Nigeria, others have a lot to gain from AfCTA implementation, says Babaeko

Steve Babaeko is the Group Chief Executive Officer of X3M Ideas SA (PTY) Limited, an advertising/marketing communications agency that is expanding its footprints in Africa. In this interview with FEMI ADEKOYA, he talks about the firm’s South Central Africa project and plans to drive regional trade by consolidating the African Advertising business. Excerpts.

You recently embarked on a business arrangement that that saw your company unveiling new operations in South Africa. Can you provide an insight into this project?
I do not want to call it the South African project; I like to call it the South Central Africa project. The project covers five territories in South Central Africa with South Africa being the arrow head where the operation is going to be spanning out to Mozambique, Zambia, Zimbabwe and Botswana. So it is a South Central Africa project.

The vision is quite clear. I have always felt that there are so many people on this continent for us to have a situation that we have currently where we are not doing business with each other. There are about 1 billion or some people say over 1.3 billon people on the Africa continent. If we make it easier for us to do business with each other, we don’t even need too many people outside. This is because if we look at the other regions and continents, the level of intra-continental trading is higher than you find in Africa.

Sometimes it is even more expensive to travel from one African country to another than it is to travel to Europe. So those are the kinds of stuff that has informed my ambition to say if we can bridge the gap in intra-trade in this continent, maybe we can go somewhere.Nigeria and South Africa are the biggest economies on this continent, if we get it right with the two economies, we actually can change the story of the continent for good. Those are some of the reasons propelling us to do what we are doing now.

How easy is it to set up business there considering the xenophobic posture of some South Africans?
It is difficult. They have their rules, and you have to play by the rules. It is a pretty good place to do business. They are very welcoming of people, who have genuine interest to do business, but the rules are the rules, you have to play by the rules. They have their tax rules, as well as their registration rules. So abide by these rules and you are welcome to do business.

Like I explained, it is South-Central Africa agenda; we are only starting in South Africa. We are not going to stop in South Africa. Let’s not forget, some of the clients we work for already have footprints in some of these markets. I was in Lusaka some weeks ago. On some billboards were Dangote Cement creative materials, those were stuffs we developed in this shop, Access Bank is already in Lusaka, Zambia.And one of the reasons we had to do this is that our clients are moving in that direction. We will be living in a bubble if we don’t do the same because we are already providing some kind of quality services to them in this market, we can transport some of these services to other part of Africa. I really don’t see xenophobia as a big challenge. Every country is dealing with internal problems. I am sure the South African government is on top of these issues. We are comfortable doing business in South Africa or anywhere else. We just need to push the Africa agenda more, if we want this continent to be better for all, we need to cross fertilize ideas to take our businesses to the next level and develop each other.
There are certain best practices already available in Nigeria within the marketing communications, which we know will be useful in South Africa. The vision is to leave an indelible print across this continent. So we are taking it region by region, this is just the starting point.

Advertising business is perceived to be more competitive in South Africa. How is your X3M Ideas SA (PTY) going to handle this competition?
Right now, we are a major player on the continent. Like recently, we were in morocco for the Cristal Award, we met a number of these global players. Some asked me: Steve, what global agency is your firm affiliated with?” I told them, we are independent agency. We are one of few or only independent agencies that won the awards like these, we won 12 medals at the event. Major players in South Africa came to the award, not all of them won at this level! So we are already competitive. We are not going there as poor cousin. We are going out there as a company that has done something substantial in the Nigerian space and to impact the African region.

After South Central Africa what’s next?
We are looking at East Africa and Kigali looks very good. Rwanda is also on the radar. The economy is growing steadily for the past five years and I had the good fortune to meet some Rwandan government officials at a conference in Dubai months ago, they are speaking in language I find so interesting and it is somewhere we are aiming at in the nearest future.

Sometimes in the past you advocated mergers and acquisitions. With your current move, do you still believe in this?
Definitely, we are not going alone into some of these markets, even though we have this South Central Africa project. We actually have people or companies we want to merge with or acquire. In Nigeria, it is inevitable. If you don’t merge in the next five years, you will mention some agencies and you will say “I used to know them”.
We have no choice than to merge; people need to get acquired because the old school ways of staying a “big fish in little bathtub” is gone. Nothing is wrong in smaller fish in a big pond and that is what merger and acquisition will do for you. It is inevitable; if not, people will die, companies will die and common sense will prevail eventually.

Five years down the line, how big is the X3M Ideas group?
We are still not big; we are still operating on the mentality of a start up. Even Amazon, I am sure Amazon still operates as a start up. The size is just a matter of mind.We started with nothing and we are still much work in progress and there is so much work to do. We started with 7 people and today we have more than 100 people across the group. We are very much work in progress.

It appears this is a mission to consolidate Africa’s Advertising businesses on continental level, how easy is this?
It is clear. It takes you to have that courage though it’s not easy to achieve. It costs money and time but we are probably one of the few agencies that did not raise money from anywhere. We generated our money and propagated the gospel of selling black excellence across the market. Someday we will consolidate the market for the whole world to see.

The obsession is to sell black excellence across the continent especially in the field of advertising. It gives us the opportunity to interact with other brands both local and global at whatever level and still be able to take those best practices and apply. We need each other on this continent. What I believe is nobody, will help us solve our problems in this continent, as black people we can solve this problem ourselves if we put our minds to it.

So what are the unique things X3M Ideas SA PTY will be bringing to the market?
Our record as X3M ideas is there for the world to see. We brought a bit of freshness to this industry. I can count how many brands we touched positively. The relationship we built with clients is much more important than the financial aspect. As a person I am passionate about what I do, I’m not driven by money. I want to take a brand from here to there where they can be able to compete with others.

What impact will the new business have on the economy if South Africa and Nigeria sign the AfCFTA ?
It would change everything. I can’t speak for the government of South Africa but I can speak for Nigeria because that is the passport I carry. I think we can renegotiate some of the arguments that are worrisome and again give credit to people in government because we have a lot of professionals there who can see if it favours us or not.I think this continent has a lot to gain if we sign that agreement, unless we are able to do it, we are not going to move forward as a people. Forget all the injustice they have done to us in the past, this is a new generation, we need to build this continent and take it to the next level.

Advertising budget is on the decrease, yet the clients want more. How do you navigate this fragile terrain and what are you going to do differently now?
We are going to be more prudent now. We have always been prudent with our resources and once you are prudent with your resources, you can deploy some of the resources to vital areas of operations. People are very important, how much do you take care of your people? In five years, we have tracked our records in terms of taking care of our people. Doing all the training required of them to grow and putting back the money into the business.