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In This Issue:

Unleash Africa Podcast
In case you missed it previously, the Unleash Africa podcast's first episode aired in October. The third episode will be out in the early part of December. The Unleash Africa podcast focuses on the full spectrum of socio-economic-political affairs of the nations of the continent. It analyzes and expounds on development techniques that will create millions of jobs in African countries by changing the manner in which African countries have traded with the world.

You can listen to the first episode, “African Countries Cannot Prosper as Consumer Societies” here.

You can listen to the second episode,
“African Countries Cannot Prosper as Consumer Societies, Part II” here.

African Trade Group’s Infrastructure Project for African countries:
African Trade Group has designed a project that addresses internal roads, which is one of the most important infrastructure challenges facing African countries, with a very innovative infrastructure plan.

Highlights of the plan:

  • It is a private sector-driven initiative. It will involve the private and public sector in every participating African country.

  • The funding for the project is through private capital markets and will be led by one of the world’s preeminent financial services firms. They will partner with financial services companies in every African country in market making and deal structuring.

  • The payment for the project is designed around the resources capabilities of African countries using conventional and unconventional means.

  • Indigenous African contractors will sort out and be invited to supply construction services in each country in order to contribute to the process of building long-term capacity within a country.

  • African labor will make up a minimum of 50% of the jobs that emanate from the project in each country.

  • The project manager will be a renowned world-class civil engineering company. They will partner with other firms of renown and qualification.

We encourage our African readers who are in high office to contact us for additional information. Also follow the link to read additional details about the plan.

Seminal Entrepreneurs - Enterprise Builders

Unleash Africa video feature has focused on the forces that are impeding the rise of African countries including corruption; on leadership qualities of the late Honorable Lee Kuan Yew, Prime Minister of Singapore and why that leadership quality is the missing ingredient in the governance apparatus of African countries. This month’s video focuses on another key element of the narrative, which is the crucial importance of unleashing the potential of Africa’s human capital. Tony Elumelu is one of many entrepreneurs blazing a trail in Africa, He is the Chairman of Heirs Holding, United Bank for Africa and Founder of Tony Elumelu Foundation.

About Tony Elumelu
Nigerian entrepreneur and investor Tony Elumelu owns a controlling interest in Transcorp, a publicly traded Nigerian conglomerate with interests in hospitality, agriculture, oil production and power generation. He came into the limelight in 1997 when he led a small group of investors to take over a small, floundering commercial bank in Lagos. He turned it profitable within a few years and in 2005 he merged it with the United Bank for Africa. That banking group now has subsidiaries in 20 African countries and in the U.S and U.K. Elumelu also owns extensive real estate across Nigeria and a minority stake in mobile telecom firm MTN Nigeria, among other assets.

Heirs Holdings Limited
A venture capital and private equity firm specializing in investments in startups, established companies, and business turnaround. It seeks to invest in information and communications technology, financial services, power, healthcare, hospitality, agribusiness, natural resources, infrastructure, real estate, oil and gas, and energy sectors. Within healthcare the firm focuses on hospitals and clinics to physicians, diagnostic laboratories, and health insurance organizations and primary and secondary care providers. Within infrastructure the firm focuses on power generation, transportation, waste treatment, and telecommunications. The firm typically invests in companies based in Africa with a focus on Nigeria. Heirs Holdings Limited was founded in 2010 and is based in Lagos, Nigeria.

Tony Elumelu Foundation’s Entrepreneurship Program (TEEP)
Following his retirement from United Bank for Africa in July 2010, Elumelu founded The Tony Elumelu Foundation. His stated objective was to "prove that the African private sector can itself be the primary generator of economic development.” The Foundation is charged with the mission of driving Africa's economic development by enhancing the competitiveness of the African private sector. As a premier pan-African-focused not-for-profit institution, the Tony Elumelu Foundation is dedicated to the promotion and celebration of entrepreneurship and excellence in business leadership across the continent, with initiatives like The Tony Elumelu Entrepreneurship Programme (TEEP).The Foundation deploys its resources to generate solutions to challenges that inhibit the growth of the African private sector. Through its commitment to catalytic philanthropy, the Tony Elumelu Foundation seeks to achieve its mission by enhancing the capacity of African businesses, supporting and driving policies that promote competitiveness, deploying financial capital through impact investments, and educating public and private sector actors through rigorous research.

What Governments Should Do: Important Intangibles

by Eron Henry

A school of thought, most commonly held by economic conservatives, is that government should stay out of the way, get out of peoples’ lives; a mantra epitomized by former United States President Ronald Reagan when he said, “government is not the solution, it is the problem.”

For those who hold this view, government should limit itself to defense, law and order and the protection of private property.


The heavy hand of government can indeed be stifling. Nowhere is this more evident than in command and control economies in communist countries such as the Soviet Union, the former Iron Curtain countries of Central and Eastern Europe, and acolyte nations such as Cuba and North Korea.

Past rightwing regimes, usually dictatorships of various kinds in regions such as Latin America up to the 1990s, exerted overwhelming control not only in politics and law, but in economic and social life as well.

As in any scenario, extremes rarely ever provide optimal solutions to intractable problems. They tend to make them worse. Neither a very loose hand of government nor a tight grip by the state is ideal. The evidence is strong, even overwhelming, that government plays important roles in the economic development of any state.

It is not whether the state has a role. It does, and always will. The difference is how effective the state is. It is a question of governance, a point John Akhile hammers home repeatedly in his book, Unleashed. Government’s role goes beyond defense and security. The political economist, Karl Polany, said as far back as the 1940s:

Even the ostensibly freest markets require the extensive exercise of the coercive power of the state to enforce contracts, to govern the formation of unions, to spell out the rights and obligations of corporations, to shape who has standing to bring legal actions, to define what constitutes an acceptable conflict of interest.

African nations fail because of government failure. It is as simple and straightforward as that. It is not the existence of government that’s the problem, it is the absence of governance or weak governance. There are some things that government must and should do in setting the pace and the tone for economic growth and development.

