The Gender and Entrepreneurship Organized by Youth for Change

At Golden Peacock Hotel, 12^th December, 2020

A Paper on:

“Unearthing Local and African Solutions: A Pathway to Economic Growth”

Delivered and Written by Pemphero Wamwale Mphande

Fellow young men and women,

I feel honoured to be here today with you all and deliver this paper. This paper is about thirty minutes long and for the most part it is very technical so it will require your attention if we are to make a difference in the end. Technical speeches usually tend to be boring especially for those with a short attention span. But I am not an entertainer and so I must be allowed to be a bore at times.

I am not a strong believer of conferences because I have always believed that they achieve so little in delivering meaningful change to those in need in our communities. In fact, I have always felt that they take away resources that could change a life somewhere.

But I also understand the importance of conversation and congregations like these where motivation is shared for those able to change the world to refuel once in a while. Conversation just like planning is the beginning of everything. I imagine that nothing we see today would have been if humans did not sit down and have conversation to plan and execute. It is my hope therefore, that today we can all be inspired and walk away refreshed with new knowledge and most importantly, renewed enthusiasm in whatever work we do.

I would like to believe that I am not standing here today because I know more or better than you all. I am standing here because even for me it is also a chance to learn and I know that soon enough, I will be where you are seated and listening to some of you. No one in this room can claim that they are the smartest and have figured out life. We are all still learning. So I hope now and here is a chance again for us to share knowledge.

My fellow young people, Malawi is going through a lot. It is one of the poorest countries in the world with more than half its population below the poverty line, very high unemployment rate for both the employable and unemployable (explain), only 18% with access to electricity, medicines still scarce in the hospitals, shortage of healthcare workers, students dropping out of universities due to lack of fees, hunger now and then because of lack of farm inputs and many others you see every day.

It is depressing to live in this country because in spite of all of our problems, we have faced a strong political unwillingness to deliver meaningful change and a strong political disinclination to do what is right. This is witnessed by the continuous abuse of resources we have seen over the years. It is a disgrace we have let this happen and therefore, it is our duty as young people to hold government accountable. Just like we did in holding President Mutharika and his failed regime accountable, so must we continue to hold the government of President Chakwera. Demanding better of our leaders is the start of a better Malawi.

The late Bingu Wa Mutharika, my favourite Malawian President to date challenged us and the world that “Malawi is not poor but the people living in it are”. It was a powerful statement that eight years since he passed still lingers and holds true.

But to me, this is a reminder that we do not need to be so bent always on only projecting the ills of our country. I have told you the problems and it will be unfair for me not to tell you the good things about the country we all love and call home.

Malawi has a population of close to 20 million- for me this is a lot of human resource that if productive can transform our country.

Malawi is beautiful, it has plains and valleys from Nyika up north to the magnificent lower Shire; it has a beautiful lake that meanders on the edge of Malawi from Chibeta up north all the way to the calm south- for me this is beauty that can bring the world to us and therefore money.

Malawi has a lot of natural resources from uranium to bauxite that can be sold for a lot of profit.

Malawi has a lot of raw materials for us to produce every item for sale locally and internationally.

Fellow, young ladies and gentlemen, the late Bingu was right. Malawi is not poor. It is very rich. For failing to tap into this wealth, we are poor. Not this country. Again, for us to start making good of this wealth we have, it starts with good leadership. When I speak of leadership, I do not refer to President Kamuzu, Muluzi, Bingu, Banda, Mutharika or Chakwera. I refer to each and every one of you. We are all leaders in our own ways playing our own roles. In this communal effort, we each must be held accountable according to our roles.

My speech today is centred on theme unearthing local solutions in Africa and I would like to shift my focus to that at this juncture. Unearthing local solutions and offering them a market is what we have done and still do under Mtukule Mnzako. To those who may be unaware, Mtukule Mnzako is an initiative I founded this year to start supporting young people who have innovative business ideas but lack capital or exposure.

For the inaugural project under this initiative, we awarded Mike Lulu Ten from Mulanje and a 25 year old graduate from MUST. He is designing a human powered Nebulizer. This is a machine that is used to give medications to patients with respiratory problems such as asthma. This device which through his company he is developing will not need electrical power.

Mike had an idea and the skill to deliver on it but did not have the resources and anyone to support him. This is what Mtukule Mnzako does; to find that rare talent, rare service, rare product and make sure it is perfected for a readily available market.

