The Insane South African Business Scramble for Africa by Jan Lamprecht
Our ANC Govt has been pushing an idea which may sound logical at first, but in reality is a definite losing game. Big businesses have been encouraged to expand into the rest of Africa on a large scale.
I have personal experience of how stupid such a thing really is! The huge company I am currently working for is also now setting its sights on expanding into Africa, and you know what, I think it is a silly idea.
In 2001, I worked for a company which was an off-shoot of Western Union, an international company which does money transfer. This South African off-shoot was funded by a wealthy white man who had been in the money transfer business for years. He decided that money transfer, and micro-lending were the perfect business to expand into Africa. His rationale was perfect. There is a real demand and need for this in Africa. He saw a niche, and pumped in millions of rands into this company.
They created a company called eSave, and I was one of those recruited to design and write the software to enable us to do some serious business in Africa.
I worked for them for 18 months. During that time we wrote a system and got it working to Botswana. That went quite well. Then we expanded into Namibia - but we began experiencing problems with distance, and slow lines. Then my bosses got bolder. We'd expand into Tanzania, Kenya and Rwanda. And that's when this whole thing started unravelling. They spent lots of money - they even gave them computers! People from our company travelled up into Africa. Then, the black Africans started reneging on their deals which they had signed! We hit one wall after another as the black Africans failed to deliver on promises.
One day my bosses walked into the office and announced to us: "You are working for us at your own risk. We are not sure if we will have the money to pay you at the end of the month!" I was shocked beyond belief! I was the luckiest of all... because I was extremely lucky, and a friend was able to offer me a job within a weekend, and on the Monday morning I walked in, and told my bosses, "Thanks, but I am leaving now!" No notice, no nothing. I just walked out! Many other people suffered a lot in the later months as they got paid a pittance for doing their work - simply because they could find no other jobs. The whole business went BANG! End of eSave!
I heard a story, some years ago about a wealthy American woman in the cell phone industry who tried to expand into Africa. She also lost millions and was furious with the blacks. It really hurt her badly. She left Africa an extremely bitter person. I think she lost about US$10 million.
Expanding into Africa is a very dicey thing to do. Africa, north of our borders is more messed up than you can believe. If you think you can waltz in there and start doing business, you're wrong. In Africa: Things don't work. Normal things, which do work in other countries - do not work in Africa. People lie, people steal, people make bold promises which they don't keep; services which you are told do work, actually don’t work!
All this talk of "expanding into Africa"... is crazy talk. Few know how to do it. The White Farmers from Zimbabwe... did well... but in the end, they may lose. The only business that ever achieved it, and did excellently was a British Business called: LonRho - an acronym for "London-Rhodesia". LonRho was headed by Tiny Rowland, and it made stacks of money out of post-Colonial Africa. But, they did so by playing African politics, bribing the necessary people, etc. LonRho is the only International Company that really knew how to do business in Africa. It was filthy, but it worked because that is the only way to do business. And it kept parts of Africa running for quite a while.
The only recent business success in Africa, which originates from South Africa is MTN which is a large cell phone company. Cell phones are a hot product in Africa because there is virtually no infrastructure. But other than MTN, I know of no other success stories.
I would never advise people in America, or Europe, to invest in Africa. It is a very dicey game, and you can come out of it a big loser.
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Original Investigative Journalism from the
Columnist Guild News Bureau
I have personal experience of how stupid such a thing really is! The huge company I am currently working for is also now setting its sights on expanding into Africa, and you know what, I think it is a silly idea.
In 2001, I worked for a company which was an off-shoot of Western Union, an international company which does money transfer. This South African off-shoot was funded by a wealthy white man who had been in the money transfer business for years. He decided that money transfer, and micro-lending were the perfect business to expand into Africa. His rationale was perfect. There is a real demand and need for this in Africa. He saw a niche, and pumped in millions of rands into this company.
They created a company called eSave, and I was one of those recruited to design and write the software to enable us to do some serious business in Africa.
I worked for them for 18 months. During that time we wrote a system and got it working to Botswana. That went quite well. Then we expanded into Namibia - but we began experiencing problems with distance, and slow lines. Then my bosses got bolder. We'd expand into Tanzania, Kenya and Rwanda. And that's when this whole thing started unravelling. They spent lots of money - they even gave them computers! People from our company travelled up into Africa. Then, the black Africans started reneging on their deals which they had signed! We hit one wall after another as the black Africans failed to deliver on promises.
One day my bosses walked into the office and announced to us: "You are working for us at your own risk. We are not sure if we will have the money to pay you at the end of the month!" I was shocked beyond belief! I was the luckiest of all... because I was extremely lucky, and a friend was able to offer me a job within a weekend, and on the Monday morning I walked in, and told my bosses, "Thanks, but I am leaving now!" No notice, no nothing. I just walked out! Many other people suffered a lot in the later months as they got paid a pittance for doing their work - simply because they could find no other jobs. The whole business went BANG! End of eSave!
I heard a story, some years ago about a wealthy American woman in the cell phone industry who tried to expand into Africa. She also lost millions and was furious with the blacks. It really hurt her badly. She left Africa an extremely bitter person. I think she lost about US$10 million.
Expanding into Africa is a very dicey thing to do. Africa, north of our borders is more messed up than you can believe. If you think you can waltz in there and start doing business, you're wrong. In Africa: Things don't work. Normal things, which do work in other countries - do not work in Africa. People lie, people steal, people make bold promises which they don't keep; services which you are told do work, actually don’t work!
All this talk of "expanding into Africa"... is crazy talk. Few know how to do it. The White Farmers from Zimbabwe... did well... but in the end, they may lose. The only business that ever achieved it, and did excellently was a British Business called: LonRho - an acronym for "London-Rhodesia". LonRho was headed by Tiny Rowland, and it made stacks of money out of post-Colonial Africa. But, they did so by playing African politics, bribing the necessary people, etc. LonRho is the only International Company that really knew how to do business in Africa. It was filthy, but it worked because that is the only way to do business. And it kept parts of Africa running for quite a while.
The only recent business success in Africa, which originates from South Africa is MTN which is a large cell phone company. Cell phones are a hot product in Africa because there is virtually no infrastructure. But other than MTN, I know of no other success stories.
I would never advise people in America, or Europe, to invest in Africa. It is a very dicey game, and you can come out of it a big loser.
Original Investigative Journalism from the
Columnist Guild News Bureau
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