WHY AND HOW TO USE
MORE LOCAL CONTRACTORS
IN AFRICAN -
ARAB PROJECTS
Dr. Willard R. Johnson
M.I.T.
Jan. 1980
WHY AND HOW TO USE
MORE LOCAL CONTRACTORS
IN AFRICAN -
ARAB PROJECTS
Dr. Willard R. Johnson
M.I.T.
Jan. 1980
Copyright
(
January 1980
by
The Business Management for
Economic Development Project
Center for International Studies
Massachusetts Institute of Technology
Cambridge, Mass.
PREFACE
The Business Management for Economic Development Project documents
cases of sincere attempts, whether successful or not, to achieve a level
of external contributions to the general development of the host economy
optimal to the internal benefits a business must have to succeed in a
developing society. Internal benefits are those that accrue to the firm
only, and external contributions are benefits to other parties. Examples
of business activity that might combine internal and external benefits
include 1)spreading technical knowledge and innovation, 2) creating
commercial linkages that promote new business development and/or structural improvement in the economy, 3) generating foreign exchange earnings or savings, 4) creating local employment, 5) creating local management capability, 6) contributing to greater income equality, 7) facilitating credit formation and saving in the host economy, 8) promoting
products and projects that meet the development priorities of the host
government, 9) reducing to a minimum the local external costs of company
operations. Local conditions will determine which of these activities
should have the highest priority.
We look to several organizational settings for relevant examples:
indigenous businesses, subsidiaries of international businesses, parastatal agencies that own or promote business operations, and of course,
public policy-making agencies.
These studies should be most useful to management training programs
for people who will operate in underdeveloped economies, whether they be
"Third World" countries, or dependent and lagging sectors of industrial
societies. Directors and instructors of management programs in underdeveloped areas, as well as government officials and some business leaders, have indicated a need to train management personnel to be more sensitive to the economic development needs and opportunities of the host environment. An expansive view of management education, that includes a
concern for the external effects of business operations,might reinforce
the commitment of individuals and enterprises to promote economic development on a general basis, and might facilitate public policy-making and administrative effectiveness on the part of those who have to define and defend the national interests with respect to both the domestic and international business sectors.
I wish to acknowledge my gratitude for the financial support which
has been rendered to the project by the Technology Adaptation Project, the
International Business Project, the Center for International Studies and
the Department of Political Science, all at M.I.T., the African American
Scholar's Council of Washington, D.C., and the Ford Foundation of New York.
The Rockfeller Foundation has supported my work on African Arab Cooperation.
M.I.T.
Willard R. Johnson
Principal Investigator
AND
WhY
HOW
TO
USE
MORE
to
the
Cairo
Presentation
LOCAL CONTRACTORS
Symposium
Cairo, Jan.
Dr.
21-25,
Willard R.
M.I.T.
Cooperation
African-Arab
on
PROJECTS
IN AFRICAN-ARAB
1980
Johnson
Introduction
Once
Now,
rich.
and
it
was
has
it
development
uine
development
increase
distinct
for
Arab
generosity,
economic assistance
or
or borrowed
transnational corporations,
someone
else's
capacities
from
even
the
to
capacity
cannot
productivity,
faster.
under
most
or windfall resources,
be
the
basis
At best such things can only help
development.
ed or move
country's
are
of production that
factors
that gen-
appreciated
under
Selling oil or other finite extractive resources
high prices,
even
a
wealth
financial
that
It is
of
countries
developed
recognized
the expansion
productivity from
its
th-e
call
phenomenah.
entails
its own control.
to
to be
come
widely
are
to
sufficient
thought
Ultimately,
of
terms
advanced
or playing host
of
economic
real
a country get
real development is,
to
start-
some extent,
reliant development.
self
how
Thus,
as important
ation or
a
as'whAt is
carries
out
its
development program may be
contained in it. Whether it
involves
forest-
administration, or whether it promotes health or harvest,
where there are
disappear.
local
country
local resources they
should be
If a, conscious effort is not made
enterprise,national
managersrthey will not
organizations,
come into being.
used, or they will
to promote
indigenous
the use of
technicians
After billions of
and
dollars
2
and
will have been spent to build roads and bridges, schools
-and railways,
ports
offices,
lacking
road builders,
and what
construction
Africa
not,
companies,
be
still
will
technical experts,
and people with the managerial know-how to keep development going
serve
and make it
local
needs and interests.
