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Why it’s too hard to start a business in Africa — and how to change it
This was a very unexpected TED talk. Magrette Wade’s passion and moral outrage are palpable. Her fellow Africans are dying trying to cross the sea for a better life:
“So, why are these people leaving? They’re leaving because they have no jobs. They’re leaving because where they are, there’s no jobs. So … But poverty, that’s really striking them, is the root cause of why they’re leaving. Now, why are people poor? People are poor because they have no money. You have no money because you have no source of income. And for most of us, what is a source of income? For most of us, what is our source of income, what is it, tell me? Jobs, thank you. Where do jobs come from? Come from where? Businesses, thank you.”
“Now, if jobs is what fixes poverty, and jobs come from businesses, don’t you think — especially, they come from small and medium size enterprises, SMEs — then don’t you think, maybe for a second, that we should focus on making it easy for a small-business person to start and run their business? Don’t you think that it makes sense? Why is it that when I look at the Doing Business index ranking of the World Bank, that ranks every country in the world in terms of how easy or hard it is to start a company, you tell me why African countries, all 50 of them, are basically at the bottom of that list? That’s why we’re poor. We’re poor because it is literally impossible to do businesses in these countries of ours.”
And as a business owner who must import key raw materials, she nails the source of corruption:
“If you were only charging me 5 percent to get my stuff in the country, my raw material, instead of the 45 percent, do you really think that I would have to go pay a bribe? That’s what breeds corruption. Bad laws, sets of horrible, nonsense laws.”
It gives me hope that people like her are naming it, and that TED is even posting it.
/sb
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Re: Thomas Reardon’s post 100894 of 10/8/18
Corruption is a huge problem in Africa. In a continent of more than 40 countries, you will rarely find a leader (politician) who is not corrupt. I was born in Tanzania and I have lived in all three E. African countries like Kenya, Uganda, and Tanzania. At 15 I went to India for further education, returned to Tanzania after graduation, and worked for a textile company for two years. Africa is very rich in natural resources and if you are a businessman with ambition, then Africa will make you very rich. Business acumen is very important but you must also know how to bribe the officials. A friend, who was with me in the same college in India, went on to become an engineer and settled down in Tanzania. He said that Africans are so corrupt that you can get a license worth thousands of pounds just for a bottle of beer. Surprisingly, the concept of loyalty to the country is not known to many Africans. Last week I saw a picture of some Kenyan cabinet ministers with private helicopters. The current Ugandan President has a jet plane. You do not need helicopters and a Jet Plane to travel within the country. African politicians are some of the richest men in the country.
Tribalism is a serious problem. There are some similarities between African tribalism, racism in the west, and the caste system in India. There is always that one group of people that wants to dominate the rest. President Obama’s father –in Kenya– belonged to a Luo tribe which is always in conflict with the dominant Kikuyu tribe. A Luo –no matter how talented– never wins an election and riots are common between these two tribes. During my teenage days, there was a very decent and well-educated African, Tom Mboya. He could have become Kenya’s second president but he was assassinated. He was not a Kikuyu. Tribalism is a problem throughout Africa and an educated African will seldom admit it to you. For any African problem, they love to blame the West. And, of course, they want to be compensated.
The E. African economy was in the hands of Indians who were envied very much. E. Africa was a huge jungle and it was developed only because of the Indians and European governance. The Germans did rule Tanzania up to the end of the Second World War. Zanzibar and Mombasa in Kenya were under Portuguese control.
Idi Amin kicked out nearly 80,000 Indians from Uganda. These Indians had to leave property and businesses and flee to the West. Those with British Passports like me came to Britain. Africans had ready-made businesses but they failed within a month. Idi Amin was exposed and even he had to escape to Saudi Arabia. The Ugandan president who followed Amin actually came to London to speak before a group of Indian businessmen. He urged the group to return to Uganda and even promised their businesses back. Some went back and settled down. They are doing well because now there is some protection. One of my classmates’ father in India had a shoe factory. His father tried to get it back but Africans threatened to kill him. One Tanzanian PM went to Canada and spoke to the Tanzanians living there. His message was simple “Please, come back.” But he made it clear that those Asians whose businesses were nationalized will not get them back. Some rich Asian Canadians have returned and have invested in the property business. Others returned.
Something interesting happened to Idi Amin. Once when he was seriously ill, the Saudi government called the best doctors to save his life. One of these doctors was an Indian woman with a medical degree from Britain. She recognized Idi Amin immediately and even told him that he had kicked her father out of Uganda. Amin was terrified and actually begged to save his life. The Indian doctor told him not to worry because she had taken some oath and her job was to save a life. She and other doctors did their best but Amin died. I forget the name of the disease but the skin on the legs could be peeled off. This woman doctor now lives in Canada where she has made a permanent home.
