Why Africa/Kenya not developed -from quora

[RV Pundit]

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[Nefertiti]

Could be a true story. However it is a subjective narrow view. There are better reasons for 3rd world under-development than the simplistic man-eat-man culture the writer describes.

[Georgesoros]

Could be a true story. However it is a subjective narrow view. There are better reasons for 3rd world under-development than the simplistic man-eat-man culture the writer describes.

It'll help if you mentioned a few!!
Me thinks development may be lacking due to mindsets that are not skill based training. It takes a generation to get one to think differently. After China built Thika rd, lots of new skills were developed leading to current expansion.

[Nefertiti]

It'll help if you mentioned a few!!
Me thinks development may be lacking due to mindsets that are not skill based training. It takes a generation to get one to think differently. After China built Thika rd, lots of new skills were developed leading to current expansion.

Yes. Lack of strong skill or talent. Enterprising or industrious minds are rare in Africa - in Kenya for instance the rich are mostly in real estate and agriculture. Manufacturing is an Indian affair. Wish the Indian or Asian population was bigger inn Africa.

It is why I dismiss the borrow & build nonsense touted here as some blue pill. If you have two people - give them the equal capital - the difference in a few years will depend on their thinking much more than chance. I get disappointed and baffled - when I see the level of thinking some corporate leaders have. The worst part being - they don't even realize their own incapacity. We don't have enough big thinkers and doers in Africa - that's the unwelcome truth.

[Nefertiti]

It's less corruption or brazen "man-eat-man" - as the German tourist opines - rather it's incompetence or incapacity. I believe the coming demographic dividend is the biggest opportunity Kenya has to leapfrog. It's palpable and apparent - all the shifting models - to digital and gig economy. Tangible. An indicator of more producers than consumers. TIVET is the best thing GoK has done.

[hk]

Could be a true story. However it is a subjective narrow view. There are better reasons for 3rd world under-development than the simplistic man-eat-man culture the writer describes.

It'll help if you mentioned a few!!
Me thinks development may be lacking due to mindsets that are not skill based training. It takes a generation to get one to think differently. After China built Thika rd, lots of new skills were developed leading to current expansion.

What new skills? Last a checked locals haven't changed the way they construct roads even after seeing chineses utilize cheap readily available red soil instead of expensive hardcore stones. That's just one example. The problem with us africans is we are risk averse.

[RV Pundit]

Demographic dividend without jobs is useless.Risk aversion is a product of poverty...you cannot risk the little you have.I agree with author...our major problem is trust at all levels.Look at Somalis succeeding because their word still mean something.Look at Asian in kenya.Our lying, conning and thieving culture is one of the biggest impediment.Ask any diaspora what has been done to them by own kins.

[hk]

Demographic dividend without jobs is useless.Risk aversion is a product of poverty...you cannot risk the little you have.I agree with author...our major problem is trust at all levels.Look at Somalis succeeding because their word still mean something.Look at Asian in kenya.Our lying, conning and thieving culture is one of the biggest impediment.Ask any diaspora what has been done to them by own kins.

That's contradiction in terms a poor person has nothing to loose they're already poor. As for lack of trust, its more prevalent among our generation and younger. When our parents were starting out in business they formed groups and companies that ended up investing in real estate, restaurants, bars and hotels. A good example is the Rwathia group doing very well. The question is why the second generation hasn't gone beyond investing in real estate to other areas unlike their indians counterparts.

[RV Pundit]

Yes lack of trust is new phenomena -probably linked to poverty of 80s and 90s - after population explosion of 70s & 80s. Anyway thanks to technology - most of these trust issues are being solved.

Kenya Indians were mainly forced by legislation to manufacturing.

I think housing became the go to sector with matatu - with collapse of formal transport and housing sector. When Mzungu was around - gov and counties - were building housing. Nearly the whole of old Nairobi was being built by gov, pension funds, banks, etc. The same for transport - Kenya Bus, Kenatco - were formal gov enterprises - elsewhere was covered by trains.When all that ceased - for Matatus started becoming the business for Africans in 70s/80s - till now. Housing started in  90s - as biting housing crisis and demand for it - rose.

Formal sector has to step into housing, transport and all these BASIC SERVICES - so mwafrika can start to invest in other avenues.

Jubilee if they delivered the promise 0.5M housing units for 1-3m will basically killed the informal housing sector - and we will start seeing people thinking about other avenues to make money.

That's contradiction in terms a poor person has nothing to loose they're already poor. As for lack of trust, its more prevalent among our generation and younger. When our parents were starting out in business they formed groups and companies that ended up investing in real estate, restaurants, bars and hotels. A good example is the Rwathia group doing very well. The question is why the second generation hasn't gone beyond investing in real estate to other areas unlike their indians counterparts.

