It has been a number of years since HKGCC last organized a mission to sub-Sahara Africa. But as the Belt and Road Initiative helps to open up opportunities around the world, the time is ripe for Hong Kong companies to explore potential business in these less familiar locations.
On the Chamber’s Belt and Road Mission to Ghana and Morocco, from 3-11 December, participants enjoyed a packed itinerary of meetings with officials and businesspeople as well as company and site visits.
“We found that both countries were well aware of the Belt and Road Initiative, and have already seen Chinese investment in infrastructure and manufacturing projects,” said Behzad Mirzaei, Chairman of the Asia & Africa Committee and leader of the mission.
“There is no doubt that BRI is driving foreign investment in Ghana and Morocco. This is where Hong Kong companies can play an important role as super-connector by providing first-class professional services for these projects.”
In Ghana, the delegation found a country that is vibrant, welcoming and modernizing fast. As they heard during an audience with Vice President of Ghana Mahamudu Bawumia, the nation is going full steam ahead in digitalizing its economy.
“Data is the new oil,” the Vice President said. “We want to leapfrog the competition. We will be able to move quickly because our country doesn’t have legacy technology hindering the change.”
For example, he explained, Ghana is currently issuing digital national IDs, and plans to introduce digital passports and driving licences. By next year, every home in the country will have an electronic address using GPS.
To push the adoption of mobile money, the government will stop accepting cash transactions after it launches its cashless platform next year. Ghana is also one of the first countries to enforce full interoperability of mobile wallets across telecoms companies and banks.
Bawumia also stressed the “Beyond Aid” mantra, as the country speeds up the pace of industrialization and aims to increase trade and investment. He said that the country has opportunities in sectors including petrochemical, garments and textiles, pharmaceutical and auto.
Andrew Wells, Deputy Mission Leader and Convenor of the Chamber’s Belt and Road Working Group said that the business-matching session with young entrepreneurs organized by GUBA was also impressive.
“Food products, jewellery, movies and IT, green industry, education and health provision were among the sectors where members were surprised to find quick opportunities for joint ventures without SOE-style capital investment,” he said.
Chamber delegate Terrence Annamunthodo, Managing Director of Perpetuum Wealth Management, noted that the visitors could see “Beyond Aid” in action.
“The many cranes around Accra are good evidence that the country is open for business,” he said. “Big projects seem to be carried on by elites. But, there is a bubbling up of creativity from jewellery makers to cobblers to media and fintech. Ghana wants to be the gateway to West Africa and, given that it is an English-speaking country, it is on the right track.”
Kelven Lit, Director of Censpot Trading Corporation, remarked on the rapid adoption of technology. “It made us reflect on the situation in Hong Kong, where technology implementation is pretty slow. While in these ‘underdeveloped’ nations, digital banks are already flourishing.”
During a meeting with the Chamber delegation, Yofi Grant, CEO of the Ghana Investment Promotion Centre, said it was a country of three Os: opportunity, openness and optimism.
“We are a resource-rich country, and we have good green land for farming,” he said. “The Ghanaian workforce is young, bold and aggressive, with many creative ideas.”
The country is politically stable, has a mobile data penetration rate of almost 80%, and improved quality and capacity in oil production.
“We have slowed down depreciation of our currency, left the IMF programme and now we are following our self-imposed discipline,” Grant added. “This should give us the freedom we need to develop quickly.”
However, he also noted some of the country’s problems, such as underdeveloped infrastructure, from water and power supply to roads and railways. He added that it can be difficult for Ghana to deal directly with Chinese investors due to the language and culture barriers, but Hong Kong could help as a facilitator.
Nana Kwame Bediako, President of Kwarleyz Group, a real estate and construction firm, also noted the country’s move towards industrialization, and highlighted that businesses in Ghana do not have a lot of support from government.
“In Africa, you still need the government to endorse your business, but what you really need is the support of the private sector,” he said. “You need established businesses to partner your business.”
