Unaccountable Aid is Dead Aid.
For far too long, African countries have primarily been extractive economies. In addition to being a seemingly helpless continent in constant need of “saving”, help often times comes via aid from intergovernmental and non-governmental organizations. The shift from aid came as many countries realized that aid has arguably hardly ever benefitted or help create value in Africa. Unless there is an earthquake, Tsunami or other natural disaster, there is absolutely no need for it. Aid stifles transferable skills, creativity, hard work, and responsibility. And in many cases, it encourages corruption, greed, and the fattening of politicians foreign bank accounts. Basically, unaccountable aid rarely ever create value or reach the people who need it the most.
Investments as an alternative to Aid.
In recent years, there has been a shift from aid to investments. While this is a welcomed improvement in the “how to take Africa seriously” book, as always, we must continue to push for progress. Investments often lead to development of much-needed infrastructure and job creation. As you may know, Africa is the youngest continent in the world in terms of its population age. Consequently, the unemployment rate is also high and rising. Thus the question of how to create value in Africa arises. Investments can play a significant role in creating value in the African continent. But not of the type of investment that comes with “conditionalities” that extract the wealth right out of the continent.
The type of value Africa needs is that which creates jobs in Africa for Africans, and keeps a sizeable part of the wealth in the continent.
The types of investments needed are those that lead to employment traineeship and skills acquisition—skills that can transfer from one workplace to the other. For companies and investors with interest in creating value and impact on the African continent and especially for the young, the solution is simple. Create employment opportunities in the local market and ensure that at least 50% of your employees are Africans. If you really want to help Africa, then create incentives for growth through employment and provide clear job progression. Challenge the status quo and treat workers fairly. As you would in a country like Norway, that takes workers rights seriously, do not over work your employees or underpay them. Pay a salary that is competitive in the local market and commensurate with the type of work they do. Create a company culture that invests in and rewards continuous learning and professional growth. And if you are feeling particularly ambitious, then offer your African employees health insurance! Toss in a few perks for their families too!
Invest in the young.
The young people in Africa are some of the most creative and innovative people you will ever meet. Why, you may ask? Because the luxuries and access to life (i.e. healthcare, study loans, social security, electricity) that we might take for granted in the West, are not readily available in Africa. And as such, many Africans have to come up with inventive ways to get by. The African environment often necessitates resourcefulness. And this type of originality is the norm, not the exception. Most Africans think on their feet—it is a survival mechanism, to find practical solutions to problems—a skill so innate, that their cups are literally always half full. Many Africans are pretty much poster children for “how to look on the bright side of life” or “how to find a silver lining in every dark cloud”. Coincidentally, this persevering positive outlook and natural problem solving skill happens to be an excellent business skill.
So, do you want an employee with strong problem solving skills? Hire an African. You want a manager who works hard? Hire an African. You want loyal workers? Provide an African with an opportunity to provide her family with the basic necessities, and she will not only be loyal, she will pray for you every day of the week, and at church every Sunday. She might even give the occasional testimony thanking God, for using you to bless her. You really do not have to be religious to get this point.
Other ways to create value includes engaging in projects that educate, inspires, and empowers people.
Do not solve an African problem, without inputs from and active participation by Africans.
Africans who are in direct contact with their economies have a better understanding of the problems they face. Never assume that because your solution worked in South Africa, that it will work in Zimbabwe or Ghana. These types of uninformed assumptions often lead to rude awakenings and business failure. Understand the local context and adapt your methods to solve the local problem.
Never give handouts unless entirely necessary. And its only necessary in dire cases like famine or a devastating flood. If you can teach a trade, better farming techniques, or build adequate drainage systems, do so, instead of handing out free cash.
“Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.” – Maimonides
I believe that most people only truly value rewards, which they have worked hard for. Take me for example, when I was at university, and my mom funded my livelihood, I did not care for how much I spent on an overpriced dress or vacation. When I started my first job however, I became more mindful of how I spent my money. One hundred dollars was no longer “just” $100, but 5 hours of my life spent trying to solve a Regression Analysis on STATA. Anyway, I digress.
If you have the power to prevent poverty, do so, but never encourage it by giving unwarranted aid. If you want to create value in Africa, encourage and reward hard work. You may wonder, where do I begin? There are so many Africans who need an opportunity. To which I respond, start with one person. Employ an African. That’s all you ever have to do. Because when you uplift one person, you uplift a generation.
It goes without saying that you will create value in Africa by making smart investment decisions. This includes the people you recruit, the market you enter, and your execution. As an investor, when investing in Africa, you can match your altruistic inclinations to your return on investment. Both are not mutually exclusive. Make astute decision, be circumspect, patient, endeavor to leave value in the country you operate in, and Africa will reward you. Not only with the amazing feeling of making a positive impact on the lives of many, but also with higher financial returns than you can possibly imagine. Just remember to reinvest a good amount of the wealth in the continent!
Written By Chisom Udeze