Mutumwa on Tuesday: Confidence building

By The NewsDay | Dec. 18, 2012 | 6 Min read

Africa is rising and yet the majority of its people remains unemployed, poor and find themselves at the bottom of the wealth and income ladder.

Opinion By Mutumwa Mawere

It is easy to blame others for the condition that many Africans find themselves in. The future is uncertain, but the majority of Africans feel powerless in addressing the challenges of life.

The story of Africa before its opening to settlement by non-indigenous people did not reveal the continent’s great potential as a source of wealth and power otherwise the settlers would have not succeeded in their project.

African lands were opened to settlement underpinned by a mood of confidence that prevailed among settlers about Africa’s future as a land of better opportunities than the land of birth.

The settlement project could not have succeeded if Africa did not offer the promise of a better life. The early settlers gained confidence that whatever they created they could secure for their offspring and built a model in support of the thrust.

The ability to superimpose a foreign culture with ease provided the impetus for new immigrants to consider Africa as an address worthy of using to secure a better and prosperous life.

Africa was settled by immigrants who carried their cultures with them and a way of doing business.

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The organisation of African societies was, therefore, affected by settlement and as a result the heritage of Africa is a story of the contribution of not only settlers but native Africans.

It must be accepted that corporate creatures are a consequence of the law and, therefore, the colonial constitutional order was framed to allow for the birth and growth of firms, and more importantly, their protection.

The colonial administration acted as a predatory actor in so far as allowing the state to create two classes of rights based on race and, therefore, reduce the commercial bargaining power of native Africans.

Native Africans naturally became weak market participants by design and independence has done little to change the market power of the majority.

A firm is a person at law and is brought into existence for a purpose by its founders. Once created, it acquires a distinct personality of its own.

Notwithstanding, the only purpose of a firm is to serve and without a market system, a firm would not have a mechanism to convert value created into a monetary form.

The exchange of goods has to be intermediated by a unit of exchange that is acceptable to both the seller and buyer.

The concept of value and exchange that was brought into human civilisation is often difficult to comprehend not least because generally people easily surrender into a mode of entitlement and often have nothing of value to offer.

The settlers were all not equal as the system allowed enterprising people to rise up the opportunity ladder. The few that made it inspired others to follow suit.

The concept of broad-based empowerment that is often misunderstood and abused is foreign to the human spirit as individuals acting directly or through firms are the builders of wealth.

Any civilisation that is founded on the primacy of distributive economics is bound to fail and history provides many examples of why and how socialism distorts and undermines confidence.

The human mind is a complex asset that is capable of thinking outside the box and yet can be destructive and corrosive.

The African mind is no different from any mind and, therefore, can be relied upon to produce the kind of outcomes that are evident in other nations.

The question that we ought to pose is why it is the case that African minds rarely meet on what matters to their common future.

Faith plays a big part in the human story and yet when asked about the future, its not unusual that many Africans do not trust their employers, state actors and anyone who is higher on the opportunity ladder.

The majority do not trust their state actors even though they are responsible for creating them.

Equally, a majority of Africans genuinely believes that the future is secure in the hands of a few wise men and women.

The experience of the mobile phone industry has many lessons that can be applied as Africa seeks a higher moral and economic ground that many of its citizens can occupy and play in.

The pioneers of the industry were private players in an industry that the state could not efficiently and effectively provide an alternative. The first firm, to the extent that it succeeded, inspired others to follow.

The response of the government of Zaire to the application by Telecel and the benefits to the consumer that followed encouraged other governments to follow suit. The regulatory and fiscal regimes adopted were and remain largely fair to give confidence that if capital and human resources are deployed the returns therefrom would not be subject to arbitrary state takings and the laws of the individual states would prevail to ensure that state-sponsored theft is minimised.

Confidence is critical to the enterprise of nation-state building. With confidence, resources can easily be mobilised and deployed seamlessly in the service of human needs.

The mobile phone network business started as a simple idea and its conversion into a viable and reliable development partner could not have been possible without a belief that risk takers would be rewarded or punished by the market.

The reasons behind the growth and success of the industry can remain hidden if no investment is made to build a knowledge base on firms and their actors and more significantly on the role of the firms and their actors in delivering the promise of a better life.

Human beings are mobile, but nation states are created out of a geographical space and, therefore, states have an obligation to inspire confidence to its human and artificial partners.

The shareholders of Africa’s mobile phone network firms are largely domiciled outside the continent and yet at the transaction point, the identity of a shareholder is irrelevant as what matters is the quality and cost of service.

If Africa’s builders of phone networks are non-African at the shareholder level, which is a sign of confidence on the continent’s future, why is it that native Africans who in the main are consumers have less confidence in the future?

The future of Africa belongs to builders, but surprisingly the majority of Africans are not participating as builders. Rather, they remain largely consumers with limited market bargaining power.

The faces and corporate flags that dominate the mobile industry are different from the faces that occupy state offices. Is it not ironic that many political actors easily surrender to the past to find explanations about why the present is not what it should be?

It is often not easy to understand the ingredients of success starting with individuals and firms. The mere granting of a permit to operate a business does not guarantee success just like the mere fact that one is born in a certain state would guarantee a better and prosperous life.

Behind the success of the mobile phone network industry are real men and women without whose contribution the voice and data connections we now take for granted would not be possible.

Language used can undermine or promote development, for confidence is nothing more than a feeling or consciousness of one’s powers to act. People do act in their self interest when they are assured that the rewards from effort would accrue to them.

A government that is greedy will scare investors, while a welcoming government that believes in the simple notion that the business of business is not the reason why governments are created will have a better chance of allowing more players to come into existence from whose income a portion can be transferred through taxes to create a better society for all.

Imagining a future is the first step, but many Africans remain frozen in the state of imagination as they seek to build a society that works and delivers to all.

The mobile phone network industry has its own story and none of the players entered into the industry with the sole purpose of maximising profits, but without exception, the primary purpose was and remains to serve the millions of users who need and use the service to their own advantage.

The money that has moved hands voluntarily from the network to stakeholders, including government is massive and at each turn there, must be a satisfied counter party to warrant the intervention of third parties.

The industry has taught us that competition is a more powerful instrument of empowerment than government engineered share transfer exercises.