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Musa Group’s Strategic Transformation Partnership in Retail 

Musa Group RetailMusa Group (“Musa”) is an investment holding company, that has FMCG, Housing and Construction, Retail Financial Services, as well as an Investment Banking and Private Equity division, all under its group umbrella. While much of Musa’s investment banking work is on larger, transformative transactions, Musa’s other activities are targeted at transforming middle market businesses within our target segments.

In recent times, the notion of social entrepreneurship has become more prevalent in business. Musa has instilled this into their core business strategies, understanding that the long term value of “giving back” whilst conducting business proves far more beneficial to the overall outcome of an organization’s success, than having a focus on the profit motive alone.

The Harvard Business Review (January-February 2011), touched on some vital points relating to the concept of “Creating Shared Value.”

“The concept of shared value recognizes that societal needs, not just conventional economic needs, define markets and social harms can create internal costs for firms…. The concept, which focuses on the connections between societal and economic progress—has the power to unleash the next wave of global growth.” 

The article further states that, “Instead of considering it as the redistributing of a company’s already achieved value, shared value refers, rather, to expanding the total pool of economic and social value,” so as to yield opportunity for prosperity to all parties.

Applying this view to the African landscape, more specifically with respect to the retail sphere, emerging retail owners are faced with severe challenges to be manoeuvred around. The evolving challenges often require innovative thought and co-dependent solution execution. These challenges vary from restricted access to capital, to lack of collateral for securing funding, to the paucity of know-how and to a lack of supplier network.

Musa bases its core ethos on “doing good and doing well” in the eco-systems in which it operates. Consistently looking to diversify its community engagement and stakeholder development, Musa has taken note of the necessity to establish joint ventures aimed at addressing the fundamental needs of entrepreneurs. This has been performed through impactful programmes and tools, all of which address ground level challenges hindering the development of broad-based black economic empowerment (“BBBEE”) beneficiaries. One such ground-breaking instrument is the formalization of an Empowerment Development Programme (“EDP”) between Musa and one of Africa’s largest retail networks. The EDP is centred around the ideology of creating a substantial presence of previously disadvantaged retail store owners and supply chain participants. The EDP espouses the objectives of the South African National Development Plan, which aims to eliminate poverty and reduce inequality by 2030.

The programme is focused on acquiring a core group of retail stores with a proven track record and experienced owner-operators who are willing to diversify their personal investments, whilst retaining operational control. This structure is focused on store sustainability and maximising return on investment.

The objective of the programme is to utilise the identified stores as a training ground for the development of entrepreneurs, as they receive formal education, as well as in-store practical training through mentorship from established owner-operators of participating stores. A further aim of the EDP is to create opportunities for successful retailer candidates to acquire equity participation in companies or close corporations that own retail stores. The core of the programme is to broaden and accelerate transformation through targeted human capital development.

Musa envisages numerous achievements from this project, primarily, the development, acceleration and retention of previously disadvantaged retailer candidates who will become independent store owners in the future. Surprisingly, ownership levels in this basic stepping stone of entrepreneurship is extremely low, with less than 5% of owners within this network of stores being from the economically previously disadvantaged segment of the population – along with home ownership, franchising is a major source of early economic activity for wealth creation in emerging segments of any population. In addition to spurring entrepreneurship, there will be improved succession planning through structured personal development programmes within the current ownership structure of stores. This project will also assist in facilitating the transfer of critical skills and competencies from existing successful retailers, through structured mentorship and coaching. True skills development has evaded many of South Africa’s industries and pairing successful entrepreneurs with future aspirants in a hands-on approach portends to deliver more efficacy and more lasting results.

The fundamental growth of our people, our country and our continent depends invariably, on our ability to recognise and pursue opportunities which harness socio-economic advancement. Musa is attempting to rise to the challenge that is being posed to business – that of tackling the social and economic realities prevalent in South Africa, through creative solutions, ultimately driving greater growth in our economy and ameliorating the effects of history that are displaying themselves in a myriad of ways, most visibly captured in South Africa’s shamefully world-leading disparity (as measured by the GINI coefficient). Musa believes that only through creative solutions can the business actively play its role in solving this problem.

“Business cannot succeed in societies that fail. Likewise, where and when business is stifled, societies fail to thrive” 

Bjorn Stigson World Business Council for Sustainable Business (WBCSB)

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Value Chain and Financing in the African Market

Agricultural Insight With Musa Group

Value Chain and Financing in the African Market


In the below sit-down interview, Andrew Makenete, Musa Group’s Agri-Business Executive discusses financing options for emerging farmers in South Africa.


