Ali Mufuruki on inclusiveness in the private sector [oxfordbusinessgroup.com]

Via oxfordbusinessgroup.com

What role is the private sector playing in 2017, and how do you see this developing?

ALI MUFURUKI: The central prerogative of the private sector is to have the government be more open to engagement and dialogue – to appreciate the fact that this is a partnership, while understanding that due to the history of our country, such a relationship is complicated. Previously there was not a lot of faith in the private sector, but now there is a serious need for cooperation to plan for the future.

The government has a number of plans aimed at moving the country in a new direction; for example, they are taking steps to achieve middle-income status, a market economy and semi-industrialisation. The rules of the game have changed: this means the private sector’s plans are dependent upon the government’s priorities, and the latter gets to define the relationship it wants and needs from the former.
One example of this is the government’s movement of its offices and day-to-day operations from the commercial centre of Dar es Salaam to Dodoma. The private sector now has to decide how much it will invest in construction and infrastructure –building houses and offices, and eventually schools and health care facilities – in the capital.

Indeed, the construction sector, which is large and wide in scope, supports a number of local industries and generates a great deal of tax revenue and employment. However, Tanzania also needs to foster construction activity because of the vital infrastructure it creates.
That being said, the government still owes the private sector a great deal of money, estimated at around TSh6trn ($2.7bn). Two-thirds of that originates from the construction sector, which remains incredibly important at this stage of the country’s development. In light of the large amount of debt owed, along with issues of transparency and corruption, and, most importantly, financial institutions’ hesitancy to continue lending to construction companies, it is clear the country needs to start fresh.

One key element of this is transparency. It is very important to know the government’s future plans, because the private sector may be able to contribute a great deal of aid, salaries and services. The government has to engage the private sector and create a mutually beneficial relationship; this will increase tax collection, public-private partnerships and loan facilities. When both the public and private sectors are involved, particularly in the case of loan facilities, these endeavours also harbour less risk.

How can the government create incentives to create a robust local private sector?

MUFURUKI: Incentives are normally built into agreements, which are an important part of the government’s investment framework. They cannot be reneged upon, which has happened in the past, and has caused the private sector to lose faith in previous agreements.

In May 2017 private sector operators met with President John Magufuli, as well as the minister of finance, and the minister of industry and trade. At this meeting, both private operators and public officials agreed on the need for a very strong and clear statement to the investment community: they are keeping an open dialogue as well as stamping out corruption. Both parties find these steps crucial for future investment in the country.

The government needs to voice its commitment to these particular principles and make clear that Tanzania is open for business. Losing investors to other East African or Southern African markets that are more investor- and tax-friendly would be detrimental to all parties involved. This diplomatic and public relations move is meant to recognise those who are contributing to the overall health and well-being of Tanzania’s developing economy: this would be very much welcomed by the private sector community.

Tanzanian CEO, Ali Mufuruki wins lifetime achievement award at “Young Achievers Awards” in Kampala

THE 2017 YOUNG ACHIEVERS AWARDS LIFE TIME ACHIEVEMENT AWARD.

This Award is reserved for eminent persons, who have, through hard work, sacrifice and service towards nation building, greatly contributed to the positive development of society, and are an inspiration to the young generation.

ALI MUFURUKI, CHAIRMAN INFOTECH INVESTMENT GROUP LTD & FOUNDER AFRICAN LEADERSHIP INITIATIVE EAST AFRICA;

On this day; The 12th of August 2017, The Young Achievers Awards has the honor of presenting to you the 2017 Lifetime Achievement Award.

The Award is in recognition of your contribution to development through building of successful enterprises in Tanzania, and the East African region, which have contributed to economic & socio growth, and in job creation.

The Award also recognizes your overt and elaborate effort to championing a culture of service, but most especially for the example you have set succeeding, and leading with integrity.

In recognition of your determination to build a critical mass of values based leaders in the public and private spheres, and encouragement of thought leadership, and several other achievements towards building a sustainable Africa, we are proud to honor you as an outstanding recipient of the 2017 Lifetime Achievement Award.

Furthermore, the Award is presented in the spirit that it will strengthen your resolve to consolidate these achievements, continue supporting and inspiring young people, and most importantly continue to mentor a responsible generation of leaders across the continent.

