Business Day (SA)

As Egypt storms ahead with its ambitious and bold economic reform programme, it is attracting considerable investor interest.

Africa’s third-largest economy and, with 95-million people it is most populated after Nigeria and Ethiopia, Egypt is a compelling consumer play. Some of the world’s biggest multinational companies have deep roots there and plan to invest heavily in new products and manufacturing capacity in the next few years.

Mega projects in infrastructure, urban development and other sectors are driving new investment, both domestic and foreign. The government is targeting $10bn of investment in its fast-growing energy sector alone. This week, Uber launched its bus service in Cairo, with plans to spend $100m in Egypt in the next few years.

President Abdel Fattah el-Sisi is a man in a hurry. He began a wide-ranging reform process in 2014 and in late 2016 the IMF came on board with a $12bn loan agreement designed to deepen the programme and keep it on track.

The reforms are tough and the president has asked Egyptians to roll with the punches as he tries to stabilise the country and set it on a more sustainable growth path. He says the process is necessary to address entrenched practices that made Egypt inefficient, expensive and uncompetitive.

The IMF drove a hard bargain. Its conditions included the phased withdrawal of electricity and fuel subsidies as well as the floating of the currency. The Egyptian pound was in effect devalued by 50% overnight, while the subsidy withdrawals saw prices double.

In mid-2017 inflation hit a record high of 33.4% and interest rates went sky high as the authorities tried to moderate inflationary pressures.

Consumers have pulled back their spending and companies have had to adjust their operating models and consumer offerings and cut margins to survive rocketing prices. But the weaker currency has given impetus to the country’s ambition to become a manufacturing hub for the Middle East and Africa. Tourism, a critical sector for jobs and revenue, is also rebounding on the back of a weaker pound.

The government has introduced laws to make the operating environment easier and to attract new investment. Social safety nets and other measures have been put in place to try to offset the hardships for some at the base of the pyramid and there are numerous initiatives under way to build up micro, small and medium enterprises.

Critics point to the bad timing of the government’s massive spending on mega projects, particularly the $45bn new administrative capital under way outside Cairo, saying money would be better spent on less elitist projects at a time of increasing economic hardship for Egyptians.

But the government counters that new urban development is an investment in the future to accommodate population growth of more than 2% annually and to decentralise development and jobs away from Cairo, already one of the world’s largest and most congested cities.

There have been some quick wins. In 2017 Egypt reported its highest economic growth in a decade — 5.3%, up from 4.2% the previous year. Foreign direct investment increased by 24% in the first half of 2018 compared with the same period in 2017.

Inflation has come down to about 13%, and exports are rising. Egypt was also one of the best performers on the 2018 World Bank doing business index.

The political will behind the reform process is unprecedented, with ministers and officials tasked with implementing it under great pressure to deliver.

Sisi’s challenge is to maintain the momentum of reform. The multipronged strategy is finely balanced and needs the will of the people to keep it on track. Analysts say this requires consumers to start feeling the gains in their pockets. There are also concerns about the government’s intolerance of political opposition, the fact that Egypt is in a dangerous neighbourhood and the possible effect of negative emerging-market sentiment on the country’s big plans.

Business believes the reforms will be bedded down in two or three years and the real benefits will start to be felt. Consumer multinationals such as Mars Egypt, Unilever, Nestle and Pepsico Egypt have millions of dollars lined up for or already invested in the country. Investment in the energy sector increased by 300% in 2017 over the previous year.

Sisi’s bigger plan is to position Egypt as an export-led economic powerhouse in and for Africa within five years, using its geographical advantage as a gateway to Africa from the Middle East and Europe to best effect.

The rest of Africa is very much on Sisi’s radar and he has spent a good deal of time courting leaders from the continent. His election to the chair of the AU in 2019 is an opportunity to bolster Egypt’s long dormant ties with the continent.

Egypt’s longstanding membership of the Common Market for Eastern and Southern Africa (Comesa) has helped it maintain economic ties with the rest of Africa. It was one of the first countries to sign up to the Continental Free Trade Area launched in 2018.  In December, Sisi hosted Egypt's third annual Africa investment event, together with Comesa's Regional Investment Agency, attended by several African leaders.