Confidence, Equitability and Leadership
The intangibles of government are as important as the tangibles, confidence being of first importance. A citizenry should be reasonably confident in a country’s political institutions and those who run or man these institutions. By government we mean the executive, the head of state or head of government and the cabinet; the legislature, those elected to represent constituencies, districts, provinces, and who make laws; and the judiciary, those who consider matters of law that come before the courts for adjudication and judgment.

A fourth branch of government, most often ignored and misunderstood, is the administrative or regulatory branch, usually a creature of the executive, but often has autonomous powers. The United States, more than most other countries, has the most sophisticated and elaborate system of administrative governance that set rules and implement decisions made by the other three branches.

The problem with too many African countries is that the citizenry lack confidence in the political institutions, from those having to do with electing and choosing leaders to those levers of power that engage in governing.  This lack of trust stems from the absence of systems and institutions that ensure transparency, accountability, and the means for redress when wrongs are committed, whether through error or malfeasance.

Another intangible is equitability (not the same as equality), but this comes through tangible means. Equitability or equity speak to justice that comes through policies that are enforced to ensure fairness and impartiality, where one group measured by race, ethnicity, gender, social class, etc., is not favored over another.  Where disadvantaged groups can flourish through policies that afford them space to thrive. This happens in the economic realm as any other.

Leadership is an important intangible. This comes down to the abilities and commitment of those who man the institutions of government and ensure that the system works. Weak, secretive, kleptocratic, distracted, uninterested, unjust or autocratic leadership generate their own problems. How often do we see these in Africa! The record is too numerous to enumerate.

An economy cannot grow without confidence. Stock markets crash because of the lack of confidence. Banks collapse whenever fear grips a nation and its citizens begin to pull their funds. Investors withdraw or stay away when they lose faith in the system or in the economy.

Equitability is essential to peaceful co-existence in the body politic. It creates opportunities for entrepreneurship from even the unlikeliest quarters and it leaves room for economic and social advancement.

Leadership garners respect and engenders hope. It has a way of motivating others. It inspires.

While African nations work on getting their economies right, the intangibles of governance are as important as sound fiscal and monetary policies.

There are two contemporary case studies. Ethiopia’s economy has experienced remarkable economic growth over the past decade. In 2015, it topped the world’s real Gross Domestic Product growth at more than 10 percent. Yet, for the past two years or more, anti-government protests have taken place over alleged human rights abuses, unfair distribution of wealth, political marginalization, land seizure by government, hundreds of extra-judicial killings by police and mass arrests, among other grievances.

Rwanda, on the other hand, has had relative peace since the 1994 genocide when an estimated 500,000 to 1,000,000 Rwandans were killed, constituting as much as 70 percent of the Tutsi and 20 percent of Rwanda’s total population. The country’s economy is growing, with real GDP growth at 6.5 percent in 2015, ranking it at 21 in the world. Despite their recent tragic past, the country now experiences relative stability and tranquility due to attempts at reconciliation, increased transparency and greater equity.

Intangibles are not inconsequential. They are as beneficial, or as devastating, as tangibles.

Eron Henry is a communications specialist who has attained the Accreditation in Public Relations (APR).  He is currently communications director for an international nonprofit where, among other things, he edits a magazine and a newsletter, manages a website, oversees social media, and handles media relations. He has authored or edited more than half a dozen books, including Reverend Mother, a novel, and is in the process of working on two others. Henry is currently a member of the board of the Religion Communicators Council and of Serve Trust, which is based in Andhra Pradesh, India. He blogs at www.oletimesumting.com.

 
Part four of “Re-Engineering Development in African Countries.”
It is a multi-part series that started in Unleash Africa in September. The series is about removing impediments forestalling sustainable resolution of economic development challenges facing African countries. It analyzes the causative realities of African nation’s socio-economic narrative in the context of global affairs and events. It postulates rectificational imperatives and the crucial importance of unleashing the human resource capacity of every African country. “Re-Engineering Development” is found here in “Unleash Africa”….the newsletter dedicated to unleashing the latent economic energy of the continent and people of of African nations.

Re-Engineering Development in African Countries
Part Four (continued from November)
by John I. Akhile Sr.

The Way Forward for African Countries

The (only) way forward is to identify and resolve the structural impediments to development one at a time. The term, structural impediment, denotes existence of foundational anomalies in society that militates against society’s advancement. These anomalies should be unearthed and wrestled to the ground satisfactorily so that they can no longer impede the train of national progress. It is not a quick fix. Rather, it is a process of re-engineering and re-wiring society for success. It will require a powerful and effective information dissemination apparatus and process that engages all of society.

There are certain truths to which political leaders must acclimate if they hope to set their societies on a path to prosperity.

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Fig. 1 Methodology of Problem Solving

Truth #1

Tackling longstanding problems will take time. The first is that tackling the challenges of their countries will (likely) require more than their time in office. Instead of contemplating a never-ending reign of a “Monarchy,” leaders should prepare for a good succession whether from their party or an opposing party. That’s what good leadership entails. The cause of (the) people is always greater than any one leader. Leaders want their people to be patriotic, to put their country first. Well, it is appropriate to state that that sort of charity must begin at home. There is no greater opportunity for leaders to demonstrate it than to subordinate their personal ambition or party interest to that of the people. It is incumbent on leaders to demonstrate patriotism by beginning a trend of seeking to lead because they are inspired to serve the people and country rather than a selfish cause. Facilitating a peaceful transition from one political leadership to the next is the most demonstrable exemplification of “a country first spirit.” We are witnessing a major change in leadership in Gambia after more than 20 years. It also happened in Nigeria. It disproves a globally-pervasive but fallacious contention that Africans cannot function in democratic environments. If African people are not coerced but are instead allowed to make their choice of leadership, they are quite capable of picking the one they think will do the best job for their society.


