This article is an excerpt from HOW WE MADE IT IN AFRICA: THE BOOK

For the first nine years of his life – while he was growing up in Niamey, the capital of Niger, on the banks of the Niger river – it looked like Mossadeck Bally was set to follow in his father and grandfather’s footsteps and enter the world of trading. A born businessman, Bally’s father left his home country of Mali when the then strict socialist regime under President Modibo Keïta forbade private economic activity, to make a home for himself and his family in their neighbouring country. There, the life of a commodities trader was ingrained in the young Bally. His father continued to import and export goods when the family moved back to Mali in 1970, two years after the 1968 coup d’état that resulted in a somewhat liberalised economy.

Bally’s grandfather originally sold salt bars from the salt mines in Mali’s Taoudenni region approximately 650km north of the ancient city of Timbuktu. His father initially followed suit and transported the salt first by camel and then, from Timbuktu, on small boats which travelled into the heart of the country. Just before the move to Niamey, he started trading fabric imported from Europe. At the beginning of the 1980s the business evolved again into the trading of rice, sugar, wheat flour, tea, tomato paste and other products sourced internationally and sold locally in shops.

“Whenever we had a vacation from school, we spent it in my father’s shops. I believe this developed in me, at a very early stage, a love for entrepreneurship. I was fascinated by my father – always travelling, hosting business dinners at home, welcoming people from all around the world,” Bally, now 57, remembers.

Despite having a grandfather who was a “famous trader from Timbuktu” and a father who was “one of the biggest traders in West Africa”, Bally eventually chose an entirely different route. He is well known and internationally respected for founding the Azalaï Hotels group and building it into a thriving company, which has earned him accolades such as the 2011 African Development Bank’s African Business Leadership Award.

The group’s name is his tribute to his family roots. “Azalaï” (pronounced as-ah-lie) is the Tuareg Berber name for the route followed by camel caravans twice a year to transport salt from the north of Mali to Timbuktu.

Laying the foundations

Azalaï Hotels has 10 properties in six African countries (Mali, Burkina Faso, Guinea Bissau, Benin, Mauritania and Côte d’Ivoire) with four projects underway in Senegal, Niger, Guinea and Cameroon. It is also in negotiations regarding developments in Nigeria, Ghana, Liberia and Sierra Leone.

The group is valued at more than $110 million, has approximately 1 000 direct employees and provides indirect employment to roughly 2 000 people.

To get to this point, Bally started in the import-export business and worked alongside his father after completing a baccalauréat (a French post-high school qualification required to gain university entry) in Marseille, France, and obtaining a bachelor’s degree in business administration with a major in finance at the University of San Francisco in the United States.

“I always thought I would spend my whole career doing what my father did. After 10 years, though, I wanted to go into industry, to diversify. I had the feeling that it would allow me to be more impactful on the economy of my country and to create more value and more jobs.”

His first idea was to start a mango factory to capitalise on Mali’s production capacity for this tropical stone fruit. The factory would process the fruit into juice and cordials for sale to major international beverage companies. Bally was well on his way and had already finalised the business plan and concluded a trip to Europe to investigate machinery suppliers, when one of his trading partners, while on a visit to Bamako, suggested the hospitality industry.

“Suppliers often came to see me and always complained about the quality of the city’s hotels – all of them were state-owned and state-run,” Bally says. Once he determined that the hospitality industry creates many jobs, allows for value to be added and brings foreign exchange into the country, Bally jumped at the idea.

The timing was perfect. In 1994, the Malian government put out a tender to sell a hotel in Bamako in a move towards privatisation. Thanks to the contacts Bally had built up through the family business, he was able to get an expert consultant to help him with the bid – which he won.

A loan of $1 million from the Bank of Africa Mali allowed him to buy the hotel from the government and a loan of a further $1 million from the International Finance Corporation (IFC), a subsidiary of the World Bank, enabled him to refurbish it. Suddenly Bally was the owner of the Grand Hotel Bamako, the oldest hotel in Mali’s capital, that was built in 1952 under French colonial rule. It was to become the first hotel in Bally’s Azalaï Hotels group.

The initial months after reopening in 1995 were difficult. Bally ascribes it to a period without much business, as the hotel first had to gain clientele, and experienced big cash flow problems. Within a year, though, it was profitable.

Although it was a tough period, it was, in some ways, good old times. “The days of turning a profit within a year are no more. Then, we were operating in a unique niche environment where no other hotels were run to international standards. Now competition is fierce and there are international hotel chains in almost every location we are in.” Azalaï’s competition now includes big names like Radisson and Sheraton.

Bally’s hotel business grew quickly, first as a chain of independent hotels before being grouped as Azalaï Hotels, as he began to capitalise on other West African governments which moved to privatise hotel properties during the early years of the century. After purchasing land for a second hotel in Bamako, which opened in January 2000, a privatisation bid for a government-owned hotel in Burkina Faso was finalised in 2004. This was followed by two others from the governments of Guinea Bissau and Benin in 2007 and 2008 respectively.

“After this there were no more state-owned hotel bids for a while and we started looking at greenfield projects, which naturally takes a lot more time to finalise – usually around four years. The only other privatisation opportunity that materialised was the hotel in Mauritania in 2016,” he says.

Great risks bring great rewards

Almost without exception, Azalaï’s hotels are situated in countries categorised as either post-conflict or conflict-afflicted nations.

