Why Africa has so many secret billionaires

(This is a transcript of the podcast posted on Monday, June 28th 2021. You can listen to the podcast by clicking on this link: https://www.buzzsprout.com/1655965/8770436)

Welcome to The Weekly Beat by Mansa with your hosts, Arnold Segawa, Maggie Mutesi, and Dumi Jere. Giving you all the info on Africa’s big finance and economic stories, The Weekly Beat by Mansa.

DUMI JERE:

Greetings, ladies and gentlemen. Welcome to this week’s episode of The Weekly Beat. My name is Dumi Jere and I’m coming to you from Johannesburg in South Africa. With me is my sister Maggie Mutesi coming to us from Nairobi in Kenya. Maggie, how are you?

MAGGIE MUTESI:

I’m doing fine Dumi. How is Johannesburg?

DUMI JERE:

Nah, Johannesburg’s all right. It’s a bit cold, but hey, it’s winter. So it’s expected.

MAGGIE MUTESI:

How far with Johnson & Johnson.

DUMI JERE:

I’m not sure which one exactly, but I know that there are some vaccines that are coming up and they announced that from the 1st of July the age group 50 and above will be eligible for registering to get a vaccine. So I suppose there’s a bit of progress, a bit slow. So there’s that. And in Kenya what’s happening?

MAGGIE MUTESI:

We have another second batch of vaccines, unfortunately, it’s for those who got the first one. So if you didn’t get the first one you won’t get anything. So it’s, I don’t know how it’s truly working out. It just feels like it’s not for some of us. Even when they bring more vaccines, they have to complete doses. And it’s still the same people who are not vaccinated, et cetera. So yeah, but there is hope. I saw at a conference the other day Strive Masiyiwa trying to emphasize the need to get more vaccines to developing nations.

And he made a very valid point about having governments getting these vaccine rollout, getting the private sector involved in this vaccine rollout. And it could help in a way if there are billionaires that they said, “Hey, you’ve got to help us manufacture this.” Maybe it could make it easier.

So yeah, I liked that part of it where he actually thinks and he believes this should not be just the government. It should be about the private sector popping down at times to maybe set up factories and not just rely on a few people and other countries to be able to get everybody vaccinated. So it was a very nice point that he made there.

DUMI JERE:

Yeah. True. True, true. Yeah. I think the whole point really is wherever vaccines can be found I think they must just be shared with everyone. So whether it is in the Johnson & Johnson or the Pfizer in the Americas or whatever, even the Russian Sputnik or the Chinese Sinovac and Sinopharm, I think people must just get access to it. And speaking of China, a story that’s been doing the rounds probably the whole of this month. And that’s the story of Jack Ma.

For those that don’t know, Jack Ma was really rich and he was famous and we all knew about him. And if we didn’t know about him, we knew about Alibaba, the company he co-founded. In fact, he was the richest man in China and according to some polls, the most famous living Chinese person. But what has happened over the past couple of years is that firstly, he has seen his net worth almost slashed in half. He has lost control of his businesses and so much more has been happening. It seems like it has been a strategic move by the Chinese government. And this got me thinking about what really happened to Jack Ma.

MAGGIE MUTESI:

It’s a good question. I mean, I’ve been trying to follow this story in every possible way and his net worth has been slashed by 70. I’m not sure, but it’s now half. When you step back, and it’s interesting because I watched a video the other day about Jack Ma being a little bit critical about the Chinese government. Not very critical but indirectly critical of the government policies and all of that, but it’s easier for you to do that probably when you have not much to lose or when you’re living in a place like the United States of America.

So what has happened? We cannot speculate. That’s why we can only talk about it. For me, I feel like that it’s not far different from a lot of governments that will probably even know closer, that would go for you and everything you have.

There are some places in Africa where it doesn’t matter how rich you are, the power doesn’t lie in your hands. They could easily crush you. Now I think with Jack Ma this story is not yet so clear, but the government has tried to reinforce different rules, laws, and regulations. Like I said, I don’t want to speculate.

DUMI JERE:

True. This is saying that never outshine the master. And it means essentially don’t look better than your boss.

MAGGIE MUTESI:

Isn’t that even a Chinese thing?

DUMI JERE:

I think so if I’m not mistaken. And I mean, it sounds simple. It actually gets more interesting the better you understand it. So essentially it just means you need to be humble and all of that. Those are sometimes difficult things to do when you have that kind of much money. But when I look at, for example, I mean, early on I even mentioned the Russian vaccine, when I look at Russia and how it treats its oligarchs you can’t have too big a voice or else, you know what squeak, the Kremlin is going to come for you.

That’s how you ended up with lots of millionaires now living in London and making noise from there because they know that from their own base they’re not able to do that. And you mentioned the point about bringing it close to Africa. I was reading an article that said that there probably are more billionaires in Africa than we actually know. How many companies do you think make a billion dollars or more in revenue in Africa? Any number, rough guess?

MAGGIE MUTESI:

Not many. I don’t think they are even 10.

DUMI JERE:

Yeah. I was also equally surprised that they are over 450.

MAGGIE MUTESI:

Absolutely no way.

DUMI JERE:

That earn revenues of $1 billion or more on this continent.

MAGGIE MUTESI:

That means we have over 400 billionaires.

