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The Journal of African Business Issue 7

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Welcome to The Journal of African Business, a unique guide to business and investment in Africa. Since the inaugural issue was published as an annual in 2020, the quarterly format has been adopted, giving our team more opportunities to bring to readers up-to-date information and opinions and offer our clients increased exposure at specific times of the year. We cover a broad range of topics, ranging from energy and mining to tourism and skills development. A wide-ranging interview in this issue with a visionary entrepreneur gives a welcome insight into how the private sector can be deployed to solve issues that go to the heart of social problems, in this instance, affordable housing. Related to urban development is the article that lays out the vision of one of the continent’s great cities to create a smarter city. Special Economic Zones have been in Africa since 1970 but there has been a great deal of new thinking about the role that these zones can play in bolstering economic growth and promoting exports. An article explores the chief motivations for the growth of this particular policy intervention and notes that more zones and organisations representing these zones are aiming to work together, not only on a continental level but through the United Nations as well. Executive education can boost the earnings of graduates of Master of Business Administration courses, but can those post-graduate programmes also respond to and equip students with the tools to tackle African challenges? The importance of being properly covered by insurance for extreme weather conditions is the subject of two case studies by the African Risk Capacity Limited, a financial affiliate of the African Risk Capacity Group, a specialised agency of the African Union. And much more... Global African Network is a proudly African company which has been producing region-specific business and investment guides since 2004.

We managed to sell a

We managed to sell a development for more than R26-million and we had made ourselves a commission of about R6-million, which we used to pay off the franchise and buy out the partners that I had brought into the business. I continued to invest in land and the land appreciated in value. The value of some land in Ekurhuleni in particular rose. That’s where our family business started.” AFRICAN HOUSING AND INFRASTRUCTURE FUND With SAHIF having achieved such remarkable success in South Africa, the model will now be deployed in other parts of Africa. Mampeule recently formed the single biggest black private investment company in optical fibre called Digital Investment Consortium (DIC) in South Africa, through an investment in Metro Fibre Networks (MFN), South Africa’s third-biggest fibre-services provider. In addition, he is a founder of the African Housing and Infrastructure Fund (AHIF), which aims to raise as much as 5-Million to invest and diversify its digital and land infrastructure investment portfolio throughout the continent.“We plan to raise capital from local and international pension funds, DFIs and LPs and we have already started knocking on doors as you may have seen us in Davos, Switzerland earlier this year. The capital raise creates a valuable investment platform from which AHIF will scale its current investments in high-speed fibre-Internet access through MFN and other strategic digital infrastructure related business in Africa,” he says, Equally the funds will allow AHIF to accelerate the delivery of affordable housing and facilitate the founders’ ambition to invest in ancillary value chain opportunities such as innovative home loan products in the financial services sector and technological opportunities presented by the zeitgeist of the 4IR and Shelter Tech in South Africa and the rest of Sub-Saharan Africa. Rali is clear that the goals transcend simply building houses : “At AHIF, we recognise the urgent continental and global need for upgrading or building new infrastructure to ensure accessible affordable housing, clean water, transportation, electricity, sanitation and digital infrastructure.” The move by large numbers of people from rural areas to urban areas is a global phenomenon, and Africa is experiencing this urbanisation in every part of the continent. Rali is solutionfocussed: “We need to address that situation by building new cities around the continent.” Using the SAHIF model that has worked so well in South Africa, Rali says, “Firstly, we are going to be looking at Tanzania, Uganda, Kenya and Rwanda in East Africa. SADC is important for us as we are based in South Africa so we are also looking at Zimbabwe, Namibia, Zambia and some parts of Lesotho. We feel that we will be able to penetrate that and at a later stage we will look at Botswana as well.” Rali has started travelling to consult and investigate possibilities. He has met with Rwandan President Paul Kagame in the context of a mooted collaboration with the Sherrie Silver Foundation in the creation of a Talent Development Centre in that country. He furthermore had talks with the Mayor of Kigali about the sort of infrastructure that will define AHIF’s investment strategy on the African continent. Rali is determined that the AHIF must make a big difference on the continent. “We are an impact investor so whatever business we get involved in must make a difference in the community,” he stresses. The impact will be made in several ways. “Firstly, by creating jobs,” says Rali. Also, in terms of bringing in new blood into the real estate sector and empowering young people, women and youth. He wants to make sure that they have “new opportunities that they never used to have”. Rali firmly believes that the construction industry can help regional economies to recover. “We are here to stay. We want to work with institutions, private investors and family offices in making sure that we can create job opportunities by using innovative construction.” BUILDING AN ECOSYSTEM As the affordable housing model is growing and expanding into other areas of Africa, so the offering is expanding in diversity and scope. Just as SAHIF has invested in fibre businesses in South Africa to enable it to service the land it buys, so AHIF will invest in fibre in other parts of Africa, bringing connectivity to some areas that are under-serviced at the moment. And Rali’s thinking goes beyond land, housing and the Internet. He wants to be able to help people solve a range of issues such as home-loan financing and energy availability and he is conceptualising what he calls an “ecosystem” to tackle them. On home loans: “We are also aware that there are some challenges in terms of funding of home loans. Most of the market that we are targeting is battling to get home loans. Traditional home loans are declined for various reasons where you find that maybe the people are small-business owners and the bank’s criteria doesn’t work the same way. We want to create a product within the same fund where we are able to give people what we call incremental funding for them to build their houses slowly like it used to be done in the old days.” Most excitingly, the ecosystem business approach has identified the renewable-energy value chain as indispensable to its ESG investment and asset diversification strategy. In this regard SAHIF has establish a new team of competent renewable energy investment professionals to inform its foray into ESG. The ecosystem begins with the land, extends to the financing of a structure, the building of a structure and the energy needed to power The President of Rwanda, Paul Kagame, with AHIF Founder and CEO Rali Mampeule. The Mampeule Foundation and the Silver Foundation are collaborating on plans to build a talent development centre in Rwanda. Here Rali Mampeule and Sherrie Silver (third right) meet with the Chief of Urban Planning for Kigali, Solange Muhirwa, and the city's Mayor, Rubingisa Pudence. 10

