The debt problem - Do Contracts Mean Anything in Africa?

Needless to say the economic downturn has also affected all of us. It again highlights elements like commitment, honesty, reputation and trust worthiness.

As I write this, major mobile companies in Africa owe my company money for months. All on contractual agreements yet some are overdue since December 2008! It is not isolated cases but it is a general tendency that larger customers are slower to remit their dues.

A good principle is to do to others as you would like to them to do to you. If you have a pre-paid mobile phone and you run out of credit it simply stops and you can not make any calls. Suppliers to a mobile companies are all too scared to stop servicing their suppliers as competition is stiff. I personally have overheard senior financial officials working for large mobile companies boasting that they have moved payments of their creditor out by months.

If we in Africa want to excel and grow we need to start at basics like honesty, trust worthiness. Reputation take a very long time to build, but it can be lost in a moment of irresponsibility. The wisdom of letting the ownership of African Mobile companies to outsiders (not from Africa) stands to be debated.

You should read P. W. Dunn’s post Do Contracts Mean Anything in Africa? Download or on the web

Never the less I believe Africa has a great future due to its people and natural resources!
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2 comments:

Peter W. Dunn said...

Thank you for your kind reference to my article. I will point out only that the discussion continues past the point which is recorded in the pdf file, with a some long comments by my friend Elisee Ouoba of Burkina Faso, in which difficulties of the modernization of Africa are mentioned. To be fair, then, many traditional African cultures deal better with certain economic problems, but modernization (particularly the educational system combined with high unemployment) has led to acute difficulties.

Johan Grobler said...

Hi Peter, Thank you for your input. We in Africa certainly need to address this.

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