Continued from last week.
Concerning tax issue, a group of supper rich American businessmen including investor George Soros, Facebook’s co-founder Chris Hughes, and Molly Munger, daughter of billionaire Charlie Munger recently wrote an open letter stating that “America has a moral, ethical and economic responsibility to tax our wealth more,” The group said in their open letter that “A wealth tax could help address the climate crisis, improve the economy, improve health outcomes, fairly create opportunity, and strengthen our democratic freedoms. Instituting a wealth tax is in the interest of our republic.”
As reported on BBC, among the 18 signatory of the “Open Letter” were a descendant of Walt Disney and the owners of the Hyatt hotel chain. Many in the group have been associated with progressive initiatives on issues such as climate change and the growing wealth gap. The letter pointed out that fellow billionaire Warren Buffett has said he is taxed at a lower rate than his secretary.
Fresh off pondering the future of billionaires, Bill Gates recently went on Stephen Colbert’s eponymous show with his wife, Melinda, to a crescendo of cheers. In accepting his new role as the world’s second-richest person, he quipped, “We’re trying to give it away faster” and the audience swooned. From their call for higher taxes on the superrich to the obligations of the successful to the empowerment of women, the applause kept coming. By the end, Stephen Colbert was playfully goading the Gateses to run for political office.
Compare that with Amazon. Its founding Chairman, Jeff Bezos worth over 130 billion dollar (at least until his divorce settles), and Amazon is worth $800 billion. Why extract a measly 3 billion dollar in corporate welfare from New York? In the truest Friedman sense: because he has shareholders – and he could.
Naomi Klein, the well known author of “The Shock Doctrine” stated that the dueling reactions underscore an American truth as timeless as Astor and Cooper and Rockefeller: Americans expect their meritocratic royalty to remain accountable to the public that helped create them. Traditionally, that means philanthropy, an aspect of extreme success (there are now 137 deca-billionaires in the world) that no longer feels optional, albeit one that still engenders cynicism. Says Gates: “The attack that ‘Why should you even have a say in setting the agenda?’ That has a certain resonance to it.” For Bill Gates, who within our lifetime will likely be regarded as the greatest philanthropist ever, accountability starts with framing the role: “picking novel ideas” or “off-the-wall theories,” as he says, and then proving that the concepts work, or don’t, taking the kinds of risks that no taxpayer-funded government or shareholder-dependent corporation could justify.
But in this era, Gates also recognizes that motives will be questioned. “If we come and improve math class, then people are like, ‘Hey, you didn’t do the band ” Bill Gates says. For this reason, Gates tries to hold himself publicly accountable through transparency, including a public letter from the foundation that he and Melinda write each year. It’s also the driving reason for the Giving Pledge, in which 189 of the world’s wealthiest people have affirmed, for all to see, that they will give away at least half of their fortunes, most much more.
A Giving Pledge signatory, Salesforce founder Marc Ben¬i¬off has similarly shifted from anonymous giving to putting his name on two hospitals, in part to be a role model for emerging tech billionaires and in part because “it sent a message that we’re supporting the community in a tangible way.” And he does the same thing with his company, which pioneered a “1, 1, 1” model that placed 1% of the company’s equity in a trust, along with a pledge to donate 1% of its software products and 1% of his 35,000 employees’ time to volunteer work. It’s a combination that’s generated $260 million in grants and 3.8 million hours for civic causes.
Paul Collier who author of “The Future of Capitalism: Facing the New Anxieties” stated that rather than rely on such voluntary munificence, Paul Tudor Jones, an American investor, hedge fund manager, and philanthropist who cut his philanthropic teeth founding the innovative Robin Hood Foundation in New York, has focused for the past several years on holding corporate America directly accountable for better capitalism. He founded Just Capital, which has surveyed more than 80,000 Americans in order to get a precisely calibrated take on what makes a good corporate citizen.
America’s older workers, it turns out, aren’t so different from its youngest, desiring companies to pay and treat their employees well, put out good products that have integrity, and care about the environment and the community. Just Capital ranks every major public company across its 36 criteria, from best to worst, proffering a Good Housekeeping-like seal to the top companies, in order to spur better corporate citizenry. Such remedies are urgent. “Unless we find a market-based solution to the exponential growth in inequality, we will end up with populist legislation that creates a hammer to go after every nail,” Paul Tudor Jones says.
Johan Norberg, the author of “In Defense of Global Capitalism” asserted that the great majority of American billionaires acknowledged that higher taxes on the billionaire set are inevitable; most even saw them as beneficial, if correctly applied. According to Bill Gates, Warren Buffett, and others, the correct way to levy taxes on the superrich is at a transaction point. Either an estate tax without the loopholes that currently render it useless or a higher capital gains tax applied only on extreme fortunes, to avoid suppressing growth.
