Doing business in Africa: more fascinating than ever!
Published on 25 February 2020
Construction of drinking water pipeline in Bamako (Mali)
What is it like doing business in Africa? Bruno Geltmeyer, Managing Director of Denys NV, a specialist in major infrastructure works, talks about his experiences and gives a few tips to boot.
Many Belgian companies are hardly clamouring to have a presence in Africa. After all, the continent suffers from an image of corruption, poor education and faulty infrastructure. But there is still a great deal brewing in Africa – certainly among young people – and success stories from Belgian firms do exist. The Port of Antwerp would be one example.
It is also striking that the private sector really can make a hefty contribution to the development of Africa, complementing the NGOs. The Belgian firm Denys is one of those companies that is very active in Africa. This was why we knocked on the door of Bruno Geltmeyer, Managing Director of Denys NV in Ghent (see box).
Geltmeyer has a long career behind him at the company. In the 1980s, he worked as an engineer in Tanzania for 3 years, to replace his military service. He tacked on a further 2 years in Cameroon.
What exactly does your company do in Africa?
80% of our activities in Africa are waterworks. The rest are piping for gas and oil, and infrastructure. We mainly bid for public tenders for major infrastructure works issued by institutions such as the World Bank, the African Development Bank or the Millennium Challenge Account.
Because our work is in projects, our annual turnover can fluctuate. Denys' total turnover for last year was 400 million euros, 20 to 25% of which was in Africa. Of our 2,500 staff, 1/3 are Europeans, 1/3 are Africans and 1/3 are from the Middle and Far East. In Africa in particular, these are mainly young people.
We have experience in a whole range of African countries, such as Ethiopia, Mozambique, Morocco, Algeria and the DR Congo. Today, we're mainly active in Niger, Mali, the Ivory Coast, Ghana and Liberia.
Bruno Geltmeyer: 'As a company, we can still play a really meaningful role in Africa.’
What is unique about working in Africa?
It's certainly essential to send your best people to Africa – the ones you can really rely on. They'll be working in difficult circumstances, you see, often in remote areas. They can be individualistic people, by all means, but they do need to follow the rules. In Mali, for instance, you're not allowed to go outside at night or leave the capital city.
Another thing you have to bear in mind is that the logistics aren't always going to be plain sailing. In Europe, you can get the goods you order broadly speaking within a day. But in Africa, particularly in the most remote areas, goods can sometimes be several months away. That means you need to organise things robustly.
Corruption is another pitfall – you should arm your staff against this. That's why we prefer to work with international institutions such as the World Bank. They maintain strict guidelines. Finexpo also helps us to achieve these objectives.
To what extent do African countries differ from each other?
You can definitely still see the French, Belgian, Portuguese or English influences. This can give rise to differing regulations, for example around taxation systems. Are there double taxation treaties or aren't there? Are taxes levied on ex-pats? You need to get acquainted with all this.
As a company, we're quite used to working in an intercultural context. We have 45 nationalities amongst our staff, representing a good deal more cultures.
How do you handle taxation in Africa?
Like any company, we want to make as much profit as possible, which means paying as little tax as possible. But that does need to be done correctly. We very rarely get tax exemptions. We're not exactly a mega corporation either, which might get special rulings. Companies like that can sometimes be more inventive with their taxes.
Is there enough expertise in Africa?
The level of education varies hugely from country to country. In countries like Ghana and Ethiopia it's pretty decent, but in some others it's a good deal less. That's why you'll be better off organising your own training courses. We've trained the bulk of our people ourselves, at any rate. That means we're contributing towards the Sustainable Development Goals (SDGs) too.
In the meantime, we've got a great many African workers who are very sound. They display great competence, which isn't just about knowledge. They're also loyal and enterprising, with great enthusiasm for their work… African workers are often better at this than Western ones.
Our best African workers sometimes move from one country to another, when we start new projects there. It's my view that the system of Belgian ex-pats ought to gradually disappear. All projects in Africa should be in the hands of African managers. We're working on this at pace. I'm also convinced that we'll have top managers from Africa within 10 to 20 years, even in Belgium.
