African Businessmen and Development in Zambia 9781400867325

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African Businessmen and Development in Zambia

African Businessmen and Development in Zambia

Andrew A. Beveridge

Anthony R. Oberschall

Princeton University Press

Princeton, New Jersey

Copyright © 1979 by Princeton University Press. Published by Princeton University Press, Princeton, New Jersey. In the United Kingdom: Princeton University Press, Guildford, Surrey. All Rights Reserved. Library of Congress Cataloging in Publication Data will be found on the last printed page of this book. This book has been composed in Linotype Baskerville. Clothbound editions of Princeton University Press books are printed on acid-free paper, and binding materials are chosen for strength and durability. Printed in the United States of America by Princeton University Press, Princeton, New Jersey.

For Fred and Ginger and For Our Parents

Contents

List of Tables

ix

List of Figures

xi

Preface Introduction

xiii 3

I. From Rhodes to Kaunda Early History and Settlement Impact of European Domination Trade in Colonial Times Independence and the Colonial Legacy The Economic Reforms Conclusion

15 17 19 34 40 46 53

II. Market Trade Zambian Markets and Marketeers Characteristics of Market Traders Organization of Market Trade Market Cooperatives and Politics Conclusion

55 56 60

III. Small Retail Trade Growth of African Retailing The African Shopkeeper Kapwepwe and Old Kanyama

89 89 91 95

IV. Challenging Expatriate Entrepreneurs Characteristics Entry into Business Background to Business Business and Family Religion and Life Style Conducting Business Conclusion

68 84

86

119 120 122 129 134 138 144 160

CONTENTS

V. Rural Business Enterprise Stimuli to Growth Rural Enterprise African Business and Rural Development

162 163 165 199

VI. Success, Family Patterns, and Life Styles Sources of Business Success Businessmen and Family Success and African Businessmen

204 205 228 237

VII. Policies, Politics, and African Businessmen Ideology and Business Impact of Economic Reforms and Other Policies Businessmen in the Political Arena Conclusion

243 244 246 254 273

VIII. African Enterprise, Entrepreneurship, and Social Change Entrepreneurship Comparisons African Private Enterprise in Zambia's Development Strategy Dependent Independent Zambia

299 306

Appendix I. Conduct of Fieldwork and Interview Schedules The Fieldwork The Schedules

314 314 317

275 276 288

Appendix II. Earnings and Growth Estimates of Businessmen and Traders Earnings and Sales Growth and Scale of Trade and Business Activity

333

Appendix III. Multivariate Analyses of Business Success Correlation and Regression Analyses Discriminant Function Analysis

340 340 360

References Indexes

362 3173

324 324

List of Tables

2.1 Regional Origin of Market Traders, 1970 and 1954, and of Lusaka Adults, 1970 3.1 Regional and Ethnic Origin of Traders and of Kapwepwe, Old Kanyama, and Lusaka Populations 3.2 Estimates of Average Monthly Turnover and Net Earnings, by Size of Business and Location 4.1 Sources of Original Capital Invested in First Business by Substantial African and European and Asian Businessmen 4.2 Education of Substantial African Businessmen and Lusaka African Males over Twenty Years 4.3 Ethnic Origins of Substantial Businessmen and Lusaka African Males 4.4 Manner of Acquiring Technological Knowledge by Substantial African and European and Asian Businessmen 4.5 Labor Problems Reported by Substantial African and European and Asian Businessmen 6.1 Zero-Order Correlations of Success with Hypothesized Contributing Factors for Lusaka and Rural African Businessmen 6.2 Number of Kinsmen Supported by African Businessmen in Lusaka A2.1 Nswima's Monthly Purchases A2.2 Distribution of Nswima's Purchases and Average Markup over Wholesale Prices, by Type of Commodity, October 1969 to October 1970 A2.3 Nswima's Business Expenses A2.4 Population and Trade Licenses in Rural and Urban Areas A3.1 Analysis of Success for African Businessmen in Lusaka, Correlations, Means, and Standard Deviations A3.2 Analysis of Success for Rural African Businessmen, Correlations, Means, and Standard Deviations

64 102 110

127 130 133

>47

151

210 232 328

329 33° 334

347

350

ix

LIST OF TABLES

A3.3 Regression Analysis of Success for African Businessmen in Lusaka A3.4 Regression Analysis of Success for African Businessmen in Lusaka (Innovation Excluded) A3.5 Regression Analysis of Success for Rural African Businessmen A3.6 Regression Analysis of Success for African Businessmen in Lusaka (Reduced Equation) A3.7 Regression Analysis of Success for Rural African Businessmen (Reduced Equation) A3.8 Interrelations (Path Coefficients) among Variables in Regression Analysis of Success for African Businessmen in Lusaka A3.9 Interrelations (Path Coefficients) among Variables in Regression Analysis of Success for Rural African Businessmen A3.10 Discriminant Function Analysis of Surviving and Failing Substantial African Businessmen in Lusaka, 1970-72

352 353 354 356 357

358

359

361

List of Figures

1.1 1.2 2.1 6.1

Zambia Greater Lusaka Area Luburma Market, November 1970 Contributions (Beta Coefficients) of Selected Factors to Success among African Businessmen in Lusaka 6.2 Contributions (Beta Coefficients) of Selected Factors to Success among Rural African Businessmen

Preface

THE study of African businessmen reported in these pages grew out of a long-term collaboration which began in 1969. Fieldwork was carried out between 1970 and 1972; it is de­ scribed in appendix one. Analysis and writing have con­ tinued during the intervening years. For two American so­ ciologists to be studying African businessmen in Zambia was considered strange by many of our fellow sociologists and Africanists, and by non-Zambians and academics in Zambia. Sociologists often questioned the relevance of work such as ours to the growth and development of their field. Some Africanists expressed doubts that African business­ men even existed in Zambia. Many non-Zambians shared the belief that few if any African businessmen existed in the country where they were doing business. Several nonZambian academics felt Zambia should be more or less their private preserve, while others favored an engaged style of scholarship which would no doubt be focused on liberation movements or some similarly congenial topic. Only a hand­ ful were completely sympathetic to the use of empirical sociological techniques in Africa. We cannot be sure if our work can change the opinion of any of these people, but we hope that it has or will. More­ over, most sociology has been done in the developed world, much in the United States alone. Yet, if the field is to seri­ ously comprehend more than the industrialized West it must be informed by studies done elsewhere. At the same time work focused on one particular locale, such as Zambia, may benefit from some infusion of methods and perspec­ tives from cosmopolitan sources. We hoped our study would aid in both efforts. By and large most Zambians and most local and international policy makers claimed to see some relevance in our work. If they were right we may have ac­ complished our third objective.

PREFACE

Despite the skepticism of some, many people were of great help to us. Most either tolerated our strange preoccu­ pation, or even shared it to some degree. First among these are the Zambian businessmen and market traders, mainly African but including some Asians and Europeans. Their time, effort, and cooperation made our study possible and can never be properly acknowledged or repaid. Those outside of Zambia who helped us before or after our stay there included David Apter, Winifred Armstrong, Wendell Bell, John J. Berna, S. J., Jonathan R. Cole, Leon­ ard Doob, William Foltz, Joseph Gugler, Richard Hender­ son, Sam Ho, Peter Kilby, A. M. Lederer, Peter Marris, Wilbert Moore, Vahid Nowshirvani, Howard Pack, Richard Sklar, Dirck Stryker and Brian Van Arkadie. Academics and others in Zambia who showed great hos­ pitality and gave assistance to two foreigners who showed up, sometimes quite literally, on their doorstep included James Burnham, Cherry Gertzel, Robert Kent, Graham Mytton, Cyril Rogers, Don Rothchild, Ann and Robert Seidman, V. Subramaniam, Alex Tweedy, and Ruth Weiss. The help provided by the Institute for African StudiesUniversity of Zambia and the advice of its acting director, J. Van Velsen, were crucial to our enterprise. The coopera­ tion of many people at Barclay's Bank, Standard Bank, Commercial Bank of Zambia, National and Grindlay's Bank, the National and Commercial Bank, Indeco Finance, the building societies, the Ministry of Trade and Industry, the Road Traffic Commission, the Agricultural Finance Company, the Ministry of Finance, and Rucom Industries is gratefully acknowledged. There are others we should acknowledge who prefer to remain nameless. To them our silent thanks. Our six research assistants, Douglas Banda, Halford Chikuse, Wills Kaira, Mike Kangwa, Z. Phiri, and Sabell Zulu, provided excellent aid. Some funding agencies responded positively to our en­ deavor and made our study possible. Oberschall received a grant from the National Science Foundation Sociology Pro­ gram (GS-3076), a Faculty Research Fellowship from the

PREFACE

Ford Foundation, and a grant from the joint committee on African studies of the Social Science Research Council. The Foreign Area Fellowship Program and the National Insti­ tute of Mental Health Predoctoral Fellowship Program (5 FOi MH43456-03 BEHA 1969-72) provided support to Beveridge. The Columbia Council for Research in the So­ cial Sciences, the Vanderbilt University Research Council, and the departments of sociology at Columbia, Vanderbilt, and Yale also provided help. We gratefully acknowledge all such assistance. The views expressed in this book are, however, entirely the authors' joint responsibility. Some of this work has appeared elsewhere in different form. Beveridge published "Economic Independence, Indigenization, and the African Businessman: Some Effects of Zambia's Economic Reforms," African Studies Review, 17 (December 1974): 477-492. Oberschall published "Lusaka Market Vendors Then and Now," Urban Anthropology, 1 (1972): 107-123, and "African Traders and Small Business­ men in Lusaka, Zambia," African Social Research, 16 (De­ cember 1973)· Parts of this work are drawn from Beveridge's thesis, "Converts to Capitalism: The Emergence of African Entrepreneurs in Lusaka, Zambia." The important substantive and editorial assistance of Paul Kingston is gratefully acknowledged, as is that ren­ dered by Carol Mead and Jeffrey Anderson. The encourage­ ment, advice, and forbearance of Sanford Thatcher and the editorial work of Barbara Westergaard at Princeton Uni­ versity Press have been most helpful. Drafts and portions of drafts have been expertly typed by Dora Barbera, Gertrude Masic, Virginia McCabe and Mary Moore. The maps and diagrams were drawn by Christopher L. Brest. Finally, we wish to acknowledge Fredrica Rudell Beveridge's continued help and support throughout the course of this work. Despite all the assistance we have received, we alone re­ main fully responsible for the study's shortcomings. Andrew A. Beveridge Anthony R. Oberschall

African Businessmen and Development in Zambia

Introduction

AFRICAN traders and businessmen and their enterprises are

the subject of this book. Development, modernization, eco­ nomic growth, entrepreneurship, dependency, neocolonial­ ism, and other terms are some of the abstract concepts so­ cial scientists use for describing and explaining social change in the third world. That market traders selling to­ matoes, onions, and dried fish; purveyors of groceries, beer, lodging, and taxi rides; and makers of furniture, houses, coffins, and water buckets, as well as small industrialists and contractors, are important actors in the vast dramas of so­ cial change may be easily overlooked by theorists and policy makers. Yet we intend to contribute to the understanding of social change by writing about these very groups. Abstract concepts are useful only insofar as they summarize and shed light on the behavior, choices, and circumstances of thou­ sands of individual human beings, each of little social im­ portance by himself, who in the aggregate have a major im­ pact on their social environment and on each other. In the study described in this book, we deal with three interrelated topics: 1. The structural sources and the patterns of individu­ al attributes and experiences that account for the growth of African business enterprise in Zambia and for success in economic activity. This topic has been referred to as entrepreneurial supply and perform­ ance. 2. The consequences of government policies for busi­ ness growth and especially for the Africanization of the private economic sector. This topic is particu­ larly important for policy analysis. 3. The expected impact of African businesses and busi-

INTRODUCTION

nessmen on Zambian society. This topic links the study of a particular group to the emerging stratifica­ tion system in a postcolonial, third world country. Contemporary Africa

The study of entrepreneurial supply and performance, of government policy toward an indigenous private eco­ nomic sector, and of the class structure in new states cannot be divorced from some wider trends in the contemporary world. Political independence has been achieved in most of black Africa since World War II. But these countries are caught up in a web of economic relationships in which they occupy a subordinate and vulnerable role. This fact of in­ ternational life has been called neocolonialism. The coun­ try's most important assets and productive enterprises are controlled by foreigners, often by multinational corpora­ tions. Skilled manpower needed in the economy and in the civil service is foreign. In some countries, non-African mi­ norities dominate commerce. Rural development, health, education, and human and social services in general, have received scant attention in the past. Infrastructure and communications have been created to serve the needs of the foreign economic sector and of expatriate settlers.1 There is a dependence on one or two export crops and ores. The vagaries of demand for these commodities in the world market create sharp fluctuations in revenue and in the bal­ ance of payments, which have major domestic repercus­ sions. There exists little manufacturing industry. The most basic products from pens, paper, and nails to batteries, automobile tires and light bulbs, have to be imported. In former settler colonies, the presence of a large Euro­ pean group with an affluent standard of life underlines daily and visibly the gap between rich and poor and sets ι Throughout this book we use the term "expatriate" in the manner in which it it used in Zambia: to refer to any noncitizen of non-African stock. Expatriates are primarily Europeans who have settled or are working on a contract in Zambia, but Asians are also included.

