Yesterday, The Africapitalism Institute engaged some members of the public in a discussion about the ideals of Africapitalism (check it out here). Being an advocate for capitalism, I was looking forward to it, but for reasons beyond my control, I missed the discussion. However, I took the pains to study all the arguments and there was a lot to learn in them.
My personal impressions are summarized below:
My personal summary of Africapitalism
Africapitalism is an improvement on traditional capitalism in that it advocates “inclusive growth”, such that “social good” is considered as a pass mark for corporations, along-side making profit.
Personally, I think that true capitalists, operating in societies where there is less corruption and better scrutiny should know this. Bringing it home in an African context is because the capitalists operating on the continent are mainly foreigners, who pay little mind to the state of the environment. They mainly want to extract all the values available and leave. This is made worst by the corruption in the land and the fact that government officials prefer to enrich their pockets by collecting bribes, as opposed to creating proper guidelines for operations of these foreigners.
Africapitalism wants to put an impression in the mind of the African business owner, who has the opportunity of side-stepping the government & maximizing profit as the foreigners do, that they are responsible not only for making profit for the shareholders, but also for ensuring that they don’t do this at the detriment of the society which they operate in. And where possible, they should make conscious and sincere efforts at bettering the lots of the consumers of their services.
The biggest questions are: Where does this leave the government? Do these theories absolve the government of responsibilities to the people who elected them? Should important functions of the state, such as security for instance, be left in the hands of Africapitalists due to government’s perceived incompetence? If this is the case? Won’t the common people suffer for these, as capitalists try to exploit them?
Real life scenario:
In Nigeria, everybody is their own government. Even though we have people in elected positions, each family is expected to handle every necessities on its own. A family would face certain difficulties if it doesn’t think about:
· Its source of privately generated power (even though they pay a regular bill to the government);
· Its source of water;
· A small neighbourhood community that fills pot-holes on the road with sand or stone, when it goes bad;
· Private security bill for the estate where they reside;
All these issues exist even though the average Nigerian worker, who’s employed somewhere, pays tax regularly.
These are social issues that a capitalist – with happy shareholders and making decent profits – operating within the neighbourhood of such family can decide to take-up. But then, if this is the case, why don’t we just build a country filled with basic units of capitalists, instead of having elected government officials?
I have a few answers to these questions, such as advocating a “thin government”, whose major functions is the creation of policies that ensure inclusive actions from the Africapitalists. This would then result in a 3-step responsibility cycle, where the people hold the government responsible. The government in turn holds the corporations/capitalists responsible. And the capitalist look to the people to provide officials for government positions.
However, I’d rather that the drivers of the Africapitalism movement enlighten us on how they intend for this to go.
What are the challenges facing Africapitalism?
From my point of view, the most obvious challenge is the dearth of influential businesses owned and operated by Africans. Or maybe just lack of local businesses which operate with these inclusive, Africapitalism mind frame – African owned or not!
The most obvious solution to this is to build more African businesses, operating with this mind-set. Either build a new class of business people, or try to integrate these ideals into existing businesses. Or both. There doesn’t seem to be a shortcut to this.
But the participants of this discussion run “social ventures”
Being more attuned to businesses that focus on profit, I couldn’t help noticing that most, if not all, participants of the discussions introduced themselves as running “social ventures”. By social ventures, I mean ventures that are “impact first” other than “profit first”. Not that all ventures shouldn’t be driven by making impact, but to clarify better: by “profit first”, I meant businesses whose activities directly influence their bottom-line.
This brings some pertinent questions.
· Is Africapitalism meant to be attractive only to these kinds of ventures?
· Can the concept be sold to a “Gabros & sons” who runs a chain of electrical/electronic supply stores in a number of neighbourhoods and want to maximize profit?
My thoughts on this is that, these kinds of venture — which depends on well-meaning foundations and people to funding their operations — may not be influential enough to push the true values of Africapitalism. Mainly because they aren’t meant to be self-sustaining. They could be the arm, through which bottom-line focused capitalist, looking to operate inclusively can give back to the community. But putting “social ventures” as the flag-bearers of Africapitalism might be a limitation to its adoption by bottom-line focused businesses.
At the moment, these are the thoughts that occupied my mind after reading through the discussion threads. I know that if I immerse myself more into this, more thoughts would surface. However, I’ll like to conclude at this point for now.
I need to go back to building my soon-to-be-launched businesses. Thanks to all the participants for sharing the knowledge they shared. It was worthwhile and helped improve on the basic ideas I had about the Africapitalism movement.