When working with international investors you’ll have to do some cross-cultural translations which go beyond language.
It took me 5 years to learn so maybe I can save you some time… useful for both foreign and African founders.
I arrived in Africa (I’ll keep specifics vague to protect the innocent
But after some time I realized, democracy came to Africa on a boat. Before white people, Africans had a perfectly fine system that involved patronage to the local chief. They didn’t need a complex system of millions of pages of writing. People back then didn’t even need a writing system; they didn’t have one.
Now Africa has a mixture of the traditional systems and democracy. We call it corruption.
Years ago I joined a business group-widely known for its strong moral values- in Kenya. I was the only white guy and the youngest.
We visited each other’s businesses. This was eye-opening. They all had wonderful businesses. And giving bribes was not something some of them did. It was something all of them did. For many, strategically giving bribes was a core competency.
Bribes in the US only become important at the level of Boeing, Pfizer, Halliburton, etc but in Africa it’s part of everyday life for startup founders right from the beginning.
Now I understood better. Or I thought I understood. Because one day a guest lecturer came to the business group who had founded and ran a huge local company. “I’ve never paid a bribe,” he said. “The other week I was caught by the police. They said ‘pay a bribe or go to the police station.’ So I said ‘Let’s go to the Police station.’ “
Afterwards I talked to my groupmates, impressed. “Wow! so he has never paid a bribe.”.
They all laughed. “Kyle, of course he has paid bribes. You don’t get where he is without paying bribes. Everyone pays bribes. When an African says that in front of an audience we are winking at each other. He must be trying to raise money from some Americans so he needs to impress them with his purity. Look how impressed you are.” Sure enough, he soon sold the company to an American PE fund.
“So how do you record bribes? You have to say how you spent the money in your accounting system, no?”
“Facilitation fees.”
“Facilitation?” said another. “That’s old school. Everyone knows that means ‘bribe.’ Use ‘bush clearing.’ ”
If anyone asks “where’s the evidence of this bush?” you can say “It was cleared.” Or ‘Pest control’: if anyone asks you say “we had a huge infestation, but now, as you can see, the pest control was very effective.” Everyone laughed.
But are bribes bad? If you were driving a truckload of food to starving people and at a police checkpoint they asked for $1 or else turn around and let people starve. Is that wrong? Wouldn’t it be wrong not to pay? What if you were bringing food to hungry people and the bribe was $10? Where is the line?
And considering the police officer makes $150/month and has a spouse and children to take care of, is it really wrong to pay him on a “base plus commission” structure?
And considering he paid a bribe to become a police officer.
And considering democracy could be considered modern colonialism…
This is not such a hypothetical example. It is argued-by Alex de Waal in Famine Crimes: Politics and the Disaster Relief Industry in Africa-that the genocide in Darfur was funded by International NGOs and multi-laterals like the UN; they paid Khartoum for “permits” to treat the people that Khartoum was killing. Big NGOs give bribes but entrepreneurs are held to a different standard. This article is not meant to complain about the unfairness of the situation, but merely for you, dear entrepreneur, to not feel alone.
To add to the irony, investors want companies to “synergize public-private partnerships,” and yet government contracts awarded without a bribe are as rare as a white rhino. Funders know this and yet encourage Public-Private Partnerships anyways.
Allow me to translate for the uninitiated: Don’t ask; don’t tell.
Until I became more African I realized I could never compete head-to-head in the business world with my group mates.
In a tale as old as time, white boy tries to change Africa; Africa changes white boy.
Westerners want Africa to transition from a traditional patronage system to democracy, as if it’s a binary thing.
But what if a third option—an authentic African governance system—is possible? One that encourages Africans’ warm, communal, capitalist nature rather than trying to make every transaction a cold process with a mountain of paperwork.
Let’s be honest, paperwork came on a boat.
Kyle Schutter is a digital nomad based in Africa. He “herds” capital for high growth African companies. He’s Managing Partner of Grant&Co and writes at African Accelerationism. Reach out to him on Twitter @kyleschutter.
