Creating local companies with global vision; The story of Kwesi Livingstone and his partner

Our reporter, Samuel Doe Ablordeppey, had a chat with Mr Kwesi Livingstone (KL), CEO of barely a year-and-a-half-year-old Ghanaian company which already has an international recognition and receives many referrals from abroad. Graphic Business (GB) first asked him what the Group was into.

KL: McOttley is a group company in three areas of operations: investment banking, McOttley Capital is specialised in fund management, personal wealth management, venture capital, due diligence for other companies and economic and financial research for our own companies.

McOttley Money Lending specialises in loans to individuals and small and medium scale enterprises (SMEs) in particular. We try to promote SMEs not only by giving them funds, but also trying to support them with management advice and engaging them.

McOttley Properties is into the real estate company specialised in property management, valuation, letting and sales. We have a 250 homes project currently under development at Dodowa. 

Some of the projects are so big that we cannot source funds locally, so we have to resort to foreign investors. This will enable us to get the quantum of funds and lower cost of capital. In Ghana, funds are short term so it is not very ideal for property development.

GB: To what extent does your subsidiaries provide synergy?

KL: The areas we operate in were carefully selected. The fund management is to help develop investment culture in Ghanaians. We also wanted to provide a credible investment company that the people can trust as not being one of the Ponzi Schemes. So having helped in pooling funds, we then invest them in productive sectors of the economy.

The money lending looks at the SMEs where they need financing; quick loans to turn things round—which is not mechanically done, but with engagement and support services. The housing side is where it has high demand, but sticky supplies. So funds from both subsidiaries are channelled into the housing sector where there is need.

GB: How did the company obtain CIMA certification in the first year of operation?

KL: We started in April 2013 so we are barely a year old now. The company is owned by two Ghanaians, with a global vision. We did not only want to be the best nationwide, but we came out with a global vision. We worked towards it and got a global recognition in the first year of operation. 

CIMA gives quality partner certification to companies that have been tested and the management, processes, quality of the board and the corporate governance meet global standards. McOttley applied for the CIMA certification in the fifth month of operations. This was ambitious, but surprisingly we passed. 

We became the seventh company in Ghana to attain that status. Currently, we get a lot of referrals from abroad and we wonder how they get to us. The name seams to resonate well with people of the West.

GB: What is your value proposition?

KL: We practise guaranteed customer satisfaction and make sure our customers are satisfied, if not we compensate you for that. Our way of thinking is not to make a mistake and correct it; we push for the total quality management (TQM) concept, getting it right the first time. Our customer retention and feedback indicate that customers are satisfied. 

GB: What is your background and motivation?

KL: I started my career in finance. I have been through Serious Fraud Office (SFO) (now EOCO), through Supreme Barnette Furnishes and Databank. I went to the UK and also worked with a number of companies, ending up with the National Health Service. Back in Ghana, I worked with the UT Group.

All along, as I worked with these companies, I picked their strengths and weaknesses and I could identify weaknesses in management styles. Some had very good leaders but they became complacent along the way. Some were good entrepreneurs but didn’t have the right people around them; some also thought they knew it all. I have also been from the bottom right up to the management level and I know what it takes to deal with a customer. 

There is something fundamentally missing in our companies; the customer’s right and satisfaction is totally missing. This is what motivated me to look for a like-minded person to start the business. 

Also the Asians are taking over EU, American and British companies, but the question is: Africans, where are we? We don’t appear anywhere and it’s a shame. So we decided to start a giant from Africa, which is capable of swallowing some global giants. 

GB: How can we improve funding for SMEs?

KL: I will say the lack of access to funds for SMEs is systemic. This is because we lack the alternative financing options and instruments to raise funds. Other countries have corporate, municipal bonds and all kinds of sources of funds. But in Ghana, it is predominantly loans. Different sources of funds mobilised to finance operations that exist elsewhere are missing in Ghana.

The stock market is too small, with just 35 companies. It is still struggling with the alternative market because of the requirements.

We also have to compete with the government, which borrows from the commercial banks and individuals, and interestingly offers higher interest rates. This is what raises the cost of capital for the SME. This is biting, hurting and it is not good.

GB: How do you plan to expand?

KL: We’ve zoned the country into southern, northern and middle belt. So we are in Accra, Tarkwa and Kumasi. We’re doing due diligence on the northern market. As much as we want to make profit, we want to see what benefits the customer stand to gain from doing business with us.

In the medium term, we expect the brand to grow steadily and we have targets for each subsidiary.

We want to get into the Club 100 within the first five years and have presence in at least one West African country. Then we will leverage our partnerships, agencies and strategic alliances in Africa and other parts of the world. Looking at how things turn out, we are not ruling out listing.

GB: What are some the challenges the company faces?

KL: There is a generally low investment culture in Ghana. People always think their incomes are not enough and it takes a lot of effort to educate churches, clubs and different segments. We’re trying to create a credible brand in the investment industry. The little confidence they built have also been destroyed by these ‘Ponzi’ and quack investment schemes. 

Also, the investment horizon of Ghana is more ‘shortermist’. Culturally, Ghanaians are averse to risk. The uncertainty of the political system and the economy also mean people don’t want to commit themselves to long-term funds. So this affects long-term development, property development and private equity and things like that.

Until the culture changes, it will be very difficult for Ghana as a country to make inroads into PPPs in infrastructure development. These are the rules within which you must operate and they do not allow you to do things profitably.

GB: How can the challenges be surmounted?

KL: We need to revise the laws. Aspects of the law which do not allow long-term investments should be looked at. This is how PPPs can be encouraged. 

GB: How do we nurture entrepreneurs? And your advice to young entrepreneurs?

KL: We don’t have many good entrepreneurs because our method of education is too theoretical. With our curriculum, we are taught and assessed in the knowledge of the theory but not the application of it. This is different from how the developed world goes about it. So first, we have to change our curriculum.

Then there should be strong collaboration between industry and academia. Research also drives entrepreneurship. The research information gives ideas of opportunities and threats, among others. In our part of the world, the professors are different from the industry gurus. We should look at how we can bring on board industry experts to tackle some models or organise seminars and workshops, so the students are able to understand the subject in practical terms.

The third issue is the financial support. If we have the investment options I described earlier and the laws allow for long-term investments, it will make finance available for entrepreneurs who have ideas but do not have capital.

To the entrepreneurs, starting from those in motion, they shouldn’t think they know it all. Nobody is a database of knowledge. They should encourage criticism, even by their own employees and subordinates.

Complacency cost several Ghanaian companies, including some which started long ago but are unable to become big companies. As soon as things begin to go well, they feel they have arrived and get complacent. Strong global brands are not complacent; they push for continuous improvement. Those that became complacent get punished.