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And are we seeing this in Africa?
Yes, of course. It is a sign that the class is coming up. They are no longer about renting property; it’s about owning their own homes. In the UK Mrs. Thatcher created six million middle class people by forcing the local authority to sell their houses to the people, but of course you have to bring finance. Credit cards and finances enable people to buy houses. And once they have bought their house, the house becomes maintained, and the landscape improves and the value begins to rise.
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It sounds like you subscribe to, and you hear this coming from African markets, using Thatcherism as a model. In 1990 Nelson Mandela promised the liberation movement would take over the apartheid economy, including the banks, and said that “a change of our views in this regard is inconceivable.” However, over twenty years later, his attitude changed: “For this country, privatization is the fundamental policy.” he said. Are you in favor of this change in attitude toward privatization? Thatcher’s legacy was starting the decay in the public sector. She contained the unions; she privatized industry – telecoms, gas, rail, water, mines – she opened up the private sector. She brought us supermarkets. She clamped down on local authorities to bring us supermarkets. She changed the UK. She created luxury shopping and made sure workers and shoppers could park their cars on the streets without getting clamped! She created demand by lowering prices. So the economy took off.
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are the people who want to be home owners, first time buyers, and once they buy their homes then the demand for construction increases and this creates more jobs.
Public sectors have no business in business because they do not operate businesses efficiently.
The same issue that Thatcher faced in the UK is faced in Africa. In the 1950s most of the leaders in Africa were all schooled in Europe where there was a wave of nationalism due to World War II, and all countries nationalized. Africans were not an exception. But where you nationalize you have a problem. Public sectors have no business in business because they do not operate businesses efficiently. They have no interest or even an understanding. The skill base is not in the public sector to run businesses. The second issue is finance. For example, the Nigerian government has estimated that its infrastructure costs by 2030 will total US$ 20 billion. Now the government plans to contribute half of this money, but it is relying on the private sector to bring the rest. The government doesn’t even have the money. Western governments don’t have the money because of their economic difficulties. The issue is how do we get the private sector 1) to bring in finance and 2) to help the public sector? The domain of the public sector is infrastructure, that is their concern, but the public sector doesn’t have the resources to adequately fund this. Furthermore, sometimes when short-term budgets are used to fund long-term infrastructure projects, they don’t work. These infrastructure projects sometimes take decades.
Corporate Africa 2014
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