The tiny country of Rwanda is now producing factory-fresh Volkswagen cars from its rolling hills. Next up are ride-hailing and public car-sharing services by the German carmaker.

“Africa doesn’t need to be the dumping ground for second-hand cars or second-hand anything, because in the long run, you end up paying a higher price anyway. So if you can pay a high price for second-hand, why not pay a high price for something new?”
These powerful words were by Rwanda’s president Paul Kagame in a speech delivered at the launch of the Volkswagen (VW) assembly plant late June in the country.
The German carmaker, which now has a presence on the rolling hills of the Kigali Special Economic Zone, is the first international automobile giant to invest in Rwanda.
It will have a capacity to produce up to 5,000 cars with a starting price of $23,000.
President Kagame observed that Africans deserve better and this is one way of showing how they can afford it.
“In the medium-term, the only way for us in East Africa to move up the industrial value chain from assembly to manufacturing is to build an integrated regional manufacturing base.”
For this to be achieved, he underscored the need to shift from the logic of competition to one of cooperation but also fuse the two “because when they are put together, everyone gains”.
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Thomas Schaefer, the Chairman of VW Group South Africa, revealed that opening an assembly plant in Rwanda aligns with the firm’s strategy to strengthen regions, focusing on new and upcoming markets.
Schaefer admitted there are challenges but emphasized the project is bound to succeed.
“Having worked with emerging markets for a large part of my career, I can categorically say that Rwanda stands out as a country where it is about what we can do to make a project work rather than listing all the obstacles as to why something would not work,” he said in an interview to CNBC Africa.
VW joins Rwanda’s market at a time when the country is conducting the ‘Made in Rwanda’ program to support local industries and promote consumption of locally-made products.
Economic analyst Kenneth Agutamba believes VW’s entry into Rwanda lays the groundwork for other brands to tap into the market.
“It’s a big win. Every time a major international brand gets into a country, it boosts the confidence of other potential investors,” he tells FORBES AFRICA.
He adds that the investment is an opportunity for job creation in the country.
<a href="http://www.forbesafrica.com/life/2018/01/11/worlds-popular-cars-2017-included-fewer-cars-suvs/" target="_blank" rel="noopener">READ MORE: The World’s Most Popular Cars In 2017 Included Fewer Cars, More SUVs</a>
“A single car has 30,000 parts and putting them together requires a minimum of 20 people. So it’s a very labor-intensive job.”
He explains that although Rwanda is a smaller market and landlocked, it has security, and political and economic stability, among other factors rare on the rest of the continent.
“It can be a base where major brands can build their headquarters but targeting the markets around it,” he says.
Clare Akamanzi, CEO of the Rwanda Development Board, hailed the development as a very important step and a new chapter.
“The fact that Volkswagen took time to study Rwanda and found it a good business case we can invest in here, means a lot for us. It’s something that shows feasibility of such business that can thrive in Rwanda and we expect other companies to emulate,” she told CNBC Africa.
Starting next year, the company will also offer ride-hailing and public car-sharing services under the Mobility Solutions program.
Lionel Mpfizi, CEO of AwesomityLab, a local company hired to provide a mobility solution platform commended VW for its openness to local companies in an interview with CNBC Africa.
“We are very happy that VW is open to work with local companies to achieve what they want to achieve. There’s something we are bringing to the table if we are local: we have the understanding, we know the clients and we are the clients,” said Mpfizi.
&#8211; By Steven Muvunyi

