The Under-Belly of Africa’s Booming Business Environment

Africa’s mobile phone revolution is one of the main drivers of the bullish ‘Africa Rising’ narrative. Underpinning this optimism in Nigeria, is the liberalisation of the country’s telecommunications sector, regarded as one of the success stories of economic reform. With over 148 million connected mobile lines, and 92 million internet subscribers, it is not hard to see why.

Amidst the praises for this emergent sector, precious little is known about the actual (and messy) back story behind the telecoms liberalisation in the early 2000s.

For that reason, British-Zimbabwean telecoms tycoon, Strive Masiyiwa’s recent account of his experience during these early days of reform provides a rare glimpse into the challenges and opportunities of operating in a place like Nigeria. The narrative posted on his blog and Facebook page, went viral several weeks ago.

As the chief executive of Econet, one of the bid winners of mobile licenses auctioned in 2001, and the first mobile operator in the country, the detailed insight into his partnerships with Nigerian investors and demand for bribes by government officials, but also how institutions such as the Economic and Financial Crimes Commission (EFCC) and some of Nigeria’s courts came to the rescue is intriguing.

Crucially, Masiyiwa’s account provides a rare glimpse into the complexity of the business environment that Doing Business surveys, while informative, hardly capture. Perhaps it is not surprising therefore, that foreign investors often end up overestimating or underestimating the opportunities and the challenges in many African economies. The recent case of Nestle admitting they overestimated the size of the continent’s middle class, and consequently scaling back some of their operations in 22 countries, comes to mind.

Although I am using the experience of Nigeria to generalise about the continent, there is some justification for that. Increasingly within the context of booming economic activity across Africa, many investors are having diverse and complex experiences with bureaucratic bottlenecks, bribery and corruption, vested interests, the consumer base and shifting demographics, infrastructure etc. We need more of such detailed accounts to gain a better understanding of how investors weathered or suffered from these (often political) constraints, and more broadly, the political context of economic growth and transformation .

This is also an area researchers need to engage with more. Although business orientated magazines such as Forbes frequently feature profiles of leading entrepreneurs, there is a dearth of analytical studies of these emerging captains of industry, in the political-economy tradition of the 1970s and early 1980s.

Having said that, Strive Masiyiwa’s account can be found here. It is serialised in seven posts all titled ‘Time to Play By a Different Set of Ethical Rules’:

Part 1: chronicles the acquisition of the mobile license, the demands for bribe by government officials and the subsequent cancellation of Econet’s management contract in Nigeria.

Part 2: chronicles the onset of anti-corruption investigations by Nigeria’s EFCC, the US and British authorities.

Part 3: he gets a bit more specific with the names of the political elite who demanded for bribes, including a former state governor of Akwa Ibom

Part 4: Masiyiwa’s role as a witness in the trial of former state governor James Ibori (who tried to solicit bribes from Econet) on charges of money laundering in the UK

Part 5: More details about Ibori’s trial, Masiyawa’s role as a witness and Ibori’s successful conviction

Part 6: His painstaking efforts in seeking legal redress for the cancellation of their management contract in violation of the shareholders agreement

Part 7: Getting a favourable verdict from the international arbitration tribunal after almost five years of persistence

By Zainab Usman