Article II: Social Ventures in Africa: What Can Go Wrong? By Brian Ray Dinning, JD, LLM

Article 2:  Social Ventures in Africa:  What can go Wrong?

By:  Brian Ray Dinning, JD, LLM and Social Venture Lawyer

June 29, 2012

Sometimes committing your life to a worthy cause like social ventures comes with many challenges and obstacles such as:  differing world views, different goals and objectives (especially from banks and investors who have financial goals rather than the founders and social venture partners who generally have charitable and social goals as well as financial goals), the unpredictable nature of people and a limitless host of other complications and factors.  Business and social ventures are hard work – let alone business and social ventures in Africa, where resources, personnel and supplies can be scarce and corruption, violence and theft are rampant.

 

The US Government published that over 50% of all businesses started in the US fail within the first five years.[1]  New Venture Lab – Equipping Christian Entrepreneurs, quotes interesting statistics from Harvard Business School noting that the failure rate of businesses can be as high as 95% (depending on how you define failure).  Their website, quoting a Harvard Business professor, provides:

 

“Most companies fail. It’s an unsettling fact for bright-eyed entrepreneurs, but old news to start-up veterans. 

 

But here’s the good news: Experienced entrepreneurs know that running a company that eventually fails can actually help a career, but only if the executives are willing to view failure as a potential for improvement.

 

The statistics are disheartening no matter how an entrepreneur defines failure. If failure means liquidating all assets, with investors losing most or all the money they put into the company, then the failure rate for start-ups is 30 to 40 percent, according to Shikhar Ghosh, a senior lecturer at Harvard Business School who has held top executive positions at some eight technology-based start-ups. If failure refers to failing to see the projected return on investment, then the failure rate is 70 to 80 percent. And if failure is defined as declaring a projection and then falling short of meeting it, then the failure rate is a whopping 90 to 95 percent.

 

“Very few companies achieve their initial projections,” says Ghosh. “Failure is the norm.”[2]

 

 

While this is the reality for businesses in the United States, a University of South Africa study indicates that the rate of small business failure in South Africa can be as high as 80%.[3]  MIT and other business schools note that the failure rate of social ventures will likely follow that of other for-profit businesses.

 

The challenge is to continue working to improve the lives of the 400 million people living on less than $1.25 per day in Africa regardless of past failures or challenges.  As Nelson Mandela states, “The greatest glory in living lies not in never falling, but in rising every time we fall.”  Quoting Vinod Khosla, billionaire venture capitalist and co-founder of Sun Microsystems: “There needs to be more experiments in building sustainable businesses going after the market for the poor. It has to be done in a sustainable way. There is not enough money to be given away in the world to make the poor well off.”[4] Researchers on social ventures at Duke note that: “We live in an age in which the boundaries between the government, nonprofit, and business sectors are blurring. This blurring results from a search for more innovative, cost-effective, and sustainable ways to address social problems and deliver socially important goods, such as basic education and health care.”[5]

 

Furthermore, Dees and Anderson realize that social venture projects and social entrepreneurs focus on the social impact of social venture projects and business-minded people focus on the financial returns thereby creating complexity.  “It is extremely hard to make strategic decisions about resource allocation or practical cost/quality tradeoffs when the social impact of these decisions is nearly impossible to measure in an efficient, timely, and reliable fashion.  It can become all too easy to focus too heavily on the more familiar, tangible and straightforward economic measures of success.”[6]

 

Businesses including social ventures fail for many reasons.  A New York Times columnist notes the top 10 reasons for small business failure:

 

“1. The math just doesn’t work. There is not enough demand for the product or service at a price that will produce a profit for the company.

 

2. Owners who cannot get out of their own way. They may be stubborn, risk averse, conflict averse — meaning they need to be liked by everyone (even employees and vendors who can’t do their jobs). They may be perfectionist, greedy, self-righteous, paranoid, indignant or insecure. You get the idea. Sometimes, you can even tell these owners the problem, and they will recognize that you are right — but continue to make the same mistakes over and over.