seems to be terribly obvious, but it is the most
All this
neglected aspect not only of the
Arab Cooperation,
but by almost all the other development promotion
going on in Africa, and for that matter,
operations
Arab world as well. As we
Arab elites
likely to perpetuate the
are
throughout
ent peoples
They
while the
who come
the world will
and technical elites
real
the African and
to
and their descendfind themselves
are taking the
in
from the already developed world.
showpiece partnerships
After another
leisured figureheads,
with foreign peo-
-ranteed jobs in either statal,
no longer be
sustainable
and all the university graduates clamoring
cracies. By then
ten or
and the Arab world will have a well
ple and institutions providing the only assurance of
productivity,
easy way
and the experience belongs to those
technical work
entrenched aristocracy of
hope
the
dependency and underde-
continue
are all going on commission
twenty years of thisAfrica
bind the
in much of
to abuse.
The political
out.
are presently proceeding,
that now characterizes their economies,
velopment
exposed
development promoted by African-
parastatal
the debt burdens of the
for gua-
or even private bureau-
"Third World"
(there will
any pretense at calling it a "developing".world) will
underclasses to a low grade existence without realistic
of- eventual relief.
Grand opportunities will have been
lost.
What Use
Is
Now Being
Virtually
The
Arab Bank
sources have
the
in
And, as a
is
a
isted until
for
at
that
additional
now,
a
not
single
made
some
I will
involve
mented by local
agencies.
an African
or
firm-.+ The
two
-ed Uganda. A
Both
the donors and the
return.
is
For
as
now
scale
unless there
that has
ex-
will have been
a result.
it
is
not warranted.
large
them.
and
recipients. This
important
to note
Twentyseven
of
complex operations,
enterprises
to perform, at least
to
some
and
or-
degree.
The
seem amenable to being completely impleBut to date, despite a
near-connects,
the
late and falter-
ABEDA has
yet
to use
first two ABEDA financed projects that will
even a regional
only very recently,
enterprise
that existing African
competent
effort and one
African
co-finance
implementation
competitive
rather
functions
are
committed
Other Arab
that money,
more
existing pattern
remaining twelve projects
utilize
$930m to help
pattern of project
the
Africa has
$100m to these same projects,
from the
to which
ganizations
ing
Development in
internationa1fdevelopment-assistance community
least an
these projects
but have
the
fault is this?
a point
only
Economic
development projects in Africa.
expanded or
Whose
is
Enterprise?
result of the expenditure of all
change
created,
Local
committed an additional
rest of
will put
of
none.
$283m to thirtynine
and
Made
firm or expert in charge
in late 1978, and
textile mill will be
have been
approved
are both located in devastat-
implemented by an Egyptian firm
and an Arab agronomist will head a poultry project.
It does not disparage
Arab Technical Assistance
experts
for
European
or
the significant contributions of the
Fund to point out that substituting Arab
American
ones
does
not
advance
African
de-
velopment
as we are
existing resources
to expand
defining it here. Opportunities
or to help create them are being missed.
should clearly note that the ABEDA is not alone
We
in
this
failure.
The African Development Bank had almost as dismal a
record in
implementing the
first onehundredten of its
When I examined that record in 1976,
ed since
on its
time,
that
I
found that
only
projects.
and perhaps it has not changsix
of
the twentytwo
firms
roster(of over two hundred)that seemed to be African owned
Only one had a contract in the
had received any contract.
mentation
five were
The other
phase.
feasibility studies and the
been awarded before 1975,
like.
involved
in
imple-
pre-investment
None of these six contracts had
eight years after it began its
investment
operations.
The record
is also alarmingly poor among the development or-
iented institutions and programs
Nations.
A study done
that are
associated with the
in 1976 by the UNDP concerning Technical
Cooperation Among Developing Countries revealed that
ly
United
fivethousand firms and
institutions that are on
of approved bidders for contracts
among the near-
the
rosters
from the major UNDP financed
agencies only threehundrednineteen were from developing countries.
Of these only twentynine had actually received any contract, even
on a no-bid basis
(with a collective value of only
$lm) and only
four
(perhaps included among the twentynine) had won competitive
bids
(for a
value
All these are
countries
of only about $.5m).
capital sources
that are controlled by the
of the Third World.
J.G. Odero-Jowi Senior Consultant.