IMG_6097

A Country On A Roll

Great people often do uncommon things. Illustrious people, however, replicate greatness around them.
How else can one summarize the ‘many realities’ of Michael Ade-Ojo, the automobile mogul fondly referred to as Nigeria’s ‘Mr. Toyota’?
He is not called ‘Mr. Toyota’ simply because he loves cruising around in the Japanese-made marques.
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“I have dealt with the Japanese now for 44 years. And it is only through me that they can mirror Nigeria. Throughout these 44 years, there have not been any promises broken, or monies owed. My word has always been my bond. That is one of the things that I believe has helped my business – integrity. The fact that I always fulfil my commitments,” he says.
After more than four decades of mingling with the Japanese, Ade-Ojo has earned the rights to Japan’s Toyota Motor Corporation in Nigeria. His lifetime’s work has made Toyota one of the most ubiquitous car brands in Africa’s largest and most populous economy.
“There are countries where Toyota is number three or number four in terms of market share, but when you take it overall, Toyota is number one in the world. They don’t have to be number one in Nigeria. However, they have been number one in Nigeria for 15 years,” he says.
Plagued by a recall of nearly 6.4 million vehicles last year, the Japanese automaker bounced back quickly from this crisis to maintain the reputation of its 78-year-old brand. It ended 2014 on a growth note with increased year-on-year sales in the United States (US), China and Europe.
Ade-Ojo has done “mostly sales” jobs during a career spanning over 50 years. As a poor village boy, he sold charcoal, firewood, matchsticks and food. Years later, he ended up selling vehicles (cars, trucks, vans, buses, tractors, motorcycles and mopeds), auto and aviation fuels, industrial lubricants, automotive and financial services, including auto and life insurance.
A man with a proclivity for details and appropriate business or traditional decorum, he has earned the number one status in Nigeria’s auto market for constantly making his numbers but also on account of his market savvy, focus and stamina, especially during the 1980s and 1990s when Nigeria’s economy was in the doldrums. A walking encyclopedia of Nigeria’s auto industry, he recalls that “Toyotas were not that common during the 1960s&#8230; by 1981, Toyota sales in the Nigerian market totaled about 52,000 units; Datsun, 100,000 units and Peugeot, 250,000 vehicles.”
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“In those days, government and companies were financing vehicle purchases, but this stopped in 1982 with all the woes that came with economic downturn,” he says.
In 1984, an IMF-induced Structural Adjustment Program (SAP) meant tariffs were hiked and an embargo placed on car and spare parts importation.
“Even if you had the cash or access to credit, you needed an import license issued only by the military juntas in power to transact business internationally.”
As consumption habits and car cultures go, Nigeria is any automaker’s delight. With a head count of about 170 million and growing, it is arguably one of the largest motor vehicle markets in the world, rubbing shoulders with the likes of China, the US, Europe, India, Brazil and Mexico.
Ade-Ojo says car sales have grown steadily since 1999 when he was responsible for 12,000 of the 30,000 Toyotas sold in Nigeria that year. In 2014, Toyota recorded about 15,000 sales, of which Ade-Ojo’s companies sold about 45%. The other seven Toyota-authorized dealers shared the balance of 55-60%.
At least one in every four cars on Nigerian roads belongs to the Toyota clan. The ratio is even higher for sales of brand new Toyotas. Ade-Ojo reckons his annual turnover from vehicle sales alone over the last two years is well over N40 billion ($200 million).
In any country, invaluable business experience and a significant slice of the motor vehicle market easily translates to influence, leadership and corporate responsibility. Even though he disagrees with the timing and modus of the government’s new auto policy, there are reports that Ade-Ojo is poised to set up a Toyota assembly plant in the country, in conjunction with his Japanese partners.
The auto policy, which took effect in July 2014, had raised the import tariff on fully built cars from 20% to 70% for companies without assembly plants in the country; and zero percent duty on imported Completely Knocked Down (CKD) units. CKD refers to the total number of parts required to assemble a vehicle.
“I am not against the auto policy in as much as it is to industrialize… but we must industrialize with a sense of strategic responsibility to the local economy; but the way things are, we seem to be putting the cart before the horse. We currently lack the industrial support environment for car manufacturing. For an average car you need about 2,500 parts. We don’t produce anything locally, and we want to begin to industrialize, to make cars, we will only end up getting the short end of the stick!”
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With a reputation for being shrewd, his formula for success is passion, focus and diligence.
“I have learned the hard way to embrace stabilization. I realize that we have not done much profitable business outside our core business area of automobiles. This goes to show the importance of focusing on what you know and what you have passion for… So my advice to young entrepreneurs is that they stick to what they know and be passionate about it. At least, if you do this, you are not likely to be poor.”
His formula has certainly earned him a vast fortune, a solid reputation as a super salesman, with juicy stakes in numerous entities and a prime spot in the commanding heights of West Africa’s automobile ecosystem.
Nigeria has however been his primary business turf.