 

3. Out-of-control growth. This one might be the saddest of all reasons for failure — a successful business that is ruined by over-expansion. This would include moving into markets that are not as profitable, experiencing growing pains that damage the business, or borrowing too much money in an attempt to keep growth at a particular rate. Sometimes less is more.

 

4. Poor accounting. You cannot be in control of a business if you don’t know what is going on. With bad numbers, or no numbers, a company is flying blind, and it happens all of the time. Why? For one thing, it is a common — and disastrous — misconception that an outside accounting firm hired primarily to do the taxes will keep watch over the business. In reality, that is the job of the chief financial officer, one of the many hats an entrepreneur has to wear until a real one is hired.

 

5. Lack of a cash cushion. If we have learned anything from this recession (I know it’s “over” but my customers don’t seem to have gotten the memo), it’s that business is cyclical and that bad things can and will happen over time — the loss of an important customer or critical employee, the arrival of a new competitor, the filing of a lawsuit. These things can all stress the finances of a company. If that company is already out of cash (and borrowing potential), it may not be able to recover.

 

6. Operational mediocrity. I have never met a business owner who described his or her operation as mediocre. But we can’t all be above average. Repeat and referral business is critical for most businesses, as is some degree of marketing (depending on the business).

 

7. Operational inefficiencies. Paying too much for rent, labor, and materials. Now more than ever, the lean companies are at an advantage. Not having the tenacity or stomach to negotiate terms that are reflective of today’s economy may leave a company uncompetitive.

 

8. Dysfunctional management. Lack of focus, vision, planning, standards and everything else that goes into good management. Throw fighting partners or unhappy relatives into the mix and you have a disaster.

 

9. The lack of a succession plan. We’re talking nepotism, power struggles, significant players being replaced by people who are in over their heads — all reasons many family businesses do not make it to the next generation.

 

10. A declining market. Book stores, music stores, printing businesses and many others are dealing with changes in technology, consumer demand, and competition from huge companies with more buying power and advertising dollars.

 

In life, you may have forgiving friends and relatives, but entrepreneurship is rarely forgiving. Eventually, everything shows up in the soup. If people don’t like the soup, employees stop working for you, and customers stop doing business with you.  And that is why businesses fail.”[7]

 

 

Aside from the ten reasons noted above, in my experience with social ventures in Africa, the ventures did not work out as planned because of differences in goals and objectives between the partners, tension between the profit-making side and the social aspect of helping people and outlandish, intentional and unprofessional (and sometimes criminal) behavior and actions of others which interfered with, delayed or handicapped the social ventures.

 

Of all the reasons for small business and social venture failure noted above, it would be the outlandish, intentional and unprofessional (and sometimes criminal) behavior and actions of others, which caused our social ventures in Africa to either fail, be delayed or become handicapped.  In order to fully illustrate this point and to tell my side of the story, I will publish this seven part series complete with documents, video, photos, letters and email.

 

In addition to documents, video, photos, letters and email, there are also witnesses to most or all of this outlandish behavior including from the perpetrators themselves.  While some of these people are looking forward to a day in court against me, they will have to take the witness stand (under penalties of perjury) and answer for their outlandish behavior and actions and, hopefully, they will understand how their actions harmed the social venture projects, other investors and donors and the local people of Africa.

 

 

Article 3 is entitled:  Social Ventures in Africa:  Wextrust Capital – The Good, the Bad and the Ugly.

 

 

 

 

 


[1] Small Business Administration

[3] Mabaso, NR, University of South Africa (March 2008).

[4] MIT Entrepreneurship Review: From the Lab to the Land: Social Entrepreneurs Explore Appropriate Technology Dissemination (Nov. 26, 2010).

[5] Dees and Anderson, Duke Social Entrepreneurship: “For Profit Social Ventures,” (2003).

[6] Id.

[7] Goltz, J., “Top 10 Reasons Small Businesses Fail,” New York Times (Jan. 5, 2011).

