by John I. Akhile Sr.
What African leaders have failed to ask themselves is why their citizens are desperate to leave their countries? So much so that many will brave deadly journeys to cross mighty seas for a chance to reach foreign countries. Why, for example, are companies like Google training Africans for leadership? Facebook and Google have combined to create a Masters program in “Machine Intelligence.” Why, in the face of crushing poverty, are African leaders refusing to accept responsibility for the condition of their countries and to do whatever it takes to change the status quo?
In part two of this piece, there was a brief introduction to the Joint Stock Company, which is a precursor of the modern corporation. Most fascinating is how the Dutch used the mechanism to evolve a community and group investing that launched what many consider the most prosperous business venture in history, the “Dutch East India Company.” The recent ascent of Apple Corporation to one trillion dollars in shares outstanding, for a public corporation is instructive of the power of group or community investing. In this case many people have committed their financial resources to Apple’s management because of their inherent belief in the ability of the company’s management to shepherd the company’s affairs in a manner that will generate good return on their investment funds. Apple and many other enterprises clearly demonstrate the importance of corporations in the modern era.
From North Africa to the southernmost tip of South Africa and from the Eastern shores to the Western shores, there is abundant latent economic power in Africa. It is evident in the natural endowments of the continent and the ingenuity and resilience of the people. A paramount responsibility of leaders is to transform latent to dynamic economic power for the benefit of society at large. The predicate is that African countries have more than enough latent economic power in the human and material resources in every nation to unleash a tsunami of prosperity across the continent. African leaders should, therefore, approach the world for investment capital to fund their dreams instead of a begging bowl that accentuates the myth of the futility of African initiative.
The myth that Africa and Africans are a lost course and eminently ungovernable is perpetuated by “rogue” leaders who ferment anarchy by their own individualistic and selfish desire to arrogate power to themselves not for doing good but to rape and rob the people of their natural resources. They are the leaders that foreign miscreants gravitate towards in order to latch themselves and their enterprises to a gravy train of wealth at the cost of African prosperity and lives. The myth persists despite the accomplishments of some of the most enterprising people in the world who happen to originate from the continent of Africa. Including: Strive Musiyiwa; Aliko Dangote; Mike Adenuga; Nassef Sawiris (I know that there are a lot of people in the world who refuse to accept the geographical reality that Egypt is in Africa and consequently, an African country); Issad Rebrab; Patrice Motsepe, etc, to list a few names. The reality is that Africans are capable and enterprising. The challenge is in the political leadership and its failure to walk the talk on behalf of the people of the countries.
There are many ways to walk the talk. The first and perhaps most paramount is to refrain from raping and stealing the people’s resources. The second is to inspire Africans to create enterprises that will not only solve the supply-chain problems of society but also create massive quantities of jobs. It is not necessary to build massive government-owned businesses. It is necessary to start privately-owned enterprises that will solve society’s problems. For instance, African countries have huge hard currency problems. In order to solve it, Africans are running to China for “freebies,” as in “gimme…gimme free money.” China built the headquarters of African Union, a two hundred million dollar construction project at no cost to the African Union. Most people would have asked why? But not the Africans!
However, everyone in the world knows that there are no “freebies.” China is giving to get. They need African markets because as recent history is proving the Chinese know that it is not feasible to depend on Western markets indefinitely. So they are using freebies to gain permanent access with full support and acquiescence of African leaders. Meanwhile, Africans are not creating enterprises to produce goods for export because Chinese enterprises are flooding markets and neutering the initiative of African entrepreneurs to produce for export.
The late Deng Xiaoping, a great man of any country and any era, who willed China out of poverty, inspired the Chinese with his wise and powerful word pictures. Here are a few examples of words that lifted China from an impoverished basket case to a global economic power. “It doesn’t matter if the cat is black or white, so long as it catches mice.” “If today we do not set about the task of improving the socialist system, people will ask why it cannot solve the problems that its capitalist counterpart can.” “To be rich is glorious.” “If you want to bring the initiative of peasants into play you should give them the power to make money.” These sayings and many more transformed the Chinese mindset from one that was a latent economic mindset to a dynamic globally-dominant one. To do that Deng Xiaoping incorporated capitalist economic principles into a command society. The Chinese are using the tools created by Western societies, including the joint stock company.
Under Mao Zedong, the people and economy of China were impoverished. Under Deng Xiaoping, the same people were activated by words that unleashed a burning desire to succeed economically. They turned over every rock and found gems of prosperity for themselves and their country. Not to take away from the leadership of Mao Zedong who was a seminal personality. He is arguably one of greatest personages in the history of the world. In retrospect, however, he was as politically astute as he was economically blind. His political achievements though gargantuan in scope pales in comparison to the economic revolution set in motion by the little big man of China, Deng Xiaoping.
Instead of running to China begging bowl in hand to beg for handouts, leaders should study Deng Xiaoping to learn how he turned around his country and people. How he went on trips to many countries including to the United States to study how capitalism created wealth at the same time as it solved socio-economic problems and the supply chain of countries. Likewise, leaders should be exhorting their people to band together to invest in enterprises that will in turn constitute the vanguard of economic emancipation of their nations.
African leaders must “stop the begging” strategy of capital acquisition for development. Instead they should focus on lifting their people and society because there is more than enough internal resources of money and ideas to begin economic transformation of every country on the continent. To earn more hard currency, countries should wholeheartedly embrace export-oriented growth similar to the Asian Tigers and China. It is being replicated in Vietnam and Bangladesh, even as African leaders and naysayers prognosticate that it won’t work in African countries because Africans are too “ignorant” to apply the positive aspects without inviting authoritarianism along with it.
The math and pathway are simple to navigate. The first step is to promote an aggressive savings culture. In South Korea, the banks—all under government ownership at the time, increased savings rates massively to incentivize savings. Second, is to quell the cultural tendency of conspicuous consumerism in most countries but especially in countries like Nigeria. The third is to energize it with massive entrepreneurship and enterprise promotion with emphasis on exporting but also on fixing supply chain issues in society. Government ownership of banks is not a prerequisite for solving the economic challenges facing African countries. However, having a banking community willing to cooperate with government is crucial. For banks, managing shareholder equity and achieving necessary profitability, while championing economic policies that are oriented towards exporting as well as amplifying supply chain structures are not mutually exclusive but, in fact, is good business.
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.