INTRODUCTION

high material aspirations for the new African bourgeoisie. Meanwhile the population is poor and rapidly growing. Migrants in search of elusive employment pile into cities and towns. The heritage of colonialism is most evident in the economic order, where the sharpest contrasts exist not just between the African and non-African minorities, but between impoverished hinterlands and affluent coastal areas, or in Zambia, between rural provinces and urban centers on the line of rail which extends from Livingstone through Lusaka, Kabwe, and the Copperbelt towns into Zaire. The legacy of colonialism weighs heavily also in the po­ litical, social, and cultural spheres. The new states of tropi­ cal Africa inherited a heterogeneous population made up of diverse peoples, ethnic groups, religions, and cultures. Ev­ ery country faces the challenge of creating and maintaining national unity. Often entire peoples and regions have great­ er affinity with peoples in neighboring countries than with their fellow citizens. Others express a preference for a state of their own. Thus the new state may face separatist move­ ments from its inception and has to attempt to forge na­ tional institutions that will be considered legitimate by all ethnic groups. It seeks to diminish regional inequalities. Because regions and major ethnic groups often coincide, and because ambitious politicians and military men find it easiest to mobilize support by means of viable and some­ times newly activated ethnic loyalties, the struggle for con­ trol of the central government tends to exacerbate or even create "tribalism" and regionalism and may undermine the drive for national unity. Cutting across these ethnic and regional cleavages, the processes of political and socioeconomic change have cre­ ated new social classes and have further accentuated urbanrural disparities. As Africans step into the positions vacated by Europeans, they inherit the salaries, houses, automobiles, servants, and other material comforts that were the accouterments of European settlers and administrators in tropical

INTRODUCTION

colonies. Understandably, they are reluctant to give up what they were so long denied. As a result, the gap between a new growing, indigenous bourgeoisie and the majority of cultivators, herdsmen, small farmers, laborers, and workers grows wide. The layout of towns and cities separates Euro­ peans, other non-Africans, and the mass of the population. Spacious houses and gardens contrast with the crowded shantytowns. Thus the physical plant itself even as it ex­ pands conspires to sustain colonial social attitudes based on hierarchy, in which the new elite assumes the superior pres­ tige of Europeans while peasant cultivators and laborers continue in their low rank in the social pyramid. Thus the colonial social system survives political independence be­ cause physical plant, wage and salary scales, life styles, and social attitudes have built-in reinforcing continuities, unless strong countermeasures are taken. Furthermore, culture has a momentum of its own. Na­ tional symbols from anthem to flag, laws, administrative regulations, the school curriculum, certificates and examina­ tions, sports, dress, work hours, the rhythm of urban life in the broadest sense, all continue and perpetuate colonial custom. Yet a new cultural policy is difficult to formulate and implement. Should one or several African languages become the national language to supplement or replace the colonial language? Should African languages be introduced into the school curriculum and into business and govern­ ment? These are by no means academic questions. The scholarly performance and career opportunities of some groups will be favored over those of others depending on the decisions that are taken, giving an edge to those for whom home, school, and official language are the same. On top of their domestic problems, new states find them­ selves the object of the contest between East and West, as both sides seek to extend their influence in the third world. Although in some instances this rivalry creates an oppor­ tunity for the new state to play one side off against the other in order to obtain aid, secure wider markets, and en-

INTRODUCTION

courage competitive offers for the exploitation of resources, in other cases domestic conflicts are heightened by imported ideological controversies, not to speak of covert foreign sup­ port for the disputants. Nor can the new state escape the conflicts of contending ideologies and powers. Needing as it does investments and skilled manpower, whatever economic policies it formulates will be appraised from the perspec­ tive of their capitalist or socialist tendencies. Depending on foreign perceptions, the government can expect any bid for investments, aid, and international support to be more pal­ atable to one bloc, and thus to precipitate opposition from the other. New states have taken a number of steps for coming to grips with the dilemmas they face. Some choices are rela­ tively cost free. African leaders proclaim populist and na­ tionalist ideologies which blend African tradition with pro­ gressive social philosophies for the purpose of nation building, modernization, and legitimation. The name of the country itself can be Africanized, as can those of towns within it. Thus Northern Rhodesia yields to Zambia, Fort Jameson becomes Chipata, Broken Hill becomes Kabwe, and so on. Other habits have become more deeply ingrained into the fabric of social life. President Kunda may wear "na­ tional dress" when he opens Parliament, and his official photographs may depict him in the same fashion, yet these acts are perceived as symbolic gestures by the people. They go on wearing European shirts, trousers, skirts, and dresses, at least in Zambia. More to the point, new states seek to gain control of their economic resources and institutions and to direct economic policy for the advancement of African interests. No simple formula exists for accomplishing this goal. The constraints on choice are formidable. Existing institutions have been shaped by the colonial power's need for some natural re­ source and in order to benefit expatriate settlers and cor­ porations. Capitalist and socialist models of development and of the ideal society may be irrelevant. Conditions in

INTRODUCTION

contemporary African societies are vastly different from what they were in Western or socialist countries when eco­ nomic growth and social transformation occurred. On a world scale, the underdeveloped countries face competition from the vastly more powerful industrial countries and from each other. Yet a retreat into self-sufficiency and isola­ tion is not a realistic alternative for countries with back­ ward peasant agriculture and limited human capital re­ sources, whose most productive revenue-producing sectors have been integrated into international markets. From the point of view of visibility in international rela­ tions, the most dramatic domestic decisions involve negotia­ tions between new states and the large corporations that dominate their economies. Yet changes in these large in­ dustries, in whatever shape or form they occur, from full nationalization to limited local participation, have more symbolic than material impact on the vast majority of or­ dinary Africans. The redefinition of the status of foreigners in commerce, on the other hand, has a wider impact. In many countries, middleman minorities and foreign trading corporations dominate retail and wholesale trade and many services. These groups interact daily with Africans in merchant-customer, employer-employee relationships and occupy an intermediary role between Europeans and Afri­ cans. Resented by the latter and excluded by the former, visibly different in their appearance and life styles, they stick together in a hostile social environment. They are ambivalent in their loyalties to their original and adopted countries. Their position after independence becomes pre­ carious. In the eyes of many Africans, foreigners had come as impoverished immigrants and have enriched themselves at the expense of the indigenous population. The effort and risk that went into building up trading enterprises and their contributions to social change go unrecognized. Many Africans are eager to try their hand at small business, but the very presence of a foreign trading community with long

INTRODUCTION

experience and established ways of financing and marketing makes it more difficult for aspiring Africans to succeed. Faced with economies that grow barely as fast as popula­ tion and with a large reservoir of manpower in agriculture which seeks to enter wage employment, the leaders of new states are under great pressure to open up positions for Afri­ cans in all sectors of the economy: in education, in health, in government, in trade, in cash-crop agriculture, in indus­ try. The pressure reinforces their desire for an economy with a minimum of foreign control. Such aspirations are tempered by the lack of trained people. In some countries, there are simply not yet enough qualified and experienced Africans to fill all teaching positions at the secondary school level, to run hospitals and health and nutrition programs, to perform all the technical and management tasks in in­ dustry and government administration. Thus foreigners— Europeans, Asians, Levantines, West Indians, Africans from other countries—in one capacity or another continue after independence to perform many vital functions. But pref­ erence is given to foreigners who will not settle permanent­ ly, i.e. to those who will leave after the expiration of a shortterm work contract, when presumably Africans will have been trained to take their place. In trade, the situation is especially complex. Middleman minorities had come to work and rear families, and to pass on their enterprises to their children. By the time of inde­ pendence, most traders had been born and had lived their entire lives in Africa. Many in the younger generation have given up trade for industry and administration, but they have not become assimilated into African society. Many have skills that are not in demand elsewhere in the world. Their countries of origin are poor and unwilling to offer them refuge. They are far less affluent than European farm­ ers and technicians and have no powerful overseas pro­ tector. They are caught in divided loyalties and legal en­ tanglements related to their citizenship. African governments handle the Africanization of com-

INTRODUCTION

merce and small business in different ways. In the short run, it makes a great deal of difference in terms of human mis­ ery. At one end is General Amin's wholesale expulsion of all but a minority of Asians from Uganda and the expro­ priation of their property. In Zambia, the transition is tak­ ing place within a legal framework, in a reasonably hu­ mane manner, as part of a comprehensive if contradictory set of economic policies designed to Zambianize the econ­ omy as a whole. These policies will be described in detail in the next chapter. Here we will only note that regardless of regime, ideology, and development strategy, and what­ ever the timing, scope, and implementation of such meas­ ures, most postindependence African governments have tried to restructure trade and small industry to allow for greater African participation. In the research reported in this book, we studied the Africanization of commerce and small industry in one new African state, Zambia, as it was grappling with the prob­ lems of its colonial heritage. The place of small African business was not yet well established. Much of the economy was coming under government control, yet the growth of African private enterprise was rapid as well. We were con­ cerned with the performance of African businessmen, with the impact of government policies on business growth, and with the effects of African small business on Zambian so­ ciety. Our academic interest in social change and our prac­ tical concern with the means of directing it were com­ plemented by a wider human interest. The successes and failures of men and women starting with few resources and against great odds have often captured the imagination of a wide public. This human drama, too, we have sought to document. Some Questions

We did not undertake this research with the intention of "proving" that African business activity might be attributed to a single, pivotal factor—achievement motivation, a

