Area 18 Interchange - Malawi

An intertwined road Interchange in Malawi got the whole country talking

Call me a cynic, but sometimes the country of my birth baffles me to the point I wonder: Is this really happening?

And if you don’t know what I’m talking about, here’s a brief: Malawi’s capital Lilongwe recently saw the opening of a new intertwined road interchange, named ‘Area 18 Interchange’. And because nothing like it ever existed in the country before, loads of Malawians began talking about it. The excitement soon reached fever pitch, to the point people were going out of their ways to go to the location of this interchange, to see it with their own eyes and observe the traffic criss-crossing its roads. Malawi’s president even visited the site the other day and stated his government’s commitment to develop the country’s cities through construction of transformative pieces of infrastructure.

Now you might say thats not a big deal, people in the developing world get excited about all sorts of ordinary things which westerners take for granted. And you are right. But what irked me was the hero-worship that followed, in that some Malawians began to claim that the construction of the road is one of the major achevements of former president of Malawi Peter Mutharika.

At which point I snapped.

It’s just a road. A tiny road for that matter. that if you go to other countries, you’ll find bigger and much better intertwined junctions… its no big deal.

On a much more reflective note, other people rate their leaders on substantive material things they achieved in their lifetimes. Achievements of huge significance that impact thousands of people, in some cases literary changing the course of history. To give a flavour, how about ending slavery as an achievement, defeating Nazism, ending the colonisation of a country, developing a Nuclear Weapon, giving the vote to women, presiding over a large National Economic Transformation (The New Deal); ending Apartheid and becoming the first black president of South Africa, lifting over 800 million people out of poverty(as China has done) …

How ridiculous do you think Malawi appears, when faced with a list of such noble and grand achievements, we’re in some corner hollering and worshiping a former leader based on a tiny road interchange that was built under their watch?? In 2020?

Is that really how low our standards have fallen? Kamuzu Banda must be spinning in his grave…

Some of these people need to visit Durban, Nairobi, Kigali or Addis Ababa- to see what real development looks like …

Let me tell you what I believe. Its no secret that countries like Rwanda, Botswana, Malaysia, and South Korea were at one point in the 50’s and 60’s on the same level of development as Malawi. But unlike Malawi, they chose to develop and made significant strides out of poverty to become middle income countries. It was a deliberate and sustained intervention to match and be level with some of the best.

Now you might say our politics were different at that time, we had an inward-looking dictator more concerned with self-preservation, and you are right. But since the start of multiparty democracy, we’ve had 26 years in which to “catch-up”. But there’s been nothing to show for.

And yet, our contemporaries also faced innumerable challenges. Like us, they didn’t have enough money. Their people weren’t that educated. In fact if you look at where we are, we probably have more incentives to develop that countries like South Korea or Botswana had in the 60’s and 70’s. The difference is while we sometimes appear comfortable in our sorry state, these countries were not content with mediocrity or token gestures. I mean, when was the last time you heard of an aid organisation working to feed hungry children in Souh Korea?

These countries decided they needed to create economies that could stand side by side with some of the largest economies in the world. Economies that were resilient to existential shocks. And it is high time we did the same.

In Malawi, we have to be careful not to let our historical excuses and well-rehearsed pragmatism (the “Malawian standards” / “crawl before you can run” excuses), ending up being main obstacles in our path to development. I’ve said it here several times before, but we really have to raise the bar on what counts as development, and what is raw and unmistakable mediocrity.

Peter Mutharika (like him or hate him) didn’t do much to develop Malawi because he was not a transformational leader. There was no blueprint, no grand plan, no credible and actionable dream, no rhetoric to charge and fire up people’s imaginations. His leadership, busied by tribalism, corruption and deceit – left much to be desired, and there was more bluster than implementation. If you don’t believe me, just look at the promises that were made in DPP’s 2014 Manifesto and compare with what was actually achieved by 2019.

In Malawi, we say of undeserved promotions that “Anangogweramo” , meaning Mutharika just fell into it. It was an accidental selection, and he wouldn’t have ended up as a leader of a party and the country if not for his brother pulling him into DPP’s Politburo.

But this post isn’t about the Mutharikas and DPP’s woes.

Malawi has to start seeking capable operators who will move us forward as a country. We have to begin to seriously empower people who are qualified and know how to build and develop a country and have the force of character to deliver on promises. Osati zongochitikira mwa ngozi.