[Dear Mami]

Demographic dividend without jobs is useless.Risk aversion is a product of poverty...you cannot risk the little you have.I agree with author...our major problem is trust at all levels.Look at Somalis succeeding because their word still mean something.Look at Asian in kenya.Our lying, conning and thieving culture is one of the biggest impediment.Ask any diaspora what has been done to them by own kins.

I agree 100%!!!! If I calculated how much money my mother has paid to govt extortionists in the past 7 years, I'd end up crying. Everything, from water to electricity to building to roads: I'm not even sure they were from these departments/ministries or just lying. They see one small sign of a structure or new business, and like sharks they are on you. And the worst thing is, once you deal with one, another comes up after and claims the issue is not resolved and you have to deal with him too. You can lose your mind, I swear. If it wasn't real estate, where at least you know the long-term returns in rent etc will recoup the lost dosh, you'd give up. I'm surprised that dude persevered for a year. Stimes I don't know if there will be a solution but this is killing us. If we don't find a way to remove barriers to new startups and businesses, I don't know how things are gonna improve.

[RV Pundit]

I think the worst is employee theft...gov official will take the ceasar share and you have to make sure you get all documentation/license...but companies that I have seen fail...they fail because of fraud from own employees...most successfully companies in kenya you have to put a Mzungu to run at least the finance dept...you leave Nyeuthi...business go KQ style. Other companies you never expand...you have to become like an Indian....sitting there the whole day handling cash.

Like Mzungu said our problem is instant wealth/gratification...nobody has long term view....not you own kin, employees, gov...etc...they don't believe in the future...there is just a lot of instability and unpredictability...in their lives.

I agree 100%!!!! If I calculated how much money my mother has paid to govt extortionists in the past 7 years, I'd end up crying. Everything, from water to electricity to building to roads: I'm not even sure they were from these departments/ministries or just lying. They see one small sign of a structure or new business, and like sharks they are on you. And the worst thing is, once you deal with one, another comes up after and claims the issue is not resolved and you have to deal with him too. You can lose your mind, I swear. If it wasn't real estate, where at least you know the long-term returns in rent etc will recoup the lost dosh, you'd give up. I'm surprised that dude persevered for a year. Stimes I don't know if there will be a solution but this is killing us. If we don't find a way to remove barriers to new startups and businesses, I don't know how things are gonna improve.

[hk]

The reason why Africa hasn't developed can be found here https://en.wikipedia.org/wiki/List_of_countries_by_economic_freedom . Economic freedom underpins economic development in most countries.   

[Dear Mami]

I think the worst is employee theft...gov official will take the ceasar share and you have to make sure you get all documentation/license...but companies that I have seen fail...they fail because of fraud from own employees...most successfully companies in kenya you have to put a Mzungu to run at least the finance dept...you leave Nyeuthi...business go KQ style. Other companies you never expand...you have to become like an Indian....sitting there the whole day handling cash.

Like Mzungu said our problem is instant wealth/gratification...nobody has long term view....not you own kin, employees, gov...etc...they don't believe in the future...there is just a lot of instability and unpredictability...in their lives.

I agree 100%!!!! If I calculated how much money my mother has paid to govt extortionists in the past 7 years, I'd end up crying. Everything, from water to electricity to building to roads: I'm not even sure they were from these departments/ministries or just lying. They see one small sign of a structure or new business, and like sharks they are on you. And the worst thing is, once you deal with one, another comes up after and claims the issue is not resolved and you have to deal with him too. You can lose your mind, I swear. If it wasn't real estate, where at least you know the long-term returns in rent etc will recoup the lost dosh, you'd give up. I'm surprised that dude persevered for a year. Stimes I don't know if there will be a solution but this is killing us. If we don't find a way to remove barriers to new startups and businesses, I don't know how things are gonna improve.

Those are the ones that manage to start (that are brought down by employees) but how many businesses do these gova othorong'ong'os thwart before they even start? The problem is with such things, you never even know how much you lose because stuff just doesn't happen.

[RV Pundit]

I don't know for sure - but I think those are fewer now - Kenya as followed Rwanda - and made it easy to start a business, register it, get connected to power, get licenses...the problem...we have like 0.5M registered companies...and only 8% pay taxes...the rest are still at infancy. Majority closes in first year. This is probably true worldwide..but I thin in Africa...ideas just never grow to become SMEs..SMES to MME...to big companies.

Well I guess part of it is people are also so poor many business will just fail for lack of effective demands/sales.

Those are the ones that manage to start (that are brought down by employees) but how many businesses do these gova othorong'ong'os thwart before they even start? The problem is with such things, you never even know how much you lose because stuff just doesn't happen.