The process to identify such young people was open and transparent. We had judges drawn from the public based on their competencies to run the competition. We did not just pick someone because we knew them. We wanted to be different from how almost every institution in Malawi is shamelessly biased and not transparent.

For this the concern was and still is the market. And this brings me to a key point in entrepreneurship. The existence of markets for what is available for sell as goods or services. So I am going to diverge into a little bit of African history, imperialism and African trade policies.

This year marks nine years since Colonel Gaddafi as he was commonly known was mercilessly murdered in Silte. It is also in Silte where in 1999 the Silte declaration was ratified to map the way for the formation of the African Union. This is a significant moment in the history of Africa.

It was the Silte declaration that called for the African Central Bank as well as the African monetary fund which would be an equivalence of the International monetary fund. While the AU was eventually formed in 2002, to Gaddafi’s death in 2011 and indeed today the others are yet to see light of day.

What Gaddafi was proposing was an African economy run by Africans. Imagine what this would have done. Of course Gaddafi knew something about growing an economy. This is the truth you must hold; he grew a strong economy. The rest as they tell of him is propaganda. When oil was discovered in Libya in 1959, Libya had only a quarter of million people who could read and write of four million people. When he deposed the monarchy in 1969, he consolidated the oil fields and redistributed wealth to his people focusing on housing, health and education.

His crime was being seen as a unifier of Africa and an anti-imperialist leader. With his socialist ideology and seemingly backing the Middle East against the US, he was seen as the enemy of the US. In 2010, protests started in Tunisia and there were actually none in Libya. The only protests that started in Libya were funded by the US. And so between March and October 2011, NATO forces started bombing Libya on the basis of protests that were not even backed by the majority.

By the time the Colonel died in October of that year, Libya had the highest life expectancy and the highest GDP on the continent. Look at Libya today. No wonder Obama called it his biggest regret.

In speaking of Colonel Gadaffi, I as a modern Pan-Africanist, believe I must be unapologetic and not succumb to the western rhetoric of oh- he was a dictator. I know better and you too must. As Julius Malema said of Mugabe on his passing, we know our heroes- the West shouldn’t tell us who is or isn’t our hero, so is my ask of you to look at not only Colonel Gadaffi but all African leaders gone that you revere in your own assessment.

So why then is this an important conversation in my speech today. Well, Gaddafi showed us that to build an African economy, we must do it on our own and through trading with each other. This is important for our generation. As young people, what lessons do we draw from this that must mean we are being productive in creation of products and services that can sell in our own markets first, and then internationally?

The danger still is the West. They are keen on making sure, they take resources from us as raw materials at a meagre price, then return with manufactured products that we can buy with money they left and gave us as aid. How do we create a market if for a start the money in the market is theirs? This is absurd!

I recall a few years back when Africa was touted as the fastest growing economy in the world. But this is not the same today or if it is, it surely isn’t reflecting. Just a few months back, the IMF projected our economic growth will shrink in 2020 amid tighter financial conditions, a sharp decline in key export prices, and severe disruptions to economic activity linked to the pandemic.

There are reasons for this. There is a history of the West purging our leaders who seem to be doing well. There is France and its hold over its former colonies. I will discuss some of these below.

My dad wrote to me recently;

 “As I told you before, I went to visit Kenneth Kaunda last year on his 95th anniversary at his house just outside Lusaka. Why am I bringing this up? Kaunda was president for Zambia for 27 years – clearly over-staying one’s welcome in a genuinely democratic political dispensation. But that is another issue. I brought this up because Kaunda left the presidency in 1991 penniless, with not even a house to retire to as past-president of a fairly wealthy country like Zambia. Nelson Mandela and the ANC had to build a house for this destitute ex-president! Nyerere? Tanzanian parliament went into a panic mode when the world laughed at them when it was discovered that their ex-president who had voluntarily retired to his village in Butiama had no house, and penniless. Nkrumah? The CIA flashed stories all over the western media that Nkrumah had amassed tons of money in overseas accounts. When he was overthrown by a western engineered coup, it was discovered that Nkrumah did not have even a single cent anywhere in the world! He died penniless, but the West never apologized for their smear campaign that contributed to his untimely death. Now, how do you compare these stories to the flashy live styles of the Bingus, Muluzis, Peter Mutharika and the like?”

My Dad was reflecting on the danger we face today. Puppet African leaders are notoriously running kleptomaniac regimes that are taking billions from Africa and investing in the West.

