The Eagle in a Storm

The following is a post (and ‘afterthoughts’) from the Facebook Page of Strive Masiyiwa, the Zimbabwean billionaire and  businessman wh is an inspiration to many Africans.

From reading the advice in his post, you have to wonder why many of our leaders in Africa are not thinking or approaching governance and development with such principles/ attitude:-

The Eagle in a storm (Part 2a).
__Changing our “wealth creation model.”

Ever since I started school, my teachers taught me that our country was “rich” because we had many minerals, and we’d recite the list of minerals. By the time I finished secondary school, I not only knew my country was “rich,” but that Africa itself was “rich” because we had so many natural resources.

Even though I didn’t study geology, I could almost tell you where all these precious minerals and other resources were found: oil, diamonds, platinum, gold, copper… in places like Congo, there were names of some things I couldn’t even pronounce.

__Yes, Africa is so rich!!!

As a young student, if I thought about what the global buyers of Africa’s natural resources then did with them, it was only ever a superficial thought. But I soon realized something didn’t add up…

__Sometimes it almost seemed that the “richer” a country, the poorer the people! But how could this be?

“1+1=2”! My primary school teacher drummed it into my head, right?

Then I got to secondary school and one day the teacher came in and said, “You know, there are situations when 1+1 does not always add up to 2.” ?!

“I’m here to talk about mathematics,” the teacher said. “It’s time to put away the arithmetic; this is senior school!”

“Senior school!”

I didn’t end my study of mathematics in secondary school. I also studied it at university where I majored in engineering.

What was it the Apostle Paul said about putting away childish things?!

Let me return to the wealth of our nations: I left university in the early 1980’s. In those days, it was not China that was rising into an economic giant, it was Japan! It was rising and overtaking every European country, until Japan was second only to America… It was so spectacular!

I first met a Japanese person when I was in my twenties and already working, yet I read every single book I could find about their prowess.

“Tell me about the minerals of your country?” I asked my Japanese friend.

“We have no minerals to talk of,” he said emphatically and proudly.

“What do you mean you have no minerals?”

As we talked about the Japanese rise, I was reminded of my lessons in mathematics!

And so I had discovered it was possible for a nation to be “rich” without minerals!

“We buy your minerals as cheaply as we can, and then we turn them into high-value products.”

“You mean you exploit us?”

“That’s not the way we see it. After all, what would you do with them if we didn’t buy them? Do you know what we do with your platinum or your oil?”

Then he added:
# “Our wealth creation model as a nation is not based on raw materials and minerals.”

“WEALTH CREATION MODEL?” What do you mean “WEALTH CREATION MODEL???”

Deeply troubled (even insulted) initially, I knew there was something more to learn if I avoided becoming emotional. The conclusions I reached changed the way I look at wealth, and totally empowered me. It changed my mindset.

The Tentmaker once said that our greatest battle is always in our minds… changing the way see things, particularly if we have held on to a certain perspective for a long time.

I hope it will do the same for you.

***

Afterthought 1. There’s a story told about a young Christian who was praying one day, and he asked God, “Why did you create the Universe?” And in his heart he heard God say to him, “Son, your mind is too small to contain my answer.” He’d ask the question again and again, making the subject of his interest ever smaller: “What about an ant?” Again the Lord answered him, saying, “Your mind is too small to contain my answer.” Finally frustrated, he picked up a peanut. Then (as the story goes) the Lord said to him, “let me give you a list of just 100 applications of the peanut that are yet to come!”

What do you know of the cocoa bean and its uses today? There are billion-dollar industries waiting to be created with the raw materials of your country, that the world doesn’t even know about today.

***

Afterthought 2. If you’re a school teacher, why not ask your students today to draw up lists of all the innovative things that are made from your country’s raw material exports.

__In just this alone, you will have taken the first step to changing our wealth creation model. If they’re in high school, ask them to draw up a list of nations that are very successful and yet do not have natural resources. In this you will change their mindsets about wealth creation.

***

Afterthought 3. If you’re a policymaker, ask yourself what incentives your country has put in place to encourage entrepreneurs, innovators and inventors to develop exciting new products and services, and to invest in industries that use your raw materials? What policies encourage investors to come in and set up industries that rely on those raw materials? What tax breaks will you give me if I set up a manufacturing business that uses the oil, platinum or cocoa of your country?

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.

Skulls over economy – Zimbabwe’s case of misplaced priority

Skulls over economy – Zimbabwe’s case of misplaced priority

Recently street vendors in Harare were given an ultimatum by the government to leave the streets. But where to? Most of the vendors are graduates who have resolved to petty trading due to unemployment. President Mugabe has not only failed in achieving his campaign promise of creating two million jobs, his administration has done the complete opposite – force people out of jobs. An estimated three million Zimbabweans are currently living in South Africa as economic refugees after fleeing the country in recent years. Yet the government places priority on the return of age-long remains. Like Rugare Mudavanhu asked, will the millions of starving Zimbabweans survive on skulls?

