Thundafund: The crowdfunding platform made for Africa

Thundafund: The crowdfunding platform made for Africa (CNN)

“Kickstarter doesn’t really work in South Africa… it’s a difficult market to break in to… It could be said [Kickstarter] is more about making money than empowering people; there’s no responsibility towards funding more entrepreneurs. Patrick is providing opportunities and helping communities.”

A new way of doing business

Good ideas are “a dime a dozen” Schofield says, but many South Africans lack the “the skills and resources” to bring their idea through to fruition. New businesses that do receive funding are often saddled with heavy debts or give away significant portions of their company to investors in return for guidance. Whilst the likes of Kickstarter “stand aside” once a campaign is launched according to Kruger, Thundafund has guided its entrepreneurs through the process, optimizing their chance of attracting investors.

Congratulations Mr President – Where does Malawi go from here?

APMMy congratulations to President Arthur Peter Mutharika (APM) for winning the 2014 presidential elections in Malawi are aptly late. Over 2 months late – I’m somewhat embarrassed, but just as the lateness was not entirely of my own doing, maybe as a consequence of it (possibly even in spite of it), a lot more thought has gone into preparing these ‘congratulations’ than would have been the case if I had offered them the day APM claimed victory. Had I made haste, the congrats would have been too brief and would lack substance.

In earnest, this post is more of a call to action than an expression of pleasantries. And what better time to do it than when the President is in the US, to meet Barack Obama at the first U.S.-Africa Leaders Summit. Pardon me for comparing the picture of 50 African leaders congregating in Washington DC to meet a US President, with governors being summoned to Rome to meet the Emperor, a summon by the Emperor to rulers of the provinces.

Except in this picture, the United states is not really an empire in the classical sense (if we ignore the economic sense for a moment). Neither are the 50 countries which have been invited to Washington, and are sending  their leaders, governors of US provinces. So the question is, why comply to such a request at all?

The simple and shortest answer is DOLLARS. Our world is controlled by the stuff. And even though the institution that issues currency in the US is essentially a private consortia of unknown entities (they are secret), the scheme of things is that most parts of the world today are currently dancing to the tune of Washington (and possibly to the tune of those who lend to Washington) , in the same way as at the height of the Roman empire, a large part of the civilised world did what Rome said, and were subjects to the political and economic power of ROME.

And while the rise of China could curb the dollar dominance, that’s not really what I want to talk about today.

1. Priorities

Mr President, as a well-educated man, I’m sure you know that there’s nothing wrong with Malawi forming alliances with bigger and more powerful countries. It is beneficial because such alliances can provide access to capital, if not attract inward investment (Your inaugural speech touched on this). Further they are potentially a conduit of technology transfer – which could have huge benefits for a country like Malawi.

Malawi needs developed allies, whether they are from the East, West, North or South.

However, who ultimately benefits from these alliances? Who gets the lion’s share? Are these deals really win-win situations? Could they be made to be win-win situations if they are not? Or is the bigger player benefitting more than the smaller player?

For example if a Chinese or American company invests $300 million into Malawi’s railway infrastructure, mining or agricultural sector, how much of that investment will genuinely foster long-term sustainable growth? A kind of growth in which ordinary Malawians are set to genuinely benefit from the deal? In layman terms, we might ask how many people will have their livelihood transformed by the investment such that they achieve or are likely to achieve long-term financial independence?

I think these questions must be asked, and addressed because it probably will not be of significant benefit to Malawians, if investors are persuaded to invest, but there is no strategy to safeguard the long-term rewards of the investment to ordinary Malawians.

An effective system needs to be created and implemented whereby revenue sharing (between investors and the government / local people) is as much a priority as the luring of investors. Maybe a good place to start would be to create investment organisations or government agencies such as this one in Angola, whose task is to iron out investment rules and create a win-win strategy. Indeed the rhetoric between Beijing and Luanda has increasingly been of creating ‘win-win’ business partnerships.

Malawi should learn something from such partnerships.

This is what most major powers today did in the heydays of their economies. Japan has these agencies, Britain established them many years ago, Germany has them (and has large manufacturing and investment zones which are testament to the success of these agencies), even China has a good number of them. And if you look at younger economies, like Australia and New Zealand, even there you’ll find them. Thus, it’s no surprise that a country such as Iran operates a few of these vehicles. With that benefit of hindsight, is it not important for Malawi to develop Government investment agencies?

