SME's - an African challenge
SME's - an African challenge
However, Africa finds itself in a situation which I think is difficult. I do not fully understand it myself, but I can see the conflict.
de Soto suggests and I concur, that land ownership is key to entrepreneurship, as it provides the owner with equity which can be leveraged into capital.
However, in many African states including South Africa, vast tracts of land (eg. 70% in Botswana) are tribal land. Title deeds cannot be gained to this land. You can get a long lease on the land but not ownership. Therefore you cannot use it as collateral. How does this problem get resolved?
South Africa has a traditional, well the ANC version of it, democracy. It also has a whole bunch of what is colloquially known as traditional leaders. Of these a number are still illiterate rural people, and yet they can control the future of the people in their areas.
How can you be entrepreneurial when you cannot own your land? When you have to pay a "tax" to the chief? When he decides how much land to give you, if he gives it to you at all? When the bank will not give any consideration to this being collateral?
I believe that this system is very similar to the old communist collective approach which we know failed. It is also why I believe communism and socialism still have such strong support in Africa today. It is a system that is known and understood, and in the context of Africa as a subsistence economy, it worked.
However, Africa is being forced away from a subsistence economy through many factors such as westernisation and globalisation. But the social systems and structures are an anachronism from the past, which are not changing. The democracies are simply trying to find ways to accommodate them, rather than change them.
Time is running out and this change has to happen sooner rather than later. There is no place for monarchies and traditional leadership in the modern world. Just like the UK and European monarchies had to change and accept their new diminshed role in society, so too do the African traditional leaders need to change and adapt before it is too late.
Rob Smorfitt
SMEs an African challenge - To learn more about this author, visit Dr. Rob Smorfitt's Website.
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African governments are all beginning to jump onto the SME bandwagon. They are all seeing it as a liferaft in a sea of poverty, which ultimately leads to unrest.
However, Africa finds itself in a situation which I think is difficult. I do not fully understand it myself, but I can see the conflict.
de Soto suggests and I concur, that land ownership is key to entrepreneurship, as it provides the owner with equity which can be leveraged into capital.
However, in many African states including South Africa, vast tracts of land (eg. 70% in Botswana) are tribal land. Title deeds cannot be gained to this land. You can get a long lease on the land but not ownership. Therefore you cannot use it as collateral. How does this problem get resolved?
South Africa has a traditional, well the ANC version of it, democracy. It also has a whole bunch of what is colloquially known as traditional leaders. Of these a number are still illiterate rural people, and yet they can control the future of the people in their areas.
How can you be entrepreneurial when you cannot own your land? When you have to pay a "tax" to the chief? When he decides how much land to give you, if he gives it to you at all? When the bank will not give any consideration to this being collateral?
I believe that this system is very similar to the old communist collective approach which we know failed. It is also why I believe communism and socialism still have such strong support in Africa today. It is a system that is known and understood, and in the context of Africa as a subsistence economy, it worked.
However, Africa is being forced away from a subsistence economy through many factors such as westernisation and globalisation. But the social systems and structures are an anachronism from the past, which are not changing. The democracies are simply trying to find ways to accommodate them, rather than change them.
Time is running out and this change has to happen sooner rather than later. There is no place for monarchies and traditional leadership in the modern world. Just like the UK and European monarchies had to change and accept their new diminshed role in society, so too do the African traditional leaders need to change and adapt before it is too late.
Rob Smorfitt
SMEs an African challenge - To learn more about this author, visit Dr. Rob Smorfitt's Website.
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