A Journey From The Iron Curtain To Africa
You learn to treat it as a challenge and not a problem, whilst constantly finding solutions
“In a growth mindset, challenges are exciting rather than threatening. So rather than thinking, oh, I’m going to reveal my weaknesses, you say, wow, here’s a chance to grow.”
– Carol S. Dweck
On December 31, 1991, the USSR ceased to exist. The Russian Federation, a new state, embarked on the road to democracy and a market economy with no clear plan of how to complete such a transformation. I spent my twenties building a career during the turbulent decade following the collapse of the Soviet Union. For me a time of considerable development and growth.
When I arrived in the autumn of 1989 on my first business trip outside of Singapore, I did not speak Russian, I did not understand the history and culture of the country, nor was I prepared for the severe winter. Everything was alien to me, yet I was excited with the unknown, in awe with Russia and the endless possibilities I saw in front of me.
I first engaged a Professor of Linguistics from Moscow State University to teach me Russian three times a week two hours each day. With no CNN or BBC, nor any English channels, every street sign in Russian and barely anyone speaking English, I had to pick up Russian fast. Having formally studied Mandarin since the age of four till eighteen my professor was confident Russian would be easy for me. She wasn’t wrong, I was able to read, write and converse in basic Russian within three months.
Managing a small business in Russia required riding through domestic turbulence and a succession of shocks. In an era of corrupt officials, inefficiency, informal practices, violence, murders by bombing or gunfire involving the Russian mafia, I was in over my head, yet drawn to the thrill of it all.
Being thrown into the deep end, leaving your comfort zone, facing adversity, will tax your perseverance to the point where you are forced to grow and do things differently to achieve your goals. I was determined to learn, driven to succeed, mentored by an entrepreneur who was my boss at the time. So began my decade long journey in post-Soviet Russia which was struggling to overcome cataclysmic political, economic, and societal challenges.
I observed the Russian transition at first hand, from Gorbachev, to the fall of the Russian white house, to Yeltsin and now Putin. I was part of history in the making. It was here that I learnt in chaos there’s opportunity, that there is an offsetting opportunity in every obstacle or adversity.
For a young man from Singapore with little knowledge about computers, ferrous and non-ferrous metals, oil & gas, building materials, I learnt fast, familiarising myself with different industries, brokered profitable deals. With the adrenaline rush I got from each successful deal I closed, I challenged myself further, the sky was the limit I said.
Starting in Moscow I ventured inwards to Yekaterinburg, Krasnodar, Rostov, Kazan, Perm, Novosibirsk, to every corner of Russia where there was a business opportunity. I began to be drawn towards frontier and emerging markets, I realised being relatively untapped, they offered a higher growth potential. Not satisfied with just Russia, I travelled across the border to Ukraine, Kazakhstan, Uzbekistan, Georgia, Armenia, all the countries in the CIS, covering thousands of miles on planes, road, and rail across multiple 1st, 2nd and 3rd tier cities and borders.
My life was threatened more than once, I’ve been robbed, thrown in jail for refusing to pay a bribe for questionable traffic violations. I paid a hefty tuition fee, but it was well worth it. The learning curve was exponential as Russia taught me to face my fears, to learn to trust my gut feel, to be resilient, to improvise and to develop new perspective and ingenuity. Russia was my University of Hard Knocks, my Harvard Business School.
The Soviet Union enjoyed extensive relationships across Africa for decades through its support for national liberation movements in Angola, Mozambique, or Guinea-Bissau. These relationships came to an abrupt halt with the collapse of the Soviet regime.
The Patrice Lumumba University in Moscow (renamed Peoples Friendship University of Russia), established in 1961, was named after the first prime minister of Congo. Its mandate was to provide education to students, especially from poor families across Asia, Africa, and Latin America. Prominent African politicians, including few of the older generation studied there, included Namibia Hifikepunye Pohamba, as well as some younger ones, like former prime minister of Chad Youssouf Saleh Abbas and the Central African Republic’s former president.
Back then the university had small cafes started by enterprising students offering delicacies from their home countries, in the early 1990’s this was the most authentic ethnic food you’ll find in Moscow at affordable student prices. It was here that I was first introduced to fufu and jollof rice, way before I stepped into Africa.