 Q: How does farmer financing in South Africa compare with the process in other African countries? 

A: In the rest of the continent farmers do not own or have individual property rights. The state owns the land and leases it back to farmers, in most cases, with well-established traditional norms and status. Long term leases are available for investors and people seeking more secure rights. Typically, the land where actual farming takes place is of a much better quality (productive capacity) than land in South Africa. It is a commonly known fact that SA is actually not well endowed agriculturally, compared to the rest of the continent; particularly the countries in Sub Saharan Africa. This means that farmers can produce on much smaller pieces of land and with higher yielding crops. Contract farming is common in the rest of the continent whereby small holder farmers are provided inputs and production finance and then they deliver the crops (produce) to the person who financed them. This is often a sugar, cotton mill, processor, or packing facility, hence being the only market for the produce. The finance risks are fairly limited in such an arrangement.

Q: What kind of financing is available for emerging and smallholder farmers in South Africa? 

A: Grant funding in various forms is available in very limited forms to emerging and smallholder farmers. This is normally from the state (national and provincial governments) in various guises or schemes. It is so limited that it reaches only a few and has had little impact. It is either for production finance, or used to fund acquisitions, primarily of land, using the three key land reform strategies.

Limited recourse funding – typically provided by SOEs such as the Landbank, IDC and a variety of provincial funding institutions, whereby the funding is somewhat subsidized and the risk lies to some extent with the funder. Recourse is often some level of personal sureties, the crop, cessions on income etc. Some private sector companies also provide such type of funding and use various instruments such as input financing, crop sharing schemes, and subsidized 3rd party insurances (sometimes even from donor countries or agencies) to cover the risks.

Q: What is the biggest mistake made by primary producers when obtaining production financing? 

A: There are a number of key risks and it is difficult to isolate just one since they are somewhat interrelated. The modern commercial farmer produces best when they are sure of a market for their produce, which can provide a commercial return. Emerging farmers, often, cannot produce at a commercial scale with is typically dependent on

economies of scale, therefore not being able to cover their production costs. At the minimum, a producer must be able to recover their production (input) costs.

Q: How do you envision financing of primary producers changing within the next ten years? 

A: The so called “value chain financing” methodology is the way to go. Primary producers become part of product value chain where the financier intermediates the whole production chain – de-risking each and every step in the chain and determining the real costs and risks and ensuring sequencing in such a manner to have adequate financial cover across the chain.

PDF Version Here: Musa Group Agricultural Insight-A Makenete

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Musa Group Perspective on SAfm


Musa Group Farming

Last month, the Competition Commission raided nine fresh produce dealers based at the Johannesburg Market and Tshwane Market after the Department of Agriculture, Forestry and Fisheries reported cartel conduct, which could limit the development of black farmers and raise prices in the food sector – affecting vulnerable households the most.

About a week ago, President Jacob Zuma urged stakeholders in the agriculture sector to develop black smallholder farmers and to make a contribution to economic growth and job creation. For more information, please see article.

Musa Group and Spar have partnered to empower black emerging farmers in the agriculture sector. The private equity firm aims to transform the agriculture sector by providing financial support and empower disadvantaged black entrepreneurs with the skills to fully participate in the mainstream economy.

Listen to Musa Group’s Agricultural Executive, Andrew Makenete, in this interview on SAfm, as he discusses the many challenges faced by Emerging farmers in South Africa and how Musa Group provides support to emerging farmers.

Please follow link to listen to the interview:


Musa Capital’s Specialised Namibian Fund Launches in Windhoek

Richard Akwei - Principal

Richard Akwei – Principal

The Namibia Mid-Cap Fund (NMCF), a Namfisa registered investment vehicle was recently launched in Windhoek.

The investments position the Fund to act as a broad catalyst for economic, social and financial regional development in private Namibian companies that provide goods and services in priority sectors like, agribusiness, consumer related industries, financial services and light infrastructure. Musa Capital Namibia (PTY) LTD is the Fund Manager and carries out the day-to-day activities of the Fund and is also responsible for the overall investment performance of the Fund in its role as the Fund’s Manager.

The team is staffed with Namibians responsible for the origination, management and execution of the investment strategy. The Namibian team leverages investment and operating experience in the same target sectors within Musa Group’s operating divisions. Additionally, the team leverages Musa Group’s institutional fund management platform, including fund reporting, legal and compliance, and ESG.