Why is it important to you to be active in Africa?
On a personal level, it's a continent where I feel at home. I mean, I've been in this business for 35 years and the best of those were spent in Africa.
But Belgium is far too small for Denys too. There's not enough interesting work for our engineers or the people technically trained in our specialities. That makes Africa interesting to us, because it's the only continent that still needs to make great strides in terms of water, energy and infrastructure.
As a company, that gives us a really meaningful role to play. If you can provide a region or city with drinking water, then that really is a lot more than just a drop in the ocean. In Europe you can move a stone, but in Africa it's a whole river.
Expansion of water supply in Maputo (Mozambique)
What tips do you have for companies wanting to be active in Africa?
First and foremost, be selective. Choose your contracts well and prepare yourself well in all senses: culturally, logistically, staffing and taxation.
You should also aim for the best in all areas: the best equipment and the best staff. Don't just send any old junk off to Africa!
You also need to coach your people well and not leave them out in the cold. All your people will have a lot on their plate because of the slow systems and suchlike.
Your people also need to be suited to deftly handling the intercultural tensions that will inevitably arise. They need to approach these correctly, without lapsing into clichés.
Naturally, you also need to make sure you have a credit-worthy customer and take out credit insurance against risks. Credendo takes care of this in Belgium.
What is your view of development co-operation in Africa?
Development co-operation definitely has a role to play, but there's no all-encompassing unified solution. The private sector prefers to take on the large-scale projects, with NGOs and the Belgian Development Agency (Enabel) doing the smaller-scale ones, but that certainly doesn't make them any less valuable. That's why we support a range of NGOs via Entrepreneurs for Entrepreneurs and regularly collaborate with NGOs.
You have strong views on the climate and the environment. How do you apply these in Africa?
The Sustainable Development Goals are now an annual theme for us. For one thing, we have an action plan around waste in Africa, which is a huge problem in the cities. That's why we try to set an example by sorting our waste. Everyone needs to learn that waste isn't something to be thrown away, but rather it's a raw material.
Construction of a collector for water drainage Oued Ouchaiah in Alger (Algeria)
How have you seen Africa change over 35 years?
35 years ago, 95% of the people on the plane to Africa were white, with about 5% Africans – today, it's the reverse. So that's a striking difference.
Back then, the Africans didn't really know much about the European world. Today, their view of the world has expanded enormously, thanks to the smartphone and social media. They now have an idea of what's possible and what's going on with us. Unarguably, this has also led to more refugees.
The progress is mainly noticeable in the urban environment, with the disadvantage that many people are moving to the cities.
A nice indication of the progress is pay and wages. Today, very good staff in Africa are paid as much as similar workers over here. They're only cheaper because they don't get a rent allowance and we don't need to pay for any tickets for them.
How do you see the future for Africa?
I see a positive future. Africans are positive people by nature. They always see positive opportunities, even in miserable circumstances. Westerners are so overindulged that they can often only see the negative side.
There's still a long way to go, but however it comes, the world will evolve towards similar circumstances for everyone, I hope.
What does Denys Group do?
Denys was originally (1923) a Belgian family business specialising in the construction of water piping and fire-fighting installations. It gradually took on all manner of other activities, such as gas and oil piping, railways, tunnels, civil architecture and buildings. The latter involves large-scale restorations and renovations, among other things, as well as new build projects.
Especially since 2001, Denys has made a big name for itself abroad: Europe, Africa and the Middle East (Saudi Arabia, Qatar, etc.). The company chiefly carries out waterworks (“complex projects in drinking water provision and water purification”) and builds oil and gas infrastructure there.
A selection of its innumerable achievements are: the renovation of the AfricaMuseum in Tervuren, the Bourse of Antwerp and the NTG Municipal Theatre in Ghent; gas pipelines in France, Germany and Poland; water supply for the capital city of Bamako (Mali) and Niamey (Niger); a large wastewater collector in Addis Ababa (Ethiopia); reinforcing and deepening the quay at the Port of Abidjan (Ivory Coast), etc.