There’s another equally important aspect to all this.

If a tiny road intersection has got the whole country excited, what do you think foreign dignitaries will think of us, as a nation? What do you think they will report to their countries, as ways in which to pacify or otherwise impress our people? Imagine how all the ruthless and pushy countries, even a China omwewa will deal with us, when they know it takes very little to impress our people… ?

We have to press the reset button on what we regard as development. Toilets that look like ma sakasa, Airport terminals towoneka ngati khola la nkhuku, tima bridge ta make dzana… and yes your little interchange, they’re all not signs of development in the context of the 21st Century. Because there are such things as global standards, and we have to pull up our socks in this area and begin to match the rest of the world. Rwanda and Kenya are doing it, why can’t we?

In any case, how can you possibly attract investment in the form of a factory (say Chevrolet, Nissan or Kia for argument’s sake), or how can you seriously attract a tech giant’s assebling facility (APPLE, IBM, HP, MICROSOFT) and compete against the likes of Ethiopia or Kenya – who have impressive infrastructure and who are doing far more to attract foreign corporations to set up shop in those countries, when your own infrastructure leaves plenty to be desired?

Why the Malawi Postal Corporation should enter the business of International Money Transfer

money-card

A few weeks ago, I watched a Christmas party video in which the speaker talked about remittances by migrants living in the UK, and immediately I got an idea.

Why doesn’t the Malawi Postal Corporation (MPC) enter the business of International Money Transfers? Not only in Malawi, but across the region…

In that video, the London mayoral candidate George Galloway said that if he is elected mayor of London in 2016, he will move to make City Hall enter into the business of International Money Transfers, except it will be done on a non-profit basis. It made me think about how Malawians particularly in the UK and the US spend so much on charges and fees to send money to their loved ones.

The choice of the MPC may seem like a random or even odd one, but it is not. The Malawi Postal services has a wide network of 180 Post Offices across Malawi and 154 postal agencies in the country. Surely with such a wide network, they must have the capacity to add an additional service of money transfer ontop of the other services which MPC already offers? The only difference would be that this service will not depend on Money Transfer Operators (MTO’s) such as Western Union, Moneygram or other services, thereby more of the benefit of the transfers will remain on African soil.

In any case, remittances to East and Southern African countries have been steadily increasing. In 2013, US$28.7million was sent to Malawi from abroad (up from US$14.5million in 2006, see Index Mundi here) and US$72.8 million was sent to Zambia  (Source: Examining the Relationship Between Received Remittances and Education in Malawi, Kasvi Malik, Claremont McKenna College, 2015). Zimbabwe received US$1.8 billion in 2013 (Source: Zimbabwe: Diaspora remittances in decline, The Africa Report), Tanzania received US$75.34million in 2012 and Mozambique received US$117million in 2010(data-World Bank)

In total the Overseas Development Institute estimates the total cost of fees charged by the Dallas based MoneyGram (whose 2014 revenues were US$1.45billion with $456.4million Gross Profit) and the Colorado based Western Union (whose 2014 revenue were US$5.6billion with $2.31billion Gross profit) to be US$1.8 billion (see Watkins, Kevin & Quattri, Maria. “Lost in intermediation: how excessive charges undermine the benefits of remittances for Africa.” Overseas Development Institute, April, 2014.Web. 20 March, 2015).

Surely this is money which should be utilised within Africa?

But why is this issue important?

Our Countries in Africa need money. Poverty lingers, our education systems are in tatters, we have high youth unemployment, healthcare crises, and in the face of illicit financial outflows, receding or suspended aid budgets, relatively small FDI’s and the corruption problem (which is far from going away), every penny counts.

Every penny must count.

The African Diaspora is a burdened community. The majority usually accept low-paying jobs, spend more money relatively than indigenous populations to establish themselves, are milked dry by extortionate immigration fees, have less social capital in the countries they dwell (therefore less access to informal or supplementary sources of funds), and fewer fallback protections than indigenous populations. In some countries, migrants have to pay more for healthcare, and for services which are free to the locals. They find it harder to access capital (with which to start businesses – which could help them financially), and on top of taxes, Social security / council tax, etc.. they have many mouths and responsibilities from family members back in their home countries, dependants who are often expecting dollars, pounds or Euros for their livelihood each month; to pay for rent, food, school fees, medical care and other expenses.