The rest of Africa is not new political territory for Egypt. Admittedly, the golden age of Egypt-Africa relations was a long time ago, under the rule of Abdel Nasser, a dedicated supporter of Africa’s liberation movements and Organisation of African Unity chair in 1964. However, following his death in 1970, the engagement has drifted as subsequent leaders focused more on the Arab world.

Egypt was suspended from the body for a year in 2013 following the military overthrow of Mubarak’s successor, Mohamed Morsi, head of the Muslim Brotherhood party. But relations are now back on track and since 2014 Sisi has been actively building political and economic ties.

Egypt is becoming a force to be reckoned with as investors consider their options in Africa. While SA and Nigeria, long viewed as essential partners in Africa’s development, are diverted by domestic issues, other centres of power are starting to develop.

Politically, Sisi has been courting old foes such as Ethiopia to solve longstanding issues over the waters of the Nile, a river Egypt shares with nine other African countries.

Tanzania has provided a quick win, with an Egyptian construction and energy consortium recently winning the contract to build the $2bn Rufiji hydroelectric dam. Sisi’s visit to Tanzania to lay the dam’s foundation stone was the first by an Egyptian leader since 1968.

A year at the helm of the AU will allow an economically strengthening Egypt to position itself as an influential force in the rest of Africa. With a big vision, strong political leadership determined to deliver that vision and an increasingly competitive private sector, the country is set to become a key player in Africa’s near-term future.

• Games is CEO of advisory company Africa@Work and has been doing research in Egypt

BUSINESS DAY (SA) - The Nigerian president’s attack on international financial institution HSBC at the weekend has put his country’s investment risk scenario in the spotlight yet again — and raised questions about what his government hopes to gain from its assault on the private sector in recent weeks.

HSBC is paying the price for questioning President Muhammadu Buhari’s fitness for a second term, in a recent article. The response was swift and brutal. The presidency accused the company of being a conduit for more than $100m allegedly stolen by former military ruler Sani Abacha in the 1990s. Buhari set his Economic and Financial Crimes Commission to work on the matter and that agency vowed not to rest until HSBC returns the Abacha money to Nigeria.

The financial crimes unit also paid a visit to the offices of Standard Chartered Bank at the weekend, on unspecified business. This follows an accusation by Nigeria’s central bank that Standard Chartered was one of four financial institutions that helped cellular network provider MTN allegedly move $8bn out of Nigeria illegally over a 10-year period from 2007.

The hand of politics has reached deep into Nigeria’s private sector in recent weeks via the actions of various arms of government and state agencies. MTN has made the headlines in this regard because of the huge amount of money being demanded of it, the fact that the latest accusation follows the company’s massive $5.2bn fine in 2015 for failing to register SIM card holders timeously and the fact that the alleged infractions go back more than a decade.

BUSINESS DAY - The Nigerian president’s attack on international financial institution HSBC at the weekend has put his country’s investment risk scenario in the spotlight yet again — and raised questions about what his government hopes to gain from its assault on the private sector in recent weeks.

HSBC is paying the price for questioning President Muhammadu Buhari’s fitness for a second term, in a recent article. The response was swift and brutal. The presidency accused the company of being a conduit for more than $100m allegedly stolen by former military ruler Sani Abacha in the 1990s. Buhari set his Economic and Financial Crimes Commission to work on the matter and that agency vowed not to rest until HSBC returns the Abacha money to Nigeria.

The financial crimes unit also paid a visit to the offices of Standard Chartered Bank at the weekend, on unspecified business. This follows an accusation by Nigeria’s central bank that Standard Chartered was one of four financial institutions that helped cellular network provider MTN allegedly move $8bn out of Nigeria illegally over a 10-year period from 2007.

The hand of politics has reached deep into Nigeria’s private sector in recent weeks via the actions of various arms of government and state agencies. MTN has made the headlines in this regard because of the huge amount of money being demanded of it, the fact that the latest accusation follows the company’s massive $5.2bn fine in 2015 for failing to register SIM card holders timeously and the fact that the alleged infractions go back more than a decade.

