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‘It’s tough to do business in Africa’

Addis Ababa – Politicians were to blame for high airfares that prevented Africans from travelling around their own continent, Mossadek Bally, founder, chairman and CEO of the Azalai Hotel group said.

Bally, who was part of a panel in the closing session of the three-day US-Africa Business Summit in Addis Ababa on Thursday, said it was easier for Africans to take a plane to fly to Dubai or Paris on holiday than within Africa.

“Just because we have all these politicians, they all want their borders, their states, their national airlines, the prices are so high, and they are restraining Africans from travelling on the continent,” he said.

Bally said he once had to go to Lusaka, Zambia, for a conference, and it took him three days to travel there and back from Bamako, Mali, for a one-day conference.

“If we want to develop this continent, let’s take out the barriers and have at last a continent, not 54 states,” he told delegates.

Bally also said it was tough to do business in Africa. In the hotel business, for instance, it was difficult to get land, and it could take up to three years to get a building permit.

Then you needed a back-up generator, which cost $300 000, and you needed a water treatment plant, because most municipalities in Africa didn’t have that.

Finance was difficult to get hold of, as were skilled workers. “In all of West Africa, we don’t have a single hotel school. In all of Africa, we don’t have a school like Lausanne,” he said.

The Lausanne Hotel School is considered to be one of the top hospitality management schools in the world.

Bally said it was commerce, not commodities, that would help Africa industrialise and develop.

Zemedeneh Negatu, managing partner at Ernst & Young, said regional integration was important in Africa, because that was what investors wanted.

In a fast-moving consumer space, multi-nationals didn’t want to build factories in countries. “They are looking for regional hubs, and the way to make it attractive for such investors is to create regional hubs,” he said.

The move to create free trade in Africa was a “big initiative”, he said.

The African Union at its summit last week in Addis Ababa said it wanted to see free movement of people in Africa by 2018.

He also said entrepreneurship from within Africa would drive development in Africa, not commodities.

“The commodity price rise came to an end a little before African countries could reform structurally,” he said. “Africa’s transformation isn’t going to be driven by FDI (foreign direct investment), but by Africa itself, most likely by entrepreneurs.”

He said, however, that the rise in entrepreneurship in the continent was “very encouraging”.

Toni Luck, who is a special adviser in the Petrolin Group, agreed business in Africa wasn’t easy. “You have to have courage and get into business for the long haul. If you want something quick, this isn’t the place to do it,” she said.

She said it was necessary to invest in human capital. “When we talk about Africa rising, we are talking about people. The thing about Africa is, the more of us are winning, we all are winning. The more of us do well, we all do well.”

Bally added that the African diaspora should be encouraged to come back and work in Africa. “Please, African diaspora, think about Africa. Think about coming to Africa. Start your projects. It’s not easy, but it’s beautiful when you come and succeed. I had the possibility to stay in the (United) States and stay in the beautiful San Francisco where I studied, but I don’t regret coming back,” he said.

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