Africa has the some of the world’s largest natural resources. Africa is blessed with a rich bounty of natural resources. The continent holds around 30% of the world’s known mineral reserves. These include cobalt, uranium, diamonds and gold, as well as significant oil and gas reserves.

Over the period 2000 to 2008 resource extraction contributed more than 30 percent of Africa’s GDP, while the annual flow of foreign direct investment into Africa increased from $9 billion to $62 billion (most of this into extractive industries).

Zambia is the biggest producer of copper in Africa and seventh in the world yet 74% of its people live below the poverty line.  And as you will recall back in the days a viral video of Prof Lumumba said that Zambia once sold a mineral at 25 million US dollars to a foreign company and the company went on to make 75 million in a year and paid them with the profits! This is what we deal with!

Another one is DRC. It is in the top ten of countries with the largest minerals in the world. As of 2009, only in deposits of cotaln and cobalt, it had 24 million US dollars. But the DRC is rich; it has diamond, gold, tantalum etc. But it has more than 25 INTERNATIONAL mining firms.

Australia has the world’s largest gold reserves but only exports 14% of the world gold. From 1905 until the 1980s South Africa had been the world’s largest producer of gold accounting for 22% of all the gold available in the world.

The exploitation of mineral resources has all too often led to corruption, and a large proportion of the continent’s resources and revenues benefitting local and foreign elites rather than the general population. This is how arguably the richest continent has the poorest people. We are not a poor continent, we just have poor people.

It is up to this generation to rise to the occasion and lead the next generation of an economic boom. I propose unearthing local solutions. I mean the smaller things. Whether it is a young person in Mchinji farming tomatoes and producing tomato sauce. Whether it is young person in Mzimba developing water supply equipment. Whether it is a young person in Blantyre starting a record label.

The job is not as easy as providing solutions but making sure they can sell. And therefore, I must warn you- it’s not easy. This is why I have dwelt so much on history in my speech. There are strong forces that would see us fail and so we must be clever. The solution is not only economical but political and social as well. This is why as we lead in creating businesses we must also lead on the political front. These co-exist.

The realities lie in our economic situation. As of 2019, Africa had a population of 1.3 billion. The GDP of the continent in 2020 is 2.6 trillion with a GDP per capita of 1.97 US dollars making it the poorest continent on earth.

The African Monetary Union which I spoke of earlier  proposed creation of an economic and monetary union for the countries of the African Union, administered by the African Central Bank and this would assist in our dreams and efforts. There has also been a proposal for the creation of a new unified currency, similar to the euro; the hypothetical currency is sometimes referred to as the afro or afriq.

When we have done this and established an economy that we want we must be aware of China and debt. The Jubilee Debt Campaign, a coalition of organizations in the United Kingdom dedicated to debt relief for developing countries has calculated that, as of 2018, around 20 percent of all African government debt is owed to China. 

From 2000 to 2017, China provided $143 billion in loans to African governments and their state-owned enterprises—the majority of which are concessional loans, credit lines, and development financing.

Like investors with poor credit, developing countries must pay higher interest rates and issue debt in foreign stronger currencies to offset the additional risk assumed by the investor.

Risk to default may be higher for African countries and also because of longer repayment periods, Africa is credited foreign debt at higher interest rates with bonds charged at an interest rate of 7-9% compared to low risk countries such as the US that can borrow at 1% coupon rates from the IMF or World bank.

I recently watched a speech by Arikana Chihombori, the former AU ambassador to the US who was fired by her comments on France’s colony tax. She argued that such kind of interest rates by institutions like the IMF only make rich countries richer.

And this is quite true. The argument of risk to default in government’s debt is quite absurd. In history only North Korea, Russia and Argentina have defaulted. Does anyone smell a deliberate campaign to make sure Africa remains in deficit, debt and therefore has little time to focus on economic growth activities?

In 1958, Sekou Toure, President of Guinea wanted out of the French colonial empire. In retaliation, France destroyed schools, roads, hospitals, burnt drugs etc. It was a warning to other African Francophones of their fate if they left the colony pact.

Other leaders who tried to leave the CFA Franc in preference of their own currencies and economic policies, were removed by French engineered coups.  61% of coups in Africa were initiated in former French colonies with 16 of the 26 coups in Africa being in Francophone countries.

France demanded at the onset of independence that their former colonies must pay colony debt for all the development France provided during slavery and colonialism. As of today 14 countries in West and Central Africa pay 500 billion US dollars in colony tax annually to France.

