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Ethiopia’s Social Media: Bridging divides or deepening chasms? Exploring the ochlocracy and its unintended consequences

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By: Theodros Tadesse
As Ethiopia continues its digital journey, the nation’s social media landscape has taken an unforeseen turn. What was once seen as a means to connect and engage has evolved into an alarming phenomenon: social media polarization. This shift has inadvertently turned Ethiopia’s digital sphere into an ochlocracy, where mob rule prevails, and reasoned discourse seems increasingly elusive. In this article, we explore the ramifications of this polarization and the negative consequences it brings to the Ethiopian society.
Polarization Amidst Digital Growth
At the start of 2023, Ethiopia had 20.86 million internet users, marking an internet penetration rate of 16.7 percent. Among these users, 6.40 million were active on social media platforms, constituting 5.1 percent of the total population according to Datareportal global digital insights. While this digital growth is remarkable, it has coincided with a concerning rise in polarization.
The Ochlocratic Transformation
Ethnic Polarization: Ethiopia’s diverse ethnic landscape often translates into ethnocentric discussions on social media. This has stoked inter-ethnic tensions and contributed to mistrust among communities.
Echo Chambers: Users increasingly find themselves trapped in echo chambers, where algorithms curate content that aligns with their existing beliefs. This phenomenon discourages diverse perspectives and fosters confirmation bias.
Misinformation and Disinformation: False information, whether intentional or accidental, spreads rapidly on social media, sowing discord and contributing to violence and distrust among communities.
The Unsettling Ochlocracy
The polarization on Ethiopian social media platforms has given rise to an ochlocracy:
Mob Mentality: Civil discourse often devolves into bitter exchanges, personal attacks, and name-calling. Rational discussions are replaced by emotional outbursts, mirroring the characteristics of ochlocratic systems.
Cancel Culture:The majority on social media can swiftly mobilize to silence or “cancel” individuals or groups expressing dissenting views, stifling free expression and open debate.
Fear of Repression: The fear of facing online backlash leads many Ethiopians to self-censor their opinions, stifling the diversity of voices necessary for a robust democratic society.
Negative Consequences Loom
The ochlocracy on Ethiopian social media platforms has far-reaching negative consequences for both individuals and society:
Political Instability: Social media polarization has exacerbated political tensions, contributing to periods of instability in Ethiopia, and hindering the pursuit of peaceful resolutions and national unity.
Ethnically Motivated Violence: The proliferation of divisive content on social media has been directly linked to instances of ethnic violence, deepening divisions within the nation.
Trust Erosion: Polarization corrodes trust between different ethnic and political groups, making it increasingly challenging to find common ground and build a cohesive national identity.
Economic Implications: Ethiopia’s polarized social media image may deter foreign investment and economic development, potentially hampering the nation’s growth.
Ethiopia’s digital landscape is at a crossroads, where the unintended consequences of social media polarization have brought about an ochlocracy. To address this issue, a collective effort from individuals, social media platforms, and policymakers is essential. Promoting tolerance, critical thinking, and media literacy can help Ethiopia reclaim the positive potential of social media while mitigating its negative effects. In doing so, the nation can strive toward a more unified, peaceful, and prosperous future in the digital age.

The writer can be reached via theodrostaddese@gmail.com

Direct debt facility

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Vivianne Infante is a member of British International Investment’s (BII) Africa Coverage Team. Prior to this role she was Country Representative in the DR Congo and thereafter in Ethiopia, since 2015.  Her coverage responsibilities included investment deal origination, portfolio management support, engagement with the British and Ethiopian governments and all realms arising from representing British International Investment in the Horn of Africa.

Prior to joining BII, Vivianne worked as counsel at the Nigeria Sovereign Investment Authority (NSIA), leading the workstreams pertaining to the first Nigerian federal PPP infrastructure project, including the first approval of the Equator-principles driven environmental and social impact assessment. She also worked on developing investment policies and onboarding of investment funds and was responsible for NSIA’s application to the international forum of sovereign wealth funds.

Vivianne is a qualified English solicitor, having worked at several international law firms, specialising in the areas of project financing and infrastructure development in Africa, Latin America and East Asia.  She’s also worked in international advisory firms, where she supported USAID-sponsored programmes.