Business Day - June 2018

Ethiopian Airlines is not breaking new ground in its strategy to become the African carrier of choice. South African Airways (SAA) has been there before. The big Africa push began in the late 1990s when SAA started spending lavishly to replace old aircraft and stepped up capacity and routes to African destinations. It even sold off a stake in the airline to Swissair, to give it access to Swissair’s then-extensive network within Africa and Europe.

The take-off, however, did not go according to plan. For example, there were massive hedging contract losses in 2002-03 and Swissair went bust not long after the SAA deal, so the South Africans had to buy back the stake. And even though there was little competition in the African marketplace, it proved tough for SAA. Many of its African ventures were unsuccessful.

Driving the strategy was an imported American team including CEO Coleman Andrews. They saw an aviation landscape that was full of opportunity amid little competition.

However, they did not factor in the difficulties of doing business in Africa, where many plans are sabotaged by political agendas or the antipathy from smaller state-owned carriers towards SA, which dominated the local aviation sector at the time, and the suspicions in many quarters about SA’s perceived hegemonic agenda in Africa.

Failures mounted.

They included the demise of regional airline Alliance Air, a joint venture between the governments of SA, Uganda and Tanzania. SAA exited its stake in loss-making Air Tanzania after a few years when it realised no value from the deal.

It lost out on a bid for a stake in Uganda Airlines, and a codeshare arrangement with Nigeria for SAA to use the US routes of the defunct Nigerian national carrier ended in acrimony. It also lost the bid to be a strategic partner to a new Nigerian flag carrier to Virgin Atlantic.

Andrews left SAA with a hefty payout that was particularly controversial, given that SAA had begun the slippery slide to where it is now.

In comparison to SAA, Ethiopian Airlines has been a plodder. It has built its business slowly but carefully. As a state-owned enterprise, it has fought hard to keep the government out of operational issues. I once asked group CEO Tewolde Gebremariam how they did this.

"With difficulty," he conceded. However, he said the politicians eventually understood that management independence was critical for success.

After more than 70 years of steadily building the carrier, Ethiopian Airlines has moved into top gear, swiftly building strategic alliances and entering into equity partnerships and management deals across the continent.

Strategic geographical advantage has been a key driver. In Malawi, the airline has a minority stake in Air Malawi, now called Malawian Airlines, and can use the country as a base for Southern Africa operations.

It has an agreement with the government in Zambia to relaunch the country’s defunct national carrier, which ceased operations two decades ago, taking a 45% equity stake in the revived Zambia Airways. It also has an equity stake in the Democratic Republic of Congo’s state-owned Congo Airways.

In Equatorial Guinea and Guinea (in the capital Conakry), it has technical agreements with existing airlines, and in Mozambique it has secured a licence in the recent liberalisation of the aviation sector. It has a 40% stake in ASKY Airlines, which is run out of Togo, which, although little known here, has an extensive network in the central and western regions.

Ethiopia’s appetite for African expansion has allowed several countries to dust off their dreams of owning a national carrier, with the old long buried in a mire of debt and inefficiency.

Chad is among them. Another is Ghana, which has had two failed attempts at a national airline — Ghana Airways went under in 2004 and its successor, Ghana International Airlines, saw its end six years later.

Ethiopia has expressed interest in the Nigerian government’s plans for a new national airline. Nigeria’s record to date in this regard is patchy. Its first national carrier, Nigeria Airways, had some early success but crumbled in 2003 under a mountain of debt. In 2004, it launched a second national carrier, Virgin Nigeria.

This was a partnership between local institutional investors and Virgin Atlantic, which ended acrimoniously in 2010.

Ethiopian Airlines is now Africa’s biggest, serving nearly 60 destinations in Africa and more than 100 cities on five continents. Gebremariam says the airline’s expansion drive is partly to counter the threat posed to African airlines from foreign carriers, which still account for up to 80% of passenger traffic to and from Africa. Locally, the competition has been floundering.

Like SAA, Kenya Airways suffered from poor management, huge debts and political interference. An ambitious African expansion strategy undertaken a few years ago was a catalyst for many problems experienced over the past few years. The airline, which has Air France-KLM as a stakeholder, is not enjoying the lavish bail-outs SAA has become used to, but it has implemented a new turnaround debt-for-equity strategy involving 10 local banks.

