The pitfalls of black entrepreneurs

Taurai Changwa Business Forum
THE upper rungs of the Forbes rich list is noticeably occupied by white businesspeople. And the rich people are growing obscenely richer. It is a scandalous reality. Oxfam, the UK-based NGO, estimates that about 99 percent of the world’s riches are concentrated in the hands of one percent of the global population.

It is, therefore, prudent to ask: does one’s skin colour determine their material wealth and or their opportunities in the world of business? Africa is arguably the next world’s growth frontier, and it is unsurprising that many budding entrepreneurs are from this continent.

Clearly, black entrepreneurs are on the rise. But in order for the growth in their businesses to be sustainable, there is need to ensure that they also develop corporate institutions that guarantee longevity. An ethical grounding — where corporate governance and sustainable practices are key — therefore becomes necessary. Unfortunately, most African businessmen think that profit margins can be driven by skipping statutory obligations and cheating the system which, most often, is folly.

Harsh as this observation might be, it is almost always vindicated. And there is now a prevalent perception — though erroneous — that asserts that it is better to deal with a white businessman than a black one. But the onus is on us to change that perception.

The golden rule in business is to pay one’s creditors, taxes and employees. Due to problems related to numeral literacy in our communities, revenues generated by businesses are often mistaken to be profit, and this anomaly needs to be addressed. Emerging black entrepreneurs must unlearn the perception that revenues ultimately translate to profits that can conveniently be converted to personal use rather than to further business interests.

It is therefore unsurprising that businessmen in these shores would rather spoil themselves, stay in upmarket houses, buy expensive cars while going for months without paying employees and key creditors. An important disclaimer is obviously to concede that not all black businesspeople do this.

Also, another scourge of emerging entrepreneurs on the continent is corruption. As the continent remains a primary source of mineral resources, which are usually used as raw materials by global manufacturers, most conflicts are mainly driven by struggles to control energy, minerals, food and other commodities.

Africa’s so-called resource curse is legendary. Take Nigeria, for example. It experienced 10 successive military coups beginning in 1966 — just a few years after independence from Britain and the subsequent discovery of large oil reserves. The struggle to control its government was in large part a struggle to control oil.

Experts say the pattern is repeated in many countries — including the DRC, (formerly Zaire), Somalia, Liberia, Uganda, Sierra Leone and the Republic of Congo — where rebels, political parties and international corporations have competed to control resource extraction.

Such political conflicts should remain alien to Zimbabwe, and there is need to ensure professionalism becomes pervasive in local business. Ethics and integrity are integral to business. Observance of good corporate governance will definitely move the country forward.

Perceptions built over the years about Africans and business should be changed. To date, Africa is unfairly regarded as the most corrupt continent in the world. This surely has to change and the image of black African entrepreneurs has to change.

This mischaracterisation has affected West African businessmen the most. All the resources that we require to prosper are found on the continent. What we need now is good management. Bribery of public officials, embezzlement of public funds, kickbacks in public procurement and questions about the effectiveness of public anti-corruption efforts is what defines Africa today. At times we are our own enemies. What is the point of making so much money and putting it in offshore accounts and yet it is supposed to benefit local people?

It is clearly now time for Africa.

  • Taurai Changwa is a member of the Institute of Chartered Accountants of Zimbabwe and an estate administrator with vast experience in tax, accounting, audit and corporate governance issues. He is a director of Umar & Tach Advisory and writes in his personal capacity. Feedback: [email protected] and WhatsApp +263772374784

4,670 total views, no views today