The Africa PreBrief Blog

The Most Important Book On African Economic Development

Jul 19 2010
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Generally speaking I try to evaluate the quality of life of any society – and the measure of dissatisfaction within it – by studying the development and treatment of four groups : women, children, the poor and the very talented. Obviously it should go without saying that these categories are not mutually exclusive.
From an economic perspective women are most intriguing because while they are frequently limited in terms of the exploration of opportunity, one still finds they are at the center of key activities like nurturing, education, cultivation, and the intermediation of finance. This is why I refer to them as the head economists of most societies – remembering that economics comes from a root word meaning ‘household management.
Children are important because they are a barometer of how a society invests in the greatest form of capital – not financial or physical but human and the unseen (the future). This is especially critical of African societies where young people are the vast majority. Africa is the ‘youngest’ region in the world with nearly 45% of its population 15 and under. In this light the news that over 70% of the youth population in places like South Africa (supposedly the most developed country in sub-Saharan Africa) wants to emigrate, is especially troubling. The problem of school enrollment for young girls perhaps says it all.
Jesus’ teachings regarding the poor sum up just about all that can be said of the value of that group, not to mention they always provided the cheapest form of labor upon which every industrial society has been built.  
And the very talented – an elite to some, a vanguard to others – their place, if they have one at all in a society, and their ability to effectively take risks, usually determines the level of innovation and progress a group, community and nation experiences.
Therefore, in my mind, the at times exclusive attention of economic development on food, clothing, and shelter misses much. The nobility of focusing on ending poverty does not substitute for accurate analysis of it, and how it revolves around the way governments, markets, and kinship systems treat all 4 groups. Certainly it is hard to overcome arguments that pull on the heartstrings – that unless one has food in their stomach, clothes on their back, and a roof over their head they cannot fully participate in economic activity, for instance. But the history of economic development is often one where deprivation and destitution give birth to or ‘mother’ change, creative and eventually lucrative activity.
In that sense economic development cannot be produced by economists and certainly not activists and ideologues who seek poverty alleviation, while failing to realize that the circumstances that produce wealth are usually dire. Here, the historians, anthropologists, and investigator guided by science more than agenda are our natural ally. It is they who understand that life is best understood as the cyclical nature of the human being’s struggle to obtain security, fulfillment, and peace in the face of difficulty, rather than the abstract quest to avoid difficulty, and then only incrementally.

Enter Moky Makura who with Africa’s Greatest Entrepreneurs delivers an unexpected jewel of a book capable of holding the interest of the casual reader, policy wonk, aspiring African businessperson, and Western investor.

 
While Dambisa Moyo may have penned the most provocative book on African economics last decade – Dead Aid – it is Moky Makura who has written the most relevant.
In chronicling the path of 16 African entrepreneurs, Ms. Makura (who is also my favorite actress starring in my favorite soap opera – the pan-African hit ‘Jacob’s Cross’) indirectly tells us virtually all we need to know not only regarding tips for business success on a continent of nearly 1 billion, but perhaps more importantly, what governments, kinship systems, and markets need to do to develop African economies, from the bottom-up.
From Wale Tinubu, oil and gas magnate we learn of the need of an entrepreneur to be both commercially and politically astute, (‘You have to learn to be politically savvy, you don’t have a choice. It’s not something you can run away from, because the government in Nigeria truly dominates the economy and the private sector is only just beginning to get a voice of its own.’)

From Ghana’s financier, Prince Kofi Amaobeng we learn how to start a bank by matching talent with capital when others won’t: “Amoabeng was a self-styled investment consultant in his spare time – a service he offered, like his time, for free. It was quite simple, really. Friends would come to him with a proposal looking for help to raise money. Amoabeng would never approach banks as they always refused such loans. Instead, he would approach other friends and acquaintances who had some money to invest and pair the two up for no commission. This free matchmaking service eventually grew to be the basis of Union Trust…”