INTRODUCTION

"Protestant ethic" in an African guise, independence from neocolonial machinations, the presence of a universal entre­ preneurial capacity, political modernization, an appropriate family structure, or whatever. Instead, we wanted to see what effect some of these and other factors have had on African business growth and development. We hope our study of Zambia will help to explain its particularities be­ cause they are intrinsically interesting. But we also hope to add to the stock of knowledge relevant for comparative analysis and for theory. The material from a case study surely can neither prove nor disprove general theoretical perspectives, yet it can help clarify some longstanding de­ bates about social change and social policy. Business activity is often described as the prototype of modern behavior. Many social scientists have focused atten­ tion on values, attitudes, socialization processes, the ex­ perience of urban living and of schooling, the influence of the mass media, which allegedly lead to modernism and be­ havioral change. A lack of modern values, attitudes, psycho­ logical orientations, and personality traits are seen as limit­ ing, if not actually blocking, economic growth. The rapid growth of African business activity in Zambia casts serious doubt on what are presumed requisites for modernism and business activity. The supply of entrepreneurs—for years the subject of a lively, if inconclusive, debate—is plainly not determined in Zambia by the diffusion of particular cultural patterns. More important for the overall success of entrepreneurial endeavors has been the postindependence reorientation of government policies in favor of African interests. Yet we did find that innovative activity at the individual level leads to business success. Zambian innovators, however, have neither a uniform personality type, nor an identical social background. There are also those who see third world societies as ineluctably dependent on a set of international relationships that doom them to being perpetually dominated eco-

INTRODUCTION

nomically by the metropolitan powers. Backwardness is, in this view, completely (or nearly so) determined by external relations, a direct result of the colonial heritage and of con­ temporary neocolonial satellite status. We do not see the de­ velopment of indigenous business as completely determined by external relations. Instead, we are willing to allow some scope to the independent activity of indigenous business­ men and others. Then questions of the potential con­ tribution of indigenous business to development are not foreclosed. The present and potential role of indigenous business within third world societies becomes a subject of investigation directly linked to developing class relations and social stratification. The foregoing academic controversies gain in importance in light of real choices being made in Zambia and elsewhere. The Zambian government was and is bent on reshaping a dependent society and on defining a role for private African enterprise. If economic growth must wait for the spread of modern values, attitudes, psychological states, and daily behavior in the population, then development must be preceded by vigorous "thought reform." Since values change but slowly, underdevelopment will be the lot of third world peoples for a considerable time. Dependency theory, perhaps ironically, leads to similarly pessimistic conclusions. Since all change short of revolution is super­ ficial, the growth and success of a business class leads to little real development. On the other hand, some theorists of a more optimistic persuasion equate an increase in the number of businessmen with economic growth, assume that such a trend must have a stimulating effect on social change, and argue for policies that promote such enterprises. Our position is more agnostic. We will root any conclusions about African businessmen in Zambia in empirical findings. These controversies have consequences for policy decisions and thus for the fate of many lives. Controversies should, however, be conducted within the framework of sound research that actually comes to grips with empirical reality.

INTRODUCTION

Only thus can choices be appropriately evaluated. Accept­ ance of pessimistic or optimistic prescriptions without ade­ quate empirical substantiation will mislead development policy at great human cost. Our Study in Zambia

Zambia was an ideal place for examining the role of in­ digenous entrepreneurs in the third world. The country possesses many of the attributes of the third world society in exaggerated form. Much of its economic activity depends on copper. Yet African economic activity has increased sharply since independence. By the time of our study be­ tween 1970 and 1972, African enterprises were located in the markets, in the shantytownships, in the commercial dis­ tricts of cities, in provincial capitals, in rural trade centers, and in villages. The government had announced a series of economic reforms and was receptive to a study of their implementation. The range of information we elicited about each category of trader and businessmen was quite extensive and based on a variety of sources and techniques of research. These will be described in subsequent chapters and appendix one. Before we deal in a theoretical vein with the three topics that our research was most centrally concerned with, we describe in some depth each of the principal types of Afri­ can businessmen studied. The ethnographic detail will give the reader some measure of the quality of our data and will provide him with information about a country with which he may not be familiar. In chapter one, we describe the political and economic history of Zambia from the early days of European explora­ tion to the present, with an emphasis on changes that most influenced African economic activity. Chapter one also tells the reader about Zambian society and the economic reforms. Chapter two describes Lusaka market traders. In the past, market trade provided a training ground for African busi­ nessmen. Market traders have increased quite rapidly, but

INTRODUCTION

are losing importance relative to small African shopkeepers and store owners. The sources of the explosive growth of African retail traders, their origins, operations, background, and prospects are discussed in chapter three. In chapter four we describe the larger African businessmen who have begun to challenge, at least in a limited way, the predomi­ nance of the European and Asian businessmen and com­ pare these two sets of businessmen in terms of origin, growth, management, performance, and their role in the Zambian economy. In chapter five we describe the rural African business sector which was most helped by the economic reforms. The last three chapters deal with theory and policy. In chapter six, the sources of business success are analyzed, as are the relation of business to family, and the role of African businessmen in the emerging postcolonial class structure. These topics are taken up as well in chapter seven, where we evaluate the Zambian economic reforms and describe the relations between businessmen and the political regime. In the final chapter we discuss the Zambian experience and our findings in the context of controversies about entrepreneurship, modernization, and economic and social change.

CHAPTER I

From Rhodes to Kaunda

BEFORE the advent of Livingstone and other British ex­ plorers in the mid-i8oos, the small amount of trade and industry that existed in Zambia was in the hands of the Africans who lived there, except for the slave trade, which was controlled by the Arabs and Swahili. After British colonization, Zambia remained an economic backwater until the growth of copper mining just prior to the Great Depression. Foreign capital and multinational corporations developed one of the largest copper-mining complexes in the world by means of African labor drawn from villages. Indeed, with a GNP of close to $2 billion in 1973, Zambia has had one of the highest per capita incomes in independ­ ent black Africa. Yet copper, the very foundation of Zambia's wealth, was also the source of its political dependence and economic vulnerability. Depending on its wildly fluctuating world market price, copper accounts for 40 to 75 percent of Zam­ bia's GNP. African and non-African economic activity was sparked by the copper boom, but remains constrained by Zambia's role as provider of a single primary commodity in the international economy. After independence the Zambian government sought to transfer control of the copper industry and other economic resources from foreign corporations and nationals to the new Zambian state and its citizens. In the 1950s less than 5 percent of Zambia's economic activity (excluding the sub­ sistence sector) was in African hands, although even this small share represented large growth in absolute terms since the turn of the century. Six years after independence in 1970, the African share had risen to over 10 percent, or

Figure 1.1

Zambia

EARLY HISTORY

about one-third, if the dominant mining sector is excluded.1 To understand these changes requires knowledge of Zam­ bia's history. Climate, ecology, resources, social organization, colonialism and decolonization, past and present govern­ ment policies, all have had a hand in shaping and con­ straining African trade and business. This first chapter describes the wider contexts of African economic activity with special emphasis on Western influences in the past one hundred years. EARLY HISTORY AND SETTLEMENT

Zambia lies landlocked in the middle of Southern Africa and is surrounded by eight other political territories: the independent African states of Tanzania, Malawi, Botswana, and Zaire (formerly the Congo); white-ruled Rhodesia; Na­ mibia (administered by South Africa); and recently inde­ pendent Mozambique and Angola (Portuguese colonies at the time of the study). Though in the tropics, Zambia is subject to a modified tropical climate because it lies on a high plateau. The soil is not especially fertile, yet even so its agricultural potential has not been exploited. Animal husbandry was not possible in areas infested with the tsetse fly, which carries sleeping sickness and is still found in large uninhabited parts of the country. The country consists mainly of flat to slightly undulating plateaus. There are several large river systems, and flooding occurs in some areas during the rainy season, notably in the Zambezi and Kafue plains. Zambia's prin­ cipal resource is the extensive copper deposits which lie in a "copper belt" extending up to Shaba (formerly ,Katanga) in Zaire. Other minerals are also mined, but copper is by far the most important. Before Cecil Rhodes sent his agents north of the Zambezi to claim the territory on behalf of his British South African 1

See appendix two for details on how this estimate was made.

FROM RHODES TO KAUNDA

Company in the late nineteenth century, the total popula­ tion was approximately one million. A great variety of peoples existed in the area that is now Zambia, as they still do. It is not certain who occupied the area before 1500, though some evidence indicates that they were Bantuspeaking peoples and some bushmen. During the succeeding 400 years before the British gained control in the area, it was the scene of invasions and migrations by various other groups. These included the Luyi and later the Kololo who mingled with local inhabitants and created the Lozi nation in what is now the Western Province. The Ngoni, a Zulu group, came from the south after their defeat at the hands of Shaka Zulu, and conquered areas in the present Eastern Province. Other Zambian groups, including the Bemba, both Lundas, the Bisa, Lala, Luvale, and Lenje trace their origin to what is now Zaire. Immigrants and conquerors became incorporated with local peoples through intermar­ riage and assimilation. Because of these historic settlement patterns, a close relationship still exists between the area a Zambian is born in, his ethnic group, and his home language.2 2 For administrative purposes the new government of Zambia has grouped languages into several main sets—Bemba, Nyanja, Tonga, Lozi, Luvale, Lunda, and Kaonde. Though English is presently the official language of Zambia, all these languages are used in teaching the early school grades and in broadcasting (Mytton, 1972). In this book, we use these broad ethno-linguistic groupings for characterizing the ethnic membership of Zambian businessmen. However, one should realize that Zambians themselves were quite willing to characterize themselves and others by what they call their tribe. Statements such as "I am Bemba by tribe," or "They are all Lozi," were said without any embarrassment or doubt as to their meaning. Yet, such "tribes" are in fact broad ethnic groupings, and unless quoting one of our respondents, that is the way in which we use the names. It is also true that more fine­ grained distinctions as to origin were in use by many Zambians. For example, many would characterize themselves as stemming from a par­ ticular village or area, such as Chief Mungule or Kawembwe. Yet, all people from such areas would consider themselves to be a member of one or another tribe.

EUROPEAN DOMINATION

The people of Zambia were organized in a variety of ways. Most ethnic groups followed matrilineal rules of descent for their offspring. Except for the Lozi and Kazembe kingdoms, state systems were not highly centralized. Com­ pared to much of West Africa and some parts of East Africa, there was little social stratification during the precolonial period. Most Zambians were engaged in subsistence agricul­ ture. Even the more highly organized political systems were recent creations. Domestic servitude did exist, however, and the slave trade in the middle of the nineteenth century had a debilitating impact on rural societies. Agriculture was usually of the slash and burn (chitemene) type. Trees and grass were allowed to grow for several years. When fields were cultivated, the vegetation was cut, piled, and set on fire. Seeds were then planted in the ash which served as fertilizer. After the crop was harvested, the land lay fallow for several years. The chitemene system suited the soils which were only marginally fertile without chemical fertilizer. Staple crops included maize, millet, and cassava. Vegetables were raised in gardens to use as a relish with porridge made from the staple crop. Few people went hungry, and few worked particularly hard (Siddle, 1971:58). Accumulation of material possessions and the growth of inequality were restricted by low population density, pro­ ductivity, and output and the lack of specialization. Trad­ ing was limited to small-scale and part-time activities. IMPACT OF EUROPEAN DOMINATION

Missions The Europeans began arriving in significant numbers after Livingstone's writing had drawn attention to the transZambezi area. Although immediate changes for the local people may not have been dramatic, in the long run, of course, the whole of Zambian history was altered. The earliest arrivals were missionaries and explorers. First in a

FROM RHODES TO KAUNDA

long line of these, Livingstone had come to spread Christi­ anity, to find the sources of the Nile, and to help stop the slave trade. The evangelists who followed Livingstone both before and after the British military conquest of the terri­ tory founded a series of mission stations and schools. Since the area was vast and mission societies had limited resources, each denomination localized its operations, and little intersectarian competition took place. Thus, Africans from the same district (and therefore from the same ethnic group) were taught a particular version of the "truth" and could acquire a certain level of education. Those in other districts learned another version and had a different educational opportunity. Missionaries were agents of change. They established stations, churches, and productive enterprises well ahead of the colonial administration. More by example than by preaching, they taught Africans some elements and skills of Western culture. They demonstrated the superior efficiency of more advanced technology and encouraged individual achievement. Africans who attended boarding school were intensively exposed to new values. While under the control of missionaries twenty-four hours a day, they were rewarded for heeding the lessons of their teachers—both secular and sacred, formal and informal. At the same time, some stu­ dents learned what were to become needed skills for ad­ vancement in the European-dominated society. The missionaries committed the African languages to writing. They introduced new skills such as carpentry and metal work, as well as new modes of dress. Many missionary societies operated farms of their own for food and sold goods in their stores for profit. In many localities they were the first businessmen, the first employers of African labor, and pioneers in introducing money into economic transactions (Gardiner, 1971:38). In later chapters, we will assess the influence missionaries had through education, preaching, and concrete help on the careers of contemporary African businessmen.