My first introduction to Nigeria, Ghana, Cameroon and DRC began 30 years ago when I made friends with students from these countries who were working part-time, either bartending or waiters at establishments I use to patronise. I had no clue where these countries were, but my new friends were kind enough to give me a quick lesson in geography. We were strangers in a strange land, eager to learn from each other, and slowly a bond was formed. Via the same university I met students from Peru, Brazil, Nicaragua, Philippines, India, etc, many of my friends till today.
Never did I imagine that one day I’ll be doing business across multiple countries on the African continent nor how prepared I will be because of my experiences in Russia. The Russian rouble crisis or the Russian Financial Crisis hit Russia on 17th Aug 1998. My first financial crisis as a working adult, not my last. The government devalued the rouble, defaulted on domestic debts, the whole system just crashed, affecting the economies of the neighbouring countries as well. The crisis led to the fall of many companies, exodus of many expats. It was time to leave, regroup, reassess, unlearn and relearn.
“Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantage.”
– Niccolo Machiavelli.
Back home in Singapore, I realised how much I’ve missed out on the growth opportunities across Asia. My Russian and East European expertise brought me back developing business across the CIS and East Europe but at the same time I prospected for business across South East Asia. I travelled extensively developing business across China and India. Not wanting to be labelled as a Russian or East European market specialist, I was constantly looking out for my next challenge. This challenge was thrown to me by a Chilean company who were expanding into Africa, seeking someone to lead the charge.
Having no knowledge about Africa I networked every event, forum, seminar, etc. involving the continent. It was at one of these forums that I met a diplomat from the Angolan embassy in Singapore whose ambassador at the time studied in Russia during the late 1980’s. He found my own experiences intriguing enough to render me an audience with his boss. Divine intervention perhaps. I spoke no Portuguese and although the Ambassador and I spoke English we just could not help speaking Russian for an hour or so, sharing our love for Russian music, history, art, literature and politics.
Interestingly my Russian language skills opened my first door into Africa, taking me a week later to Angola, subsequently on a journey of discovery across the vast continent. In Luanda, my first client only spoke Portuguese but fortunately his sister studied in Russia, at Patrice Lumumba University no less, so we conducted our business entirely with me speaking Russian to his sister whilst she translated in Portuguese.
I spent the first one and half years in Africa traveling on trade missions and on my own starting in the East covering Djibouti, to Uganda, Kenya, Rwanda, Ethiopia, then to West Africa covering Congo Kinshasa, Congo Brazzaville, Cameroon, Gabon, Ghana, Togo and Benin. Africa is a continent, not a country. It’s made up of 54 countries with a combined population of over 1.3 billion. There are cultural, economic, and linguistic differences across the continent, more so between Sub-Saharan Africa and North Africa. The number of languages spoken is between 1,250 and 2,100, some even estimate it to be 3,000. Nigeria alone has over 500 languages. It’s crucial to spend time understanding the cultural, language, and the people. Do not make assumptions.
Armed with my limited French language skills, I boldly ventured on my own to Mauritania, Senegal, Mali, Gambia, Liberia, Burkina Faso, Niger, Nigeria, Chad, Central African Republic etc., networking with locals and foreign businessmen along the way, learning to navigate the markets. Friends eager to explore Africa but fearing the unknown soon joined me.
I drove from Ouagadougou to Bobo Dioulasso in Burkina Faso starting at 5am for 5 hours just to meet a couple of clients and back that same day after 10pm. I’ve travelled on bus from Maradi to Tahoua in Niger just to meet a client, drove from Bamako to Timbuktu in Mali, crossed the border from Benin into Nigeria, from Nzassi into Cabinda, I’ve been robbed in Uganda, had unpleasant experiences with overzealous custom and immigration officials, etc. I chalk it up as exhilarating experiences.
In Nouakchott, Mauritania, whilst driving around the city looking for a Chinese restaurant, I stumbled upon a new Chinese trade association building (six-story high) who welcomed me with open arms simply because I spoke fluent Mandarin, without an accent. It helped that I mentioned my wife was of Fujian descent, which immediately made me family. I was given an open invitation to stay with them (the association had a restaurant and a hotel within the building) any time I’m in Nouakchott, and to call them should I need any assistance. With an increasing number of Chinese businesses venturing into Africa, my Mandarin language skills have come in handy. I was blending in in more ways than one.