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Introduction to my Social Venture Work in Africa by Brian Ray Dinning, JD, LLM and Social Venture Lawyer

Article 1: Introduction to my Social Venture Work in Africa

By: Brian Ray Dinning, JD, LLM and Social Venture Lawyer

June 27, 2012

NOTE: As I am writing this series, I have been wrongly accused of wire fraud related to social venture projects in Africa and face a trial in the United States. See Footnote 1.  While I do not believe I have done anything criminal, that decision is likely in the hands of a jury of my peers and I hope and pray that truth and justice will ultimately prevail. The purpose of this series is to tell my side of the story, complete with letters, video, emails, documents and all backed up by witnesses. As a lifelong follower of Christ, I trust in God and his promises like John 8:32 “Then you will know the truth, and the truth will set you free.” (NIV) I also want my wife, children and family to know that I did my very best to help as many of the 400 million poverty-stricken people of Africa as I could and I will work as long and as hard as I can to help them for the rest of my life.

I also want my family, friends and others to know the truth behind the delays, slowdowns, obstacles and impossible situations we faced when doing social ventures in Africa. While it has been disheartening at times and sometimes I just want to give up, I often think of men like Nelson Mandela, who endured years in prison only to be released to become the President of South Africa. As Mr. Mandela states:

“Let there be justice for all. Let there be peace for all. Let there be work, bread, water and salt for all. Let each know that for each the body, the mind and the soul have been freed to fulfill themselves.”        NELSON MANDELA, speech, May 10, 1994

“The greatest glory in living lies not in never falling, but in rising every time we fall.” NELSON MANDELA, Autobiography

My aunt and uncle were Christian missionaries in Africa and my family performed missions work in South Africa for over 35 years. Brought up in a dynamic faith-based household, I was always taught that we must care for orphans, widows and the poor – and that everyone is born with a purpose in life. As unlikely as it might sound, by the age of 10, I knew I wanted to be a lawyer, and I also knew that one of my purposes in life was to help people in Africa. It wasn’t until much later in life that I understood how I might combine those two ambitions.

I’ve been a practicing lawyer for 22 years and, up until recently, I’ve had a spotless record, full of accomplishments and commendations that have brought me and my family a great deal of pride. As a tax and business consultant to energy and mining companies in 2011/2012, I was able to charge an hourly rate for consulting work of $400 and I am blessed to make a good living in the for-profit world. In social ventures, you can also make a salary or work as a consultant but sometimes (most times) the pay is not as good.

I have had the privilege of traveling to Africa over 60 times, and in 1992 through 1994, I helped my professor at Georgetown University write a legal textbook on how nonprofit organizations can do for-profit social ventures, which is the foundation of the modern day social venture or social entrepreneurship project. This work resulted in the legal treatise entitled, “Sanders, Partnerships and Joint Ventures Involving Tax Exempt Organizations” (Wiley & Sons 1994).

I started doing work for clients in Africa in 1994 and have been working on social venture projects in Africa ever since then. These were missions-type projects where we would help build a church or community center, help with clean water, renewable energy, organic food and more. In this work, I realized that the local people of Africa had dreams to become something more, to be connected to the world that existed beyond the boundaries they were confronted by – to also ensure that their children had a future. So, I believe that I was blessed with the talents, ability and vision to look for innovative ways to help the local people in Africa to create jobs, income and a future. This was – plainly stated – to look at their natural resources (land, water, wildlife, mineral rights etc.) and help them locate the tools (people, financial partners and education) to help them maximize those resources – by building a tourism lodge, starting a micro business or starting a minerals project. This way, the local African people could achieve sustainability – meaning they could feed their families, afford to send their children to school and have food and clean water. More importantly, when talking with local community elders, they overwhelmingly said they want to provide a bright future for their children.