Why China should help Mozambique and Tanzania develop their Natural Gas production Capacities

I refer to the section 3.1 titled ‘Addressing General weakness of the economy’  and section 6.1  titled ‘Unchecked Greed and Resource Conflict’ of the above document, which has the following interesting paragraphs:

Given the prospects of high revenue earnings from economic rents of oil and natural gas, unchecked greed of business, political or other social leaders can foment and precipitate “resource conflicts”, which manifest as civil wars, regional conflicts involving neighbouring countries which share common borders, as well as in-country social divisions which weaken national solidarity. In the extreme they become a prelude to secessionist tendencies, with intent to draw new territorial boundaries curving out the regions with rich resource endowment and to declare them as independent sovereignty. That is the “resource curse” per excellence! Resource conflicts destabilize nations hosting unchecked greedy “resource seeking investments” and increase the risk to human safety, natural resource extraction infrastructures, as well as raise the overall cost of doing business.
… The discovery of huge natural gas resources has engendered heightened expectations for Tanzania with respect to revenue receipts and the likely spending power of the government. People think Tanzania can immediately get out of the poverty trap and move into the middle to high income bracket. Such popular view does not appreciate the level of investments required, the engineering challenges to be overcome and the time required to move through all the process steps before commercial gas production commences. The timeline is
between 5 to 8 years activities.

While there may be few dream images of the erstwhile Middle East and Persian Gulf countries as models for sharing national prosperity of the new gas economy, there are also nightmare images of the bad experiences of the Niger delta being repeated in the Ruvuma delta. It is common knowledge that oil production in the Niger delta has resulted in environment degradation on a massive scale, which has totally damaged the traditional local economy and livelihood which was based on fishing and agriculture. In that regard, the local communities feel “left out” of the growth and economic benefits, which have accrued to Nigeria as an outcome of exploitation of the petroleum resources. Then local communities have come to be viewed as a security threat because they have engaged in hostile activities against both the Government and the Oil industry. …

But first, lets deal with China. I’m not completely sold about them. I like their organisation and unity, and how they can achieve seemingly heavy tasks, in very short periods of time, and at a fraction of the cost west companies would undertake such tasks. But there can be a price. On quality in particular. Further, I don’t like the controversies that they tend to leave behind, or rather the alleged conduct of some Chinese companies, neatly dissected here, regarding their practices in Africa, and the implications of such practices. I also wish Chinese politicians and officials could at least raise human rights issues when dealing with countries such as Uganda, Sudan (where they’ve sent 700 troops), DRC, Zimbabwe and Ethiopia.

But that’s besides the point. Some readers of this blog will know  that there have been large Natural Gas finds off the coasts of Tanzania and Mozambique. The estimates of the finds range from  46 trillion cubic feet(tcf) to 55 tcf. for the deposits in Tanzania, and 50 tcf. to 70 tcf. for the deposits in Mozambique. In plain English it’s a fortune!

According to Standard Bank, Liquefied Natural Gas (LNG) will add $39 billion to the Mozambican economy over the next 20 years, boosting GDP per capita from approximately $650 in 2013, to $4500 by 2035.

The trouble is, it is being claimed that billions upon billions will be required to put in place the technology, infrastructure, structures and logistical capacities to realise the benefits of these reserves.

And I simply don’t believe it will cost that much.

Now, I may be an engineer – one who knows how to build certain things cost-effectively, but I’m not a geological engineer. I’m not a surveyor, or an industry professional within the natural gas or petroleum industry, and my contention is based purely on rebuttals such as these – in this case of the corrupt practices in the construction sector in Malawi. But having said that I can find some credible industry professionals who can provide an honest unbiased opinion of the costs involved.

In other words, the $10 billion that is claimed in the above paper as the cost of building capacity, how exactly did they arrive at such a costing? I’m not disputing it outright, I’m just curious to know how they computed the figures…. since as I stated earlier, contractors and other infrastructure developers have a bad habit of quoting say £10,000 for a job that in real terms will cost £1000 to build (that is in real money the cost of raw materials, labour, logistics). The extra £9000 goes to profits for the company …and it is this that I have a probelm with because in my view it is hugely inflated.

So if someone says some project will cost $10 billion, alarm bells automatically start ringing in my head. I begin asking, is that $10 billion the real cost of raw materials and labour, or are we factoring in wastage in terms of corruption, the profits you want your company to make – off the coffers of the undiscerning African government, and off the backs of the helpless African people??