Kwarleyz Group has successfully partnered with global companies in its own developments as it works to build a new Ghana. Bediako is optimistic about the outlook, not just for the country, but also for overseas investors.
“You didn’t come to Africa to find opportunities, you came to Africa because the opportunities are already here and calling you to come!” he told the delegates.
A highlight of the visit was dinner with the Chinese Ambassador to Ghana, Shi Ting Wang. He welcomed the delegation, saying that it was the first official business delegation from Hong Kong to visit Ghana. During discussions, Wang noted China’s dominant role in Ghana’s import and exports, and said that Hong Kong has a potential role in providing professional managers and support services to Belt and Road infrastructure projects.
Wells also noted that there was a natural affinity between Ghanaian and Hong Kong business cultures, given their shared common law, language and Commonwealth history.
With its ancient cities, fascinating culture and stunning mountains, Morocco is a well-known tourist destination. The delegation visited the biggest city Casablanca, historic Marrakesh and the capital Rabat.
“Morocco has a fairly sophisticated business culture that has experienced many years of commercial ties with French companies, as it was a French colony,” said Annamunthodo from Perpetuum, although he noted the fact that French is the language of business may deter investors.
At Credit du Maroc, Director of Corporate Banking Ali Chorfi introduced Morocco as a stable economy with a substantial middle class and growing home ownership. Access to banking has seen a healthy growth of 60% in the past 10 years.
The delegation also visited Casablanca Finance City (CFC), which has benefits including tax incentives. Many African banks and also the central bank of Morocco have moved to the CFC.
“The King is determined to develop Morocco into Africa’s financial centre, with Casablanca in the centre of development,” explained Mohammed Rachid from CFC, adding: “Morocco is a very safe entry point into Africa.”
Omar Laalej, Director of Africinvest, a private equity investment firm, drew delegates’ attention to the fact that EY ranked Morocco second in its Africa Attractiveness Index. He noted Morocco’s strong auto-manufacturing industry, with BYD as the biggest Chinese investor. There is no capital gains tax, and 100% ownership of most businesses is permitted.
However, Africinvest reported that they have found Chinese investors to be less willing to work with local partners.
The country is also seeking more sustainable growth. Professor Hassan Radoine from University Mohammed VI Polytechnic introduced the Green City of Benguerir. This city aims to be a development engine and research hub centred around the university, and has already started experimenting innovative ways of applying solar and wind energy, and recycling wastewater.
“We are Africa, not Europe, we do not have big machinery or industrialization to help us develop,” Radoine said. “Instead, we need to be smart and efficient.”
Morocco has long been a gateway to Africa for Europe, and it is now building on this experience. Annamunthodo noted that some of the country’s industrial parks have been earmarked for Chinese investment.
Professor Radoine also remarked on this broadening of scope. “Morocco has always been a close partner of Europe, but now China’s influence is growing,” he said. “Chinese investors, through the BRI, come not only with ideology, but more importantly, also with concrete projects.”
The growing Chinese influence can be seen in the growing numbers of Mainland tourists. Marita Group Chairman Rahal Boulgoute told delegates that the real estate group was keen to tap into this trend, and was discussing with global brands about cooperating to build new hotels.
Lit from Censpot Trading said that his eyes had been opened by the trip. “As a tech businessman who has never been to Africa before, I am pretty inspired by both countries’ willingness to accept new technologies and their implementation in business.”
Hong Kong’s expertise in IT areas could be beneficial to both countries as they continue to modernise.
“The digital economy seems to be on the government’s policy-making agenda in both Morocco and Ghana,” said Mirzaei. “In this regard, I see Ghana being more flexible in its efforts to be a platform to establish e-commerce, or fintech companies to serve Ghana and other West African countries.”
Professor Radoine noted that more help with technology would be welcome: “There is generally a poor adaptation and implementation of technology and gadgets in Africa. What we need is to learn how we can better apply incoming technology and innovation to grow.”
The Chamber delegates reported that the trip had been extremely interesting and fruitful, allowing them to better understand the different opportunities emerging in these rapidly developing nations.