Initially, in 1994, I was asked to go to South Africa with some filmmakers to do a reconciliation film entitled “The Final Solution” by filmmaker Christopher Krusen about the life of a dynamic lawyer turned missionary named Gerrit Wolfaardt. This changed my life because Gerrit told me that “you must meet the heartfelt needs of the African people in order to talk to them about God, and missions work and micro enterprise. A starving person needs to be fed first before all else.” On this trip, I met John Coors, the youngest of the Coors brewery brothers. John hired me as a consultant to help with his project “Golden Photon” – which was designed to create solar energy water pumping systems to provide clean water to the rural communities in Africa. They also created a solar energy battery charging system to charge car batteries, which could be used, exchanged and reused by local people to power a light, radio or other electric appliance for their homes. Both were designed as micro businesses and were ingenious social ventures. These men, Gerrit Wolfaardt and John Coors, were pioneers in social ventures and I am thankful for the example they set for me. With my recent research and writing on how non-profits can do for-profit ventures, I was perfectly suited to help them.

These were amazing times because the Apartheid Era had just ended a few months earlier and Nelson Mandela, jailed 27 years by the Apartheid Era as a terrorist, was now the President of South Africa at the age of 76! The entire country was buzzing with life and hope – and expectations: for example, Nelson Mandela promised that he would help provide housing for all people so tens of thousands of people living in the rural countryside moved into the cities expecting to be given a home – not understanding that such a promise would take decades to complete. I met Bishop Frank Retief of the St. Johns Church of England in Cape Town, where eleven people were tragically killed in a church bombing by those loyal to Nelson Mandela in their struggle for freedom. Such stories of loss and tragedy and yet miraculously the Government of South Africa switched control from all White to mostly all Black in a short span of months – and all without any bloodshed. South Africa was a new nation and I was blessed to travel there several times a year from 1994 to the present.

In 1998, I met a man in Stellenbosch, South Africa, the wine country outside of Cape Town, who had heard of our social venture work and asked if I would like to travel to a country in need, Central African Republic, and work at a National Park, Manova Gounda St. Floris National Park – a World Heritage Site in Danger. From 1980 to 1999, the once rich elephant population dropped from 66,000 to 2,000 – all victims of poaching! It is also one of the poorest countries in all of Africa and its population is being ravaged by HIV/AIDS. After researching the country and the issues, I agreed to travel with him to Central African Republic in 1999.

Knowing that we needed a lot of help, I called Ted Turner’s office at CNN in Atlanta. His assistant listened to my story and then told me to send a fax to her office. Three days later, I received a call from Ted Turner’s office asking me to go to his newly formed UN Foundation in Washington, DC to meet with them. In 1999 – 2002, I worked as a consultant for Earth Conservancy where we partnered with UNESCO and the UN Foundation in Central African Republic to manage three large National Parks including Manova Gounda St. Floris National Park. In 2001, Earth Conservancy organized a UNESCO and United Nations sponsored mission trip to assess the current state of the National Parks. Headed by an intelligent and insightful woman named Elizabeth Wangari from UNESCO’s World Heritage Center, the trip and mission in May, 2001 was a great success and we had amazing adventures including several Presidential receptions with President Ange Felix Patasse.

We built two small tourism camps to help create jobs and to teach the local community about conserving wildlife so that tourists would come to the untouched paradise. There were many stories about life and death struggles with poachers, being held at machine gun point by soldiers, the amazing biodiversity and wildlife, walking on foot into a pride of lions, cannibals, naked pygmies and more. As early as 2000, we heard of the terrible persecution of Christians in Southern Sudan. In fact, it was the Sudanese soldiers who were the primary poachers in the National Park. With all this land, millions of acres, I thought the National Parks would be a perfect place to also provide sanctuary for those people being persecuted in Southern Sudan – just across the border from Manova Gounda St. Floris National Park.

Based upon these visits, in 2000 and 2001, prior to September 11, 2001, I wrote several White Papers to the late Congressman Murtha asking the US Government to help in our Central African Republic work as the small country is surrounded by Libya, Sudan, Chad and Congo. In meeting with the Congressman, I suggested that a peacekeeping and conservation mission would allow the US Government to post intelligence personnel so that these dangerous areas filled with terrorist training camps could be watched. The White Papers were bounced around the US Congress and different government agencies and I met with many people but it was decided that since the US Government did not have a formal presence in Central African Republic that our Government could not help. Tragically, we learned that many of Saddam Hussein’s terrorists trained just across the border from Manova Gounda St. Floris National Park. I often wonder if these terrorists could have been detected or stopped earlier had we been able to establish an intelligence gathering post in Central African Republic, while also doing our humanitarian and wildlife conservation work.

