You might have heard the story. This guy owns a fumigation service. One day some gentlemen call him and say he comes highly recommended and that they have a job for him. They describe the nature of the job and they agreed on a price. The next day they pick him up but insist on blind folding him all the way to site. When they eventually take off the blind fold our fumigator finds himself in a garage stacked up to the ceiling with bank notes.
And this was in Kampala.
Last week a website Silicon Africa run a story “The New Rich
in Africa” the article made the revelation that there are at least 100,000
dollar millionaires on the continent and that 20,000 are created every three
years. Thankfully most of these are hardworking entrepreneurs and less and less
public officials.
But it also described a new class in Africa who have
enriched themselves off stolen public funds. The article went on to say that
the African public official is not more corrupt than his counterparts in Asia
or South America. However unlike his counterparts who invest in industry and
building businesses the African fat cat consumes his money and squirrels the
rest away in Swiss bank accounts.
Corruption is bad whichever way you look at it and even if
the corrupt invest their ill-gotten wealth in the productive sectors of the
economy there is still a negative consequence of this course of action.
Say for instance the thief got his money and built himself a
chicken feeds factory. To begin with he has no cost of money and has a choice
either to sell at the market price and make a huge profit or undercut existing
players. Either way he distorts the market putting genuine entrepreneurs out of
business and when the corrupt official’s access to free money is cut off – as
often is the case, he will be unable to operate without the state “subsidy” and
he will go the way of his competitors. This will disruptive to the chicken
industry and cost a lot of jobs in the process.
Our guys of course gorge themselves on land and real estate,
making Kampala’s real estate among the most dear in the region and placing it
out of the reach of the average Ugandan.
The return of the Bad Black makes you think about illicitly
gained wealth.
Her flight and eventual recapture has some interesting
lessons for those who clamour for wealth by any means necessary.
First, that there is no money that cannot be finished.
Secondly that fleeing the country to live abroad, where there are relatively
higher costs of living means the money will get finished quicker and thirdly,
if you do not have a genuine way of making money here you will be exposed
faster abroad.
It is basic economics; money is a store of value but has no
real value of its own.
To keep the money coming you have to keep creating
value. If you are employee your income
increases according to the increasing value you can show your boss you are
creating for him – you might be able to hoodwink for a while but somehow they
eventually catch on. You increase the value by adding to the stock of knowledge
you have and can deploy for the benefit of your employer.
If you are a business man the value create is often in the
needs you are meeting. To earn more you have to serve more people or show how
much more valuable your service or product is to your existing client so you
can charge him more or all of the above. The moment your market determines you
are not adding value to their lives is the day you are out of business.
There is no value addition with stealing money from the
public, which is why you never hear of a corrupt official who stole a few
millions resigned and went off to start a business. It’s always that they get
caught. Luckily for them in this country we don’t seem to able to convict these
white collar criminals even if we found them hands dripping red. So they run
off grumbling for public effect how they have been treated badly and that they
are taking their skills elsewhere, to start business. Spoilt on the easy
pickings of their public office they quickly find out they have no clue how to
create value for which they will be paid.
Beyond the moral issue of taking that that does not belong
to you, its next to impossible for corrupt individuals to do any value to our
society – they even take more space than is necessary.
Okay maybe they put the odd kid through school, they provide
some wages for the porters at their construction sites, buy a few beers at the
bar but that’s about it.
It’s embarrassing but when they fall from grace the corrupt
come up against the harsh reality that making money is hard enough but making
that money work for you is even harder. You almost want to feel pity on them!