Truth #2

Reform should not be carried out in peace-meal fashion. The second is that the process will involve a holistic socio-economic cleansing of ills, structural impediments, debilitative cultural roadblocks, anti-social private and public sector practices and corruption. Fixing one part and leaving another means you still have a rotten fruit. As soon as you add it to the others, it begins to spread the rottenness again and before long you are back exactly where you started. Maybe one cannot tackle everything simultaneously. However, a plan to tackle everything should be cast in stone with accompanying schedule and timeline for each segment of the challenge.
 

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Fig 2. Dr. Edwards Deming’s Problem Solving Plan

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Fig. 3 Problem Solving Design Spiral


Truth #3

Rule of law is imperative to becoming a society that works for all. The third is to elevate the rule of law by bringing sanctity and transparency to the judicial system. It will entail purging bad judges from the bench through legal means and bringing integrity to the practice of law enforcement in society. It is true that so long as humans are managing the process, no judiciary system can be deemed to be perfect. What a society can and should expect is a perfect oversight process that has power to review the decisions of judges. And a civil service review process that does the same with law enforcement. Businesses around the world understand when rule of law prevails in a country. It is the safety blanket they need to plan and function. To gin up an economy for massive inflows of foreign investment, loans and credits, countries need to become transparent and the path to transparency in a country is paved by the “rule of law.” In society, no one, not even the present or former head of government or traditional ruler, should have a perch above it. Everyone that transgresses the law must be held accountable in order to ensure that discipline prevails in all social-economic and political dispensation in interpersonal association, business transactions and government accountability.


Truth #4

“Keeping the government clean” is crucial for credibility and by-in from the people. The fourth is to commit every appointee to swear an oath of purity in carrying out their service to society. Goodluck Jonathan, the former President of Nigeria stated, publicly, that he is not willing to declare his assets. It is symptomatic of the challenges that African leaders are confronted with. The issue is not that he made the statement but that he made the statement and maintained his job. In civilized countries that is grounds for rescinding his appointment by whatever means the law stipulates but rescind it they will. The challenge African leaders are facing is whether they can ever learn the importance of earning the trust of their people. Which can be phrased in a simple question: Can they stop themselves from stealing the people’s seed? The phrase, “keeping the government clean” was coined by the late Lee Kuan Yew, when he became prime minister of Singapore. In a symbolic gesture of purity, the entire ministerial and leadership team, including Lee Kuan Yew chose to wear white garments for the swearing-in ceremony of his first government of Singapore. It was a remarkable commitment to honest government at a time when many Asian governments were rife with kleptocracy.

Government by Kleptocracy is a form of political and government corruption where the government exists to increase the personal wealth of its officials and the ruling class at the expense of the wider population, often with pretense of honest service. This type of government is one that pervades in the continent of Africa. The modus operandi is systematic embezzlement of state funds. While the term can be used in its literal sense to mean a society based on theft, it is more commonly used derogatorily to point out a corrupt government or ruling class.

Endemic corruption is a deadly economic cancer that eats away the heart of any society. It often manifests in rebellion, terrorism and political fractionalization which is the root of all civil wars. In other words, corrupt African leaders are risking the lives of millions of people for self-aggrandizement. When government officials pad purchases in order to obtain graft, they are stealing the seed capital of society. The money could have gone into economic development, building schools, providing better health care, training for workers, infrastructure, general economic development fund, etc. It is also a double injury to society because the proceeds of most egregious perpetuation of graft on a grand scale usually winds up in foreign financial institutions, helping to make their well-to-do society richer still. By depositing said funds in foreign financial institutions, they are depriving their society of critical seed capital for development. It is a very cruel two-edged sword that has been wielded to great effect by leaders of African countries since the era of self-rule. The needs in African countries from Egypt to Morocco, Tunisia to South Africa and From Somalia to Western Sahara are vast and growing wider with every passing year. In the face of an avalanche of needs, any African leader that considers his or her office an entitlement to “steal” from impoverished people is the personification of evil.

 

Truth #5

Thinking outside the box is a great virtue for a change agent. The fifth is to see everything in a new light and to think-outside-the-box. To succeed and grow society must embrace and adapt to change. Failing to adapt condemns society and culture to a slow but certain death. One of the remarkable achievements of the Asian Tigers was their ability to try new ideas that were totally outside the purview of anything that had been done before. For instance, Taiwan learned from research that there was a market in the West for canned exotic mushrooms. They geared up production to fill the demand. Taiwan was determined to get involved in manufacturing of hardware for the digital age and developed one of the world’s most dynamic computer hardware and software industries virtually from scratch. They did not adopt a concept of importing to meet local needs. Instead they wanted to create a supply chain that can meet international needs. Singapore wanted to be a center for crude oil refining and for manufacturing of petrochemicals. They proceeded to create the environment for integrated oil companies to locate such facilities in the country and now, forty years later, Singapore is a major producer and exporter of refined petroleum and petrochemicals products although the country doesn’t have a significant stock of crude oil. The key is to aim high, do the homework and pursue the targets relentlessly…to be continued in next edition of Unleash Africa in January 2017.

John I. Akhile Sr. is the author of two books: Compensatory Trade Strategy: How to Fund Import-Export Trade and Industrial Projects When Hard Currency is in Short Supply and now Unleashed: A New Paradigm of African Trade with the World. He is also the President of African Trade Group LLC., a U.S. based trading company.


When 95 Million Nigerians are Living Without Electricity Something Needs to Change
by Obinna F. Mouh


From the student in a rural town somewhere in Nigeria that is literally burning the mid-night oil to the industrialist whose cost of production puts her in an untenable market position, the socio-economic life of every Nigerian has been affected in no small measure by the upheavals  in  the power sector.

nigeria lantern light
Esther Jacob sells cassava flour by lantern light in Lagos, Nigeria, Aug. 24, 2010. Nigeria's president announced a multi-billion-dollar plan Thursday to repair and privatize the oil-rich nation's decrepit national power grid that forces people to rely on private generators to provide electricity. AP Photo/Sunday Alamba

When one considers the importance of electricity to modern life, it is understandable that Nigerians from all walks of life, rich and poor, old and young are frustrated with the user experience. Despite the less than ideal circumstances, Nigerians are expectant. In the 21 st century, it is certainly not farfetched to expect that as night falls, that by the simple flick of a switch, one can confidently illuminate the darkness without the nightly cacophony of generator engines disrupting the evening quiet.