EUROPEAN DOMINATION

British South Africa Company

Traders, prospectors, soldiers, and administrators soon followed the early missionaries. It was the employees of the Chartered Company, founded and owned by the British South Africa Company, who had the greatest subsequent impact on the history of Zambia. They came searching for deposits of great wealth, the gold and silver of a hoped-for new Rand. Their prime object north of the Zambezi was to obtain mineral rights and trading concessions. They often accomplished their purposes by misrepresenting themselves to the local chiefs. One of the most blatant examples re­ sulted in the Lozi King Lewanika's concession to Lochner of nearly all rights in a vast territory in Western Zambia. Lochner represented himself as an envoy of Queen Victoria; in fact, Lewanika was dealing with Rhode's Chartered Com­ pany, "a very different kettle of fish," as one historian of the period rightly notes (Davidson, 1969:217). By means of the Lochner and other concessions, the Char­ tered Company claimed control of the vast territory called Northern Rhodesia. The British government was only too happy to put another area of the map under its sphere of influence without having to spend funds to administer it. In Eastern and Northeastern Zambia, however, British troops had to be called upon to establish de facto control ahead of Belgian, German, and Portuguese penetration. Of the tribes in the area, the Ngoni resisted most determinedly. In 189798, a military force of 1,000 Indian and African soldiers commanded by British officers was sent to face 10,000 Ngoni warriors. In the ensuing battle, the Ngoni military leader was captured and shot. Twelve thousand head of cattle were seized, and many villages were destroyed. In Bembaland, in the North, the chiefs were divided, and little resistance was offered. The Lunda capital at Kazembe was subdued by a small European force after a show of artillery (Pollock, 1971:179-183). A little more than a decade later, in 1913, the entire territory was controlled with the help of a police force consisting of only 750 Africans led by 27 British sergeants

FROM RHODES TO KAUNDA

and officers (Gann, 1971:102). Pax Britannica had arrived. Under the skeleton colonial administration the slave trade was stamped out, and government stations (bomas) were established. Ethnic warfare and mass migration also ceased. The Chartered did not make any profit in Northern Rhodesia, however, and in an effort to cut costs, spent little on administration. Company administration was primarily of the "law and order" variety. As late as 1931, seven years after the end of Company rule, the administration consisted of 9 provincial commissioners, 91 district officers, 15 Euro­ pean clerks, 95 African clerks, and 553 native messengers (Davis, 1931:245). Because Northeastern Rhodesia was more accessible from the east than from Southern Rhodesia, it was governed for a time by the British colonial administra­ tion from Malawi (then called Nyasaland), for which the colonial office received a £10,000 compensation from the Chartered Company. The modest economic development brought by Rhodes's British South Africa Company was spearheaded by the rail­ road. With the dream of a line from Cape to Cairo entirely within British territory, Rhodes convinced the British South Africa Company to bridge the Zambezi at Victoria Falls. By 1906 the rail line reached Broken Hill (now Kabwe), about three hundred fifty miles north of Livingstone. By 1909 it crossed all of what is now Zambia into Katanga. As Kay (1967:31) wrote, "so great was the influence of the railway on the distribution of European settlement and economic development that the 'line of rail' was quickly distinguished from the up-country 'bush' regions." This distinction has persisted to the present day. According to historian Gann (1971:109), however, despite the railroad, before World War I, "Northern Rhodesia remained a sleepy, poverty stricken, backward country which mainly served as a reservoir of African labor for the wealthier South." The problem of making Africans supply their labor to the colonial economy of Southern Africa was solved by means of poll and hut taxes. In the Northeast, a hut tax

EUROPEAN DOMINATION

of three shillings was replaced in 1914 by a poll tax of five shillings per adult male, and five more for each wife beyond the first one. It was later increased, though the tax on wives was abolished in 1929 (Meebelo, 1971:193). Elsewhere in Zambia the tax varied depending on the level of local wages for African labor, but in general the tax was set at one month's wages for an African laborer. If villagers and chiefs resisted collection, punitive expeditions were mounted. Chiefs might be exiled or imprisoned, and some villagers might be publicly flogged. As late as 1930, the government could and did invoke a law permitting collective punish­ ment, collective fines were imposed on all inhabitants of a village, ethnic group, or community if they failed to prevent a criminal escape or restore stolen property, suppressed evi­ dence in a criminal case, resisted tax collection, or rioted (Davis, 1931:241). Though of modest scale and scope, by the late 1920s the European impact had started the transforma­ tion of village life in Zambia toward the European and urban dominated society which emerged with the copper booms. New employment opportunities and the subjugation of village authority to the British eventually affected the life of every African. The labor migration system was the first widespread evidence of these changes, which influenced the source and eventual direction of contemporary African business activity in Zambia (Bates, 1976). At first, recruiters had to travel to rural districts to ensure an adequate labor supply. Soon Africans accepted the market economy, and labor flowed in large migrations back and forth between village and European mine and farm. The wage differentials between low-paying Northern Rho­ desia and such higher paying regions as Southern Rhodesia, Katanga, and South Africa were so great that Africans mi­ grated in large numbers to these distant places both before and after the Copperbelt was developed. The unskilled laborer who was paid three, five, or ten shillings in Northern Rhodesia in the 1900s earned fifteen to thirty shillings in Southern Rhodesia and forty-five shillings in the Transvaal.

FROM RHODES TO KAUNDA

The DeBeers mine in South Africa paid one pound a week for semiskilled labor (Pollock, 1971:411, 422). Africans offered their labor at low wages, usually for a limited period only. As Davidson (1969:224) writes, "the Africans were no more members of society than the cattle and the game for whom 'reserves' were also soon marked out." Business and commercial farming were made illegal for the "Kaffirs," despite the fact that few Europeans settled in Northern Rhodesia until the 1930s. In 1921 there were fewer than 4,000 Europeans, some non-British by descent. Some occupied the good farmland north of Livingstone which they had quickly reserved for themselves. Another group farmed in Eastern Province around what is now Chipata. Commerce was firmly controlled by the Europeans. Not finding Northern Rhodesia a paying proposition, the Chartered Company relinquished administrative control in 1924 to the Colonial Office while retaining mining and other commercial rights. Despite this change, the white settlers remained in day-to-day control, since London was far away. Mining Development

Some mining development had occurred during the period of Company rule, but the bulk of it came later. Licensing arrangements for prospecting were changed to give more favorable terms to the potential prospecting com­ panies, thereby encouraging more prospectors to come to Northern Rhodesia. In 1925 the first of the major copper finds was made. Between 1927 and 1931 development of the Copperbelt proceeded at a brisk pace. The opening of the mines meant a surge of migration—both African and Euro­ pean. By 1930, there were about 30,000 Africans employed in the mines, and the European population had grown to 14,000. Even in the depression year of 1930-31, 80,000 Afri­ cans (about one-fifth of the adult male population) were employed in wage labor in Northern Rhodesia, and another 35,000 worked elsewhere in Southern Africa (Barber, 1961:

EUROPEAN DOMINATION

198, 210). Mining activity declined temporarily in the early 1930s following a 60 percent drop in the price of copper, but resumed in late 1933 and flourished during World War II. Vulnerability to world market fluctuations in copper prices has been a constant problem for the Zambian econ­ omy since the copper development of the late 1920s. The system of labor migration in Zambia and Southern Africa created a shortage of productive labor in rural areas and led directly to their impoverishment. Migration, poor soil fertility, low population density, and chitemene agricul­ ture combined to make life there most precarious. In a study of the Northern Province, where out-migration was greatest, Richards (1939) documents how levels of living deteriorated because men spent their most vigorous and productive years in cash employment. Moreover, both the missionaries and political authorities discouraged the slash and burn agriculture since it exhausted and eroded the soil and since the population movement it fostered made it difficult to demarcate village and other boundaries. Because no suitable substitute was provided, the curbs on the slash and burn system adversely affected the well-being of the rural population. A large number of Africans became wage earners in urban areas for the first time. There they suddenly and often harshly became exposed to a vastly different type of society, one created and dominated by British colonists. Urban Life Cities were built on the Copperbelt and along the line of rail, and a racially stratified social system was established. Skilled European labor came to work in the mines, the railroads, and other industries. Europeans jealously de­ fended their jobs and living standards against African en­ croachments and formed strong, militant trade unions. As social amenities and public-health measures improved and transportation became easier, white women followed the men. The earlier practice of African women cohabitating

FROM RHODES TO KAUNDA

with white men during the frontier era was terminated. As elsewhere in Southern Africa, the color bar was instituted in fact, if not in law. The Eurafrican colored population and the Asians came to occupy a middle position between the dominant white and the subordinate African (Gann, i97i; 133-1^34). According to one anthropologist who studied the urban social system of the Copperbelt, "each racial group tended to form a closed social group. . . . Outside of economic and administrative matters . . . race was 'per­ vasive' in the social structure in that it provided a primary basis of ordering social relations in nearly all situations." (Mitchell, 1970:320-321). Africans were at first required to carry passes in the Euro­ pean areas, and these passes, as well as permits to stay in town, were given only to those with regular employment. Houses were provided in authorized settlements to some Africans by municipal governments or by their employers at subsidized rents. However, housing in planned neighbor­ hoods was always in chronic shortage. Many Africans had to settle in unauthorized neighborhoods. Lusaka, for in­ stance, was laid out in colonial days on the South African pattern. Prior to independence, housing was segregated by race, as was business activity. Authorized settlements for Africans, called "suburbs" or "townships," were under the control of the city council. They consisted of small houses built by the council along straight, improved streets, with some sewerage, water, and electrical services provided. These neighborhoods contained schools, clinics, and recre­ ational areas. Places were set aside for shops and markets. In contrast, unauthorized settlements, referred to as "squatter's compounds" and "illegal" locations, grew up unplanned on farmland or unoccupied areas. Homes were made of mud bricks, dirt tracks served as roads, and urban services were unavailable. The owners had no title to the land on which they lived. Copperbelt life as well as urban life elsewhere in Zambia proved to have some "Westernizing" influence on Africans,

Figure x.s

Greater Lusaka Area

FROM RHODES TO KAUNDA

but did not influence all aspects of their lives equally. Social and cultural changes proceeded at different rates. Labor re­ lations and attitudes toward jobs, advancement, and ma­ terial goods were relatively quick to change, but family practices, domestic roles, and patterns of social solidarity were much more resistant. Faced with a multitude of lan­ guages and ethnic groups with different customs, the mine management sought to transplant elements of village gov­ ernment into the urban industrial setting. Councils of socalled Tribal Elders and Tribal Representatives were established to settle disputes among Africans, offer advice and moral guidance to new townsmen, and handle labor relations (Epstein, 1968:26-47). Many of these elders were related to chiefs and royal families. The African miners themselves formed various fraternal and mutual aid societies to provide death benefits and other services to their mem­ bers. However, with the differentiation of occupations of Africans in the labor force and the increasing labor mili­ tancy marked by strikes and unionization drives, the socalled Tribal Elders were caught between the interests of management and the African work force. The new men in the benefit societies and trade unions won the contest for leadership. In 1953 when the mine workers were given an opportunity to choose, 97 percent voted against the reten­ tion of the Tribal Elders (Epstein, 1968:100). By then, having been helped by British trade unions during the late 1940s, African trade unions had spread throughout the Copperbelt. The major issues in labor relations were the advancement of Africans to skilled positions reserved for Europeans, and the differential pay scales between blacks and whites. Although the colonial system had imposed distinctions based on race as the most relevant guide to behavior (Mitchell, 1956), employers had followed the practice of assigning Africans to work teams and to company housing without regard to ethnic affiliation. Work and neighbor­ hoods cut across ethnic lines. They were still important,

