Monday, November 12, 2012
Law and investment in Africa
I recently attended the Texas Africa Business Summit in Houston. It was very interesting and saw there some friends from Malawi. The Summit brought together many friends of Africa in the Houston Business Community. There is a huge amount of support of Africa, East Africa and investment in those relationships-business or otherwise. It was remarkable to me, coming from California which is not so far away, to see that support. Africa does not exist, really as far as California is concerned. I forgive them that since the last few years have been so difficulty here on the left coast. However, Hollywood has not stopped cranking out the American cultural propaganda they call movies and spend not so much time bringing the outside world to us...and they could do that. They have the power to do that.
Hollywood has sat by making money while California raises taxes to provide the basics like education. The State had to ask for more money to do what we already pay taxes now to have them do; which is to educate the children. Where is all of the money?? I am not that good at math but I think donating even a small percentage of some meaningless holiday films this season could solve the crisis of public schools in the entire State of California. So, people in California don't even care about California, let alone Africa. Houston, Texas has some people who care about Africa and I went to their conference.
There was not much discussion of the law at the Texas Africa business Summit. There was a good deal of discussion of how bad the colonial powers were in Africa and how we (those of European descent) should all be ashamed of that. There were also on discussion panels,many former diplomats who were now Academics or at least writing books about their time spent in Africa. To be honest, they said so many valuable and interesting things from their personal perspective of having lived and worked there for so many years. Also, of interest was the discussion by the mutual fund managers who spent time meeting with company executives learning how to invest in Africa. A wise South African told me when I was in Malawi this past Summer, that Africa is about relationships.
I am sure that is true, but it is also true about pretty much everything. I think he meant it in a more complex way. Africa is about cultivating those relationships. This is excellent advice for Americans who really think everything is about the transaction. The relationship is incidental or collateral to the deal. This basic truth and misunderstanding, is America's problem with the World and California's basic, fundamental problem-full stop. It is also the fundamental problem with a focus on laws when trying to promote investment on African Exchanges. Investing has ALWAYS, historically been about relationships. The law can help and support that but not create those relationships. Rule of law, banking infrastructure, phewy!! Get in there and start relating and that is how we create more investment.
This December I will attend the African Stock Exchange Association meeting in Cairo. It looks very stimulating and there might be some regulators there worth hearing from. Cairo may not be super friendly to female Americans but who knows. I go and invest my time because I believe that there is a future for investment in Africa, for America and the World. I go because each year these Exchange Executives meet and ask the questions that the Investment community asks as well. How do we improve the investment climate in Africa, above and below the Sahara??!!
Conferences are monumentally silly-some sillier than others, but they do start conversations. The bad things happen when that conversation stops.