They grace the pages of Forbes magazine and are celebrated as a new generation of Africa’s entrepreneurs. Uganda’s Ashish Thakkar, South Africa’s Patrice Motsepe and Nigeria’s Jason Njoku and Ladi Delano are just some of the entrepreneurs that have joined the ranks of Africa’s richest. Their fortunes have been made in diverse industries from media to alcoholic beverages and are a testament to the shifting dynamics of Africa’s business landscape. Historically, Africa’s ultra rich made their fortunes by dipping into state resources, at the expense of the citizens. But, it is evident in the projections for the next few decades that there will be many more private millionaires on the African continent. This has increased a growing interest in the secrets of Africa’s rich and how they made it.  

Adventurous Entrepreneurs

Ugandan born entrepreneur, Ashish Thakkar, started his entrepreneurial adventures at the age of fifteen and before his 30 birthday had built a 100 million dollar business.

Six of the world’s fastest growing economies between 2001 and 2010 were Sub-Saharan African countries Angola, Chad, Ethiopia, Rwanda, Mozambique and Nigeria.  In many countries, the expansion was off a low base, but growth and development has enabled interesting investment opportunities. Although the world economic slowdown has dampened the growth prospects of many African nations, the possibilities to create wealth still present sexy opportunities for adventurous entrepreneurs.|inline|||c|jpeg|url.jpeg||left|

Veteran, renowned emerging markets investor Mark Mobius has been particularly vocal on the growth industries of the African continent.  He is still placing his bets on telecoms, banking, and natural resources and the consumer market, driven by a young population. Many multinationals have made attempts to capitalize on Africa’s growing industries, but for local entrepreneurs their trump card has been a very good understanding of the intricacies of African markets and the unpredictable outcomes. Technical insights are one half of the puzzle, the other is to understand the grassroots requirements and build unique products and business according to each market.

Rwanda has had a tumultuous history but it has emerged from chaos and conflict into one of Africa’s star economic performers.  The country gave birth to Africa’s first telecommunication entrepreneurs, long before Africa’s economies began rising.

When the late Rwandan billionaire tycoon Miko Rwayitare entered the telecoms business, he took advantage of the lack of telecommunications on the African continent and founded Telecel International.  By the mid 80’s he used his engineering skills and challenged state-owned telecommunication monopolies to launch a telecommunications company in the Congo. 

Throughout history, the shrewd ability to produce unique solutions to serve the pressing needs of African societies, has been the formula for success for many of Africa’s greatest entrepreneurs.  No complex financial derivatives, speculative trading, or fashionable IT startups. Wealth creation has been built on long term strategies and unique insights into the African business context. 

Africa’s Super Rich

Singapore based research firm, Wealth X published some interesting research on Africa’s super-rich.  Their 2012 report concludes that over the next five years, the number of super rich Africans will grow at an average of almost 7 percent, which is the highest global average.  The world’s largest economy – the United States, is expected to grow at the slowest pace, with the list of the US’s super rich growing at just over 2 percent. 

Business Tycoons such as Nigerian born Aliko Dangote and South Africa’s Patrice Motsepe still rank amongst at the top of the continent’s billionaire list.  Dangote and Motsepe share similar traits in their strategies to amass wealth, by focusing on creating value in the natural resources sector. Dangote’s investments are in the flour, sugar and cement industries.  He aggressively acquired and built value in these three sectors and turned a family business into one of Africa’s greatest conglomerates. He has also developed a reputation for being a workaholic, rarely taking vacations and not settling into his success.  Motsepe created value in the mining sector when he formed a mining services venture that cleaned gold dust from inside mineshafts, in the mid 90’s. By 1997 he took advantage of the low gold price and bought marginal gold mines from Anglo-Gold at a good price and turned them into profitable ventures.  Both Motsepe and Dangote were born into trading families, which gave them a solid knowledge base from which to build their empires.  They also took advantage of Africa’s network economy and formed strategic alliances with powerful political players. 

Retail Magnate Christo Wiese also focused on scalability to build his empire.  As the man in charge of Shoprite Checkers, Wiese grew eight supermarkets in Cape Town into a pan-African supermarket chain. He focused on the basics - supplying mass products to a wide base.  The consumer market is still one of the fastest growing industries which and is still throwing up lucrative opportunities for local and international investors.  It’s hardly surprising that retail giant Wal-Mart has geared itself up to expand into the continent.  Like Wiese the strategy is to provide reasonably priced products to a mass market and turn a profit.

There is also a large pool of Africa’s richest who have cashed in on the banking sector.  In Nigeria Tony Elumelo became the youngest CEO of a commercial bank at the age of 34.  In 1997 his strategy was to acquire a struggling medium sized bank in Lagos and turn it around by growing its retail network and developing a wide range of financial services.  By 2005 Standard Trust Bank became one of the five biggest commercial banks in Nigeria. 

Africa’s richest list is still dominated by men, but there are a handful of women who are forging ahead and making things happen. Folorunsho Alakija, is one of Nigeria’s oil Tycoons.  Like her counterparts, she accumulated her wealth by applying for an allocation of an oil-prospecting license.  She bucked the trend by not selling her license to international firms and chose to partner with Star Deep Water Petroleum as her technical advisor.  When the company discovered reserves of more than 1 billion barrels of oil equivalent, she found herself battling with the Nigerian Government Company for ownership.  Her wealth quest was defined by tenaciously holding onto her assets, forging ahead with no fear and making sure that ownership translated into wealth.    

Of course, with every investment opportunity, Africa’s richest have had some good fortune and a bit of luck in their favour, but astute business acumen, instinct, single-minded focus, stamina and an appetite for risk are qualities shared by all of Africa’s richest. Working with no rulebook is the guideline for striking it rich on the African continent.  Mature markets have some safety nets for entrepreneurs but Africa’s super rich have had to be highly competitive and adaptable to crack the market. Emerging economies also have very limited data and information available for making investment decisions. So every ambitious entrepreneur has to network tirelessly to get ahead. 

With all this in mind, it is clear that the opportunities are there for more millionaires-in-the-making.