African Countries Can Stand Tall by Eschewing the Begging Bowl: Part 3

by John I. Akhile Sr.

Leaders are supposed to inspire, exhort, teach, and correct but in African countries, most leaders are raping and stealing from their people. As such, they have no voice to exhort and inspire because a rapist and a robber can do neither. As a result, a vast array of opportunity is left by the wayside without a promoter or shepherd.

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.

Dangote, the Congo plant and the imperative of African industrialization

By Ehiedu Iweriebor

Alhaji Aliko Dangote

The Dangote Group of Nigeria, one of the pre-eminent industrial conglomerates in Africa, in pursuit of its pan-African development and emancipation strategy, on November 23, 2017 formally launched its newest economic development industrial project, the Dangote Cement plant in Mfila, in Congo-Brazzaville. With this $300 million dollars, 1.5 million metric tonne per annum plant, the Group now has a presence in ten of the 17 countries in which it plans to construct and expand cement plans. While it had to re-calibrate the pace and timing of its earlier ambitious plans to complete its various planned plants at an earlier date, because of the economic down turn in Nigeria from 2014, the completion of the Congo plant indicates that the Group’s Pan-African cement plant’s expansion and new plants’ construction programme is still very much on course even though the pace of completion is now staggered over a longer time frame.

This new plant, as an industrial project will have direct and indirect benefits in Congo-Brazzaville that domestic resource-based industrial projects plants usually generate. It is expected to provide at least 1,000 direct jobs and numerous other employment opportunities that will be stimulated by its presence. For example other sectors that will be stimulated include the following: expansion of local civil and housing construction projects by state and private builders; expansion of cement block makers; the establishment of a transportation fleet for the distribution of the cement and the employment of drivers, conductors and mechanics for the trucks; the expanded use of fuel; the emergence of small and medium scale cement distributors and even big distribution companies and workers and new sale stores; banks, food suppliers and sellers of small dry goods and items. In short, the impact of this plant will be the progressive creation of new economic activities and employment opportunities. From these new economic activities the Congolese state, the local government and community authorities will derive Internally Generated Revenues (IGR) that did not previously exist.

The Dangote Cement plant

The various speeches at the launching of the Congo-Brazzaville plant highlighted the economic development significance and prospective impact of this massive industrial project. President Denis Sassou Nguesso of Congo-Brazzaville, noted that the plant was the biggest industrial plant in the country and the investment represented an industrial revolution within the regional group – Economic Community of Central African States. He noted that from their assessment of the impact of Dangote cement plants in other countries, they had always stimulated multiplier effects through the promotion of complementary and cognate industries and hoped that similar multiple direct and indirect effects will happen in the country. He also noted the timeliness of the take-off of the plant as a contributor to state revenues at a time when his government’s revenues had precipitously declined by 31.3 percent and oil sector revenues had also declined by 65.1 due to the fall in oil prices.

Clearly the Congo-Brazzaville government appreciates the investment, presence and impact of the Dangote cement plant.

In his own address, the Nigerian President Muhammadu Buhari, affirmed that Aliko Dangote and the Dangote Group by their pan-African investments had emerged as “worthy Ambassadors” of the country. He highlighted the various areas in which the Dangote Group had through its massive investments in the cement sector changed the course of Nigeria’s economic history. These include the provision of a key material for infrastructure development, the introduction of road construction with cement, the pursuit of expansion through backward integration and import substitution and the achievement of national self-sufficiency in cement availability and the contributions to savings of over $2 billion dollars annually from the termination of dependency through importation.

Aliko Dangote, President of the Dangote Group, in his address articulated the significance of the plant in terms of timely completion, its contribution of widespread availability of affordable cement, the plant’s contribution to the country’s expanded cement production capacity in excess of current demand and the consequence of reducing dependency on cement importation. He also noted that the plant will contribute to the country’s economic renaissance through foreign exchange conservation, employment generation, infrastructure expansion and multiple economic activities.

Dangote graciously and gratefully highlighted the strong and dedicated support provided by the government and people of Congo-Brazzaville from project’s conception to completion. Partly in pursuit of the Group’s philosophy and strategy of Corporate Social Responsibility, the Group was implementing several social projects including school construction, provision of scholarships, renovation of a hospital, road construction and bridge renovation. It also affirmed its company’s policy and commitment to give priority in employment to indigenes of the area of the plant’s location.

The various addresses highlighted the great economic impact of the Dangote’s chosen investments in cement production. But they did not often directly and fully underscore the actual primary sources of its revolutionary impact as a specific type of non-dependent industrial project with its inherent catalytic consequences. That is that they are resource-based industrial plants whose production are based on the exploitation and processing of a local resource. In short, the reasons for the great impact of these projects is that unlike the more common, attractive and lucrative arenas of foreign direct investment (FDI) such as extractive, wasting and non-development sectors like mineral and mining sectors and enclave assembly plant industries that are unconnected to the local economic environment, Dangote chose a different trajectory.

The Dangote Group’s choice of resource-based industrialization based on a comprehensive backward integration strategy as the primary pathway and its contribution to African self-actuated and self-directed economic development, prosperity generation, transformation and emancipation is developmentally apt, strategic and fecund.

