How Africa’s Billionaires Make Their Money | Forbes

hi everybody I'm Diane Brady I'm here with my colleague Rob lafranco who's an editor on the wealth team talking about billionaires in Africa Rob Crystal how many are there we have a 19 billionaires that we have counted in Africa this year is that oh I mean that sounds like a relatively High number I mean it's higher than last year was it I guess it depends on I mean Africa is an extremely vibrant region country by country differences of course but as we know China is flooding money into Africa um I mean it's it's just booming the consumer Market is booming in many countries there so um I depends on your perspective whether it's a lot or a little but it's been a stable number for a long time which is interesting how stable that money is because often it's dependent on the sector you're in or how tied you are to the politics there I think what I have seen in Africa is the it's either old money that goes back to say the diamond industry of South Africa which is the good old days and you got Israeli billionaires from that market and you got South African billionaires from that market but then you have something like Nigeria which is a kind of a free-for-all economically but no one really gets Rich there without some kind of in with the government so it's not quite a China type situation yeah but um you can't do it without having some sort of government connection well you've just named two so the three markets where you see a lot of concentration of wealth you know it would be Egypt right Egypt Nigeria South Africa yes correct talk a bit about the nature of wealth in those places I would assume Nigeria for example would be Commodities to some extent the richest man in Africa who is Nigerian aliko dangote he uh has it's basically from cement sugar oil um for sure right resources I mean I Out of Africa it seems to be natural resources and Telecommunications I mean you think it's you're building the infrastructure it's a region that kind of in many countries skipped right over copper telephone lines and went straight into Mobile phones there's fortunes to be made there and lots of European companies uh you know orange for example in in um uh in Maracas can say Mozambique I was like no it's an m word for example which has investments in Morocco you know there's a lot of money that is going in to support that development of mobile markets which is not just telephones it's the way people bank right and PESA and Kenya for example um you know it's I'm let's step back a second and talk about um this cohort of 18 billionaires since you've been tracking it for a while can you tell us a little bit more about them and we know who the richest man in Africa is who are some of the other sort of regular players that show up on this list uh yeah you've got uh folks like Mike adenuga who is either the second or third richest uh man in Nigeria who is also similar to dangote has telecommunications Investments and um uh Commodities Investments um you've got someone like esad RAB who is the only billionaire that we've been able to find out of Algeria um and has a company that is quite secretive but has enough there's enough out there in the public record to show his dealings with companies in France and across Europe to know that this is legit um but it's a situation it's a very difficult reason to get information from and they've had a they post the revenue number for the company publicly traded no it's private I was getting the same Revenue number for the past 15 years it's like when GE used to have its earnings to a penny every single quarter well good for you for being so able to predict the way that we're just going so our reporters are tasked with okay they're dominant tonight they are the dominant company in Nigeria Algeria it's a conglomerate it's consumer it's industrial it's everyday plus the other stuff that they do around the world so you really have to year by year look at what the Algerian economy is doing so you can get a sense of where is this company what's the real picture of this company's Revenue how involved because there journalism and there are many people who prefer not to have their wealth judged you know Eve schweinard comes to mind you know the Patagonia guy one of the reasons he gave away his money was didn't like being listed on the billionaires list for Forbes and then there's people that will you know Donald Trump comes to my will bring you into their office to prove how wealthy they are in that Spectrum where would a lot of the African billionaires fall you know on a percentage basis I'm going to say that as a country the U.S aside because we have a fair number of billionaires who have who are obsessed about the number we have on them they are they're actively engaged with us in different ways I mean there's folks like nikkiopian Oppenheimer Diamond well from South Africa you'll never talk to us Johan Rupert will never talk to us I mean that's that's almost Legacy of colonialism Colonial Family money that is not going anywhere right but then you've got you know folks like Mike idenuga or Christoph weasel who's also South African or another new money South African guy named lady Kirsch who we don't count on the Africa list because most of his business Investments are now in the UK Israel and the United States so we consider him a European billionaire but they are they're very active in communicating to us not only how the assets they hold are infinitely more valuable than what we give them credit for but also to kind of cut down the other guys to basically say yeah they may be publicly traded but you know that stock is not worth what the market thinks and it they have an element of truth to it isn't that true everywhere it's more so in like it's more Nigeria it's more so not necessarily just in Nigeria though Nigeria happens to have this more than other countries on a percentage but when I when there's a company that has a public float of five percent for example meaning 95 of the company is