With humility, on behalf of the Young Achievers Awards, and on behalf of all progressive African youth, we are proud to present to you this Award. You are a thought Leader of our time.

Presented at the Kampala Serena Hotel on 12th August 2017.

READ ALI A. MUFURUKI’S ACCEPTANCE SPEECH

Vodacom Tanzania appoints Ali Mufuruki as Board Chairman

By The Citizen Reporter 

Dar es Salaam. Vodacom Tanzania PLC has appointed businessman Ali Mufuruki as board chairman with effect from 01 August.

The mobile network operator listed its shares on the Dar es Salaam Stock Exchange on Tuesday after completing the initial public offering (IPO) which was fully subscribed to raise Sh476 billion as planned.

Mr Mufuruki succeeds Mr Vivek Mathur following his recent resignation, the company said in a statement published on Thursday.

Non-executive directors, including the chairman, are appointed in accordance with the company’s articles of association and in line with corporate governance guidelines issued by Capital Markets and Securities Authority (CMSA).

“Mr Mufuruki brings with him a wealth of experience and influence from years of service in and out of the country,” stated Vodacom Tanzania’s chief executive officer Mr Ian Ferrao.

Mr Mufuruki is the founder and CEO of the Infotech Investment Group. “I look forward to facilitating collaborative working relationships with directors, management and other stakeholder groups to deliver on the board’s mandate,” stated Mr Mufuruki.

Vodacom also welcomed three new interim directors from Vodacom Group representing majority shareholders. These include Shameel Joosub (Vodacom Group ceo), Till Streichert (Vodacom Group chief financial officer), and Matimba Mbungela (Vodacom Group Human Resources director).

Directors representing minority shareholders will be appointed during the company’s annual general meeting where the board will be fully re-constituted.

Nicola Colangelo: Simple, wise and business genius

Left to right – Peter Mbogua, Rumit Mehta, Nicola Colangelo, Iain Christie and Saada Juma during the Africa Travel Association Partners with Harvard  past years. PHOTO | COURTESY OF THE WEB 

By Ali A. Mufuruki

A few minutes before noon on Monday July 24, 2017, a friend sent a whatsapp message to the CEOrt group chat informing us of the terrible news of the passing of Tanzanian Italian businessman Nicola Colangelo.

I had known of Nicola’s struggle with a terminal illness for quite sometime but hoped he would beat it and return to Dar.

Nicola and I had exchanged messages of hope and a possible reunion in Italy in September only days before he finally gave up the fight.

I was saddened by the news and as the week wore on with an endless stream of sorrowful eulogies circulating in the media, I realised the best way to deal with the sadness that was engulfing me was to reflect on and celebrate what I have learned from the man over the last twenty five years of friendship.

Nicola will be remembered by all who knew him for the vast business empire he built in Tanzania over the last half century.

Many have spoken of his super size vision, his incredible business acumen, his generosity, his wisdom and his love for family and the many friends he made during his life. All that is true and possibly understated because he combined all those qualities and more.

However, of all of Nicola’s traits, it is his simplicity and irrepressible humor that I will miss the most. Every time I ran into Nicola at a function and it happened to be one of those rare occasions when he would be wearing a suit and tie; he would be quick to say:

“Ali, don’t laugh. I know this suit doesn’t fit me. I have borrowed it from my security guard,” after which we would both heartily laugh, not least because it was true the suit was a poor fit but also knowing him, I wouldn’t put it beyond him to borrow his askari’s suit for the occasion.

The joke was repeated without fail every time he found himself at an event in a suit.  Nicola had little time for formality in general and for the formal dress in particular. He seemed uncomfortable in formal surroundings and was always impatient to get back to his more relaxed ways.

He was most at ease in casual open neck cotton shirts, khaki pants and open shoes. His office set up was simple, almost austere with high quality wooden furniture that he made in one of his many companies.

Thousands of people walking through his vast Slipway complex on Dar es Salaam’s Msasani Peninsula on any given weekend could walk right past him without recognising he was not only the owner of the place but also the creative genius behind its beautiful design, the builder and operations overseer all in one.

My fascination with Nicola’s simplicity however, extends beyond his choice of clothing. He lived a simple yet full life.

He demonstrated that creation of wealth must not necessarily lead to one being submerged in and consumed by it.