Nevertheless, in spite of the myriad of election year promises of power for all, reports commissioned, and targeted intervention programs implemented since the early 1970s, the Country has registered very little progress relative to where it ought to be. Therefore, in those instances where our expectations inevitably confront the daily reality of power rationing, grid collapse, exorbitant fuel costs, lack of electricity metering, and tariff increases a potent brew of disillusionment and pessimism overwhelms the polity, promising a strong hangover to boot. With ninety five million Nigerians currently without access to electricity, the promise of power for all has largely been a mirage of sorts.

The fits and starts observed during the ongoing revitalization of the Nigerian power sector after many years of chronic neglect is in many ways analogous to the experience of a middle-aged person attempting to re-engage the formal education system after many years of chronic truancy. Folks that have had to begin their educational pursuits anew understand that tackling grade school during adolescence is an entirely different proposition compared to attempting such at the age of forty, when the demands of a job, family life, and other socio-economic commitments jealously compete for one’s time. The opportunity cost experienced reflects competing resource demands that surely require difficult tradeoffs.

Let me be clear, the argument here is not so much that the country has aged and consequently is unable to tackle this particular challenge. Far from it, that argument would in fact be nonsensical and for good reasons invite charges of ageism. Rather it is saying that by failing to make the necessary investments required to keep up with the increase in electricity demand over the last thirty years the Nation is now faced with a seemingly intractable situation. A situation where reversing the tremendous deficit in electric power supply will require much steeper economic and cognitive costs. This is at a time when similarly scaled investments are needed in education, agriculture, national security, and healthcare.

The industry figures also help tell the story of where the Country is relative to where it ought to be. Nigeria presently has an installed power generating capacity of 12,522.0 MW, available operating capacity of 3,879 MW, and transmission capacity of 5,300MW. Owing to gas supply problems, significant transmission & distribution losses, a lack of maintenance, infrastructure sabotage, and poor water management only 1,864 MW or 25% of installed capacity is distributed to consumers per the Federal Government’s own data. The transmission and distribution network are also threatening to be a major bottleneck. On the 31st of March 2016 the power sector suffered a system collapse, which resulted in a national grid output of zero megawatts of power for a three hour period. When grid power is available, only 45% of Nigerians have access to it, but much of that supply is epileptic and of very poor quality.

nigeria electrical pole

A power official works on an electric pole along a street in Nigeria's commercial capital Lagos October 3, 2012. REUTERS/Akintunde Akinleye

According to the World Bank’s 2014 Statistics Nigeria has an estimated population of 178M people. When compared to South Africa, which has a population of 53.6M and an installed generating capacity of 44,000 MW of electricity, the scale of the challenge facing Nigeria begins to come to the fore. More so, given that South Africa’s current electricity consumption per capita is approximately 4,800 kwh/person/year, an equivalent power consumption level for Nigeria, which currently consumes 126 kwh/person, given its population would be 98,000MW. Though this is a rough estimate, it however confirms the severity of the power generation gap.  Nigeria is Africa’s largest economy with a GDP of $521.8 billion, while South Africa is second with $350.6 billion.

According to the Federal Government’s 2010 Power Reform Roadmap Report, Nigerians spend over twice as much on self-generated light and power, using candles, diesel, and petrol as they do with grid-based electricity. More so, it is estimated that at a minimum 6000MW is generated using petrol and diesel generators.  This mode of self-generation represents a financial albatross on Nigerians equivalent to between $6.7 and $10.47 billion compared to grid-based power. This is not counting the premature deaths and chronic ailments resulting from breathing polluted air.

To address the situation, the Country previously set for itself a target of generating 40,000MW within a 10-year period starting in 2010. This seemingly modest target for generating capacity alone, according to the Government’s Roadmap for Power Sector Reform will require an investment of $3.5 billion per annum over a 10-year period. When you consider the entire value chain that includes generation capacity, transmission, and distribution, the effort will require $10 billion per annum over 10-years. Nigeria’s proposed 2016 Federal Budget is $21.3 billion. Therefore, the yearly cost to achieve what is in fact a very modest goal of 40,000MW over a 10-year period equals a one half of the Country’s annual budget. The 2016 federal budget proposes the sum of $1.4 billion for power sector capital expenditure. Additionally, owing to missed milestones and exigencies, the initial target of 40,000 MW by the year 2020 has also been revised down to 20,000MW.

Although the government’s privatization effort was a step in the right direction, with the backdrop of falling oil revenues, it cannot be expected to shoulder the financial responsibility on its own. The magnitude of this challenge calls for an all hands approach, especially concerning long-term capital formation, technical expertise, and innovative business models to reduce the delivered cost of electricity.

The issue of capital formation is especially pertinent considering the enormity of the costs involved and the limits of the Federal Government and the indigenous Capital Market (Nigerian Stock Exchange) as a resource for such. The Federal Government is facing dwindling oil revenues and the Nigerian Stock Exchange, with a market capitalization of approximately $35.26 billion, simply does not have the depth and breadth required to spearhead capital formation at this scale. The industry needs stable policies and appropriately structured and varied cost recovery instruments to attract and sustain participation from both foreign and indigenous investors.

One of the instruments for cost recovery available to investors is the tariff charged to electricity consumers. This must be appropriately structured to attract capital currently sitting on the sidelines without being unnecessarily burdensome to consumers. The public outcry following the recent tariff hike (45%) underscores the need to also address the significant information asymmetry between Operators, Policy Makers, Consumers, and their Representatives. Since addressing this challenge will require a consistent and focused effort over a long period, the best possible way to ensure that efforts at ameliorating the situation do not fall short of success is through a well-informed and engaged citizenry. An engaged and patriotic citizenry attuned to their responsibilities regarding timely payment of electric bills and abstaining from acts of vandalization will help ensure that the industry remains economically viable and attractive to investors.

