Where Do the Experts on African Business Come From?

Some time ago I came across a list published by Russian Forbes Magazine, of 10 most wanted professions for the next decade. According to that article, one of those top 10 professions is that of an expert in conducting business in Africa.

I have been working in African countries for about thirty-five years: first as a Soviet diplomat, later as an academic, and in the private sector during the last fifteen years. After all these years, I can proudly say that I do have some experience in the matter. But if you asked me: “What is an expert in business in Africa?” – I would not know how to answer.

Where do the experts in Africa come from? What kind of formation such specialists should receive? In USSR, the country where I was born, one’s job was determined by a purely bureaucratic decision.
In 1975, after the Rose Revolution took place in Portugal, its African colonies gained independence and started to build socialism. I was appointed to work in Soviet Representation for Economic Relationships in Angola, probably because I worked previously as Spanish-Russian translator in Cuba and, therefore was susceptible to learn Portuguese in short time (at that time, there were virtually no Portuguese speakers in USSR). And that is how I officially became a “specialist in Africa” or an “Africanist”.

Our Representation was managing the projects related to a multi-billion dollar credit granted by USSR to Angola. We had specific instructions to spend those funds to the last cent within a strict time limit.

Some of our projects were blatantly absurd. For instance, we built a mausoleum for the first president of the country, Agostinho Neto. We have spent more than one billion dollars (by eighties’ rates) on the works, including the maintenance of the embalmed late president’s body (which turned out to be an extremely complicated technical procedure). To build the mausoleum, a considerable residential area was demolished in the capital of Angola, a country already ravaged by civil war.

In early eighties, we received a visit from the USSR Minister of Economic External Affairs. While we were reporting on the accomplishment of our contracts (as you can imagine, a big budget required hundreds of contracts), the Minister had fallen asleep. When he woke up he told us that our work made no sense. Many of the present agreed.

I was young and thought that the Minister was going to give us a wise advice. And so he did.

‘You must start organizing “kolhozys”,’ he said.

The Counselor on the External Economic Affairs of Soviet embassy in Luanda was a resourceful character.

‘We are already on it,’ he answered.

The “kolhozys” were “created” by the citizens of the then Soviet Republic of Uzbekistan, sent to Angolan cotton plantations abandoned by the Portuguese. As specialists in socialist farming, the Uzbeks were supposed to share their experience on organizing collective farms with Angolans.

The area where the plantations were located, and where our government was sending these groups of Uzbeks, was not under control of the Angolan government, and was mostly occupied by UNITA guerrilla factions. Neither USSR nor the Angolan central government was willing to recognize the existence of anti-governmental guerrillas, the official statement being that any armed conflict on Angolan territory was provoked by “South African regime of apartheid, a puppet of American imperialist expansion”. In fact, Moscow preferred to send our “specialists” to the no-man land just to prove that said land was actually under control.

The Uzbeks were left to handle by themselves, which they did quite well under the circumstances. They grew vegetables and sheep, and hunted for living. They were wise enough not to bother with cotton plantations and never tried to organize the local population for that task. Before Angola became independent, work on cotton plantations was carried out by convicted criminals and the Angolans regarded this kind of labor as a new form of slavery.

The Uzbek colony received fertilizers, agricultural poisons and medicine from USSR. They shared their medicines with UNITA guerrilla, which did not harm them in return.

The Angolans found a good use for the fertilizers and poisons meant to be employed on the imaginary cotton plantations: they used them as poison for hunting and fishing. We were very lucky it never occurred to UNITA to use those products on Luanda’s water supplies.

Meanwhile, we kept reporting to Moscow on the progress of socialist’s transformations in Angolan agriculture.

Today our exploits in Angola might have been labeled with a popular term “synergy”. The Counselor on the External Economic Affairs called it by a more ideologically correct (by those standards) word “kolhoz” for which he was awarded a medal from the Soviet government.

During the eighties’ Gorbachev Perestroyka, USSR and USA tried to implement several cooperation projects for Africa’s development. In particular, one of such projects was aimed to prevent the desertification of the continent.

To be honest, it reminded me very much of the “kolhozys” we were building in Angola. All of our Russian-American projects were simply different takes on bureaucracy decisions on the distribution of aid.

One may say that is what happened in Soviet Union, a country which has proven to be economically inefficient. But I would like to ask you to give me one example of effective assistance to Africa by Western countries. Of course, there are hundreds or thousands of examples of water wells being drilled, solar panels and windmills generators installed. But how many of those installations left to be managed by local labor, are still working, at least two years after the foreigners who built them have returned to their homes to tell the stories about how they have helped Africa?

During the years of independence, African countries have received international aid on the amount of more than two trillion dollars. Most of these funds were not granted on ideological grounds – USSR has ceased to exist almost 20 years ago. Was this money well-spent?