AFFORDABLE HOUSING The Rali Mampeule Property Mentorship is one of several programmes that fall under the Mampuele Foundation that offer support and encouragement to young people. Bursaries are offered to tertiary institutions. that structure. “Before that,” says Rali, “we install fibre in their units so that they are connected and lastly, we are going to make sure that they are able to work and play in the same area so we will invest in retail centres and create work opportunities in the same way that we are doing in this country. “Essentially, we will be building new cities around the continent that are integrated developmental cities. In South Africa we have not built a lot of new cities since 1994, so we want to be in that space of building new cities. There is a lot of demand in terms of housing where people are moving from rural areas into urban areas.” NEW TECHNOLOGIES To solve long-standing problems, new solutions are needed, according to Rali. As he says, “If you’re going to use the same method to solve the problem you are not going to be able to make a big difference. “We looked around and said what other methodology and innovative construction methodology can we come up with for us to be able to accelerate delivery of affordable housing.” One of the things on the agenda is to build houses using 3D printing. In January 2023 a typical RDP house was put together in a day in a project undertaken by the National Department of Science and Innovation (DSI) and the Sustainable Materials and Construction Technologies Research Centre (SMaCT). Rali is chairman of SMaCT, which is a unit within the University of Johannesburg’s School of Engineering and the Built Environment. The plan is to use 3D printing in South Africa first before rolling the technology out across the continent. That drive has started. Says Rali, “AHIF is donating a 3D printing centre for youth development as a part of introducing our technology in Rwanda.” “We have partnered with a Dutch 3D printing manufacturing company called CyBe,” reports Rali. “We are excited that we are going to be using those machines to print houses around the SADC region as well.” Rali describes this option as “new technology for this generation”. He believes that it is something that is going to become the future, not only for affordable housing, but also for high-end properties. “It’s an exciting time for us as our partnership with CyBe can accelerate that delivery of affordable housing in South Africa,” he adds. Rather than worry about technology pushing people out of jobs, Rali notes that previously under-employed sections of the population such as young people and women will have more opportunities in the sector than has been the case in the past. “We are studying the impact of this technology on jobs,” he notes. “Young people are going to be interested in this type of technology and we are going to be able to bring in women who may be struggling to get into the construction industry.” Although the technology won’t necessarily be cheaper, it will definitely result in a project being completed in less time than a conventional scheme. “We can definitely say that it is fast and if you do a project faster, you automatically save some money but it is not necessarily the cheapest method.” Rali maintains that the quality of 3D printing building is also better than the traditional bricks and mortar approach. He is upbeat about what technology is doing and what it might do in the future. YOU DON’T NEED MONEY TO MAKE MONEY The reference to young people being interested in new types of technology is no coincidence. Mentorship and education are a big part of this entrepreneur’s DNA and Rali cares deeply about young people being given a chance. Through the Mampeule Foundation, the Rali Mampeule Property Mentorship ensures that new entrants to the real estate sector have a chance to learn from experienced practitioners and take courses to improve their skills and certification levels. Support for participants on the programme includes partnerships with the South African Property Investors Network and the South African Institute of Black Property Practitioners (SAIBPP). The Foundation supports the SAIBPP UCT Property Entrepreneurship Programme and the SAIBPP Student Chapter meetings and mentorship sessions. Rali is convinced that entrepreneurship is mostly about motivation. According to him, “The key message is that it is not about the money, it’s about the drive. It’s about the passion of wanting to do something and actually going out and achieving it.” He recently told a gathering of young people, “You do not need money to make money in real estate or in business in general.” Rali referenced the many immigrants into South Africa from countries like Switzerland or Greece who have stories of arriving with very little and working their way to success. “So, I tell young people wherever I go, ‘Be like those Greek guys who come to this country with nothing and built their businesses.’” The mentorship programme is a way of bringing new blood into the old business of real estate and training young people to understand the principles. Applications open in January of every year for entry onto the programme. Says Rali, “We want to motivate them to get out there and to grow their businesses.” 11

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