Shopping mall trend continues to grow in Ghana

This article was published on the website www.howwemadeitinafrica.com on 10th September, 2013

A few years ago, shopping in Ghana meant boarding a bus to the city centre and wading through crowds of people into an open market to bargain for items. This practice still continues, but a different retail phenomenon is attracting shoppers away from open markets.
 

Marina Mall in Accra, Ghana’s capital

Ghanaian capital Accra’s retail shopping scene has been changing with the development of formal, Western-style malls that also serve as popular hangouts and meeting places, especially on weekends and holidays.

Accra Mall which opened in 2008 with a 21,000m² capacity, attracts an astonishing 135,000 visitors a week, according to Actis, the UK-based property investor which financed the development. South Africa’s Shoprite and Game are the anchor tenants and the mall boasts a one stop shop concept where almost all purchases can be made under one roof.

There are several reasons for this growth in retail property, most notably the 2007 discovery of oil in Ghana and its subsequent production. The country’s economy grew a whopping 14% in 2011, 8% in 2012 and is projected to grow 7.8% in 2013.

Moses Luri, head of retail leasing at Broll Ghana, property manager of both Accra Mall and A&C Mall in the east of the city, explains the growth of shopping malls.




“We have favourable economic conditions here. A growing middle class with disposable income, so now people are actually able to afford some of the brands that they are used to outside the country, or even afford their basic necessities,” he says, adding that people also want to shop in a modern environment.
Last year Marina Mall was opened. It is located in the Airport City area, a multi-purpose shopping and office hub mostly under construction close to Accra’s Kotoka International Airport, and is managed by JHI Properties Ghana, a local subsidiary of a South African property firm.

“Retail is coming up all over the place. I think a lot of people are interested in malls and shops… the setting of the malls where you can go in and you can get everything is more inviting than going to a market where everything is open and it’s crowded and it’s crazy,” says manager of the mall Florence Menson.
This push in new malls is led by South African capital. According to the IMF, the average growth of African economies for last year and this year was between 5% and 6%. South Africa’s economy, the most developed on the continent, is closely tied to the economies of developed nations. However, stagnation in Western economies resulted in South Africa experiencing lower economic growth – less than the continent’s average. Thus, South African brands such as Shoprite, Game, Woolworth, Mr Price and Truworths are looking to other African countries such as Ghana to bolster profits.

Challenges to growth

However, the growth of retail property development is not without its challenges.

“I think the number one [challenge] will be most retailers telling you that the rents are high… import duties seem to be one of the things that they talk about. And then the fact that for new retailers, unfortunately, there doesn’t seem to be any tax breaks for them with regard to the investment that they’re putting into the retail [economy],” says Luri.

Menson highlights another challenge: adjusting to longer working hours.

“I think the people [staff] are not quite ready for working long hours [as demanded in mall situations]. I think human resources management is a huge problem because some of the service providers that we use are not used to these long hours [working on shift basis and closing late at night]. Usually everybody here [in Ghana] works nine to five. Here you have to work till 10pm, you have to work on weekends,” she says.
Menson says the unreliable electricity supply also affects business.

Despite these challenges, Broll Ghana estimates that around 110,000m² of retail space will become available over the next 12- 24 months – in Accra and other cities such as Kumasi and Takoradi (the hub of the country’s oil and gas industry).

There are currently a number of retail property developments underway: the $93m West Hills Mall; One Airport Square and Nester Square, both in the Airport City development; and Oxford Street Mall on the tourist favourite Oxford Street in downtown Osu, Accra. In Kumasi, the $48m Garden City Mall will open later this year.

The world’s second largest supermarket retailer, French firm Carrefour, this year announced it will open shop in Ghana through African distribution company CFAO.
 

Stability attracts investors

Last week, Ghana’s Supreme Court affirmed the results of the country’s December 2012 election, after a challenge by the opposition. Will this political stability attract more investors?

