Business Panacea to Africa’s Ills

Published on 9th May 2006

Ali A. Mufuruki is one of Tanzania’s preeminent business leaders. He has served as Chairman and Chief Executive Officer of Infotech Investment Group Limited, headquartered in Dar es Salaam. His company comprises four operating divisions: Infotech Computers Ltd; M&m communications Ltd, an advertising company; W-Stores (T) LTD, a Woolworth’s franchise, and Tellus Africa Ltd, which develops software for Internet-based tourist information databases.

Mr. Mufuruki participated in a seminar held in Zanzibar organized by TechnoServe and The Aspen Institute. Its purpose was to promote dialogue between local business leaders, government officials and non-governmental organizations on what it will take for Tanzania to create sustained economic growth in the global marketplace. It is there that Mr. Mufuruki met TechnoServe President and CEO Peter Reiling, and became familiar with TechnoServe’s initiatives to build businesses that fuel rural economic growth in Tanzania and other developing countries in Africa and Latin America.

Mr. Mufuruki describes the challenges Africa faces, as countries strive to bolster economies, increase living standards and become bigger players in the global economy.

Q: Is there a crisis of leadership in Africa?

Mr. Mufuruki: Yes, but this is nothing new. Africa has been in a leadership crisis for many centuries. The nature of the problems keeps changing, but the crisis has been the most constant of all occurrences on the continent.

Q: What is the nature of the crisis?

Mr. Mufuruki: Forty years ago, Africa was engulfed in a liberation struggle of some sort. Africa had more than its fair share of bad leaders then. During the Cold War, Africa became the favorite playground of the superpowers and this produced a different brand of leadership, which only aggravated the crisis, especially on the economic front. These leaders put the political and economic interests of their masters -- in this case, the superpowers of the day and their allies -- above those of the people they were supposed to serve. Some introduced failed Marxist policies without the consent of their people, or allowed their mostly poor countries to engage in senseless proxy wars and looted national treasuries to enrich themselves and their friends. Others pursued western economic models but at the same time subjected their people to severe hardships through economic exploitation and political repression. And it was during the 1970s and 1980s that most African economies experienced dramatic economic decline.

Right now, the majority of countries in Africa are struggling with the challenge of multi-party democracy, globalization, HIV/AIDS and abject poverty. There is a war in at least one out of three countries and where there is relative peace the situation is still tense, either due to ethnic troubles or religious disagreements. Either way, many of Africa’s current leaders seem to be either completely helpless or are actually fomenting the troubles to sustain themselves in power.

Q: How does Africa’s leadership crisis affect the private/business sector?

Mr. Mufuruki: Private-sector growth requires a stable political environment coupled with sensible policies and, of course, good governance. These have been and continue to be in short supply in most African countries. However, there are signs of positive change in this regard in some African countries, including Tanzania, South Africa, Ghana, Senegal, Rwanda and a few more.

Q: What role is the private/business sector playing, or what role should it play, in addressing Africa’s leadership crisis?

Mr. Mufuruki: I do not see a direct role for the private sector in the field of political leadership. African politics are and will continue to be dominated by technocrats and career politicians for quite some time to come. The poverty that faces the majority of the people in Africa has helped to perpetuate this state of affairs. Poverty on the one hand drives the wrong people into the field of politics, and on the other hand, makes it extremely difficult for the poor masses to remove or change their leaders when they fail to deliver, even in a multi-party democracy.

Business people can help provide leadership in the field of economics, but even this will not be easy because politicians think that they need to control the economy just as much as they control the politics. In short, the political leaders are not willing or ready to accommodate non-politicians in their leadership circle.

But by creating wealth, not only for themselves, but also for others, African entrepreneurs are contributing to the creation of a society that is less prone to political bribery or bullying, and thus a society in which the quality of leadership will become an important social issue. Through this process and over time, the leadership crisis facing Africa will be brought to manageable levels if not overcome altogether.

Q: Can the private/business sector play a role in influencing governments to create the conditions necessary for economic growth: macroeconomic stability, transparency, respect for contracts? In Tanzania, for example, is there a forum where business leaders like yourself can sit down with government leaders and discuss the "action steps" each sector must take in order to create a solid foundation for future economic growth?

Mr. Mufuruki: In Tanzania we have a CEO Roundtable made up of 20 chief executive officers of some leading companies based in Tanzania. They represent interests in mining, manufacturing, agriculture, telecommunications, energy, banking, information technology and retail trading. This CEO Roundtable, which is an informal group, has been holding a series of meetings with the President and ministers in the  cabinet.

Another forum for this kind of dialogue is the Tanzania National Business Council (NBC). The purpose of the National Business Council is to create a platform for genuine and binding deliberations between the government and the private sector, civil society, labor and academia - basically all stakeholders in Tanzania. It surely is a step in the right direction.

My role in the NBC is rather small but perhaps very significant in some ways. In early 1996, I attended a meeting at the State House. During this meeting I read a statement I had prepared on behalf of the private sector that emphasized the importance of a genuine dialogue between the government and the private sector in our effort to build a successful, private sector-led economy in Tanzania. This started a huge discussion on whether or not there was a private sector in Tanzania worth its name, and if there was not, what needed to be done to create one. I stepped back from active participation in the dialogue sometime in 1998 to focus on building my business, but I continued to be involved in the background, as a member of several boards of directors and through informal groups such as the CEO Roundtable.

Q: As you know, TechnoServe is "on the ground" in Tanzania and other African countries, working to build businesses that will fuel rural economic growth. What role can an external organization like TechnoServe play in assisting the private sector to create wealth and overcome this leadership crisis?

Mr. Mufuruki: The best contribution that organizations like TechnoServe can make is to quicken the pace of wealth creation in poor societies. These organizations can share their considerable experience and help promote well-tested international "best practices," be it in farming, trading, business methods, management skills or organizational skills.

Organizations like TechnoServe could also be goodwill ambassadors for poor economies in the raging debate on globalization, by urging their own countries to adopt trade policies that are supportive to developing nations. TechnoServe can support efforts to provide access to cheaper drugs and where possible vaccines.

Q: What are your thoughts about the current debate on debt relief for the poorest developing countries?

Mr. Mufuruki: Debt relief as it is being implemented today will not work. It is designed to make the debt of "poor" countries manageable, using a definition of poverty that is only understood by the IMF and the World Bank. There is a big difference between "manageable debt" and "sustainable debt." The current program attempts to deal with the former.

There is also the unresolved issue of how this debt came about, this is, how it was incurred and whether the lenders were not to a certain extent responsible for the problem that is now being left to the poor countries alone to bear. The IMF and the World Bank seek to use debt relief to protect banks that gave out loans recklessly, in some cases knowing very well that the borrowers would never be able to recover their investment. This is not fair.


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