Settled strangers – Why some diasporas are so successful
Apr 16th 2016 Ecconomist
Life has not always been easy for Ashish Thakkar, founder of the Mara Group, a conglomerate that invests across Africa. He was born in 1981 in Leicester, about a decade after his family settled in Britain after being kicked out of Uganda (where his forebears had moved from India in the 1880s) by Idi Amin. The family worked hard and saved, and in 1993 they moved back to Africa.
Ashish was sent to school in Nairobi; the family started a new business in Kigali, Rwanda’s capital. The day after he returned home for the Easter holidays in 1994, the Rwandan genocide started. “Cutting a long story short, we came out alive but we lost everything again,” he recalls.
Undeterred, the Thakkars went back to Kampala, Uganda’s capital, and started all over yet again. In 1995 the teenage Mr Thakkar left school, raised a $5,000 loan and set up an IT hardware business. After that he moved to Dubai. Now the Mara Group operates in 25 African countries. Many African-Gujarati businessmen in east Africa have similar tales to tell. Doing business in Africa may be difficult, but some groups—Gujaratis in east Africa, Lebanese in west Africa—seem to be particularly good at it.
East Africa’s biggest supermarket chain, Nakumatt, is mostly owned by the Shah family, who also have their origins in Gujarat. In Uganda, the leading sugar manufacturer, Kakira Sugar, is owned by the Madhvani family, who bought their business back after it went bankrupt when they were expelled from the country. In Ivory Coast the biggest retail firm is Prosuma, which is Lebanese-owned. Lebanese Ivorians claim that Lebanese families control around 40% of the Ivory Coasts’s economy.
What is it about these diasporas that allows them to succeed in business? Large numbers of Indians came to Kenya and Uganda in Victorian times, drawn by the new British-built Mombasa-Kampala railway. With the Lebanese, the story goes that they got lost in Ivory Coast on their way to Brazil and decided to stay. Both groups have become “settled strangers”, a label used by Gijsbert Oonk, a Dutch historian who has studied Asian diasporas in east Africa. That quality may explain their business success. “It’s a marriage of global ability with local knowledge,” says Aly Khan Satchu, a Kenyan financier whose family arrived in east Africa in 1884. “These families use their international relations like a multinational corporation would do,” notes Mr Oonk.
Chadi Srour, a Lebanese property developer in Abidjan, moved to Ivory Coast from Washington, DC, on a recommendation from his brother. Lebanese people, he says, “are not afraid of dangerous places as long as they are making money”. Ivory Coast’s two wars this century were profitable opportunities, he jokes, since many long-established French expats sold up “and the Lebanese took over.”
Asian businesses are no longer as dominant in Kenya as they were at independence. Avaricious governments after independence hurt some; poor succession planning others. In Ivory Coast, Lebanese businesspeople complain that they are being squeezed by corrupt politicians. Yet the declining importance of Africa’s business diasporas may be a sign of success. Asians did well because they had strong families and easy access to education and international capital. These days, such privileges are also enjoyed by plenty of Africans.