Economic Empowerment

mg2I hate to be the bearer of bad news but I’m not sorry to be the one that spoils the party. Especially this particular party…because while Malawi is currently heated with election campaign fervour, some of the events happening on the ground have caused one part of me to doubt whether much substance will in fact come out of the leadership that will be appointed after the 20 May elections.

Are we really going to see the transformation being excitedly predicted by each party’s honchos? What kind of transformation will we see? Are the parties really going to deliver what they have promised in their manifestos? Weren’t similar promises made during the election campaigns of 1994, 1999, 2004 and 2009? To what extent were those promises honoured? So then, what major transformation came out of the administrations who won those elections?

I think no matter who you choose to vote for, it would be wise to be cautious, and carefully examine each candidate on their merits, and what their track records in terms of actual achievements the last 5 – 10 years (not just the last year or two) have been…

Many a times I have waxed lyrical as if on a soapbox about economic empowerment of Africans, and many a time, I have not exactly got through to the right people. Which is okay. The right people are rarely in the right jobs, they are rarely listening.

But this is an issue that has to be addressed sooner or later, otherwise African countries will continue to struggle with poverty and other ills. Donors and foreign corporations will not tackle the issue of empowerment because it’s not always in their best interests, and they are not good at doing so [See this: Between the Elusive and the Illusionary: Donors’ Empowerment Agendas in the Middle East in Perspective – Mariz Tadros].

In Malawi most NGO’s do not have the power, nor are they sufficiently well resourced to influence the establishment of a nationwide empowerment initiatives that have a real chance to make a big enough impact. It’s all down to the government and MP’s, and for what it’s worth one part of me can’t see enough progress being done after the elections. Maybe I’m being unfair and prematurely judgemental, but I’m yet to be convinced whether any of the major parties truly can deliver what they promise. And this is not only because the practicality of what they promise in their manifestos is questionable but also because the vagueness of some of the promises render them useless.

But for those voters who are listening, and concerned, the important questions every Malawian should ask the candidates of the 20 May elections, before voting, are these:

What will they do differently to ensure that Malawians are economically empowered, and not taken advantage of? And why should we trust you?

This is important especially because it is clear to most Malawians that the tenures of the MCP, UDF, DPP and PP governments in the past have established very little for Malawians to show for. While countries like Kenya, Zambia, Rwanda, Ethiopia and Mozambique (where there was a debilitating 15 year long civil war) have powered forward with impressive results, Malawi, despite unsustainable blips of progress, is still languishing in the doldrums.

So, what will the candidates who vie for election to Parliament do which hasn’t been done already in the country’s 50-year-old history?

The reason that this question must be answered is that economic empowerment will not occur if the policies the new government institute turn out to be mediocre (like distributing cattle, chickens, houses or shoes) or the same as what has not worked in the past, and if corruption continues to be tolerated. In a country with 15 million people, the presidency would be best advised to think on a much larger scale, than wasting resources on mediocre projects.

Taking a simplistic general view, for people to be innovative and industrious they require one or more of the following:- an income, education, inspiration, tools/ building blocks (trucks, implements & equipment), and power (literally electricity). So, one would think that when a government articulates how they will provide these as part of a wider national transformation strategy, there will be a much higher chance of transforming Malawi than say distributing a million cows to villagers.

But that alone is not enough. Empowerment essentially means giving one power or authority to do something. So I’d like to see factories built, where young people can work, earn an income and develop transferable skills. And those factories, must be majority owned by Malawians, so that the profits made from Malawi stay within Malawi. Further, instead of giving a mining contract or power generation contract to a foreign corporation – which has its own interests, I’d like a government that promises, and implements a national  mining company, or power generation company, which is government owned, and whose profits are reinvested into Malawi.

That is precisely the kind of visionary leadership Malawians should seek and vote for.

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UnlockedMoneySafe: Investigating Cashgate – the twists and turns of corruption in Malawi

I feel sorry for the forensic investigators probing into Cashgate. Each day brings with it a new revelation, scheme or scandal, each day new drama. If it wasn’t the fact that government funds belonging to a country which is regarded as a poor country have been misused, I’d say stop wasting resources on an investigation which you will never fully get to the bottom of. If it wasn’t the fact that it is innocent citizens of a beautiful country who stand to lose out, I’d say give up.

Today another report emerges that the secretary of the Catholic Commission for Justice and Peace in Lilongwe, Peter Chinoko (Peter Chinoko is the brave soul who has been attacked and even sustained a fracture in the past for helping organise the July 20 protests against Bingu Wa Mutharika. The same regime that was oppressive against Joyce Banda. When he speaks we must listen) has said that the current president of Malawi, Joyce Banda is implicated in the cashgate scandal.

According to the news report, this is because she organised an inner circle designed to channel funds, following her complaints that she was spending too much of her own money on the PP party. Interestingly, the name of a company I have heard before associated with Joyce Banda (which has been mentioned by several people following the scandal much closely) has popped up yet again:  Veventis Risk Solutions, headquartered in Mayfair, London.