DUMI JERE:

Probably.

MAGGIE MUTESI:

And that would make sense. They can’t declare because they could go after them.

DUMI JERE:

Yeah. And this is a research that was done by McKinsey.

MAGGIE MUTESI:

Oh my God. It’s quite interesting.

DUMI JERE:

Yeah. And so when you look at such things now you actually can believe that, you know what, there are actually lots more billionaires on this African continent but some just choose to sort of stay in the background or be quiet and not be so critical of the government.

And sometimes I think that’s a good lesson. I always tell the story of this well-known, well, not sure about well-known, but this American gangster who was a famous for racketeering and fixing games back in the early 1900s. His name was Arnold Rothstein and he offered this famous quote that there’s an advantage in being a nobody because no one targets a nobody.

And I guess that’s the lesson I pick up from that is that sometimes no matter how much money you have, even if you become a billionaire, sometimes it’s okay to just be in the background like the other 450 billionaires or so people that we will have never heard about but people are busy running these successful conglomerates out there.

MAGGIE MUTESI:

Dumi, you know that’s interesting? No, you need to share it up there, $400 billion in revenues.

DUMI JERE:

It’s not just to say all of them are making $1 billion, so some are making much more. I mean you look at, for example, say the Dangote Group. It will be in that list, but they are making far much more than a $billion dollars. So they are making much, much, much more. But as just as a base, whoever is in that billionaire dollar club, there’s about 450 companies doing that in Africa. And I found that quite interesting.

MAGGIE MUTESI:

It brings us back to what this podcast is entirely about, which is investment. Because if Jack was in place halfway, it was nine months ago. You can imagine the shareholders, you can imagine people who had put money into his companies. Now when governments go after you like this, there is that investor confidence that it’s left hanging for, to say, is this economy worth investing into?

In China’s case, I don’t know how it’s going to play, but I know for Africa’s case, a lot of times, even when people ask, I don’t know how to put it, but is it safe to bet? You know, I’d put my money, a couple of millions of dollars in this company. What if there’s a crackdown and everything is lost, which you have seen in Africa, not closer to home. I feel like in a way it limits investments into some places, but I feel like one of the reasons as to why probably America is what it is, is because of that openness, that open market of it’s just come in, bring in your money, bring in whatever you have.

And it doesn’t matter as long as you pay taxes and do this, probably they also have a way they do it, but it’s not as open, direct and visible like we’ve seen in these other countries. So for me, that is actually my biggest fear that the people who probably put money into companies, what kind of messages being sent out in terms of this is a billion dollar company, this has been the richest man. This company has expanded.

He should be like the son of the soil who has put China on the map in terms of a billionaire, the technology and all of that. If we can go after him regardless of the amount of money probably we get from your or the platform he has given to our country, then it puzzles me a little bit. So my biggest skepticism for me is in what kind of message this sends out to investors.

And even when we come to Africa, like you’ve mentioned, if we don’t even know about this 500 companies that are making billion dollars in revenues every year, there is a missing gap because maybe we could even have more investments into the continent, but people do not know because there’s no transparency because of the fear of the unknown of like you’ve said.

They’re uncertain of what would happen if I declare my wealth and this is how people are so informal. They have companies, they have a lot of money but there’s absolutely no structure, maybe because of the fear, but I don’t think economies grow with this. For me, I am utterly shocked.

DUMI JERE:

I mean, at the end of the day is it not maybe a case of business and politics should not necessarily mix?

MAGGIE MUTESI:

I think politics is business and business is politics. Somehow I feel like they need to coexist.

DUMI JERE:

So it’s difficult to separate the two?

MAGGIE MUTESI:

Very, very difficult to separate the two. And it brings me to a conversation that I have. I’ve always kept saying that. For me, I feel like the biggest economies have thrived where the private sector has worked closely with the public sector. I mean, these two need to co-exist because you have to set rules, regulations, you have to put policies that can regulate these businesses because businesses also should. But how do you co-exist?

DUMI JERE:

So I think a good example would be Aliko Dangote who has been working hand in hand with his government for a long time. He was very visible in the government of His Excellency Goodluck Jonathan. And even when President Jonathan left and President Buhari came in, still he was very visible working with the current government. So to your point, yes, there’s a greater need for public and private sector cooperation.

And that has been a good example of working together and maybe the other investors need not worry too much about whether the money is safe, but rather work with the governments. You could actually get more power from doing that because you’re able to lobby, you’re able to push for more policies that are in favor of whatever it is that you’re doing. And so with that, this is the end of our discussion today.

And thank you so much folks for listening to this episode. I really, really, really appreciate. As always a special thank you to my cohost Maggie, the team behind the scenes, and of course you loyal listeners. Remember to visit our website, mansamedia.africa for more news about the continent, as well as follow our social media pages, Mansa Media Africa on Facebook and @mansa_media on Twitter. Please remember to follow us on Spotify or Apple Podcasts or Amazon Music so that you’re notified when a new episode goes live. I am Dumi Jere, until the next time, yes to peace and profits.

The Weekly Beat by Mansa with your hosts Arnold Segawa and Maggie Mutesi and Dumi Jere, giving you all the info on Africa’s big finance and economic stories, The Weekly Beat by Mansa.

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