So how would the MPC Money Transfer scheme work?

On a very basic level, a non-profit organisation would be incorporated in the UK, the US, Malawi, Zambia, Zimbabwe, Tanzania, Kenya, South Africa and Mozambique, with bank accounts opened in all those branches.

The organisation would have one or two staff members based at the Malawian embassies in each of these countries. The Malawian government would deposit US$100,000 in each of the bank accounts, and when a remittance has been made, the organisation would level a 5-10% fee on the value of the remittance, as a cost for sending the money. A mobile app would be developed to make the job of transfering money easier, and contracts with banks and money gateways would be utilised to allow payments to other bank accounts or services in the participating countries on favourable terms. Any profits made at the end of the financial year after all the costs have been deducted would be donated to a fund to be used for job creation for youths, healthcare initiatives and other such purposes across Africa.

Obviously it’s not going to be as simple as that, and current market players are unlikely to want a new serious entrant with Social ambitions, but you get what I’m saying.

A few years ago, some people suggested that Diasporas Bonds (Read Economist article here) was the way for African migrants to help invests in their countries, but the scheme still depended on the likes of Western Union.

I acknowledge that the rise of mobile money has had a positive impact on empowering rural communities across Africa, but I’m not convinced that the benefit of such has been significant or evenly distributed among the people who use it. Indeed, it seems to me that a handful of entrepreneurs, and a few corporations (for example Orange SA who own Telkom Kenya, the part-owner of Safaricom, which owns Mpesa. Safaricom is also partly owned by Vodafone Group) have reaped the majority benefits of the mobile money revolution, meaning what mobile money has done, is made companies and corporations who are owners of the various platforms richer.

What I’m calling for is a scheme whereby our governments in Africa, as opposed to MTOs or private companies control a greater chunk of the pie, with a hope that such would lead to greater investment in services for the greater good of our people.

Artificial African Boundaries

This is an extract from a page in honour of Kanyama Chiume on Facebook. I’ve reposted it here because it echoes a lot of what I believe. Further, it’s undeniable that our economies are struggling in Africa not only because of corruption, illicit financial outflows and all of the other evils, but also because we do not trade with each other enough, and critically, we are not sufficiently united in the way that say China is united, or how the majority of South American countries are united.

Kanyama-NyerereWhen African nationalists worked together for the benefit of all. That is self-evident in this letter written by Julius Nyerere of Tanganyika to Kanyama Chiume in 1960, when the latter was exiled in London during the State of Emergency in Nyasaland. From the London office, Chiume had the task of keeping NAC party alive at international stage, at a time when it was banned from operating in Nyasaland and some of its leaders chased out of the protectorate while others were detained after Operation Sunrise (Kamuzu Banda along with Masauko Chipembere, Dunduzu Chisiza and Yatuta Chisiza were languishing in jail in Gwelo, Southern Rhodesia).

This letter, found at the British National Archives in London by Prof. Azaria Mbughuli, a historian at Spelman College, shows the extent of cooperation between African freedom fighters. Prof Mbughuni adds:

“The letter is yet another reminder of how Africans are interconnected. The artificial boundaries we hold on to so dearly are just that: artificial. We have come to accept them as a reality. Nyerere and Chiume worked closely through PAFMECA/PAFMECSA, both espoused Pan Africanism as an ideology of unity and a tool for liberation. If one looks really closely at Chiume’s story, you realize the foolishness of the colonial boundaries. Born in Nyasaland, Chiume lived in Tanganyika from age 8 with relatives, went to school in Tanganyika, attended school inTabora with the likes of Kambona, taught in Dodoma (resigned his position in 1955), collaborated with TANU in the mid-1950s, 60s, basically throughout most of his political carrier; and off course, eventually married a Tanzanian. TANU provided regular support to Nyasaland African Congress in the late 1950s through him. I came across a peculiar situation in early 1950s where Nyerere is asking Odinga of Kenya to help him talk to the Luo in Tanganyika because they did not want to join TANU! You have ethnic groups split by artificial boundaries; it is no surprise that people from different “territories” worked closely together to demand freedom and independence.”

