Some time back—1995 to be specific: while enjoying the exile days into which some of Kamuzu’s boys had conveniently dispatched me—a South African transport company head-hunted me as Project Manager for their “‘seamless’ services” project between Cape Town and Johannesburg, later extended to Durban and then briefly to Franscistown and Bulawayo [just to get the 56 Humber cars some genius in Lusaka had imported]. This is not the space to argue the ulterior motive of the South African rail management for taking on a black man at that specific time of South African economic-politics.
Briefly though, what happened is that on 15 January 1995 [doubters check Spoornet records] I reported for duties and the Afrikanner Executive Manager and his Rail Services Managers [mouthful titles that didn’t fit on an average business card!] took me through the paces. These were a sort of my verbal terms of reference. Thereafter, they booked me on an afternoon flight to Cape Town:
‘Just go and have a look and see…’ was their specific words. Judging by their tone, it was clear they had not bought into what the employment agency had told them: that I was a qualified and seasoned business-process re-engineering consultant. That would be impossible! But more importantly, as judging by the camaraderie manner they put a hand over shoulders, I understood why, back in 1965, someone in Zambia had coined the term ‘window dressing’.
Indeed, I flew to Cape Town [I wont tell you what the white air hostess did with my lunch]. But my job had started in earnest. And, of course, as is my nature, I just didn’t ‘have a look and see’. I am a consultant—derogatively called ‘business undertakers’ in the trade. Thus, I can smell a ‘dead’ business concern from miles away! Soon—using a mental business analysis methodology—I discovered why the ‘seamless’ service was progressively failing. At that point, even the stop gap solution, in the form of the ‘Wits Blitz’ [white bullet] train [for reasons soon to become obvious], had proved unworkable.
A few strategically placed questions during rare tea with business managers in Cape Town and City Deep revealed why the South African rail system needed redevelopment. I established where I could actually twig the system and get the whole thing working again! Needless to say that did very little to enamor me with my ‘new’ boss—the Rail Services Manager—on the eleventh floor of Mdjadji House.
As complicated as it appeared, it was a simple problem really. It goes like this: ‘When you force theory on practice sooner or later problems will invariably crop up in the least expected places’. I don’t know who coined that sense, so don’t ask me. But we have had that problem, here in Malawi, since 1964. Medical-doctors-turned-politicians dismally endevoring to perform economic surgeries on whole nations!
You see, in the years leading to 1994—when South Africa eventually attained political independence—most Apartheid state companies were quickly ‘restructured’. The argument was that they should become ‘new-political-dispensation’ friendly. Thus, most were ‘privatized’ altogether. Of course, post 1995, African and a few white apologists/ analysts would provide fuller explanation as to why it had to be done this way. They argued while opting for ‘commercialization’ instead: ‘privatization’ had been an Afrikanner ruse to ring-fence profitable state corporations so that the incoming African leadership and its potential ‘thieving’ cronies would not reach them! That is: what would have become ‘private’ and operating ‘profitably’ would not, as per ANC manifesto-requirements, be ‘nationalized’.
Naturally, hours were spent training managers—mostly Afrikanner—on how to efficiently run such ‘private’ organizations. The trick concept/terminology of the day was ‘Strategic Business Unit [SBU]. Like an aroma-ful coffee, SBUs and ‘decentralization’ concepts filled the ‘mainly white’ corporate air of South Africa. And just like trade winds, concepts, terms and fads have a tendency to waft towards other unaffected regions. That is why, years later, decentralization would be the catch-all term in democratically-minded Malawians. As its aroma fades, decentralization has also become good reason for inaction among a few civil servants in Malawi!
Back then in RSA, management consultants were doing roaring business: chopping up big state companies, introducing ‘corporatist management systems’, the whole shebang! But, even a streetkid economist could see through it. How do you—given Apartheid had finally collapsed because it had spent itself to the ground: fighting the ‘revolutionary wars’ around it—decentralize, that is blow up the size and management costs of your system, when your ‘revenues’ are going down? It is best described as an economic monostrocity of thought! But as usual politics has the knack to find some economic sense to explain the opposite and true reality on the ground! But it always does not go according to plan. Sometimes the humus gets to hit the fan!
