Monthly Archives: August 2012

Guide to Maputo

A guest post by @misswretched 

Getting There: Kenya Airways flies direct from Nairobi to Maputo for approximately $900, round-trip. Don’t miss your flight, as KQ only operates three flights a week: Sunday, Tuesday and Friday morning. You could be greatly inconvenienced especially if traveling for business. Ethiopian Airlines also has a Nairobi – Maputo flight, though it requires a lay-over in Addis. KQ does also have connecting flights via Jo’burg, though you’ll need a visa to transit through South Africa.
Kenyan citizens require a visa to travel to Mozambique, which typically takes 3 days to process. The Mozambican consulate is located in Bruce House, Nairobi. Make a point of calling the consulate to confirm visa fees ahead of time. You’ll need a letter from your host and you can easily download a visa application form online. With a multiple entry visa you can visit Swaziland from Maputo by road, so don’t miss the opportunity if you’re interested. 
 
The Maputo International Airport (also known as Mavalane International Airport) is a beautiful, new, hassle-free airport which Nairobi’s JKIA should aspire to. Though small, the airport is fairly modern and construction of the refurbished terminals by the veritable Chinese is still ongoing. There are no unexpected taxes as far as I know and you can get a visa upon arriving; it’s cheaper but not advisable. The local currency is the metical (meticaisin Portuguese, pronounced meti-cash, also known as mets), with the current exchange rate being 28.4MT to the US dollar. A cab to and from the airport should cost you no more than 600MT (21USD).
Getting Around: The shapas (matatus) and buses are most preferred means of transport by locals. Buses run on a regular schedule and are slightly more orderly compared to Nairobi. People actually queue in line to get aboard. Public transport is relatively affordable (you’ll pay no more than 20MT to get around town). There are a number of tuk tuks, though not as popular.
It is quite easy to get around on foot if you enjoy walking, depending on where your hotel is located vis a vis your meeting venues. Alternatively, you can rely on cabs which are easy to find at reasonable costs.

Beautiful Bilene – Gaza Province
 Communication: Vodam and MCel are the two main mobile operators in Mozambique. For about 200MT, you can get a SIM card if you are unable to roam with your regular line (you’ll have to go through a SIM registration process). It is relatively expensive to make international calls. Wi-fi hotspots include Café Mar Mara, Milano Grill House, and Café Acacia, all for free or for a small fee. You can also access free wi-fi at the Maputo Shopping Center food court and at the airport. Cybercafés are few and far between in the CBD.
Accommodation: Accommodation in Maputo is super expensive. You’ll be looking at approximately $95 for a one-star bed and breakfast with basic, clean accommodation. These are locally known as recidencials and include Hotel Royal and Hoyo Hoyo. Hotel Royal is fairly comfortable if you are on a tight budget. You’ll have a spacious, clean room, basic breakfast, limited wi-fi and friendly service. The one thing they won’t tell you is that guests are allowed to smoke in their rooms, which leaves smoke circulating through the ventilation systems. So if this compromises your comfort, be warned. Whatever you do, don’t stay at Hoyo Hoyo: no fun being cooped up in a moldy matchbox for $95 a night.  
If you are willing to spend more, Hotel Villa Das Mangas is a three-star-ish boutique hotel that’ll give you more bang for your buck than some of the five-stars. You’ll drop about $130 a night for bed and breakfast in this Portuguese villa style hotel, but it’s well worth it. Hotel Cardoso is a five-star Lornhro Group hotel with a beach-front view, but the accommodation is over-priced and there’s nothing to write home about (so I’ve heard). I spent an average of 50USD a day (excluding accommodation).
Electricity is reliable in Maputo, but you’ll need a two-pin adapter to charge any of your electronics, which ou can easily buy one from street hawkers for about 100MT. 