*UNDP Doc DP/229. 19 Nov. 1976.
"Technical Co-Operation Among Developing Countries"
5
Why
Have
Any
one
factors
are
of three
3)
realistic.
1.
Psychological:
recipients
the
izational
needed to
the
types
donors
Both the
the
that
of
and
and organ-
human
development projects
implement their
efficiently,and quickly,do not exist locally or withregion.
broader
the
to believe
conditioned
resources
competently,
in
are
and
procedural,
of
important
nonetheless.
but important
involved,
factors
least
the
is
This
2)
The
result.
this
could produce
psychological,
1)
types:
Organizations?
Local
of
Use
Little
factors
of
complex mix
a
of
Such
Made
Investors
Arab
Their bias is not one of placing no value, philosophically,
on
African
and
once
humiliation
conditions
again becoming
the political
the
ed world,
think
to
a number
expl6itation
similar
terms
of
about
However,
history.
technocratic
the
to share
they believe
the
officials of
ties
the
to
develop-
competent
to
level
and training is crucial to successfully
region,
these
companies
their projects,
technically trained people
and that if the qualified people
in-
companies will assign only
and experienced personnel
are inexperienced, that a very high
or within the
favor ones from the
that the international
all highly competent, that these
such African companies and
ed,
in
their own
of
local enterprises and to
dustrialized world;
highly
intrusion,
common
and share also a number of very basic beliefs that work
to disadvantage
are
even
tend
development agencies
them
subjects
and
elites
external
of
and Arab experience
the
Indeed,
resources.
local
up
and/or building
using
that
as exist
of formalized education
doing
the
tasks
involv-
and companies existed locally
officials would
already know about them.
K)
When I have
why
they
-to award more
fail
lending institutions
asked officials of these
tutions, after proclaiming the non-existance
they
often talk
of such resources
about the colonial complex that made Africans
and other ex-colonized people
have little
faith in their own in-
stitutions. ABEDA officials have even stated to me
great row that was made about
funds through
and insti-
experts
to local
contracts
that despite the
the Arabs not distributing their
the African Development Bank, many delegations of
African officials express to them a preference
that the
funds
not
ADB,which they'claim is too slow, too inefficient,
go through the
and too politicized.
An official of the Arab League mentioned to me
strong sentiments
among Arab as well as African
But they have
period.
exist at the
that
take a lesson
ing
colonial
institutions
Arab states should
said, who made many moderniz-
and achieved enough power to
alter the world bal-
acquired advancedtechnology by hiring individual
He
logists,
in the small
Perhaps the
from Mohammed Ali, he
innovations
ance.
little confidence
national level.
leaders to regain
remember the
They
control over their own resources.
that there are
not whole organizations.
Officials of the African Development Bank, like those
about
ABEDAhave
spoken to me
influences
too many decisions.
Dr. Ayari,
about
the
techno-
"an
at
inferiority complex" that still
President of ABEDA, has
also expressed concerns
attitudes and perspectives that dominate African develop-
ment programs, and perhaps
also his own institution, which may be
retarding progress toward genuine
development, but he relates this
more
to the
types
they are
the way
of projects
implemented.
he has stated to me,
what we
we
learned
that
in
"There
same
the
(Western)
education."
factories
cement
to the receivers,
and the like,
all of us
universities..
The
operate makes
perts
the
applying
leads
them to emphasize
complains Ayari, and "from the donors
are biased by what we consider as the
one idea is to look like a North
This
is a worldwide
fact. It
The way in which not only the Arab
but most international
on any grand scale.
implementers.
system, only
.the elite with whom
financing institutions
it difficult to utilize local
insistence on
whatsoever,"
is a fact."
Procedural Factors:
and the African,
than
they come from the same sources,
American city or a European city.
2.
rather
no innovation,
This orientation
mode of consumption today...the
is wrong, but it
is
supported
"we are reproducing the
are talking in Africa today,
with the
are
institutions and ex-
The most important aspect of this
is
"arms-length" relationships with the project
It is rare
that capital sources other than the
transnational companies themselves provide direct management
or ot'her technical services during the implementation phase.At
that point they emphasize monitoring and evaluation almost exThe contracts
clusively.
through
to implement the projects are
international competitive bidding.
to certify
awarded
The procedures used
the bidders never involve any outreach effort to iden-
.tify and certainly not to help create qualified competitors from
the
developing world. The
Bank, or the
lists of
firms approved by the World
Caisse Centrale, or U.S.A.I.D. or even Chase Manhat-
tan Bank are the
same as
for the UNDP,
the ADB or the ABEDA.