And better yet, the tax code can be refined to encourage growth and spread it around more evenly. The launch of opportunity zones, engineered by the Facebook and Spotify billionaire Sean Parker, has already been put in motion, offering tantalizing tax breaks in needy areas of all 50 states. Adjusting corporate tax rates based on jobs created – more jobs, lower taxes – is another worthy idea.
The eternal beauty of the free market is its ability to evolve. Leave it to the most admired capitalist in the world, Warren Buffett, who has lived through more than one third of this country’s history and who bought his first stock in 1942, at a moment when it was conceivable the United States could lose World War II, to make a prediction: “The luckiest person that will ever be born in the world to date will be a baby being born in the United States today.” Bet against Warren Buffett, and capitalism, at your peril.
Reimagining capitalism
Fintech Summit
Ethiopia is going to host the first Africa Fintech Summit to Addis Ababa on Nov21st.IBEX Frontier, a Virginia based niche Investment advisory firm focused in Ethiopia with presence in London & Addis Ababa is proud Co-organiser of the Africa Fintech Summit(AFTS).
Zekarias Amsalu is a founder of IBEX Frontier who has been at the forefront of providing deal sourcing, research, buy-side & sale-side Investment advisory, guiding international investors on entry into and about bankable opportunities in. Starting from coining the term ‘Sheba Valley’ for Ethiopia’s tech space and representing and speaking on behalf of entrepreneurs of Ethiopia at various international summits, Zekarias is helped investors pour out FDI into Ethiopia as well as created visibility of Ethiopian businesses & entrepreneurs globally.
Zekarias is also the 2018 cohort of NextGen Investors of Invest Africa(USA) and has been featured on various international mediaincluding CNN, CGTN, Quartz Africa & Digest Africa among others. In September 2019, Zekarias has been featured as the reckoned connector of opportunities to Investors and Route-to-Ethiopian Market advisoryby Forbes Africa, in its exclusive issue on Ethiopia entitled: Ethiopia: The Pride of Africa”. Zekarias has brought the premier Africa Fintech Summit to Addis Ababa and Capital Newspaper has sat down with him while he was in Addis for the planning of the summit. Here are excerpts of the interview.
Capital: Can you briefly tell us about Ibex Frontier and its role in connection to the AFTS?
Zekarias Amsalu: Ibex Frontier is an investment & route-to-market advisory firm based in Virginia with presence in London and Addis Ababa. In one hand, we help international investors and corporates with buy-side advisory/deal sourcing as well as customized research and business intelligence on opportunities in Ethiopia and in another, we represent Ethiopian businesses as investment advisors- from getting them investment-ready to road-show to investment negotiation and fund raise. We are humble to have the privilege of helping Ethiopian businesses successfully raise funds in the last 2 years and we have few more investments we will be closing soon. We currently are working on FDI generating, job-creative initiatives and investment in excess of $100M in Ethiopia in Fintech, Tech, Mining, FMCG, FMCG & Infrastructure. With our commitment of providing Access, Visibility & Opportunity to Ethiopian businesses, I spoke at a panel of AFTS DC last April and immediately I approached the Founder of AFTS to bring the next AFTS edition to Ethiopia and for Ibex be co-organizer and here we are, very pleased that AFTS is taking place in Addis Ababa on 21 November 2019.
Capital: Can you tell us the story of AFTS, it’s origin and track record so far and what makes it different from other Fintech summits?
Zekarias: The AFTS was born of the belief that fintech holds the potential to transform lives and economies in Africa but more collaboration among stakeholders and nations is needed.
In 2016, the Founders at Dedalus Global led a series of round-table discussions about how technologies like peer-to-peer payments, mobile money, and blockchain could reverse financial exclusion in Africa and in the process unleash unprecedented economic firepower. It was tremendously exciting stuff, but it also became equally clear that silos posed a threat to this potential. Banking and tech communities were often isolated from each other, policy makers and regulators weren’t always attuned to new technologies, cross-border integration was scarce, and global investors just didn’t have a good understanding of African markets. Led by an advisory board of investors and entrepreneurs, the AFTS was created in 2017 specifically to bridge these gaps.
Capital: How is AFTS different from other Fintech summits taking place across Africa?
Zekarias: The AFTS is different from other fintech summit is a few key ways. First, we are a biannual event that occurs each April in Washington, D.C., and each November in a different African city. That makes us a pan-African event with a global scope. We are also unique in our diversity, as we engage with the full spectrum of sectors and geographies that comprise the highly-dynamic African fintech space. Lastly, we are content driven and feature Africa’s thought leaders, which makes for a highly curated and outcome-oriented event. We’re proud that a number of large investments were mobilized during the last three Summits and that we facilitated real policy development, particularly at our Lagos Summit last November. Ultimately, however, our biggest differentiator is the relevance of our program and the quality of our participants.