held by one individual or a small group well that's essentially a private company and how do you face in the numbers you have is it hard I mean I know we were this list came out when we had faith in the numbers so it's taken a lot of reporting to get to this stage it does and there's two ways you can go about it and it depends on the company and the file how you do it so we've talked to many adolescents and they say well if you have a company that has got only five percent of its shares can be purchased by someone outside of somebody sitting on the board well you need to Discount the value of that company by at least 40 percent because as some billionaires reps have told us essentially you have a guy who can call his brother-in-law who's gotten Rich because the guy has made him Rich by giving him a chance buy you know 2 000 shares because I need to have the price Forbes is doing its list again I need to have that price up right right right so it's very easy to manipulate the price of the stock when you have so few of it in the public hands whereas you look at something like Google where I don't know what percentage of it is publicly traded but it's really hard for Sergey and Larry to manipulate the price of Google yeah yeah that's sort of the complication we get into some of the companies that are publicly traded well we just value them as a private company if it's a publicly traded Telecom company and there's only 2 000 shares well there's enough telecom companies in Africa or elsewhere that are publicly traded with operations in Africa and you can use their Market valuation and since it's a public company with a little float their financials are reported whether they're accurate financials or not is another question but you can do evaluation now so there are countries in the world China for example where you're ties to the government can be critical to your underlying wealth especially if if you're in a business that the government has a lot of you know impact over like an internet company what is it like for a lot of these players in Africa are they intimately tied to particular regimes or is it much more just self-contained regardless of who's in power it it varies a little bit but more so that it's connected to the people in power but they span the administrations so for someone like Nikki Oppenheimer or Johann Rupert it doesn't matter who's in power in South Africa that money is not going anywhere it's been the family for too long but for someone like Christoph Risa who's from South Africa he made his forties he's a new billionaire if you will from a gross retails retail sales um and he wasn't but he invested he built his business invested in another business which ended up having an accounting Scandal so he lost nearly all of his fortune fought clotted back settled it's almost like a Donny and in India but he wasn't really at fault right he sued the company that he purchased that had this account okay and was rewarded with shares of the company that he folded into it and so volatile back on our list now is he connected to the government in South Africa sure but not in the same way that say um who just opened up a refinery in conjunction with the Nigerian government you know in Nigeria it's kind of hard to do anything I suppose without dangote being involved somehow well let me ask you one more question or many more if you've prefer to uh go on about this but a lot of people look at billionaires almost as I hate to say Canary in a coal mine but they look at them as really an indicator of where the world's going where wealth is being made is is that can we look at Africa since we're talking about you know old money you certainly talked about the Telecom boom to get some sense of of where the patterns of growth are what to be excited about or is it really not a good indicator as to what's happening on the continent as a whole I think you can look at it as on the continent for sure and not globally no but again touching back on the on the Telecommunications element of it like that is a market that is going to create wealth whether it's billionaire wealth or not it's going to create a lot of wealth instant infrastructure correct and as smartphones proliferated across the continent well there's going to be internet fortunes made out of Africa um so in that sense yes and then if you look at something like the commodity side of it the the oil or anything like that well that's always going to be a part of Africa's economic history and growth um it's just more expensive to actually create wealth out of that kind of business so there's going to be a fewer number it's not going to be as dynamic because like under uh dangote and andanuga are always going to be at the Forefront of that because they now have the resources and the capital and the assets to invest and reinvest and give Aid to the government to create these refineries that they then will ship the oil out to the rest of the world not a small entrepreneur is not going to do that they may come up with some sort of way to clean the oil some some but that's a different kind of stuff and and I know no women on the list any any that are um coming on the radar or really that's they're not the ones making the big Fortune there was there was a woman on a list from Telecom um but there was a scandal there the scandals are a common theme lost wealth is a common piece across Africa boys Club this year might change this year yes right change here's hoping yes thanks my pleasure

Channel: Forbes

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Keywords: Forbes, Forbes Media, Forbes Magazine, Forbes Digital, Business, Finance, Entrepreneurship, Technology, Investing, Personal Finance, Christoffel Wiese, Africa, South Africa, Nigeria, Alike Dangote, Ghana, Benin, Egypt, richest people in Africa, Richest Africans, Richest Nigerians, Richest South Africans, Aparteid, Blood Diamonds, wealth in south Africa, Apartheid in South Africa

Id: ixAHnxICl8k

Length: 12min 37sec (757 seconds)

Published: Thu Apr 06 2023