Germany is trying to build the next Silicon Valley

http://www.businessinsider.com/germany-is-trying-to-build-the-next-silicon-valley-2015-3

This article is interesting.  Germany recognises what role a government should play in fostering a climate in which entrepreneurship can thrive. I’ve encountered many views on this, and from my own experiences with SMEs have formed parallel if not views that are convergent with those expressed in this article.

Unlike most African countries, Germany has a stable and dependable communications infrastructure which means people have affordable access to information and can communicate at reasonable cost – which is important when incubating new companies. In addition,  Germany has a dependable transport network (You can easily get to Germany’s regional cities from most major cities across the world ) which means entrepreneurs can travel easily when they need to – and at a reasonable cost. And finally Germany has reliable power supply.

Further,  there are many facilities in the form of business centres and institutions where newly formed companies can find cheap office space, in the early days when they are trying to minimise costs. To this add a supply of talent from good universities, and the availability of ample opportunities to be able to network with like-minded entrepreneurs. Looking at these factors alone the recipe for success is almost guaranteed, if it wasn’t for the constraints mentioned in the article above.
But assuming Germany did overcome those challenges, whether their industry would grow to match Silicon Valley is an entirely different question.

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However,  what our economies across Africa can learn from this is that to foster creativity and entrepreneurship in the IT sector,  these factors must be firmly addressed. In addition, there must be an increase in access to Venture Capital and our countries need to have functional property rights laws that work for both small companies and big companies. To this end, some lessons can be learned from Kenya, which is making incredible strides in the IT sector.

Kenya receives loan from African Development Bank for Last Mile Electricity Connectivity project

Remember my post here about 10 things President Peter Mutharika could do to help Malawians? Remember the part about the Malawian government applying for a developmental loan from the African Development Bank and / or a few select countries?

Well, look at what Kenya has done:

AfDBIn case you wanted to find out how much 12.2 billion Kenyan shilling is, as of today, its equivalent to US$134 million

KesOr as the African Development Bank (AfDB) itself puts it on their website,here, US$133 million when the loan was approved. Still a decent sum I think, which if properly utilised can go a long way.

According to the AfDB:

..the funds will finance the Last Mile Connectivity Project that aims to maximise the use of the Kenya Power and Lighting Company’s (KPLC) 35,000 existing distribution transformers spread across the country. The total project cost is estimated at US $147 million, with the Government of Kenya contributing the remaining US $14 million.

..

The Last Mile project has three components: (i) construction of the distribution network including installation of energy meters for the connection of residential and commercial customers; (ii) project supervision and management; and (ii) capacity-building activities, which include training KPLC technical staff to operate and maintain the distribution system.

The proposed project will cover the entire country with selected transformers in 47 counties and expected to directly benefit low income groups, largely in counties with the lowest penetration rate. At least 314,200 customers, which would translate into approximately 1,571,000 people, will have access to electricity. By providing increased electricity access, the project will contribute to improved living standards among targeted households in terms of education, health and access to information. As for small businesses within the project area, the project will also help increase their competitiveness and ability to expand activities.

Excellent. A connected and powered Africa is a stronger Africa. Great stuff. Good for them!

 

President Uhuru Kenyatta’s Speech During the Groundbreaking of the Greenfield Terminal at Jomo Kenyatta International Airport

“Airports today are important vehicles for propelling economic growth. An airport, being the first point of contact by the visitors, be they tourists or businessmen, has a lot to tell about the community and country in which it is located. It can, therefore, influence positively or negatively the level in Foreign direct Investment and indeed the number of people wishing to visit a country….

My Administration is keenly aware of the aviation infrastructure deficit that currently exists not only in Kenya but also on our continent. Without sufficient aviation infrastructure, our region will remain unexploited and expensive for commerce and business.”

Full speech here:- President Uhuru Kenyatta’s Speech During the Groundbreaking of the Greenfield Terminal at Jomo Kenyatta International Airport

I have often laboured with this point on this blog a number of times (see previous articles here, here, here and here). And it’s because it’s a very important point. Before any economic development occurs, one of the critical factors which must be addressed by the leaders of African countries, and which must be a top priority, is the development of first points of contact such as airports to such a level of excellence that they meet global standards.

In other words our Airports across Africa should generally have the same facilities and be of the same standard as the airports in Bangkok, Durban, Moscow, Manchester, Santiago or Wellington.

When that begins to happen, Africa will have moved towards a place where it can compete with other countries across the world.

Manchester Airport : Fact Sheet