Hence, ‘Seamless Service’ was an act of desperation: a product of a ‘decentralization’ policy gone awry. Naturally, where the rationalization [undertaker’] type of consultants had made a killing chopping up state organizations, it became our turn—the developmentalist [‘the exhumers’]—to try and put back the organization ethos within the dismembered units! Even black blocks like me were suddenly in kutapa kutaya demand. But, remember life is a mess. That is how people made money out of the man-made ‘Millenium bug’ story!
Prior to 1990, the Afrikaneer South African Transport Services [SATS] had been an ‘efficient logistics system’. This is because, as a centralized and unitary transportation system, it had efficiently and effectively operated along the logical national value chain. It had been involved in extraction of raw materials, processing them and putting them into the global markets. In return for production inputs—to ensure the looped system functioned like clockwork—it had brought in goods and services. Through SATS Apartheid had survived and thrived! Then, the value chain had had no ‘seams’ and/ or artificial breaks.
But in 1990 [the anti-Apartheid writing was on the wall] Transnet—the replacement system to SATS—became necessary; premised on the SBU approach. This now meant seams everywhere. Back in the days when Malawian youth read novels James Hardley Chase wrote: ‘safety is in numbers’. The Afrikanners reintepreted this as: ‘confusion is in numbers’ [in decentralization]. They created separate Extraction logistics—mine conveyor systems and pipelines—Viamax. A Roadnet was also created separately from rail system—Spoornet. Irrespective that the rail rain into Ports—Portnet was weaned away. The national shipping line—Safmarine—conveniently gravitated into the Lloyds shipping fraternity. There even came a time, when ‘business excellency’ madness reaches its worst diagnozed levels, that each unit was ordered to compete and cannibalize traffics from the other!
Thus—just as daylight must follow darkness—SBU managers soon religiously implemented what they had been taught: ‘make sure systems within one’s ‘silo’ were robust and securely protected against ‘competition’ outside one’s operational territory’. After all their salaries now relied on how effectively each SBU reported performance results within such a ‘privatized’ ethos.
The best example was in the Spoornet system where I was eventually thrust; with specific intentions that I fail. Here the SBU concept allocated a specific number of shunter trains to each SBU manager. He was expected—at the end of the month—to explain how efficiently he had used each shunter horse. Otherwise he would forfeit his shunters and rolling stock to better keyed SBU Managers!
So, on the Cape Town-Johannesburg corridor—once a single business unit—ten SBUs suddenly surfaced; spoils were shared. Thus, a train from Cape Town—operated by the Cape Town SBU—would dump its cargo at De Aar; some 100 or so kilometers up the corridor to Johannesburg. Job well done and on time! The De Aar SBU would pick up this cargo and dump it up the corridor, through Bloomfontein and onwards until it reached Kazerne and/ or City Deep in Johannesburg! Soon—because this is a relay actions and that’s probably why I have never been excited with ‘Relay Races’ in trackfield contest—a train that had taken 56 hours to operate, end to end, now took 144 hours! Do your sums: a whole 88 hours had been inefficiently built into the system! The English cliché is: time is money, therefore imagine the cost implications. When the Wits Blitz was introduced into this fray the SBU managers conspired—a matter of a child you taught witchcraft rebelling against your authority—by cutting up the train and hiding the ‘white’ locomotives and rolling stock up disused rail sidings while Wits Blitz electrical units and consummables mysteriously disappeared! In Durban even junior managers promoted themselves into SBU managers, started their own thing and pushed trains into Kings marshalling Yard that were not on the computerized manifests. So the problem back-roomed into the port itself. If trains are not leaving the marshalling yard then fresh ones can’t enter and therefore ships can’t be loaded and/ or off loaded. Not to be undone, the Durban City Council launched a new tourist attraction: ‘Come spot tens of aimlessly ships floating in our harbor!’