“All my investments are in Nigeria. I’m a believer in what you call the Nigerian dream,” he says while sitting in his plush house in the town of Ilara-Mokin, his birthplace on the outskirts of Akure, the capital of Ondo State in south-western Nigeria.
Ade-Ojo began selling cars in 1965, five months after earning a bachelor’s degree in business administration from the University of Nigeria (UNN) in Nsukka, in south-eastern Nigeria.
“The first car I ever sold was a British Motor Corporation Wolseley car model,” he says. “I sold it to Mr Okubanjo, a permanent secretary in one of the ministries. We later became friends. This was how I got hooked on automobiles.”
Soon he acquired his very first car, a Morris 1100, with a loan from CFAO, his employers at the time.
He joined CFAO straight out of school – the company sponsored his last two years at university – and had a brief stint as an inspector of taxes at the Federal Inland Revenue Service, followed by four years at British Petroleum (BP). His “painful personal history”, growing up poor, including experiences and escapades at these companies propelled him towards his destiny.
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A near fisticuff with his manager cost him his job at CFAO.
“I had sold 20 trucks to Electricity Corporation of Nigeria (ECN) and this man from New Zealand gave the company the impression that he did the job. The company believed him and ignored the fact that I had singlehandedly brokered and sealed the deal. I showed my anger to management and I almost punched him… I was really pissed off. So in December 1966, CFAO decided not to renew my contract. I became jobless.”
While at BP he went to Benin City to relieve a colleague temporarily and “within three months I increased the total sales of that division by 25%. I grew turnover by 25%&#8230; the dealers were requesting for me not to leave. They actually wrote a petition to BP’s South Western Divisional Office in Lagos asking them to retain me in Benin… so I became restless; I kept ruminating over this Benin episode. I kept thinking to myself, ‘perhaps it was time to quit’. The funny thing is the chap I had gone to relieve in Benin eventually got promoted on the basis of my sweat. BP actually made him my boss.”
Months later, back in Lagos, he approached Danish-owned RT Briscoe, a leading heavy duty equipment and auto dealer, and asked if they would allow him to sell their products on a commission basis. They agreed. Armed with this agreement and key product information from RT Briscoe, he took a month’s annual leave from BP. The results of his moonlighting was a pleasant shock.
“Within the four weeks of freelancing, I sold 40 cars. I put pen to paper to calculate my expected commission and, to my great surprise, what I was going to earn from the 40 vehicles was more than my one year salary at BP. So, armed with that knowledge, I went back to work at BP.”
He quit BP soon after this “discovery”. On August 1, 1971, Elizade Independent Agencies (EIA) was born, co-founded with his first wife, the late Elizabeth Wuraola Ojo, who had been a year below him at UNN.
“I started it with my savings. I had been very thrifty, so we saved £4,000 ($6,300). We used this £4,000 to rent my office and showroom in Lagos. I lived in the same property. Eventually, that was also the very first property I ever owned.”
EIA became incorporated as Elizade Nigeria Ltd (ENL) in 1973, dealing in motor vehicle and spare parts sales and services. After-sales support currently provides 10% of bottom line for the Elizade Group of Companies, a business empire which now includes a string of companies in the auto, education, fashion, hospitality, financial services, petroleum marketing, technology, real estate and construction industries.
Ade-Ojo’s Toyota franchise revolves around controlling stakes in Elizade Group, Toyota Nigeria Limited (TNL), RT Briscoe Motors and the subsidiaries and associated firms of these entities. After a series of acquisitions and divestitures, he currently owns 100% of the RT Briscoe Group in Nigeria and 74% of TNL.
“I had become 100% of TNL in 2004 but after one year, Toyota came and said they want me to partner with a Japanese company. So I had to extricate 26% of TNL to Sumitomo Corporation of Japan.”
Beyond these organizations, his business empire also includes Elizade University, Elizade Autoland, Crown Motors (Nig) Limited, Classic Motors Ltd., Okin Travels Ltd., Odua Creations Ltd., among others. He is the chairman of TNL, Moorhouse Sofitel Ltd., Custodian &amp; Allied Insurance Plc, Baun Limited, Imperial Telecommunications Ltd., Crown Drinks Ltd., Meristem Securities Ltd., Meristem Wealth Management Ltd., MikeAde Properties Development Ltd., 3Line Card Management Ltd., and SMT Nigeria Ltd., distributors of Volvo construction equipment, Volvo trucks and Mack trucks in Nigeria.
He’s also been a director of several banks, including Ecobank Nigeria and First City Monument Bank. For his contributions to business and society, he was awarded the national honor of Officer of the Order of the Niger (OON) in 2005.
Professor Pat Utomi, renowned Nigerian political economist and management expert, believes that in an economy like Nigeria, where mobility and transportation infrastructure are key to socio-economic development, “it is appropriate to make the point that sometimes you have to trade” in order to tap into the inherent commercial capabilities of the market.
“Ade-Ojo is a super salesman. He is in many ways Nigeria’s Akio Morita, the Sony co-founder who came to be known as the paramount salesman of the 20th century,” says Utomi.
A lifestyle of globetrotting in private jets has not robbed Ade-Ojo of his modest manner. Constantly shying away from discussing his personal net worth, he tells FORBES AFRICA that, “considering that Elizade was the genesis of my business, it must be worth at least several billion dollars now, but you see what is important for me is that business must be conducted honestly and openly, and society must benefit from your business gains.”
