Status symbol: How African enterprises flounder

Oct 14, 2016

By Ranga Mberi

A FEW years ago, while driving in the sugar estates in Zimbabwe’s Lowveld, I saw what looked like the shell of an old abandoned bus on the side of the road.

It was the shell of a Shu-Shine Bus, once one of the largest bus companies in Zimbabwe.

One has to understand what bus companies meant to the black community. They were a symbol of black wealth, an example that blacks too could run businesses. It was an industry with a great history, but one whose ultimate demise serves up lessons for black businesses in post-colonial Africa.

How come none of those big name bus companies even went on to become large, successful corporations? What went wrong?

Let us start where it began.

One time while rummaging through the National Archives, I came across the story of one “native” only named as Chanakira who set up a wagon service back in 1912 to transport farm produce and farmers from Seke to the market at Salisbury, the former name for Harare.

Over the decades that followed, bus companies became the one business that was to be a marker for black success. This was because black enterprise had limited options in colonial Rhodesia.

Many Zimbabwean black entrepreneurs thrived in the bus business, well into the 1970s, even as the war raged and many of them lost a lot, either to harassment by the colonial regime, or by contributing towards the war effort. One Josphat Ruredzo lost a lot of his buses during the war and had to shut down.

The 1980-90s were boom time, as Zimbabwe’s Independence brought new opportunity. And yet, none of these famous bus companies ever really amounted to much. How many transformed from bus services into large, profitable logistics enterprises?

Today, cannibalised shells of old buses lie strewn around all those many seemingly abandoned bus depots in Zimbabwe’s industrial areas.

The reasons for this failure are many – not least the state of the economy. But one has to question the business practices of many of those pioneers. Many of them took their buses not as businesses, but as status symbols.

Many insisted on their buses plying routes to their rural home areas, and not on routes that were commercially viable.

They needed to be “seen”, to display their successes to their kinsmen.

They built large mansions and invested very little back into their businesses, to sustain and grow them into the future.   It is a cancer that blights many black businesses today. Excited by new money, many young entrepreneurs are too desperate to flaunt their success they end up destroying their ideas before they bloom.

While all those famed bus companies were a great success in our eyes back then, they really were small players compared to the large, multinational logistics firms that now hog the region’s transport routes.

In 2016, there must be better mentorship of our emerging entrepreneurs in Africa.

Too many of them are squandering what little success they have made so far, throwing seed money away into parties, luxury cars and rented mansions.

All because, just like those pioneer entrepreneurs, they are desperate to display their success.

It is this new money that is driving a boom in luxury items across Africa. Luxury goods retail sales reached $4 billion in 2014, and may rise 31.2 percent by 2019, according to Euromonitor. Across Africa, major luxury goods brands are making good business. Africa has about 50 directly operated global luxury single-brand stores, with LVMH and Richemont accounting for 60 percent.

We get far too excited in times of plenty, and forget entirely to prepare for the time things may turn. It is the same mentality that has seen our countries squander all the money they made from the commodity boom.

In Gabon, during the oil boom, the country at one time became the world’s highest per capita consumer of champagne. It is an embarrassing statistic, especially now that the boom is over and Gabon is in debt.

It is also a lesson many of our entrepreneurs still refuse to learn.

They still must be seen.

Have we learnt nothing from that Shu-Shine bus, once part of a large fleet, but now on the side of the road, rusting away in the heat of Zimbabwe’s Lowveld?

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October 2016
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