NOMPU SIZIBA: A number of African countries stand among those currently branded as the fastest-growing economies in the world, with the likes of Rwanda and Ethiopia among them. This presents an opportunity for investors to get in there to catch the wave of progress. But it’s often said that the rest of Africa is a difficult terrain to operate in. We’ve had instances of established South African businesses in various sectors being bitten as they ventured to invest in other African countries, and promptly withdrew. But, according to one businessman, if investors have the appetite, there are opportunities for investment on the continent, and they are abundant.
Well, to tell us more I’m joined on the line by Xolile Sizani, the group CEO at facilities management company Servest. Thanks very much, sir, for joining us. Which African countries, including those that are not commonly mentioned, do you believe offer ample opportunity for investment? And in what sort of areas or sectors?
XOLILE SIZANI: Perhaps the starting point is an appreciation of the learning and the GDP growth within the eastern side of Africa, where you find countries like Kenya. Ethiopia is one of the countries with significant growth to GDP, experiencing growth on average of about 9.8%. So these are the countries that would make sense for one to consider. Rwanda is another country that has very good infrastructure development, and adoption of technology which is also appetising for investors. Also Ghana is another country that I think businessmen in South Africa need to consider, because there are also significant job opportunities in infrastructure development.
NOMPU SIZIBA: You’ve highlighted some countries where things are happening, but what sectors are also appetising within them?
XOLILE SIZANI: I think in the main it’s really in the healthcare sector. I think there are huge prospects in those countries that sector. The retail and the hospitality sectors are other sectors where we think there are opportunities for growth. Transport is one of them. If you look at Ghana, for example, they are expanding their airports, which also gives opportunities for facility management companies that have the ability to provide technology for parking and parking management, for example.
NOMPU SIZIBA: You company is a facilities management entity. You operate in some eight African countries, including Botswana, Malawi and Kenya. What does your business do exactly? I see that it has generated several thousands of jobs.
XOLILE SIZANI: As a facilities management organisation our main focus is really around creating an environment that is safe, comfortable, and an environment that is productive through the integration of technology, the place and the people. So we will find, for example, in the transport sector I mentioned the airports where there is opportunity for us to provide parking solutions. From a technical point of view the installation of parking systems is an avenue where you will see a lot of job creation from the technical side of things to the project-management side of things, and also the management thereof. Facilities themselves have an opportunity for job creation in keeping those facilities in mint condition, whether instrument terms, the brand of some of these facilities through landscape and turf management. Also cleaning and office services. Security is another area where there is great opportunity for job creation.
NOMPU SIZIBA: Many people do describe Africa or the rest of it as a frontier for investment and growth. But, as I mentioned in my introduction, some people do view the continent as a tough environment to operate in. What are some of the winning strategies to first penetrate these markets, and ensure longevity in them?
XOLILE SIZANI: I think always for one to enter in any African country one needs to have an appreciation of the macroeconomic environment in that country, the political landscape, and the economic landscape within the country. Some of the strategies that we have employed at Servest are the identification of strategic partners within those countries. They help us to better understand the modalities and the dynamics within those countries. I think that’s a very important one.
But also to try and co-create some of the solutions, together with the strategic partner that we have identified in that country.
The last thing that you need is to really copy and paste the models that work in South Africa, and just impose those into those countries – you’d have a tough time.
NOMPU SIZIBA: Of course, you must get to know your market, do your market research.
Africa is gifted with an abundant youthful population, so I suppose part of any success on the continent is being able to upskill your workforce, and also integrate them with the technological developments we always hear about, like 4IR [the fourth industrial revolution].
XOLILE SIZANI: Yes. And I think the beauty of Africa and its prospects is that it is still a youthful continent. I think some of the numbers that we’ve seen in the research that has been done is that there is an expectation that by 2040 about another one billion Africans will born, which means that the population will grow from 1.21 to about 2.1 billion. I think that’s one. But the other aspect is that the upward mobility of those youthful Africans is that they are also moving away from the peri-urban areas and the rural areas into more metropolitan cities, which also drives the development for infrastructure that’s related to accommodation of such youthful Africans. That means both simple accommodation, hotels, hospitals and schools, and office blocks, which will all create opportunities.
NOMPU SIZIBA: So you’ve been talking about the great stuff, the opportunities. What do you see as the challenges, particularly from a regulatory point of view? Where have you been frustrated in your operations, where you think governments could do better to make your life easy as a businessman?
XOLILE SIZANI: I think one of the countries that presents some challenges that anyone would need to navigate, is Nigeria. Some of the challenges that one would find, for example, is the inability to repatriate cash from such a country. But also there are developments, because every single country is trying to protect and meet the demands of the youth within those countries. So, for example, in countries like Botswana they are beginning to introduce legislation which will limit the number of opportunities that get given to non-citizen companies.
So one needs to be well versed in some of the dynamics before entering into those countries.
NOMPU SIZIBA: Xolile, a pleasure talking to you, sir. Thank you.