Fundamentals over short term profits

I fortunately or unfortunately was travelling in South Africa last Thanksgiving. Unfortunately I was not home to enjoy the time with my family, but fortunately I could not participate in the binge of Black Friday shopping. The most interesting thing while in South Africa, is that they too now have Black Friday shopping specials and activities, no Thanksgiving turkey, football, but the shopping!

It is amazing how living in this global community and internet age, how cultures and traditions are engulfing the borders and barriers that once stood in place to segregate different countries, people groups and cultural beliefs. South Africa and other parts of the world have embraced the shopping and retail therapy option for the "good of the economy", but at what cost?

Very few people stop to think that in order for them to participate in the shopping, that it requires other people to be there in service of them. So as much as Black Friday offers great bargains and opportunities for the shoppers, have you ever stopped to think about the burden this puts onto other people and families?

In the news this week has been a retail company who decided to buck the trend of opening earlier and earlier, or maybe not even closing for a good old traditional family meal day. REI decided that they are not going to do any Black Friday shopping this year or for the future, and I have to say congratulations! Business done right, does not put profits above the good of people, and I am glad to see a company make a stand and allow their staff to take one of the few days available to develop the relationships in their family and community, knowing that the customers will still be there the day following Black Friday!

Entrepeneurial Africa!

A few years ago I was excited to visit Zimbabwe, for some business. I was heading to Harare, the capital and it magically coincided with the last elections to be held there.

I have long time family friends that had remained in the country while so many were fleeing from the governments crack down and forced removal from farms etc. It was really insightful to have a local business owner drive me around for the week, allowing me to see parts of the city that a normal business visitor or tourist would not be exposed to.

It was very sad to see as I disembarked from the plane, old rusty and forgotten planes off the side of the runways, and this theme continued as we drove into town to the hotel I was staying at. Everywhere I looked I saw remnants of what must have been glorious times. As the economy of Zimbabwe crashed  and hit ground bottom, in the early years of the 21st century, the government either did not have the funds or had not allocated the funds to maintain and continue investing into the infrastructure. This has left Zimbabwe with infrastructure crumbling and fading away.

I recall thinking to myself  as we drove around the city, "Even if I had the money to buy a luxurious car in Zimbabwe, I wouldn't waste my money!" The number of pot holes and condition of the roads, ruins every car, what was the point of ruining a $50,000 car when the ride was just as bumpy as in a $10,000 car.

However, as much as the city of Harare and country of Zimbabwe were not engulfed in luxurious infrastructure, the country and economy continued to tick, grow and create wealth for people within the communities. One of my fundamental business beliefs is; "Where there are people, there is an economy!"  The people of Zimbabwe embraced a more entrepreneurial economy where less than 10% of the population were employed in formal employment structures. The rest of the economy traded and bartered their goods and services, making a living, paying their bills, building an economy. I left Zimbabwe thinking, what if the government did more to assist these entrepreneurs, where could the economy grow to? What role and activities should the government undertake to support entrepreneurs?

Technology has changed your life!

I live in an area of Pennsylvania very close to the Amish farms and our visitors always marvel at and enjoy driving out to see them living life oblivious to the first world amenities around them. They choose to live a more basic and simple life, but many people in this world don't have the choice!

Technology has changed our lives so much! Can you imagine landing on an island with nothing, and no way to access the outside world? If it was just you and nature, you would very quickly come to understand how technology, no matter how small or somewhat insignificant, has changed your life.

I was explaining to someone just yesterday an example of something that some people in the world view as a right, and not a development of technology. This technology, as some what basic and insignificant to most people in the western communities, has made huge strides in impacting our way of life.

"Technology reduces tasks to the most minimal amount of time, and time is our most valuable and priceless commodity."

Think about taking a shower, Most of us in the western communities expect this activity to happen on a daily basis and take no longer than 5mins. We get ready  and head to the shower, turn on the tap and adjust the temperature to the desired level. All in all it is very painless and a quick activity that makes a daily option very painless and easy to do.

Now lets see what some people in rural parts of Africa would have to do in order to achieve the same thing that took you 5 minutes. They would first need to head down to the nearest water source, lake river etc. Lets just say that it is a 30 minute walk to the water and the same back. We won't add in any time for  the actual water collection, so an hour later they are back home, sweaty and certainly ready for a shower. Your shower takes 5 minutes because you have an endless supply of hot and cold water, theirs only lasts 2 minutes, as that is all the water that they were able to bring back home in one trip.