8
The preference to invest only in projects and not in more
general development programs may also bias
Program support would presumably
operations
against local
allow more
flexibility in carrying out
from the
firms.
documented experience of the
of their contracts
small--less
5%.
obstacle to the
sufficient volume of demand."
of the picture that the
and UNDP systems can
study concluded that
formation
vices in developing countries
by the
if they get
share of the market has been quite
It is noteworthy that the UNDP
est single
UNDP financed programs that
through non-competitive bidding,
In any case their
than
the program. It is clear
from developing countries will get almost all
local contractors
them at all.
the implementation
"the great-
and growth of consultancy ser-
is probably
the irregular and in-
It is precisely
lending agencies
influence with the
the demand side
such as the ABEDA, ADB
least amount of interference
industrialized world.
I.wish
to quote another passage
from the UNDP report because
it reveals what is both a cause and a result of
tunities
for contractors in
the
limited oppor-
the developing countries:
(Para.152) The international organizations normally use either
rosters...or directories of consulting organizations published
by professional associations or private firms to prepare a
"long list",pf firms which may provide the type of consultancy
services required for a specific assignment. Published directories are usually available for consulting organizations in deA roster of consulting organizations is the
veloped countries.
only means, for practical purposes, of identifying consultancy
services in developing countries. (Para 153) The data available
organizations
from seven agencies indicate that consulting
from developing countries account for only 6.6 per cent of a
total of 4,840 consulting organizations on the roster.. .The importance of being on the roster is far more important for a consulting organization of a developing country than for individual
experts or training institutions...No conscious and systematic
efforts have yet been made to identify consulting organizations
in developing countries by major international organizations."
9
I can add my personal experience to the evidence
that the
including
major internati-onal development finance organizations,
those
and by Africans, have not seriously at-
controlled by Arabs
tempted
to use
inquired
personally
and other
engineering
local
in
the
and other
and organizations
implementation functions
At
the World Bank there was
and the
can firms,
find no trouble
there was
the U.N.
listings of African and
that might be
of projects
relevant for
supported by
the usual array of directors
Bottin directory of French
firms.
One would
These also give more information on European
Africa than local ones.
The French language
numerous than the English ones,
de
and
l'Afrique noire,"
d'Afrique noire,"
but if you look inside
I know about are not
despite
the
firms
in
such as:
"Afri-
or "Annuaire
or "Societes et four-
or "Les 500 premieres societes
find only information about French
Firms
contain titles
d'outre-mer,"
of commerce
sources were more
: Ficher industriel de l'Afrique noire,"
des entreprises et organismes
nisseurs
and
countries. But
for non-Arab Africa only the telephone and a few chamber
que Industrie
of Ameri-
1966 Egyptian Stock Exchange Yearbook and a
few Commercial Directories of other Middle Eastern
annuals.
there.
these directories you
firms with but few exceptions.
Even for a country like Algeria,
socialist character of its economy, there
are
local
firms which go neglected in the Annuaire.
The situation at the United Nations is worse.
directories
the
these insitutions.
in getting information about British firms,
even the
I
firms.
Bank,
of the World
libraries
and the U.N.D.P. for directories
Arab enterprises
consulting
I found at the World Bank are there.
Few of the
There was-
10
and
Argentina on
in
conference
were
directory
that
gave
who
from the
results.
Ahmadou
Bello
would be
relevant,
and
Directory
governments
from which
midit.
to
attention
One
the principal
or
even
the
about
Nsukka
Ibadan,
as
hundreds
the
countries.
the
develop
to
low-ranking
judge
this
even how
Lagos
statal
or
Lagos)
(not even
to make
the
contact
and
the
one
at
would
that
businesses
of
universities
be
with the
services.
libraries would tell the inquirer anything
structure,
owners
major
The
to
can
the
confer-
the
as well.
several other
the
Development at
nothing about
capital
of
sources of technical services--
(not even
such
relevant,
Nothing in these
the
by
only
Ser-
of
something
not
issue
the
sponsored
But the
reveals
the
co-
technical
for
and
thousands of individuals who could provide
about
not
For Nigeria, to take one important example,
University
Nothing
Ibadan.)
subject.
around
sent
minimal
Management
for
Center
you will
course,
itself
are only two listings as
there
need
out by some ministry
filled
official
that
of
about
were
that
questionnaires
countries,
the participating
but
ence organizers
the
seriousness
of'
problem--lack
recognized
conference
that
for
prepared
vices
-
developing
among
operation
has
Nations
United
The
Trade
index itself.
or the
registry
find the
But
Africa.