This is what Arikana Chihombori, the former AU ambassador to the US was fired for. It tells you that this evil deal in the colony pact between France and Africa is being sustained by spineless African leaders taking away the sovereignty of African states. But there is more.

Francophone countries are expected to deposit 50% of their foreign reserves in the Central bank of France with less control over it. They can use annually up to 15%. If they want more, they have to BORROW FROM THEIR OWN reserve and if more than 20% with a cap!

France, a country without minerals on it’s own, depends on Africa and indeed in March 2008, former French President Jacques Chirac said:

“Without Africa, France will slide down into the rank of twenty-third power [of the world]”.

On top of the above, here some aspects of the colony pact;

• If any new minerals are discovered in its ex-colonies, France has the first right to buy. Only after they refuse can it be sold to another nation.
• In procurement, contacts must first be offered to French companies.
• France has right to train military officers
• Right to intervene in cases of conflict.
• Ex colonies must join it in case of war.
• Obligation to use French as a language
• Obligation to use France Colonial Money (CFA francs) as a currency.

There is more. But this abuse is prompting African leaders to rise. Macron’s France isn’t like that of De Gaulle’s that inflicted an atrocity on Toure’s Guinea in 1958. These sentiments are also backed by far right leaders in France such as Le Pen who in 2017 promised to end the CFA.

To those of you that will recall it’s why I backed Le pen over Macron in her 2017 campaign. She promised sovereignty to African states. Benin’s President Patrice openly said all 8 member countries of the West African CFA union are planning to pull out of it.

France must be held accountable for its evil on Africa and this must be led by the African Union. Sadly, I don’t see it happening as our leaders who form the Union’s assembly and commission are the same incompetent politicians.

Does this make you angry enough? If it does, I am going to make you angry one more time before calling you to the cause of growing Africa’s economy through local solutions driven by us and for us.

The story of countries like Zimbabwe and South Africa is a lesson of what has for so long deprived us of access to our own wealth and prosperity. Zimbabwe was colonised in 1881 and became known as Southern Rhodesia. Malawi was once in a federation with Zimbabwe formed in 1953 and dissolved in 1963 known as the federation of Rhodesia and Zimbabwe.

While we obtained our independence in 1964, Zimbabwe a land with hundreds of thousands of white settlers became a white minority government free from the Queen. In fact, in the 1930s 51% of the land was given to approximately 50,000 white inhabitants, with 29.8 per cent left for over a million Africans. How absurd was this?

When Zimbabwe got its independence in 1980 under the leadership of comrade Mugabe, all of Africa had attained its independence mostly in the 1960s with the exception of South Africa who would gain its independence a decade later.

In 1980, Zimbabwe had a stronger economy but it all began to fall apart in the late 90s. In the late-1990s whites accounted for less than 1% of the population but owned 70% of arable land in Zimbabwe and as such Mugabe began to snatch land from them. Almost 20 years later Zimbabwe is a shadow of its former self.

South Africa on the other hand did not push out white farmers. Mandela made sure of it in 1994 when finally the former union of South Africa broke free from apartheid. And today with those whites still owning land, South Africa is an economic hub on the continent.

So what does this tell us? You either suck up to the imperialists or you get swallowed. No wonder today South Africa is the second richest country in Africa with a GDP close to 400 billion US dollars!

This is why for our generation of Africa, it is important to champion the 21^st century version of Africa. We can scream on social media for all I care but what does that yield? We can make fancy speeches like the one I am making but who is listening? Not Moussa-Faki! Not Ramaphosa!

As for Colonel Muammar Gadaffi, he is gone and with him his dream of a united Africa with free trade. The voices that once spoke with him now patronise the yonder world. These men either answered the call of nature or were taken out by the imperial masters.

We must mourn them by doing the right thing; we must unlock African talent to create, produce, innovate and brand everything AFRICAN on our terms with our own hands and minds. When we have done that, we must make sure that the first market is us right here in Africa.

I will deviate a bit to reflect on Malawi and what growing our economy and creating a market entails. But first it is important to understand what role government can play in all of this and this means to understand its financial capability also.

To understand how governments are financed here is a basic layman explanation. This will help you understand what to expect from the current government.

