Remarks Before the
VII Leon H. Sullivan Summit
July 17th, 2006
Chair, Special Summit Session
First and foremost, I would like to commend my friends Hope Sullivan Masters and Carl Masters, and my personal hero Ambassador Andrew Young, all co-chairs of and for this historic Sullivan Summit, for organizing a first-rate leadership meeting here in Abuja, Nigeria. With former U.S. President Bill Clinton, 17 Heads of State from Africa, a Presidential Delegation from U.S. President George W. Bush, led by HUD Secretary Alphonso Jackson, and more than 1,000 delegates from government, community and the private sector in attendance, 200 of which are African-Americans representing the diaspora traveling from the United States, and delegations from more than 40 African nations, all traveling to be here in Abuja, Nigeria, yes, the late Reverend Leon H. Sullivan, a mentor to me and a hero to us all, would indeed be proud. Good job Ms. Hope Sullivan.
There is no better way to honor Reverend Sullivan's legacy than the passionate continuation of his life empowering work. Just like Dr. Martin Luther King, Jr.'s annual holiday in the United States of America is as much about a "day on" (service to others) than a "day off," Reverend Sullivan's lasting legacy is and will continue to be about "the work" here in Africa.
African-Americans in the U.S., and Africans here in Nigeria and throughout the African continent, share a common problem of the 21st century – we both created a political power base, out of necessity, before we created an economic one.
Now, noting this fact is not in any way meant to be a criticism of our leaders in the United States, nor for the most part, government leaders here on the African continent. We all did the best we could with what we had to work with at the time, and for the most part we did it well. Truth be told, in America the civil rights movement led naturally to a focus on political empowerment. It seemed like the most natural next step. The problem is that America is what I would call an "economic democracy," or a democracy rooted in capitalism. Ownership and resources matter, and individual property rights really drove the early success of the nation. In short, African-Americans lacked the economic resources to make its political agenda "stick," so to speak.
Some would say that I am simply dead wrong here.
They would argue that there were indeed African-Americans in the United States who did extraordinarily well financially, before the "political answer" was introduced as a way to effectively expand prosperity and democracy to the broadest range of individuals; inclusive of African Americans and every other disaffected group in the United States.
Well, this counter argument is true on its face.
There are countless examples, from Reconstruction forward, of African-American entrepreneurs and professionals making substantial amounts of money in early America, but the deeper problem with this argument is at least two-fold; (1) this prosperity did not extend to all, or even the majority of African-Americans of the day; at least not enough to create "an ownership class" able to take the entire community into a new and positive direction, effectively defined by these new values of work combined with thrift (saving), investment and an ownership mentality. (2) The other challenge here, quoting my hero Ambassador Andrew Young and that modern day comedian-prophet Chris Rock, is that there is a big and very real difference between being "rich," and being "wealthy."
That a basketball player in America with a $20 million contract is rich, but the guy who owns that team, and cuts the ball player his paycheck is well, "wealthy."
And so, we made some money - some of us - but because financial literacy and "silver rights" was not stressed as much as a sense of public justice and civil rights were (both necessary I might add), we did not keep it (the money), and we certainly did not grow it.
An example of this is my father, who lives in South Los Angeles in the United States; an amazing man who I am proud to say, "raised me right." Truth be told, I probably owe my entrepreneurial perspective, and my success, to him because I saw him meet a payroll for the workers of his cement contracting business out of the front door of our South Central Los Angeles home in the 1970's and 1980's. Every week he did this.
But for all my father did for me and for others, running and building a business he still runs today at age 81, some 53 years later, he did very little, long-term, to help himself. He made money, but no one really taught him how to keep it too.
My dad would ask the money lender who came around to his house, "what's the payment," and not "what's the interest rate?" As with many of us, my father learned by doing. Making mistakes along the way, and then ultimately getting it right. Of course, my father was not dumb nor stupid – brilliant actually – it is simply "what he didn't know, that he didn't know." A common problem in mainstream and minority America alike. No one taught him financial literacy or the tenants of the free enterprise system coming up, and maybe that is part of the reason why I am so passionate today about teaching our children about financial literacy in America's low-wealth communities and schools. Why I have a vision for Africa, to do the same.
My father took the initiative in his life to become self-taught, and that alone was enough to open, build and run a successful business for years – and to make enough in the process to feed, cloth and protect his family, with the help of my mother of course, also an entrepreneur of sorts – and I am who I am today because of it. But it was unfortunately not enough to build upon, nor even to extend completely into retirement.
And so, the fact remains that the major problem, I believe, both in America and here in mother Africa, is that we – Africans and African-Americans both - have not effectively understood the free enterprise system, and how it could be made to work for poor people.
This issue of understanding the free-enterprise system and making it work for us, has to become a core part of any discussion we have around "African entrepreneurship" today, because in a very real sense the future of Nigeria, Ghana, Rwanda, Kenya, Ethiopia, South Africa and other forward leaning countries I have visited recently, literally lies with the ultimate success of its African entrepreneurs and its business class.
What I mean to say is that African governments should be increasingly fed and funded by a healthy and robust and growing tax base, and not foreign aid.