“We have shown that we have stability,” says Yaw Adu-Koranteng, a research analyst at NDK Asset Management, a local financial advisory firm in Accra.

He says most investors moving into African countries are concerned about risk, especially political risk. “We’ve shown that Ghana is a place where their investments will be safe… I think going forward it’s going to be a plus for Ghana in terms of attracting foreign direct investment.”

Menson says a lot of office buildings are under construction. International companies are also moving into the country and need office space. “The economy out there even in the developed countries is not great, even the Ghanaians who are gone [those living abroad] are coming back home. So, I think there’s a lot of room for growth and a lot of people are seeing the potential in Ghana,” she says.

“If you look at some of the grocery retailers, talk about the likes of Carrefour and talk about the likes of Casino Group, all these [retailers] are looking at Ghana. Talk about international fashion labels and they are all looking at Ghana and so there’s a lot of demand coming from there and that’s fuelling all the projects that we have on the table”, Luri says.

Holiday Inn Ghana's GM on Ghana's 2012 election and Business!

This article was published on the website www.howwemadeitinafrica.com on 30th Sept. 2013


Bruce Potter has been the general manager of the Holiday Inn Accra Airport hotel in Ghana’s capital since its opening in November 2008. The hotel was named Best Business Hotel, Ghana, in Business Destinations’ 2013 Travel Awards, and Potter has been named Business Destinations’ General Manager of the Year, Africa, 2013. The hotel also hosted US President Barack Obama and the first family when they visited Ghana in 2009.
 

Bruce Potter, GM of Holiday Inn Accra Aiport hotel, Ghana

Potter has been part of the campaign to firmly establish the Holiday Inn brand in West Africa. He shares his experiences and advice with potential investors.

Describe Holiday Inn Accra Airport’s business? 

We are one of the busy hotels like many – there are 10-12 [upper segment] hotels in Accra. We all have our fair share of our customers. Business this year has been slower than the years in the past and I am putting that down to the high court case regarding the government (Ghana’s 2012 election result was challenged by the opposition in the Supreme Court), which meant that investors have been waiting to see [the outcome] before making any steps to invest.

Every year when there’s an election, business slows down five or six months beforehand on new investors. The current investors have a rally so business in some respects gets busier before the election so that ties and deals can be struck.

Once a new government starts, as in the past for me, [it’s] taken four to six months before the country gets back into proper gear and this year we’re only starting now, with the government now really having been established to stay in power. I think the next three or four months before Christmas will be a big pickup compared to the rest of the year.

 

What was business like before the December 2012 election?

Business is stronger in Accra for hotels, especially the large corporate establishments. Being near the airport makes it a prime location. The average stay for customers is three to four days. They come in on a Sunday, leave on a Friday. Weekends are traditionally quiet for the hotels but on average over the last four or five years, there’s been a 10% increase [in patronage].

Who visits the hotel?

We cover the world. The largest patronage for the hotel will be American followed by the UK, followed by South Africa, but we cover all the areas from Middle East to as far afield as Russia. We have customers from every part of the world. There is a trend for the Eastern countries to be developing [as visitors]. China has taken over in size although they don’t use the hotels as much but they are making a big difference to construction from where I see [it]. But internationally, all the regions are covered.

What challenges have you encountered in Ghana?

The main challenge with the customer is making sure we reach their expectation. In Ghana, the international expectation is high with the new buildings and the terrain, and the development of Accra over the last years… The staff don’t have the travel experience or the international experience to understand what that customer’s expectation will be. So the challenge is to have a training and teaching on each culture, each nation. Around the world everybody has their own preference [of hotel service].

So the quality of the hospitality industry staff is a concern?

The quality of the person is there. If anything, from my experience now in Ghana, the people here are more willing to learn and understand and are [more] committed than I’ve seen elsewhere. But the experience and what they have seen outside of Ghana is only what they have seen on television, and that is quite different to the real world.

Future plans?