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It’s been suggested before by various people and organisations that there have been attempts to obstruct the investigation into the cashgate crisis in Malawi, including employment of delay tactics, let alone a PR sanitizing machine.

But what concerns me is that with so much speculation on social media, it’s becoming harder to distinguish between credible news and misinformation, more so since the PR machine which is attempting to distort the news, keeps on providing what I consider to be false information. For example, Nyasa times, one of the most popular online Malawian news sources is yet to carry the above allegation??

So, if one reads something online, on social media, as we saw with the revelations of Mphwiyo shooting, there is every chance that the tenets of truth are contained within a pile of speculation, or vice versa, with some embellishments for full effect. Personally, such information, although probably not strictly journalistic, could provide leads to the forensic investigators, on who to interview next.

Anyhow, if you are not familiar with the latest news headlines, see below:

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The troubles facing Joyce Banda are many. Recently, a journalist questioned the statements made by the Malawian President regarding what she reported the IMF to have said about her government’s leadership.

Yet all along, the president has maintained that she is innocent and not a part of the officials who have been embezzling money from the government. In a recent statement to Al jazeera when asked if she has failed with regard to fighting corruption, she said:

“No, we have not failed. I don’t know if you know that this cancer has been going on for 15 years and the biggest tragedy in the fight against corruption is covering up. I think the best one can do as a leader is that once you discover then you need to take advantage of the opportunity.”

Which is interesting because not too long ago an article emerged on Afrol News website (titled Malawi loses US$ 40 million in corruption ) in which Joyce Banda’s own company was alleged to have been paid for work it did not undertake. In particular the article says:

The document alleges that the government has not yet recovered kwacha 13 million in a case where DPP Secretary-General Joyce Banda is said to have been awarded a kwacha 26 million contract to construct a transit depot by ADMARC, the national food security agency, in 2002 when she was a Board Member. The document further reveals that Ms Banda allegedly pocketed kwacha 13 million in advances before commencement of the work.

Unless the document is a fraud, doesn’t this compromise her position even further?

Only time will tell where this goes next, but I appeal to donors and the forensic investigators not to leave any stone unturned. All these organisations whose names have been popping up all over the place should be questioned. There is a shameless and cancerous culture of impunity in Malawian politics that should be ended. Malawi’s money is definitely not safe with the current breed of leadership.

From the politics of chameleons, neatly chronicled by another activist here, to jealousies and a pull-down culture, there is a lot that needs fixing in Malawi. The question is, are Malawians up for the challenge?

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Where is Africa’s manufacturing?

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I prefer to ask (and answer) the above question, that references to the ‘stage’ or ‘point’ (not physical location) when asked ‘Why is Africa not manufacturing?’ . I’ve been asked this question so many times, by people beffudled as to how Africa pretty much fails where everybody else has succeeded. The reason I prefer to answer the above question is because unlike popular belief Africa is in fact manufacturing, just not as much as everyone else, and just not always visibly (you don’t hear these stories on Tv, and they are rarely in the mainstream media publications – unless you read FT – although that’s arguably not mainstream)

Similar to the questions of manufacturing is that of whether the skills for the establishment of a bigger manufacturing sector are readily available for investors to tap into?

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I’ll start with the bad news:- If the skills are available on the continent, then as things stand, they are in severe shortage and are not really of African origin. According to research from OECD [see BBC link here], by the end of this decade (emphasis required, that’s by 2020) 4 of every 10 young graduate is going to be either from India or China. Looking at the list of countries listed, not even a single one is an African country. What does that say? Well, a number of things; that we are not producing enough graduates, or that the number of African graduates with skill sets (and of a high calibre) who can compete with their contemporaries from Chinese and Indian universities is comparatively insignificant. Which is worrying, because it essentially means Africa’s manufacturing is nowhere, or only material if driven and held together by non-African effectors.

In the past the Education of Africans has received very little support from those who should know better. Most dictators who took over from the colonialists did too little to maintain the standard and level of Education (or Higher Education) across Africa, focussing instead of consolidating their rule. With a few exceptions, multiparty governments that came after dictatorships followed suit, by not investing anywhere near enough as was necessary. The donors that were bed-fellows with the dictators (and those that came after) arguably weren’t as sympathetic or visionary. According to an ESSA paper (quoted in this paper titled “THE ROLE OF HIGHER EDUCATION IN AFRICA” by Prof.Dr.Birgit Brock-Utne of the Institute for Educational Research at the University of Oslo) the World Bank once viewed Higher Education in Africa as a luxury:

“To meet minimally acceptable targets for coverage and quality of lower levels of education in most countries, as a general rule the tertiary sub sector’s share of stagnant real public education expenditures cannot expand further, and in some cases may have to contract. Some combination of efficiency improvements, increased private contribution to costs, and constrained growth of – in some countries and fields, outright cutback in – production of graduates must be sought.” (World Bank 1988: 95)

Expenditure on education was merely a self-serving budgetary exercise, and it didn’t matter what the result was, or whether indeed Africa would be ‘left-behind’ as a direct consequence of the under-investment, what mattered was only that money had been saved.