Ironically, Kenya Airways’ CEO recently mooted a tie-up with SAA to give both airlines a shot at taking on Ethiopian. The South African government’s resistance to privatisation, coupled with Kenyans’ suspicions of SA’s corporate aggression, makes this an unlikely solution.

However, both airlines could learn a thing or two from Ethiopian Airlines. Despite its ambitious strategies, the airline has cost containment as a major priority. In its 2016-17 financial year it generated $2.7bn in revenue, up more than 11% from the previous year. Passenger numbers rose by more than 18%. A thriving cargo business and technical training businesses add to a growing bottom line. It opened 12 new routes in 2017 and is expecting to do at least that many in 2018.

The history of aviation in Africa, however, would suggest that its new strategy for the continent is risky. It is in partnerships with countries that have an appetite for costly vanity and political projects. Most have tried, and failed, to keep a carrier in the air. It could be the victim of political agendas which, as a minority shareholder in its partners, it cannot control.

However, by all accounts, Gebremariam believes the best way to build a thriving framework of hubs and networks is with the support of other African airlines, not in competition with them. Unless Africans get more involved in their own aviation sector, there will not be an African carrier of note within the next decade, he predicts.

Better air links and cheaper flights are a critical underpinning of the African Continental Free Trade Area and other AU initiatives. But talk is cheap. The sustainability of African aviation is already undermined by politics and uncompetitive costs resulting from dysfunctional operating environments. For example, most countries rely on high landing and other taxes for easy revenues, not seeing the bigger picture.

Ethiopian’s strategy, however, has put it in pole position in African aviation and it could use its continental relationships to make the playing field easier for other local airlines. The lesson Ethiopian Airlines offers is not necessarily how to run a successful state-owned business; it is that a strategic plan and a vision, supported by good business practice and — importantly — by all stakeholders, become the bedrock of operations.

With little of that evident in SA’s public enterprises, such a notion may just be pie in the sky for SAA.

• Games is CEO of advisory company Africa @ Work

Business Day - May 2018

From a crusading hero feted on the streets of Harare just over six months ago, Zimbabwe’s President Emmerson Mnangagwa is now becoming known as a man of excuses.

His early promises to improve peoples’ lives have not materialised. Boastful announcements about $11bn in investment pledges have been questioned by the trade unions and others while striking nurses, who have worked in deplorable conditions for years, were fired for standing up to government.

Cash-strapped businesses are still shedding jobs as the debilitating liquidity crisis and acute foreign currency shortages from the era of former president Robert Mugabe continue. Meanwhile, election campaigning has gone into full gear for a poll expected to be held before 21 August – less than three months away.

Huge banners of Mnangagwa have appeared around Harare, punting him as Zimbabwe’s next leader. He took a short break from extensive international travel to release the ruling party’s election manifesto at the weekend, promising again to make Zimbabwe great again.

Admittedly, he has not had long to do much of substance. His focus has been on international re-engagement and securing investment, a priority which is a long way from the daily grind experienced by most voters without money, jobs and prospects.

People are sceptical about the ability of his ruling Zanu-PF party, a known refuge for scoundrels, to reform even if the president proves to be genuine about doing so.

The party itself may have lost the two main factions that defined its last few years, headed byu Mnangagwa and Grace Mugabe, but other divisions are beginning to show. One is the growing tensions between the military and civilian factions within the top echelons of both party and state. Soldiers who made the move into government through Mnangagwa are reportedly trying to exercise undue influence over him and other civilians in government.

Under Mugabe, military chiefs enjoyed significant power, patronage and influence and they are now in an even stronger position after helping Mnangagwa rid Zimbabwe of its ageing leader. Many also have large commercial interests that they need to protect. Their appointment to top posts in the interim government is not, as many thought, likely to be just a thank you from the president until the real work begins; they will not go quietly.

But a quasi-military government is not what Zimbabweans envisaged when they celebrated soldiers on the streets in the immediate aftermath of Mugabe’s removal and the ascendancy of soldiers may cost the party votes.

Chiwenga has already shown his style. He was, for example, responsible for the unpopular decision to fire 16 000 striking nurses instead of addressing their grievances. He fired the top brass of the police while the president was outside the country. Both decisions were later reversed by Mnangagwa. 