In the more than 25 years that I knew him, I don’t recall ever seeing him driving a new car or sporting an expensive watch. He didn’t care about these things.

He showed all who were interested that wealth is nothing but a tool for doing good, useful only if it can serve a useful purpose in the wider community.

That’s why he seemed to be at his happiest when giving his time and resources to social causes.

I worked on some of these causes with him and could not stop being amazed by the keen interest, patience, time and money he invested in them.

The man who grew up in poverty and came to Tanzania aged 18 as an equipment operator for an Italian construction firm has achieved what most of us can only dream of and yet remained authentic and unchanged by his wealth, not a mean feat in a city where the slightest amount of financial success can have a transformative effect on people’s personalities.

He always showed up on time for the CEOrt Board meetings, walked up the four flights of stairs to the Infotech Boardroom – apparently he didn’t trust elevators which is quite funny since many buildings in the country operate elevators installed by his company – and made the most insightful contributions to the many policy ideas that our group has considered over the years.  He would stay on for a chat after the formal business and never took a call during meetings. His ability to focus on what he was doing was remarkable.

As he leaves the stage for the last time, I will treasure the lessons of humility and simplicity that are Nicola’s most memorable contribution to my own personal growth as a businessman, husband and father.

I do not have the words to thank him for sharing this beautiful side of his personality with me. I will celebrate his life and pass on his teachings to future generations.

Go well my friend and see you again, Insha’ Allah

Ali A. Mufuruki Chairman, CEO Roundtable of Tanzania 

UK parliament appoints Mufuruki to lead special team to Africa

By Citizen Reporter 

Dar es Salaam. UK Parliament has appointed a Tanzanian businessman, Mr Ali Mufuruki, to be co-chair of its special team that is investigating efficiency of Britain’s aid to Africa in expanding business, investment and international cooperation in the last five years.

Mr Mufuruki is currently the chairman of the CEO Roundtable of Tanzania, a policy dialogue forum that brings together more than 100 CEOs of leading companies in Tanzania. This group engages regularly with the senior government leadership of Tanzania to find solutions for the country’s economy. The other co-chair is Lord Stephen Green from the House of Lords. Others are Prof Myles Wickstead and Lord Paul Boateng from the UK and Ambassador Darlington Mwape from Zambia, according to a statement e-mailed by Mr Mufuruki yesterday.

The committee started its task yesterday in London by listening to 17 stakeholders from different organisations, including the World Bank, DFID, UNCTAD/WTO, Trade Mark East Africa, ITC and others.

“There were also representatives of private companies operating in Africa, international business research firms and lawyers in the international business,” said Mr Mufuruki in the statement.

Cote d’Ivoire was represented by its Minister for Trade Jean-Louis Billon. According to him, the committee will submit the report and recommendations to UK Prime Minister David Cameron on June 23, 2016.

Impediments to Economic Growth, Including Governance, Corruption, Inequality

Low productivity and high population growth are troubling issues

In a Conference featuring many expressions of optimistic enthusiasm, Mufuruki’s presentation provided a ‘cold
shower’ of sober realities as he highlighted the more daunting challenges facing Africa.
Mufuruki began by pointing out that “every time good people take a good look at the state of Africa, they wish it
could be better.” Yet the ‘New Africa’ that everyone hopes for has remained elusive. Stressing that he should not be considered an “Afro-pessimist,” he said that the continent and its future “mean everything to him and his family.”

Mufuruki called for “realistic hopes based on an accurate assessment of Africa’s strengths and weaknesses,” and cautioned that we must resist settling for too little. As for impediments to Africa’s progress, he said that there were too many to list in the time allotted him so he would focus on what he called “the Big Two” of impediments: low productivity and high population growth.

Africa’s current productivity growth rate, about 6% per annum, Mufuruki branded as totally inadequate, first because of the low GDP base it started from and, secondly, because of Africa’s consistently high population growth. He noted that Africa was a world leader “in all the wrong things,” including: unemployment, extreme poverty, inequality, natural disasters and epidemics, armed conflicts, terrorism, political instability,
human rights abuses, and numbers of refugees.

