(Courtesy of callmegomo.wordpress)
Why begin this article with these pictures? Well, it is popular in South Africa to refer to the first picture as Julius Malema before tender and the second as post-tender. The former African National Congress party Youth Leader has certainly had his share of troubles linked to tenders since 2009, with investigations intensifying on his lifestyle and how he is funding it.
This leads to who a tenderpreneur really is. It is defined roughly as a politician or government official who abuses their powers and influence to secure government tenders and contracts, according to Wikipedia and most internet sources. However, it is seen generally as someone highly connected to government officials and who uses those connections to land contracts, with an implicit opinion, of such individuals being seldom qualified for the tenders or contracts which they win.
There is nothing wrong with having connections and using them to get ahead in the game of landing contracts and tenders. That is the reality of the world. Granted, it only works when executed appropriately and the money used towards the intended projects and not diverted. However, it takes on a negative connotation if an unqualified person is handed that contract, and they blatantly fail to deliver and keep on getting those tenders; a move used by corrupt officials to distribute national money to their cliques or syphon it to offshore accounts.
(Courtesy of The Sunday Independent)
This tends to be a transactional affair of money exchanging hands, allowing for the illicit flow of funds. This kind of pervasive behaviour is endemic in the extractive sector on the African continent. It is a reason for the inefficient running of resources as tenders are given to ‘cliques’ and entrenches the kleptocracy that dominates most of Africa. Most of the contractors do not have operating knowledge of how the industry works and yet are able to get contracts. This destroys healthy competition which is necessary for an economy to grow and stunts growth, as not the most constructive tenders reach the table of decision.
Africa’s richest man – Aliko Dangote has been accused of benefiting from this culture as in the most populous country on the continent, he was one of the few individuals to have been given the licence to import cement. Granted, he seems business-savvy and is doing a lot to grow the agro-processing and manufacturing sector on the continent, it could be said he had an undue advantage as he did not face much competition in Nigeria.
It is not unusual to hear that people became extremely wealthy following a connection that brought government contracts their way. In the long run, this is extremely detrimental to the economy in that development plans which are supposed to have been achieved within that period remain unattended to, which will result in a financial haemorrhage as funds will have to be spent thrice over to achieve just one goal such as building sustainable schools.
South Africa is often used as a classic example of how tenderpreneurs can kill an economy. This is because it is one of the few African countries that is on track to creating a market economy that only a handful of African countries can dream of. The ruling ANC’s (African National Congress) practice of awarding contracts to its long-term supporters or those closely connected to it, has been visible for all to see. The fact that most of these tenderpreneurs are running services down for which they are contracted has not escaped the public’s eye. The culture of, ‘I need to sink my hands into the money pot and cater for my family before it runs out’, is popular not only in South Africa but the whole continent.
The former president of Zambia, Rupiah Banda was charged last year with abuse of office for signing a series of oil transactions, which did not benefit Zambians. It has been alleged that in one case, the oil was lifted from Nigeria and the money was paid into an account in Singapore, under his son’s name. This is indicative of how funds can also be diverted through tenders.
In order to fight this tenderpreneur endemic, there is a need to cultivate the entrepreneurial population o the continent. The youth need to be empowered when they embark on entrepreneurial ventures and this can be done through government practices, policies that are business-friendly and tax breaks. Venture capitalists have sprung up such as the Tony Elumelu Foundation who now invest in businesses they believe in. There is no reason why the government cannot also become an investor in its citizenries business ventures!