From the start-up days of Herman Mashaba we gain rare insight into how one of the non-romantic benefits of marriage is personal maturity and the end of an unwanted and unproductive entourage:
“On weekends friends and I would go and party at different shebeens (pubs) and stokvels (savings clubs). I knew it would be dangerous to have a car with all these friends and I didn’t want them to have the impression that my car would be a taxi for their use. I knew I could not go out and buy a car and run a business under these conditions, with all these friends around.  
Before this idea came to my mind, ‘marriage’ was not in my vocabulary. Now there was a different reality. I was going to be in business and I needed a car for that business. I thought that to reallyget the protection and stability I needed, I had to get married before I bought a car, and it is the one decision of my life that I treasure most.”
Did Mrs. Mashaba mind this arrangement? Apparently not, or perhaps she forgave her husband’s view of the efficiencies matrimony provides. According to Moky Makura, “It may not have been the most romantic reason to get married but marriage nevertheless proved to be Mashaba’s salvation. More than anything, it showed great maturity on his part and was the first tangible step the young man took down the path towards his goal. In 2008 Mashaba and Connie celebrated their 26th wedding anniversary. She is not only his wife, but over the years has become his business partner; at one stage the CEO of Black Like Me, the hair and cosmetics company that Mashaba founded in 1985.”
Of course, not all of the profiles featured in Africa’s Greatest Entrepreneurs revolve around such accounts of domestic finance.
In the stories of mobile telecommunications entrepreneurs Sudanese-born Mo Ibrahim and Zimbabwean born Strive Masiyiwa we get a taste of the kind of tension that continues to exist between successful African entrepreneurs who are almost always global in outlook with foreign business partners on one hand; and African governments, on the other, still unclear on how to unwind their business monopolies (their control of the rules that govern trade and commerce: borders, customs, franchises, and capital mobility) post-Independence.
Of Mo Ibrahim’s building of Celtel Ms. Makura describes, “But building businesses on the African continent was not without its challenges, and a profitable business like telecoms attracted more than its fair share of trying moments. Dealing with bureaucracy in general, and the industry regulator in particular, being perceived to be a foreign company even though all the company’s assets were in Sudan itself, and being subjected to arbitrary taxation ‘whenever the government was short of money,’ were the types of issues that Ibrahim dealt with continuously.”
In riveting fashion Africa’s Greatest Entrepreneurs lays out a titanic struggle between Strive Masiyiwa and the Zimbabwe government, in the establishment of his telecom company Econet - an epic that reads like a tug of war. 3 years after having been defeated in court by the state-run Zimbabwe Post and Telecommunications Corporation (PTC) through an interpretation of the country’s Telecommunications Act, Masiyiwa received an anonymous tip from a member of the ruling ZANU-PF party. Likening the episode to the secretive ‘Deep Throat’ of Watergate fame (finally revealed to be the FBI’s # 2 man Mark Felt), we read, first hand from Mr. Masiyiwa, “I got a phone call from a very senior member of the party (Zanu). He said: ‘You know, I was at Lancaster House and I was involved in the writing of the constitution. Go and look at section 20 of the constitution.”
Moky Makura takes the drama from there:
“Masiyiwa immediately dropped the phone and went and bought a copy of the new Zimbabwean constitution. It had been created under the 1979 Lancaster House agreement which ended white rule in Zimbabwe. Masiyiwa went straight to section 20, read it, and called Judith O’Neill. Section 20 of the Zimbabwean constitution says: ‘Every Zimbabwean has a right to receive and impart information without hindrance.’ Masiyiwa and his legal team were about to challenge the very basis of their government – the constitution. It was a daring move and one of his lawyers likened it to Masiyiwa ‘breaking into the KG6 military barracks, stealing a tank and driving it into Harare’s Unity Square, because that’s how the government is going to react if you take them to court!’ The lawyer suggested instead that Masiyiwa take his advice and leave: ‘You’ve sold your assets; you really don’t have anything more.  You’re a great professional engineer. Apply for a job, go back to England, do whatever you have to do.’ But Masiyiwa ignored the advice: ‘The Lord said I shouldn’t; that’s the simple truth. As I prayed about it, my convictions became stronger and stronger. I never hesitated.’
Masiyiwa instructed his lawyers to prepare the papers to take the Zimbabwean government to court, and the rest, as they say, is history. He planned to ask the supreme court to form a constitutional court to look at the legality of the Telecoms Act and effectively strike it down. The legal challenge was based on the premise that the Telecommunications Act, with which PTC had argued and used to defeat Masiyiwa, in fact breached the freedom of expression clause in the Zimbabwean constitution. It was a brave and radical move. Some would say it was foolhardy and short-sighted, but regardless, Masiyiwa was in for the long run, and he never took his eye off the ball. He was one step ahead of the government at every turn.
In 1996 the Zimbabwean government launched its own mobile telecommunications service NetOne, and shortly after, issued a tender for a private mobile phone licence. Masiyiwa submitted a bid. He was one of six bidders, along with his old friend, Miko Rwayitare of Telecel, who subsequently won the tender. Rwayitare’s consortium was backed by a number of political heavyweights. 
Suspecting foul play and collusion in the tender decision, Masiyiwa used the 30-day window allocated to bidders to inspect each other’s submissions, to discover that the Telecel bid did not meet the licence conditions. He went back to the high court in an attempt to overturn the decision. But in the meantime, Telecel started to roll out its network. By July 1997 Telecel was operational.
Masiyiwa was now fighting two battles on two fronts for a third mobile telecoms licence in Zimbabwe. Through the courts, he managed to get the Telecel bid suspended, but shortly afterwards it was reinstated by the telecommunications minister. It was rumoured that the minister was linked to one of the Telecel shareholders. Following a Cabinet reshuffle two months later, Telecel’s bid was cancelled once again and the courts issued a telecoms licence to Econet, making it the first time in global history that a telecoms licence had ever been issued by a court of law. In other words, Masiyiwa had won."
An ideologue – whether statist or free-market in orientation would see the account of Masiyiwa versus his own government’s business monopoly as validation of their own respective worldview. To them Masiyiwa, or Mo Ibrahim, for that matter is either a foreign agent or a capitalist success story.
But the manner in which Ms. Makura writes makes it clear that another point of view matters – one that at times is activist, conservative, radical or even apolitical. The entrepreneurial perspective simply cannot be subsumed by one’s philosophical preferences, as it is based in reality and only exposes what is both right and wrong in how societies manage the three essentials of freedom, justice and equality. In some cases the entrepreneurial journey is one of self-absorption, unbridled ambition and greed, and other times it is the embodiment of inspiration, perseverance and shared success.
Yes, in challenging current economic and political constructs, the African entrepreneur can be both enemy of the state who is little more than a functionary of a foreign power; or a freedom fighter who challenges unjust laws and forces governments to distribute wealth on more equitable terms.
Today, that narrative is being written on a daily basis by entrepreneurs in over 50 countries on the continent.

