Sustainable Development in Africa: the importance of family enterprise

By New Europe
The European political newspaper

The European Union’s external investment plan has mobilized €44 billion of sustainable funds for Africa and EU Neighbourhood countries.

The European Commission has singled out five areas of investment, so-called “investment windows”, in which the first actions of the External Investment Plan (EIP) will be implemented. These investment areas are crucial for sustainable development in countries in Africa and the EU Neighbourhood countries.

Micro, Small and Medium-Sized Enterprises (MSMEs) will have the ability to grow significantly.

New Europe has taken the opportunity to investigate examples of already established, multinational family businesses groups enjoying significant success in the African market.

In the emerging markets of sub-Saharan Africa, family enterprises have all the necessary advantages. The business environment requires companies that are value-driven, can leverage a network and are built for the long-term.

Family-owned companies across Africa make up around 80% of all businesses, forming a growing and essential backbone for many of the continent’s economies. Part of their strength undoubtedly lies in a deep understanding of their markets and industries, derived from years of personal relationships with stakeholders across the value chain.

As demonstrated by the business groups that New Europe has identified, African enterprises have been able to significantly outperform rival international businesses in the provision of vital goods and services. Here are three examples of family businesses that demonstrate what is possible in the African market.

METL Group (Dewji Family) – Tanzania

Mohammed Dewji is a former parliamentarian and Chief Executive of METL Group, a conglomerate established by his father in the 1970s. At that time, under the family’s leadership, METL grew from a small trading company to Tanzania’s largest home-grown company, employing more than 24,000 people across the 11 African countries it now operates in.

With interests ranging from trading, agriculture, manufacturing, energy, transport, telecommunications infrastructure and real estate, the Dewji family has incorporated their family values to create a platform for growth across Africa.

Mohammed Dewji’s comments from when he committed to the Giving Pledge, promising to give away at least half of his wealth to philanthropic causes, demonstrates the impact of his family’s values on his decisions. He credited his parents with “instilling the ethos of philanthropy”, and said he would use impact investing to help the disadvantaged and would build a business strategy that sees them “not as charity cases, but as willing and able consumers for products that match their needs”.

MBI Group (Yousuf Family) – Zambia

MBI Group is a privately-owned group of companies, active across three continents. Rooted in Zambia, it is focused on five core sectors: mining, energy, agriculture, fast-moving consumer goods, and soft drinks. The group is chaired by Zuneid Yousuf and has over twenty years’ experience in business ownership, management, and successful delivery in some of the most challenging global markets.

Starting out as a soft-drinks business in the family’s backyard in the early 1990s, the first company, Tangy Drinks, grew rapidly and is now only surpassed in the region by Coca-Cola and Pepsi Co. This business provided a network and platform for the family to move into fast-moving consumer goods.

MBI Group’s portfolio also extends to Neria’s Investments, a fertiliser company, and Delta Energy. In December 2015 the opportunity arose to supply white fuels to the Zambian market, at a time when the country was facing an impending fuel crisis resulting in severe shortages. Following a selective bidding process triggered by the supply difficulties Zambia faced, Delta Energy and three other international companies were awarded contracts to supply white fuels. Since March 2016, Delta Energy’s unrivalled ability to deliver has ensured a continuous flow of fuel, sustaining the needs of the Zambian people and its economy.

In each of the business ventures, the Yousuf family has embarked, they have stayed true to their Zambian roots to build sustainable, well-managed and profitable enterprises.

Ramco Group (Patel Family)- Kenya

Founded by Rambhai Patel as a small hardware store in downtown Nairobi in 1948, the Ramco Group has grown into one of Kenya’s largest conglomerates made up of 34 companies employing more than 3,000 people.

His three sons joined the company after completing their studies and, following initial expansion into the hardware and building supply industries, the company diversified into steel, polythene and office supplies and continues to expand into new sectors as it grows.

The company claims that it is these strong family ties, that still exist within the company today, continue to build on the foundation that has allowed it to grow and expand.