Mnangagwa’s charm offensive has only taken Zimbabwe so far, for now. The management and outcomes of the 2018 poll, not the removal of Mugabe, are critical for unlocking investment, capital and opportunities and getting remaining sanctions lifted. Key questions are whether it will be free and fair, whether observers will have unfettered access to stations and voters, whether the opposition is allowed to campaign freely and importantly, what happens in the event of a serious electoral challenge to Zanu-PF.

Investors have waited a long time for change in Zimbabwe. Most are prepared to wait a bit longer.

It seems unlikely that Mnangagwa and Zanu-PF will lose this election. The odds are stacked in their favour. The government has been lethargic in implementing promised electoral reforms and much of the existing machinery, which has enabled Zanu-PF to rig previous elections, is in place. Voting in the diaspora, a large repository of opposition voters, is off the table.

There are persistent stories about deployment of soldiers into the rural areas, which previously has been used as a strategy to create fear and get people to vote the “right” way. There are also concerns about the reaction of Zanu-PF should it lose the election and what the fallout would be, given its political stranglehold on the country.

“Cheating” is widely expected to take place – it is a cornerstone of Zanu-PF politics – but it is hard to know in this altered political landscape whether it is needed for the ruling party to get back into power. The president is still enjoying residual goodwill from displacing Mugabe. Many accept that his efforts at reform are sincere.  

He and his economic team have travelled the globe in an attempt to restore Zimbabwe’s tarnished image and attract new investment. There is no shortage of interest in the long-neglected opportunities in Zimbabwe.

Once reduced to a grey blob on the African maps used in investors’ power point presentations across the globe because it was regarded as too risky or difficult to explore under Mugabe, Zimbabwe is now back in full colour.

The opposition may still be fragmented and have lost ground to events of the past months, but broadly speaking, the opposition has a strong case. Mugabe might be gone but the old guard remains and Zanu-PF is unreformed and mostly unrepentant about the damage it has wrought to the country. Voters have had a while to assess their new president and have the space to think about what kind of country they want.  

Promises about the future are flying thick and fast as campaigning begins in earnest. The opposition MDC Alliance has focused its efforts on rebuilding the rural economy and improving livelihoods while Zanu-PF is, ironically, focusing on rebuilding the economy it helped to destroy.

Zanu-PF’s election manifesto, “Unite, Fight Corruption, Develop, Re-engage and Create Jobs”, pledges to transform Zimbabwe into a middle-income economy by 2030 by courting investment in all sectors but particularly in mining, agriculture and manufacturing. “It will be “no longer politics, politics, politics; but politics and economics,” Mnangagwa told thousands of ruling party delegates in Harare.

Over the next five-year term, the president says that if given the mandate, the party will target annual growth rate of six percent per annum over the period as well as $5 billion in annual foreign direct investment inflows and double that in domestic investments. It will raise capacity utilisation in industry to 90 percent from about 50 percent currently. This is ambitious, but not impossible if he manages the politics right.

But voters have heard it all before. In the country’s darkest days of economic collapse, Mugabe, with Mnangagwa at his side, trotted out a regular wish list. New promises were made, old ones revived and the country continued to limp along. No plan was workable without the kind of political change the old guard, including Mnangagwa, found unpalatable.

It is only once the dust has settled on yet another volatile election that the true path for Zimbabwe will be clear and whether the current crop of leaders have been just biding their time and behaving for the cameras during the transition to ensure they regained power or whether a new path forward is really possible.

. Games is CEO of business advisory Africa @ Work

Business Day - April 2018

As the ink was drying on the African Continental Free Trade Area (AfCFTA) agreement signed in Rwanda a few weeks ago, a crisis was developing at Kasumbalesa border post, between the Democratic Republic of Congo and Zambia.

Delays in transit clearance procedures at crossing had resulted in a 70km queue of trucks on the Congolese side of the border, mostly laden with mineral exports destined for vessels to the south. Common Market for Eastern and Southern Africa (Comesa) officials intervened to sort out the mess, blaming the situation on the failure of the two countries to integrate their customs systems.

On a good day Kasumbalesa is a problematic border, characterised by delays and inefficiency. Trucks can get stuck for weeks, particularly on the Congolese side, where roads are poor and few roadside facilities exist. The mining town of Lubumbashi 100km away feels the pinch when its main supply route to the south clogs up. Supermarket shelves start to empty and food prices rise.

