More African billionaires please

Phumlani Majozi says these must be businessmen who rise to riches through their creativity, not corruption

It is an age of envy. Envy by politicians, the media and academia. This envy has been normalized worldwide. Those who are successful enough to have accumulated wealth through their hard work and creativity, are demonized and their wealth taxed more.

There is a bad habit out there – and that is to wrongly associate wealth creation and accumulation, with greed and human exploitation.

The people who propagate this lousy mindset of envy, are from the left-wing political spectrum. By left-wing political spectrum, I mean that they believe in bigger government interventions in the economy. In their flawed view, the wealthy are wealthy at the expense of the poor, and therefore the government must intervene by forcefully taking from the wealthy and giving to the poor.

What is hypocritical about their mindset, is that it is more envious of rich business people, not rich entertainers, athletes and politicians. They do not obsess about millionaire entertainers, athletes and politicians – they obsess with business CEOs and founders. That proves their inconsistencies and their corrupt value system.

This mindset is not what Africa needs at this stage of economic development. We will be better off with more billionaires than less billionaires. Because as the legendary economist of the Hoover Institution, Dr. Thomas Sowell once said, “The only thing that will reduce poverty is wealth. And the people who create the wealth reduce the poverty.” Our desire to accumulate more wealth helps and will help in the fight against poverty in the African continent. Wealth creation creates jobs and expands business opportunities.

Now it is very important to clarify something. When I talk about the need for the pursuit of wealth accumulation in our society, by that I do not mean we should pursue wealth accumulation through illegal and immoral means. We must not create a continent where people steal other people’s assets to enrich themselves.

Financial crime and corruption need to be severely punished and eradicated in the African continent. People must attain their wealth through their creativity and innovation of products that the African and the global market want. 

Corruption is staggering in Africa. The Corruption Perceptions Index (CPI) by Transparency International shows that amongst the world’s top 10 most corrupt countries, at least 6 are African; Somalia being at the top at the moment.

These appalling levels of corruption present an enormous challenge for Africans. Such disturbing levels of corruption must be rooted out urgently. The net-result of rooting out corruption, will be to create a thriving environment that attracts more investment which will increase the number of billionaires over time.

We must not aspire to a society where it is the politically connected that become billionaires. These are the children or relatives of kings and presidents.

Take for example Isabel dos Santos of Angola. She’s the daughter of Jose Eduardo dos Santos who ruled Angola for 38 years; from September 1979 to September 2017. 

On the 5th of this month, Foreign Policy reported: “Once Africa’s richest woman, Isabel dos Santos has seen her empire crumble after the publication of the so-called Luanda Leaks, a trove of documents that accused her and her associates of corruption.”

Foreign Policy further wrote that the International Consortium of Investigative Journalists (ICIJ) published more than 715 000 emails, contracts, accounts and other documents that showed Isabel allegedly used her political relationships to build her multi-billion dollar business.

Isabel’s case of corruption amongst relatives of political leaders is not the only case in the African continent. There have been many of this kind since most Sub-Saharan African countries became independent from their former colonisers in the 1960s.

Africans must not tolerate such corruption. We must create genuine, inspiring billionaires who create jobs and reduce poverty. Billionaires who rise to riches through their creativity, not through corruption.

On government policy that would help in increasing the number of billionaires in the continent, there is only one way. It is the embrace of pro-growth, pro-market policies. These are privatizations, low and flat taxes, deregulation and government spending cuts. 

Governments must also discourage the demonization of the wealthy. Because these people’s wealth is not under their pillows. It is invested and sustains companies that employ ordinary Africans. There is no need to tax the wealthy more. Because they will move their wealth elsewhere and that will not be good for Africans.

Nobel Prize-winning economist Angus Deaton has been sensible on wealth tax. He has said that it would be “very difficult to implement” and gives the wealthy “huge incentives to avoid it – and avoid it they will,”. 

Such avoidance by billionaires, as pointed out by Deaton, is not something we want in the African continent. Because we need more creation of wealth and more billionaires to build a prosperous Africa. It is our responsibility as Africans to make this happen. 

This article was first published on Billionaire Tomorrow Magazine.

Phumlani M. Majozi is a senior fellow at African Liberty. His website is phumlanimajozi.com. Follow him on Twitter: @PhumlaniMMajozi