BII is the UK’s development finance institution and impact investor with a mission to help solve the biggest global development challenges by investing patient, flexible capital to support private sector growth and innovation. Recently BII provided its first direct debt facility to Ethiopia’s financial sector. Capital caught up with Vivian for a candid interview about the operations of BII. Excerpts;

Capital: Can you provide an overview of British International Investment and its core focus within the investment industry?

Vivianne Infante: British International Investment (BII) is the UK’s development finance institution (DFI) and impact investor with a mission to help solve the biggest development challenges by investing patient, flexible capital to support private sector growth and innovation. BII has been investing in emerging economies across Africa for 75 years. At the end of 2022, the Africa portfolio was valued at $4.68 billion, supporting 768 businesses across the continent.

BII’s investment portfolio in Ethiopia is currently valued at $131 million with 16 businesses. It has seized every opportunity to pioneer investments in the Ethiopian market since the 1970s, starting from having a stake in the Gumaro Tea Plantations. It backed the Schulze Global Ethiopia Growth and Transformation Fund, the first private equity fund established to focus on investments in Ethiopia, as well as the Cepheus fund, focusing on investments in Ethiopia’s most innovative companies and entrepreneurs.

Another ground-breaking investment by BII in Ethiopia is being part of the investment consortium to launch Safaricom Ethiopia, and BII was the only DFI to bid at the outset of the bidding process, playing a key role in liberalising Ethiopia’s telecommunications sector and improving access to digital services for millions of Ethiopians. Not to mention, the latest example is BII’s commitment to Dashen Bank, which is the first of its kind for Ethiopian banking sector, and in collaboration with fellow DFI FMO to attract more private capital.

Impact is at the heart of what BII does. BII invests to create more productive, sustainable and inclusive economies, enabling people in those countries to build better lives for themselves and their communities. For example, BII supports businesses that boost job creations and improve standard of living for all to foster productive development of economies. It also commits to sustainable investments such as climate finance, and prioritises investments that benefit marginalised sections of society, such as women and other underserved groups.

Capital: What differentiates BII from other investment firms in terms of investment strategies or approaches?

Vivianne Infante: As a DFI and impact investor, BII provides impact-focused investment. BII looks at whether the businesses have the potential to make a positive economic, environmental or social impact, as well as how commercially sustainable and successful they can be. Both measures of success in terms of impact and financial return go hand in hand.

BII is also a long-term investor, uniquely positioned to offer businesses a broad range of capital solutions across debt, equity and funds and in a wide range of ticket sizes. On top of this, BII aims to become a trusted partner with local businesses to bring the highest standard of operations, business integrity and ESG practice.

What also differentiates BII is its risk appetite and counter-cyclical investment horizon. Fulfilling BII’s mission requires a higher risk appetite and it also invests countercyclically to help companies grow and withstand challenging economic cycles, which helps shift the risk perception and works towards attracting greater and longer-term investments for businesses needing growth capital.

Apart from supporting business growth, mobilisation of capital is also a key goal of BII to attract greater private investment on the continent. In the last strategy period BII mobilised £2.5 billion of commercial investment between 2017 and 2021.

In Ethiopia, BII’s involvement in the Global Partnership for Ethiopia resulting in the launch of Safaricom Ethiopia is an example of its mobilisation capability and counter-cyclical investment approach, pioneering investments in Ethiopia’s untapped mobile market with significant benefits to the country’s development agenda for decades to come.

It has also been involved in setting up innovative first-of-their-kind partnerships like the African Forestry Impact Platform which seeks to scale and transform the sustainable forestry sector in Sub-Saharan Africa, as well as Gridworks, a platform company set up to transform transmission, distribution, and off-grid electricity in Africa.

Capital: How does British International Investment navigate the ever-changing global investment landscape and identify promising opportunities?

Vivianne Infante: BII operates in five-year strategy periods. The current 2022-2026 strategy builds on its deep understanding of the markets with its 75-year history and track record of success over the last decade. 

Under the current strategy, BII targets a range of vital sectors that meet global opportunities and address challenges, including the need for jobs and the twin crises of climate change and natural resource depletion.

For example, there is an increased focus on climate finance, including in green infrastructure, and a target for 30 percent of its new commitments over five years to be in climate finance.