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He set up the Ade-Ojo Scholarship Scheme in 1991. Over 100 poor students have benefited from this scheme since its inception. A few years ago, he spent slightly over $205 million of his personal funds to rebuild Ilara-Mokin’s township roads. The town’s microfinance bank, primary and secondary schools have also tasted his generosity. His Elizade University, also located in Ilara-Mokin, cost him about N8 billion (about $40 million) to establish.
“I’ve been spending averagely about N1 billion ($5 million) every year to subsidize the university.”
In 2014, he put Ilara-Mokin on the world’s movie map. The town was the setting for October 1, a Nollywood flick directed by popular Nigerian filmmaker, Kunle Afolayan. Ade-Ojo’s auto companies helped finance the movie, which reportedly cost well over $1 million.
For those who may question the efficacy of Ade-Ojo’s dogged pursuit of projects and causes, his daughter, Deola Sagoe, a renowned international fashion designer provides a response: “With my father, what you see is what you get. He’s always been a pragmatic person, and particularly adept at spotting opportunities… he lives and breathes business in all spheres of his life.”
“I like the fact that Chief Ade-Ojo always puts his money where his mouth is. He is so unassuming he makes you rethink the essence of wealth,” Olumide Ojutalayo, a golfer and businessman says on the grounds of a world class golf course Ade-Ojo built in Ilara-Mokin.
Smokin’ Hills Golf Resort “cost me about $17 million to establish,” he says. “I built it for myself and anyone who likes to play golf.”
Soon, the resort will have a five-star hotel, an aircraft landing strip with hangars, restaurants and other entertainment facilities. The project might complete the transformation of the serene, leafy locale – with a current population of about 60,000 – into a modern, suburban community.
At the age of 77, Ade-Ojo has certainly earned the right to build himself a private leisure paradise. His passion for his birthplace is infectious. It may also have deep personal reasons. The fifth of six siblings, it was in the Ilara-Mokin village that he began life in a poverty-stricken family. Hunger was a perpetual companion, he says. He therefore grew up experiencing the harsh reality of rural poverty.
“I was often derided and mocked by people whose parents I considered to be better and richer than mine… so I think I must have been around 15 years old when I made up my mind to change the dynamics of my background.”
He credits his mother, his late wife and business partner, and current wife, Taiwo Ade-Ojo, an affable lady who had also been involved in his business for many years, for contributing immensely to the strong foundation, business success, peace and stability he has had in life.
“My mother made me work so hard. I hated it, in fact, my belief was that my mother was wicked… she drove me to do everything. I was the one sweeping the grounds, I was the one going to fetch water that we would use to bathe and drink every morning, and it didn’t matter whether it was in the cold Harmattan [wind] or the hot season. So after that, I may have had to hawk eko (cornmeal) before going to school…”
“In the evenings, I would sell kerosene and matches… at that time people could not afford a box of matches, we used to tie them 10 sticks a bunch to sell to people. So, I did all these, and I became a very successful laborer. I was going to farms with people, to support my school fees I would go clear bushes, or cut the weeds in cocoa plantations, or clear farmlands, burning the waste, preparing the heaps and then planting… all these I could do. I knew every aspect of farming.”
Amazingly, he excelled at Imade College, Owo town, his secondary school. His path out of poverty had begun. He enrolled for an 18-month course at the School of Agriculture in Akure. This led to a brief stint as a laboratory technician at the Ministry of Agriculture, Moor Plantation in Ibadan, in south-western Nigeria. While in Ibadan, he began attending pre-degree evening lectures at the British Council, studying zoology, botany and chemistry, hoping to eventually study medicine. He however had to ditch the idea after learning he also needed mathematics to qualify for medical school. He picked up a new set of subjects, economics, government and geography, and was eventually admitted into UNN’s Business Administration program in 1961. It was the first set of a Business Administration degree course in Nigeria.
His financial headaches trailed him to campus.
“After two years of struggle, I could not sustain myself in the university,” he says.
He was already working part-time as a research assistant. Unknown to him, a faculty staff member had secretly approached CFAO for financial support on his behalf. CFAO agreed. His tuition fees sorted, he still could barely afford one meal a day. Fate stepped in through the young Elizabeth Wuraola. They met in the university chapel one evening and became friends. Soon, she would begin to save him from hunger and the perils of poverty. She often gave him her meal tickets so he could eat at the cafeteria. One day, she gave him £40 ($63), her entire pocket for the 1962-63 academic year.
“She gave it to me to go pay part of my school fees,” he remembers emotionally. “That was the turning point for me.”
“So, this is really the heart of the matter… She was denying herself for me. This was what made me feel that, yes, a woman could assist you to succeed; even when I approached her, my intentions were not that serious. But I felt it to my marrows that I was going to marry this woman because there was now real love between us. I tell you, I didn’t regret that I stuck to her. But I lost her on November 8, 2003.”
The ‘Elizade’ brand name was coined from both their names, Elizabeth and Ade-Ojo.
Behind every great man is a great woman. Ade-Ojo has never let go of this greatness.

Tag: Automaker

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A Country On A Roll

From Farmworker To Multi millionaire