I’m sorry I have to be so negative about Africa. However, I feel it’s important to keep a reality check on the claim that Africa is undergoing a new wave of economic development, because although there some good stories to tell, on the whole, it’s not happening. If we pretend that it is, we run the risk of not identifying the root causes of poverty, environmental degradation and human rights abuses that are prevalent across vast swathes of the most populous countries in Africa. The death of Cecil the Lion is symptomatic of a breakdown of law and order and more importantly, morality and ethics. I accept that many countries in Africa are not like Zimbabwe, but what is common to almost all of them is a rising tide of regulations, licences, fees and tolls which are creating an intolerable burden on small businesses. The Africa Rising theme has emerged in a number of publications that present Africa as the next big business opportunity, and use statistics about poverty and governance in a way that ignores what is happening on the ground. Global foreign policy consultancies that profit from directing opinion give the impression that Africa has just been discovered. They use words like “potential” or phrases like “could become the next…” but a little scrutiny reveals that there is scant basis for these claims.
So what is happening? Since the Berlin wall came down in 1989 and a wave of democratisation swept across Africa, there have indeed been countless opportunities to make money. The African socialist policies of the governments of these countries reduced small but functional colonial economies to nothing. When they opened up, you couldn’t help but make money. Anything you did made money because there was little competition and the regulatory frameworks were non-existent because the civil service were not used to dealing with normal business practice. Tax collection was hopeless for years after the economies got off the ground. But the low hanging fruit of Africa has been picked, and the Africa of the 21st century is not an easy place to do business. The Ibrahim Foundation has recently produced an index of African governance for 52 African countries and of these only 27 score more than 50 out of a possible 100. The measures have actually decreased over the last 5 years for 11 countries and 18 countries have increased by less than 2 points over the last 5 years. This is not a picture of Africa rising. There are profound problems of governance which are never addressed and where they are addressed it is through the pushing and shoving of foreign governments holding the carrot of aid in front of a ruling elite that don’t give a damn about their people. There is little change from within. The statistics and indexes tell a simple story, but they disguise the details of a thousand interventions that hold back business even where the country is relatively well governed. Let me give you one example.
I used to import cement from one African country to another. When the cement arrived at the border of the country where it was being imported, I was required to hand over one bag of cement and pay US$200 to an official from the National Standards Authority. The money and the cement were used to test if the cement was of a quality that met with the local standards. Sounds quite reasonable, even if it was a little expensive. After paying regularly for over a year, I decided to dig a little deeper as to how my money was being spent. I had already established that the payments were legitimate and not a bribe. I called the head office in the capital city and asked if could have a copy of the test results for all the cement I had imported. I couldn’t find anyone who knew what I was talking about. So the next time I visited the capital, I went to their offices. After most of a morning being sent from office to office, I managed to establish that they had records of my payment, but that they did not have any records of cement being tested. Not only that, they had no equipment to test cement and they did not employ anyone who was qualified to test cement, nor had they never done so. I didn’t bother to enquire what had happened to the 40 or so bags I had handed over. I assumed someone was building a new house.
This has nothing to do with corruption. It has to do with the thousand interventions that African governments introduce to daily business practice which they have no capacity to follow through. Drunk with ambition at the possibility of introducing EU style regulation into small, simple economies, and thereby claiming to be implementing good practice, they ignore the absurdity that they have created. I could cite countless examples. Importing a vehicle into some countries requires you to take a week off work to follow the arcane and absurd process of getting 20 separate documents together from officials who are often not at their desks. I cannot tell you how many years of my life I have spent waiting while I watch receipts being written out in quadruplicate, by hand, using carbon paper and a borrowed ball-point pen. I would be willing to bet that most of the readers of this blog have never seen a piece of carbon paper.
There is no rubbish collection service in the town I live in, but if you take your own rubbish to the city dump you get fined for not using the local rubbish collection service. The environmental regulators prosecute small lodges and remote safari camps for disposing recycling their own rubbish locally. They insist that it is transported to the local dump, which is simply an empty piece of bush where refuse piles up and rots, or blows around unmanaged and uncovered to collect in the trees and surrounding bushes. How is this better than local recycling? The water supply to my house was increased in price so that it exceeded the nationally legislated minimum wage. There are now hundreds of illegal connections to the water supply from surrounding households who need water but can’t afford it. Water eventually arrives at my house in a trickle in the early hours of the morning and is barely enough to run a decent bath. When you add these absurdities together the task of running a business becomes similar to being reborn in Salvador Dali-like landscape where everything is surreal, where the truth is always held to be true no matter how many lies underpin it. Until governments in Africa sweep away these absurdities they will never enable their citizens to start businesses and become successful. The multinationals will employ armies of clerks at low wages to deal with the absurdities, or like the Chinese, make covert arrangements with key officials to avoid dealing with any of it. Africa will never rise while businesses are weighed down by a thousand absurd interventions.