African, stay home

28 Oct, 2022 - 00:10 0 Views
African, stay home Cities such as Dubai and New York attract the world’s capital in all its forms

eBusiness Weekly

Clifford Shambare

In this world, there is an old paradox; that the most travelled race on earth is the one that has established the most permanent home (s), of all human races on the same planet so far. This is the Caucasian race.

That said, this is the kind of assertion can easily be misunderstood. But think about it; most of the biggest and oldest cities in the world that this race has built since the earliest days of civilisation are still inhabited today. These are the cities of Rome, Jerusalem, London, and Athens, among others.

Even though in some cases such as that of London, there are several layers of buildings representing some historical eras dating back to the Roman Empire, the same city still remains on the site where it was first built.

By comparison, of the oldest cities in Africa — that is, Thebes, Timbuktu and Carthage — only ruins remain.

Within the aforementioned first world cities, there are buildings that are still in use today. Some of the most famous of these are the Vatican and the British Parliament buildings. The amount of money that regularly goes into the maintenance of that building is staggering. For example, a cool £127 million was spent for this purpose in 2020.

Still in the same country, the British have even gone on to repair or bring back to life, some royal buildings of note, at a great cost. Two such buildings are the Balmoral and the Windsor castles. The

Norta Dame Cathedral building in France that was burnt on April 15/16, 2019 is another.

The repair of this building that was started in 2020, was estimated to be finished by 2024 at an estimated cost of US$900 million. So why spend so much money maintaining such buildings, one may ask? Here we can only make an educated guess that it is because of national pride and the preservation of history.

However, there are other more recent appealing reasons for this attitude by the owners of such structures.

Today most of these cities act as tourist attractions, thus earning their countries considerable sums of revenue.

In the same vein, cities such as London have developed into veritable centres of the financial trade.

Moreover, this city has been the travel hub of the world ever since air travel started around the beginning of the 18th century.

Not only that; because of the systems that have been built in that city over the period that it has been in existence —that is merchant banks, investment companies, manufacturing industries, reputable universities, art theatres, sports stadia and so forth—even though its power to attract wealth has been waning over the years — London still attracts more wealth in money and precious minerals than at its foundation.

Interestingly, as far as money is concerned London now attracts both clean and dirty money because it has the systems and the aura for it.

So, because of all these activities that happen in them, all these cities act as financial magnets that bring wealth — that includes money — into their countries.

Then there are other no less important cities that are younger than the aforementioned but are nonetheless, just as important in the same respects.

These are such cities as New York, Hong Kong, Tokyo and Beijing, among the main ones. All these cities attract the world’s capital in all its forms.

Cities such as Dubai and New York attract the world’s capital in all its forms

Then there are newer cities such as Dubai, that have been deliberately founded to act as trade centres that also attract the same wealth.

In the case of Dubai, this strategy ensures that when petroleum money stops flowing, this desert Arab region continues to thrive economically.

Because of these magnetic qualities, these cities attract hordes of the African elite who transfer their money and precious minerals — mainly gold and diamonds, there. On the other hand, according to the Africa Forbes Magazine 11th Anniversary issue of October/November 2022, “there are 15 South African billionaires, but only five of them still live in South Africa”.

The magazine continues: ‘Several western governments have instituted several programmes that enable “high net worth individual (HNWI)” Africans to migrate to their jurisdictions with the crucial exchange being citizenship for a set investment amount.

“The receiving governments not only benefit from the investment injection, but also address capital and human resource gaps within their borders”.

It (the strategy and/or process) has been growing in popularity for affluent African families seeking more stable environs to continue building their wealth.’

Sadly, these Africans do not seem to realise what this means for their nations in the long run — stagnant growth, slow death and most probably, extinction!

It is not an exaggeration to assert that today, every African who regards himself as somebody, finds himself transferring his wealth to these places as a matter of course.

The big question here though is, why this mentality? In this day and age, the countries which these people call “home” are all poor and inhabited by people who cannot afford a decent daily meal.

It is true to assert that usually, when an African acquires wealth above a certain level, he turns his back on his home country and begins to look for somewhere to spend it other than the latter.

A closer scrutiny of this attitude reveals the fact that it usually starts at the lowest level, his personal home. In most cases, Africans find it difficult to build houses/homes that last even a decade.
Sometimes there is not a trace of human habitation after people have moved elsewhere. Sadly, this behaviour is often transferred to a higher level — that is, the national level.

But buildings in themselves, are an enduring form of wealth, even though most of us only realise this fact when we own a house in the city. This is because of two reasons.

One is the city by-laws that insist that the home owner maintains certain minimum standards.
The other is the fact that he derives direct income from such buildings when he sells them. And he may also get rentals from same.