To identify opportunities, BII partners with experienced industry leaders, such as through the Africa Water Infrastructure Development (AWID), a new joint venture with Metito, building on a shared ambition to galvanise investments that improve Africa’s water infrastructure and help close the funding gap.

BII also provides capital to the full spectrum of opportunities in the digital sector, from large-scale digital infrastructure to early-stage venture capital.  The launch of M-Pesa in Ethiopia by BII-supported Safaricom Ethiopia has proven to be a game-changer for financial inclusion in the country and a huge boost to transforming the country’s digital economy. Last year, BII committed $100 million to pioneering startups in Egypt, including Algebra Ventures and Endure Capital, two leading local VC firms that support promising early-stage businesses to build scalable companies in fintech, agritech, edtech, logistics and healthcare.

It also invests to promote diversity, including a new target for 25 per cent of its annual new commitments in gender finance. BII is part of the 2X Challenge, which has raised over $16 billion to empower women’s economic development.

BII’s capital goes wherever it can make a lasting difference in people’s lives and it prioritises the areas where capital is scarce.

Capital: Could you discuss some of the key investment products or services offered by British International Investment and how they cater to the needs of your clients?

Vivianne Infante: Being a flexible, patient investor means BII’s offerings across capital solutions can be bespoke and meet the needs of the markets and local businesses. 

Among many successful examples, I would like to highlight three cases that demonstrate BII’s innovative and forward-looking offerings.

The first is Safaricom Ethiopia. The country’s first private sector telecom player is supported by an international consortium including BII, International Finance Corporation, Vodafone Group, Vodacom Group, Safaricom and Sumitomo Corporation. It has recently gone live with M-PESA to enable greater financial inclusion beyond connecting people via mobile network.

The second example is the launch of Growth Investment Partners (GIP) in Ghana. The platform is a first-of-its-kind company that will provide patient, flexible local currency financing to SMEs. It seeks to address a critical gap in accessing finance for SMEs who are the lifeblood of the Ghanaian economy.

Lastly is Gridworks, a development and investment platform launched by BII principally targeting equity investments in transmission, distribution, and off-grid electricity in Africa. It recently announced the creation of a new utility that will aim to bring grid power to almost 70 per cent of Burundi’s population over the next seven years. Only 12 percent of the country’s 12 million people currently have access to electricity.

Capital: What criteria does British International Investment use to evaluate potential investment opportunities and make informed investment decisions?

Vivianne Infante: BII’s investment process includes specialists both from the investment and impact teams. Investment opportunities are brought to BII  and the deal team together with the investment committee conducts further research to carry out due diligence, assess the viability of the investment and ensure it meets the impact criteria spelled out in our Impact Dashboard which articulates the expected development impact a potential investment would have (potential development impact is linked to the Sustainable Development Goals).

Responsible investing is also core to who BII is. As such, the investment process also includes evaluating prospective investees’ environmental, social and governance systems and practices and their commitment to making improvements and adhering to industry good practices. Sustainability and inclusivity is key to the investment process and BII always looks for opportunities to maximise impact with a particular focus on the priorities of ESG, gender equality, climate change and business integrity.

Capital: How does British International Investment manage risk within its investment portfolio and ensure the protection of client assets?

Vivianne Infante: Investing and operating in Africa comes with inherent and perceived risks. However, BII’s robust investment history has equipped us with valuable insights and expertise to manage risky investments and take on greater risks than commercial investors ordinarily would.

For example, through the Catalyst Strategies BII helps channel capital into frontier and developing economies. Managed in-house by BII, the Greenovate strategy aims to address, through concessional debt, financing constraints for high-impact infrastructure projects caused by first-mover disadvantage, lack of precedent or affordability challenges. Another example is MedAccess, a social finance company founded by BII, which aims to increase patient access to life-changing medical supplies.

Through BII Plus, its technical assistance facility, BII offers a range of capacity-building support to investee companies to enable them to drive greater impact. One of the initiatives BII Plus supports is the African Resilience Accelerator (ARIA), a platform created in 2021 with the aim of increasing investments in frontier markets. Ethiopia is one of ARIA’s focus countries and the platform aims to offer a range of services that empower businesses, DFIs and private sector initiatives to drive sustainable economic growth and social impact.