In the long term this translates to tax payers who must be taxed heavily to pay off the debt that will be taken by the government to finance such a project. Pensions that will remain meagre, because the African government is still paying that $10 billion loan they took…school children who will continue to have poor facilities, because…well, there’s no money to invest in modern educational facilities…salaries that will remain low…lapses in security, because, well, there’s simply not enough money about to improve security or pay decent salaries… I could go on.

My point is if the Mozambican and Tanzanian governments asked the Chinese for greater degree of help, in establishing the industry, employing professionals, while maintaining ownership of the whole project and resource (or atleast a large % of it) – as opposed to letting any foreign corporation have the lions share – the governments would most probably be able to build everything cost-effectively, probably for less than £2 billion, and Tanzania and Mozambique would come out stronger than any arrangement that gives ownership (or  the lions share) of the finds to a foreign private company.

Is Robert Mugabe the right person to chair the African Union?

Such is the irony of democracy in that sometimes even cantankerous oafs can be celebrated as valiant heroes.

A few days ago, I was dismayed to learn that Robert Mugabe had been chosen as chairperson of the African Union (also reported by Al Jazeera here). Reading the comments below the announcement, its interesting to note just how many supporters Mugabe has even in Malawi. Now, I  know he is considered a warrior-esque hero in most parts of Africa, and if you sat next to him at a party, you would no doubt find yourself amused by some of his jokes.

But in the 21st Century, an old man’s jokes are not good enough when inequality is growing; when young unemployed people are demanding more from their leaders; when security is worrying investors, after all the negative publicity Mugabe and the ZANU PF have received in recent years, was Mugabe really the best leader that the AU could have come up with from Southern Africa?

I know there is a process of rotation of chairmanship in the AU’s framework, but are we not shooting ourselves in the foot here? If after everything we are resigned to going with Mugabe as AU chair, isn’t that an indictment as to the lack of leadership across Africa? After all, will it not be the head of the AU representing the Pan-African bloc and be the face of Africa at international summits such as the G8 and G20?

I’m not convinced they’ve got it right this time around.

Ceremonial it may be but Robert Mugabe is not the right person to chair the AU. And for many reasons, not least that:-

Africa needs leaders who are going to move the continent forward

Forget his cosy relationship with China, a Mugabe chairmanship is bound to be one characterised by jests to the west and pronouncements of Pan-Africanism devoid of any real substance, in every speech. Yes, we agree that Zimbabwe has been unfairly punished by sanctions, and ordinary people have disproportionately suffered as a result. Yes we agree that tax evasion and illicit financial outflows have worsened the marginalisation created by colonisation. We all agree that Africans find it difficult to raise capital (partly because of bias and partly because most Africans do not have the assets to put forward as collateral) and that something must be done to re-balance the playing field; Yes we all want Africans to be economically independent, and poverty to be overcome – it’s an African mantra; We all desire a fair state of play where western countries are not forcing their economic policies on African countries, or virtually holding nooses around our economies; it is true that regime change must be the preserve of the people of a democratic country via elections, and not forced on them by donors, neighbouring countries or foreign powers.

But in practice how are you going to achieve all those aims?

How are you going to ensure that there is accountability in governance? That Africans have fairer access to capital to enable them to pursue entrepreneurship. That state spending on women, healthcare and education is prioritized over vain self-enrichment projects. What is the plan to defeat ‘economic enslavement’? For example what should Africa do to reduce Youth Unemployment and ensure that young people who come out of Universities can use their skills to advance the continent? How are you going to encourage manufacturing, or open up new markets for African goods? What are you actually going to do about it?

Sadly, I don’t think Mugabe has the answers, because if he did, his own country would have started recovering from the economic disorder it currently is in. Also, consider this: with all the controversy around Mugabe, and despite the lifting of some sanctions, how many moderate donors (those who do not strictly subscribe to the Anglo-American line of sanctions) in the developed world are going to want to associate with him? In the end you can’t teach an old dog new tricks.

The African Union needs leaders who are going to inspire hope

How many young people today would name Mugabe as a leader who inspires hope? On what basis would they do so? What has Mugabe done for his people lately that is noticeable and  that is worthy of praise? To hit this point home, take Paul Kagame in Rwanda for example. He is a man who despite the criticism, is driving Rwanda forward with an admirable and achievable economic policy. The results are there for all to see. Rwanda has over 55% of its parliamentarians being women. Has a GDP per capita of around $1500 compared to Zimbabwe’s $500. And yet Rwanda is much smaller compared to Zimbabwe.