2. Education

The technical projects of Bingu Wa Mutharika’s government were an excellent idea. And it is in your government’s best interest if these were successfully completed. We need more high quality educational institutions that will train our workforce, and empower them with skills that they will need to do their jobs well. Transferable skills which they can use in various scenarios. For this to happen we need to train teachers and lecturers abroad, to access this knowledge and impart it on our students. We also need to attract foreign specialists who already possess this knowledge, and bring them to Malawian institutions so that they can impart their knowledge onto our students. We need to broaden the subjects on offer at our institutions, and we need to make higher education more accessible. Here, the use of technology may be useful, in that video technologies that allow the creation of  ‘virtual classrooms’ could provide an excellent (and cheaper) way of technology transfer. Here also is the need for equipment most paramount. Your government would be best advised to source as much educational equipment from other countries or educational institution as can be possible. This can be a real game changer in terms of the quality of graduates we train.

3. Corruption

Mr President, if there’s one critical limiting factor to Africa’s economic development, whose negative effects don’t need re-articulating, it is corruption. The practice is killing the continent. And if nothing is done to curb the prevalence, and extent, we will never catch up with the rest of the world. In Malawi, the Cashgate crisis has put this issue in sharp contrast. And an opportunity has arisen in that addressing corruption in Malawi could close the loopholes for good, safeguarding public funds, and paving the way for sustainable economic development. It is crucial that the perpetrators of the Cashgate scandal be brought to book without selection or bias because this will give people confidence in your government. It really is in your best interest that our government in Malawi becomes clean. A cleaner government is a stronger government. And a stronger government has a better chance of creating and maintaining a strong economy, than one which is inherently corrupt. Examples of this relationship stretch from recent governments in Norway, all the way back to the Roman empire I referenced to above.

4. Unity

Bringing in Muluzi into government was a good and commendable gesture. Although many people I’ve spoken to have doubted whether he has the experience for his current office, I think having him in government is a positive thing. But that aside, I think trying to find common ground, and inviting the opposition into government should go much further. There are many talented people in Malawi. Proud Malawians who have immense talents – but who are not utilised and therefore feel left out. Maybe the creation of Parliamentary committees enables participation on some level, but more must be done. I’d think new blood like Juliana Lungudzi and several other young politicians could do more if entrusted with responsibility within government. Why? Because Malawi needs fresh ideas, and different people have different ideas they bring to the table depending on their experiences. Yet ultimately, we all want Malawi to develop, to do better, so it would be in our own interest if everyone participated. I urge you Sir, to empower this parliament to be different, to be united and a force for good on behalf of ordinary citizens. The way to do that is to keep the legislators busy with meaningful projects that have a real prospect to effect change. And to keep jealousy firmly locked out.

5. Federal System of Governance

This goes without saying, but power shared is responsibility shared. There’s little justification why a country the size of Malawi with a population over 13 million should restrict itself by virtue of its system of government. And one man can never fully cater to the needs of 13 million people. Neither can 192 people – no matter how prolific – do enough to improve the lives of so many people. A Federal System could change that. It will bring more people into participation in the building of our economy, and the power bestowed upon them will enable them to undertake projects free from the control or bureaucracy of a centralised system. Across the world, there are many examples of countries with Federal Systems that work far better than those with centralised systems, and as an expert in law, I’m sure this issue is evident to you.

6. Infrastructure

See this and this (which includes a reference to the Shire-Zambezi Water Way). Increased infrustructure will open our continent up, and make it easier for people to do business. It will also lower the associated costs of investment – a factor which could attract more investors.

7. Investment into Manufacturing and Business

In order to be less reliant on products sourced from outside, we need to develop our own manufacturing sector. Why should we buy from outside things which we can make or source quite cheaply within our own borders? With tobacco earnings set to drop, now could be the time to diversify into manufacturing. After all, China is increasingly becoming an expensive destination for western companies – many are looking for alternatives. Creation of incubation and business centres is also a necessary prerequisite to sustainable economic development. If you make the cost of doing business low in your country, many people will flourish and reward your government handsomely in increased tax contributions.