“This mission allowed us to have hands-on experience on how the Belt and Road Initiative could help our company step out of Hong Kong,” said Lit. “Through participating in well-arranged government meetings and business matching with local companies, we understand more about the countries’ policies is and how business could work there well.”
Wells said that the mission had shown the readiness of new markets, particularly along the Belt and Road, to work with Hong Kong professionals and SMEs. He concluded that the most important takeaway from the mission was the ability of the Chamber to open up new perspectives to its members during the current U.S.-China trade tensions and unrest in Hong Kong.
“It is no longer enough for either major corporates or SMEs to rely on their traditional markets,” Wells said. “Though missions such as this, the Chamber is uniquely placed to bring our members into touch with the wider and more positive world of the Belt and Road.”
Ghana Facts and Figures
Population: 30 million
GDP per capita: US$4,700
Government: Presidential Republic
Ghana, officially the Republic of Ghana, is located along the Gulf of Guinea and Atlantic Ocean in the sub-region of West Africa. It is Africa’s second-biggest gold producer (after South Africa) and second-largest cocoa producer. It is also rich in diamonds, manganese ore, bauxite and oil.
Accra is the capital and largest city in Ghana, with an estimated urban population of 2.27 million. It is a centre for manufacturing, marketing, finance, insurance and transportation. Economic activities include the financial and commercial sectors, fishing, and the manufacture of processed food, lumber, plywood, textiles, clothing and chemicals.
Tourism is a growing source of business including in arts and crafts, historical sites and local travel agencies. Oxford Street in the district of Osu has grown to become the hub of business and night life in Accra.
Morocco Facts and Figures
Population: 37 million
GDP per capita: US$3,007
Language: French, Arabic and Berber
Government: Parliamentary Constitutional
The Kingdom of Morocco is a unitary sovereign state in North Africa. Its key economic sectors are agriculture, phosphate minerals and tourism. Industry and mining contribute about one-third of the annual GDP, while the production of textiles and clothing is part of a growing manufacturing sector.
Casablanca the largest city and is considered the locomotive of the economy, with 32% of the country’s production units and 56% of industrial labour. Many domestic and international companies have their headquarters and main industrial facilities in Casablanca.
Marrakesh, known as the “Red City,” has good tourism infrastructure that helps attract global visitors and international events. More luxury hotels are boosting the sector’s continuing development.
Rabat, the capital of Morocco, is a cultural city with a rich history. It is also a modern, environmentally responsible capital that takes pride in its green spaces.
During the trip, Mirzaei signed three MoUs on behalf of HKGCC:
• Ghana National Chamber of Commerce, to formalize cooperation between the two chambers and enhance business opportunities in both regions;
• GUBA Enterprise, an organization that works to attract investment to Africa and which supported the Ghana leg of the HKGCC mission;
• General Confederation of Moroccan Enterprises (CGEM), the largest business organization in Morocco.
A Glimpse of the Sights
Despite the packed schedule of business meetings, the delegation did have a little bit of time to see some of the sights. In Ghana, they got a taste of the modern Ghanaian shopping experience at Accra Mall, and visited the renowned Made-in-Ghana Bazaar for some local produce. More than 200 exhibitors displayed items ranging from shoes and bags to beverages, jewellery and cosmetics – all made in the country.
In Morocco, the delegates visited the Jemaa el-Fna bazaar in Marrakesh, to soak up the atmosphere of this bustling hub for tourists and residents. In Rabat, they enjoyed a bus tour and paid a visit to the medieval fortified Muslim necropolis Chellah. In Casablanca, they visited the Hassan Second Mosque. Located on a promontory overlooking the sea, the third-largest mosque in the world can hold more than 100,000 worshipers within its grounds.
And for movie buffs, no trip to Casablanca would be complete without a visit to Rick’s Café, a faithful recreation of the fictional bar from the classic 1942 film Casablanca, starring Humphrey Bogart and Lauren Bacall.