In the East you have Uhuru Kenyatta whose policies are opening up Kenya to investment (according to AFK insider Kenya Will Have Highest Number Of Initial Public Offerings In East Africa). Kenya is driving proposals for an African court of Justice and Human Rights a step designed to move away from the selective prosecutions of the ICC. Kenyatta is building infrastructure including plans to provide clean water to 30,000 low-income households, strengthening security and investing in young people using the National Youth Service. And this is just a tiny fraction to what Kenyatta is doing. Why didn’t they select him instead?

To the West, you have Angolan president José Eduardo dos Santos, who although equally controversial, hasn’t attracted the kind of bad publicity that has hounded Mugabe. Despite the fall in global oil prices, Angola’s economy is still growing with the country set to post a growth of 5.2% this year. And although unemployment is at 26%, there is foreign direct investment, one of the highest infrastructure development in Africa and effective poverty alleviation mechanism are in place. In other words, a man in charge of his own house.

Similarly, while it is true that he is stepping down as president of Namibia, but how about Hifikepunye Pohamba as AU chair? Why not elect him instead, and transition to the new Namibian leader in March?

The African Union needs leaders who will get to grips with the continent’s biggest challenges

And the 90-year-old Mugabe is not cut out for that.

How did the AU perform with regards to the recent Ebola crisis? Or more specifically, what did Zimbabwe do to contribute?

Further, until very recently, why haven’t the AU confronted Boko Haram head on? How have they reacted to the various episodes of unrest in several African countries in recent years? On South Sudan?

Why does it often appear as though the AU is always the last to the crime scene on African soil, behind the UN, the US and countries of the EU…? In the Central African Republic for example, when it was revealed that there was ample evidence of war crimes, what has the AU done since?

Can such an organisation really afford its leadership to a controversial old man who has burnt most of his bridges?

If the militants known as ISIS are finally driven out of their caliphatal enclaves in Northern Iraq and Syria, where will they seek shelter, seeing a considerable number of them will be unable to return to their home countries? Do you think they will leave all their weapons behind? Suddenly deciding to lead peaceful civilian lives? What if they decided to come to Africa? And its porous borders…

If African leaders do not strengthen their borders, an evil worse than Al Shabbab or Boko Haram combined could infiltrate the continent causing untold horror. And before long, car bombings, beheadings and suicide attacks of the kind we see every day in the middle east will bring to African soil a reign of terror that has never been seen previously.

The African Union in collaboration with western countries and others such as Russia, Japan and China must be at the forefront of anticipating these things, and preemptively act well in advance to bump up security to prevent such terror from ever gaining ground across Africa. In my view Robert Mugabe is not the man to front such an important agenda.

I’ll end with words from one Zimbabwean contact, who is also an activist:

ZIMBABWEANS we create our own problems.
Why are overzealous brainwashed Cadres calling for people to go and receive President Mugabe at Harare Airport coming from his holiday in Asia paid by tax payers? People will use ZUPCO Buses to the airport paid by TaxPayers but the Govt is struggling to pay civil servants;services delivery is down,poverty,poor healthcare,economy is down and families can’t afford to pay fees for their children.Is this happening in other countries? ……..AND you think you are PATRIOTIC!
EDUCATED FOOLS!

Go on, throw your weight behind Mr Mugabe if you want.

 

I have decided to leave Zimbabwe

I have decided to leave Zimbabwe via Voices of Africa.

A few paragraphs are worth replicating:

…In fact, when all my peers and former school mates left I stayed because I was patriotic to the land. I saw a future where others couldn’t see one. I told myself that whatever we were going through as a country would soon come to an end and that in no time things would be better…

…Then I started realising something about the republic.

No one cares for the public. We have dirty water in the taps and no one cares. We have erratic supply of electricity and no one cares. The roads are in shambles and no one is doing anything about it. Fuel prices go up and we can’t do anything about it. New taxes are introduced and we can only comply. Internet is very expensive. The public hospitals, the ones which we can afford, provide crappy service and people are dying because the nurses don’t care. I know because I watched my mother-in-law die at the hands of poor service delivery. And no one cares. Not them, not you, not the minister of health. No one. The company CEOs get treated outside the country now. But what about me? What about my kids?

…And guess what, my children have to grow up in such an environment and go to schools whose teachers don’t even know why they are doing what they do.

No.

I am sick and tired of it all.

Surely I wasn’t born to suffer. I just want a better life, that’s all.

**The article first appeared on 263chat**

Andrew Young On Landreform In Zimbabwe & South2North : Zimbabwe: Lessons from land reform

You will to forgive me for gleaning the posts of others, but this is another topic that I have been specifically requested to write about, but which i have had no time to research and write about…so hopefully these facts will help shed light on the situation (at least to those who asked). Obviously, I’m not an expert, which is why these (especially sources of information such as the book referred to in the second video) videos are useful…

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