He’s the Kiwi who made billions in Russia. Now Stephen Jennings believes Africa is the next land of opportunity.

They've been turning out in droves to see the Stephen Jennings show.

Kenyans young and old have been packing Nairobi venues to hear the Kiwi rich-lister denounce private sector corruption, which he says is one of the biggest threats to the east African country's economic future.

From Jennings, there have been none of the sycophantic platitudes foreign investors so often deliver in their target markets.

The Waitara-born businessman - who made a fortune as an investment banker amid the financial anarchy of post-Soviet Russia and is now spearheading huge urban development projects in Africa - is telling it like he sees it.

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And the 55-year-old's outspoken stance appears to be striking a chord with Kenyans fed up with rampant corruption. So many people turned up to his talk at Nairobi's Sankara Hotel in June that it was standing room only for many attendees.

Speaking to another capacity crowd at the city's Louis Leakey Auditorium on September 17, Jennings said it was easy to point the finger at the Kenyan Government over deteriorating corruption.

"But what we've found in Kenya is that a huge amount of corruption originates in the private sector," he said.

"You've got incredibly skilled businesspeople who are forced to co-exist with total crooks and thugs."

The catalyst for these comments was the scandal that has embroiled Tatu City, a 1000ha, multibillion- dollar development on Nairobi's northern outskirts in which Jennings' firm, Rendeavour, is the lead investor.

The initial phase of the project, being built on a former coffee plantation, will house 70,000 residents and 30,000 daily visitors.

But it has been held up by years of bitter legal wrangling between the international investors in Tatu, led by Jennings, and their powerful Kenyan business partners: household products baron Vimal Shah - Kenya's richest man - and Nahashon Nyagah, a former governor of Kenya's central bank.

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In a recent development, Kenyan police are investigating an alleged illegal transfer by Nyagah of a large parcel of land, owned by the Tatu City investors, to members of his family.

At last month's event Jennings made a scathing attack on Shah and Nyagah despite a court gagging order issued two days earlier that, according to local media reports, was meant to stop him making details about Tatu City public.

He said "certain members" of the Kenyan police were hampering the investigation into the land transfer, while he and other Rendeavour staff had been summoned to the Immigration Department "without any proper justification" and interrogated over work permits this year.

"In 25 years of working in around 35 emerging markets, this was my first experience of this form of cheap harassment."

Speaking to the Herald from Nairobi this week, in his first New Zealand media interview since 2009, Jennings said it was crucial to "front-foot" the Tatu City problems and expose them publicly.

"The standard modus operandi here is that people shake you down, try to intimidate you and tell you to keep your mouth shut - and that works with a lot of foreign investors in Kenya," he said.

"And obviously, if you go down that road, you will be extorted, you will lose value and your reputation will suffer."

Jennings said he was not normally so vocal about public policy and corruption issues.
"We normally prefer to work behind the scenes. But normally we would get more support from government and more traction within the system.

"It's when we weren't getting that traction and we weren't getting that kind of support that we went more public with these issues."

Jennings is up against some powerful forces in Kenya's political and business landscape.

Asked whether he faces any danger, he said: "We made the decision - and I think it was the right decision - that it would have been more dangerous not to speak out."

Rendeavour owns more than 12,000ha of African land and is also building large-scale satellite cities in Ghana, Nigeria, Zambia and the Democratic Republic of Congo.

It's not as if Jennings needs the money. His wealth was estimated at $980 million by the National Business Review this year.

So, after more than two decades in emerging markets, what drives him to keep operating in such challenging places?

The Democratic Republic of Congo, for example, was ranked 184th out of 189 countries in the World Bank's latest ease of doing business survey.

"I like being in places that I think, fundamentally, are going to change and where there's very long-term growth opportunities that are not necessarily well understood or identified by other people," he said.

"I don't mind working and living in places that are bit different, challenging and interesting."

Stephen Jennings speaks during a press conference at the 2nd annual Pan-African Investor Conference in Lagos, Nigeria, in 2011. (AP Photo/Sunday Alamba)
Stephen Jennings speaks during a press conference at the 2nd annual Pan-African Investor Conference in Lagos, Nigeria, in 2011. (AP Photo/Sunday Alamba)

In 2012 Jennings sold his remaining shares in Renaissance Capital, the Russian investment bank he co-founded in 1995. He says his business links with Russia - where he was known as the only foreign oligarch - are now fully severed, although he still has many friends and contacts there.

He has a home in the Cotswolds in England, where he lives with his wife Yulia and his youngest daughter, but he tries to spend three or four weeks in New Zealand each year.

He owns a house at Oakura, on the coast southwest of New Plymouth, and his extraordinarily low profile in New Zealand means he can usually walk along the beach without being recognised as one of the most successful businesspeople the country has produced.

"The locals just treat me like another local and I really treasure that," he said.