Central
and
East
for
Index
Commercial
a
or
Firms,
of Manufacturing
Registry
Kenyan
a
is
there
that
discovers
one
directories
of
bibliography
this
In
Corporations.
Transnational
on
Center
U.N.
the
at
directories
of
directory
a
and staff
the
amount
of
and parastal
of
assets,
any of the private
organizations
the experience,
businesses,
in
the African
. 4.
If' an
can
American
inquire
more
with
information
potential
ABEDA.
company wants
the
on Nigerian
for
formal request for
3)
that
Factors
is
a
firms,
starter
than
available
of Realism:
business
The
Commerce and
you
can
find at
institutions
ural
the
the
bulk of
and industrial
ABEDA has
that
are
in the
should make
to
businessman.
an American
objective
investment has
projects
devoted about
explicitly
of
reality
of
a
gone
is
that
jects, etc.
rather
the
a
and
charact-
nature,
These types
comiponent
the
parts by
same picture
Development
Despite
of its
and even
scale.
loans
some of
involve some infrstructure
of projects
a single
can be
Bank.
I
infrastructCumulatively,
to projects
the
projects
work, such
stations for polder pro-
favor large, established firms,
a whole or in very
organization.
seen
in
examined the
projects in 1976 and found that the bulk
relate to public utilities,
the
region or its sub-re-
large
especially if the project is carried out as
African
the
into essentially
threefourths
this
agricultural sector
Much
or
such firms
fishing port developments and pumping
large
suppliers,
information oui
lack of any overall development plan for the
gions,
receive
the ADB
institutions do not favor local organizations.
can
it
development programe being supported by the Arab and Afri-
er of the
as
abroad,
importing agents,
these
a copy of the
readily
do
Department of
partners, whatever,
Perhaps
people
U.S.
to
the
experience
first
of
the
onehundredten
involved projects that
such as power and telecommunications,
and transport and other basic
facilities. Many of
these projects
were supervised by government ministries, but all of them, with but
12
one
exception
to African
awarded
had been
implemented by
was
firms
or
contracts
Five
firms.
non-African
for pre-investment
individuals
functions.
It
is
not
any existing
clear that
African
firm could
have
han-
dled any of the public utility or transport projects in their entirety.
The
whole
African
to
an
African
firm
went
It does
project.
that
firms
installation
of
can
seem
handle
telephone
likely
portions
and'power
that
of
there
a number
are
road projects, or
lines.
African
firms
functions in each of the
probably performed some of the
ber processing
and
A
lines, the
marketing,
number of
by African
al
have
following
projects
tions;
rice,
all
subh as
There were
as:
dairy
a
feedlot
number
are
in
not that
situation is not
not
"I
aware
of.
operations
and various
development,
of projects
Ayari,
in
entirely
horticulturthe
ADB pipe-
amenable to African contractshorticultural
cotton,
for cocoa,
opera-
sugar,
irrigation schemes.
something the
Dr.
handled
been
farming and processing;
palm, maize, salt;
of 1978:
at
organizations,
such
telecommu-
development programs,etc.
projects might have
agricultural
field and processing
This
tions
tourist
1976 that would also seem to be
line in
power and
tim-
digging and widening of canals, paper milling
textile plants,
projects etc.
of
i'nstallation
and marketing,
of
the
type of projects which the ADB had already supported by 1976:
nication
a
to
road builder who may have been given only a portion of
Senegalese
the
contract awarded
one
for
officials of these
example,
told me
institu-
in Nov.
fully agree with you that we have not been endeavoring
seeing
much;
can expertise
I
in
what the
African
dont want to
certain
expertise
exaggrate
sophisticated
the
areas
can
offer
actual
us.
status
Probably
of
of production.
AfriBut,
nevertheless, you have medium size
in Africa
ready,
totally
a
but
of African
list
among
.. I
the best.
or the
somebody
to push
has
all
in
contractors
us,
for
am not asking them to be
better
reason I shouldn't do it."
