On the face of it, African family firms selling out to foreigners sounds like a good thing, because it is a sign that the region is on the up. So the news that the family behind the Chi farms business wants to sell sounds positive, especially because corporations Nestle and Kraft, and private equity houses KKR and Blackstone are apparently showing interest.
It might at first seem that this is a story about a plucky little African business growing big enough to grab the attention of western multinationals. And someone who supported family ownership might argue that it would be better if the firm remained in family hands, rather than seeing the profits to be made from the expanding African middle class flowing away to western shareholders.
But the truth is a little more complicated. Chi is no small-time operation. It is owned partly by the TGI Group (it stands for Tropical General Investments), a vast conglomerate with businesses in Nigeria, Ghana, Republic of Benin, Morocco, UAE, South Africa, China and others. Its activities range from selling curry powder, running farms, importing tractors, manufacturing cotton and operating trawlers.
TGI works closely with a family-owned German firm called Vink & Co., which imports and exports from West Africa and also makes chemical products, including cheese coatings and aromatic adhesives, among many others.
So the sale of Chi is a way of these families realising a bit of the investment they have made over the years. Because while it is true that multinationals are trying to cash in on African growth, the untold story of the continent is that families got there first.
For example, Africa’s richest man, Aliko Dangote, a telecoms billionaire whose father was a wealthy merchant, made his fortune in the last decade; Nigeria’s Dantata oil conglomerate and Kenya’s Bidco corporation, which manufactures food, have been going for decades.
Families have laid the foundations for the Africa boom which is now starting, and which the rest of the world will profit from.