The owner of the hotel has two other properties. He has long stay apartments in Accra’s Airport Residential [Area] called Holi Flats, and in the next two to three months we aim to open a five-star hotel in Takoradi [in Ghana’s Western Region, where crude oil is being produced] and that will be branded as a Best Western.

What advice can you give to potential investors?

They need to find somebody on the ground locally who they can rely on and who has got their interests at heart. It is very easy to arrive in Ghana and be overtaken by the excitement of opportunity and very quickly fall into a trap where deception and money very quickly spent can disappear. The cost of doing things in Ghana has been increasing year on year.

So potential in Ghana is enormous, but know your territory. You can’t bring the ready-made product or work practice from America, UK or Europe into Ghana and think that you can plug-and-play. There’s a whole lot of local learning to be done before you succeed.

How Ghana’s Michael Agyekum Addo built his business with almost no startup capital

This story was published on the website www.howwemadeitinafrica.com on 23rd August, 2013

As a young boy raised by his single mother in a poor village in Ghana’s Eastern Region, Dr Michael Agyekum Addo is no stranger to adversity. His mother was a trader and became ill when Addo was six years old. As she could no longer work, Addo took over his mother’s selling activity to provide for his two other siblings.

Michael Agyekum Addo

Later on, the benefactor who supported him financially through secondary school died unexpectedly. Addo completed the last five years of school with his fees in arrears because the headmaster of the school was sympathetic to his plight.

He repaid his fees once he had completed his education and was working as a teacher. In 1972 he entered university to study pharmacy. Addo sold jewellery part-time on campus to earn some money.
After working for a private medicine manufacturing company for a few years, Addo started his own business, opening his first pharmacy in 1986. Since then, Addo has built the pharmaceutical company Kama Group.

Growing his business

Kama, which means “excellence” in the local Akan language, now employs over 400 staff and boasts 11 wholesale and retail outlets across Ghana, two pharmaceutical factories, a micro-finance firm, real estate business and a multi-purpose conference centre.

Getting capital to start his very first shop was a challenge, so Addo set his business up by borrowing almost everything.
“I must say that I didn’t have any money, not a cent, not a dollar, but I depended upon networking, the people I knew,” he says.

Addo says he came from a poor family with no relatives to help him, but had “dreams and determination”. He saw closed up shops and enquired about them. He asked about one closed shop whose owner was living in Ivory Coast, and “he gave it to me on credit”.

Buying the supplies he needed on credit was how Addo started his business. He earned the trust of his suppliers by repaying them as soon as he could. “The furnishing and the painting were all done on credit and I started getting my first supplies also on credit and reliably tried to pay back and collect new stuff, pay back, replenish, pay and replenish, consistently like that and I grew my business with the profit that I made.”

Start with the familiar

Addo is now a successful entrepreneur whose company is named on the Ghana Club 100, a listing of the most prestigious companies in Ghana. He advises entrepreneurs to start a business in an industry with which they are familiar.
“Going on my own was much easier because I knew the terrain. So I believe that… what your parents have been doing, what you are aware of, what you have also tried on as an apprentice, those are the areas that you’ve got to start your [entrepreneurship] life, before you go to what other people have been successful in. The fact that others have been successful does not mean that you can also be successful,” he says.

Teachers can groom entrepreneurs

As a deeply religious person who believes in giving back, he has established the Kama Education Project which trains teachers to make entrepreneurs out of students from a young age.
“My belief is that the teacher can do better, the teacher can do well, the teacher can change the whole world. It is the teacher who churns out the doctors, engineers, politicians, name them. So it’s the same teacher who can create jobs through these people that he handles.”

Addo believes giving students practical insight into their field of study is vital to teaching.
“When I gather these teachers, 500 at a time, I tell them the theory behind teaching which they know already. Then the practical form as per each subject; what are the areas that you can take the children to for [field] excursion for them to see how the topic that you are teaching is related to practical life. You could also invite the contractors or the people in that field, in that practical field, to come to the classroom,” he says.