Meantime, every SBU reported in improved performance results—and these tended to get better the longer the cargo stayed in line. Overtime, extra shifts etc [signs of a growing economy] became the order of the day. Real money [not accounting or monopoly money as we consultants call the silly accounting systems in many public organization] exchanged hands at these ends of the system!
But, the real victim in this revised value chain was the cargo-shipping customers. And they reacted accordingly. Soon more road trains were operating between Cape Town, Johannesburg and Durban. The South Africa train across the Limpopo was an early victim and so Malawian containers at Dabuka in Zimbabwe were all in ‘overstay’ category. The trucking industry in Malawi was suddenly in high demand taking high value cargo by road to Durban. Of course, they needed ‘tip’ money in order to promptly off load once in ‘bottleneck’ Durban. In fact, it is in these circumstance that one of Transnet’s own SBU—a road freight corporation—became an instant success story. An unfortunate vicious circle of success had been born!
It is in this environment that I made it my task to destroy this vicious circle—fight decentralization. Naturally it did not enamor me with a few people in both camps—the white SBU Managers and the ‘xenophobic’ African Managers who could not believe that ‘someone from Africa’ [according to them South Africans is part of Europe that happened to be accidently attached to the southern tip of Africa] could achieve such a feat! For causing such embarassment I am back ‘in Africa’, ain’t I?
But the South Africa account is not the moral of this story. I use it merely to demonstrate something that we, here in Africa, could be doing wrongly and for all the good reasons. For example, ‘decentralization’—and mark me I don’t hate genuine decentralization—is the raging development concept in Malawi today. Indeed, city governments are currently at a standstill because every officer in there argues: ‘decentralization has flopped’ and ‘without local councilors it is difficult for them to make any decisions’. There I have told you why our cities are on a backward winding spiral to decay.
Of course, a recent Nigeria delegation to Malawi left us with three pieces of gem-like advice. One: you seem to be on the right track in terms of approaches to town planning and urbanization. Which raises questions as to what kind of mess Abuja is in? Two: whatever you do, don’t discover oil until Malawi has become politically mature. Ugh? Three: we have lived under so many military regimes and as civil servants we realized waiting for genuine local councilors could be long coming. So we have conscientiously gone ahead and introduced change; convinced the councilors—when they do arrive—would retrospectively ratify those decisions. After all isn’t that what councilors do [retrospectively ratify prior or subsequent decisions made by technicians]; whether they are physically or democractically around or not?
Indeed, the government-NGO impasse in Malawi today includes a demand that local government elections have been repeatedly postponed. And the NGOs are right. Structural Adjustment, Multiparty democracy and Millenium Development Goals are all about pro-poor development objectives. Expectedly, the three are predicated on the successful implementation of a decentralized decision making system. Centralization, less confusion equals less attention to the needs of the greater majority: the poor. Briefly stop here though and chew through that: who really are the greater majority in decentralization? The poor or the beneficiaries of decentralization who may not be poor after all? Meantime—if you follow the standard logic to its conclusion—a government that resists decentralization must surely be against the poor and thus anti-democratic!
So much for the idealism but note the double talk in the NGO recent demands for change. They also want more forex and an end to fuel shortages. In other words, NGOs are no more different from the Apartheid leadership of the 1990s—faced with a sinking ship—picked on an economic concept to explain away the impossible. Decentralization is a chimera [a fad really] of the highest proportion. Of course, everyone would love it if this was possible and there are experts somewhere who will argue so—that democracy and wealth can be possibly achieved at the same time.