A shower in rural Africa takes 1 hour 2 minutes, compared to the 5 minutes it takes you. If taking a shower was this much effort for you, would it still be a daily activity?

The simple expected technology of water distribution and water heating, has allowed you an extra 57 minutes to be productive. The lack of technology and infrastructure in Africa, causes on a daily basis a great divide between the African developing economies and the western developed economies.

What other technologies do you take for advantage that gives you an advantage over the developing world daily?

Growth of economies

The United States grew their economy after World War 2 through various infrastructural developments, building roads, bridges, tunnels and entire cities. The infrastructural development played a major role in the growth of the economy by creating jobs, tax revenue, but more importantly creating an infrastructure that the future economy and generations could stand upon and build upon.

The question for the African governments, is how and what can they do to kick start the economies, and infrastructure for the countries? With a young average population throughout Africa, Africa has the workforce eager to get involved in the projects that will lead to employment and a brighter future.

When I met with a new airline that was looking to operate short range national and local flights within the central African region.  One of their interesting comments were about his part of Africa with all the mountains and rugged terrain. Building roads would not only be very expensive but difficult and time consuming. Operating aircrafts opposed to buses and trucks in their opinion would create more accessibility and at much lower upfront costs and hurdles.

This conversation got me to think how African governments look into investing into an infrastructure that will position the economies for job growth but an infrastructure that will position the continent for the future.

Snowballs and momentum

As we in the northern hemisphere transition through Autumn into the colder winter months, I am reminiscent of the warmer, sunny days of the summer, longing that the cold dark days fly by quickly. Last winter, we had plenty of snow and I did manage to have one day of rolling snowballs with the result being my family's best snowman ever.

As you roll a snow ball for the snow man, starting with a small clump of snow it grows in size as you roll it along. The snow clutches on to additional snow as it rolls over and past increasing in size and weight as you continue to roll it. Standing downhill from one of these can be catastrophic!

I can not help but think of the similarities in business practices and the principles in place with physics. I believe that successful and sustainable business practice includes the understanding and  principles keeping in mind that the major principle in place is "reaping what you sow".

A principle of Momentum-
In the same way as rolling snow balls will gather snow, so a growing business will continue with the momentum to grow. The downside is that companies can easily find themselves contracting and the same principle  of momentum seems to be like a noose closing round the company more and more.

I believe that at the moment that the global economies are facing consequences and fighting the unwinding momentum triggered by the Chinese slowdown. Africa as a developing market is adversely affected and grouped together with the Chinese, having many international investors pulling away from their investments. With Africa's market so heavily invested into the resources and minerals sector, the bump in China's road has left the economies scrambling, kick starting the downward roll of this economic snowball.

All is not lost, especially if the momentum is tackled early, reversing the shift and momentum. We are seeing more and more the US and European central banks involved in this activity, but each business and person in our global economy can play their part in restricting the downward movement and reinforcing the growth. You can see from this article publish in the Star newspaper today, that the research is done with people that choose their view.

In our daily roles, within the global economies, are your actions and decisions impacting the growth or contraction in your communities economy. Your actions ripple throughout the global economy, so act in a way that will reverse the downhill slide for the path of growth.

New Africans

In some communications that I had over the weekend with some potential business partners from Africa, I was reminded that I was dealing with the new African's. This point was being raised as a means to confirm that the world that for so long has taken advantage of the continent reaping huge profits from the exploitation of the continents resources and people.

I will be the first to show the evidence that Africa has been exploited. I and my company are working hard to move investments into the continent to beneficiate from the resources at the disposal of the people of Africa. For too long, Africa has shipped away the profits to China and the West, it is now definitely the time for Africa to create the infrastructure and invest into the means to create more jobs and more profits for the local companies.

Having said this, I am concerned that these "New African's" will take the page of the western book of history. For Africa to be "new", they need to have a "new" mindset and approach to business, one that is balanced and beneficial to the communities that they are found in. A mindset that embraces the environment, the stability of the economy and the futures of the African children!

If there is a time and place for this to be done, now is the "New African" time! With people that are so community focused, I look forward to seeing how they can look within their communities to build a great economy.

What investments in Africa do you think will be beneficial to growing companies, jobs and communities?

Democracy in Africa

I recently read an article in the New York Times where they discussed the health and stability of the democracy in South Africa. South Africa has had various struggles since the 1994 elections where Nelson Mandela became the first Black elect president of the country.