He
up
to build
sure,
.They
fields..
Americans...but deliver good services,
there is no
I for one am ready,
to try to act.
today who would like
and enterprises
corporations
will
have to be
than
the Germans
seriously managed...
felt that a number of
countries already offered a reasonably developed market for finding
but he
such capabilities,
also asked a crucial question which I
"Why should.. .an Arab banker have to go
in turn pass on:
fetch
in Africa? Why are the Africans not coming to us themselves?"
What Evidence Is There That African Enterprises Can Be
They Do Not Already Exist?
Most of the
are
functions of the
run by Africans.
So too are
independent African governments
the operations of the
sub-regional and national development banks.
for the Arab states, the Arab League(s)
and banking
institutuions
But
established.
that
Arab
it was the established
states
to
these- functions when
regional,
The same is
have
true
investing
and the various
recently
fairly
wisdom of the
administrations that neither Africans nor even Arabs
to handle
Created If
colonial
were
ready
the colonial governments were
forced
relinquish their control.
Nothing in the prevailing assumptions of
prepared one
to believe
Canal, Algerians
the Western world
that Egyptians could operate
the
Suez
could establish and successfully operate SONATRACH,
that Kuwaitis could establish a Development Fund that would match
the competence of the World Bank, or that Nigerians
could run
14
a
Insurance Company
National
Tanzanian
prevailing opinion
The
Corporation.
are not
that Afro-Americans
debates.
of
None
these
International businesses
But
these
the
still a
positions
that
pace
had
have
no
virtually
has
financial
had
to
senior and managerial
posi-
evident that
access
although,
it,
to be
continued
sure,
responsibility.
started
with
there
But
functions.
the
In
were
the
general,
the positions
dealing
and come last of all
relations,
relations or public
with personnel
to control
became
also
"window dressing" appointments to high level
indigenization
of
it
required
lot of
in Africa have
operating
so when
did
they
countries
and are
pattern
if
have happened
forced to bring Africans into more
tions.
to
would
things
still
foreign policy
in
to participate
ready
is
States
United
the
a
Development
or National
in
run
could
Tanzanians
forced.
not been
be
that
Petroleum Company, or
Nigerian
point
is
that
most
of
the
Africans who have been put into positions of real responsibility
were
yet
thought by
ready for
the
it.
international
businesses
in. question
The
actually doing the
I direct
Business
fiot
made
important pre-
job.
for
Management
M.I.T. has
at
be
Yet the performance has been good. Some train-
ing and preparation is necessary, of course, but the
paration is
to
Economic
a number
of
Development
studies
Project which
of African business
1.
and management
in
development.
Our
study
of management development
Kenya found-that Africans made rapid progress where
mination
existed that they
mid-1960s,
should do
so.
for example, almost all the
were Asians.
It was
Until
the
the deter-
period of
the
clerks in Kenyan banks
said that Africans did not have the mentality
15
for
rather simple
this
of banks.
function,
But pressures
the. government
but one
for African
crucial
to the success
advancement convinced both
and the banks that Asians should not be given a
monopoly on these
and Africans were found to be
functions,
able
to perform them well. African advancement in the banks then went
Barclays had already operated a training school in Nairobi
ahead.
The
which it then expanded to accomodate African candidates.
National Grindlays Bank aggressively brought in African Junior
Management Cadets
through a collaboration with the
local high
schools.
Africans moved ahead in other business sectors
Mombasa Oil
Refinery attained
full Kenyanization at
supervisory levels within a short period of time.
for
the on-site
Kenya had ac-
of the holding of Cal-
quired control through nationalizing some
Tex, Shell-BP and Esso.
as well. The
The General Manager remained expatriate
some time, but he saw fit to declare that the Kenyan take-
over had been
"very cordial" and that those
refinery are all Africans.
they are
We
"who actually
could blow up the place!
They
run the
But,
competent."
found that the career paths of Kenyan senior managers,
those holding the
top positions of General Manager,
Managing Direct-
or or Departmental Heads, could learn to handle these
ties as quickly as expatriatesfif not more
were only slightly olderthan
instead of
35,
on the average.
younger than their expatriate
the
junior
quickly.
responsbiliThese people
level managers--40 years
This tends to be about ten years
counterparts
and than simil'ar African
managers in other parts of Africa,such as Nigeria.