Capital: Who are your co-organizing partners with Dedalus Global and describe their relationship with Ibex Frontier?
Zekarias: Dedalus Global is an investment and communications advisory that focuses on emerging markets and emerging technologies. Based in Washington, DC, and Lagos, Nigeria, they have an intimate understanding of African operating environments as well as a strong network of global investors. Dedalus specializes in country insights and research, investment facilitation, strategic communications, and investment summits. Dedalus has deeper insights in Western Africa as well as global reach of Fintech investors and eco-system players while Ibex Frontier has similar capabilities in Ethiopia and East Africa, this has made our collaboration synergetic and complimentary to organize result driven and highly anticipated summit in Ethiopia. 
Capital: What international companies are you bringing to Ethiopia for the Summit?
Zekarias: We are very pleased to say that given the intersection of Fintech in Banking, Telecom & Technology, we have speakers, sponsors and panelists from international giants gathering in this summit including KCB, TDB, AfDB, Eco-Bank, Standard, Microsoft, IBM, Google, AWS, Oracle. We are also pleased to be welcoming the Global office of Partnership, US State Department as our strategic partner and they will lead a country mission to Ethiopia in connection with AFTS and bring US Tech giants and investors attending the summit. Part of the partnership, a startup pitch event P!TCH ETHIOP!A is arranged as an extension of our Fintech Summit on the 22nd November. This will provide an opportunity for Ethiopian Tech startups pitch their businesses in front of incoming investors and secure long term partnership as well as winners being funded to travel to Silicon Valley to participate on the Global Pitch of Startup World Cup with full expense paid!
Capital: What can Ethiopia and Ethiopian Fintech companies expect from the Summit?
Zekarias: We have diverse participants who benefit from diverse outcomes. Entrepreneurs have raised over 20million USD in venture capital through the AFTS. Investors use the AFTS to source deals. In our 2018 report, we have shown that Ethiopia raised around $11.3M in Tech investment, was 7th largest Tech investment destination in Africa with some 76% of the funding going to Fintech. We have created an ‘Alpha Expo’ where we give 10 Fintech & Ecommerce companies free pass, exhibition table to showcase their businesses & products so they are connected to investors and partners. Secondly, Regulators and policy makers come to hear what other countries are doing and learn how new technologies are changing markets. Third, early stage startups and Tech outsourcing companies benefit by showcasing their capabilities to the incoming Tech giants, DFIs and corporates for business development and job-creation initiatives. Fourth, companies like banks, fintech’s, and Telco’s use the AFTS as a powerful global platform to build their brands and tell their stories. And lastly, we are expecting hundreds of delegates coming from abroad to our summit and this is a huge boost to the Conference tourism industry as well as Ethiopian Airlines that is our airlines of choice for the summit. We will be showcasing successful Fintech companies in Ethiopia that can manage complex outsourced jobs and drive as many jobs as possible are created locally as a result.
Capital: How is the government supporting the Summit?
Zekarias: We are very grateful for the gracious support and help we have received from the onset. His Excellency Ambassador Fitsum’s endorsement was instrumental in bringing the summit to Ethiopia as well as the US delegation participation. His Excellency Dr. Ing. Getahun, Minster of MiNT has been actively helping us from lobbying and endorsing for the summit to take place in Ethiopia to gracing our summit as a keynote speaker. We have the honor of welcoming key Government officials including His Excellency Dr. Yinager, NBE Governor, EIC Commissioner Ato Abebe, Job Creation Commissioner Dr. Ephrem, Dr. Brook Taye from MOFED, Ato Yodahe from the PM Office, Ms. Feven from the ICT Village. We have a number of investors coming to the summit and we have partnered with Ethiopian Investment Commission so EIC has a booth at the summit and promote ‘Invest in Ethiopia’. All this support is something we are very grateful for.
Capital: How can Ethiopian businesses and startups register to attend the summit and who will participate in the summit?
Zekarias: Our Summit is taking place in Sheraton Addis on 21st November, followed by P!TCH ETHIOP!A on the 22nd November. Global delegates can register via our website. For Ethiopian delegates, we have partnered with our sponsor AMOLE for registration and payment in Ethiopian Birr. We expect 350 in attendance, out of which around 175 are coming outside the country. Some of the remaining local ticket is assigned to key Government offices & eco-system players within the policy making, regulatory and enabling decision makers. Any company that does Fintech, Mobile-money, E-commerce, Tech, Incubation, Banking and Financial services will need to hurry up securing their tickets before these are gone.
Capital: Speaking of sponsors, who are the sponsors of the Summit?
Zekarias: We are very proud to welcoming Kenya’s KCB as well as TDB as sponsors from the Financial services sector. We are also proud to having AMOLE, Flutterwave and M-BIRR & Iris-Guard as Fintech sponsors. We had a promotional event in New-York sideline of UNGA last September and as a result we have encouraged global investors to join us in Ethiopia which is bearing fruit. We are hoping to welcome more sponsors to the summit in the coming days.