A reminder of the embedded problems in intra-African trade is necessary, given the hype about the launch of the continental free trade area. The initiative is certainly symbolic and important in setting targets for countries to improve their trade facilitation, develop industry and broaden markets.

But the enthusiasm for a pan-African success story does not match the reality on the ground across much of Africa. Inefficient bureaucracy and poor infrastructure continue to frustrate the limited trade African countries have among themselves and impose huge costs on African consumers and economies.

Protectionism through the back door undermines the publicly stated commitments to regional integration by leaders. A flagship project of the AU, the AfCFTA aims to fast-track intra-African trade and economic development by creating a market of more than 1-billion people with a combined GDP of over $2-trillion. It contains provisions for countries to reduce tariffs by 90% and address impediments to trade, thus enabling intra-African trade to grow by more than 50% from less than 15% at present.

The spirit of free trade is well represented at public forums across Africa. But policies and actions at a national level tend to paint a different picture, one that is characterised by slow movement towards the very agreements that African leaders sign up to.

Why would the continental initiative be different? It is instructive to ask what has happened to the last bold trade initiative signed up to in Africa, with almost equal fanfare: the Tripartite Free Trade Area.     

Business Day - 2 March 2018

Former president Jacob Zuma was seen by many in Africa as a great leveller. This was not because of any attempt to address inequality among his people but because he aligned SA to the broader African experience of governance. His behaviour, together with that of his ministers and friends, removed any sense that SA is exceptional in Africa, a perception that used to be held by many in the international community but also by South Africans themselves.

Zuma can take responsibility for finally putting that issue to rest.

As SA’s media uncovered the excesses and murky strategies of the Zuma administration, revealing new dirt almost daily, many Africans expressed concern about SA’s trajectory. This was not because their own governments were better, but because they weren’t. They have lived with the continued erosion of value in their institutions, lifestyles, governance and other key areas of life. African countries from west to east have shown at times in their history how easily the rot at the top eats its way down, undermining moral and ethical propriety at all levels of society.

Nigerians maintain that SA is a beginner in the corruption stakes – their leaders and military dictators have siphoned billions from the fiscus for decades. Their lesson has been that self-interested leadership breeds endemic corruption. The longer rotten government is in place, the more moral laxity pervades the social fabric of the nation. It is hard to turn this around.     

The value destruction which Zuma and his supporters have brought is familiar to millions across the continent, writes Dianna Games

BUSINESS DAY - A Nigerian economist said recently that his country was better prepared for crisis than success. Managing dysfunction and expecting the worst has become the new normal, he added. His comments highlight the country’s response to decades’ poor leadership, weak institutions and the emergence of a culture of impunity, forged by political neglect and vested interests.

The situation into which SA has been plunged by President Jacob Zuma, his supporters and "handlers", coupled with the attendant destruction of value and values, is familiar to millions of Africans. Rebuilding countries destroyed by venal, self-serving leaders is long and costly. It is not just about the cost for governments of rebuilding neglected infrastructure, but also of trying to restore value systems, building trust with citizens and trying to root out embedded corruption.

Africans from other countries have voiced concern about SA’s trajectory. The Nigerians are sounding the loudest warning, saying that self-interested leadership breeds endemic corruption. It is not difficult to end up in a situation where the very people who can effect change won’t do so because they are benefiting from the status quo. The taint of corruption has undermined Nigerians’ trust in the ability of their institutions, politicians, the judiciary, police and even the country’s main corruption-fighting body to deliver efficiently and without bias or hidden agendas.

Bureaucracies have become a menace in Africa. Not only do they swallow the largest chunk of scarce resources without attendant productivity, the moral laxity at the top of the pile tends to trickle down into the service.

Transparency International says that in 2015, an estimated 75-million Africans paid bribes, many of them to get access to basic services. Many also paid bribes to escape punishment by the courts or police who are generally regarded as the most corrupt group. In Zimbabwe, 92% of people view the police as extremely corrupt while 75% in Kenya feel the same way.