Bottom line, you cannot do this without creating real private-sector jobs and real economic opportunity. In other words, Africa must create a dominant class of very successful African entrepreneurs, at all levels of African society, from the "self-employment project" businessman of sorts, selling his or her wares in the local neighborhood, to the owner of a major telecommunications enterprise providing cell service to millions of African people. Individuals focused on creating wealth (their own), and not simply distributing it (others).
Or as we here at Operation HOPE continue to say, we must be focused on "converting cash economy customers into banking customers, renters into homeowners, small business dreamers into small business owners and entrepreneurs, minimum wage workers into living wage workers with new, marketable job skills, and the economically uneducated into the economically empowered. That education is the ultimate poverty eradication tool, because when you know better, you tend to do better. And when you do this, you move individuals from the poverty rolls into the payrolls. And in so doing, you are creating the new working class and middle class taxpayers that African governments ultimately will need if progressive African countries are ever going to become truly self-sustaining.
I am reminded here of a great Andrew Young quote – "you can make more money (honestly) from a growing economy, than you can steal from a dying economy." And for this reason I am truly excited to see this session here at the Leon H. Sullivan Summit at room capacity. This proves to me, and should be a powerful signal to government, that there is a passionate interest amongst Africans in not just government to government treaties, but business to business deal making too. That you are not focused, ultimately, on a hand out philosophy, but a hand up strategy – you just need help figuring out how to do the things you want to do.
In short, as you become successful, start building your business and creating jobs for others, you will increasingly need less government in your life, not more. In turn, Africa will explode successfully into the global economy as a new, promising, emerging market worthy of attracting private investment dollars, and not simply aid and hand-outs. This is the future of Africa I see.
But I see another opportunity here -- not only for Africa but for the world as well, and possibly led by the evolving African model of free-enterprise. A model rooted in dignity.
Ambassador Andrew Young recently said that "Communism failed because it failed to create a middle class. And capitalism succeeded because it succeeded in creating a middle class, but capitalism has not yet to prove that it can work for poor people."
Well, this is precisely what Africa will need to prove if in fact it is going to be successful; that capitalism and the free enterprise system can work for poor people. And when and if it does this, it succeeds as well in proving that when one person wins, someone else does not have to lose. "Doing well by doing good." Dignity in action.
We have seen what happens when frauds and dictators rule and loot sovereign nations, and the result has not been good, and is certainly not sustainable. I am proud to see the near-continent wide focus on cleaning up Africa's governance act, and providing government accountability to its people.
Just look to the model of Rwanda, where "an honest President," His Excellency Paul Kagame, has helped to introduce a Constitution that is one of the most progressive in the world today.
A Constitution where 49% of the seats in government, by law, are held by women.
A Constitution that respects the rights of people and protects individual property rights.
A Constitution where no one political side can "win," because no party can hold more than 50% of the power of government. No absolute winners, but no absolute losers either.
A Constitution that provides for free education for all children to the 10th grade; absolutely groundbreaking for a developing country.
A Constitution so strong and rooted in justice, and not "just us," that even criminals sent to prison for the genocide will get their real property protected too. I am even told of stories where prison inmates receive rent payments from the homes they no longer occupy, yet still own. This is revolutionary…in Africa. And dignity too.
We have also seen what happens when you have an accumulation of wealth at the top, earned honestly or not, and a much larger accumulation of poverty at the bottom, and no one in between; its called anarchy, and it is what happens when a country falls apart.
I am convinced that a nation cannot survive with the very, very rich, and the very, very poor, without creating a vibrant and growing middle class, or at least the reasonable hope for one, and for caring for the poor. Without hopes and dreams, a nation-state will slowly deteriorate. Collapsing in upon itself.
And so, my answer here in Africa is the same one we had to come up with for ourselves following the worst riot in U.S. history: the Rodney King Riots of April 29th, 1992. Respectfully, the federal government failed us in their response to these events, and its aftermath, and so the private sector and the community had to fill the breach. And we did it; we innovated, we were creative, we focused on practical solutions and producing measurable results. We knew that we could not afford the cost of negative energy, and failure was not an option. We had to feed our families, and we had to rebuild our community. In the end we all worked together to create a new covenant; a working partnership between government, community and the private sector. One that still works for the most part today.
As a result, South Central Los Angeles was rebuilt, not back but better. In the years following the Rodney King Riots, literally billions of dollars from the private-sector flowed into this small area of inner-city Los Angeles, California, because we convinced the world that it was not in fact an economic sink-hole, but a profitable emerging market opportunity waiting to be tapped, and that we were all willing to work hard to make it happen. As a result, oddly enough, the local, state and federal government benefited; from decreasing levels of crime, and increasing levels of personal prosperity and ownership, resulting in increased tax revenue to the government. And I am also convinced that if the government had done more, they would have in the end gotten more, too.
Well, this approach is precisely what entrepreneurs here in Africa need to do.
African entrepreneurs must be the change they want to see in Africa. No one else is going to do it for you. You must sell yourself, and your country and continent, as worthy of investment. And then you must produce something that brings value to consumers and customers alike here in Africa, and around the world, where you dream of someday exporting, too.