EUROPEAN DOMINATION

however, in family life and social relations outside of work. In marriages contracted on the Copperbelt, in recreational activities such as the Kalela dance, in friendships, and in drinking and eating groups, the pull of ethnicity still proved to be strong. However, ethnic associations never developed on the Copperbelt as they did in many other African urban areas (Harries-Jones, 1965). Studies of at­ traction and social distance among ethnic groups indicated a strong preference in face-to-face situations for the same ethnic group or those culturally similar. Stereotypes based on geographic distance between ethnic groups, cultural similarity, and the reputation of some groups for military valor in precolonial times persisted. At the same time, studies of occupational prestige indi­ cated the high degree to which Africans had internalized the economic and social outlook embodied in the colonial stratification system. The better-paid nonmanual occupa­ tions mostly identified with the European elite, such as lawyer, school inspector, and senior clerk received prestige ratings far above those of the manual occupations of the majority of African wage earners, such as taxi or truck driver, office messenger, bricklayer, market seller, and cook. African market traders ranked in the lower middle of the scale (Mitchell and Epstein, 1959). There were so few African businessmen in the mid-1950s that the researchers did not bother to include a prestige rating for such a role. Europeans became the standard-setting reference group in economic affairs and public life in Zambia. Knowledge of the English language, European clothes, furniture, artifacts such as watches, and even European diet distinguished the sophisticated townsmen from their country cousins (Mitch­ ell, 1970). This spread of European life styles and attitudes together with the division among Africans along social class lines had a profound effect on Africans in the Copperbelt urban areas. They constituted a substantial portion of the total population and after World War II had a relatively high

FROM RHODES TO KAUNDA

per capita purchasing power, "probably the highest for any single group of urban Africans in tropical Africa" (Miracle, 1965:286). Zambia's colonial heritage thus consisted of a more highly urbanized and better paid labor force than elsewhere in black Africa, but also included a larger gap between urban Africans and the rural subsistence cultivators. Education

Colonial rule and the discovery of copper at first had little impact on the quality of education offered to Africans. In 1924 education was available only in mission schools, and opportunities scarcely improved in the following years. Davidson (1969:224) reports that in 1932 the Legislative Council had more concern (as evidenced by the number of pages of reported debates) for outbreaks of rabies among "native dogs" than for "native education." As late as 1958, even though the Zambian population included more than two million Africans, there was only one school that pre­ pared African students for the Cambridge Certificate Ex­ amination—the O levels (the rough equivalent of high school in the United States).3 Moreover, schools were segre­ gated by race, with Europeans able to attend well-equipped schools while African students sat on the ground and liter­ ally drew their lessons in the dirt. The European schools spent twenty-four to forty-eight times more per pupil be­ tween 1930 and 1950 than did African schools (Hall, 1965: 31°).

At any given time the great majority of African students 3 From colonial times until an educational reform in the late 1960s, the following grade levels existed for African education in Northern Rhodesia and Zambia: substandard A; substandard B; standards one through six; forms I through V. Upon graduation from form V a stu­ dent was presumed to be at the so-called ordinary Cambridge examina­ tion level, the O levels. The standards and substandards have been re­ placed with grades one through seven. Upon completion of grade seven (standard six during the earlier period) students may go on to form I, if they pass an examination, or pursue training as a medical or agri­ cultural assistant or in the manual arts.

EUROPEAN DOMINATION

were in the earlier grades. Hall (1965:138) writes: "The system which had developed was characterized by extreme waste and unbalance. Over half the children enrolled were in the first class of school. In 1942, out of 86,300 on roll, 47,500 were in substandard A, 3,000 in standard three, and less than 500 in standard six. In the entire territory there were 35 secondary school students." Receiving a meager edu­ cation that usually cost about one-thirtieth of its European counterpart was nonetheless a rare privilege. The oppor­ tunities for postprimary training were even fewer and thus those who received any training beyond the standard-six level qualified as members of an African elite. The presentday African businessmen received their education, if any, in this system. Politics

From the early days of Colonial Office rule in Northern Rhodesia, "unofficial" members of the Legislative Council— that is, settlers—held significant positions. These members continued to increase their share in the council and became a majority in 1945, when nominated "unofficial" members, all Europeans, were included to represent African interests. Although the Colonial Office had earlier adopted the prin­ ciple of trusteeship for the African majority in all British colonies, the actual impact was slight. The Devonshire declaration of 1923 (which applied specifically to Kenya) expressed this principle as follows: "Primarily, Kenya is an African country, and His Majesty's Government think it is necessary definitely to record their considered opinion that the interests of the African natives must be paramount, and that if and when those interests and the interests of the im­ migrant races should conflict, the former should prevail. . . . His Majesty's Government regard themselves as exercising a trust on behalf of the African population, and they are unable to delegate or share this trust, the object of which may be defined as the protection and advance of the native races" (Davidson, 1969:233). The principle of "para-

FROM RHODES TO KAUNDA

mountcy" of African interests in the Devonshire declaration was interpreted in 1930 by Sidney Webb (Lord Passfield) to include all settler colonies, including Northern Rhodesia. However, more than two decades of conflict between Afri­ cans, settlers, and the Colonial Office was required before the Colonial Office could even begin to implement this principle. In the short term, the theoretical paramountcy of African interests had almost no effect on governmental practices. The prevailing rules and conditions had been laid down by the whites. Africans mounted some resistance, and their opposition to the regime increased as the white settlers tried to secure either amalgamation with their "brothers" to the south or hegemony of their own. Occasional protests and disorders broke out in urban areas, as did a few in the rural areas. Welfare societies and associations were formed and expressed the voice of educated Africans. From a federation of these societies, the first African political party emerged. Labor militancy in the mines increased as trade unionism spread. At the same time African religious move­ ments broke away from the control of the mission churches. A small measure of African political representation was achieved in 1948 when Africans were seated in the Legisla­ tive Council for the first time. Africans insisted on im­ proved conditions, but did not want the British to depart and leave them under settler control. The settlers themselves were divided over whether they wanted a federation or some other form of association with Southern Rhodesia or self-government on their own. In the late 1940s a major political crisis broke out over the federa­ tion issue. With the Tories in power in Britain in 1953, the Federation of Rhodesia (Northern and Southern) and Nyasaland was formed over strong African opposition. Fol­ lowing their victory, the Europeans benefited from terri­ torial consolidation for ten years. A Colonial Aristocracy

Despite a modest increase in the political influence and

EUROPEAN DOMINATION

economic importance of Africans, the pattern of racial dis­ crimination remained unchanged. Though Europeans were provided with education from federal funds, most of which derived from the copper mines in the North, African edu­ cation was assigned limited resources in each separate terri­ tory. Wage scales based on race remained the common pol­ icy, and while incomes did increase for African workers, wages for whites were still twenty to thirty times those for Africans. In absolute terms, the Europeans lived quite well. In 1945, while Europeans were earning on the average about 600 pounds sterling a year and the Asians were making about 440 pounds, the average income of the employed Africans was about 21 pounds, or thirty times less (Deane, 1953:242, 243, 245, 251). The incomes of those engaged in subsistence agriculture .was estimated by Deane to be less than 3 pounds a year, or one-two hundredth of the average European wage. An ex-civil servant of British upper-class origin describes the European life style in Northern Rho­ desia in the 1950s in the following way: Most households have two cars. In the days of boom in copper, the Sunday Mail said in a recent article, copper miners used to have three per household, the highest rate in the world, mostly the latest models, changed every six months. They now have to make do with two, including sometimes last year's models. Most people have the latest in "hi-fi" wireless and radiograms with stereophonic sound. Many own their houses, pleasant but not very tasteful villas standing in their own grounds. Their high incomes enable them to have motoring holidays not only in Southern Africa, but in Europe. They can indulge in expensive hobbies, such as driving speed boats, and have a taste for expensive cameras, both still and movie, with the latest equip­ ment for showing the results. They have large parties at which the drinks flow freely and nothing serious is said (Wood, 1961:57-58).

FROM RHODES TO KAUNDA

The cultural and social patterns of the whites in North­ ern Rhodesia were common throughout Southern Africa. This lifestyle diffused along the roads, railways, and tele­ phone lines, which all ran south. Virtually all imports and exports came and went through the South. Zambia was, after all, Northern Rhodesia, a hinterland of the South. TRADE IN COLONIAL TIMES

As they did for the economy as a whole, the colonial pat­ terns have had a lasting impact on trade in independent Zambia. African trade existed in Zambia before the Euro­ peans colonized the area (Roberts, 1970). It played an im­ portant part in some local economic and political units, though there were few full-time traders. Ivory, slaves, guns and other weapons, salt, metals, beads and ornaments, cloth, tools, and other goods were all exchanged in a set of trade links that extended from both the Atlantic and In­ dian oceans into the interior chiefdoms and kingdoms. American crops, cassava, maize, sweet potatoes, groundnuts, sugar cane, and tobacco spread into Central Africa through this territorial network. European penetration rapidly undermined the tradi­ tional patterns of trade, however, and by 1910 most trade was in European hands. Miracle (1965:295), describes this transition: Most obvious was the suppression of the slave trade, but indirect effects were of equal significance. Euro­ pean hunter-traders began to tour the country, living off the land and trading such items as hoes, salt, blan­ kets, cloth, beads, other ornaments, and meat of the game they shot. For these they got grain, other food stuffs, and where they could be found, elephant tusks, cattle, and hides. African trade could not withstand the competition. Europeans supplied, at reasonable terms, the mainstays

TRADE IN COLONIAL TIMES

of traditional commerce, or a substitute. . . . The Afri­ can trader who formerly made long expeditions on foot to buy hoes, salt, etc., not available at home, was nearly extinct by the time European settlers, adminis­ trators, and missionaries came in numbers. Westbeech, one of the first European traders north of the Zambezi, came into Barotseland in the late 1860s with three wagonloads of goods. He successfully challenged the long-distance trading influence of the Mambari, the col­ ored traders from Angola. In 1875 alone, he took 12,000 pounds of ivory out of the Barotse Valley (Pollock, 1971: 99). Other traders came from the South in their ox wagons. Many of the early pioneers were East European Jews, like the Susman brothers from Salisbury. Later they opened stores and eventually built up an entire chain of trading posts in Western and Southern Zambia (Gann, 1958:150158). Founded by Glasgow merchants for supplying the mis­ sions and for fostering legitimate trade, the African Lakes Company established branches in Northern Zambia in the 1880s. They found the competition of Arab and Swahili traders and slavers too tenacious to dislodge until the Brit­ ish military forces intervened in the 1890s. In alliance with the missions, the African Lakes Company helped build the Stevenson Road linking Lakes Nyasa and Tanganyika. In 1890 the Lakes Company was bought by the Chartered Company. Neither company did anything to encourage production and marketing of African-grown crops, prefer­ ring to concentrate on the sale of European trade goods. The Chartered Company was primarily interested in de­ veloping Northern Zambia as a labor reserve (Gann, 1958:150-158; Davis, 1931:17, 190). After the first European stores were opened by mission­ aries, the administration allowed Indian hawkers and shop­ keepers to handle trade with the Africans in Eastern Zam­ bia, despite the opposition of European farmers, merchants,