Protecting his local reputation was part of the reason he started a defamation action against Fairfax Media and a senior journalist over a report published in March that covered his Kenyan business dealings.

"Obviously I'm in Africa to try and make money and build things, but it's a very difficult and challenging place to operate," he said.

"To have someone at home kick you in the backside without doing their homework, without thinking about what knock-on effect that would have, was very upsetting."

Rendeavour's demands mean he now spends about 70 per cent of his time in Africa - "I'm very, very focused on this part of the world."

Jennings began scoping opportunities in Africa in the early 2000s, long before the "Africa rising" narrative about the continent's economic growth story became trendy.

Today, some of the world's fastest-growing economies are African.

Ethiopia, one of the continent's rising stars and a country being eyed up by Rendeavour for a possible project, is expected to notch up economic growth of 10.5 per cent in 2015-16, according to the World Bank.

Jennings reckons Africa is an even bigger opportunity than Russia was in the 1990s.
"It's more sustainable, because you don't have the terrible Soviet legacy that Russia has," he said.

"Where's the growth in the world going to be over the next 20 years? It's going to be in India and Africa - they will be the two fast-growing poles and they're both billion-plus populations."

Questions are now being raised about Africa's prospects as a result of the slowdown in China, which has been a big investor in Africa, and the commodity price slump.

Jennings, on the other hand, remains bullish. "It hasn't changed my view at all."

But he does think many international investors and businesspeople still struggle to approach Africa with open minds.

"Most people are deeply prejudiced," Jennings said during his talk at the Sankara Hotel in June.

"When I went to Russia, the nickname for our group in the flash offices in [London's] Canary Wharf was the 'smellies', because those sophisticated Europeans thought Russians smelt because they didn't shower every day."

He blames prejudice towards Africa on aid organisations, which tend to paint a negative picture of the continent in their marketing.

"They're able to generate funding and support by generating pity," Jennings said.

"And pity requires a pretty negative picture ... I think they've done Africa a massive disservice."

He believes New Zealand companies are, by and large, failing to respond to the opportunities available in Africa.

"I'm absolutely convinced that New Zealand is missing a massive trick in Africa.

"We're so fixated on China and the rest of Asia. In terms of foreign affairs and our business and marketing push here [in Africa], we're very weak."

He says Kiwi companies shouldn't put off having a go.

"Barriers to entry now for us, across a range of products and services, are extremely low. But if you come back in 15 years they'll be much bigger markets with much, much higher barriers to entry."

The Tatu City saga highlights some of the reasons New Zealand businesses might be reluctant to do business on the continent.

But Jennings said that situation was an isolated one for Rendeavour.

"Of the eight cities that we're building, [Tatu] is the only one that has had material problems."

Despite the legal battles, work on Tatu City is continuing.

The groundbreaking ceremony for Kijani Ridge, the project's first residential phase, was held in July.

And large plots have been sold to industrial firms, which are expected to invest US$750 million in commercial facilities.

At last month's event in Nairobi, Jennings said he dreamt of turning the project into Africa's largest urban development over the next five to 10 years.

"We really want to achieve this because so many people have come to us and said, 'I've had the same thing happen to me. Please keep going. Please try and make an example,'" he said.

"Giving up is not in our repertoire, so don't worry about that."

Stephen Jennings. Photo / Supplied
Stephen Jennings. Photo / Supplied

Story of a Kiwi Oligarch

Stephen Jennings has been at the cusp of the emerging markets growth story for well over two decades.

It all began in 1992 when, aged 32, he arrived in Moscow on a six-week assignment for investment bank Credit Suisse First Boston.

His mission was to pull off the first privatisation following the collapse of the Soviet Union - of the Bolshevik Biscuit Factory.

The factory sold for less than $1 million, but Jennings, a free-market economist and former New Zealand Treasury official, saw Russia as the land of opportunity.

The six-week visit turned into a 20-year stay in Russia, where he became known as the "Kiwi oligarch".

In 1995 he co-founded Renaissance Capital, which became a powerful force in emerging markets finance and played a central role in developing Russia's capital markets.

Writing in the Moscow Times in 2012, fellow investment banker Bernie Sucher described Jennings as "a charismatic, intense leader" who "rallied his best people to a challenge few of them understood and for which none of them had bargained".

He rebuilt the company after it came close to collapsing during the 1998 Russian financial crisis.

Forbes valued Jennings' stake in the business at $5.2 billion in 2008, making him perhaps the richest New Zealander at that time.

But the global financial crisis took a heavy toll on the firm.

By 2012, when he sold his remaining shares in Renaissance Capital, his wealth was estimated to have fallen below $1 billion.

The National Business Review Rich List this year estimated his wealth at $980 million, up from $800 million in 2010.

In recent years his African urban development business, Rendeavour, has been expanding its activities across the continent.

It now has projects on the go in Kenya, the Democratic Republic of Congo, Ghana, Nigeria and Zambia.