Language: Portuguese is the official language of communication in Mozambique, and you will have no choice but to learn a bit of it. The average person you meet will speak little English, and probably not fluently. All communication and signage is in Portuguese for the most part, and there are no English newspapers. So when you visit Mozambique, don’t be one of those tourists who doesn’t care to learn a word and expects everyone else to communicate to them in English. Instead, learn how to say good morning, please, thank you, how to order your breakfast and how to ask for your bill. It’s easy and people will appreciate your efforts and treat you even more hospitably. You can also learn phrases like ‘fala Inglês?’ (do you speak English?) and ‘não falo Português’ (I don’t speak Portuguese) which can be helpful when navigating your way around. In Maputo, restaurant menus often have both English and Portuguese and hotel staff usually speak decent English.
Food and Drink: Portuguese style galinhaand batatas fritas (grilled chicken and chips) is probably the most popular meal you’ll find in Maputo. It’s often served with lemon, vinegar and salada. Local food also includes xima (shima), a softer version of ugali, though it is not as popular in mainstream Maputo restaurants. Fish and seafood are staples and come highly recommended.
I stayed along Ave. 24 de Julho which has a number of nice cosmopolitan restaurants and bars including Mundo’s, Piri Piri, Mimmo’s and Cristal, and plenty of cafes including Nautilus and Café Mar Mara. One of the nicest cafes is Café Acacia (at Hotel Cardoso on Ave. Patrice Lumumba) which is set on a beautiful park with a view of the beach. Dolce Vita is a more exclusive café-bar-lounge combination, located across the South African High Commission on Ave. Julius Nyerere. The fish market along Mira Mar is a tourist attraction for fresh fish and seafood and there is a cool bar by the name of Xima that serves local dishes as well. If you get a chance, try out a porcaria (equivalent of a typical nyama choma joint) for delicious pork and xima. There is Lola’s Place tucked inside the city, but chances are you’ll have to drive out of Maputo for the porcaria experience.
2M (dois-em) is the local beer, the Tusker of Mozambique if you will. You’ll pay about 40MT for the 750ml bottle. You can get beer and liquor almost anywhere and everywhere, even at roadside kiosks. However, woe unto you if you are a Kenyan who enjoys ‘warm’ beer. The Mozambicans will laugh at you and look at you funny! All drinks are served ice cold; actually there is an ice factory within Maputo that manufactures…yup, ice. Ciders are equally popular and you’ll also get more varieties than you do in Kenya, such as Hunter’s Dry, Hunter’s Gold, Redds Gold and Savannah Dry.
Sightseeing and Shopping: A visit to Maputo won’t be complete without an ocean drive along Ave. Marginal, Mira Mar and Costa do Sol. Costa do Sol has some spectacular views including beautiful condominiums and beach side properties. You could also cross the ferry to Catembe on the other side of Maputo Bay for more beach fun. There are lots of nice little museums scattered around including the Museu da Moeda (museum of money) which is located downtown, across the historical Fortaleza de Maputo, a national fortress. The Caminho de Ferro de Moçambique (CFM), also downtown, is the central train station and is ranked among the most beautiful train stations in the world. Make sure you pass by the Samora Machel monument too. There are also a number of nice little parks within the city including Jardim dos Professores(Garden of Professors) and Jardim dos Namorados (Garden of Lovers) which are perfect for reading a book or relaxing. Mozambique has some first class beaches too, so if you are traveling on holiday or have a weekend to spare (during the warm season), take a short road trip and check out the very best of the Indian Ocean. I spent a blissful weekend in Bilene (Gaza Province), a small beach town 150km north east of Maputo. There are lots more places to visit in and around Maputo so be sure to ask your host or hotel.
CFM Central Train Station

There is a weekly craft market downtown (Masaai market style) every Saturday for your locally made crafts and souvenirs. The Maputo and Polana Shopping Centres offer a more exclusive shopping experience; both host impressive designer stores like Cartier and Lacoste.
Others: All in all, Maputo is a nice little city to visit. I felt relatively secure when walking around, no particular threats or warnings received, and as a tourist I was just asked to be vigilant. I found it rather interesting that residential buildings and commercial buildings are mixed in together in many parts of the city, like banks on the ground floor of multi-storied housing blocks. There is also something very European about Maputo; maybe it’s because the people there eat bread with every meal (in little loaves, never sliced) and speak a language more ‘dreamy’ than French or English…
See also Guide to Nampula

Naushad Merali on Entrepreneurship

Kenyan businessman Naushad Merali, known for his Sameer Group investments in banking, telecommunications, manufacturing, agriculture and other sectors, gave a talk at a new Entrepreneurs Club event on Thursday. He briefly spoke about his business life and then took part in a Q&A session.

Excerpts: 

Merali spoke about how he grew up in Mombasa, and would take a bus twice a month to sell Indian sweets in Moshi to pay for school fees. And then worked for a few years at Ryce Motors as an accountant, he was able to buy it out from the owner who was retiring and also convince Daihatsu that he could sell their short wheel-base vehicles in Kenya, landing their franchise.

