Businessman Simbi Phiri has been criticised by his detractors for always taking risks — and going where angels fear to tread. But in an interview, Phiri shrugs off criticism of his style. Phiri, the highflying construction magnate and chairman of Khato Civils, is plotting his next move in conquering sub-Saharan Africa.
The businessman revealed this week that he is setting up business in Ghana — a stable democracy and West Africa’s second largest economy and market. Phiri says Africa is one of the least understood continents on the planet, but says he is not bothered by the pessimistic views. He believes that Sub-Saharan Africa is rapidly changing for the better and this is the right time to reconsider the potential of this vast untapped market of 850 million people.
Phiri admits that there is money to be made in Africa, adding that the return on investment into the continent has already been substantially higher than anywhere else in the world. “We are looking at spreading throughout the region from Accra, Ghana, where our offices will be based [from] around March this year. We have already secured land in Accra,” says Phiri.
Phiri’s Johannesburg-based construction company, Khato Civils, has extensive experience in the delivery of water and waste water services. The company’s core business includes management, operation and maintenance services for both water and sewage bulk treatment plants — including main distribution, pumping and storage systems, as well as water reticulation and waste water sewer networks. Phiri says setting up business in Ghana will offer his company access to over 300 million in the Ecowas market and highly skilled and trainable labour. He says that while the West African region offers him an opportunity to venture into other lucrative businesses such as manufacturing, energy, tourism, infrastructure and real estate, he will for now concentrate on the water and sanitation business opportunities offered by the Niger River basin.
According to recent media reports, the water in the basin is partially regulated through dams. The water resources of the Niger River — the principal river in western Africa, extending about 4 180 km — are under pressure as a result of increased water abstraction for irrigation and the impact of climate change. Dam construction projects for hydropower generation are either already underway or are envisaged as part of a a bid to alleviate chronic power shortages in the countries within the basin. Phiri sees this as a big opportunity to exploit.
“The Niger River will have to serve the whole region and assist to industrialise the whole region. We will not change the continent without clean water. Without clean water we are not going anywhere. Without developing water resources we will not industrialise the continent,” says Phiri.
“Future wars will be about water. For industries such as textiles to succeed, you need water. The tendency of waiting to do business during rainy seasons must come to an end. We have to build dams — even in the desert. Food security cannot come without water”.
He stresses that this has happened elsewhere on the continent. “The Israeli government has turned the Negev Desert into a source of food production.”
Phiri says he chose to set up new offices in Accra because of the ease of doing business in Ghana. The nation has also been named by various world business reports as among the top five destinations for doing business in Sub-Saharan Africa. Ghana, according to Phiri, also offers flight connections to Europe, the Middle East, the Americas and Asia. Phiri explains that he was also inspired to do business in SubSaharan Africa by the African Renaissance spirit — espoused by Abdoulaye Wade of Senegal, Olusegun Obasanjo of Nigeria and former president Thabo Mbeki.
He says doing business in Africa remains a challenge in many countries, especially when it comes to walking the line politically while dealing with a variety of countries. “When you meet with the ruling party officials, you are viewed with suspicion when you meet with the opposition party officials. For an African businessman this is a tough call. To survive we must avoid making political pronouncements about leaders and politics. But politicians in Africa need to open their eyes and understand that businessmen have a right to associate with whoever they want to. When a business succeeds, it also benefits the same politicians,” says Phiri.