JOHANNESBURG - In line with a plan to build a pan-African financial services group, Alexander Forbes wants to double the share of business from the rest of Africa to 10percent in the next three to five years, chief executive Andrew Darfoor said on Friday.
In September 2016, Alexander Forbes said it would accelerate its simplification, with a focus on building a pan-African financial services company.
“When I arrived (at Alexander Forbes) 18 months ago, I looked at the countries we were in and the type of businesses we had. I felt we had to be clear on what we wanted to be, which is a pan-African company. We had a business in the UK. I sold that,” said Darfoor.
Alexander Forbes sold its 60percent interest in UK-based consulting business, Lane Clark & Peacock (LCP), for R1.3billion in 2016. The company said that the LCP business was no longer central to its strategy.
Explaining the rationale for the sale of LCP, Darfoor said: “Brexit had happened and it was unclear to me whether Brexit was positive or negative for the business. I felt that it was a distraction. We would rather take the cash on that sale and redeploy into growing the pan-African business.
“As a result, South Africa became 95percent of Alexander Forbes and the rest of Africa became 5percent. By the next three to five years, the rest of Africa must be at least 10percent of Alexander Forbes,” he said.
Following a “landscape assessment” of Africa’s other 53 countries, Alexander Forbes has prioritised establishing a presence in stable legal and legislative environments. He said they wanted to be in countries with emerging middle classes.
“Most importantly, we looked at the ability to repatriate money out of that country to South Africa,” he said.
He said the company would maintain presence in southern, West and East Africa. “I’ve always found it puzzling that many South African companies have shied away from francophone countries. They have the same needs.
“We identified Morocco as a country of interest, because if you crack Morocco, by default you crack Senegal and Côte d’Ivoire. Right now we are in seven countries outside of South Africa, but the focus in terms of expansion would be centred around West Africa. Beyond West Africa, we would look at North Africa,” said Darfoor.
He said the expansion into new African markets would be executed cautiously, because each African country had unique characteristics, cultures, circumstances and nuances.
“You do not just parachute into a country without doing your homework,” he said.
In a wide-ranging interview with Business Report, Darfoor said that, as it expanded its footprint into new markets, the company had to embrace technological innovations.
“The way we engage with our customers has to be through whatever means they want, any time they want. The traditional way of engaging with clients tends to be face-to-face advice. We serve 1.5million people across Africa. It is impossible to reach every one of those people through face-to-face advice. We touch them through automation,” he said.
He said the group last year set aside R1bn to modernise its entire technology infrastructure over three years. “We are moving to more cloud-based systems,” he said.
Darfoor said the move would lower the company’s costs and improve efficiency and turnaround times. “It also allows us to penetrate new markets. In a country like Kenya, 70percent of all financial transactions are done using the phone. Kenya is a market we are in. We want to go to a country and interact with customers in a way they want to interact with us. It is critical. We had to make a significant investment,” he said.
- BUSINESS REPORT