Mufuruki illustrated his main points with a statistical comparison of Africa and China, beginning in the early 1980s
when they were roughly similar in terms of population (about one billion each) and per capita income. Since then, China had achieved double-digit GDP growth (between 13% and 18%) compared to only 6% for Africa. China had focused on training millions of engineers and scientists and on preparing its workers to take up industrial jobs, while in Africa, with no prioritizing by governments, students tended to shun engineering and science in favor of the easier arts and sciences.

“How can we seriously hope to industrialize,” Mufuruki asked, “without engineers or technicians?”
He then gave a depressing list of all the areas where Africa had fallen behind China: percent of the world’s GDP
(Africa, with 14% of the world’s population, had only 3%, compared to China with 18% and 16% respectively); ending poverty (36% of Africans live on less than $1 dollar a day, while China has only 5% under a higher poverty measurement of less than $2 dollars a day); population growth (China, growing at only 0.6% per annum, against 2.5% for Africa); and food self-sufficiency (Africa imports 83% of its food, while China is self-sufficient and even exports food).

Mufuruki noted the recent downturn in exports of African commodities to China, and its impact on African countries reliant on such exports, especially those exporting only single products (i.e. Zambia’s copper and Ghana’s cocoa). Whereas the Chinese had specifically planned for reliance on African materials in their 5-year plans, African supplier countries had been passive throughout. When the bounty of the export income suddenly diminished or stopped in the last few years, they were caught totally unprepared. “A movie we have seen
before,” Mufuruki commented ruefully.

Here the speaker returned to the troubling issue of declining African food production, pointing out that in 1980 Africa was exporting about as much food as it was importing. By 2007 there was an imbalance of about $22 billion of food imports over exports, and last year imports made up 83% of Africa’s total consumption. This situation has caused inflation in food prices and related increases in dietary deficiencies, especially those affecting brain development, in millions of African children. With Africa’s warm climate, vast arable land, and reliable water supply, this food deficit is puzzling, but a recent report of the UN’s Food and Agriculture Organization attributes it to lack of strategic planning and government support.

In considering solutions, Mufuruki urged leaders and planners to remember that “Africa’s people have the right to
some of the same aspirations that people have in other parts of the world,” specifically the ability to:
 Earn a living through honest work
 Have enough of the basics to live a dignified life
 Send their children to school
 Save enough for retirement
 Have hopes for the future of their children

When people lack hope for these things, Mufuruki said, “terrible things can happen, as is already happening in many parts of Africa.”

As for what must be done to rescue these hopes, Mufuruki returned his focus on finding cures for the vicious
cycle of low productivity and high population growth, stressing that, in his opinion, “Sub-Saharan nations must aspire to annual GDP rates closer to 20% for a period of no less than 30years if current generations of Africans are going to have any hope in the future.”

Success in this area would require finding ways to harness Africa’s unchecked population growth more positively
by better educating of the hordes of unemployed young people that Africa already has, and by taking better advantage of Africa’s present economic opportunities through better planning and policy making.

Mufuruki then turned his attention to the continent’s pervasive political corruption, the fight against which he called “a matter of life and death,” adding that “if we fail, everything else we are trying to build will come crumbling down.” Here Mufuruki added a pessimistic note, pointing out that even the African institutions charged with combating corruption—thejudiciary, the police, and the regulatory bodies—were badly
infected by it.

To conclude, Mufuruki said that the fight against corruption must go hand in hand with innovative efforts to provide jobs and increase production. This is no time for complacency in any of these areas, and Africa, to be successful, must follow a different path of development than that of other regions.

Calling attention to the many up-coming celebrations of 60 years of African freedom from colonial rule, Mufuruki said: “We must ask ourselves what we have done with that freedom.” He ended by stressing that “responsibility for creating the New Africa that the whole world is calling for rests squarely with today’s generation of Africans” and that “we cannot afford to fail.”

In the question period, Mufuruki made the following comments:
Regarding the quality of the information available to Africa’s economic planners, Mufuruki said that the data he
saw while on the Board of Tanzania’s Central Bank overemphasized the urban “official” economy and created mistaken assumptions and that his efforts to improve them were rebuffed.

On the subject of suitable role models for African development, he advocated against disqualifying the former colonizing nations, noting that South Korea had prospered greatly by purposely following the example of the hated Japan.
 Reported by Charlie Graham

Download Highlights from the 29th Annual Camden Conference