When in Africa it takes some time to realize that Africa is not ruled by Africans. The actual rulers are the Chinese but they are behind the curtains and the Africans are learning how ruthless these Chinese can be. During my brief stay of about three years in Tanzania, I was always uneasy. There was something in the atmosphere. It was that fear of the unknown. I was very careful of what I said and to whom. Distrust was very common. An Indian tailor told me that if an Indian wants to go to the UK or India, he will disappear suddenly without telling anybody. The secrecy is to avoid problems with the customs officials. Much of my protection came from Ayn Rand’s Capitalism: The Unknown Ideal. When surrounded by the collectivists, three principles in “The Anatomy of Compromise” will most definitely help you to find an escape route.
Tanzanian socialism reminded me of the political atmosphere in We the Living though somewhat diluted. We all –including the Africans– lived in fear. During the first year, I lived in an African village with an Asian roommate due to a housing shortage. After some months my roommate left for Canada and I was alone. I did not trust the Indians who worked with me. Nor did they trust me. But we were polite to each other. It may surprise you, but it was the Africans whom I trusted most. Tanzanian Africans are not aggressive like American blacks or West Indians. They are usually polite, have good manners, and are friendly. I could feel that they were very protective of me. Once I accidentally and unknowingly walked into an area under quarantine. I wanted to buy vegetables for my evening meal. A policeman appeared from somewhere and said, “You are under arrest.” He said we must wait for the police van and go straight to jail. It was Friday, so I could only be presented before the Magistrate on Monday. I was deeply worried. The policeman was slightly drunk and started speaking against Indians. He was very loud so there was a crowd and he was trying to impress them. Then something strange happened, the crowd was not impressed. No one laughed at his jokes about the Indians. Very slowly women and their teenage daughters started coming out of their houses with sticks. The African shop where I shopped regularly closed. The owner came out and just stood there staring at the policeman. The women and their daughters did the same. African males were not at home. They were busy playing football. Nobody looked at me. I just could not figure out what was happening. Then the policeman stopped lecturing me. I saw fear on his face. He told me quietly in Swahili to wait for 5 more minutes and then I could go. He told me clearly that he would be in trouble if he took me to jail. I said I will cooperate. The women, their daughters, and the African shopkeeper made it clear silently that if he took me to jail then he would be in big trouble. The policeman got the silent message.
I think you can visit most African countries as a tourist but settling down is not a good idea. As Objectivists, we know simply too much about human nature. Fear grips you and in my case, it left me only when I sat on the plane to London. I know why Africans are taking a huge risk to come to the West.
When discussing racism, it is almost always taken for granted that an African is a victim. Not true. An African can be a racist just as anybody else. A few months back I read about a white South African who was gang-raped and then stabbed more than 30 times. Somehow she dragged herself onto the road and some kind man took her to the hospital. The good doctors saved her life and I think she is a motivational speaker now. There are many such cases where the victims keep quiet. To these Africans, white lives do not matter.
My best protection came from Ayn Rand’s article titled “The Anatomy Of Compromise” in Capitalism: The Unknown Ideal. Try those three principles when surrounded by the collectivists. You will almost always find an escape route no matter how serious the situation is. In my interview with the Tanzanian Immigration Officer, I used ideas from this book to attack Tanzanian socialism. I got the work permit without bribing him. For the first six months, I worked as a salesman for a textile company covering the whole country. The sales were down because the three directors were not honest with the customers. Their father was a genuine moneymaker. It was his idea that I should travel throughout Tanzania and improve sales. He thought that if I could live life alone in an African village, then I could improve his sales too. In E. Africa it is generally believed that if a European or an Indian starts living among Africans, then he has been kicked out by the society and now the Africans will do the finishing job. I was very happy because the sales tour meant freedom. The managing director suggested training in salesmanship, but I found an excuse to refuse him. Read one good book by a British author on salesmanship and on every sales trip I took Capitalism: The Unknown Ideal with me.
I made millions for the company and handled some very very difficult negotiations. Thanks to Objectivism. My reputation was better than my directors’. Later, I had to give up sales and took care of the accounts department. The Tanzanian government had taken responsibility for the distribution. As an accountant, my managing director gave me a free hand in writing letters to the bank. The bank was not paying the foreign suppliers and it was my job to convince the bank manager that they ought to pay as fast as possible. With the help of Capitalism: The Unknown Ideal, I was able to convince the manager how important a businessman is for the country and how the company keeps alive hundreds of Africans. I must have written some 30 letters and each letter was individually tailored, keeping the suppliers from different countries of the world in mind. In all my letters my arguments were based on ideas in Capitalism: The Unknown Ideal. If you are in a business or facing a non-Objectivist, then this book can be very useful.
Britain is quite safe but for extra protection, do not forget to take those three principles with you along with your credit card and your mobile. You will come back home in one piece and no bruises.
/sb
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Re: Thomas Reardon’s post 100894 of 10/8/18
What makes this woman’s story painful, is that change of government toward business freedom is a conclusion of a long chain of philosophical ideas. She started conceding her own freedom the moment she said she’d be okay with 5% rather than 45% – the reason why – a philosophy that thinks it’s alright for man to be sacrificed. It’s admirable she thinks something is fundamentally wrong, but the answer is philosophy at its core first. Clinging to a culture with philosophical views that created that government will not create a better government.
/sb
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