I recall always thinking how South Africa could be the shinning light for the continent, right at the bottom, burning with a flame to the top of the continent with a message of tolerance, unity and as Mr. Mandela put it, with no person oppressing the other, no matter the race, religion or background.

It although seemed to be a disappointing dream, with the following presidents openly sitting at the feet of the various dictators of the continent, learning the skills and art of manipulation and self empowerment.

But as the African Renaissance continues to build momentum, the flames are fanned by the likes of yet another great leader in Africa, President Muhammadu Buhari of Nigeria.  Nigeria is the largest economy in Africa with a population of 180 million people. My company does business in Nigeria with one of our board members born and raised in Nigeria, and I always feel for the people of the country since their whole reputation was so tainted by the 402 scams of a few years ago.

President Buhari though, seems to be winning the approval and respect of the people of Africa and the world, with nothing but honesty and treating others as he would have them treat him! This is part of the continued effort to place Africa firmly in the global economy, not to be patronized but respected with their seat at the table.

African's tend to be the most pleasant and joyful people, have you met one that made you ponder why you are not quite so jovial?

Withdraw from developing markets

Logical investing says that when everyone else is running we should run too! This is what causes such large swings in the stock markets. I have often heard trainers say that you should be happy to sit in the middle of the market, not being the first to enter or exit the market, but ahead of the majority.

Not that I am advising or giving investment advice, but you can see how the shaky commodities and Chinese  markets have shaken the US and European markets to the point of selling off and waiting out for the stormy waters to die down.

"Fortune favors the Brave" not the crazy! But as the western investors leave the developing world and Africa in drives for better times, investors that setup the long term infrastructure will reap the rewards. I am not condoning crazy investment, however as I have learnt from being involved in the African economy, where there are people there is an economy.

One of the attractions to Silicon Valley is the leadership and their approach to taking on risks, read this article about the likes on Elon Musk.

Leadership of Silicon Valley

If you were the leader of a company that could benefit from long term investment in Africa, would you be running away or to the continent right now?

Africa - Business not Charity

I am often met by a broad smile from people and comment to the tune of "Good for you!" when I discuss my businesses activities in Africa. Although once the penny hits, they then ask how we are able to fund the business and outreach?

The perception by so many within the US and western communities is that Africa is a place that you go to with your charitable gifts or assistance. "The poor African's!"

For many years it has been said that Africa has the greatest mineral and resource deposits in the globe, so then why do we view Africa as the poorest continent, when in fact they are the wealthiest continent and people in the world?

I can assure you that Africa is not full of poor people, the wealthiest African is a Nigerian, Mr. Aliko Dangote with a net value of $25 Billion. This places him as one of the top 25 wealthiest people in the world above the likes of George Soros, Jack Ma (Alibaba) and Carl Icahn.

Africa similar to most the world today has a great divide between the haves and have not's, but the questions has to be asked, Why? My skeptical brain has to assume that Africa has been kept in its place to maintain the wealth of the Western communities, since they benefit so much more from a continent that can be exploited!

This is not a rant about Africa being put into the debt of the world, but how the world should start to view Africa as a serious economy that can offer a great marketplace to sell its products and an excellent source for labor and creativity for products.

Trade with Africa between and the US only equals $10 Billion opposed to $50 Billion in aid. This underscores the perception that Africa is not a source of business partnerships opposed to Charity partnerships! 

Trade, the glue holding our economies together!

Trade has created cities, countries and territories due to the fact that people need food to eat, clothes to wear and tools to make new things. We can not all build, make or do all things, we don't have the time in the day to do this (as the od adage says, time is money!) So that means that we have trade or purchase other services or products in order to have the quality of life that we want.

I SO enjoy the study of macro economics and how we the people the world are dependent on each other! Imagine for a minute what would happen if the person that removes your trash decided to not work for a week, we would all very clearly see the impact in the street of the excess trash. Well in the same way our economy is dependent on traders, people who can find products and move them to a place that the communities can find them. Traders are people who know how to find a deal and advantage and exploit it, better than other people in the community! Without them, our houses would be very empty and you would only be able to source products from those made in your nearby community.

Trading has become so much more specialized in the world we live today, with traders being experts in their fields and industry sectors. A trader of fruits, can not trade textiles with you, even though the fundamentals of buying and selling remain the same, the knowledge and expertise of the products needs to adjust.

Really good traders and trading companies also have the ability to foresee the markets needs and demands, preparing the stock for these demands before they happen. They do their homework and travel  the world to find that right product.

Do you know a trader? What would be missing from your house if they didn't make their goods available to where you could find them?