8. Subsistence farming and preservation of Small Industries

There are lessons to be learned from the Farm Input Subsidy Programme. And your government would be best advised to listen to what the people want. Thus, how many fishermen who currently use canoes for their trade would do better with a boat? How many farmers who use hoes to prepare the fields could benefit from a cooperative that lends out a tractor? Similarly, what should the government do to help industries such as these:  How second-hand clothes kill business for Malawi’s tailors.

9. Accountability

Our culture of accountability needs to be restored in Malawi. People should not do wrong (be it in a parastatal or top civil service position) and think they can get away with it. A good way forward would be for regular performance reviews not only for ministers, but also ordinary civil servants, preferably to be undertaken by external auditors (to minimise the prospect of favouritism developing into self-accountability). That way we would be replacing entitlement (where people think they have a right to a job – even when they are not qualified for it / when they are bad workers) with accountability. Similarly, it must never be right for an investor whose company has earned millions of dollars through doing business in Malawi, to evade tax, legitimately, on Malawian soil. The loopholes need to be closed shut.

10. Increased Trade with other African countries.

I urge you sir to be an advocate of the Africa brand. We need to import more from our immediate neighbours than from farther afield. We need to lobby the west to act in reducing cost of remittances. We need Africans to do more business with other Africans. See this for more information.

11. Security and Safety

We need to restore our confidence in the police. Malawi needs more security, not only along our borders but within our towns and cities. People in Malawi don’t feel safe anymore. Not like how safety used to be defined in the 70’s and 80’s. If we can’t afford police cars, let the government buy our police officers motorcycles (which are cheaper to run), so that they are able to respond to calls for help.

12. Investment in International markets

Malawi and other African countries need to invest in international markets. This should be a strategic and long-term initiative. We need to create organisations that invest in global companies around the world, so that the dividends therefrom are wired back to our countries in Africa, boosting our economies, and thereby contributing to our continent’s economic growth. Just see this article titled Bleeding Money: Africa Is A Net Creditor To The World, Illicit Outflow Actually Exceeds Inflow Of Aid, Investment, to understand why this is necessary. It’s urgent.

Mr president, Malawians are looking up to you now. They need leadership accompanied by action, and less of the empty promises of previous regimes.

Once again, congratulations Mr President Sir!

 

 

 

 

 

 

Slow Justice: delays / inaction of Malawi’s institutions symptomatic of a weak democracy?

There’s a bad habit in Malawi of authorities sitting on cases  (in which shady dealings or suspect conduct had taken place) and piling them on the shelf for years and years. This almost intrinsic dormancy does not only affect formal legal cases. Even others which are strictly speaking neither before a court of law nor pending investigations of impropriety (but are nonetheless issues which in any decent democracy would call for investigations) are simply ignored, or at least not attended to. In Malawi, depending on who is in power, people often get prosecuted only after a new leader hostile to the old regime comes into power. At least that’s what seems to have been happening in the past.

And it’s not because there are no competent bodies to do the investigation or order the prosecutions (there is the Anti-corruption Bureau, the Judiciary or even the Public Affairs Committee to highlight wrongdoing). Yet more often than not, you find issues which should have been investigated or cases which should  have been brought to an end dragging on for years and years, when it is clear (or the suspicions are somewhat overwhelming) that wrongdoing may have occurred.

Obviously, such a state of affairs is undesirable and can only mean one or more of a number of things:  (i) A weak democracy with weak institutions incapable of competently undertaking their jobs for the benefit of Malawians – an unattractive market to any investor. or  it can mean (ii) Political interference obstructing the course of justice – making the market even more unattractive to investors ; or (iii) Under-resourced or overstretched institutions failing to allocate resources or cope with workload …

Among the cases / suspicious issues which call for investigation or are yet to be concluded in Malawi are the following:-