Despite the laundry list of challenges and the very little progress made thus far, this is not the time to be caught middling. The stakes are just too high. With Nigeria’s population projected to exceed four hundred million by 2050, the next thirty-four years have to be markedly different from the last thirty. To keep up with the annual population growth rate of 2.54%, the country should set for itself a target of 11,000MW of new generating capacity yearly; however, this is just the first step. As noted earlier, there are equally important challenges and constraints, like capital formation and a tariff structure, that have to be addressed to ensure that the hopes of expectant Nigerians are not dashed on the jagged surface of disappointment.

Obinna F. Mouh is the V.P of Business Development, at Poleton Innovation Partners and has a MBA of Strategy and Finance with a focus on managerial strategy and finance from Case Western Reserve University.


Africa Needs to Take Advantage of the Internet for Financial and Social Growth 


by Omono Okonkwo

For the first time in September 2016, Facebook CEO, Mark Zuckerberg visited Nigeria. Many asked why he would come all that distance. But the truth is Mark understands the profit he has garnered from the West African country alone when it comes to internet activity.



Nigeria is a nation of more than 160 million people, a great number of that population is active on Facebook. Personal users and even business men and women take advantage of Facebook’s wide range of services to boost their personal economy.

Truth be told, Mark has been able to build a formidable presence and loyalty here in Nigeria. Facebook is able to parlay the patronage of Nigerian users of its social media platform into advertising revenues for the company. Little wonder why he was here, to be in the presence of people, to engage in conversations with them and see how he can be an influence for the upcoming coders, who may want to tow the path that he has set aside for himself.


“The World Wide Web has a plethora of opportunities and the possibilities are limitless. If only we would seek out ways to improve on what currently exists.”


Now, the truth is a lot of Africans, particularly youngsters have yet to discover the true power of social media and the internet as a whole. Many use it mainly for entertainment, a gateway for fun and sharing gossip. What still eludes so many youths is the fact that there is a lot to be gained over the internet, particularly financial freedom.

A chance meeting with a Nigerian online game developer, 25-year old Emmanuel Omene a few months back taught me something valuable. He said in his country, there are hardly any jobs available especially for those who do not have some kind of link to the powers that be. So, it is left for the youths to think outside the box and come up with something to do for themselves. “That was how I became a game developer and had my app available on Google play store in 2015,” he told me, bursting with pride.

If every young African were to wait for white collar jobs, what would be the fate of the continent in a few years? Instead of focusing so much on idle talk or rants, why won’t African youths, who are currently without jobs, but have access to the internet, try their hands at developing something that could be useful to society and also be profitable to them?

The World Wide Web has a plethora of opportunities and the possibilities are limitless. If only we would seek out ways to improve on what currently exists.

Who can forget the way Jumia and Konga came onto the African online landscape and changed the face of shopping forever? In fact, many small scale businesses are beginning to search for ways to adopt the online mechanism of buying and selling. This is because everyone and everything is going online.


“In fact, many small scale businesses are beginning to search for ways to adopt the online mechanism of buying and selling. This is because everyone and everything is going online.”


There are so many challenges facing Africa and Africans ranging from poor transportation, poor healthcare systems, accessing basic welfare, especially in run-down areas. All these can be solved through launching an online solution that could target those suffering from these problems and making life easier for them. After all, when people are opportune to get a solution to a long-standing problem, they will always come for it. Besides, nowadays, there is hardly anyone without internet access, even in rural areas.

I remember reading about some Africans who had done well to invent something that could put an end to a particular problem. One of them was Funke Talabi, a young lady who started CityHires, Nigeria’s first video recruitment portal in 2015. Those who had had enough of the regular way of recruiting could make use of Talabi’s creation to switch things up.

It is not true however that the bulk of African youths are going online to waste their time on frivolities. Truth is, some have started using Twitter and Instagram to launch fashion businesses, putting up photos to attract would-be customers and making a small fortune off making smart online choices.

Omono Okonkwo is a Nigerian avid reader and writer. She has written for several platforms including Ventures Africa, Edufrica, and the Premium Times. Her interests are Business, Innovation, and Policy on the continent. You can follow her on Twitter @NwanyiOzalla.

Challenges of Entrepreneurship in Africa


by Gayle Cottrill

Earlier in 2016, we started the column, Spotlight on African Entrepreneurship, hoping to showcase successful businessmen and women of the African continent. So far, we have shared the stories of businesses in Ethiopia, Cameroon, Nigeria, and Kenya, and while they have been met with success in their communities and countries, they have all faced challenges as new startups, and they are challenges that are common throughout the African continent.


Unleashed: A New Paradigm of African Trade with the World, by John I. Akhile, Sr. lays out strategy after strategy to help African nations become global trading powers. The book presents the problems facing many African nations and offers historical examples of the Asian Tigers that were able to rise above similar economic impediments and become some of the leading economies of the world. One of the largest issues that nearly every African nation has is that it is a consumer nation, importing goods and services instead to consume of producing goods and services for their own people and exporting to other nations. Exportation is what we have been focusing on in our Spotlight of African Entrepreneurship. We have strived to present businesses that have found success in growing to be an export-driven business model.

While the businesses we presented had wonderful success stories, they were met with challenges along the way, as any business will. However, a recurring challenge that nearly every entrepreneur we have interviewed in the past nine months faced is the economic environment of their nation and the roadblocks their country has for startup businesses.

Olatorera Oniru (left), CEO of DressMeOutlet.com of Nigeria said it best, “Nigeria's general challenges have been my biggest challenges as an entrepreneur and founder of Dressmeoutlet.com. Each and every day, I desire much more greatness coming out of the nation. Better roads, security, education, electricity, water supply, internet. So many things aren't working as perfectly as they should and thus we find ourselves having to take on more work and finance much more than necessary to provide the perfection our customers expect from us as a leading retailer. Our industrial steamers for apparel require clean water, all our marketing and operational tasks require stable internet, our processes require competent graduates and the entire organization requires stable electricity. All these development essentials that are standard provisions in other nations are not yet well developed in Nigeria.”