All
the Africans
16
in our Kenyan
study were
the first generation of
such.positions. Almost all had been
to occupy
their families
to university but
had not necessarily trained for a business career. Generally,
acquired their managerial experience
Africans have
in government
administration which does not always or even often impart entreprenurial
instincts.
for the natural
and Kenya,
entreprenurial orientations of their populations,
like Nigeria, is one
of these.
Kenyan experience also exhibits
"colonial
example,
complex" we have
was
started
ial
Development
some
in
in
and Commerc-
expatriate
expatriate who never tells his
n't care
less.
top
General
from other firms."
and other African managerssharply criticized
international
manage-
The Kenyan
told us, "these expatriates were rejects
programs that the
effort,
Subsequently its
management was Kenyanized and it prospered.
He,
KENATCO, for
a cooperative
bu't it brought
ment under which the company floundered.
Manager
The
Industrial
from the parastatal
Corporation,
of the problems of the
already mentioned.
by Kenyan drivers
support
financial
with
are more noted than others
Some countries
firms established.
the training
"You get an
junior anything. Expatriates
They left you to survive or perish."
could-
Under the
Kenyan manager of KENATCO a vigorous training program was
success-
ful.
- Another firm which demonstrates
in'African managers at a rapid pace
is noted
is the Bata Shoe
Company which
throughout Africa, indeed much of the developing world,
for being one of the
This
the possibility of bringing
real leaders in indigenizing their operations.
company essentially trained its managers and wholesale
tors on the
job.
opera-
17
The
formal
But
craftsmen.
training
whose
a
a
for
success
some
of
also
schooling
those
Somerset
and
is
absolutely
not
small
A
study
operations-. About
other business
their business.
or
a
larger
of
African
that
small
proportion,
type
scale
artisinal
the
continent
that there was
entrepreneurs
develop
little
into
respect there is
some
can find almost everywhere African business"...one
men who have started with extremely modest means and
have managed, largely by dint of their own efforts,to
develop enterprises which, though small in absolute
sense, are still rather impressive by comparison with
Undoubtedly the percentage
their modest beginnings.
of Africans already engaged in business that have a real
capacity for development into entrepreneurs capable of
operating on a larger scale and in accordance with more
If effective programs for
modern methods is very small.
promoting African private enterprise are to be developed,
the necessary means for singling out the relatively
small percentage of businessmen capable of development
must be
This
found."
3.
study noted that in Nigeria a survey done
that in Lagos alone
that employed over ten people,
educational
in 1965
showed
there were nearly threehundred locally owned
onehundred workers, and
The
those
career were
This
entrepreneurship throughout
industrial operations, even in this
hope:
firms
of
third
no
who had no training.
published in 1971 by the World Bank did note
evidence
businesses
businessmen who had
about a third, also held up for those running industrial
operations
that
indicates
rather
These were
third of
successful
had been
make
to
able
also
about
running
training were
formal
success.2
for business
necessary
and
even other
business or
Marris
Kenyan businessmen
about
1965
in
published
Businessmen by
African
study
twentytwo that employed over
sixty that had capital
assets over LN20th.
level of this group of businessmen was quite low--
18
only
40%
about
concentrated in
firms
The
Nigerians
be
to
local
are
over EN
in
and
in
the Norther
Region
less developed regions of
Bank
study
found
3,000 workers
undertake
are
In
two
time.
used by
these
firms
had turnover
has been
firms
of between
author of
that had employed
The,se were
as
clearly
the
many
able
World
as
to
construction.
have made
development
the
which
and
contracts of
out
Ibadan the
of
contractors
at one
alone,
state
couitry, there were
the
contractors
city
the
road and bridge
of
None
2m.
federal,
the
could carry
that
Six Nigerian
LN
and
firms
There are
con.struction.
contractors
25,000.
L500,000
in
of
eleven construction
making, printing,
like.
thousands
registers;
one of the
the
level.
secondary
the
sawmilling,furniture
very active
also
beyond
or
rubber processing and
garment making,
said
education at
any
had
entry
into
the
registries
institutions of
finance
concern
that
to
uS.