ARIA is ready to strengthen its in-market presence in Ethiopia and has already put in place a pipeline of investable opportunities across the market. ARIA’s DFI partners will also conduct sectoral country visits to develop a practical understanding of the Ethiopian market and ensure impactful deals materialise.

Capital: Can you elaborate on the recent successful investment strategies with Dashen Bank?

Vivianne Infante: This transaction is BII’s first direct debt facility provided to Ethiopia’s financial sector and is in line with the Ethiopian government’s priorities to increase agricultural exports and attract foreign investors. BII’s joint commitment with FMO to Dashen Bank aims to revitalise Ethiopia’s agricultural sector as well as give a much-needed boost to the country’s financial services sector.

Agriculture is responsible for 80% of Ethiopia’s export earnings. This investment seeks to provide affordable credit and loans to smallholder farmers for the purchase of new machinery and to automate and expand product lines. The facility will contribute to increasing Ethiopia’s exporters’ earning potential, improving smallholder farmers’ ability to generate USD revenues and boost productivity across the sector.

This investment has the potential to catalyse growth within the country’s financial services sector by increasing access to credit supply, improving the quality of financial services, and opening up the sector to modern technology and banking systems that better serve society. Currently, only 45% of the country’s population has access to bank accounts and our investment aims to foster greater financial inclusion in the country for marginalised groups: women, youth, and entrepreneurs.

Capital: We heard that BII and FMO jointly facilitated a foreign currency financing for Dashen Bank, how could you collaborate to provide the finance and do you have such a collaboration in the past and any plan in the future?

Vivianne Infante: We have partnered with FMO to offer $20 million each to Dashen Bank. This joint commitment is the first long-term foreign currency (FX) facility in the market since foreign investment was previously prohibited in Ethiopia until 2020.

Given the current FX shortages, this investment will be key in providing exporters with critical FX capital to expand their product lines and purchase new machinery to increase agricultural production and boost productivity as well as increase FX flows into the country.

BII’s contribution will be significant as among the first foreign investors in Ethiopia’s financial sector, catalysing the market for further investment from international investors. We hope that BII’s convening power and mobilisation potential will see incremental investment into the country from international commercial investors as well as other DFIs in the long term.

Dashen is the latest in a series of partnerships between BII and FMO. Another example includes the Africa Resilience Investment Accelerator (ARIA), an initiative jointly powered by BII and FMO. It brings development finance institutions together to unlock investments in frontier markets in Africa, by uncovering investment opportunities and tackling barriers to investment. Ethiopia is a focus country as well as Sierra Leone, Liberia, Burkina Faso, the Democratic Republic of Congo, and Benin.

BII has previously partnered with FMO in the African Infrastructure Investment Fund 4 to boost renewable energy access, digital infrastructure, mobility and expand  Africa’s logistics sectors. Both have invested jointly in SunKing to support the expansion of its pay-as-you-go (PAYG) solar consumer finance business as well as invested in Equity group to support its $6 billion ‘Africa Recovery and Resilience Plan’ to finance 5 million businesses and 25 million households.

Capital: How does British International Investment integrate sustainable and responsible investment practices into its investment approach?

Vivianne Infante: As a responsible investor, BII plays an important role in strengthening industry practice in ESG. BII has deployed a range of good practice guidance, capacity-building programs, and online tools to help investee companies manage risks and pursue opportunities to enhance ESG performance in ways that drive positive development impact as well as tangible financial benefits for their businesses.

With such commitment to Dashen Bank, BII is exploring technical assistance designed to raise Dashen’s good practices in Environmental & Social governance, risk management, and gender to the highest standard in the country.

Additionally, through BII Plus and the FMO co-funded ARIA initiative, we are looking to expand support in Ethiopia by hiring a local consultant on the ground to monitor and provide in-house advisory support to businesses to meet agreed E&S and gender targets and implement action plans and monitoring systems to track progress.

Capital: There are a number of financial institutions in Ethiopia. How did you select Dashen and what is your criteria and how was the process?

Vivianne Infante: Dashen Bank is one of the largest private commercial banks in Ethiopia and one of the leading lenders to exporters in Ethiopia. While the bank has been operating in a particularly closed environment, it has been proactive in introducing innovative and first-of-its-kind solutions to the market as well as demonstrated a willingness to raise its standards and processes to become a leading example in Ethiopia and across Africa.