Remember what Ambassador Young said, "you can make more money from a growing economy, honestly, than you can steal from a dying economy," and then look around at all the unmet needs of your fellow African brothers and sisters, and find a way to meet it. And look not so much to the United States or Europe for an example or a role model, but (look) no further than right here, in Nigeria, Rwanda, Tanzania and other African nations on the move.
Look at all the financial modernization and clean-up work recently done in the banking sector by the Nigerian Central Bank, and the more than 65% of Nigerians, in a country of more than 150 million people, who are effectively still "unbanked." Look here and see the opportunity involved in bringing these hard working individuals into the mainstream financial services community, as this nation literally takes off.
Look at my fellow entrepreneur, Eugene Nyagahene, CEO and founder of Tele10 Group of Kigali, Rwanda, who has built several successful businesses and now is planning a $25 million amusement park – for Rwanda.
He has already raised $5 million for his newest dream, $2 million of which came from his own pocket and that of a friend in Rwanda. He is already worked the numbers and knows that based on a conservative revenue model he can be successful. Eugene is not asking for a hand out, simply a hand up. And soon, he won't even need that!
Or (look at) the bread making company Eugene also created, a mere three months ago in Rwanda, simply because he could not find anyone (other than two small shops owned by Germans) who made or delivered bread. He did not complain or petition the government, and he did not wish his fellow German brothers and sisters out of business. He simply ordered a baking oven from Europe. Then he located a baker and flew him over from Europe for three months time, where the baker proceeded to train local Rwandans in the fine art of baking bread. Three months into business start-up, my friend Eugene is profitable; 50,000 loafs of bread baked and sold daily at .50 cents each, generating $25,000 a day. Eugene told me that the only thing he needed was an oven, trained workers, and a distribution network and he was in business! Brilliant and simple.
Or the vast opportunities I saw first-hand while traveling last month through four countries in Africa, including a major opportunity for someone to create a mortgage company in Rwanda. Currently there is no mortgage company, and middle-class Rwandans are purchasing $60,000 and $80,000 (U.S. currency) homes with a commercial loan designed for a business, with a 5-year term, 12% interest and requiring a 30% down payment. Most surprising of all, these loans are being paid off with these terms, as agreed. It doesn't take much to imagine what would happen if someone came along with a deal of say, a 10 or 15 year term, 10% interest, and say 10-20% down payment for the same middle-class homes. My guess – the economy would explode. My hope is, if I keep talking about the opportunity as I have since I returned, some bright entrepreneur, or bank, will listen - and fill this niche need in Rwanda within the year.
I call this particular opportunity in Rwanda the Ford Motor Company model. Mr. Ford knew that he needed not just a good product, he needed purchasers too. Mr. Ford made sure he paid his skilled workers a living wage so they could in turn afford to buy the cars they made. And just as Ford built a car company on this strategy, by paying the home builder-workers in Rwanda (masonry workers, carpenters and framers and such) a living wage (so they too can buy the homes they are building) I believe Rwanda can build an entire economy too.
In Africa, unlike America, if you don't work you don't eat. It is just that simple. There is no "welfare" program to lean back on in Africa; just hard work and sacrifice. And still, Africans survive. What an African woman can do with $10 dollars is simply incredible; send her children to school, take a child to the doctor, make household repairs, prepare dinner for her family – and invite guests like you and me over to join them for the meal! This is dignity in action.
This is an amazing story of the human condition, because this history of surviving against the odds has been done, in most every case not involving war, without burdening others, or an otherwise negative disposition. Just the opposite actually, is the case in modern Africa.
Just look at the incredible healing process that has taken hold in both Rwanda and South Africa. In less than 15 short years, Rwanda and South Africa have moved from Genocide and Apartheid, to black African Heads of State(in both nations), justice and healing with regard to their oppressors (in both nations), and an embrace of the free enterprise system, individual property rights, education for all and a respect for the entrepreneur and the private sector (in both nations), and an economy on fire with hope – fueled in many cases by the efforts of the former poor and imprisoned, made good. From a beaten people with the figurative oppressors' boot on their neck, to literally buying and wearing lizard skin boots of their very own. Blacks and whites, Tutsi and Hutu, living together in peace. Nation's where the fragile experiment with democracy is new and still under construction, but also nation's where "prosperity is the new found partner of peace."
In Africa, most people have "been doing so much, for so long, with so little, they can almost do anything with nothing."
Yes, Africa is a large part of my hope for the future, and I believe, a very real hope and opportunity for the world in the 21st century.
Just like the inspiration of "rainbows, after storms," I am utterly convinced that Africa's newly emerging entrepreneurial class will prove key to opening a new and promising gateway to Africa's future.
African's entrepreneurs can and will lead the emerging "silver rights" movement in and for mother Africa.
In closing, I would like to take a moment to thank Toyota Motor Sales USA, and several other partners of HOPE, for actively supporting Operation HOPE and HOPE Global Initiatives, as well as those that have provided key support to the "Andrew Young's Africa" series of upcoming compelling documentaries on the promise of the African continent. Thank you.
Onward, and with HOPE.