Outsourcing

34 James Turk South African 62 -20 DRD Gold limited

35 Goodie Ibru Nigerian 67 -19 Ikeja Hotels

36 Marc Wainer South African 61 -19 Don group

37 Biagino (Gino) Stefanutti South African 61 -19 Stefanutti Stocks

The List


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The ListThe ListThe ListThe List

List of Possible Members of the “Endangered List” (Ages could not be verified)

No Name Citizenship Company Name

1 Mohamed Farid Khamis Egyptian Oriental Weavers

2 Irvine Bell South African Bell Equipment

3 Mr. Paul A. D. Cave Zambian Cavmont Capital bank

4 H.J Paunrana Kenyan Athi River Mining Limited

5 Dr. Hassan Abass Helmy Egyptian Pharco pharmaceuticals

6 Adel Barakat Egyptian Misr conditioning

7 Sami Saad Egyptian Samcrete Misr

8 Mohammed Azab Egyptian Pyramisa Hotels

9 Rachid Ben Yedder Tunisia Amen Bank

10 Omar Tazi MoroccanSociete de Therapeutique

Marocaine

11 Saïd ALJ MoroccanSociete de credit a la

consommation Taslif

12 Mohsen Hachicha Tunisian Electrostar SA

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Rank Name CitizenshipAge in

2009SEF Company Name

38 Panagiotis Halamandaris South African 61 -19 Famous Brands limited

39Mr Adam Fleming / Dr Marc

WatchornSouth African 61 -19 Witwatersrand Cons Gold

40 Gerrit Thomas Ferreira South African 61 -19 RMB Holdings

41 Oba Otudeko Nigerian 66 -18 Honeywell flour

42 David Sussman South African 60 -18 JD Group

43 Ernie Joubert South African 60 -18 Peermont Global

44 Geoff Davidson South African 60 -18 KayDav Group

45 Michael Somen Kenyan 72 -15 Access Kenya Group

46 Miloud Chaâbi Moroccan 80 -8Société Nationale d'Electrolyse et

de Pétrochimie SNEP

47 Onsi Sawiris Egyptian 79 -7 Orascom Construction

48 Othman Benjelloun Moroccan 78 -6 BMCE Bank

49 Mohammed Berrada Moroccan 77 -5 Colorado SA

50 J. Cyril Lagesse Mauritius 77 -3 Phoenix Beverages

51 Dr. Ibrahim Kamel Egyptian 68 4 Rowad tourism Company

52 Mohammed Khalil Moroccan 68 4 Dari Couspate

53 Abdelwaheb Ben Ayed Tunisian 71 5 Poulina Group Holdings

54 Monir Fakhri Abdel Nour Egyptian 64 8 Egyptian Finance Co.

55 Dawood A. Rawat Mauritius 65 9 British American Investment


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55 entrepreneurs from 8 African countries across 4 regions of the continent (East, North, Southern and West Africa) make up the final list of endangered kings of capitalism. This is excluding the 12 other probable inclusions whose ages could not be confirmed.

3 Egyptians, 8 Nigerians, 35 South Africans, 1 Kenyan, 2 Mauritians, 1 Zambian, 4 Moroccans and 1 Tunisian form this first release of endangered capitalists. A life expectancy average of 42years (2008 estimate) put 7 South Africans at the top of the list that has sages like, Orascom Construction (Egypt) founder, Onsi Sawiris, Liberty Holdings (South Africa) founder, Donald Gordon, Diamond Bank (Nigeria) founder, Pascal Dozie, and Abdelwahed Ben Ayed of the Poulina Holdings (Tunisia). Other greatly revered entrepreneurs also on the list are; Ynna holdings (Morocco) founder, Miloud Chaabi, Mauritian living legend, J. Cyril Lagesse and Allied Electronics (South

Africa) founder, Dr. Bill Venter.

Coming to age analysis, 38.1% representing 21 of the 55 entrepreneurs are seventy or above; SNEP founder Miloud Chaabi is the oldest as he is expected to clock 80 in 2009. Donald Gordon and Onsi Sawiris will be 79years and two others (Raymond Ackerman of Pick 'n' Pay and Othman Benjelloun) will be 78years this year 2009.

No particular sector appears to be at more considerable risk than the other although financial services and mining are prevalent in terms of number.

In all, average Endangered Factor is at -19.7 while the average age of the entrepreneurs on the list is 68.4years. South Africa seems to be the most at risk; 63.6% of the list is South African followed by 14.5% Nigerians and 7.3% Moroccans.

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International Corporate Research (ICR) is a department-brand of Stakes Capital Limited. We are experts in Research, Assessment and Evaluation studies and in developing Assessment and Evaluation Models. ICR research capabilities span all aspects of research with specialty in corporate research, market intelligence, price survey, benchmarking, media monitoring, data analysis etc. Recent research projects include; the Nigerian Banking Fact Book, the HOB Web Assessment Report, Stakes 55 report and Africa's Endangered Kings of Capitalism Report.

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For additional information contact: Sanyaolu Kehinde,Chief Research Analyst Stakes Capital Limited

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