This brings a unique set of challenges but Bally considers them simply as risks that have to be identified, tackled and mitigated; just like any other risk facing young and growing businesses.

When he and his team moved to establish a presence in Abidjan in Côte d’Ivoire in 2016, many of the investors who had supported Azalaï over the years felt that the group was not yet ready to invest and compete in a more developed market. “With the operation that we have in Abidjan today, we feel we were right in moving from exclusively frontier markets and into bigger economies. Our risk is well spread,” he says.

With a large part of his business in countries prone to political unrest and instability, Bally has had to make the decision a couple of times to close a hotel when a coup d’état was underway or had just taken place. During the 2012 coup and conflict in Mali, he was forced to close two hotels in the country for eight months. Luckily, the group’s size allowed them to retain their employees. “We have since taken out political risk cover with insurance companies. We didn’t have it before, but we are now covered by a company that reinsures with Lloyd’s of London,” he says. “But with high risk, you also have high returns.

“That is our job as entrepreneurs, to take risks. I would say my strongest point was being born and raised in an entrepreneurial family where I developed the sense of taking risks very early on. I got a good education but have an even better family education, thanks to my parents. I always tell my kids that I got my real MBA on the ground while working with my father, not at school.”

Having learnt the value of hard work and integrity as a child, he now imparts it to young entrepreneurs. “I tell them to always get advice from a mentor and to know that nothing which is beautiful can be achieved quickly.”

Like all entrepreneurs, the first hurdle Bally had to overcome was to find the money to buy and refurbish the Grand Hotel and he says, “For someone who really wants to start a business, financing is often the biggest challenge, especially if it’s a start-up.”

Bally’s contacts from the family business certainly helped in this regard. The IFC officer who assisted him to find a consultant to help with the bid for the Grand Hotel was someone he had met while working with his father. It is a connection which has lasted for more than 20 years and Bally and the IFC still have a working relationship.

The second hurdle was finding qualified contractors to refurbish the hotel on a limited budget and hotel staff who could provide superior service. With the help of the African Management Services Company (AMSCO), Bally found a hotel manager, Bertrand Boyer. AMSCO is an IFC/ United Nations project that helps African small and medium-sized enterprises to find high-level managers and subsidises their salaries. “I would not have been able to bring in a high-level expatriate and seasoned hotelier like Boyer otherwise,” says Bally.

“Human resources remain my biggest problem. The countries Azalaï are in haven’t invested in training in the hospitality industry. I was fortunate to have a French national as the manager of the first hotel who could train our Malian and other African employees.”

Azalaï Hotels now has its own hospitality training academy in Bamako that provides one year’s vocational training to students wanting to go into hotels, restaurants and diplomatic households.

A further challenge was “how to balance a very busy, time-consuming professional life with having a personal life”. “At some point, you will have to compromise. The price I had to pay was quite high – my first wife and I had a divorce. We have three beautiful and successful boys.”

Now that Azalaï has grown and has a large staff contingent, he does enjoy a more balanced life but is not sure whether it is because he has finally learnt how to strike a balance or because he is not as involved in the day-to-day operations. “I am married for the second time and can say that I am a very fulfilled person. It is easier for an established entrepreneur to find this balance than for a start-up,” he says.

Why not sit back and enjoy his success?

“When people ask what motivates me because I have nothing left to prove, I always have the same answer: I want to create more jobs and have a greater impact on a country’s economy. It is not financial satisfaction that I am looking for. I had that as a trader.” He says passionately, “It fuels me on further when I see the women who sell products to our hotels, the butcheries who provide the meat, the taxes we pay to local governments, all the young people who find employment and don’t have to leave for Europe or work as slaves in Libya or have to die on a small boat in the Mediterranean Sea.”

His greatest fear is not being able to pass on his company to someone who will keep developing it, whether it is to his children or an outside buyer. “I really want Azalaï Hotels to remain an African brand and to continue growing. I fear that if my children do not want to take over, I will have to sell it to an international company that will take down the brand and manage it as a subsidiary.”

Despite business challenges such as keeping a hotel open in conflict-torn countries, his enthusiasm for Africa remains undiminished: “I am quite confident that the continent will develop. I am confident about the future of Africa and its economies as more and more African entrepreneurs are coming to the fore and developing more champions. There is tremendous opportunity.”

While intra-African investment is climbing, Bally acknowledges the continent still has to sell itself to attract foreign direct investment to be able to achieve its potential. For him, it is a matter of disseminating information, advertising and communicating better. “Perhaps bigger African media houses should talk about the positives in Africa instead of having only international media talking about what is not going well. There is a very high risk perception of the continent. Some of it is real, of course, but most of it is not.”

A few years ago, news reports indicated that there was a plan in the offing at Azalaï Hotels about listing on a stock exchange. Bally says this has not changed but it has been postponed. “Today we don’t have problems accessing finance. Thus, strategically, we think we can push the listing out two to three more years,” he explains.

“When speaking to businesspeople who are new to Africa, I always tell them that they must have a long-term plan. Africa is not a continent where you can take a short-term view. I learnt this from working next to my late father. He was very patient and never became discouraged,” Bally says. “You have to be optimistic and resilient to succeed in Africa.”

This article is an excerpt from HOW WE MADE IT IN AFRICA: THE BOOK, published in November 2018.