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Policies should enable wealth creation

By Tania Ngima | Dec 8th 2015 | 4 min read
By Tania Ngima | December 8th 2015

Most small business owners just want to run small businesses that allow them to take care of their most basic needs. They have no desire to grow, expand or create a lasting legacy. If you are as surprised by this statement as I was, then you probably assume that everyone who starts a business wants to create significant wealth and leave a legacy. I did too.

When one of my friends expressed the above sentiment, I hotly contested, arguing the reverse. However, the more people I speak to, the more this sentiment surfaces. And a few real world instances have gone towards supporting this notion.

Exhibit one. It was a friend's birthday a few weeks ago. In typical gift-giving fashion I approached her local dressmaker to tailor something for her. Being the time conscientious person that I am, I made all these arrangements two weeks before the D-day; half the art of giving a gift is impeccable timing. I hope that that sounded as profound as I meant it to, I may or may not have just made it up.

Fast forward to two days before the birthday and the dressmaker calls me, sounding harried and frazzled. She was at the fabric store, and could not find the cloth that my friend had shown a preference for. She also needed me to send some additional deposit money so that she could purchase a more expensive option.

I was fine with that, after all, I reckoned, maybe my friend had deliberately delayed the process. But on speaking to my friend it emerged that she had asked the tailor to have the item of clothing ready by her birthday.

Exhibit two. One of my friends was moving house earlier this year. For most of his furniture, he engaged a carpenter whose woodwork skills were a joy to behold. Everything was progressing swimmingly, with only positive updates being given via the phone over how beautiful the furniture looked.

Towards the end of the job, he passed by the carpenter's workshop before he made the last payment. And there he was met with shock and awe, and not of the good kind. There was not a trace of his furniture in sight. No, it had not been sold to a higher bidder. Neither had it been stolen, delivered to the wrong location or been kept in storage. It never existed.

Apparently, the common practice among some of these 'jua kali' artisans is to spend the money they are paid by one customer on non-business activities, and use the next deposit to do the previous job. They are, then, always one step behind.

The problem though, is that in a bad month if you were the last client to place an order your work will stall until the next patron walks in and hands over his hard earned money; which will then execute your job, and so on and on.

I'm now starting to think that there's some truth to the argument my friends were putting across. What I am not sure of though, is why this is an acceptable modus operandi for micro enterprises. Is it a result of ignorance regarding the fact that they can build stable, sustainable businesses? Or is it a lack of ambition, a negation of my assumption that everyone who is building a business wants it to grow? Or is it a factor of all of the above?

As we approach the 10th World Trade Organisation (WTO) Ministerial Conference, it is especially important to understand the nuances around MSME's, including debunking the myths around how to turn a craft into an enterprise. I am keen on the fact that this year's conference was themed 'Trade Works'.

However, trade does not just work. It needs a cohesive and consistent effort to ensure that it is reducing poverty and not just increasing the inequalities between the rich and the poor, in the guise of the former being politically aligned with the ruling elite.

Trade policies are a significant part of the equation that creates prosperity and economic stability. There is a reason why trade does not work for some countries, instead contributing to rising inequalities. Part of this is due to the fact that legislators do not spend the requisite amount of time in ensuring the right local policies are being debated and effected.

Additionally, we also do not invest in the research that advices these policies. Knee-jerk declarations, such as making an announcement that it will take 24 hours to register a business, and not having this implemented over a year later comes off as empty rhetoric.

Even worse though, is not evaluating the unintended consequences of the few laws that are passed, most of which are grounded in extreme short termism and protection of individual's interests above the country's.

While taking enterprises global is a noble cause, a significant number of businesses are a long way away from being ready to face global competition. In fact, most businesses are not even ready to play on the local stage; this is where our attention should be focused.

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