BII is keen to work with partners like Dashen Bank to drive greater impacts for people in Ethiopia.

Pass it on 3

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“You’ll find plenty of advice on building a successful business, but people don’t talk so much about how to leave it behind. And yet there are many good reasons for wanting to exit a business. Maybe you’ve found a better opportunity elsewhere and want to start a new venture. Maybe you want to retire or scale back. Maybe your business has just run its course, and you don’t have the passion for it anymore. Maybe you need to raise cash quickly, and selling your business is the only way. Even if you don’t plan to leave any time soon, it’s worth thinking through your exit options and having a strategy in place. Each one has its own advantages and disadvantages.”
The past two weeks we looked at different exit strategies and ways we, as a business owner, can work on a successful handing over of our role to somebody else. Andrew Blackman wrote an accessible and interesting article on this subject, from which I quoted his four first suggested exit strategies, which were:


Pass the business on to the next generation.
Management or employee buy-out.
Trade Sale.
Liquidation.


Now, with a liquidation, you’re almost certainly not getting anywhere near the full value of your company. For one thing, you’re usually only selling the physical assets. Often a large part of a business’s value is in things like its reputation, its employees, its knowhow and its relationships with customers, and those things are hard to liquidate.
Also, even the physical assets are typically not sold at full value. We’ve all seen those “Closing Down” sales at local stores, where the merchandise is deeply discounted so that it sells quickly. Even if you don’t run a retail store, liquidating your company is the equivalent of running a “Closing Down” sale. Buyers know that you need to sell quickly, and you’ll struggle to get good prices. Because liquidation is likely to generate less value than other exit options, it’s important to present your liquidation plan to creditors and shareholders and get their approval before you act. Then it’s about conducting a detailed inventory of all your assets and deciding on the best way to sell them. Options include selling directly to a competitor or supplier, selling all your goods in bulk to a dealer, holding an auction, or holding a retail sale to customers. For more detail on how to liquidate successfully, read the useful step-by-step guide prepared by the Small Business Administration.
Other Options
These are the main options for a total exit from your business, but you do have other alternatives, particularly if you’re looking for a partial exit. Perhaps you don’t want to walk away from your business, but just want to take some money off the table and take more of a back seat in the running of the business.
In that case, some of the options we looked at in our recent Funding a Business series could be worth looking into. Some business owners, for example, invite private equity firms to invest in their business as a partial exit strategy. They sell a large portion of company stock to the PE firm, and hand over some of the managerial control. The idea is that the private equity investors make the firm more valuable during their five-to seven-year involvement, and then arrange a sale or IPO (Initial Public Offering), at which point the owners can either fully exit themselves or stay on as minority stakeholders.
IPOs, as well, can be used as partial or even full exit strategies. The original owners often stay in place after an IPO, but some take the opportunity to sell the bulk of their stock and pass on the management reins to someone else.
Next Steps
As you’ve seen, the route you take depends on what you want to achieve, and what’s important to you.
Passing a business on to a family member is a good idea if you have a willing and able successor, but can sometimes cause conflict, and needs to be carefully managed. Management or employee buyouts keep some continuity in the business and reward loyal employees but can be difficult to arrange if the company has a high valuation.
Trade sales often offer the best price for a company, but mean loss of control. And liquidation is a “last resort” option for exiting a business cleanly, but usually without realizing its true value.
The key, no matter which option you choose, is to plan early. If your life circumstances changed suddenly, what would you do? Make sure you have a strategy mapped out, so that you’re prepared to exit your business when the time comes.
That includes making provision for life after business ownership. A recent survey found that nearly 70% of entrepreneurs and self-employed people are not saving regularly for retirement. If you sell your business for millions, that won’t be a problem. But if the sale amount is smaller, or if you want to pass the business on to a family member for a token amount, then you’ll need to make other provision for yourself.
These and many other personal choices will affect the type of exit you choose, so it’s best to start planning and consulting your financial advisor as soon as possible. If you start early and do it right, exiting a business won’t be a headache, but a smooth transition to the next phase of your life.
“Andrew Blackman is a copy editor for Envato Tuts+ and writes for the Business section. He’s a former Wall Street Journal staff reporter, now travelling around Europe and working as a freelance writer and editor. He maintains a popular blog about writing and books.”