But, as life always evolves and circumstances change, one week after our United Nations sponsored trip to Central African Republic, the military of the country staged a coup, President Patasse fled the country taking untold millions of dollars with him and most of the government officials we worked with were killed. With the help of his friend Qaddafi (who I met in 2000 along with President Nicephore Soglo of Benin) and the Libyan and Congolese army, Patasse regained control of the country but a successful coup ousted him from power in 2003. Ten years later, after a failed Presidential bid to become the President of Central African Republic again, former President Patasse died in Cameroon in February, 2011.

The sad story is that the people of Central African Republic, who live in a country filled with the most amazing natural resources, remain the poorest of the poor in Africa. Also, the infamous warlord Joseph Kony and his rebel army are thought to be hiding out in those beautiful National Parks in Central African Republic still abducting children, raping, murdering and promoting terror. Tragically, due to circumstances beyond our control, the work for the local poor in Central African Republic remains unfulfilled. I often dream of that beautiful country and the people there and in Southern Sudan and wish I could have done more to help.

In 2002, my law firm was sponsoring The Shakespeare Theatre season of productions in Washington, DC. I was asked to represent the firm at a gala banquet for the Shakespeare Theatre in Washington, DC. There I dined with Justice Ruth Bader Ginsberg, Justice Rehnquist and the newly-appointed Head of Africa at USAID, Constance Newman, now Assistant Secretary of State for African Affairs. Ms. Newman was fascinated by the social venture model of partnering for-profit and non-profit companies to promote community-based projects in Africa. Ms. Newman asked that I meet with her staff at USAID and provide power point presentations and keep her updated with any progress.

At the same time, in 2003 and 2004, Dr. William Brown, a Fulbright Scholar and Ph.D Professor, and an innovative film crew worked with Earth Conservancy to produce two award winning HIV/AIDS education films work in Kenya and Tanzania with the United States Department of Defense. The films focused on the true life stories of soccer stars and promoting education, testing and awareness of HIV/AIDS. Winning awards at the Houston WorldFest film festival, the films achieved the goal of educating young people about HIV/AIDS and were shown throughout Kenya and Tanzania using a screen projector shown on bedsheets sewn together by a team who traveled from village to village. Earth Conservancy stills works in Tanzania and I am working on the establishment of social ventures with Dr. Steven Kiruswa, Ph.D and Maasai warrior, at his home town near Mount Kilimanjaro.

In 2005, our social venture team was privileged to partner with several local Xhosa Tribal communities in South Africa to help them manage and sustainably develop tens of thousands of acres of beautiful oceanfront property.  See Footnote 2.  Sotheby’s International Realty said it is the most untouched and beautiful coastal property remaining in South Africa.  See Footnote 3.  Because all of the small beach hotels were run by local white South Africans under a for-profit model – meaning they did not share any profits or ownership with the local people – our goal was to help the local community develop their own natural resources where the local people were actually partners in the projects.  See Footnote 4.  This would allow the local communities to not only receive jobs and education but also potentially receive profit, if the projects succeeded. Through Earth Conservancy, we also participated in three missions trips to build a church and a playground for a local orphanage. We also sent hundreds of bicycles, tons of food and clothing, soccer balls, medical supplies, computers and school supplies to the local people from clothing and bicycle drives that my wife and I organized.

As of today, I am still working as hard as I can for social ventures to help the poor in Africa. In 2011 and 2012, I helped to pay the start up costs for several new social venture projects in organic farming, education and a wildlife refuge and I have not received any compensation for my efforts. Furthermore, I started to pay back my past compensation from the social ventures to be discussed in this series. My goal is to help the people in Africa and to do my best – along with other caring people – to create sustainable and successful social ventures in Africa.

Article 2 in the Series is entitled: Social Ventures in Africa: What can go Wrong?