Because a home is situated on land, the same land — ranging from a few square metres, to a whole country — becomes a lasting form of wealth.

The strategies followed by those wealthy individuals who go out of their way to build islands for use as holiday homes and for earning them huge amounts of money, attest to this assertion. That said, our story does not end there. On the world economy platform, this matter assumes even more fascinating characteristics.

In this respect, consider the attitude of the same developed economies to the matter of property. Under capitalism, or even communism, every business is supposed to have a domicilium citandi — that is, an office that is sitting on a piece of land.

All those factories, banks and other types of repositories that are guarded day and night, are built on land.

On this planet Earth, there are only a few places — all of them on, or underground — where physical wealth can be stored. While it is there, the owner is assured that it is safe from any form of harm — theft and fire being the biggest threats.

This is because the level of security that has been built into those places is unmatched elsewhere else in the world. These are the places where most individuals, companies, and whole countries, send their wealth — most of it in gold and diamonds — for safe keeping.

On the surface, this is normal behaviour, but if you think seriously about the matter, you begin to realise that these places are only man-made arrangements.

They constitute reliable security systems. But this situation has far reaching implications for the whole of mankind.

The countries in which those systems are situated become very wealthy over time, in a number of ways. Some of these ways are simple and obvious to a casual observer while others are not that simple and obvious to same.

Looking closely into this matter still, one begins to realise and understand one fact: It is an unwritten rule that wealth sitting on a particular location, attracts more wealth to that location.
This happens through two major ways. One is psychological, while the other is literal and physical.
Firstly, people are attracted to a place because of the aura that it carries.

This is a psychological phenomenon.

Secondly, if a place has physical systems — that is, buildings and other security structures that look formidable and exude a sense of security, people will want to store their valuables there.
Then there are three other non physical elements; these being trustworthiness and/or reliability, and power.

The last element is intertwined with politics. A nation that is regarded as having more of all these attributes than others, attracts wealth. Most wealthy individuals and businesses want to store their wealth there.

Over time, this perception becomes normal — a sort of status quo, if you will — in the minds of many.
Consider here, outfits like the banks and finance houses of New York, London and Paris, for example.

In this respect, consider that all African countries were colonies at one point. At that time their economies were appendages of the mother countries’ So naturally, the latter’s banks were their sources of capital.

And today this is still largely the case.

And their investors as well as their profits belonged to these same countries. These were conditions under which no African was involved in any meaningful business venture.

After the political independence of these countries, the businesses concerned still belonged to the mother country.

At the same time, each country’s natural resources became the property of the state. And nearly all the businesses in operation in these colonies used those resources.

(This was actually the reason for their colonisation anyway).

And since all those political leaders represented their people who were demanding their countries from their colonisers at that time — land minerals and all — they automatically became involved in the business affairs of their countries.

But these people were not knowledgeable nor experienced in such matters. So they had to let the colonists continue to run their businesses undisturbed. Meanwhile the colonists put in mechanisms that kept the Africans — politicians, business people and all — on the periphery of their systems. It was under such conditions that the Africans found themselves remaining attached to their former colonial masters.

Under those conditions, trying to run an economy independently of the former, proved an impossible task. And so the Africans remained beholden to those European capitals.

In fact, being connected to, and visiting those cities regularly, was some sort of achievement for them.

This was the case even for apparently hard-nosed characters like Robert Mugabe of Zimbabwe.

In the case of Francophone Africans, these ties were so strong as to render the African leaders virtually powerless to run their economies without their French colonisers. (Remember Fracafrique?)Fast forward to the current era and we come across a situation that is both fascinating and somewhat alarming to ponder over.

Today there are some African businessmen and women of note. Quite a few of them have become billionaires. To date there some billionaires whose total worth is above US$84,9 billion.

A close look into their businesses reveals their very strong connections to the said capital markets.

Viewed from the Afro-centric perspective, this is some sort of dilemma, why? You see, there is that aura and attraction of those capital markets as discussed above. These places are where the capital — real capital — is to be found.

So if a budding African entrepreneur wants to move to the next rung of business development, he has no choice, but to be involved in those capital markets.

Here we have Aliko Dangote (Nigeria), Elon Musk (a white American, originally from South Africa), Strive Masiyiwa (Zimbabwe) as some of the relevant examples.

At this juncture, I am sure you, the reader, can appreciate the kind of challenges that Africans face in this respect in this era. It is at this same point that the rather poignant cry: “African, stay home” becomes pertinent.
But don’t take me literally here. All I am saying is that the African must have a home-based mentality.

Here we have Asians as a good example.

Shambare is an agriculture economist based in Chinhoyi and is reachable on 0714045435.

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