  • Bingu Wa Mutharika’s unexplained wealth  (see another source here)
  • Bingu’s relationship with Mota-Engil
  • Malawi: Ex-President Muluzi’s corruption trial – this trial has had some severe delays partly due to Muluzi’s ill health, and at one point last year, the then head of ACB couldn’t make a court date because he had to appear before a magistrate for a matter the ACB director had been arrested over. (see another source here and additional / alleged charges against Muluzi here)
  • Pioneer Chemicals saga which named Goodall Gondwe (never mind his latest turn back into politics) was dropped by the ACB with little explanation other than that ACB lacked evidence. Why then did ACB make the allegation in the first place?? What did they see or hear that drove them to make the allegation?
  • Patricia Kaliati – Nyika Corruption saga   (See another report here. A further corruption case against Kaliati here)
  • Apollo International fiasco in which Ken Lipenga has some explaining to do
  • Fertiliser subsidy saga which raises possibilities of conflicts of interests affecting cabinet ministers in Joyce Banda’s government
  • The Midnight six – how can people who plotted what was effectively a coup in a democracy be dealt with so leniently? Will they be let off the hook? Will they go to prison? Will the President pardon them? Something doesn’t add up…
  • The Paladin Kayelekera Uranium issue  (see other links here and here).  While Paladin has denied any involvement in paying bribes, to me two questions still remain: How could the government have signed such a bad contract with little or no benefit to Malawi – and how could such an action be justified as being in the interest of Malawians? (ii) Secondly, which Fraud/ Corrupt company ever admitted to paying bribes or doing wrong? (See related document about Paladin’s activities / transparency record here: Radioactive Revenues)
  • Mathews Chikaonda and Hitesh Anadkat –  the K320 million corporate scam, in which investors lost money, and which was alleged to have been a case of insider trading. However, as most Malawians know, president Joyce Banda has a close relationship with the duo, and in one instance was pictured wearing attire with colours of FMB, the bank in which Anadkat is the Vice Chairman.  The scandal was reported on Nyasa Times on March 6, 2012, although interestingly, the story has since been deleted – reinforcing some of the things people on social media have been saying about Nyasa Times’ lack of impartiality. Luckily for those of us who know how to hack our way around the web,  a cached version (which we have downloaded in full) is still available on google (accessible via  this link), as can be seen below:

Chikaonda-Anadkat

  • Dr Kamuzu Banda’s estate – was it really all legally obtained? Don’t Malawians deserve to know? In the bbc article, the writer says a missing death certificate is the reason why overseas financial institutions will not release the information regarding his accounts. My question is this:  if there was genuine leadership in Malawi, wouldn’t it be in the interest of the country, for the government (or the appropriate authority / hospital) to request the issue of another replacement death certificate, to audit the source of Banda’s wealth??
  • Then there are alleged cases of corruption mentioned in links such as these , which names late Aleke Banda, Cassim Chilumpha, Bakili Muluzi, the current vice president Khumbo Kachali and the president herself.

Reading all these allegations, it makes one wonder, if there wasn’t an investigation at the time when the cases were reported, if no one was prosecuted, and there was no clear clarification / acquittal, what hope would there be today of ending graft in Malawi?

In almost every advanced country in the world, institutions such as Anticorruption bodies and the judiciary operate independently of the government. If an official or politician commits what is clearly a crime or is involved in some kind of shady conduct, the courts in collaboration with investigators and the media will often get to the bottom of the matter, irrespective of whether the politician / official belongs to the ruling party or some power bloc.

This fact alone is probably one of the best indicators of a healthy democracy.

But in most African countries, this kind of thing doesn’t happen. Rather, one’s liability to prosecution is influenced by how many friends they keep in high political office, the police , the judiciary and suchlike.

How then can our democracies in Africa progress if our institutions are not genuinely independent of the powers that be?

So, on top of all that pile of cases add Cashgate to the list with its many complex scandals (most recently see  here)…and it starts to become clear that the road to a functional democracy in Malawi, one with effective  institutions that operate independent of the government, will be a very long one…

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Global 100 Voices: No 4

My next guest is a good friend and a brother who I have known for many years. Based in London, he is a true son of Malawi, and someone who I genuinely believe has a bright future ahead of him. Yet it was only recently that I discovered just how much passion and ‘fire’ he has for Africa. Mr James Woods-Nkhutabasa, thanks for doing the Global 100 Voices Interview!

[ Brief profile: James has several years’ of communications experience working for public and private organisations, in promoting achievement in African leadership, issues concerning global governance and development. He is also one of the founding members of Diaspora Capital LLP (dCAP), a members investment club which seeks to make socially impactful investments in Africa ]
  1. As a Malawian, how important is Malawi’s Socio-Economic stability to you and your family?

