Corporations acquire citizenship only because of the existence of the rule of law and, therefore, the evolution of Africa’s relationship with its corporate citizens is located in the realm of colonialism’s corporate legacy.
The understanding of corporate institutions and their role in facilitating human development is low, not because there is any conspiracy to undermine knowledge building on these powerful institutions, but rarely do we pose to reflect on what could be the reality if such institutions were missing in Africa’s experience.
It is not easy for human beings to acquire multiple identities let alone citizenships.
It is now known that the father of African mobile telephony was the late Miko Rwayitare, who together with his partner Joseph Gatt, established Telecel Zaire in 1986 as a corporation registered in terms of the laws of the former Republic of Zaire (now the DRC).
The name Telecel still exists, but not in the country in which it was first established. Telecel was the first indigenous African mobile strategic investor.
The company commenced operations in 1987 against a background of a crumbling state–operated fixed–line telephone system in most of the African states.
There were no guarantees then that the new phone system would produce the kind of market response that we now know is possible let alone that the African market could be financially rewarding.
What must have occupied the founding fathers of this industry was the need to find a solution to the communication challenges of the day given that the state had failed to put in place a functioning business model to serve people whose welfare was daily undermined by continued hegemony of the state over the telecommunications industry.
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History records that Rwayitare’s financial investment was $200 000 and by 2000 when Orascom purchased 80% of Telecel, the consideration was $413 million in what was the largest acquisition by a fellow African corporate citizen Orascom Telecom, a company that had Egyptian heritage.
The issue of economic freedom in post-colonial Africa is topical, so is its alleged link to the manner in which natural resources are exploited by foreigners, including the rights over land.
However, the transformation of an investment of $200 000 into an enterprise value of $516,25 million in a period of 14 years must surely provide a basis for a change of conversation about what matters in terms of wealth creation.
The role of the state in converting a promise into a durable business model cannot be understated. Without the licensing and regulatory environment, there is no doubt that this transformation would not have been possible.
Equally, the presence of the rule of law helped secure the investments. What is important also is that had Telecel chosen to limit its horizon to the territory of former Zaire the transformation would have produced different financial results.
Telecel Zaire was the vehicle through which connections in the country were facilitated between willing market participants and the network. Having proved the concept in former Zaire, it was then possible to replicate the same arrangement in other African states and in so doing motivate others to follow suit.
Telecel Zaire was a citizen of former Zaire and in 1993 a new citizen was created in the name of Telecel International with a focus on building networks in other African states.
By 1998, Telecel International had operations in six countries and, therefore had acquired six African identities using the same name.The name crossed African boarders in a manner that human beings often find problematic. It has not been easy for natural Africans to be citizens of two African states, let alone six.
The investment by the founders of Telecel in other African networks has to be understood in its proper construction.
Telecel was transformed into an African multi-national corporation in less than 11 years of existence.
The relationship between Telecel Zaire and Telecel Gabon, for instance, took the same relationship of brothers and sisters all under the parentage of common founders.
The different entities had common parents who were based in former Zaire. Each of the entities established acquired the citizenship of the host country and in doing so was subject to the laws applicable in the country of incorporation.
The fact that the shares were held by Telecel International was irrelevant to the operations of the different companies under the stable.
Each of the entities had to justify its existence by serving the target market.
In 1998, Rwayitare and Gatt separated with Gatt keeping the operations in Zaire, Guinea and Madagascar and Rwayitare keeping the other three operations outside Zaire as well as the Telecel name.
The torch passed from two parents to one parent. What is significant is that Rwayitare chose to give up the operations in former Zaire being the first company to come into existence.
Just a year later after Orascom’s acquisition of Telecel, an announcement was made that Orascom would divest Telecel from its 12 mobile companies due to large losses and debt.
The first batch of West African Telecel operations in Benin, Burkina Faso, Gabon and Niger were sold in 2003 to Atlantique Telecom, a subsidiary of an Ivorian Bank.
In 2003, Telecel operations in Zambia, Uganda, Burundi, and Central Africa Republic were sold to the Gloria Trust, a trust that was controlled by Rwayitare.
In 2004, Loteny Telecom in the Ivory Coast was sold, leaving Orascom with just three Telecel subsidiaries (Chad, Congo, and Zimbabwe).
The history of Telecel and its evolution to a corporation with multiple African identities provides important lessons on what is possible in Africa. In one generation, a name was externalised to other African states with ease notwithstanding the toxic effects of economic nationalism.
Wealth was, indeed, created without using God-given natural resources and, therefore, benefits from the progress made in the industry have largely been privatised without attracting the attention of small minded nationalists who believe that benefits from economic activities must be nationalised with the state playing a key role in the harvesting process.
For Rwayitare to generate $413 million in disposing of 80% of his shareholding in Telecel International to Orascom, it must be accepted that it was a market determined price based on the fact that the customers were African and it is from them that the value was generated.
As we occupy our minds with social engineering experiments that reside principally in the minds of state actors who often believe that they have a better claim on solutions to Africa’s myriad of development challenges, it must be refreshing to learn about the positive stories that have come from Africa’s post-colonial experience.
Rwayitare died on 25 September 2007 satisfied about Africa’s capacity to deliver the promise of a better life and he no doubt understood the limits, challenges and opportunities that African governments imposed on African progress.
The history of the mobile phone industry has produced its own superstars and icons. It is important that we draw lessons from these stories.
Who would have thought that in one generation, Africa through Sudan could claim credit for producing a billionaire from the mobile phone industry? And yet it is true that Dr Mo Ibrahim, born in North Sudan, is a mobile communications entrepreneur who founded Celtel, a company that sold over 24 million African subscribers in 14 African countries in 2005 for $3,4 billion.
Zimbabwe produced Strive Masiyiwa whose ascendency to fame has its own story, but what is significant is that Econet evolved from a Zimbabwean story into a multi-national platform with multiple identities, yet retaining the founding name.
Africa through Nigeria has produced Mike Adenuga, the founder of Globalcom Limited, a Nigerian telecommunications company headquartered in Lagos, Nigeria, that started operations on August 29 2003 and currently operates in six African states.
The history of MTN and Vodacom provides useful knowledge on what is possible in Africa.
The story of mobile telephony in Africa is not dominated by foreigners and to the extent that indigenous Africans have distinguished themselves as wealth creators, it is critical that the tone and language about the causes of the unacceptable condition that the majority of Africans find themselves in, changes to reflect the stories of some of the corporate citisens that have been created and operated outside the corners of nation states to the benefit not of governments, but willing market participants.
The experience of the mobile phone industry has shown that Africa can be united through enterprise and the transformation of national brands into regional and continental brands offers hope in terms of Africa’s future.
What is important is that those who have benefited from an open Africa invest in building knowledge systems about the importance of building a seamless and borderless Africa founded on values that assist in delivering the promise of a better life.
Mutumwa Mawere is a businessman based in South Africa. He writes in his personal capacity.