I slowly understood the operating environment of the many markets across the continent, the colonial history, the Francophone, Anglophone and Lusophone countries’ mindset, tribal differences, the CFA zones, the ethnic business communities that hold monopolies on some trade, trade blocs, distribution of goods, the porous borders, etc. Several countries on the continent are plagued by political instability, spiralling corruption and poor governance. It’s no secret that things often get done here by cutting corners, greasing palms or looking the other way. These are common, harsh realities, and taken for granted.
Corruption remains a major issue in many African countries, affecting the lives of citizens at multiple levels. Illicit trade has had a devastating impact on legal markets and on state revenues. The porous borders across Africa today have led to the rise of trans-border crimes. Poor landlocked nations, such as Chad and Mali are subject to significant amounts of goods transits along roads and have largely uncontrolled land borders. Poor road infrastructure makes transporting goods from ports to inland countries costly and time consuming.
Differences in taxation policies and subsidies contribute to smuggling across borders. One example is fuel, which is highly subsidised in one or two countries, creates an incentive for the product to be smuggled into neighbouring countries that border them. “This Is Africa” or TIA as it’s commonly used by African’s and non-Africans basically means “take a chill pill, go with the flow, relax, this is how it is in Africa”, often as a sigh of resignation. Over time you start to learn to accept and use this term on a regular basis. C’est la vie!
Across the continent there are a range of inconveniences, from power cuts, general inefficiency, infuriating bureaucracy and questionable ethics. But there is also rapid economic growth and the business environment is improving. Africa isn’t just about oil, gas, commodities or minerals, consumer demand for new products and services is creating opportunities across a wide spectrum of industries. While US, British, French conglomerates are focused on minerals, oil and gas, the Asians are developing infrastructure (road rail, power) and manufacturing industries on the continent.
Indian confectionery manufacturers are setting up production in Cameroon, Ghana and several other countries. Kenya and Ethiopia are major hubs for international flower growers. China has launched mega Free Trade Zones from Djibouti to Ghana. With the European economy in disarray, and the supply chain disruptions caused by the coronavirus, more investors are finding their way to Africa.
Think African first, adapt, compromise. To do business here you need to have a complete change of mindset, think African first, adapt, compromise, keep your eyes and ears open, build relationships with local partners and government officials. There are a lot of misconceptions on what it takes to succeed in Africa. Surely it is challenging, a struggle to navigate. The struggle is real, but so are the rewards to those who come with an open mind, to adapt and to learn, exercise patience and build trust with local partners. You may not succeed on your first visit, or second, or third even, but you’ll succeed with patience. But you need to work the market hard.
It’s frustrating initially to understand what works, what not. The first rule to operating in this continent is to learn to take things easy, because how business is done here is far different from the West or the East, the pace at which it’s done is so slow, do not expect punctuality.
Expect “I’ll be there in 10 or 15 mins” to be an hour or two or more delay if you’re lucky. This is a sharp contrast from the West or the East when everything moves at a fast pace. In Africa, you work on African time, not Swiss precision time. Frustrations are part of the experience, over time you learn to accept it, laugh at it. You learn to treat it as a challenge and not a problem, whilst constantly finding solutions.
It is one continent that will always keep you on your toes as border closures are common, import duties can suddenly spike overnight, policies can change, etc. It is thus important to have a representative on the ground in priority markets to keep you abreast with the local issues as it unfolds daily, not weekly, not monthly. Investors must have a long-term perspective when doing business in Africa, keeping in mind that top line growth will be strong but bottom line returns may take years to materialise.
I often hear people say Africa is dangerous, but I say it depends on your definition of danger. Russia in the early 1990’s was a dangerous market to operate but everything is easy when you learn to adapt. Don’t believe everything you see or hear in CNN. See Africa through my eyes, hear my words, it’s a different Africa from what the media portrays.
My experiences in Russia armed me with the tools to succeed in Africa. The markets may be different, yet navigating them has been a familiar experience.