(Think) Big: when he signed the deal to buy the First American Bank in London, Merali did not have the money, but by the time he flew back to Nairobi people had heard and were amazed and want to partner with him – so by the time it came to conclude the deal, he had a cheque to pay. Same with Kencell – when MTN bought out Vivendi they were sure that they’d get their way and he would not be able to match their offer, but he chose to exercise his preemptive rights and spent 15 days flying around during which time he got funding from Celtel.

Exits: Don’t get emotional about owning a business, and know when to cash out. Selling out, and getting liquidity and value for all your hard work is the only way to grow. e.g. He took money from communications and put it into the fibre cable business.

Give Back: Do this and you’ll get back more. He’s done this by listing his shareholdings, the creation of the Jaffrey Sports Club on prime land that is free for all the public to use, and other philanthropic activities that his wife manages.

Growth: Diversify, but don’t take money from one business to put it in another one. Grow each one with its own capital, and if one fails, it goes alone.

(Take advantage of) Opportunities: On a flight, he sat next to a man who he conversed with and found that was trying to sell his company called Sasini. He had no idea about tea and coffee, but shook hands and had a deal.  Same with his IT investments did not know muchAlso, when President Museveni told him that farmers were pouring milk because there was a shortage of milk processing, he set one up and expanded the capacity of the country to process milk many times over.

Partnerships: Choose the right partners – business partnerships are harder to break than marriages and you need partners who align with your vision for the next few years. He found that his new South African partners had a different style than him so he cut back his internet interests.  

People: Kenya’s greatest resource is its people – hardworking resourceful staff. He mentioned how he motivated his salesmen at Ryce Motors, by giving their wives cheques to hold, that would only be signed if their husbands sold enough car volumes. Also, he is very protective about creating and retaining jobs for workers (the Sameer group now has 24,000 staff). He said when Firestone chose to stop manufacturing their brand in Kenya (and shut production), he bought them out and created a new brand – Yana. 

Succession: On business succession – life is finite, and many businesses here won’t last more than one generation because of secretive management styles, unlike those in developed countries that last hundreds of years. He advises that you bring your kids into the business open your books share your secrets, but don’t hire relatives as they are very hard to fire, and can cause domestic stress and lawsuits. 

TEA: His motto for business and finding new partnerships is (TEA) T – trustworthy, E efficient A – attitude (i.e. work with people with positive attitudes).

Technology industry: The problem with tech is that companies require continuous investment year after year – so tech entrepreneurs should know when to take on new partners and funding, perhaps giving up a little equity to like-minded partners, if they are to grow.

Final advice from Merali: Invest in agro-processing & food value addition as that’s the future.

Diamond Trust: Third Rights

Diamond Trust Bank is back to shareholders for some fundraising after two rights issues in 2006 and 2007.
Since venturing into  Uganda and Burundi in  2008, it has become a pan-African bank growing from assets Kshs 45 billion and Kshs 1.6 billion in profits to 2011 assets of  Kshs. 107 billion and profits of Kshs 4.3 billion. The additional  funding will be invested in Tanzanian Uganda and Burundi as well as alternative channel categories.
Like the previous issues, this one closing on Friday, August 10, is likely to exceed the full subscription. All the large investors – Aga Khan Group (AK fund for economic development fund  (owns 17%), Habib Bank (11%), Jubilee Insurance (10%), and the International Finance Corporation (IFC owns 10%) have committed to take up their rights.
The above commitments are for 51%, and with the minimum target is 60%, there’s a rump option in case other shares are not taken up but it’s expected that most of the 11, 242 shareholders will pay up (there was little trade in rights when it opened).

Contrasting Rights
Year – Nov-06 ; Nov-07 ;  Jul-12
Target (Kshs M) – 735 ; 1,600 ; 1,809
New shares (M) – 15.5 ; 23.3 ; 24.4
Price (Kshs)  – 50 ; 70 ; 74
Ratio  –  1:8 ; 1;6 ; 1;8
Budget (Kshs M) 41.6 ;  54.7 ; 57.6
 

Others
  • IFC has also provided funding of about $65 million for the bank operations.
  • All the arms of the company are profitable; Kenya profit after tax of Kshs 2.2 billion in 2011, Tanzania (own 55%) Kshs. 398 million, Uganda (own 54%) Kshs. 315 million and Burundi  (own 67%) Kshs. 31 million.
  • Diamond Trust only owns 3 of their branches in Kenya (out of 38) , and none of the 22 in Uganda, 14 in Tanzania or 4 in Burundi.
  • There’s no indication of interest to venture into Rwanda or South Sudan as with many other Kenyan banks.