FOOTNOTES 1-4

Article 1 FN 1 Letter from William Brown to Mr. Haynie

Article 1 FN 2 Sotheby’s Endorsement Letter

Article 1 FN 3 Hole in the Wall Listing in Sotheby’s

Article 1 FN 4 Legal Opinion Letter for Hole in the Wall by Smith Tabata Law Firm

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Forward to Articles: A New Business Model in a Blossoming Continent by Brian Ray Dinning, JD, Social Venture Lawyer

Social Entrepreneurship in Africa: A New Business Model in a Blossoming Continent

 By:  Brian Ray Dinning, JD, LLM and Social Venture Lawyer

 June 21, 2012

“I’m encouraging young people to become social business entrepreneurs and contribute to the world, rather than just making money. Making money is no fun. Contributing to and changing the world is a lot more fun.”
      

                             – Muhammad Yunus, Founder of the Grameen Bank

 

Social entrepreneurship is a partnership – it combines both social objectives such as feeding the poor, creating jobs, promoting education along with traditional business objectives of profit-making. Traditionally, an investor– like a Mega-Corporation—thinks of a project the same way a predator thinks of its prey. The goal is to extract as much capital as possible with little regard for the well being of the environment in which that capital lives. The new social venture model, recognizing that all boats rise with the tide, hopes to profit while making a “satisfied customer” of the environment. In plain speak, it means if we’re going to make money on business projects in Africa, then we must help the local people to create jobs, receive skills training and partner with the local Africans so that when and if we make profits from helping them develop their natural resources then we all share in those profits.  This is the first principle of social entrepreneurship and the first principle by which I guide my business ventures.

 

I have been privileged to work with social ventures in Africa since 1994 and have visited Africa as early as 1983 to visit my uncle and his family, who served as missionaries in Africa for 35 years. Following in the example my family set for me, I’ve been on three mission trips to Africa. These have been astonishing experiences that have left me grateful and happy to be able to help others. In my life, I’ve been blessed to help feed hundreds of children in Africa and to express my love and devotion to a beautiful people. By getting involved, even taking little steps, we can all touch people, helping to change the course of lives forever.  That is the essence of social ventures and social entrepreneurship – creating sustainability for the business, the employees and the local people – hopefully making a profit while doing good.

 

As you will see in my subsequent Series of Seven Articles, sometimes committing your life to a worthy cause like social ventures comes with many challenges such as: differing world views, oppositional goals and objectives (especially from banks and investors), the unpredictable nature of people, and a limitless host of other complications and factors.  Face it – business is hard – let alone social ventures in Africa – with at least half of all businesses in the United States failing within five years (a Harvard professor notes that up to 66% of all businesses fail from differing viewpoints between people in the start-up process).

 

However, helping those in need in Africa or elsewhere around the world is a cause worth fighting for and an opportunity for social ventures and socially-motivated organizations such as The Bill and Melinda Gates Foundation, Oprah Winfrey or The Grameen Bank to make a tremendous positive impact.  We can all help by getting involved in helping others in your own home, in your neighborhood or city or any other place in the world where people need a helping hand.

 

Africa, once known as “The Dark Continent” is a booming economic giant with abundant natural resources, growing economies and a rapidly expanding middle class. Not surprisingly, the business world is noticing. As Forbes states, “African economies easily rank among the most resilient in the world. In the middle of the 2009 global economic recession, Africa was the only region apart from Asia that grew positively at about 2%.”  And it will get even better in 2012. Africa is favorably positioned to become one of the fastest growing regions in the world, and according to the International Monetary Fund, economic growth across the entire continent of Africa will be an amazing 6% in 2012.

 

Africa remains, however, largely misunderstood.  The media and news networks generally focus their stories on the negative news:  the dictators, conflicts, pirates, health issues and more. This negative bias by the media has led to ignorance on the part of the people of the developed nations of the world to the vast and burgeoning investment climate in much of Africa.  Of course, as noted above, the mega-corporations are all jumping on the bandwagon long before the rest of the world catches up.  This is how the mega-corporations seize their market share and maintain dominance, through recognizing the emerging economies, market opportunities and consumer spending trends before the rest of the of this world, and pouncing.  Currently, much of their attention is focused on the emerging markets of Africa.

