The Broken Window

A short film by Mises University students.



From Mises.org.

Challenges Facing African Businesses

Africa has the potential to compete in business just as any other nation does in the world. Were a few things taken a bit more seriously, change might easily be foreseeable. I believe that with proper planning and attitude to socio-economic engagements, progress can be attained. It is up to each and every policy maker across the continent to be bold enough to step out of traditions of corruption and lead with a sense of direction.

For any business to start or operate smoothly, there has to be proper infrastructure in place. It is within established frameworks that activities are easily coordinated. Africa lags behinds in infrastructural development on many fronts. Just to mention a few, roads are often not conducive for effective transportation, a primal necessity for any working economy. Noticeably, South African roads being the much more developed in Africa translate to a better business environment as compared to the rest of Africa. Now that we mention South Africa another point of discussion comes forth. Insecurity. Crime and political instability discourage even local entrepreneurs let alone foreign investment. Electricity supply is simply unreliable in most countries and power generators just don't answer this big question. Railway systems are just sometimes inadequate or underutilized. Countries that might have the rails in place then have few or under serviced cars to run on these tracks. Given that the South African railway network has seen a major revamp due to its hosting of the World Cup hosting of 2010, I am keen to see if the region sees the evident development queue and takes the advantage of developing infrastructure even further. Investment in IT has certainly seen its brighter side in most African countries but more needs to be done. In order for Africa to establish its place in the world map of markets, efficiency has to be guaranteed in the IT sector since this is becoming the backbone of any developing market. Services industries, which Africa has a very huge potential of developing, depends heavily on how good IT infrastructure is so investment here should be a given.

I believe skilled labour exists in most countries in Africa but it is also worth noting that the most skilled would rather seek opportunities abroad rather than sticking it out where they got it all. Ways should be devised to keep talent interested.

Corruption I can not emphasise enough. Corrupt politics often means that before a business holds ground, there has to be some form of collusion that has to be made with the responsible bureaucrats. Maybe the tradition will die down with time and as leadership is passed on over the years but for the two decades I have observed history, corruption never diluted in Kenya. It may have changed form and disguise to become more evolved as a malaria parasite does.   

 

Unlike most developed countries where banks play a huge role in advancing credit facilities to the business community, banks tend to be very wary of lending out in Africa even despite minimum lending requirements that often exist. Banks would rather pay fines for withholding credit than risk lending to what they consider highly risky ventures. Without access to funds, business growth and development is therefore very much constrained and this, is said to be the number one of the hindrances to new business start ups. A study conducted amongst entrepreneurs in Nigeria found that 72% of entrepreneurs studied considered lack of funds as the number one constraint in developing their business (Mambula 2002). According to Honohan and Beck 2007, about 68 percent African firms finance a significant percentage of their investment with internal funds.

There is very limited government support for businesses in Africa than is the case in developed countries. Most developed countries support local industries actively. Amongst these include research development, export protection and promotion, subsidies, training and education, well coordinated patent protection policies and direct funding. African leadership should borrow a leaf or even two from developed countries because there clearly lacks policy coherence in most African governments. There should be a sense of nationalism and if it would serve to improve Africa's place in the world markets, why not be aggressive about promoting your own? Bretton Woods institutions might not support individual efforts to find a place in world markets but how has the idea of 'free trade' helped Africa? Regions struggle to integrate even when only a border separates them.  

African companies are very gradual in effecting change in the way they operate and are therefore very easily phased out by the more adaptable and well-established multi-nationals when they join these markets. Local companies tend to be outdone in their technical know how, quality of production and international marketing but I believe this can be changed if the necessary investment is set aside to develop local industry.

A brief look at Muslim courts in Kenya

How did Islam come to Kenya? As far as my history lesson went and have come to learn over time, Islam was brought mainly by Muslim traders from Asia who came by sea in the 1700s. These Arab-Muslims on interacting with the local dominant language group along the coastal Kenya, The Bantus resulted to a new Language, Swahili. Most of the communities around the coast slowly adopted Islam and the traders that moved inland also to some extent spread the religion as well. They however remained a segregated minority to some extent since they were seen by the locals as exploitative business men simply because they had means of keeping their business running, having good supply of stock through the port of Mombasa and other coastal towns from their mother countries.

What about Christianity? Christianity was brought into the country by English missionaries as you would probably have guessed in around the 1800s the same time as the colonialism set in. I would guess that people had their ways of worship, they call that indigenous. This is just my view but I think Christianity was imposed on people since they were thought to have unorganized ways of worshiping their God. The idea of God was there, it just wasn't formal.

How separate is the Church and the state in Kenya? Church and state in Kenya are separate formally but unfortunately the Church has a lot of control of what the government does. For instance the proposed constitution sought to legalise abortion, of course under some conditions but the Church strongly stands against such an idea. Reasons? They are not that clear.

Kadhi courts have been operating in Kenya and have not affected any non-Muslims as far as I know. I am pretty sure nothing has changed with the the demographic figure of 6% of Muslim population in Kenya to make it such a contentious issue in a country where the majority of the people are Christians. There are obviously bigger fish to fry in the proposed constitution but this particular one seems to warrant political airtime that should be worth so much to the taxpayers so to speak. Where do we get the time?

Are these just two words?

So what effect do two words have on a nation that is Kenya? I might be fetching this too far but the simplest congruity I can find is in martial law. Martial law provides for the use of the military force in cases of emergencies. This might not be directly mentioned but I would be led to think that an emergency generally has the effect of destabilising national security. What happens in this case? The rights of innocent public are consequently infringed without questions. You simply do not question a curfew for instance. It might not be as explicit but given these words managed to be in a draft of a constitution implicit meaning applies just as effectively.

Or is this a fear tactic dealt upon the people? Also notice the link this has with the National Security Intelligence Service.

Here is an excerpt of the article from the Daily Nation.

The Daily Nation revealed exclusively on Monday how the copies distributed last week at the official launch of the proposed constitution presided over by President Kibaki and Prime Minister Raila Odinga contained changes sneaked in that had not been approved by Parliament.

The correct version of Article 24 (1) (d) reads: “The need to ensure that the enjoyment of rights and fundamental freedoms by any individual does not prejudice the rights and fundamental freedoms of others.”

The altered one reads: “The need to ensure that the enjoyment of rights and fundamental freedoms by any individuals does not prejudice national security, the rights and fundamental freedoms of others.”

Who did the 'planning'?

As I read an online article that reports the resistance of a Maasai community against a geothermal project development in their neighborhood, the following words stifle me.

"We have done a census and a resettlement action plan and it's a matter of time before we reach an agreement and find them alternative land," he said.

These happen to be the words of the project manager heading the project. Assuming that he meant a survey when he says census, it would have also been prudent to tell the public what the results of such a survey found out.

The power generating company clearly claims that they have a resettlement plan but it seems that they encounter resistance from a local Maasai community which only means they still have to implement the plan. The paper reports that a local man claims "environmental degradation and claimed women had miscarried due to poisonous fumes".

What was the aim of having a resettlement plan if you were going to bring in 100 of your engineers to work the project before you even talk to the local residents? Or was your plan to start a hazardous project ahead of your relocating people to safety, of course assuming the people agree to such a deal? If an assessment has been done by the government and the World bank financing team, were these Maasai locals ignored.