1. The primary source of revenue for government are taxes. This could be taxes from salaries, taxes on products etc.

1.1 Therefore, the more the taxes, the more the revenue, the higher and the budget a government can fund.

1.2 To have more revenue, more people must be working, more products must be produced, more business must be introduced.

1.3 Ideally, if an economy is thriving, there will be both imports and exports on which a government can charge tariffs.

1.4 This brings me to an important aspect of the economy, the gross domestic product(GDP). This is the market value of all the products and services produced in a country in a given time.

1.5. The more products and services a country produces that can be sold at a market, the more revenue is generated through taxes for the government.

1.6 This is an involving process as usually deliberate approaches must be taken to induce an economy’s GDP growth.

1.7 For example, through industrialization, you create more products that can be sold locally and outside. This creates more revenue and jobs. As a result the government gains in two ways, taxes from salaries and products on the business.

1.8 What this means is that for economic growth, the government must find ways through public and private partnerships to create industries.

1.9 Governments must also introduce deliberate policies such as lowering corporate investment taxes so that they attract more investors who can in return employ more people.

2. The second source of revenue for governments like ours are grants or simply donations. Usually these fund specific projects or programs. In some cases, though, these are non-restricted funds.

2.1. These grants are policy dependent. Usually following the international sustainable development goals or a country’s goals which in our case would mean the Malawi Development goals.

2.2. There are then policies such as gender policies that build up from the above.

2.2. Therefore, grants are dependent on a government of the day’s policies.

3. Borrowing. This simply means that the government will get money locally such as from banks or companies and from international institutions or countries to be paid back.

3.1 This can be to fund specific projects such as the Bingu Stadium.

3.2 This can also be to fund sections of the national budget.

3.3. How much a country borrows is dependent on the deficit that arises from its budgeted expenses after it has taken into account firstly, revenue and grants.

3.5 Therefore, a government will only borrow if it is unable to attain more revenue from its GDP. This is usually the case for most countries over time.

Finally; what am I communicating?

The promises made by Tonse alliance such as cheap fertilizer, 1 million jobs, tax cuts etc. all require both an increase in expenditures. This entails, the need to create more products and services that can translate into more GDP and therefore, more revenue.

The way I see it; there will be need for a lot of investment in industrialization, entrepreneurship, new big corporate investments.

All this will require new policies, partnerships that can bring investments into Malawi. I’m imagining loans to set up factories that can tap into unused raw materials. I’m thinking of Chikwakwa and its cattle; massive shoe industries from skin, shoe polish from blood.

I’m imagining deliberate identification of markets for our agricultural products. I’m imagining scaled up commercial farming of specific crops e.g sunflower.

I’m imagining lowered taxes to attract certain big companies to invest and stay in Malawi. I’m imagining reintroduction of car assembling factories.

I am imagining Malawi enterprise development fund (MEDF) that follows a script like what I earlier outlined with what we do with Mtukule Mnzako. Those funds should go to young people or folks who are actually doing something that can employ them and others. Not to sons, cousins or spouses of politicians.

My friends, this is how, we can grow our country’s economy. But I speak for all of Africa because our problems are common and somehow the success of each country on this continent is tied to that of the other and this is my dream for Africa.

I envision an African economy mushroomed in industrial production, digital innovation and one that taps into its vast resources for value addition. When we start to produce more with our own companies, markets will be readily available within and outside.

Once we start selling what we produce, we import less but export more. This will strengthen our economies. Slowly, each country will have a workforce that has been trained on home soil and is contributing to growth. In doing so, we can cut our deficits and settle long standing debts.

This will usher in a new era of economic growth. And oh, how I long for that day. May it come soon? But I warn you; it will not come easy! We must look at what our friends are doing and unearth local solutions to our common problems. From entertainment and sports through agriculture to industrialisation.

We have our own doctors, engineers and many other innovators that can take charge of this economic boom which I envision. Our own professionals empowered to work in economies where policies such as Economic integration thrive will dedicate themselves to the patriotic cause of unearthing talent.

The local solutions are to our health problems; where we create our own testing equipment for malaria. The local solutions are in agriculture; where we create our own hybrid crops suitable for our arable lands. Our local solutions are in our education problems; where we develop our own curriculums and teaching tools. Our local solutions are in our music industry; where the biggest concerts on earth happen in Africa and our artists become billionaires on this continent.

I could go on but if we unite through the unification of economic policies between different nations and introduction of  non-tariff restrictions on trade across the continent for us to sell to each other what is ours, I say not even the sky will be the limit. I hope to see this happen in my life time. Thank you. God bless you all and God bless Africa!