The Africa Report : 2019-06-17



TOP AFRIC AN COMPANIES 107 THEAFRICAR­EPORT / N° 108 / JULY-AUGUST-SEPTEMBER 2019 Letting go gradually: Jean Kacou Diagou, founder of NSIA Participat­ions, and his daughter Janine Diagou, CEO TAAHRLREEI­GKHIDTS How do successful familyowne­d African rms beat the odds to survive past the rst generation and continue to evolve? By NICHOLAS NORBROOK Hassen Khelifati, the chief executive of Alliance Assurances in Algeria, recalls the brutal change in minimum capital requiremen­ts in the insurance industry that required a quick financial injection in 2010. “It was quite a difficult conversati­on with the family to get them to open up their equity and go towards the market, but now we are in agribusine­ss, food, education,” he recalls. African capitalism is a tapestry of companies, which are often family owned. The management of family companies bring its own set of problems, like improving governance and handling succession­s. Alliance had one of the happier trajectori­es. It is not the only path available. Take Nigeria’s Diamond Bank. Set up by Pascal Dozie in 1990, it was an innovator and market leader in several categories. Pascal handed the task of running the bank over to his son Uzoma Dozie, who became CEO in 2014. Things did not go well, and the bank’s death spiral ended when it was bought by Access Bank in late 2018. There is a saying beloved of money managers: ‘The first generation makes it, the second generation spends it, and the third generation blows it.’ Luc Rigouzzo of Amethis Capital says: “In my career in both Latin America and Africa, I have seen tragic stories where family groups didn’t have the courage to tell people [read ‘other family members’] that they needed to behave like shareholde­rs and not managers and get out of the operationa­l side of things.” Rigouzzo has long worked with family businesses. He reminds those he works with that just because you own it, doesn’t mean you should necessaril­y run it. This challenge has become a priority for Rita Maria Zniber of Morocco’s Diana Holding, who wants to avoid the third-generation curse: “We are a family group that has only really just started to open up to the kind of corporate governance that will ensure our sustainabi­lity.” Be wary of nepotism The group recently restructur­ed its agricultur­al companies into a sub-holding and sold 22.6% of the equity to Fipar-holding, an investment fund owned by Morocco’s state-owned Caisse de Dépôt et de Gestion. “It is these institutio­nal partners that allow you take the right path and especially allow you to be certain that nepotism will never be the Achilles heel of the group,” Zniber says. FAMILY BUSINESSES

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