Monopoly money

 Waldo Swiegers/Bloomberg via Getty Images

Christoffel Wiese is a South African businessman and billionnaire who built Shoprite Holidings Ltd., a supermarket retailer, from the ground up. Waldo Swiegers/Bloomberg via Getty Images.

By: Marcia Klein

One of South Africa’s richest business leaders talks exclusively to The Africa Report about his commercial successes and failures, the debates about race and economics in South Africa and his criticism of the government

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Education Campaign: In the Maghreb, a younger generation looks outwards


The need for greater professionalism and training has been recognised among family-owned businesses in Morocco


In Morocco, a new elite is emerging among the children of dynasties dating back some 50 years. Trained in the best schools of Europe and the United States, this younger generation is bringing with it new management techniques and strategic vision.?


Many of the Moroccan graduates from the best European and American schools are heirs to the commercial and financial companies founded at the time of independence in 1956, or else during the first wave of Moroccanisation of businesses during the 1970s. Against a backdrop of privatisation and the emergence of a financial market in the mid-1990s, most of these business empires were then developed or restructured, and they are now applying new management methods that are shaking up the traditional cultural codes of the family-run business world.?


For Bouthayna Iraqui Houssaini, president of the Association des Femmes Chefs d’Entreprises du Maroc (Association of Female Heads of Enterprises in Morocco), these ‘heirs’, who more often than not have been trained abroad, bring a new business mentality as well as the tools needed for modern management. The changes they are bringing to family businesses could be vital for the survivial of these companies.?

Interivew with Mahmoud Triki, Dean, Mediterranean School of Business, Tunis


Although the vast majority of businesses in Morocco and Tunisia are still family-owned or family-controlled, there have recently been fundamental changes in the way these companies have chosen to develop, says Mahmoud Triki, dean of the Mediterranean School of Business in Tunis. Responding to harsh pressures from international competition, larger companies now show “a higher level of professionalism among their top executives”, he adds.?


Among the emerging new elite of the Moroccan business scene there is strong evidence of this professionalism. The strength of the continuing family influence in Ynna Holding, with extensive interests in real estate and the construction industry, is a remarkable one. The children of Miloud Chaâbi, a shepherd-turned-millionaire, now occupy strategic positions in the group, while the septuagenarian Miloud continues to preside over its destiny.


In the family?


Trained in marketing in the US, Omar Chaâbi, the youngest of the family, is now Ynna’s executive vice president and director of communications. The role of Ynna vice president and head of development is carried out by Faouzi Chaâbi, another son and himself a graduate in business management in Paris. Daughter Asmaa studied at Oxford University and before joining the group was elected Morocco’s first female mayor, representing Essaouira.?


“What’s good about being a family business is the ability to reinvent oneself very quickly,” claims Omar. By innovation and redefinition of its strategy, the Ynna group has continued to evolve since its conception. It has followed the changes in the world economy, a trend accentuated by the efforts of the children. A turning point came at the end of the 1990s when the company diversified into markets including distribution, hotels and wind-produced energy. The youngest of the family takes care of ‘China-proofing’, in other words protecting the business from the competition China poses, taking advantage of Morocco’s proximity to major markets and the quality of its services. Today, Ynna Holding has 18,000 employees and a turnover of almost Dh10bn (about $1bn).?


A brother and sister head the Bensalah family holding company, Holmarcom, a player in the food, packaging, logistics and finance industries. Their story began in the 1930s, when their late father, Abdelkader Bensalah, came up with the idea of bottling water from a natural source in the region of Khémisset, near Rabat. Since then, the mineral water of Oulmès has become one of the most profitable subsidiaries of the conglomerate. For 19 years, the head of the business has been Meryem Bensalah Chaqroun, a formidable businesswoman. After an affluent childhood in Casablanca, she left to study abroad, starting in Paris where she obtained a degree from one of its best business schools, the Ecole Supérieure de Commerce. Then she went to the United States and obtained her MBA in international finance and management at the University of Dallas. Finally in 1990, at the age of 31, she threw herself into Oulmès.?


Mohamed Hassan Bensalah, younger brother and president of Holmarcom, is a graduate in management from the Sorbonne and the Paris-based management school l’École des Cadres. He has led the restructuring of the group, which had been in decline, establishing partnerships with other companies. One success that ensued was the creation of Regional Airlines in 1998. Oulmès’s growth was linked to a partnership with another large Moroccan family group, which in 2003 obtained a licence to bottle and distribute the Pepsi drinks range. In 2007, Oulmès boasted a turnover of more than Dh1bn.




In her office in Casablanca, Lamia Tazi, 34 years old and director general of the pharmaceutical company Sothema, juggles phone calls in French, English and Arabic. The company was founded 30 years ago by her father, Omar Tazi, who remains president. It employs 600 people in five factories in Bouskoura, near Casablanca. Sothema is listed on the stock exchange with an annual turnover of Dh700m, three times as much as it had ten years ago. ?


Lamia, with a doctorate in pharmaceuticals from her time in Belgium, is the eldest of three children and the only one of them to work in the family business. She says she is proud to have put “new techniques of management and communication” in place. Over the last five years, Sothema has moved into exports. The father-daughter team seems to function harmoniously. Father Omar is the strategist for the development of the African and Middle East markets, and a factory in Dakar has been commissioned to start production in the first semester of 2009. His more technically-minded daughter will deal with the European and American zones, where the group seeks to develop its business of sub-contracting for large multinationals.