Capital: Any message to Ethiopian Fintech, financial services and tech companies?
Zekarias: One reason that Ethiopian companies are not active in the African fintech space is the prohibitive cost of travelling and partnership at various international platforms. AFTS is bringing all the possible DFIs, Banks, Telecoms, Fintechs, Tech giants and investors to Ethiopia and my message to Ethiopian Banks, Fintechs and mobile money enablers is simple: – Don’t waste this great opportunity in your own backyards. From partnering with global DFIs for financial inclusion initiatives to preparing themselves for post-AcFTCA opportunity, AFTS gives them unparallel opportunity for brand exposure, Business Development, partnership and technology leapfrogging.
Strategic Planning 6
The past few weeks we have been gathering information to arrive at a SWOT analysis for the business. Internal weaknesses and strengths as well as external opportunities and threats need to be identified and addressed in order to improve the effectiveness of the company and for the business owner to be able to take strategic decisions for the future. What strategic options are available? In the first place it is important to realise that deciding on a strategy is above all deciding on what is practical and possible. An appropriate strategy will be different for each business and change over time as internal and external factors change. The following options are available:
Do nothing. This is only an option if you are convinced that you will continue to be successful, doing exactly what you are doing now.
Improve what you are doing now. For example improving your quality or customer care.
Expand the business. By taking your products and services to new customers or by developing new services to your existing customers.
Diversify or innovate. This means developing new services for new customers.
Whatever decision you make, it will be an appropriate decision only if it will help you gain ground on your competitors, while taking into account the environment in which the business operates and the resources that you have available.
Once you have decided what the strategy will be, it is essential that you communicate this to everybody in the business, as a first step in putting your strategy into action. Next you will need to capture the strategy into a business plan for the coming year. The business plan can be used for instance to find additional financial resources but also to monitor progress in achieving results. A business plan could look like this:
Introduction to the business.
1.1. Details of the business.
1.2. Principle activities of the
business.
1.3. Organization of the business.
Marketing
2.1.The overall market for the
business.
2.2. Target market segments.
2.3. The competition.
2.4. Your Unique Selling Point (USP).
Finances.
3.1. Analysis of costs.
3.2. Cash flow forecast.
3.3. Projected profit and loss account
for the current and next year.
3.4. Break even calculations.
The business plan is a route map for the immediate future and a working document, which indicates the core objectives and activities. It is the first step into the next stage of growth of your business.
Below now follows a summary of the main issues we discussed over the past 5 weeks in respect of strategic planning:
Focus. Step back and take time out. While continuing addressing the short-term administrative and operational issues, you ignore the big issues in your business.
Objectives. Make your business objectives explicit and communicate them to all your workers.
Market. Identify your core business activities and key markets.
Customers. Know your customers and provide services that they want. It is easier to keep existing customers than to find new ones.
Finances. Determine and monitor the key financial statistics for your business.
Quality. Only the best is good enough. As owner of the business, be a role model to your workers and demonstrate commitment to delivering high quality services and products.
Workers. Be aware that if you don’t know where the business is going, neither will your workers. Consider personal development and training needs and be aware of the benefits of a simple performance appraisal system.
Communicate. Be approachable and break down communication barriers. Communication is essential for the workers to do what you expect them to do.
Be flexible. Look for new opportunities always. Recognise workers who suggest useful ideas.
Finally, we saw, that to arrive at a strategic business plan, information needs to be gathered and considered in a SWOT analysis. This will take time and energy and may reveal unexpected outcomes. You may be confronted with some real challenges. Don’t let this discourage you. Look at it as an investment. There are long term benefits in working through and resolving what could otherwise be long term and unresolved challenges for you and your business.
Ton Haverkort
Habtamu Tesfaye Tesemma
Name: Habtamu Tesfaye Tesemma
Education: BA, ACCA, Diploma in IFRS
Company name: Habtamu Tesfaye Certified Audit Firm
Title: Founder
Founded in: 2013
What it does: External Audit, Financial Consultancy, Tax Advisory, IFRS Conversion
HQ: Addis Ababa
Number of employees: 11
Startup Capital: 150,000 birr
Current capital: Growing
Reasons for starting the business: To play a valuable role in the Accounting, Auditing and Financial Consultancy Business
Biggest strength: Continued development in terms of professional development
Biggest challenging: Lack of Qualified Personnel
Plan: Be one of the big Firms
First career: Banking
Most interested in meeting: With anyone I can end up with meaningful results
Most admired person: Bill Gates
Stress reducer: Family Time
Favorite past time: Education
Favorite book: ‘The 7 Habits of Highly Effective People (Stephen R. Covey)
Favorite destination: Anywhere I can be fruitful with my career
Favorite automobile:Ferrari
