In the previous part of these series, I left off at where our elites do not trust African banks or their fellow Africans hence sending their loot abroad. In this piece, I endeavour to respond to readers’ request to expound on how the missing ingredient of the culture (secrecy or self space) causes capital flight from Africa.
Remember, in part-I, I talked about how we (Africans) have succumbed to culture-blind assumptions and prescriptions of leadership that befit the colonisers’ culture rather than the virtues of our culture.
This view is echoed by Matsiko Kahunga. Writing in Uganda’s daily Monitor, Matsiko argues that one explanation to the persistent corruption in his native Uganda (and Africa) is anthropological (culture). “We left Africa, but we never reached Europe or the Middle- East, the cradles of our model worlds. We were uprooted but were planted nowhere”.
This perspective suggests that we uprooted the virtues of our culture of self space to mimic the colonisers’ culture of general space so as to fit in the open global village. I am not against western culture but urge Africans to treat with a pinch of salt the promises that demonising African cultural virtues such as self space as vices or un-transparent or corrupt behaviour.
But as I said in previous articles, developed countries were built by corrupt robber barons who used exploitative practices to amass their wealth, not saints.
Back to the topic of the day; capital flight Africa. There are many different reasons for capital flight, but they all point to one idea: capital flight occurs when rich people and/or government officials move their [illicit] financial assets out of a country in order to avoid the risk of political instability or government power that would confiscate wealth or tax it, or regulate it heavily.
Capital flight can also be caused by private businesses and rich individuals who don’t like government policies or simply because they don’t want the publicity take their money out of the country secretly.
To understand the role of culture in capital flight from Africa, let’s look, for example, at the current banking system in contrast to the traditional African saving system vis-a-vis your expectation of the secrecy/confidentiality of your bank account information or information about your wealth.
Traditionally, wealth worth saving kept in pots and buried in the ground, thus technically putting it away from any possibility of exposure to the general space or the public. Culturally speaking, what we [Africans] need and expect from a bank is ever better secrecy of information about personal wealth, not confidentiality breaches in humano-technical systems, by which I mean the bank teller who operates computer systems or the state agents who, strictly speaking, intrude personal bank account records under the pretext that they are fighting corruption.
Let’s face the reality. We often hear gossip about people’s wealth, bank accounts or salary information. If you don’t hear these gossips, you probably live on mars. Just the other day I was in one of the coffee shops and I overheard a bank teller (with a budge hanging around the neck) gossiping about a company that has millions of dollars sitting on its account.
How else would one explain these confidentiality breaches if not by the humano-technical deficiency of systems embedded in our banking institutions?
Literature on banking in post-colonial Africa avoid dealing with cultural traditions underlying the lack of confidence in African financial institutions, instead popularising the myth that poor savings culture as the reason why most people in rural-Africa do not have bank accounts - a contributing factor to the difficulties facing local banks in Africa.
A study on the challenges in Banking in sub-saharan Africa, by Pascaline Dupas, Associate Professor at Stanford University’s, concluded that the main reason people do not have bank account was “they do not trust the bank”.
In light of lack of trust and confidentiality breaches, strictly speaking, one would perhaps understand why our elites continue to send their wealth [capital] abroad, especially if the means through which it was obtained was questionable.
I don’t condone corruption, in fact, I wish it could be eradicated; however, as I have said repeatedly in this series, I don’t foresee the African leadership turned an all-saints overnight.
Thus, tackling capital flight can never be achieved for as long as the deficiencies in humano-technical systems in financial institutions still exist, as long as self space is curtailed. This, in my view, is the primary reason for the soaring capital flight, why development will continue to elude us, why Africa will languish for a long time - in spite of the brilliant managers, technocrats, economic planners in and out of government with multiple degrees to their name, the mineral riches that lie beneath our fertile soil.
So, what can Africa do to deal with capital flight? Well, as a Kinyarwanda proverb goes, “ibuye ryabonetse ntiryica isuka” whose literal translation means, “‘the stone unearthed will not damage your hoe anymore.” Also, Charles Kettering, the famed inventor and head of research for General Motors (GM), said “a problem well defined is a problem half-solved.” Here, then, are two thinking quotas that could potentially contribute to reducing capital flight from and possibly capital repatriation to Africa.
First and foremost, financial institutions must understand our culture and build systems that respond to the needs and cultural expectations of African people. We will then shape our institutions according to our aspirations.
Conversely, African governments should expand the right to self space by rethinking the specific policies that radically curtail the right to self space under the pretext of fighting against vices.
Economic growth starts with the formation of capital. This is what happened in Japan, Korea, and Taiwan which developed very fast they did not let their money leak out. Africa needs a cultural renaissance, in fact, which can only be enriching with, not a departure from the rest of the world.
If you’ve read these series this far, you must be interested in what goes on in African leadership paradigm, and I would encourage you to watch this space. As Albert Einstein said, “If I were given one hour to save the world, I would spend 59 minutes defining the problem and one minute solving it”, I have defined the problem as clearly and comprehensively as possible, decided on the problem-solving question and set the thinking quotas.
In the next series, I will expound on thinking quotas.
The writer is a Doctor of Business Administration and researcher at the prestigious Robert Gordon University, Aberdeen, Scotland (UK). His research interests fall in the areas of leadership and culture.