What
Is
To Be
Those
Done?
genuinely interested
of Africa
will
strenuous
efforts
stitutions
have
that
One needed
to
undertake
and
carry out
all
phases
of development projects.
accessible
even
at the
local
undertaking
to create
of
indigenous
of
in-
development projects.
to compile
a list
useful in performing the
This
that can be accomplished quickly because
easily
developihent
the
step in this direction would be
of existing enterprises that could be
functions
the
promote
locate and perhaps
to
can
in promoting
level
will not
be
something
the basic data is not
but
a
start can
be
made.
19
A
would
to
help
firms
to
for the
be
or more
general-management-service
is
This
utilized.
ment
one
the
be made
to
firm of
this
The
type!
related African
market possibilities
some
ial
of
starting point
may be
to
them
and to
into production
to
in order
assess the
a conferenc-
host
other
to
opportunity
them the
to
communicate
federate
and
larger capacity
units of
owned
manufacturing and
engineering,
should
it
and
Development Bank,
an African
firms
owned
Develop-
African
launch
construction,
of existing
the
fully
not be
may
Help to
as well.
ABEDA
to
international
the
their skills
I have made
a proposal
subcontractors,
group
from
and technicians
the East African
to
and
Bank
to
umbrella organization
an
from government posts where
and
firms
themselves
institutions
trained managers
attract
to
finance
could be
that
activity
possible
immediately
development
into being
bring
more
but
reaching,
far
more
territor-
scope.
The
could
organizational
vary
a
consideralby--from
Development Banks
mental
form of a
to an
general-management-services
subsidiary
independent
of
bne
company with
or
more
manageral responsibility
fields.
It would have to have
business administration,
fields.
ists, for
for project
Its
the
govern-
or without
shareholding from one or more African countries.
offered by such a firm would include general,
of
firm
The services
that is overall,
implementation
in technical
staff trained and experienced in
law, accounting, and specific engineering
own permanent staff would most likely best be
general-
the most part, with more specialized people and subcon-
tractors brought
in as needed.
The firm would have the
responsibility for proper project performance that the
same
full
interna-
20
tional
firms have--to coordinate
to handle
and consultants,
the
suppliers,
activities of
to carry out financial
trol
and contract compliance operations,
trol
and the
such a
satisfaction of all
legal requirements.
firm may build up its own direct construction
to
In time
and/or other
start out with such.
firm could enter into partnership arrangements with interna-
tional
firms
to
fill out its
be to develop its
ly do
capability, but the objective would
own capabili-ties as broadly as
it can competitive-
so.
The advantage
that such a firm would have over the existing
situation derives not only from the value of having
institutions
are
con-
quality con-
to assure
engineering capabilities if it is unable
The
subcontractors
directly in control of project
not bound to
cies.
Such a
the constraints
firm would also be
implementation that
inherrent in government bureaucrato African technicians
appealing
who are already trained and experienced
trained, who would find it more
indigenous
,
or those
currently- being
attractive to work in an
tion that operates in many localities, and that is not
to local political pressures,as
positions
often are.
1)
tify existing
ed by
so subject
the government and parastatal
The role of the ABEDA and other development
would be:
institu-
determine the market potential
firms
finance institutions
for such a
firm, 2)iden-
and communicate to them the opportunities
their combination in this
fashion,
afford-
3) provide the necessary
working capital to get them started, and 4)
provide the initial
market they need.
In any
case,
these institutions
the need to build up
should begin
to take seriously
indigenous project implementation capacities.
End Notes
1.
2.
The following are monographs and papers of the Business
Management for Economic Development Project, M.I.T.
a.
International Investment and Transfer
Willard R. Johnson.
of Power: Perspectives on Africanization of Management. 1974
b.
Willard R. Johnson. Training
1974
Economic Development.
c.
Willard R. Johnson. The Financial Character and Performance
1976
of The Commonwealth Development Corporation.
d.
W.R.Johnson and M.M. Toby. The Commonwealth Development Corporation's Contribution to Housing Development: A Case Study
1975.
From Kenya.
e.
Management Development
James G. Karuga.
East Africa. 1972.
f.
The Transfer of Management Technology
Carol A. Bloomberg.
1974.
in The Commonwealth Development Corporation.
Business
Managers
to
Promote
and Business
In
Businessmen: A Study
and Anthony Somerset. African
Marris
Peter
of Entrepreneurship and Development in Kenya. London: Routledge
&
Kegan Paul. 1971.
3.
John C. de Wilde. The Development of African Private Enterprise.
International Bank for Reconstruction and Devel(in two volumes)
opment.
October 1971.