Listen to Namibia’s 99 FM Maggie Forcelledo interview with the Principal at Musa Group Mr. Richard Akwei below:

View original content here:


Musa Group AVCA Interview with Will Jimerson and Richard Akwei


Musa Group Musa Capital

Q: William, what was your background prior to co-founding Musa Group, and what prompted you to start a business in South Africa at such a pivotal time in the country’s history?

A: I co-founded Musa Capital with my partners, Antoine Johnson, and Meredith Marshall in 1995. Whilst completing my undergraduate degree in engineering at Massachusetts Institute of Technology, I interned at Microsoft, NYNEX Corporation, and Digital. I also worked on Wall Street prior to launching Musa Capital. My partners and I felt deeply that we could make a positive contribution to Africa which was at an extraordinary time in its development.Musa Group

Q: Richard, please tell us a bit about your professional background.

A: I started my career with J.P. Morgan, spending 16 years in investment banking positions in Latin America and Africa. I transitioned to principal investing in 2004 when I joined The Rohatyn Group, an emerging market fund manager based in New York. I have known the founders since 1995 and joined the Group in 2012 shortly after moving to South Africa.

Q: Tell us about the evolution of Musa Group. What makes you different from your peers? Do you consider yourself an impact investor?

A: Musa Capital started with Fund I which had US$30mn and was focused on financial services and telecommunications investments across Sub-Saharan Africa. As the fundraising market was difficult following the exit of Fund I, we decided to make direct investments with the carried interest and also developed a broader advisory platform.We launched Fund II in 2008 with US$80mn and continued making investments leveraging the consumer theme. Moreover, we realised that these types of companies required a more direct investment model to sustain their rapid growth. In 2015, a large African institutional shareholder acquired a 30% stake in the newly constituted Musa Group, with Musa Capital holding 70%. Musa Group now consists of a fund management group, operating companies in the food, housing and retail financial services sectors, and an investment banking group. Our structure has evolved to enable us meet our core objective of “doing well and doing good” in Africa, while being cognisant of the investment opportunities that are present, the needs of the underlying businesses and the broader fundraising market. Management believes that the firm is well-positioned to take advantage of Africa’s attractive investment themes regardless of the structure of the opportunity.

Musa Group

Q: Musa is currently raising capital to invest in Botswana, Namibia and Tanzania. Why develop a country strategy now?

A: We decided to focus on these countries because they have similar development challenges to South Africa, so we felt we could successfully apply the expertise we had gained from investing in South Africa. Furthermore, it was important to focus on countries where pension fund managers had shown commitment to investing in PE, and these three countries fit that criteria. Each country fund will target mid-cap businesses, with typical investment sizes of between US$3mn and US$8mn (in local currency). A co-investment facility, domiciled in Mauritius, will provide global investors with exposure to each of the country funds.

Q: Given your experience investing in the mid-market in Sub-Saharan Africa, what are your key value creation levers? What is your philosophy when it comes to social impact?

A: Many mid-sized businesses cannot afford a well-trained risk manager or finance director. However, they still need strategic direction, not just in the board room, but also in the c-suite. Sometimes, you just have to “roll up your sleeves” and meet the CEO every other day, on issues such as the product range, cost efficiencies and containment, or leakages. The challenge is to instil a good governance model without stifling entrepreneurial spirit. Our ethos is to “do good and do well” which means feeding, housing and educating people, and giving them access to decent healthcare and financial services. In 2010, through Fund II, we invested in Matlapeng Housing, which builds and manages good-quality rental stock for low to middle income housing in South Africa. If the needs of people are met, we will always do well financially.

Q: Has Africa’s recent economic slowdown meant for a more challenging environment?

A: Our presence in South Africa for over 21 years has given us insight into a number of cycles within the market and we have always found success. With depressed asset prices, investors are able to deploy capital at more attractive prices. With depressed asset prices, investors are able to deploy capital at more attractive levels. We actively seek out opportunities within the education, food, healthcare and residential real estate sectors, where there is a clear need due to a lack of high-quality supply.

Q: Given your longevity in the African PE industry, what developments have you witnessed over the years and what are your expectations for the future?

