Funeral home business in Africa

October 17, 2016

The advent of mobile based applications offering advise and pre funeral needs in African has left me gobsmacked.David is a Maasai friend of mine who hails from Mara region in northern Tanzania. He recently shared with me how he listened with a growing sense of dread to the sales pitch of an undertaker who bravely entered his offices seeking an appointment with him. Still fresh in his mind was a recent burial of his nephew. David was quickly sold on the wisdom of a pre-need funeral and offer was $150 discounts to those who register, he recalls.In the end, David invited him around to his Arusha home and in the end, both him and his wife, chose to be cremated because it was the more sensible option. Both of them are octogenarians and interestingly, they also dispensed with such things as radio announcement, newspaper notices, headstones and floral tributes. But by the time the process finished, they still faced a bill of more than $3200 which isn’t small money for them.Deathcare industry has long evolved from the popular image of a dark-suited bloke in a black cowboy hat, to a sophisticated international business.Five years ago, funerals in Africa were worth $2 billion. Now they are valued at more than $7 billion, if the cost of graves and memorials are included.Burials have grown into a giant enterprise where large corporations do battle with smaller, family-owned companies for the treasures of the underworld, and where empires are built and collapse with little or no government regulation.Today, those bereaved are not in a position to question an ever-rising spiral of costs. These begin with a coffin, but can quickly stretch to storage fees, funeral directors’ fees, transfer of body fees, mortuary fees, limousine hire, clergy fees, floral tributes, radio announcements, newspaper notices and an undertaker’s princely demand for up to $900 for anything that comes under the ubiquitous heading disbursements.The motivation behind it all is to charge what the market can bear and load up the consumer with as many things as you can think of, and that is how funeral homes make a profit in Africa.

Those of us alive know that one day, we shall face the same scenarios and as David lamented, there’s absolutely not one cent spent on the funeral that goes to make the slightest difference to the deceased.That is a totally frightening idea to the industry because the whole industry is based on the proposition that the more you spend on the funeral the better it will be.And they will fight tooth and nail to convince you of this. In East African countries of Uganda, Kenya and Tanzania, in 2015 people spent nearly as much dying $800 million on funerals as they spent giving birth.But while birth is an understandably costly business needing specialist equipment and treatment by doctors but the same cannot be said of the funeral trade.An undertaker needs no formal qualifications and the raw materials are surprisingly cheap, despite the glossy brochures given to would be clients. To a very large extent the profit in a funeral lies in the purchase of a coffin, because that is where the funeral director can say, Hey, did you get on with your Mother, did you love her?’ Of course, what are you going to reply?……the answer will be yes. And then the funeral director show you the coffin that they think would be fitting for her circumstances and yours, and one that is very reasonably priced at $1500.”The thing is, the coffin only cost him $100. So it is like $1400 has just dropped into his pocket. And the bereaved will be grateful for what he has done.”The unquestioning attitude of consumers is compounded by the circumstances.”I was sort of numbed by my nephew’s death … that would be the best way to describe me. You think you are on the ball but you are not,” says David, who buried his nephew, few months ago, but who still recalls the shock of the $4600 final bill.”I was in straightened financial circumstances so I was certainly looking for the cheapest possible alternative since the mother and father were already dead and was the only who was expected to cater for the expenses. But you sort of feel embarrassed that you care so little for your nephew that you just want to get out cheaply.”

Undertakers have the upper hand in more ways than their customers probably know.It is not the only corporate involvement in Africa’s funeral business such investment is a trend which has grown along with inflation over the past few years but it is by far the largest.There are different companies catering to different parts of the marketplace. Pricing isn’t as straightforward as it may seem. There are cultures which dictate that they should spend as much as they can, and then some. So I suppose that is one of the things to keep in mind.The advantage of the large organisation is that it can offer many extra facilities, such as motel-like suites for mourners within funeral homes.In fairness to businesses engaging in such, they recognised a long time ago that funerals are not for dead people.Funerals are for living people who can come together to reflect on a life that has meant something to them.Given the potential for profit, however, there are strangely few government restrictions on the industry. Firms are so desperate to get them that they tender as low as $70 per body. This is an apparently uneconomical figure given that it is an unpleasant job often carried out at short notice in the dark of night. But the incentive, it seems, is the chance to secure the funeral. There are meant to be very strict guidelines about not being allowed to tout.However, some funeral directors are using it as an opportunity to then get the funeral, and David, told me he consider that unethical. More serious are the undercurrents of alleged corruption involving nursing home staff, clergy and hospital staff who direct business to certain undertakers. Bribes start from $100 but they go to $800. The ongoing battle to secure business by convincing people like David who are still living that they need to plan ahead.The advantage for the undertaker in the pre-paid funeral business is that it overcomes the restrictions of a fairly static death rate. And certainly it has been the major success story over the past few years, growing from funds of less than $100 million in twenty years ago to about $3billion in Africa today.

Contador Harrison