 

Africa also has 400 million people living on less than $1.25 per day.  The mega-corporations cannot and should not reap the benefits of the abundant natural resources of Africa without first addressing the heart-felt needs of the local people for nourishing food, clean water, an opportunity for a job and the basic necessities of life. It is this basic principle that separates the social venture and socially-responsible companies from the mega-corporations.  Thankfully, social entrepreneurship is an economic phenomenon that allows the global innovator to recognize an investment opportunity or market trend and capitalize on it utilizing a unique and solidifying arsenal of tools such as social venture capital, new business structures, growing social awareness, social media, non-profit support and grassroots entrepreneurship.  Examining the social entrepreneurship model as it relates to the role of the social entrepreneur in Africa – as an emerging trend in an emerging continent – and discussing the value proposition of the idea of partnering with – or supporting – social entrepreneurs in Africa is the goal of my research and writing.

 

Social venturers or social entrepreneurs see the “greater good” in working on projects that have both a financial and social business purposes.  As stated by some social venture pioneers, social ventures are revolutionary and are here to stay.

 

“Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry.”


- Bill Drayton of Ashoka Foundation

 

“Social entrepreneurs have existed throughout history. St. Francis of Assisi, the founder of the Franciscan Order, would qualify as a social entrepreneur — having built multiple organizations that advanced pattern changes in his “field.” Similarly, Florence Nightingale created the first professional school for nurses and established standards for hygiene and hospital care that have shaped norms worldwide. What is different today is that social entrepreneurship is developing into a mainstream vocation, not only in the United States, Canada, and Europe, but increasingly in Asia, Africa, and Latin America. In fact, the rise of social entrepreneurship represents the leading edge of a remarkable development that has occurred across the world over the past three decades: the emergence of millions of new citizen organizations.”


- David Bornstein – How to Change the World: Social Entrepreneurs and the Power of New Ideas

 

“We need to reverse three centuries of walling the for-profit and non-profit sectors off from one another. When you think for-profit and non-profit, you most often think of entities with either zero social return or zero return on capital and zero social return. Clearly, there’s some opportunity in the spectrum between those extremes. What’s missing is the for-profit finance industry coming in to that area. Look at the enormous diversity of the for-profit financial industry as opposed to monolithic nature of the non-profit world; it’s quite astonishing.”


 -Bill Drayton – Ashoka Foundation 

 

Article I in the Series is entitled:  Introduction to my Social Venture Work in Africa.

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Africa must create more jobs to sustain exceptional growth in 2012-2013 and beyond by Ray Dinning, JD, LLM (tax)

See Article By PATRICK MCGROARTY from Wall Street Journal Online

DAR ES SALAAM, Tanzania—Countries in Africa will need to create jobs more rapidly to sustain strong economic growth, as the number of young people in the region rises, a report by leading international organizations said Monday.

The number of Africans between the ages of 15 and 24 will double by 2045, according to the African Economic Outlook released by the African Development Bank, the OECD Development Centre, the United Nations Economic Commission for Africa and the U.N. Development Programme. At the moment, even leading African economies are showing few signs that they are prepared to absorb those youths into the workforce, the report said.

According to the International Labor Organization, the unemployment rate in many African countries tops 20%. In South Africa, the continent’s biggest economy, the rate is 25.2%. And it is worse among young people—60% of the unemployed workforce across Africa is under the age of 24.

AFEMPLOY

“The continent is experiencing jobless growth,” African Development Bank chief economist Mthuli Ncube said in a release accompanying the report. “That is an unacceptable reality on a continent with such an impressive pool of youth, talent and creativity.”

The report forecast that Africa’s economy will grow 4.5% this year and 4.8% in 2013. But much of that growth will be in commodity-rich countries that have seen booming business for their crude oil, like Nigeria and Equatorial Guinea, or coal and natural gas deposits, like Mozambique. The results have yet to trickle down toward broad material improvement for increasingly young populations, which is threatening social cohesion and political stability in countries that aren’t tackling their unemployment challenges, the report said.