[Nefertiti]

Those cultural issues - greed, rent-seeking, etc - are not unique to Africa. They all describe subsistence businesses that join the beaten path. Hotel, retail and such business - face cut-throat competition. The lack of demand is driven by competition with no differentiation. Such businesses would not significantly transform the economy even where successful. The overwhelming majority of Kenyans are employed by MSMEs. It is disingenious to claim the same MSMEs don't survive let alone thrive.

Inventive business models - startups - are businesses that solve real problems. M-KOPA Solar, BRCK, One Acre Fund, SunCulture, Uber and such. Not duka or hotel or real estate - which just slice the pie and not grow it - so they are not even considered startups. Startups rarely have serious competition - because of their uniqueness - solving the unsolved problems. They create new wealth, jobs, taxes, etc.

It is these risky capital- and talent-intensive innovative enterprise capabilities Kenya and most Africa lack.

[Nefertiti]

If it is not a new business model - or a new technology, science or method - it is not a startup. Its success or failure is not impactful nor transformational.

[gout]

There is no breakthrough with state sanctioned theft of resources from productive people/sectors to unproductive government officials. Now we have feudal state capture all across Nyeuthi lands. A mobutu rises strips the people and resources then falls comes a Kabila; Jomo-Moi-kibaki-Uhuru-??; Zuma-??; dos Santos-??;

No way out with these acroparasites. The acroparasites will bring down even the likes of Jack Ma in China!

[RV Pundit]

They rarely survive - and those that do - are basically owner-run and remain in that state forever - just making enough for the owner to keep them running - I am talking of business in transport like matatu, many in retail, hotel & accommodation --majority remain informal. Admittedly they are better than farming. They are few that graduate to SME - or less that become medium sized enterprises - and very few that go on to become large enterprise - and a tiny few like Equity tha become MNCs.

Now start ups is an interesting idea....but majority(if not all) are backed by foreign venture capital and managed by foreigners. Basically they seem to succeed in places like Israel where jews globally have their pursue opened for them or where founders knows where to get the money (say Silicon valley or New York) or through donors (most of start up you highlighted are social enterprises).

Ultimately, we need to understand why Mwafrika is not succeeding at MICRO-LEVEL. Is it really a question of lack of capital? Is it lack of trained labour? Or it's just SOFTWARE issues...lack of trust/discipline/ambition/long term thinking/delayed gratification?

From my observation at micro-level - it mostly software issues - that keep people down. Many are born to poverty but few are able to pull themselves out - instead sinking to drug addiction, laziness, thieving (therefore spoiling their credibility forever). Others just breed like rats, marry many wives and basically enjoy poverty - with zero ambition to succeed.

Those cultural issues - greed, rent-seeking, etc - are not unique to Africa. They all describe subsistence businesses that join the beaten path. Hotel, retail and such business - face cut-throat competition. The lack of demand is driven by competition with no differentiation. Such businesses would not significantly transform the economy even where successful. The overwhelming majority of Kenyans are employed by MSMEs. It is disingenious to claim the same MSMEs don't survive let alone thrive.

Inventive business models - startups - are businesses that solve real problems. M-KOPA Solar, BRCK, One Acre Fund, SunCulture, Uber and such. Not duka or hotel or real estate - which just slice the pie and not grow it - so they are not even considered startups. Startups rarely have serious competition - because of their uniqueness - solving the unsolved problems. They create new wealth, jobs, taxes, etc.

It is these risky capital- and talent-intensive innovative enterprise capabilities Kenya and most Africa lack.

[gout]

State corruption is the evil ill that won't let Mwafrika innovate or use innovations optimally to enable the enterprises thrive and thus social mobility. Let us take a few case studies:

Matatus: Governments takes the licences and does not inspect or regulate the industry leaving it to thugs and police who thin out the profit margins thus a cyclical thuglike culture which will run mad any professional manager.

Hawkers: Inhumane councils all over Kenya take profits from and destroy the merchandise; making a murderous game rather than enterprise

Wines and Spirits: NACADA; County Liquor thugs; Police; MCSK

Ultimately, we need to understand why Mwafrika is not succeeding at MICRO-LEVEL. Is it really a question of lack of capital? Is it lack of trained labour? Or it's just SOFTWARE issues...lack of trust/discipline/ambition/long term thinking/delayed gratification?

From my observation at micro-level - it mostly software issues - that keep people down. Many are born to poverty but few are able to pull themselves out - instead sinking to drug addiction, laziness, thieving (therefore spoiling their credibility forever). Others just breed like rats, marry many wives and basically enjoy poverty - with zero ambition to succeed.

[Kim Jong-Un's Pajama Pants]

I think it just comes down to instability.  Africa is a very unstable place relatively speaking.  Nation states and societies are still in their formative stages.