This can best be understood within the perspective of Africa’s greatest failure in the post-independence era: economic development. This has been due to the failure to create and apply an autonomous economic philosophy and strategy of self-actuated development based on the well-established principles of endogenous technology capacitation and industrialization. On the contrary, African states and leaders at independence chose the maintenance of the inherited colonial economy, and in the neo-colonial framework of the times, the focus became the expansion of the production and export of raw materials: agricultural and mineral; the mass importation of consumer goods, intermediate goods and capital goods. This entailed the corresponding non-domestication of the historically established levers of development levers: the productive forces – technology and industrialization and equally importantly the ideological premise of development: the psychologically disposition, political will and activated self-agency for self-actuated and self-reliant development that is imperative to any successful development.

The result of this failure of the inherited and non-development neo-colonial economic system and strategy has been the condition of growth without development characterized by the persistence of underdevelopment, expanded dependency and poverty generation. The fact is that no African state since independence from the 1950s has been able to establish and sustain a philosophy, policy and strategy of self-actuated development and secure domestic prosperity generation.

This economic development failure was aggravated by the largely successful recolonization of African economic development objectives, policies, strategies and programmes in the 1980s through the acceptance, imposition and implementation of the Multilateral imperialist agencies – World Bank and International Monetary Fund(IMF) – non-development dogmas embodied in their Structural Adjustment Programmes (SAP) by the African leadership and states. Based on the unproven and unvarying dogmas called conditionalities: currency devaluation, trade liberalization, removal of subsidies, deregulation and privatization, they were not intended in any way to address the core causes of the balance of payments crisis of African economies of the late 1970s and early 1980s, that is African countries development incapacitation, raw material exports, dependency, mass importation, non-industrialization, under-production and poverty generation. It was the African leaders inability or unwillingness to identify and address these fundamental issues and their preference for pre-packaged supposedly neutral external “expert technical” solutions that led them as supplicants to these neo-imperialist agencies.

The substantive objective of these imperialist agencies was to forcefully return the incrementally economically self-directed African states back into the conditions economic colonialism with its exclusive focus on primary commodities (raw materials) production and export and dependency on importation of all manufactured goods. Furthermore, the World Bank and IMF also wanted to effect the removal of African states’ as promoters and activators of economic and social development especially freedom conferring industrialization through the cession of development responsibility by privatization to the undeveloped and dependent local capitalist groups; but more consequentially to foreigners through the fetish of foreign Direct Investments (FDI) as the new promoters of African “economic development”. But the FDI fetish is a dangerously misleading dogma of non-development: it misdirects, misrepresents and disarms societies and leaderships from ownership and responsibility for the philosophy, objectives, strategies for their own societies’ development.

The ability of external forces to inflict these damaging, disruptive and painful consequences of neo-colonial economic failure and their expression in persistent underdevelopment, dependency, underproduction, poverty, beggarliness, humiliation and indignity on Africans, has been possible due to active and direct complicity of much of African  leaderships’ and elite who were successfully programmed to marginalize African agency and responsibility for its own development. These African elite enthroned and accepted foreign diktat, policies and programmes as inescapable for African development.

Yet this situation of the subservience and servility of the psychologically programmed African leadership, elite, intelligentsia has not been uniformly one-dimensional.  Not all African leaderships, elite, intelligentsia, business people, bureaucrats and technocrats have supinely conceded to Africa’s surrender, submission and acquiescence to conditions permanent underdevelopment and cession of self-responsibility for development to others. Some among these were patriotic elite and leaderships who came to the ineluctable and correct conclusion that Africa can only enter into the state of freedom, dignified existence and a prosperous world by the pro-active choice and creation of its own philosophy and strategy of self-actuated development. This new development strategy will comprise the assumption of responsibility; the centrality of African agency; technological capacitation; modernization of all productive forces including agriculture and mineral production but above all the relentless pursuit of mass industrialization and mass production as the indisputable pathway and proven expressions of societal self-modernization in the contemporary world.

In the African business world today, it can be said without equivocation that Dangote and the Dangote Group has been and is in the vanguard of the promotion African self-development through resource based development capacitation; backward integration and genuine import substitution; radical reduction of import dependency for consumer goods and industrial inputs; mass industrialization, mass production and in-country and incontinent prosperity generation.

The expansive range of the industrial products of the Dangote Group beyond cement; and including food and agro industry: sugar, salt, tomato, rice, pasta, milk, flour; poly products and heavy industry like motor vehicles, coal mining and processing, refined petroleum, fertilizer and petrochemicals all attest to the promoter and Group’s understanding of the centrality of industrialization to genuine economic diversification and successful societal development and advancement.

The opening of the Congo cement plant within the Dangote Group’s pan-African industrial development strategy and its multiplier effects, creation of diverse employment opportunities and in-country prosperity generation, all attests to the Group’s contribution economic development and empowerment, and re-dignifying of Africans through the single-minded commitment to economic advancement through industrialization.

What is now required of African states, leaderships, technocratic and bureaucratic elite and business leaders and intelligentsia is following Dangote’s example, to prioritize technological capacitation and industrialization as the indisputable foundations and pathways for the project of Africa’s self-conceived, self-directed, self-funded and self-actuated and non-dependent programme of radical economic transformation and renaissance in the modern era. Only liberated African peoples, states and leaders can create this made in Africa – Africa by Africans for Africans and the world.

Ehiedu Iweriebor is a Professor, Department of Africana and Puerto Rican/Latino Studies, Hunter College, City University of New York, USA.