Funding for starting a business has also been a challenge for businesses like Madlyn Cazalis. Said CEO and founder, Christian Ngan (right), “Developing a business through auto-financing, without the support of investors, banks or subventions, required a lot of financial discipline to avoid unnecessary expenses. It is not easy to do business in Cameroon.” In addition, Ngan said, “The economic initiative of the young population is not encouraged, there is a heavy administrative burden, getting goods through customs is a big hassle and the lack of support from the government are the main challenges most entrepreneurs face in this country.”

And lack of support from the government is not isolated to Cameroon. According to Akhile in Unleashed, there are residual ordinances still kept in place from the time of colonial rule in many African nations. Akhile wrote, “The cumbersome process of enterprise formation inherited from colonial administrations was meant to keep competitors from participating in the business activity of their territories and also to make it difficult for indigenes to enter the business arena.” They have mainly been kept in place because of policies that promote importing rather than exporting, but the switch to exportation is a crucial step for African nations to find economic success. And doing that requires action to help businesses start and grow in a welcoming environment for entrepreneurship.

If the governments care about helping their nations grow economically, simplifying the steps to start up a business is crucial. There are three key changes that Akhile says would benefit entrepreneurs in African countries: they should keep startup costs low; allow a business to be able to complete the startup process within forty-eight hours; and finally, decentralize locations where businesses must go to register, so that long-term planning and the cost of travel can be eliminated.

Regarding registration of businesses, Akhile said in Unleashed, “The only requirements for registering a new business should be proper identification and payments of a very small variable registration fee, based on the type of enterprise being registered.”

Despite the difficulties entrepreneurs must face when starting a business on the African continent, many push through and have forged their own path to success. Every one of the entrepreneurs we have been fortunate enough to interview has been an example of perseverance and hope. Every entrepreneur generated a business idea that not only helped them, but helped a community, often times their own.

Vava Angwenyi (left), founder of Vava Coffee in Nairobi, Kenya said, “Our business runs on a Social Enterprise model. We believe that businesses can make profit while impacting communities positively.” Angwenyi has a direct one-on-one relationship with every coffee farmer she buys coffee from.

They have also expressed a desire for their business to be a model for other entrepreneurs.

“We also hope to extend our footprint across the globe and become the most recognized and sought after Specialty Coffee Company out of Africa, inspiring the spirit of social enterprise among other young african talent,” said Angwenyi.

Ngan, too, is hopeful that Madlyn Cazalis will offer hope for future entrepreneurs of Cameroon and all of Africa: “Madlyn Cazalis’ success is a proof that building a young international startup in Cameroon is possible. We promote African entrepreneurship, African self-esteem, African agriculture and African industry.”

Oniru hopes that her business, Dressmeoutlet.com will have a positive impact as a model business for others. “We want Dressmeoutlet.com to serve as an epitome of quality. We are always ready to share best practices and growth tips,” said Oniru. “I'm a strong believer in the fact that Africa is not yet ready for competition; at least not rigorous monopolistic competition. Right now it simply is just time to work hard and push dreams. There's room for entry in most industries for many more players. The more players, the more growth.”

Entrepreneurial enterprises have also found immense success locally, within the communities in which they started. SoleRebels, a footwear brand that started as a way to help artisans use their expertise to create a product that could be sold locally and globally, has done just that. Founder of SoleRebels, Bethlehem Tilahun Alemu (right), said about the success of the employees who handcraft every pair of shoes the business sells, “People have started making their own money and are in positions where they can support their extended families. People are buying their own houses and condominiums;  their children go to good schools and they can afford to send them to post secondary education--college and university. People also have changed through the different trainings we have given: people now dream of going out and doing their own business when it is the right time.”

We have only showcased a few African entrepreneurs in 2016 but will continue to reach out to more and more. “Unleash Africa” believes in the importance of highlighting the success of entrepreneurial endeavors that are doing well for themselves and for their communities and nations, spurring on growth for local and, in turn, national economies. As Akhile wrote in Unleashed, “If business is the engine of economic growth, then it is reasonable to express that countries striving to grow economically would be very favorable to having more businesses.”

The bold businesses we write about in Spotlight on African Entrepreneurs often face adversity in their endeavors, and while they have persevered, it is crucial for the governments of African nations to help. “It should be a particular goal of political leaders and their respective governments that business start-ups are easy and painless,” wrote Akhile. “Business formation and enterprise promotion are the only reliable paths to economic prosperity for a country.”

The British East India Company: Putting Looting into the Lexicon

A lot of the stories of artefact repatriations focus on state sponsored looting, such as the massacres in Benin or Beijing’s Summer Palace. A second category is that of private individuals such as the Seventh Earl of Elgin who were also involved in the pillaging of ancient relics, although not normally on such a large scale as it is hard for a single person to have the same impact as an army.

There is a third category though, one which brought us the word Looting – a Hindustani slang phrase for plundering. The word rapidly entered the English vocabulary via the British East India Company, one of the world’s first multinational corporations. While the British East India Company & their unprecedented levels of looting have thankfully now gone, the problem still exists, although it manifests itself in different forms, such as terrorist groups & warlords who like the EIC maintain their own private armies & relatively unencumbered by laws will happy loot ancient sites for personal gain, or merely to deprive others of the ability to see the relics that were once there.

The East India Company: The Original Corporate Raiders
by William Dairymple

Continued from part one, published in the November 2016 edition.

Bengal’s wealth rapidly drained into Britain, while its prosperous weavers and artisans were coerced “like so many slaves” by their new masters, and its markets flooded with British products. A proportion of the loot of Bengal went directly into Clive’s pocket. He returned to Britain with a personal fortune – then valued at £234,000 – that made him the richest self-made man in Europe. After the Battle of Plassey in 1757, a victory that owed more to treachery, forged contracts, bankers and bribes than military prowess, he transferred to the EIC treasury no less than £2.5m seized from the defeated rulers of Bengal – in today’s currency, around £23m for Clive and £250m for the company.