Ton Haverkort
ton.haverkort@gmail.com

KAKISTOCRACY & AFRICA

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Kakistocacy denotes a system of government ruled by the least competent and most corrupt. In other words, the general condition that obtains in almost all African countries. But how long can we expect the African sheeple (human mass) to tolerate miserable social & economic reality brought about, amongst other powerful actors, by our mediocre elites? Currently there is hardly an African nation that convincingly promises a secured future for its sheeple. Given such a gloomy scenario, no wonder the African sheeple is, once again, gearing up for grass root revolution to transform its unenviable predicaments. Colonialism was fought, first and foremost, to bring freedom and self-sufficiency. Instead, independence, flag independence to be sure, only brought polarized social existence, unsustainable economic paradigm, cultural disfranchisement, environmental degradation, etc., etc. To a large extent, these are compliments of the global power that be (TPTB), in collaboration with Africa’s kakistocracy!
Africa was and still is, in a much better position to learn from the ‘development’ experiences of those who have been at it for a while longer. Sustainability or more realistically, ‘resilience’; is now a critical (life and death) issue for all of us, not only Africans, than it was, say half a century ago. Without taking the finiteness of resources and the saturation of planetary sinks, (mostly due to our modern/industrial wastes) into consideration, the whole modern edifice Africa is trying to build (economic growth, GDP, etc.), on sand, we might add, will not bring salvation, material or otherwise. The model of development that is pushed on us, mostly to satisfy the destructive desires of transnational capital is bound to be a non-starter, rhetoric and gimmicks aside! In fact, it promises to be a major source of contention that will bring even more chaos to the continent. African leaders, under the direct dictatorship of the ‘deep state’ of the West, have proven to be worse than kakistocrats! Admittedly, current African leaders are not the inquiring types and do not like serious debates based on factual reality. Nonetheless, these issues are and will remain quite detrimental to the various so-called developmental trajectories. Indigenously based analysis, like what is being attempted in South America (Bolivia, etc.) is conspicuously absent here in our ‘dark continent’, to use a phrase favored by our colonial masters
The level of corruption on the continent is also frightening. It is not only the usual petty corruption, but grand political corruption that has taken deep root. The current political impasse in many of the African countries, (Kenya, etc.) arise mainly from chronic and structured grand political corruption. In the absence of a convincingly unifying broad ideology operating on the continent, kakistocrats and their ilk have resorted to leveraging primordial sentiment (identity politics) to facilitate the criminal looting of country’s resources. Accumulation that relies on ethnicity, creed, etc. can never secure peace and harmony to diverse nations. In this regard, the few federal states of Africa seem to have erected and cemented grand political corruption as one of the pillars of their devolved political arrangements. Destabilization is the natural outcome of such shortsighted socio-political configuration or reconfiguration, as it were. Moreover, once legitimacy is lost in multi ethnic nations, recovery will not be easy, as all kinds of tendencies relying on identity politics (the de facto governing ideology) vie to carve myopic boundaries of all sorts!
As we never tire of preaching: the planet’s ‘sustained’ carrying capacity has already been surpassed. To think the collective South will attain western lifestyle is to assume potential resources and sinks equivalent to that of six more planet earths! Since this is an impossibility planetary abuse that is taking place under various guises must be stopped immediately. Humanity has to abandon its fixation on gluttonous consumption and should embark on a more sustainable/resilient form of existence, however difficult. Besides, even those in advanced industrial societies are not content about their general situation in regards to the modern world system. Procreation itself has become a hassle to many, preferring to forego our God given natural prerogative. The built-in stress of modern life (hyper rationality, brutal, cold, wasteful etc.) is taking its toll. Genuine human values unencumbered by the blind logic of excessive accumulation must, once again, be revived and validated. The current value system based on incessant accumulation and unnecessary consumption (mostly) is neither good to humanity nor to nature at large! Human societies have to internalize the core ideas of conservation and recycling. Our future must be informed by the concept of permaculture. Here again, our leaders, particularly those in Africa, are proving to be kakistocrats par excellence!
This was first published in December 2017