Without research into what their policy position currently is, I wouldn’t be able to tell you whether this view has changed or not.

Investors with the means have been to put it mildly, shy of investing on the continent let alone into skills development. A paper by a researcher named Paul Bennell which addresses the issue of whether structural adjustments programs ( these are those stringent rules imposed on African countries as part of loan agreements from the likes of IMF and World Bank) over a 15 year period have indeed achieved the desired response (i.e. increasing foreign investment in the hope of triggering technology transfer from the industrialized countries to Africa) paints a depressing picture. To quote Bennell (via this link):

Surprisingly, the share of net earnings from UK manufacturing investments in Africa remitted each year to the UK was higher than the global average between 1985 and 1990 . . . While UK companies have been keen to reinvest very sizable proportions of their profits in North America, Europe and Asia, investment opportunities in manufacturing have generally been very limited in Africa and thus, given the option, most parent companies would like to remit the bulk of subsidiary profits from the region

In other words, Africa was where you went to make your money, and not a place to reinvest your profits.

But it isn’t all bad news.

Recently, the African Development Bank’s (AfDB) approved a US$ 45 million grant for the creation of a Pan African University (PAU) that will consist of five Pan African Institutes focussing mainly on science, technology and innovation. The background to the story reads:

Africa has only 35 scientists and engineers per million inhabitants, compared with 168 for Brazil, 2,457 for Europe and 4,103 for the United States. Shortage of skills has been a major constraint to Africa’s progress in science, technology and innovation. Due to low investment in research and development, Africa ranks low in global competitiveness and productivity. African students tend to opt for economics, business, law and social sciences rather than science, engineering and technology, hampering the continent’s competitiveness and growth. The result is a mismatch between skills produced and private sector jobs.

While one would hope this initiative will be a success, and the Institutes will not falter under the common problems that beset universities and research institutions across much of Africa, it will be interesting to see how this develops.

As is well understood universally, innovation is the lifeblood of industry, and without the creation of ground-breaking and new products,  a country cannot advance or gain a competitive advantage. It was the case during the industrial revolution, during the rise of countries such as Germany, Russia, Japan and even Brazil. The exception (only to an extent) to this rule appears to be China, but that’s for a whole load of other reasons that distinguish it from the rest of mankind

But as the African Development Bank correctly observed above, in order to create ground-breaking innovations and products, and in order to influence global scientific research and technology, you need a skilled workforce. That’s why  the AfDB initiative represents a realignment of Africa’s potential in the right direction.

Across Africa, there are many success stories that are truly inspirational, although as i stated above, these are not shouted about in the mainstream media. One such inspirational story is that of Fabrinox, a south African company manufacturing sheet metal that was formed in 1993, and that has seen turnover in recent years hit US$5.8 million. Asked what had been the best decision he had made to grow his company, the company founder says:

To have followed the advice of my business mentor Johan Beyers to not restrict Fabrinox and its people to one geographical area, product or service, but to take a global view in running the business. For instance, it means that we think globally in terms of our supply chain, and are most willing to service clients beyond the boundaries of the Western Cape province in which we are located, and South Africa for that matter.

In addition to such success stories, there are also many partnerships between foreign manufacturers and agricultural producers across Africa, and some of those partnerships are genuinely beneficial to Africans. Who knows maybe some of these could one day pave way for an African manufacturing industry of its own, if some haven’t began to do so already? After all, manufacturing in industries such as motorcycle build and assembly in China began when after purchasing equipment from Japan, the Chinese assemblers began to modify the Japanese made components; fast forward a couple of decades, and China was making its own motorcycles which essentially were improvements (i.e. “innovations” more or less) of the original Japanese models.

The partnerships article above correctly points out that:

The level of mechanisation in African farming is still very low. Kenya had 25 tractors per 100 square kilometres of arable land in 2009 while Nigeria has almost seven, according to the most recent data from World Bank. That compares with an average of 271 machines in the US.

There are also some manufacturers who are looking towards Africa not because it’s ideal, but because they are getting sick and tired of the happenings in Asia (workplace safety that in recent years has become a major issue, levels of corruption, the increasing fees demanded by some factory owners, etc)

But before anybody gets too excited, look, the Chinese are planning on setting up shop in Africa! (see here and here). Although here one must wonder, does that mean Chinese labour (as they have been known to do in some African countries across the continent) or will these factories use African labour?

As for the power that will drive everything and get every bit of machinery working (in some countries – putting an end to years of intermittent blackouts), that’s about to get much more exciting. At least that’s what Obama seems to be saying.