Carbon Credits: Voluntary solutions for climate change


There is growing momentum to involve Africa in the carbon-credit trade, now worth some $64bn a year, but strict regulations may keep it away from certified global markets


Anew project to protect some 425,000 hectares of rainforest in Madagascar’s Andasibe-Mantadia corridor might seem a win-win proposition for the local population – which can benefit by selling non-timber products like fruits, vegetables and fibres – as well as for the rare lemurs that live there. But many African projects like this one have been left out of the lucrative regulated market in carbon credits that has been growing rapidly worldwide.?


Africa is now taking the matter into its own hands and developing the conditions for more carbon-credit trade and for more direct benefits on the ground. Last December saw the launch of the Africa Climate Solution, an initiative led by the Common Market for Eastern and Southern Africa (COMESA), which is also lobbying for the inclusion of projects such as ‘avoided deforestation’, the ‘re-vegetation’ of degraded land, as well as agro-forestry and sustainable agriculture schemes that can operate within regulated global carbon markets. “If they are included, we can take the pressure off our existing forests and use the carbon market to help lift poor farmers out of poverty,” said Sindiso Ngwenya, COMESA’s general secretary.?

Green and gold standards


There is a wide variety of
voluntary carbon schemes.
Read more. 


Africa still only makes up only 2% of the world carbon-credit market, whether of the regulatory kind – through the Kyoto Protocol’s Clean Development Mechanism (CDM), whereby industrialised countries can offset their own emissions by investing in low-carbon projects in developing countries – or in the sprawling voluntary market, which is certified mainly by independent alliances or NGOs. ?


The CDM market for certified emission reductions (CERs) has complex and rigid regulation mechanisms. Only projects from a number of pre-selected (mostly heavy, polluting and large-scale) industries qualify. Those industries get carbon credits through adopting new, more environmentally-friendly technology.


?In Africa, 46% of the current carbon projects are forestry-based, but forestry has so far been largely excluded from the regulatory market. Only one out of the 1,383 registered CDM projects worldwide is forestry-related, and it is in China.?


Take-off will be delayed?


Because CDM registration can take several years, there are long time-lags between initial investment and the first revenue from a project. Green Resources, a Norwegian forestry company that has been planting trees in East Africa since 1997, has yet to sell emission reductions, which is a “terrible frustration”, according to its managing director Mads Asprem. The company’s first project in Tanzania fell foul of CDM criteria because it began before the CDM starting point in 2000. Other, more recent, projects in Tanzania and Uganda have been in the pipeline for months and are still not registered.?


The chairman of the Uganda Carbon Bureau, Bill Farmer, who advises entrepreneurs interested in venturing into the carbon market, warns of the difficulties for companies with little financial clout operating in African economies that lack the infrastructure and business environment to facilitate project development. ?


The alternative for the smaller projects is the voluntary market. Although the lack of regulation and liability to scams have given the market a bad name, a number of new voluntary standards have emerged, and some of these are backed by methodologies just as rigorous as the CDM process.?

 Registered CDM projects

The result is a new-found legitimacy. The voluntary market is “more adapted to our project types and sizes”, says Farmer. “It’s also, in many cases, a learning experience before coming head-on with the CDM.”?


The price of voluntary credits, unlike the market-driven CERs, can vary hugely depending on the size of the project and the type of verification. Forestry and renewable offsets tend to be the dearest on the market, with Africa proving the most expensive at $13.70 per credit, compared to $5.80 in Asia.?


Still, while the price of CERs has gone down, the price of Voluntary Emission Reductions (VERs) has gone up. “The price difference between CERs and VERs is much smaller – €10 for CER, €7-8 for VER – and for the extra inconvenience the CDM involves, project developers may well be more inclined to opt for VER,” said Edward Hanrahan, head of voluntary sales at J.P. Morgan, which last year acquired Climate Care, one of the UK’s biggest sellers of carbon offsets.?


Baby steps?


The Uganda Carbon Bureau’s Bill Farmer points out that conventional financial institutions are not flexible enough for a market that is still in its infancy, which is why he has been trying to create a local carbon market of companies keen to become carbon neutral, a market that is less risk-averse and more tolerant of relaxed standards.?


Information provider Ecosystem Marketplace produces an annual “State of the Carbon Markets” report. Its managing director, Katherine Hamilton, says new standards have raised the bar and many projects that would have started trading credits during the CDM-registration phase are now waiting for the standard’s approval.?


Such was the experience of Norway’s Green Resources. The company estimates it has produced 500,000 tonnes of CO2-equivalent carbon credits since it began operating – half of which has been independently verified by the Swiss company SGS – but refuses to sell them until they are certified to the highest standards available. “If we sold them now, they wouldn’t have the same value,” says Green Resources’ Asprem.?


Despite these different approaches, experts agree that Africa has huge potential in trading carbon credits, particularly if ‘avoided deforestation’ and land-use projects are included in climate-change-mitigation efforts. Asprem says that such projects would also help the most destitute in Africa: “If you plant trees where there is no economic activity, with no other employment, it makes a huge difference, socially and economically.”


?The World Bank is investing actively in Africa’s fledgling carbon market: 22% of its carbon projects are in Africa, and the continent accounts for a third of projects from its BioCarbon Fund, a $91m facility dedicated to ‘carbon sequestration’ initiatives through forests and agro-ecosystems. It has also helped fund Madgascar’s Andasibe-Mantadia project, which is now well under way.


The UN Framework Convention on Climate Change, which runs the CDM and is organising a major conference in Copenhagen in December 2009 that will draw a post-Kyoto road-map, accepts that Africa has mostly missed out on the regulatory market. But this is slowly beginning to change. While there are currently only 29 registered projects in Africa, mainly in Northern and Southern Africa, 94 more are in the pipeline. 

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