Shirt Shopping in London

I recently made a trip to London for a business event.  Before I left Nairobi, I was also assigned a mission to go buy some shirts at a famous London address. These are real cotton shirts made of good strong fabric that will last for many years and washing cycles.

I was told to look for Jermyn Street, which is a small street that near Piccadilly Circus Train Station. What I found was a narrow street full of shops that specialize in men’s clothing – suits, ties, and shirts and to lesser extent shoes and other accessories like belts and cuff links.

The stores have old family names, many starting with the letter H – Hilditch & Keys, Hawes & Curtis, TM Lewin, with the year the company started e.g. 1866 to convey their long history of designing and producing fine clothing.

Shopping for shirts was a lesson in professionalism and efficiency. You’d walk into a shop and be faced with racks of shirts neatly folded and arranged in tall shelves by neck side ‘14.5 inches’ followed by ‘15 inches’ next to  ‘15.5 inches’, and on to the largest.  Shoppers would step up and pick out the colour of the shirt they wanted, and look at other shirt features like the fit (normal or narrow) and shape of the collar.

The shops all had assistants, smartly dressed young men and women, who were ready to help. They can look at a customer and accurately assess their size with just a momentary glance and what shirt, trouser or suit will fit their body type. They only reach for a tape measure if you challenge them or to confirm their assessment – and are rarely wrong.

Another unique feature of the shops was their understanding of who their customers were. In many American cities or even Nairobi, if a black or shabbily dressed person walks into an ‘expensive’ shop they may be followed around by a shop assistant who will gauge their insecurity potential and who may not be very friendly in the belief that this particular customer can’t afford to buy anything in the shop.

But not on Jermyn Street, which has a surprisingly large amount of West African customers. Among Africans, our brothers and sisters, from the Western side of the continent are known for their investment in fine clothing with cost not being an issue – and the shopkeepers on this street will attest that they are good customers with fine tastes. So despite being casually dressed, I was able to walk up and downs several shops, pick and choose shirts, ask and receive advice and tips, and generally shop without being hassled.

The shops also understand the power of the sale, which appeals to casual and spontaneous shoppers like myself – and on this summer day, most of them had ‘sale’ and ‘discounts’ advertised in their shop windows. The shirts I got were priced at about  £70 (Kshs 8,400) per shirt, but I paid between £30 and £50 for them and the assistants carefully packed them for me to take to Nairobi.

Article first published in 2010.

Nairobi Business Park Expands

At the entrance of the Ngong Racecourse is a set of office blocks that blend with the trees and grass of the racecourse comprise the Nairobi Business Park. It is part of the $300 million portfolio of Actis.
The first phase of the park was completed in 2004 and  has attracted ‘blue chip’ tenants including DHL, Finlay, Nokia, BAT, and Coulson & Harney advocates. The next second will be 15,000 sq. metres of buildings to house cafes, restaurants, banks fitness centers, shops and is budgeted to cost $22 million.

 The investors aim for the Park, which overlooks the race track , golf course and forest complex to comprise green buildings that meet US green building council standards through measures like water recycling, rain water harvesting, solar lighting , and even eliminating air conditioning. Also to keep the green look, the Park which has one of the most generous parking rations per occupant, will have parking spaces underground. 

The Park is expected to benefit from the future expansion of Ngong road to dual carriage way and completion of a bypass road that is about 2KM away (by Lenana School) – and when all the road are done, a drive to Jomo Kenyatta airport could take 30 minutes, and Westlands, 10 minute drive. 

 Actis , which developed both phases of the Junction mall and recently acquired 32 acres from East Africa Breweries on Thika Road to develop Garden City, with the largest mall in East Africa, also own a majority stake in the Mentor Management that develops, sells and manages properties from concept through to investor exit.  Other partners in the Park are the Association for the Physically Disabled of Kenya and the Jockey Club of Kenya.
 
Separately,  an article in the Star last week about the lure of office space in the suburbs, noted that the current cost of construction for high-end office buildings in Nairobi is about Sh60,000 (~$705) per square metre and that developers could yield a 100% return on sale or rent.