For the past 10 years or so, I have been reading the works of my pal, Brian Paxton, in South Africa. His writing is insightful and I often send him notes about things that link to his thinking about Africa and its opportunities. Here is one that I received this morning in his Mbendi newsletter, notable because I think it hits directly on the kinds of thinking I see as problematic.
Before I share his writing, though, let me frame it up with this idea:
The above is illustrated in what Brian shares:
THE WORLD AFTER 2020 – INFRASTRUCTURE DREAMING
In these days of fast advancing technology, one of Africa’s key competitive advantages versus the rest of the world is that it is very much a green field. Not literally of course, because you have places like the Sahara Desert, but figuratively.
Take communications for example. Twenty years ago, at the advent of the cell-phone / Internet revolution, Africa’s telephone infrastructure, where it existed at all, was decidedly antiquated. Today the majority of Africans have cell phones – I have vivid memories of seeing a red-clad Masai in the wilds of Tanzania herding his cattle while talking on his phone. East Africa pioneered cell-phone payment systems largely eliminating the need for banking infrastructure, branches, ATMs and all.
New cheap smart devices can deliver education, entertainment, news, medical diagnoses, prices and a whole lot more to Africans without requiring all the obsolete copper, paper and corporate infrastructure developed nations still have to amortize.
A regular MBendi newsletter reader recently pointed me to an article on the Guardian newspaper website. It seems that at some times of the day Queensland wholesale electricity prices fall below zero as 1,100 MW of solar panels on the roofs of 350,000 buildings across the state churn out electricity. Of course those same buildings are also connected to dirty coal-fired plants via a complex system of transmission and distribution cables, all of which, likewise, requires amortization, so there’s a tussle developing between the utilities wanting a return on capital and their customers wanting cheap power.
Now, if Queensland is sunny, Africa is even sunnier with a countryside largely unblighted by transmission lines and coal-fired pollution. In our last newsletter we mentioned that solar street lights are to be installed in all towns in Nandi county, Kenya. Last week NYSE-listed Chinese company Jinko Solar, the fourth-largest solar PV manufacturer in the world, opened an R 80 million manufacturing plant in Cape Town which can produce solar photovoltaic panels equivalent to 120 MW each day. So, in the electrical power arena, it would seem that Africa too enjoys an advantage through its lack of traditional power infrastructure and there are some, albeit cautious, moves afoot to capitalise on this.
But not so fast. Last week the US government convened a meeting of the leaders from 54 African countries to discuss USA-African trade and investment. With great fanfare the US government used the occasion to announce that it is to invest billions of dollars in African infrastructure, particularly electrical power generation where General Electric will lead the charge. Chinese leaders chimed in to propose working hand in hand with the Americans on African infrastructure. Meanwhile down in South Africa, state investment in infrastructure is seen as a way to stimulate the economy, starting with yet another massive coal fired power station, a nuclear power plant and additional railways to ship coal locally and abroad. Not only do none of these projects take advantage of Africa’s green fields but they will leave the continent with expensive, soon-to-be-redundant infrastructure.
But that’s not the only problem. While the USA claims to be investing billions in African infrastructure, the payments will go largely to American suppliers and consultants with just a fraction paid to local manufacturers. In East Africa there’s a protest groundswell developing at the news that 5,000 Chinese workers are to be shipped in to build a railway; perhaps the Ethiopians have told them about the thousands of Chinese workers who weren’t repatriated when major projects finished there. We’ve all had the experience of buying a computer printer then finding replacement ink cartridges cost as much as the original printer; I hope someone sane is factoring in all the running and maintenance supplies needed from the donor nations after this generous donation of infrastructure goes live.
Back in 2002 BAE Systems, aided and abetted by the UK government, foisted an expensive and totally unnecessary military radar system on Tanzania. The whole shady deal turned out to have involved bribery and corruption so much so that in 2010 the UK’s Serious Fraud Office handed down a £29.5 million fine on the company. Companies from around the world who, with the support of their national governments, supplied South Africa with arms in the late 1990’s are suspected of similar malpractices.
All these big infrastructure projects – unlike solar panel or cell phone investments of individuals – carry the same potential for the decision making process to be perverted by bent carrots and sticks, especially by opaque governments. With Russia tipped as being the favourite of South Africa’s atom-minded cabinet, maybe that’s why President Zuma didn’t condemn Russia’s takeover of the Crimea as he lambasted Israel’s Gaza incursions in a supposedly trade-related speech in Washington?
Africa would be a better place if a group of experts could sit down and rationally plan how best to plow Africa’s rich green fields. Start with a glorious vision; take a sober view of where we are at present; and then build a logical plan to take us from here to there. This is a much better approach than simply gratefully accepting what is foisted on us by others in their interests even more than ours.
In my words, the Square Wheels are everywhere but the Round Wheels already exist in the wagon. We can repeat the same old models for electrical infrastructure or we can look to NEW proven models that would seem to make a lot more sense. They need to step back from the wagon to see things differently and to generate alternative choices that make the best sense and that optimize the journey forward.
(An irony is that GE’s Turbine manufacturing is located here in my home town. I think they are a great employer and I have many friends working there. But are the same Square Wheel Turbines what Africa really needs to move their wagon forward?)
Y9u can reach Brian Paxton here – MBendi Information Services <email@example.com> and you can find and subscribe freely to his previous (great) newsletters here: http://www.mbendi.com/mbendipr/newsletter/website/index.htm
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Dr. Scott Simmerman is a designer of team building games and organization improvement tools. Managing Partner of Performance Management Company since 1984, he is an experienced presenter and consultant.
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Africa’s definetely coming of age with many projects (on infrastructure), underway. Innovation is changed the way we think too about more power – look at the leading economy in Africa – it wants to have 8% of power coming from renewables by 2020, and even more “life after 2020”, to have 16% by 2030. that will be great; http://constructionreviewonline.com/2014/09/19/nigeria-planning-additional-2483mw-renewable-energy-2015/