But it requires a magician’s portion to explain how they would work the formula below:
P = R-C [P is equals R minus C]
Where:
’P’ is profit
‘R’ is revenue
‘C’ cost
Profit—and thus overall shareholder happiness—is possible when your revenue is going up and/ or your costs are coming down. The reverse is true; especially when your costs are outrunning your revenue. Generally democracy [shareholder happiness and freedom] are highest as revenues are rising. Naturally, to achieve this you need strict control on costs [centralization]; especially if your revenue is not ‘tracking’ properly.
There are several things you can do; particularly if your export-capability is next to negligible. Get the donors in to supplant your revenues. Generally get them in to fund the discretionary cost elements. Governments have tended to include ‘pro-poor’ projects within the ‘discretionary’ category: a thing NGOs don’t particularly like. In fact, it is just such kind of government behavior or carelessness to their elected duties that eventually made NGOs a reality. The collorary is: if government were to pay more attention to ‘pro-poor’ activities then NGOs would become redundant. The corporate observation goes like this: ‘A people-sensitive manager keeps the Unions away!’
There you are: NGOs are unions doing their rightful thing. By the way: do you know that Tsvangirayi is a product of the fake unionism that Mugabe created in 1980 just to head off genuine unions in Zimbabwe? In Chichewa the Tsvangirayi-Mugabe saga is called ‘kulumidwa ndichokumba’ [bitten by what one was digging out for lunch!]. Of course, every corporate board member will tell you a ‘crowd-pleasing’ manager reports low shareholder value. Naturally, if the board doesn’t get him, sooner or later the shareholders or the poor [democratic happiness] will get him!
On the other hand, if you are an ‘economist’ you are likely to see decentralization [local government elections included] as adding up operating costs; never mind the wasteful laxity that comes with councilors’ salaries and perks for jobs not done! One cannot see any profit—shareholder happiness—at the end of that silver lining. This is especially when donors are prapared to enthusiatically meet initial democratic costs and not the recurrent costs related to such endeavors. That’s the problem with these internationalist civil servants—the UN included—starting up costs, causing others to ‘run’ their petty projects only to dump the baby on the doorstep of poor African governments! They have a funny way of counting what they give you. It’s like that saga where private sector auditors found billions missing at a state institution but when government auditors went in they actually found that the staff had been putting in their own money to help the institution survive from ‘hand to mouth’. That’s your donors telling everyone what they give you when they actually are taking out!
Unbeknown to these internationalists and their unionist cronies—critics of the Washington Consensus agree—these people are actually busy chopping up things that would be better managed as unitary systems; at least at the present stages of economic development. You do not decentralize at a point when every scarce national development resource is required to put a shoulder to processes of ‘national economic take off’. It does not make sense, does it?, to take forex intended for critical raw material inputs to buy fuel just so politicians and NGOs can run around the country celebrating democracy on and for the empty stomachs of the poor out there! Every serious mother will tell you it is not ‘cake time’ when the ufa pantry is running low! You don’t chop up the household budget at such trying times. But not your average donor. They appear to reason that we need to occasionally ‘let down our hair’—burp out some of the hunger gases welling up in our bellies! And don’t tempt their ‘long memories’ calling them ‘Neocolonialists’!
Anyway, a closer look at the ISI diagram above—I also discussed it in an earlier blog: ‘Pictures and Words in Practical Economics’—will show you where the ‘seams’ have been deliberately introduced into our national system. If we are not democratically decentralized then we have been economically and policy decentralized since 1964. Can you imagine the astronomical cost such ‘seam’ impose on making and managing economic process in Malawi?
How much more do we pay when we indulge in such policy ‘relay races’ every time we seek to make a decision and/or scream that someone is ‘trampling onto our decision territory’. Meanwhile, monopoly money is being counted everyday. People are being patted on the back and promoted for good decisions made within wrong decision making frameworks. Real money exchanges hands too! And as my boss—sometime back when I worked in Malawi’s private sector—would say: zazungu sakangana nazo [what a white man designed is not for a black man to contest]. It’s all confusing; while the real people, down there, suffer!
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