With very few exceptions, the standards of living in Africa have worsened during the last 30 years and the economies have impoverished. Some countries have simply vanished. Others have been in a state of unrest and civil war for so many years, that the catastrophe has become a normal day-to-day life for the people living there and for the international public opinion.

For instance, has anybody lately heard any news not related to crime, civil unrest and piracy from Somalia? What about Congo, Guinea-Bissau or Côte d’Ivoire?

We cannot even be sure that the international aid will save Africa from hunger. There is a trend of continuous impoverishment and, with few exceptions, there are no reasons to believe that such trend will revert, regardless of how much more economical aid is injected into the region. Moreover, the existing system of international welfare favors corruption both in Africa and in donor states, and is greatly responsible for the further destruction of African economies.

One thing is helping people who have suffered from a disaster – be it a natural cataclysm or civil war. A completely different matter is teaching them to live off the international charity provided by the NGOs.
The reality is that so far the governments of the industrially developed countries have not been able to offer any constructive ideas, let alone a plan for structural investment in Africa, as an alternative to the disproportionally grown lobby of non-governmental organizations, which are asking for more funds so they can “aid” Africa.

This is to say nothing about such obvious publicity stunts as the so-called “solidarity caravans”, which covers the well-known Paris-Dakar rally route on trucks loaded with pasta and tomato sauce. Is it really necessary to traverse the whole continent on trucks, when this food can be delivered by a freighter in a couple of containers?

I did not regret losing my job when USSR ceased to exist – quite frankly, I deem I did more harm than good as an appointed “specialist in Africa”. I started a private business and became acquainted with people to whom, while I was a bureaucrat, I had never paid much attention before. I am talking about people who have been doing small and medium size businesses in Africa for decades: Europeans, Americans, Asians.
Some of these people have come, like I did, to work in Africa. Some have been born there. I have the pleasure to know several European and Lebanese families who are managing companies started by their grandparents at the dawn of the past century. These small and medium-sized businesses are creating actual employments and provide the much-needed working training in Africa, in fact being the only driving force for the building of what in USA and Europe is known as the middle-class.

As a side-note, the definition of the business size in Africa is very relative. For Western Europe, a company of ten-twelve million yearly turnover can hardly be called a big business. However, in any small Western or Central African country a firm of this size provides from 20% to 50% of food imports for the whole population.

The businesses I am talking about are generating little to none media attention: on one hand, the public does not seem to be particularly interested in them (unless, of course, there is a nasty story to tell), on the other hand, any press releases would surely create problems in the countries they are working with. They are also generally ignored by their governments, which are incapable of offering them any protection (the tragic story of English farmers in Zimbabwe immediately springs to mind).

The companies working in Africa and people behind them are nor saints nor Samaritans; they do not pretend to build a utopian society and do not think in terms of global solutions to global problems. Their stories are of strife and survival, and they are the actual pillars of the battered African economies.

Recently, I came across another article published in Forbes, “The Business of Africa” ( [http://www.forbes.com/forbes/2009/1005/opinions-marshall-plan-africa-ideas-opinions.html] ). The author, Mr. Michael Maiello states similar concerns on the role of the NGOs in the African impoverishment, and writes about the proposal of the “New Marshall Plan for Africa” penned by Mr. Glenn Hubbard, a chairman of the Council of Economic Advisors under George W. Bush and now dean of Columbia Business School and Mr. William Duggan, a former aid worker who spent two decades in Africa with the Ford Foundation and other charities.

Although I cannot avoid feeling certain skepticism about any new plans to aid Africa after all these years, the idea of implementing a structural aid package based on USA assistance to Western Europe after World War II, does seem like a glimmer of hope on what otherwise is a pretty bleak picture.

The main difference between the original Marshall Plan and the current system of economic aid to African countries is the former was structurally oriented. The US credits were offered to privately owned European companies, thus encouraging the private business and strengthening of the middle-class. By the same token, the returns from these credits were invested in re-establishing and development of the infrastructures of the western European countries, battered after the World War II.

Although it is hard to predict the success of the formula proposed by Hubbard and Duggan, I am certain of one thing – ignoring the interests and experience of small and medium sized foreign companies in Africa would be a crucial mistake of the New Marshall Plan or any other initiative for a structural recovery of African economies.

Moreover, such plan would only make sense if the creditor states agree on the actual aim of the economic aid. Are they actually intending to help the African countries in building their self-sufficient and competitive economies or to stage yet another experiment on pseudo-socialism?

The experiments with utopias have failed so far. Africa simply might not survive the new wave of pseudo-socialist populism – for instance, of the sort of Hugo Chavez in Venezuela. It is doubtful that the NGOs, which mainly share the beliefs similar to the ideas of utopian Proletarian, Christian and, as of recent, Muslim socialism, will play a positive role in this process.