A: The African PE market has significantly evolved from the early 90s. The industry was originally dominated by New York or London-based fund managers, which over time established regional offices. Those players still exist and have become household names like Actis, Emerging Capital Partners and Helios; however, they have been joined by a growing number of indigenous African fund managers. Similarly, while the initial commitments were largely DFI-based, the investor pool has widened to include commercial investors such as fund of funds, global and regional pension funds, family offices and global impact investors. Like most nascent markets, first-mover advantage is rewarded, and much of the value creation in those initial transactions came from finding and building “hidden gems.” In the current market, improving operational performance and governance are as, or more important, as finding “hidden gems.” We believe that the current trends will continue, and that African pension funds will play a significantly more visible role in the future.

Q: Taking the long-term view, is this a good time to invest in Africa?

A: There has never been a better time in the past 21 years. This is partly because African pension funds are now more enthusiastic about investing locally. The only problem posed, is that there is a lack of product for them to invest in. Now it is up to us and other investment managers to prove that their enthusiasm is well-placed.

Read PDF version here


“Private Equity Will Flourish Where Strategic Investors Won’t Go”

William Jimerson, “private equity will flourish where strategic investors won’t go”.

William Jimerson at SuperReturn Africa 2015, at the Mövenpick Ambassador in Accra.

Musa Group Corporate Essentials Feature

Watch Musa Group CEO, Will Jimerson talk  entrepreneurship‬, ‪the importance of impacting lives‬ when doing business, and success‬, all fundamental focus areas for the Musa Group.

Why Millennials Should Look Into Entrepreneurship

Entrepreneurship - The road less travelled

Entrepreneurship – The road less travelled

As is reflected in South Africa’s alarming level of youth unemployment, one of the biggest challenges facing Millennials is finding a job. With the need to create more new employers and more opportunities for others, should Millennials be following the path to entrepreneurship?

ACCORDING to the 2014 GLOBAL ENTREPRENEURSHIP MONITOR (GEM) SOUTH AFRICA REPORT, 7.0% of the adult population in South Africa is engaged in entrepreneurship, while 2.7% already own or manage an established business. It also reveals that for every 10 adult males engaged in entrepreneurship there are eight females.
From this report we also learn that the typical South African entrepreneur is male, between the ages of 25 and 44, lives in an urban area, is involved in the retail and wholesale sector, and has a secondary or tertiary level of education.

Based on the report’s findings, it is safe to say that South Africa needs more male and female Millennials (born between the early 1980s and early 2000s) to consider starting businesses. The reason for this is that the biggest challenge this group faces is finding jobs and/or opportunities, hence the alarming level of youth unemployment.

Education plays a significant role in starting a new business and Millennials, unlike generations before, have more access to education. Moreover, Millennials are tech savvy and possess IT skills that are a must have for any business start-up. Currently, 28% of South Africans start businesses because they do not have another option for work – they are known as ‘necessity entrepreneurs’.

In this day and age, we need to create more new employers that will create more job opportunities for others. The challenge begins after graduation when the majority of graduates opt to seek employment instead of starting a business. Some graduates even settle for career paths different from their field of academic study, while others eventually give up and end up sitting at home. Our society is in dire need of ‘opportunity entrepreneurs’ who can identify an opportunity to start a growing business that, in return, will create employment for others.

The majority of Millennials are risk takers and dream chasers, willing to make mistakes and learn from them. A generation that has been constantly overcoming obstacles and has gained tremendous amounts of bravery, boldness and confidence growing up. This generation is distinctive and open minded. Millennials believe in lifelong self-development and growth. A wealth of information is available at the Entrepreneurs Growth Centre (0861 SMEFIN) for this purpose.

Millennials are also entering into what THE FUTURE OF ENTREPRENEURSHIP: MILLENNIALS AND BOOMERS CHART THE COURSE FOR 2020 REPORT refers to as the traditional ‘peak age’ bracket – around 40 – for entrepreneurship.

Millennials are resilient, assertive go-getters and fall into the 35.5% of adults in South Africa who identify good opportunities to start businesses. This compared to 25.4% of adults who are prevented from starting businesses because of fear of failure.

A prosperous future for Millennials in entrepreneurship begins with establishing a locally desirable idea, ensuring it is clear and simple for people to understand, it is relevant and provides a needed service or product, and that they identify mentorship from knowledgeable and supportive people. It is of utmost importance to maintain focus on acquiring and maintaining customers by fulfilling on a promise to provide a quality product at a value proposition. Following this mantra will allow the entrepreneur to do good for the community in which they operate while doing well (making financial, social and emotional profit) for themselves.