To correct the situation, the report recommended that countries encourage rapid private-sector growth, particularly in the informal economy and agricultural jobs that still dominate many isolated African countries.

Improving education is also crucial, the report said, as is expanding countries’ manufacturing and service sectors to wean them off unsustainable proceeds from commodity exports.

“Export diversification beyond raw-material and private-sector development are important to mitigate the continent’s susceptibility to external shocks, but that takes time,” said UNECA’s director of economic development, Emmanuel Nnadozie.

There are signs that Africa is already moving toward diversification, with telecommunications, trade and service sectors growing strongly off an extremely small base, the report said.

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WSJ and IMF Reports 5.5% Growth in Sub-Saharan Africa for 2012 by Ray Dinning, JD, LLM

 

See Wall Street Journal Online for May 13, 2012:

ADDIS ABABA, Ethiopia —Countries in sub-Saharan Africa are expected to register economic growth of at least 5.5% in 2012, compared with 5% last year, driven by new resource exploitation and recovery from drought, the International Monetary Fund said Monday.

In a report, the IMF said that the region’s continued strong performance has been propelled by favorable international commodity prices and increased export diversification toward emerging Asian markets, but it warned that “clear downside risks” remain due to continued global uncertainties.

“Natural resource exports contribute importantly to…budgetary revenues in a large number of sub-Saharan African economies, and demand for these products remains reasonably robust, most notably for oil,” the lender stated. The 44-nation region includes seven oil exporters, defined as countries where net oil exports make up 30% or more of total exports.

But the rate of growth in South Africa and Nigeria, the region’s two largest economies, is expected to slow. In South Africa, growth is set to be held back to less than 3% due to weaker exports to developed markets. In Nigeria, Africa’s largest oil producer, growth is expected to remain largely static at around 7% despite fiscal consolidation.

The IMF also said that growth in middle income economies is expected to remain static or lower than 2011, as these nations tend to track more closely the global economic slowdown. Eleven of the nations included in the survey are defined as middle income, including Botswana, Namibia, Ghana, Senegal, and Zambia.

Countries in East Africa and the Horn of Africa are recovering from the worst drought in 60 years which hit the region late 2010 and early 2011, hurting their agriculture and threatening millions of livelihoods, according to aid agencies. Drought also hit in the Sahel region in West Africa.

Ivory Coast, West Africa’s second-largest economy after Nigeria, was also hit by post-election civil conflict leading to a 5% reduction in its gross domestic product last year, IMF said.

Countries that rely significantly on exports of non-renewable natural resources have grown faster than economies less well-endowed with resources, but have also experienced significantly higher volatility in exports, revenue, and GDP growth, the IMF said.

Countries in sub-Saharan Africa export metals such as copper, cobalt, tin, gold, diamonds and aluminium, as well as crude oil and agricultural commodities like coffee, cotton, tea and cereals.

 

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African Economic Growth Strong for 2012 through 2013 according to Reuters by Ray Dinning, social venture lawyer

(Reuters) – The African Development Bank said on Monday it forecast the continent’s economy would grow 4.5 percent this year and 4.8 percent in 2013, but warned the festering euro zone crisis may hurt demand for African exports.

Africa’s economy grew 3.4 percent in 2011, with North Africa’s economic output expanding 0.5 percent and sub-Saharan Africa growing by more than 5 percent.

“The economic outlook for Africa remains optimistic. Natural resource-rich economies are expected to do better than more mature emerging economies,” AfDB said in its annual African Economic Outlook.

(Reporting by Duncan Miriri; Editing by George Obulutsa)

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Forbes lists “20 most powerful men in Africa for 2012” by Ray Dinning, tax lawyer

The 20 Most Powerful People In African Business 2012

They are the African business leaders, empire builders, moguls and high-flying chief executives of multinational corporations who possess continental clout and wield the most widespread influence in Africa’s business and economic circles.

These are the corporate titans and leaders who set the African economic agenda. Their voices are much listened to within Africa’s business and political circles, and through their resolutions and actions, they shape the economic future of the continent.

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