Many Ivorians in the diaspora (a category I technically fall into) invest their money back home – often in little projects – farming, construction, etc. The goal is often to build an investment portfolio back in the place where many expect/hope to eventually return. There’s also the idea of job creation for relatives. And frankly of getting better returns than a Western savings account.
And so when Ivorians meet abroad, the conversation frequently turns to such subjects – and often with a sadly recurring theme – how their hard earned savings that they thought they were investing, have in fact been stolen by some good-for-nothing cousin/sibling/uncle etc. The hardest challenge for any business seems to be obtaining trust and professionalism from those running the business back home.
Anyway, aware of these pit-falls, I’ve started a little project myself. As well as my house going on the rental market, I now have a taxi running the streets of the economic capital, allegedly with my name on the back bumper (although I haven’t seen photo proof of this yet).
Here’s how it works. Late December I commissioned my Dad and brother in the UK to find an old Toyota Corolla (the car of choice for taxis in Abidjan). There aren’t huge numbers available – due to age and perhaps previous exporters. I was looking for a 5-door, manual, diesel model – and making sure not to get one with a French engine inside (a pitfall a friend of mine fell into). They found one for a little under $2000, which then cost about $700 to ship to Abidjan. Passage through the port/customs took a few weeks and cost $3000, and then changing to left-hand drive, paperwork and other modifications to create a red/orange taxi cost about $2800. So total expense (and about 6 months waiting) leaves me with a taxi working the streets of Abidjan for $8500.
That’s a little bit more than I’d expected, but it’s still about $2000 less than buying a similar car all set-up from a forecourt in Abidjan. Was I cheated along the way? I have proof for all the expenses so I don’t think in a major way, though it’s remarkable how little of the original car’s purchase value in England is of total expense (less than a quarter).
So, after many months the car is now on the road. The economics work like this; there are two taxi drivers who work two days on, two days off, six days a week (the car rests on Sunday when there’s not much traffic). Each morning the driver gets the car with a full tank of fuel and must return it with a full tank in the evening, along with 17,000 cfa for a week day (or 15,000 cfa for a Saturday). These charges seems to be standard across the sector. Anything above that is the taxi driver’s income. I’d love to know how much they actually make on top of this – perhaps I can investigate this when things settle down.
My brother in law who runs the business gets 2,000 cfa (4 dollars) on the weekdays and 1,000 cfa on Saturdays. There are then several other expenses on a monthly basis including insurance, a secure car park space we hire and vehicle maintenance. Then of course there the breakdowns which are likely to become more and more frequent as age and Abidjan’s roads take their toll.
After four weeks, including a major breakdown in week 2, I’ve made 218,000 cfa ($400) after expenses. At such a rate, it’ll take me 73 more weeks to recuperate my investment. though hopefully breakdowns like week 2 will not be frequent. It’s certainly not a path to riches, and many don’t succeed. As far as I can see, the three key factors are i) not being cheated by your manager, ii) having a car that survives long enough to earn a profit, iii) not seeing revenue as profit, but realizing that the capital investment needs to be reimbursed and that for the business to continue, you’ll need a pot of money in two years’ time to purchase a replacement vehicle.
I’ll let you know how we get on! The government recently tried to crackdown on illegal taxi vehicles, so that should improve the market for me.