A unique perspective from British multi-millionaire property developer Azad Cola and Ghanaian serial entrepreneur Nana Bediako who recently joined forces to establish an investment company, Capital Nine Zero (CNZ), to develop Petronia City – a 2000-acre city development project in Ghana.
Why is Africa a land of opportunity?
Because there is so much to be done. Africa imports almost everything just to meet existing demand. As these imported goods are produced in other parts of the world, they’re usually very expensive once imported. As large parts of Africa remain some of the least developed regions in the world, the continent hosts some of the lowest average monthly incomes and as a result, many of the most economically vulnerable people in the world are forced to pay very high prices for their basic needs.
So many of the countries in Africa are also rich in resources, yet virtually none of their economically viable deposits are processed in their country of origin, huge parts of the value chain are effectively exported alongside the raw materials. If there were the means to keep a larger portion of the value chain in country by processing natural resources into refined materials and then producing finished goods this would not only hugely and positively impact the rates of economic growth in these countries but also create skilled and better paid jobs, reduce import dependency and drive demand for consumer goods as living standards and average wages rise.
What are the main challenges you face?
Slow and inefficient government policy-making and policy implementation. Many programs that are conducive to FDI are announced to great fanfare, only for nothing to have actually been put in place several years down the line.
Let’s then talk about the lack of availability of highly skilled labor and the technical expertise available locally to implement large-scale projects. This creates the requirement to import a labor force of large numbers of expatriates, which has significant financial and cost implications for the project.
Fundamental challenges also include logistics and transportation infrastructure; inefficient, poor quality road networks and congested ports which directly impacts on our ability to operate efficiently.
Finally, the lack of a consistent and available power supply, a big challenge, well documented in many emerging African markets.
Would you call yourselves challengers to the established status quo of industrialists operating on the continent?
A challenger assumes there is an established market; industrialization is at its infancy in large parts of Africa, most notably Sub-Saharan Africa. We need to kick-start the industrial revolution in this new frontier. We consider that this makes us more like pioneers rather than challengers.
How do you see your relationship with African banks?
We have good relationships with a number of leading banks on the continent. However, due to the extremely high interest rates associated with local banking finance, it is more often than not economically unviable to finance large-scale industrial projects and developments without the support of international banks and development finance institutions (DFIs).
What African countries have the biggest growth potential?
Those countries with the best growth potential today host the correct combination of political stability and solid economic fundamentals. A great example is Ghana, which has had free and fair democratic elections for the last 25 years and has recently discovered significant oil and gas reserves, the future development of which will bring huge economic growth and prosperity to the nation and its people.
Then take a look at Senegal, one of the continent’s most stable countries, experiencing peaceful political transitions since its independence from France in 1960.
Not only has Senegal recently discovered significant oil and gas deposits, it also has an extensive coastline, which enables it to serve as a major shipping hub. As the capital of the former federation of French West Africa, Dakar is home to numerous banks and institutions, serving as a conduit to the continent’s Francophone countries.
Despite Rwanda being landlocked and largely deforested, the country has made great strides in economic diversification, including the installation of an efficient energy framework and internet infrastructure, which presently covers over 95% of the country. The nation will continue to record year on year economic growth due to manufacturing prowess coupled with the government’s emphasis on its tourism and ICT sectors.
What is lacking today in the African infrastructure development ecosystem?
The biggest single challenge to developing Africa’s infrastructure is the funding. Many African governments struggle to find the sufficient funding necessary to bridge their infrastructure gap with the rest of the developed world, which makes the States reliant on the support of more developed economies. This financial support is often associated with onerous conditions, which in many cases has led to the build up of unsustainable levels of national debt.
Recognizing the implications of these challenges and finding effective ways of dealing with them often leads to opportunities.
In Ghana, in seeking to address import substitution, lack of availability of international quality goods and services and the deficit in skilled labor and stable energy, we have decided to launch the Petronia City Industrial Park (PCIP). The PCIP is a 371-acre free zone enclave, to serve as a platform from which foreign and domestic companies can expand in to the sub region and beyond. Incorporated in to the platform will be our own dedicated power supply, with direct access to water, gas and information and communications technologies.
A privately owned and funded initiative, PCIP will support the government in its objectives to secure foreign direct investment and to create better-skilled and better paid jobs, creating economic growth and rising through sustainable investment.
This is further encouraged by the project’s secured special economic status (FEZ) which provides a framework of significant tax and economic incentives for those companies coming on to the platform.