It is common to hear Africans described as being resilient, made so by their often difficult and unpredictable circumstances. The ability of people to adapt to incremental hardship has made dysfunction seem almost normal. It also gets poorly performing governments off the hook — the expectation of public service delivery diminishes over time.

Remittances sent by Africans who have sought better lives elsewhere are the main source of income for millions of people who remained at home. Nigeria, Egypt, Somalia and Zimbabwe are among the top recipients of remittances, but Kenya — viewed as one of Africa’s most successful economies — is also a major recipient. In 2016, diaspora remittances remained Kenya’s largest source of foreign exchange earnings for the third consecutive year. Attempts by governments in recipient countries to capture these inflows have largely failed; the mistrust runs deep.

But ironically, the diaspora has also helped governments by boosting their economies without the politicians having to lift a finger.

Running water and regular power have become luxuries in many countries across the continent. Billions of dollars will have to be found to rebuild and upgrade systems.

Dysfunction in state services is best exemplified by the power sector. Utilities across the continent have been kept on life support for years, even though many provide almost no electricity or potable water to consumers. Infrastructure has been destroyed by government ineptitude, an absence of long-term planning and war.

The generator business across the continent is booming. In Nigeria, more than $20bn a year is spent on fuel to power them. People off the grid in Africa — an estimated 600-million citizens — spend hard-earned money on nongrid power energy options such as paraffin lamps, wood and charcoal. The UN Environment Programme says 26-billion candles are consumed annually in sub-Saharan Africa.

Manufacturing capacity has declined in most African countries due to economic mismanagement and skewed policies. Zimbabwe, once a major African exporter, now imports almost 70% of its needs.

State-owned enterprises have suffered a common fate across Africa — they have been looted by governments, undermined and often destroyed. National airlines run as vanity projects have crashed and burned. Who remembers Ghana Airways, Nigeria Airways, Zambia Airways, Uganda Airlines and Air Malawi? Governments refused to privatise these "family jewels" and destroyed them.

Much of this dysfunction is driven by vested interests — politically connected officials and business people making money out of the status quo.

Trust between the state and the electorate is a major casualty. A Ghanaian said even with improving governance in his country, people still do not trust the government, no matter how good its intentions may be. They tend to still believe that politicians act in their own interest first with any benefit to citizens being more by coincidence than design.

The lax tax compliance across the continent is part of the trust issue. As governance falters and corruption thrives, tax collection suffers. A lack of compliance becomes part of the culture of impunity. People resist funding governments who fail to spend tax revenues wisely, honestly or productively.

The compliance burden is also a factor. According to the PwC 2016 tax survey, it takes an average of 313 hours for a company in Africa to comply with its tax filing obligations, against the world average of 261 hours. In Nigeria, it takes 908 hours to comply.

The tsunami of stories about grand corruption, venal and conniving leadership and the attempts to undermine institutions — among many other issues — are being heard loud and clear in SA as the media uncovers a murky trail and shouts from the rooftops.

The destruction of value in a country is seldom a single event. It is a slow erosion, an incremental shift in perceptions and expectations, year by year, incident by incident, until one day what has been destroyed is largely forgotten and there is a new normal.

People no longer complain or protest about what they have lost because they have found a way to adapt to a degraded situation.

SA’s current problems, or similar issues elsewhere, barely make the news in other African countries, they have become so much a part of the fabric of life. And anyway, politicians no longer feel pressure from electorates to fix what they have broken. When these problems are no longer newsworthy in SA, we will know we have arrived in the new normal.

• Games is CEO of business advisory Africa @ Work.

Business Day (SA) - China’s deals in Africa are negotiated in such a way as to create new frontiers for Chinese labour, capital, materials and contract fees. But the opposite is true in Africa

 Business Day (South Africa) - 31 July 2017: As Zimbabweans brace themselves for the prospect of their 93-year-old president being re-elected in 2018, Nigeria is pushing for younger people to be eligible for political office.

The voting age in Nigeria is 18, but to be president or a governor in one of the country’s 36 states, citizens need to be at least 40 years old — and 35 to be a senator.

Last week, the Nigerian Senate and House of Representatives passed the #NotTooYoungToRun Bill, which includes provisions to allow young people to run for president from the age of 35 and as a governor or senator at 30.