“Well I do own very many commercial and residential buildings here but definitely not half of them,” he laughed.
Within minutes I establish that the buildings he owns include several apartment blocks and other buildings in the city where one of the big four banks is a tenant of his All Danquah CC which also owns a restaurant and guest lodge in SA. He is also the proprietor of Comet Steel South Africa.
In Ghana, he is a 50% shareholder of Macsteel Ghana, the local subsidiary of Africa’s leading steel supplier. He also owns the Obuoba Group, a collection of companies which include a hotel, a roofing entity, alcohol distillery and an FM station. Outside of Obuoba, Danquah owns Metalex, a company that manufactures high quality roofing, plastic and brick products and he is also in the process of funding the construction of a technical university.
Before the meeting, I googled this Ghanaian entrepreneur and came across a detailed case study conducted on his business by the Columbia Business School in the USA. The paper found that the Metalex Group alone had net assets of over ten million dollars in 2007. Assuming continued growth within this and his other interests and the possible values of his real estate interests, Danquah’s net worth could easily amount to a billion rand or at the very least a billion Ghanaian cedis at the exchange rate of 1ZAR=2GHC. I engage him in the following question and answer sequence seeking to discover what lies within the brain of a billionaire.
Where did the journey to entrepreneurship begin for you?
My father was a petty trader dealing in building materials in the town of Koforidua. I was his eighth child and assisted in the family business for a year after I completed high school education. He gave me USD 4,000 in 1982, to go to Accra and start my own business and that is when I started Metalex which at the time manufactured wood making machines. I started small with a few employees but the business grew rapidly. In 1987, I started trading with Macsteel and this later resulted in a 50/50 partnership in Macsteel Ghana. In the year 2000, I purchased a mismanaged brick making factory from the Bank of Ghana. Since then I have from time to time sought opportunities in sectors that appeal to me.
How did you come to SA and why did you invest in property?
When Macsteel executives came to Ghana looking for a distributor, the taxi driver brought them to my door because he (the taxi driver) had seen a sign for Metalex roofing. We got into discussions and began trading. After a while they realised that I was trustworthy and approached me to partner with them in a Ghanaian venture. As per my culture, I need to see where a person comes from in order to engage in a partnership with them and so I travelled to SA to visit their headquarters. I was amazed at how well developed this African country was and decided that I would invest and live here. This was after independence and white South Africans were leaving the country and selling their properties cheaply. I favoured Kempton Park because it was near the airport and I figured a number of employees would be in need of housing in the area.
I think property is a great investment because it will always appreciate as population grows. I target repossessed properties in strategic locations. It is also a form of saving and should you wish to seek loans for business ventures you can always use real estate as collateral. I don’t sell property for short term gain because I view it as a long term investment which will also benefit my children when I am gone. I also don’t place values on them every year because doing that can make you become complacent.
What advice do you have for aspiring billionaires?
I am a Christian and the Bible says that the way to heaven is narrow while the road to destruction is wide. To become successful, you need to deny yourself and work hard. You need to separate your wants from your needs and constantly re-invest instead of living lavishly. You can start living lavishly when you reach the break-even point. I define the break-even point for an individual as the point where you have acquired enough passive income that you do not need to work at all to sustain your lifestyle. Today I live in an 18 bedroom palace in Glen Marais because I have passed the break-even point. I do not however like to be flashy, look at this old Nokia phone that I am using. If you are too flashy then people will target you and you will need bodyguards and lose sleep at night.
To this day, I wake up at 4.00 a.m. every morning because success does not come easy. It is like an aeroplane, once you are up in the air you need to keep flying or you will hit the ground.
You also need to have an appetite for calculated risk; in the span of a few years I have lost close to five million dollars due to metal prices. As an investor you should take risks that you can afford and if they don’t pay off, you should learn from your mistakes.
If you love a woman, you will go wherever she is without feeling tired. In the same way, pursue something that you love when it comes to business because every line of industry has money in it but it is only those who are truly passionate about their line of business who will succeed.
You also need to be dynamic because no business can be profitable for a long time with the same ideas. Things change constantly. A few years ago a poor man had nothing and a rich man had about USD30, 000. Today a poor man still has nothing while a rich man has billions.
I would encourage Africans to be innovators. Today we are only good at continuing what the white man has started but we can be just as innovative as they are in initiating things.
How many employees do you have and what is your management style?
I have over 500 employees. I don’t believe in hiring “A” students because brilliant graduates understand your business very quickly and keep demanding pay increases. After a while you are unable to meet their demands and they will head off to a competitor with your ideas. But if you hire average individuals they can work very hard without you having to face high staff turnover. I was actually invited to speak on this concept at the Columbia Business School.
I also believe an employee needs to generate at least three times their salary for them to be worthwhile to you. That is what I base pay increases on as well as terminations of employment. Everyone who works for me knows that I have that expectation and so they do not need to be micro-managed if they understand their individual goal at the end of the day.
What are your future plans and do you intend to venture into politics?
My plan is to complete my university and retire in my home town of Nkawkaw. I will never become a politician because I was born an industrialist, but I do support politicians on a ratio of 60% government 40% opposition because next to God comes government. I don’t shun politicians because everyone is important; even the thief is important because he takes away the old things that you do not need and creates employment for police and security providers.
I do not get caught up in pledging die-hard allegiance because politicians are like soccer players. They can change teams very easily but it is we the supporters who remain bitterly loyal to our chosen squads.