FROM RHODES TO KAUNDA

and the African Lakes Company. Trade goods were brought from Nyasaland and Mozambique by porters and wagons. Indian coins were in use for a time before British currency was introduced. Asians were at first denied trade licenses to operate in Livingstone. Eventually they became entrenched in the rural areas in the South and East because they were willing to live in those outposts, handle lower turnover, and earn less than Europeans. Later they also settled in the towns. However, the Asians were few in number. As late as 1931, only 176 Asians lived in all of Northern Rhodesia; by 1946 their numbers had grown to 1,115, anc^ 429 retail trade licenses were issued to Asians in that year. (Deane, !953:272-275). In the 1930s and 1940s, Asian trade expand­ ed from the South and the East along the rail line into the Copperbelt and Northern Province. The demise of African trading in the early colonial era and its subsequent marginal nature was caused by restric­ tions imposed by the colonial administration and by com­ petition from non-Africans. Trade in indigenous goods was undermined by cheaper and higher quality imports, and Africans could not turn to trading in imported goods be­ cause Asians and Europeans controlled that market. Fur­ thermore, Africans labored under a number of restrictions that limited their opportunities. Basic foodstuffs like maize, grain meals, salt, sugar, coffee, and tea could not be legally sold in most African marketplaces or offered by African hawkers. According to Miracle (1965:299), "for the grains and grain products, such prohibitions enforce a statutory government marketing monopoly which appears to have been designed to disguise a subsidy to European farmers. Restrictions on the sale of other products were designed to protect storekeepers who commonly assert that without limiting competition, some of them would go bankrupt. The officials say they must cater to the demands of store owners because they pay a disproportionately large share of municipal taxes." Other official restrictions on African economic activity

TRADE IN COLONIAL TIMES

hindered indigenous efforts. Government-regulated beer halls had a monopoly over the sale of beer and other al­ coholic beverages to Africans. Another ordinance prohibit­ ed "credit sales to natives." Moreover, unlike European and Asian retailers who could obtain goods on credit from wholesalers and suppliers, Africans were legally barred from this common and necessary business practice. Licens­ ing of commercial activity was a further barrier: petty trade along a roadside or in one's house was illegal without a license. Licensing fees were set high in relation to the volume and profits of African trade. Africans were charged seven pounds, ten for a general dealer's license, the same fee that much larger European and Asian enterprises paid, and two pounds, ten for a hawker's license. On top of that, three pounds per annum plot rent was charged to store­ keepers in the "reserves," and double that amount outside (Gann, 1964:287). These licensing policies, in effect, pushed Africans into the marginal village trade and hawking from which they could not mount a competitive challenge to Europeans and Asians. Furthermore, in urban areas Africans were not allowed to operate stores except in African neighborhoods, the "locations." Asian shopkeepers were located in the so-called second-class retail areas while Europeans and Asians shared the main commercial district and also operated stores in the main rural centers. Many of these stores were branches of British, South African, and Rhodesian firms. Widespread labor migration created another set of impediments to Afri­ can trade. As we have seen, able-bodied males, who were the wage earners and the most affluent segment of the popu­ lation, were away in towns. According to an analysis of the budgets and expenditures of African urban wage earners in Northern Rhodesia in the late 1950s, only 1.6 percent of total earnings was remitted to rural areas (Barber, 1965: 116). Village life was impoverished and stifled by such un­ even exchange. Although most accessible to African com­ merce, village trade was also the least profitable.

FROM RHODES TO KAUNDA

Yet even in the 1930s and 1940s, some African business­ men did exist. According to 1931 licensing records, 72 Afri­ cans held a trading license, and 617 were hawkers (Davis, 1931:200). During the depression, in 1934, those numbers were down to 49 and 313 respectively. From the mid-thir­ ties, following an upswing in copper mining and the re­ duction of license fees for village traders, African trade ap­ pears to have increased, at least if complaints voiced by Europeans are a good indicator (Gann, 1964:288). There is also some evidence, however, that in at least one town on the line of rail, the number of Africans in business de­ clined in the 1950s and 1960s from a relatively high level. This decline was a result of competition from retail stores started by European servicemen who migrated to Northern Rhodesia after the war.4 In areas of commerce where the government put no ob­ stacles in the way of African activity, such as market trade and long-distance fish trade, there was never a shortage of African enterprises. But having blocked the emergence of African trade on a substantial scale, the administration then saw its absence as a confirmation of the view that Africans were incapable of business. It was a self-fulfilling prophecy. The business situation in the middle forties was analyzed by Deane (1953:272-275). In 1946, Africans in Northern Rhodesia held more than 4,000 trade and 1,000 hawker li­ censes. These were issued by the district commissioner's of­ fice, and during this period licensing regulations were fairly rigidly enforced. Deane estimates that the traders and store­ keepers had an average turnover of about 60 to 70 pounds per year on which they made about 20 to 25 pounds, mostly profit and their own wages. Hawkers made and handled somewhat less. When these figures are compared with those for Europeans and Asians, the usual disparity appears. Ac* Oral communication from Arthur Turner who is writing a history of Broken Hill-Kabwe. He based his assessment on the number of trade licenses issued to each race.

TRADE IN COLONIAL TIMES

cording to Deane, about 550 Europeans and 400 Asians had licenses at that time. They averaged about 9,000 pounds turnover, of which 1,800 pounds was value added. This latter figure includes rent, profits, wages and salaries. Profit and wages paid to the businessman himself would account for more than half of this amount. African traders account­ ed for only about 5 percent of all trade in the territory in the 1940s. During the federal period (1953-1963), African retailing continued to be insignificant. No legal beer halls were in African hands until 1959, and no legal bars until 1961, though some traditional African beer makers obviously ex­ isted illegally. Africans could not register companies or own land in most parts of the country. In their home areas, land tenure was usually under the control of the chief. The towns were for Europeans. Africans did not enjoy favorable relations with the government, banks and bankers, credi­ tors, potential customers, or suppliers. As a result of these restrictions on African business, the contracting companies, the stores on Cairo Road (Lusaka's main street), the specialized service enterprises, the bars, the stores in the second-class areas, the wholesalers, the fac­ tories, the motor-repair shops, and indeed virtually every­ thing beyond routine retail trade and rudimentary artisanship were in non-African hands. By contrast, the African businessman traded used clothing across the Congo (now Zaire) border, bought and sold charcoal, caught and sold fish, and engaged in petty hawking. Some were in business only part-time. Storekeepers were relatively few and had a small turnover. Some exceptions existed, like the fabled Luka Mumba who acquired a whole fleet of buses and trucks as well as hotels and stores in Luapula Province (Gann, 1964:377). But when the economist Marvin Miracle became interested in the study of African entrepreneurs on the Copperbelt in the late 1950s, he necessarily focused on market trade, not retail stores and small industry. "Storekeeping is still mainly the preserve of foreigners," he wrote,

FROM RHODES TO KAUNDA

and Africans depended on "the goodwill of Asian and Eu­ ropean competitors, who are prone to turn to 'gentlemen's agreements,' price wars, and the like, when faced with a new rival" (Miracle, 1965:286). Thus, at the time of independence, Zambian trade pat­ terns had been molded by the political and economic domi­ nance of non-Africans. This dominance was based on the massive foreign-controlled development of the copper in­ dustry, which had directly or indirectly transformed nearly every aspect of African society. INDEPENDENCE AND THE COLONIAL LEGACY

The struggle of Africans for self-rule and independence became increasingly intense throughout the decade of fed­ eration.5 In 1953, the newly created Central African Federa­ tion was a very strange beast. In Southern Rhodesia the settlers held on to the self-government they had gained in 1923. Advancement of Africans to positions of real power was resisted. In Northern Rhodesia and Nyasaland (now Malawi), the Colonial Office had a great deal to say on any issue that might adversely affect African interests. On dayto-day matters, however, the settlers on the Legislative Council had the decisive voice. The federal government it­ self was controlled by settler interests, mainly those in Southern Rhodesia. Africans could only partially determine who would represent them in the Federal Assembly. When efforts mounted for placing the entire federation under a system more attuned to African interests, Southern Rhodesian white settlers resisted strenuously. This resistance prompted African nationalists to demand the dissolution of the federation because they saw it as an obstacle to even­ tual majority rule and independence. 5 Our brief sketch is based on the following more comprehensive accounts of Zambia's nationalist movements and postindependence policies: Davidson (1969), Hall (1965, 1969), Kaunda (1962), Mulford (1964, 1967), and Rotberg (1965).

INDEPENDENCE

African political parties were formed in reaction. The first was the ANC (African National Congress), started in 1948 by a group of welfare societies. Harry Nkumbula be­ came its president and Kenneth Kaunda, Zambia's presi­ dent since 1964, its secretary-general in 1953. During the first few years of federation, political activity diminished as African wages increased and initial fears that settlers would achieve self-government proved unjustified. However, the political calm was broken as Africans organized strikes to support African advancement in the mines and boycotts to end discrimination in European shops. Protests also fo­ cused on European attempts to change the federal and ter­ ritorial constitution to extend settler dominance. In 1958, after a term in jail, Kaunda broke with Nkumbula and formed ZANC (Zambia African National Con­ ference). Unlike Nkumbula, Kaunda refused to go along with a proposed new constitution, and he eventually emerged as the main nationalist leader. Commissions and constitutional change flourished during the next several years. Outside events finally tipped the balance to the ad­ vantage of the nationalist leaders. After a tour of the con­ tinent in January i960, Harold Macmillan made his fa­ mous speech in Capetown about the inexorable "winds of change" sweeping Africa from the north. It was only a mat­ ter of time until Zambia achieved independence. Inde­ pendence in other African colonies and opposition to the federation in Malawi stimulated increased agitation for change. People demonstrated and were jailed, fired, and blacklisted. In 1962, the "winds" finally reached the north­ ern bank of the Zambezi River (from which Zambia's name was to be taken). As the result of a general election con­ ducted on the basis of a very complex franchise, Nkumbula's ANC held the balance of power between African na­ tionalists and European settlers. After being wooed, cajoled, and threatened by representatives from UNIP (United Na­ tional Independence Party, the final successor to ZANC) and the European UFP (United Federal Party), Nkumbula

FROM RHODES TO KAUNDA

sided with Kaunda. Black majority government was at hand. In 1963 the federation was finally dissolved, and in 1964 Northern Rhodesia became Zambia. As in most ex-British colonies, the new government was organized on the Westminster model. A nonracial society was proclaimed, a marked contrast to the multiracial vision of the former federation rulers, who had wanted a system with the whites as the "rider" and the Africans as their "horse." Whites were invited to come and make their fu­ ture in Zambia, and an era of good feeling began. It was hoped that Southern Rhodesia would soon follow in Zam­ bia's footsteps. Zambia became independent with a unique set of assets and handicaps. The copper mines and associated develop­ ment provided financial resources but also meant a heavy reliance on a large European presence. According to the most recent census, in 1969 Zambia was inhabited by over 4 million people, including nearly 60,000 non-Africans. Of this group most are Europeans, but Asians and colored (those of mixed blood) comprise almost one-fourth—about 11,000 Asians and 4,000 colored (Zambia Central Statistical Office, ig7oa:B3). Over 30 percent of Zambia's population is concentrated along a belt within twenty-five miles of the rail line which connects all major urban areas. As one analyst (Jackman, 1971:45) notes, "movement toward cen­ tral places offering hope of employment and modest urban amenities is marked, and the truly rural population is wide­ ly declining." Government efforts to overcome the ruralurban gap have not yet been successful. Urban wages av­ eraging K869 per year (Ki was worth about $1.40 in 1971) for those in the industrialized sector are among the highest in black Africa. Because of past educational practices and the restrictions on apprenticeships and on-the-job training, Zambia faced a manpower problem unparalled in the rest of Africa (UN/ ECA/FAO, 1964:1). Since the highly developed sectors of the economy, including mining, required skilled labor