From the story of Ghanaian beverage magnate Kwabenja Adjei’s naming his company after the chief of his tribal region; to the account of the rise of South Africa’s Ndaba Ntsele and his Pamodzi Holdings in the backdrop of apartheid; to the narrative of growing into a family business that is Uganda’s Gordon Wavamunno; to the description of the diversification investment strategy of Richard Maponya; Africa’s Greatest Entrepreneurs serves up cultural nuances, professional advice, political sagacity and soul-inspiring stories which paint the landscape that is the continent with the greatest potential for development and growth this century.

In terms of the four groups by which I measure economic development Africa’s Greatest Entrepreneurs admittedly falls short in attention to women (not a single one is profiled) and while capable of being read by the youth, does not focus on them.
But in the vital categories of the poor and the very talented, Moky Makura has done a splendid job of chronicling how and why the relationship between poverty and risk-taking can no longer be examined as isolated realities.
For far too many activists, mainstream economic theorists, and policy makers it remains the greatest story never told...
Cedric Muhammad
July 19, 2010

 

Cedric Muhammad is a business consultant, political strategist, and monetary economist. He’s a former GM of Wu-Tang Management and currently a Member of the African Union’s First Congress of African Economists. Cedric’s the Founder of the economic information service Africa PreBrief (http://africaprebrief.com/) and author of ‘The Entrepreneurial Secret’ (http://theEsecret.com/). He can be contacted via e-mail at: cedric(at)cmcap.com

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Last changed: Jul 20 2010 at 9:21 AM