No great sophistication was required. The entire contents of the Bengal treasury were simply loaded into 100 boats and punted down the Ganges from the Nawab of Bengal’s palace to Fort William, the company’s Calcutta headquarters. A portion of the proceeds was later spent rebuilding Powis.

The painting at Powis that shows the granting of the Diwani is suitably deceptive: the painter, Benjamin West, had never been to India. Even at the time, a reviewer noted that the mosque in the background bore a suspiciously strong resemblance “to our venerable dome of St Paul”. In reality, there had been no grand public ceremony. The transfer took place privately, inside Clive’s tent, which had just been erected on the parade ground of the newly seized Mughal fort at Allahabad. As for Shah Alam’s silken throne, it was in fact Clive’s armchair, which for the occasion had been hoisted on to his dining room table and covered with a chintz bedspread.

Later, the British dignified the document by calling it the Treaty of Allahabad, though Clive had dictated the terms and a terrified Shah Alam had simply waved them through. As the contemporary Mughal historian Sayyid Ghulam Husain Khan put it: “A business of such magnitude, as left neither pretence nor subterfuge, and which at any other time would have required the sending of wise ambassadors and able negotiators, as well as much parley and conference with the East India Company and the King of England, and much negotiation and contention with the ministers, was done and finished in less time than would usually have been taken up for the sale of a jack-ass, or a beast of burden, or a head of cattle.”

By the time the original painting was shown at the Royal Academy in 1795, however, no Englishman who had witnessed the scene was alive to point this out. Clive, hounded by envious parliamentary colleagues and widely reviled for corruption, committed suicide in 1774 by slitting his own throat with a paperknife some months before the canvas was completed. He was buried in secret, on a frosty November night, in an unmarked vault in the Shropshire village of Morton Say. Many years ago, workmen digging up the parquet floor came across Clive’s bones, and after some discussion it was decided to quietly put them to rest again where they lay. Here they remain, marked today by a small, discreet wall plaque inscribed: “PRIMUS IN INDIS.”

Today, as the company’s most articulate recent critic, Nick Robins, has pointed out, the site of the company’s headquarters in Leadenhall Street lies underneath Richard Rogers’s glass and metal Lloyd’s building. Unlike Clive’s burial place, no blue plaque marks the site of what Macaulay called “the greatest corporation in the world”, and certainly the only one to equal the Mughals by seizing political power across wide swaths of south Asia. But anyone seeking a monument to the company’s legacy need only look around. No contemporary corporation could duplicate its brutality, but many have attempted to match its success at bending state power to their own ends.

The people of Allahabad have also chosen to forget this episode in their history. The red sandstone Mughal fort where the treaty was extracted from Shah Alam – a much larger fort than those visited by tourists in Lahore, Agra or Delhi – is still a closed-off military zone and, when I visited it late last year, neither the guards at the gate nor their officers knew anything of the events that had taken place there; none of the sentries had even heard of the company whose cannons still dot the parade ground where Clive’s tent was erected.

Instead, all their conversation was focused firmly on the future, and the reception India’s prime minister, Narendra Modi, had just received on his trip to America. One of the guards proudly showed me the headlines in the local edition of the Times of India, announcing that Allahabad had been among the subjects discussed in the White House by Modi and President Obama. The sentries were optimistic. India was finally coming back into its own, they said, “after 800 years of slavery”. The Mughals, the EIC and the Raj had all receded into memory and Allahabad was now going to be part of India’s resurrection. “Soon we will be a great country,” said one of the sentries, “and our Allahabad also will be a great city.”

***

At the height of the Victorian period there was a strong sense of embarrassment about the shady mercantile way the British had founded the Raj. The Victorians thought the real stuff of history was the politics of the nation state. This, not the economics of corrupt corporations, they believed was the fundamental unit of analysis and the major driver of change in human affairs. Moreover, they liked to think of the empire as a mission civilisatrice: a benign national transfer of knowledge, railways and the arts of civilisation from west to east, and there was a calculated and deliberate amnesia about the corporate looting that opened British rule in India.

A second picture, this one commissioned to hang in the House of Commons, shows how the official memory of this process was spun and subtly reworked. It hangs now in St Stephen’s Hall, the echoing reception area of parliament. I came across it by chance late this summer, while waiting there to see an MP.

The painting was part of a series of murals entitled the Building of Britain. It features what the hanging committee at the time regarded as the highlights and turning points of British history: King Alfred defeating the Danes in 877, the parliamentary union of England and Scotland in 1707, and so on. The image in this series which deals with India does not, however, show the handing over of the Diwani but an earlier scene, where again a Mughal prince is sitting on a raised dais, under a canopy. Again, we are in a court setting, with bowing attendants on all sides and trumpets blowing, and again an Englishman is standing in front of the Mughal. But this time the balance of power is very different.

Sir Thomas Roe, the ambassador sent by James I to the Mughal court, is shown appearing before the Emperor Jahangir in 1614 – at a time when the Mughal empire was still at its richest and most powerful. Jahangir inherited from his father Akbar one of the two wealthiest polities in the world, rivalled only by Ming China. His lands stretched through most of India, all of what is now Pakistan and Bangladesh, and most of Afghanistan. He ruled over five times the population commanded by the Ottomans – roughly 100 million people. His capitals were the megacities of their day.

In Milton’s Paradise Lost, the great Mughal cities of Jahangir’s India are shown to Adam as future marvels of divine design. This was no understatement: Agra, with a population approaching 700,000, dwarfed all of the cities of Europe, while Lahore was larger than London, Paris, Lisbon, Madrid and Rome combined. This was a time when India accounted for around a quarter of all global manufacturing. In contrast, Britain then contributed less than 2% to global GDP, and the East India Company was so small that it was still operating from the home of its governor, Sir Thomas Smythe, with a permanent staff of only six. It did, however, already possess 30 tall ships and own its own dockyard at Deptford on the Thames.