INDEPENDENCE

which could not be quickly trained, foreigners were needed to maintain output. At independence, therefore, most skilled and white-collar jobs in the civil service and in the private sector, including the mines, were held by Europeans. This pattern, though somewhat attenuated, remained at the time of our study. The copper industry remained in the hands of multinational corporations owned primarily by British, United States, and South African interests. Coal for copper smelting came from Wankie in Rhodesia. Elec­ tric power from the Kariba Dam was generated in a power station located on the southern, Rhodesian side of the Zam­ bezi River. The railroad routes to ocean ports passed either through Rhodesia to Mozambique and South African ports, or through Zaire to an Angolan port. The only route to a friendly African country and port, Dar es Salaam in Tan­ zania, was unpaved on the Tanzanian side. Telecommuni­ cations passed through Johannesburg. When President Kaunda spoke to President Nyerere on the telephone, both knew full well that South African intelligence was monitor­ ing the conversation. Economic planning and even routine administration made use of expatriate civil servants and technical advi­ sors. Important government documents were often handled by foreign nationals. Foreign intelligence could easily pene­ trate the government to the highest levels (Christie, 1971). Some officers in the armed forces were British. On three long borders impossible to protect with Zambia's limited resources, armed conflict between African nationalists and colonial powers spilled over into Zambian territory. In retaliation for Zambian help to freedom fighters, bridges deep in Zambian territory were sabotaged. Overflights by South African reconnaissance planes were impossible to stop. The security and secrecy necessary for an effective, in­ dependent foreign policy were impossible to achieve. In domestic matters as well, the capacity of the govern­ ment for engineering change at the grass roots was limited, notably in agriculture. Basic information was often hard to

FROM RHODES TO KAUNDA

come by. Was there a famine in a remote rural district? Had trucks with relief food arrived after traveling over the washed-out roads? How would farmers respond to the new­ ly posted, government-guaranteed grain prices? Could a severe grain shortage be expected? No one was in a position to supply an answer to these and other critical questions. Rural development was also limited by shortages in skilled manpower, small markets, and high transportation costs. Allocated funds went unspent for lack of viable projects. A survey of nutritional needs and priorities revealed "a pic­ ture of isolation and neglect, carried over as part of the co­ lonial inheritance" (Rothchild, 1972:223). The era of good feeling toward Britain was undermined when Rhodesia unilaterally declared its independence (the so-called UDI) from Britain in November 1965. When the UN declared sanctions against Rhodesia, it was Zambia that experienced shortages, gasoline rationing, and high costs. Many white residents openly expressed sympathy for the regime of Rhodesian Prime Minister Ian Smith. It be­ came evident that Britain would not move with force against its kith and kin in Rhodesia, nor would it go out of its way to help Zambia. Rhodesia's action pointed up the vulnerability of Zambia to foreign economic interests and forces in terms of the pattern of trade, energy sources, trans­ portation, the ownership of economic assets, and skilled manpower. Immediately following Rhodesia's unilateral declaration of independence, Zambia began the search for alternative sources and routes of supply and export. Zambia, Britain, and eventually other members of the United Nations began to apply sanctions by barring both imports from and ex­ ports to Rhodesia. Since Zambia was tied to Rhodesia com­ mercially, industrially, and physically, the sanctions were felt severely in Zambia. It was difficult to find new sources of supply and new supply routes quickly, especially since many of the foreign companies in Zambia were branches of Rhodesian firms. (By the time of our study, Zambia had re-

INDEPENDENCE

duced its imports from Rhodesia by some 50 percent, Zam­ bia Central Statistical Office, 1972:22.) Goods were bought in South Africa, shipped from there to ports in Portuguese Africa, and then trucked or shipped by rail to Zambia. Gasoline rationing was a fact of life until the oil pipeline was completed from Dar es Salaam in 1968. Until then, oil and gasoline were trucked, often by South African business­ men, over the "Hell Run"—the road to Dar es Salaam: "The section to the Zambian Tanzania border was untarred and became a foot deep in reddish mud in the rainy sea­ son . . . [it then] . . . passed over a mountain range rising 8,000 feet. From there, the road was generally narrow and rutted with primitive bridges and poor drainage" (Hall, 1969:167). Despite much official effort, only a small portion of Zambia's imports and exports could be routed through Dar es Salaam, at the time, the only politically acceptable route, because of the large output of copper, the small ca­ pacity of the Dar es Salaam harbor, and the poor road. Even though the Great North Road has been paved and the Tanzam Railroad has opened, Zambia continues to face supply and export route difficulties. A United Nations re­ port estimated that the earlier sanctions and the closing of the Zambian border with Rhodesia in 1973 together cost Zambia over 300 million dollars (Times of Zambia, 1975b:!). Her continuing vulnerability to foreign supply routes was again confirmed during the 1975-76 Angolan civil war when the Benguela Railroad line was cut off. Despite these handicaps and limitations, Zambian politi­ cal leaders have pursued a vigorous, independent foreign policy designed to help bring black rule to all of Southern Africa. They also have undertaken a series of far-reaching changes meant to diminish foreign economic dependence and increase Zambian control of the country's economic as­ sets, institutions, and policies. These changes are referred to as the economic reforms, and sometimes as the Mulungushi reforms. They were proclaimed between 1968 and 1972 in the context of an economic boom sparked by the

FROM RHODES TO KAUNDA

highest copper prices in years. They were legitimized by President Kaunda with reference to his philosophy of hu­ manism, a Christian, noncapitalist view of the good society which seeks to maintain elements of African tradition and cooperation while promoting economic growth. Each re­ form wave represented a challenge to expatriates, foreign investors, and foreign economic interests. Each also repre­ sented a gamble, in that outside technology and mana­ gerial personnel were making valuable practical contri­ butions to development efforts. Each was also a gamble inasmuch as the success of the reforms depended on African readiness and ability to take the place of expatriates. THE ECONOMIC REFORMS

The economic reforms have had an impact on all Zambian business, large and small, African and non-African. The reforms were proclaimed in three separate addresses. They were meant to shift control of the Zambian economy from foreign interests into government or private Zambian hands. In part, this policy was to be accomplished by ban­ ning certain lines of business to non-Zambians. The reforms are having varying effects. But the fits and starts of Zambian economic planning and performance are not due to the economic reforms alone. These have to be analyzed in the context of the massive reorientation of import and export patterns and transport routes, policy on land tenure, tax collection methods, and the imposition of price controls. Together these changes provided new business opportuni­ ties for Africans, though they also complicated business operations. In this section, we present the highlights of the reforms chronologically. In later chapters, we analyze their impact on specific types of African business.® β Several studies discuss the impact of the economic reforms on var­ ious areas of the Zambian economy. See Young (1970a, 1970b) and Chaput (1971) on Indeco (Industrial Development Company); Bostock

ECONOMIC REFORMS

First Wave

The first reforms were announced by President Kaunda in the so-called Mulungushi address before the National Council of the United National Independence Party in April 1968. Resident expatriate businessmen were allowed to renew or acquire a retail trade license or liquor license only in the major towns' main business districts. An excep­ tion was made for trade in a restricted number of special­ ized items such as pharmaceuticals and electric appliances. Since trade licenses expired once a year in January, the af­ fected businesses had eight months to prepare for the change. The Mulungushi reforms covered other types of busi­ nesses and small industry, and some services as well. Roadservice licenses for buses, lorries, vans, and taxis were to be granted to or renewed only for companies, cooperatives, or other arrangements with at least 75 percent Zambian own­ ership. Similarly, building-material permits necessary to ex­ tract sand, gravel, and clay were only to be given to Zambians, with companies and cooperatives having preference over individual entrepreneurs. The mining companies were urged to Zambianize their subcontractors. All Public Works Department contracts under 100,000 kwacha were to be awarded to Zambian contractors. The reforms have also progressively put more and more of the Zambian economy under government control. In the MuIungushi speech, President Kaunda proclaimed his in­ tention to "ask the owners of certain firms to invite the government to join their enterprises" (Kaunda, 1968:38). Twenty-six firms were "asked," and these included most companies in the building supply field, the breweries, a fish processor, the larger road transport companies, the logging companies, the newspapers, and the large trading and Harvey (1972) on the copper mines. Insightful analyses of various projects and programs have also appeared in the Times of Zambia, Business Review.

FROM RHODES TO KAUNDA

companies.7 These 26 firms controlled key areas of the economy, were large by Zambian standards, and for the most part were owned and run by white foreigners. The government was to acquire a 51 percent interest, the cost of acquisition to be paid out of future earnings. The expa­ triate European management was often retained. As a result of the arrangements for the buying of shares, however, most profits continued to leave Zambia. These companies were placed within the semigovernmental conglomerate Indeco (Industrial Development Com­ pany) along with other joint and state enterprises that had been formed by the government. Indeco was to be managed in a "proper and businesslike way" (Kaunda, 1969:60-67). When the government purchased a company's assets, it paid only the book value of the shares; it paid nothing for good will and future earnings. Indeco thus acquired interests in many critical areas of the Zambian economy. In the past, many non-Zambian firms had brought in little capital and had borrowed necessary funds from local banks, insurance companies, and building societies which were themselves controlled by Europeans. They would thus repatriate profits while reinvesting little. In an attempt to stop this practice, the reforms directed that unrestricted loans were to be limited to firms that were 100 percent Zambian owned. Loans to non-Zambian companies required advance approval from the exchange-control authorities, who based their decision on the amount of money the com­ pany owed and its equity in Zambia (Kaunda, 1968:52). A one-to-one ratio of loans to equity was established, mak­ ing it possible to borrow only as much capital as the com­ pany already had in Zambia. Second Wave

The economic reforms were extended a year later in the 7 Changes in retail and wholesale trade were of particular interest to us. They are more fully described in chapter seven.

