Reaping the profits of failure in Africa

By Ranga Mberi

RECENTLY, Zimbabwe’s Transport Minister announced the country planned to ban haulage trucks from transporting “bulky goods”.

A new regulation was in the works to force transporters to use rail and not the road, Minister Joram Gumbo said, “because if we allow big trucks to ply our roads they will be destroying our roads and there will be continuous rehabilitation of the roads”.

He is not alone. An official of Zimbabwe’s revenue agency was quoted separately as calling for a ban on large haulage trucks, as they cause “damage to the road network and congestion at our borders”.

Not long ago, I was at a business seminar where Zimbabwe’s Finance Minister Patrick Chinamasa complained that we had “allowed our railways to go to the dogs”. Now, he said, the roads are crumbling because they are carrying the loads our railways should be taking.

All three officials are talking sense. However, should they press ahead with any such plans, they face stiff resistance. This is because across Africa, there is millions to be made out of failure. Failure, in other words, is huge business for some, and they will resist any attempts to put things right.

With the demise of Zimbabwe’s rail company, the National Railways of Zimbabwe, a multitude of trucking companies stepped into the breach. Many of them, especially those that get the big contracts to move grain, coal and other bulk material, are making good money.

They will not complain about the collapse of the rail, or of any public infrastructure.

Here is the thing; when we allow our key infrastructure to collapse, there will be clever people ready to jump in and step into the breach, at the cost of our economies. That’s just how capitalism works. Once those industries that thrive on failure are steaming ahead (forgive the pun), then it is hard for anyone to return to what we knew to be normal.

If Gumbo and Chinamasa somehow do find new investment to revive rail, they are going to have the powerful trucker lobby calling them at night and knocking at their doors at odd hours, demanding things do not return to normalcy.

There will be people who will benefit from failure, and they will resist any progress.

Looking at the figures, it is easy to see why.

Take, for instance, the power situation in Nigeria, one of Africa’s leading economies. The country has a population of 170 million, but produces not more than 4,000MW of power. For perspective, South Africa, with three times fewer people, produces over ten time more power at 45,000MW. Nigeria’s commercial capital, Lagos, gets just 10 percent of its power needs.

This is bad news for the population there, but it is great news for the privileged few who are in the generator business. According to a report by Research and Markets released this September, Nigeria’s diesel generator market is projected to reach $694.8 million by 2022.

So, do you think anyone in the generator business in Lagos wants to see power fully supplied? No, they would rather it worsened. That’s where their money is – in the failure.

Some years ago, in Kenya’s Kibera, reputedly Africa’s largest slum, I saw groups of youths selling water. The local water utility cannot supply water to the slum, so the bulk of the residents of Kibera had to spare up to a third of their meagre earnings on water.

This is where, we heard, the “water mafia” kills it. There are local gangs, reportedly tied to wealthy, powerful people, who control the sale of water there. It is big business, selling water to a desperate 2,5 million slum dwellers in Nairobi daily.

Do you think those water cartels want water supplied to Kibera? No, they would rather the crisis remained.

The Flame Tree Group, a company listed on the Nairobi Stock Exchange, makes an annual turnover of over $20 million from selling plastic water tanks across East Africa. Recently, the company expanded to Mozambique and is making good business.

In Zimbabwe, where councils have simply given up on supplying water to new suburbs and settlements, manufacturers of water tanks are making a killing.

Would they be happy if those local authorities suddenly found the will to do their job? No, they would definitely not.

Nobody should be surprised when progress to restore our infrastructure is slow, or when feet are dragged when citizens demand better services. Somewhere, someone is making money off all that failure, and they are not about to give it up easily.

We call it failure, some call it opportunity.

October 2016
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