I believe a socio-economic stable environment is beneficial not only for the nation only provided government can create an arena of good governance, accountability, transparency and no corruption. This is also attractive for investors.

  1. After nearly 50 years since independence, what visible progress do you think Malawi has made since independence?

The visible progress for me is that Malawi is now a democratic nation, people have more access to goods and are also more connected due to the digital revolution. On the downside Malawi is still fighting the goals set at independence and poverty levels remain high. We still have a long way to go.  Maybe regional integration is key to addressing this weakness through the delivery of wider social and economic benefits that would benefit the country and drive its development further. We need to stop thinking of Malawi as a single unit but think of it as a major part of the remaining 53 nations on the continent. Only then will we sing our success story. But we need to get our house in order first.

recycleds      3. In your view, what pressing challenges remain and what should Malawi aspire towards?

Malawi, similarly to other African countries is facing major corruption issues and a lack of good governance. Our parliament is also filled with recycled politicians – what I aptly name – ‘The Kamuzu/Muluzi Giants’. It seems to me that our politicians change allegiances as much as they change suits. The political world, leading a nation, serving your people should be a vocation or ‘a calling’ but not a pension, as it currently seems to be for some.

Malawi should aim to be a success story in good governance.

  1. In view of those challenges, what do you think is the role of government in tackling those challenges?

Create an environment of patriotism, transparency and competence. The government needs to remember that they are there to serve their people: men, women and children and thus to run the country accordingly as it is their responsibility. We need strong leadership and this can be achieved collectively, through government and civil society. Malawi needs an enlightened and dedicated sort of leadership that looks forward and not backward. Most importantly get the right sort of people involved in government.

  1. As someone who has lived outside Malawi for several years and hopefully been exposed to modern and progressive ideas, what things in your country of residence have had the greatest impact on you, and why?

The competitive work ethic and drive that people have in London is absolutely brilliant. People have the desire and resilience to achieve the best possible outcome. This has taught me to continuously improve to keep up with this ‘rat race’ and be able to be significant in the growth and development of the nation.

  1. What lessons do you think Malawians and the Malawian leadership can learn from those ideas?

Malawi has extremely bright individuals who can contribute great things for the nation. The leadership needs to promote an open society – welcoming of all and not based on ethnicity, tribe or social standing, but instead on what you can offer to drive forward development.

  1. If you have recently visited Malawi, what struck you most as the greatest sign of improvement or development?

The amount of women and youth trying to make a living through a business; truly inspiring to see the entrepreneurial spirit and a can-do attitude, be it selling vegetables on the side of the road to managing small wholesalers. It is really amazing at how they have adopted technology such as the use of mobile phones to sell and place orders. This has inspired me.

  1. What struck you most as the biggest sign of stagnation or regression?

I believe the lack of good educational standards and opportunities have really been under-played. Youth are the future of Malawi, the leaders of tomorrow; they are being frustrated by the lack of opportunities and a lack good of education. These youth can be a curse or a blessing and rather sadly it has been a curse on the nation with increased criminal activity. If we do not invest in the youth and create jobs how are we to have a good future? Without the right investment we will continue to face the same problems of corruption, poor leadership and bad governance.

  1. Malawians will be going to the polls in 2014, to elect a president. In your view what kind of leader does Malawi NEED, considering the country’s current challenges?

I think we need a bit of the positive characteristics that our past and present leaders have shown but most importantly we need a leader who has an entrepreneurial spirit, a socio-entrepreneurial impactful spirit. We as African’s are natural-born entrepreneurs…we need a leader who will use an entrepreneurial approach to create sustainable development and leadership in so doing promoting a culture of hard-working, ambitious young people to drive forward development. A leader who has innovative ideas and simply not just focussing on what has been done, but looking at what can be done. We need a leader who will deal with disparities in wealth that exist between the poor, the middle class and the rich. High on their specification will be better business and financial acumen, infrastructure, education, employment and better health services.

  1.  Specifically, how should that leader approach the top job in terms of sustainable development and reducing aid dependency?