Jahangir’s father Akbar had flirted with a project to civilise India’s European immigrants, whom he described as “an assemblage of savages”, but later dropped the plan as unworkable. Jahangir, who had a taste for exotica and wild beasts, welcomed Sir Thomas Roe with the same enthusiasm he had shown for the arrival of the first turkey in India, and questioned Roe closely on the distant, foggy island he came from, and the strange things that went on there.

For the committee who planned the House of Commons paintings, this marked the beginning of British engagement with India: two nation states coming into direct contact for the first time. Yet, in reality, British relations with India began not with diplomacy and the meeting of envoys, but with trade. On 24 September, 1599, 80 merchants and adventurers met at the Founders Hall in the City of London and agreed to petition Queen Elizabeth I to start up a company. A year later, the Governor and Company of Merchants trading to the East Indies, a group of 218 men, received a royal charter, giving them a monopoly for 15 years over “trade to the East”.

The charter authorised the setting up of what was then a radical new type of business: not a family partnership – until then the norm over most of the globe – but a joint-stock company that could issue tradeable shares on the open market to any number of investors, a mechanism capable of realising much larger amounts of capital. The first chartered joint-stock company was the Muscovy Company, which received its charter in 1555. The East India Company was founded 44 years later. No mention was made in the charter of the EIC holding overseas territory, but it did give the company the right “to wage war” where necessary.

Six years before Roe’s expedition, on 28 August 1608, William Hawkins had landed at Surat, the first commander of a company vessel to set foot on Indian soil. Hawkins, a bibulous sea dog, made his way to Agra, where he accepted a wife offered to him by the emperor, and brought her back to England. This was a version of history the House of Commons hanging committee chose to forget.

The rapid rise of the East India Company was made possible by the catastrophically rapid decline of the Mughals during the 18th century. As late as 1739, when Clive was only 14 years old, the Mughals still ruled a vast empire that stretched from Kabul to Madras. But in that year, the Persian adventurer Nadir Shah descended the Khyber Pass with 150,000 of his cavalry and defeated a Mughal army of 1.5 million men. Three months later, Nadir Shah returned to Persia carrying the pick of the treasures the Mughal empire had amassed in its 200 years of conquest: a caravan of riches that included Shah Jahan’s magnificent peacock throne, the Koh-i-Noor, the largest diamond in the world, as well as its “sister”, the Darya Nur, and “700 elephants, 4,000 camels and 12,000 horses carrying wagons all laden with gold, silver and precious stones”, worth an estimated £87.5m in the currency of the time. This haul was many times more valuable than that later extracted by Clive from the peripheral province of Bengal.

The destruction of Mughal power by Nadir Shah, and his removal of the funds that had financed it, quickly led to the disintegration of the empire. That same year, the French Compagnie des Indes began minting its own coins, and soon, without anyone to stop them, both the French and the English were drilling their own sepoys and militarising their operations. Before long the EIC was straddling the globe. Almost single-handedly, it reversed the balance of trade, which from Roman times on had led to a continual drain of western bullion eastwards. The EIC ferried opium to China, and in due course fought the opium wars in order to seize an offshore base at Hong Kong and safeguard its profitable monopoly in narcotics. To the west it shipped Chinese tea to Massachusetts, where its dumping in Boston harbour triggered the American war of independence.

By 1803, when the EIC captured the Mughal capital of Delhi, it had trained up a private security force of around 260,000- twice the size of the British army – and marshalled more firepower than any nation state in Asia. It was “an empire within an empire”, as one of its directors admitted. It had also by this stage created a vast and sophisticated administration and civil service, built much of London’s docklands and come close to generating nearly half of Britain’s trade. No wonder that the EIC now referred to itself as “the grandest society of merchants in the Universe”.

Yet, like more recent mega-corporations, the EIC proved at once hugely powerful and oddly vulnerable to economic uncertainty. Only seven years after the granting of the Diwani, when the company’s share price had doubled overnight after it acquired the wealth of the treasury of Bengal, the East India bubble burst after plunder and famine in Bengal led to massive shortfalls in expected land revenues. The EIC was left with debts of £1.5m and a bill of £1m unpaid tax owed to the Crown. When knowledge of this became public, 30 banks collapsed like dominoes across Europe, bringing trade to a standstill.

In a scene that seems horribly familiar to us today, this hyper-aggressive corporation had to come clean and ask for a massive government bailout. On 15 July 1772, the directors of the East India Company applied to the Bank of England for a loan of £400,000. A fortnight later, they returned, asking for an additional £300,000. The bank raised only £200,000. By August, the directors were whispering to the government that they would actually need an unprecedented sum of a further £1m. The official report the following year, written by Edmund Burke, foresaw that the EIC’s financial problems could potentially “like a mill-stone, drag [the government] down into an unfathomable abyss … This cursed Company would, at last, like a viper, be the destruction of the country which fostered it at its bosom.”

But unlike Lehman Brothers, the East India Company really was too big to fail. So it was that in 1773, the world’s first aggressive multinational corporation was saved by history’s first mega-bailout – the first example of a nation state extracting, as its price for saving a failing corporation, the right to regulate and severely rein it in.

Continues in Part 3 in the January issue of “Unleash Africa.”


This article was originally published on elginism.com.

About William Darymple

William Dalrymple was born in Scotland in 1965, and brought up on the shores of the Firth of Forth. He was educated at Ampleforth and Trinity College, Cambridge where he was first History Exhibitioner then Senior History Scholar. He is winner of numerous book awards. He has three honorary doctorates of letters, from the University of St Andrews ‘for his services to literature and international relations, to broadcasting and understanding,’ from the University of Lucknow University ‘for his outstanding contribution in literature and history’, and from the University of Aberdeen ‘for his contribution to the writing of the history of India.’ Two more, from the Universities of Chichester and Bradford, will be received next year.

William Dalrymple is a Fellow of the Royal Society of Literature, the Royal Geographical Society and of the Royal Asiatic Society, and is a founder and co-director of the Jaipur Literature Festival. He is a regular contributor to the New Yorker, the Guardian, the TLS, and the New York Review of Books, and is the India correspondent of the New Statesman. Learn more about him at this link. http://www.williamdalrymple.uk.com/biog

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