Addo is concerned with promoting education and entrepreneurship in Ghana, and has written a book detailing his advice called The Seven Principles of Success and Wealth Creation.

DerryDean Dadzie: Ghanaian tech entrepreneur says good relationships are everything in business

This profile was published on the website www.howwemadeitinafrica.com on 18th July, 2013

One of the emerging trends – in Ghana in particular and Africa in general – is the growth of technology entrepreneurs. One of these is the young Ghanaian startup, DreamOval Limited, led by its 31 year old co-founder and CEO Derrydean Dadzie. DreamOval develops internet and mobile software solutions and provides a payment platform for banks and telecom providers. The company has grown to include 25 employees since its inception in 2007. 
 

DerryDean Dadzie

Dadzie started DreamOval at the age of 24 and in 2011 he was recognised as Ghana’s Young Entrepreneur of the Year. In 2012, DreamOval was awarded the National Youth Achievers Gold Award in ICT. Anthony Sedzro sits down with Dadzie to talk about his entrepreneurial journey and some of the lessons he has learnt.


Describe what DreamOval does and give us a profile of some of your clients.

We build software for companies in banking, agriculture, shipping, telecoms, and for individuals.
We have built software for bill payments, online banking, mobile banking and others. We provide software for five banks, including Ghana’s biggest bank, GCB. We also partner with mobile telecom operators and port authorities and others.
We have mobile agriculture software that sends SMSs to 20,000 Ghanaian cocoa farmers, to [help them] increase their productivity.

What motivated you to become an entrepreneur?

I have always had an entrepreneur in my persona and also in the way I do things. From my childhood to secondary school days, I’ve always helped people and I’ve always wanted to try better ways of doing things and taking up opportunities.
The software company I worked for was okay, but I thought we needed to deliver services in a different way, be on the internet, use new technology and deliver our existing services in a channel agnostic way. I reckoned, being on the internet, we could go global… These were the kind of suggestions I brought to the table, but they were not ready to move along with me. So when my friend approached me, I thought it was an opportunity to do the things I believed in. Four of us thus started it together.

How did you finance your startup and what was the process like?

Funds came from friends and family and personal savings of the co-founders. We didn’t spend a lot of money on ourselves… A classmate of ours donated money to us and we bought our own wood and with a carpenter’s help, made our own furniture. A colleague’s uncle gave us money to rent a small office. The passion was there and that was what drove us.

 

Considering your young age, what is the ripe time to become an entrepreneur?

Entrepreneurship [comes from] within. Your challenges and how you perceive them determine how you take opportunities around you. There’s no specific age, but to succeed as an entrepreneur you need to know people. So your life should be built around building good relationships with people.
You need to let people trust you and it can only happen through the way you talk, approach people and the way you show them what you know. That process should be started from a very tender age and that forms the basis of becoming a good entrepreneur. You don’t build a successful business around products. A successful business thrives on good relationships.

What mistakes did you make and how did you learn from them?

Initially you want the business so bad that you don’t care about agreements. You need to take legal agreements seriously. You also need confidence for people to trust you. We didn’t care about relationships, as we felt that once the product was good people will just like it. In other words we did not put adequate emphasis on business model excellence but rather focused on product features and related elements. The challenge with this approach is that you would have built a great product without the corresponding viable business framework to support and drive it.

Describe your dreams for the future

We want to go global by expanding our territories and partner network. We have partners in Singapore and Kenya, plus relationships in USA that contribute immensely to our bottom-line. We also want to set up a technology campus called “Dreamville” to train and raise technology entrepreneurs. We have already acquired the land, and are working on it.

What advice do you have for first time entrepreneurs?

Entrepreneurship starts from your childhood. But if you position yourself well as a person and build your reputation and good relationships, you will do well. For startups, don’t make product excellence your premium but get the whole business model right.