I believe aid is still vital to Malawi for the next few years at least, but our president needs to really focus on the fruit of a stronger regional economic integration across the continent; and build economies of scale to enable Malawi and Africa to better compete in the global economy. Malawi seems to be attracting a lot of investors to the vast minerals in the country ranging from bauxite, gold, limestone (marble), monazite, niobium and uranium…then we’ve got oil and agriculture. The key aspect to ensuring the leadership moves away from aid dependency is to create a strong and efficient financial system that could support high levels of investment…also the need to eliminate the tax breaks these foreign investors have in the country as we are losing millions of US dollars annually.

Malawi can have a wonderful future. By strengthening its financial and legal systems respectively, and focusing on regional integration, Malawi has the potential to become one of Africa’s fastest growing economy by the end of this decade provided that political stability, social protection, quality education, private sector and good governance are implemented.

  1. Looking at the problems that have plagued the tobacco industry – which is our biggest source of export revenue– in recent times, what alternatives do you think Malawi has besides Tobacco, and why are they viable alternatives?

There is a major problem by relying on tobacco. Let us look at the bigger picture – tobacco farming is a major employer in Malawi where it employs 70% of the nations workforce – in terms of providing a living to the population it plays a big part.

The country does need to diversify and not only focus on tobacco as the international controls on tobacco are surely having or going to have an effect on the economy.

I think a strong emphasis should remain on agriculture produce such as tea, coffee, macadamia nuts, groundnuts, sugar, cotton, soya and timber. The potential for agribusiness is there but we need the right mentality in promoting good practice to increase efficiency and bring in investment and expertise to help scale up production but also go into agroprocessing, where higher prices for commodities can be achieved.

Infrastructure development is vital for Malawi’s economy to flourish. There is a need for better roads, airports and aviation, rail, ICT, water and sanitation.

Stronger focus on the extractive industries and corporate realisation of Malawi’s objectives in oil found in Lake Malawi. Mining currently accounts for only around 2% of GDP, with tobacco, sugar and tea remaining the main exports by value, but we all know the short and long-term potential of the mining industry if we play our cards right.

Tourism is another sector to focus on. This would bring the needed foreign exchange and foreign direct investment and importantly raise the profile of the nation as truly ‘the warm heart of Africa’. I do not know if you are aware but Malawi was recently crowned runners up in the 2012 Safari Awards “Best Africa Tourist Board” beaten by Kenya. This is definitely an important space.

12. Considering our troubled history with donors and funders such as the IMF and World Bank, how do you see Malawi progressing from this relationship in view of the criticisms these organisations have received in the media across the world?

Malawi, is still too fragile to sustain herself – as mentioned earlier I believe once the powers that be start developing the nation, attracting more investors and regional integration is in place Malawi will be on the right path to stand with the rest of Africa as partners and not rely on these international bodies.

13. How do you think the government is doing regarding managing Malawi’s natural resources?

Problems are there, such as issues to do with mining legislation. The main legislation governing mining is the Mines and Minerals Act 1981.

The Mines and Minerals Act 1981 states that companies operating in Malawi need to employ and train local staff but this is left at the discretion of the company, thus local workforce are often found to be losing out. There is lack of regulation, think of the people who are displaced by the mining companies? There is no protection for these people – regulatory framework for resettlement only requires compensation to be given for land, livestock etc…but nothing is in place to give those people back land of same quality. Most people living in villages where these mines are based do not own the land through purchase but through living there for generations thus when the mining companies come, these people are evicted and not titled to any compensation. Most importantly there is a lack of transparency – mining companies are not revealing their profits in line with expenditure and taxes. The mining companies are not required by Malawi government to reveal their spending in Malawi.  

14. Can the government do better to manage natural resources? If so how?

Government needs to address the points I’ve just raised and ensure something is done to curb this behaviour of secrecy. They need to tighten legislation, this will be achieved by revising the Mines and Mineral Act 1981 – I understand that this is being done.

15. What is your answer to increasing transparency and eradicating corruption which is plaguing most governments across Africa?

African governments need to be accountable to their citizens. The responsibility for dealing with corruption and transparency falls equally on all parties from governments and donors, to civil society and citizens. We all have to fight to ensure we can develop better leadership with the tools of good governance.

We have to remember, when we the people have information; we have the power to hold our leaders and governments accountable to improve the systems, tackle corruption and have transparency.

16. Any famous last words?

Let’s continue driving our country and continent forward. In the words of Kwame Nkrumah ‘’We face neither East nor West: we face forward’’.

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