ECONOMIC REFORMS

so-called Matero speech at another meeting of the National Council of UNIP in August 1969 (Kaunda, 1969). By this decree wholesaling in smaller rural towns was also to be Zambianized. Kaunda also declared his right as president to revoke any trading license when he had "good reason to believe the holder of that license is engaging in antinational and anti-social activities" (Kaunda, 1969:11). Of greater significance was the 1969 nationalization of the mines and the introduction of a new royalty system giving incentives for exploration and development of mineral de­ posits (Kaunda, 1969:29-39). Following the Indeco pattern, the mines were to be controlled by Mindeco (Mining De­ velopment Company), the second pillar of Zambia's par­ tially nationalized economic structure. Several new projects in association with foreign companies were also announced. The state companies and statutory boards were given import monopolies in areas in which they were either major cus­ tomers or suppliers (for instance, building materials, tex­ tiles, and consumer goods). These measures were designed to hold the line on prices and halt some illegal business practices for getting money out of Zambia, such as overinvoicing by suppliers in international transactions. Loan requirements were changed to enable companies with 51 percent Zambian ownership to borrow without regard to the amount of their equity in Zambia. This policy was intended to encourage joint ventures by Zambians and expatriates. A new National and Commercial Bank was formed with government participation. Not surprisingly, it lent exclusively to Zambians and received the immediate benefit of many government deposits. Third Wave At the next UNIP National Council Meeting in No­ vember 1970, Kaunda banned non-Zambians from all retail and wholesale trade throughout the country except in twenty-one categories of goods—a reduction of ten cate­ gories (Kaunda, 1970:57-69). At the same time, only totally

FROM RHODES TO KAUNDA

Zambian companies were to be allowed to operate transport, brick-making, and stone-crushing businesses. The new re­ strictions took effect on January i, 1972. Also, the mining companies were directed to stop using expatriate subcon­ tractors for transport and building by January 1, 1971. Other specific proposals included the takeover of seven more major companies, two mineral-oil refineries, a milling company, two bakeries, and two cigarette manufacturers. Other companies voluntarily invited government partici­ pation, since the third reform wave impaired their market position in the face of government favoritism toward semigovernment companies. Some companies that had previously joined Indeco were reorganized, and different expatriates, many from Italy, took over management. Eleven other com­ panies were shut down summarily under the president's new powers. It was alleged that they were engaged in currency manipulations and fraudulent customs declarations to avoid foreign exchange restrictions and to get capital out of Zambia. In the third wave of the reforms, in 1970, plans were also announced to establish a third pillar in the Zambian economic structure, Findeco (Financial Development Com­ pany). It was to consist of all banks—Barclays, Grindlays, Standard, and Commercial—which were to become 51 per­ cent government owned. This share was to be entirely new capital; no attempt was to be made to buy out the foreign owners (Kaunda, 1970:64-66). These proposals were modi­ fied eventually because of the banks' resistance. Though the final act may not have been played, the remaining private banks were forced to incorporate in Zambia and to draw more than half their directors from the Zambian popula­ tion. The smallest foreign-owned bank, the Commercial Bank of Zambia, merged with the state-controlled bank, giving it several new branches immediately. Over the long run, the government could force the nonstate banks out of business by making all its deposits in the state bank and requiring the partially state-owned conglomerates to do the

ECONOMIC REFORMS

same. The foreign insurance companies were forced to close, and a state insurance company was formed to take their place. The building societies were also taken over. In 1963 the Indeco Finance Company had been estab­ lished to give longer term loans to small businesses in Zam­ bia. It was renamed the Industrial Finance Company (IFC) and became part of Findeco. Originally Indeco Finance granted loans to European and Asian businessmen, but IFC began to offer most of its credit to African businessmen and had been charged with partial responsibility for financing the economic reforms in retail and wholesale trade. Loans from this agency, however, were at least as difficult to secure as normal bank loans. As the deadline for the termination of non-Zambian wholesale and retail trade approached, Africans flooded the IFC offices to inquire into procedures to obtain loans and to submit applications. In 1971, IFC had outstanding loans of about one million kwacha, equal to its paid-up capital. Until then, the default rate had been moderate, about 6 percent. In 1972, this default rate began to rise precipitously while overhead costs were run­ ning about K.20,000 per month. IFC was forced to borrow additional funds from the National and Commercial Bank; in late 1974 it was virtually bankrupt. IFC did make some efforts to extend loans to businessmen in rural centers, but the agency had little success in financing the reforms in trade or rural commercial and industrial development. Other Policies

In addition to the series of reforms in trade, industry, commerce, mining, and finance, a system of price controls was introduced into African suburbs and the rural areas in 1969 (Kaunda, 1969:57). The price control agency had the power to set and enforce specific profit margins and prices for many retail and wholesale goods. If these margins were too low to be profitable, or if other goods could produce higher profits, the businessman was in a dilemma. Because state-controlled companies had a monopoly on the import,

FROM RHODES TO KAUNDA

manufacture, and wholesale trade of many consumer goods, and because state retail stores sold these goods to consumers as well, private business was caught between the price con­ troller, the state supplier, and the state competitor. Price controllers and officials of state corporations were in a posi­ tion to decide how to allocate profit in the several stages leading from import or manufacture to final consumer sale and in effect forced private business to conform to their decisions. Even if they made a good profit, businessmen were no longer legally allowed to earn a high income. Individual tax rates were raised to 90 percent for those in the over30,000-kwacha bracket. Corporate taxes were 45 percent (Kaunda, 1969:60). The way in which the taxes were ad­ ministered was also discouraging to businessmen. Assess­ ments were often arbitrary, several years late, and unreal­ istic. Several businessmen reported that when a newspaper interview with them was published and mention was made of some figure—either in regard to a new investment or what something cost—the tax office sent an assessment for that amount. Another area that was fraught with uncertainty was real estate and land tenure. Most of Zambia had no formal system for land tenure with legal provision for titles, regis­ tration, or deeds. Instead, most land was allocated under customary tenure, and depending upon communally de­ termined policies in each local area, one had rights to the land for as long as one worked it. In the cities and near the main towns, some land was freehold, registered, and subject to property taxes called rates. Other land was held under ninety-nine-year leasehold, with the local authorities con­ trolling land use. The uncertainty about land resulted from discussions about land reforms in 1969 which were not finally proclaimed until 1975. These reforms included the reversion of all undeveloped land to the state and the modification of all freeholds to one hundred-year leaseholds. Land allocated by the government in urban areas was to go

CONCLUSION only to those who were relatively poor (Times of Zambia, 1975a). Occasional statements by government officials de­ ploring landlords' profits and high rents added to the con­ fusion. Until the recent reforms, the value of real estate holdings was uncertain. (As this is written in 1978, exactly how these reforms are to be implemented was undecided.) Business­ men did not know whether they had and would continue to have clear title to their stores or premises. Some were reluctant to invest money in real estate, including housing.

CONCLUSION Zambia's efforts to break its almost total economic de­ pendence on foreigners and on white-ruled Southern Africa must be viewed in the context of the continuing impact of its colonial past. The economic reforms which have re­ stricted certain activities by noncitizens are not formally different from restrictions against African enterprise during colonial days. The earlier barriers stymied African enter­ prises and protected non-Africans from business competi­ tion. The economic reforms were an attempt to reverse the pattern created by the earlier restrictions and place eco­ nomic activity into the hands of Zambians. Beyond this, however, the government has been trying to stimulate in­ digenous growth by instituting a pattern of enterprise that draws on a local African private sector, a sector fully con­ trolled by the state, and a sector consisting of joint ventures between the state and multinational companies. The role that African private enterprise is to play in this mixed economy has not been well defined. At the time of our study in the years 1970 to 1972, the new economic policies had created an unsettled business climate in Zambia. The white and Asian businessmen wondered who would be next to "join the 51 percent club." All businessmen, Africans and non-Africans alike, faced supply disruptions, credit uncertainties, a squeeze on profit

FROM RHODES TO KAUNDA

margins, competition from state enterprises, and erratic changes in government policy. In combination, these factors discouraged risk in substantial business ventures. Nevertheless, one of the most notable concomitants of independence has been the rapid growth of an African business sector in the entire range of enterprise from small trader to large industrialist. The character of this expansion in the late 1960s, much like that found in a boom town, was directly linked to lifting the colonial-era restrictions imposed upon Africans, and to the cumulative impact of the five "fat" years of high copper prices—1965 to 1970—which created new business opportunities in a growing economy.

CHAPTER

II

Market Trade

THE broad base of African business activity in Lusaka has consisted of market traders selling fish, tomatoes, onions, and small quantities of other foods to African consumers; young men peddling Coca-Cola, bread, and meat-filled pastries from bicycles and pushcarts throughout the city; craftsmen making and selling buckets for carrying water; and carpenters assembling chairs, tables, and dressers. These small enterprises, found largely in markets, have provided more employment than any other category of African busi­ ness. They have far outnumbered the combined total of all other business establishments. They have introduced many of the larger and more successful entrepreneurs to business and provided them with opportunities for acquiring skills and capital needed in expansion. Zambian market trade was from its start sponsored and regulated by the colonial administration and European settlers (Miracle, 1965:296). It was for years the only legitimate, independent urban African business activity. The growth of African trade and craft from the 1950s through the early 1970s followed the explosive urban growth in Zambia. Since petty enterprises never faced direct competition from the European and Asian businessmen and required far less skills and capital than any other type of business, Africans turned to such ventures in large numbers. However, since the mid-1950s the demands of trade have gradually increased. Trading has become a full-time pur­ suit for many, and trading takes place on a larger scale. Standards of craftsmanship have risen. Marketplaces have expanded and have been physically upgraded. At the same time, consumption patterns have changed among broad

MARKET TRADE

segments of the African population. They can now afford to purchase a wider range of goods, some of which are not manufactured and sold in markets. Consequently, some trades and crafts have declined, as has the relative impor­ tance of market trade in the overall distribution of African consumer goods. Because other avenues of commerce and trade have opened up for Africans since independence, market trade is no longer uniquely attractive for independ­ ent-minded, upwardly mobile Africans. ZAMBIAN MARKETS AND MARKETEERS1

Urban markets play an important role in the distribution system for food and other commodities in Zambia. In Lusaka most Africans go to markets for a large share of their day-to-day shopping. The largest markets are located in or near the authorized African townships. Markets there are part of a commercial area that includes choice locations for a few African retail shops. By contrast, unplanned squatter settlements have but small markets that must com­ pete with numerous retail shops located there. Forty-eight thousand Africans lived in Lusaka in 1954. They shopped at two African markets: Matero, in the cen­ ter of that African township, and Luburma, surrounded by Asian shops near the second-class trading area.2 At that time there were about 280 marketeers operating in these two markets, according to Nyirenda's pioneering study of mar­ ket traders in Lusaka. In 1954, the 10,000 Africans in wage employment in Lusaka earned a mean salary of 48 pounds a year (Nyirenda, 1957:35)· By 1970 there were 220,000 Afri­ cans in Lusaka, including 45,000 employees, earning an average of 900 kwacha a year (Zambia Central Statistical 1 "Marketeer" is the word for market trader in Lusaka, and we shall use both terms interchangeably. 2 Second-class trading area in Zambian cities refers to a commercial zone designed for Asian businesses by colonial city planners and ad­ ministrators. Residential and commercial land-use zoning followed the practice of racial separation in Northern Rhodesia (Gardiner, 1970).

ZAMBIAN MARKETS

Office, 1970a:B55).3 At the time of our study, there were about 2,000 marketeers trading in at least twelve markets throughout Lusaka. The number of marketeers had grown from 150 to 450 in Luburma and from 130 to 350 in Matero. A second market in Matero had an additional 180 marketeers. Such growth of African markets reflected the increases in African population and purchasing power in urban areas. Of the African marketplaces in Lusaka, Luburma was the largest and busiest and offered the widest range of com­ modities.4 The main Matero marketplace was second in size. Chilenje and Kabwata were considerably smaller and served only their surrounding residential areas. Luburma was also the wholesale market for various commodities. However, except for size, market trade was essentially the same in all Lusaka marketplaces. Luburma marketplace was governed directly by the city council. The other marketplaces were governed by coopera­ tives. The cooperatives elected their own officers and ran the day-to-day affairs of their markets; they paid rent and other fees to the city council. Marketeers could join the cooperative by paying a one-time membership fee which en­ titled them to a reduction in their daily stall fees and to priority of choice in trading sites. Surrounded by a rectangular cement-block wall, Luburma marketplace occupied the major portion of a public square in the second-class trading area along the railroad tracks. It was open from 6:00 A.M. to 6:00 P.M., seven days a week, though not all traders traded every day. The mar­ ketplace was especially busy in mid-morning and after pay­ days. The market formally closed only during national holi­ days when attendance at ceremonies was expected of all, ® A kwacha was originally worth one-half pound sterling (ten shil­ lings). 4 The Central Market on Cha-Cha-Cha Road in the main commercial district served mostly European and other higher-income shoppers. Many traders were wives of European farmers. Since it was not an African market, we did not study it.

Figure 2.1

Luburma Market, November 1970

ZAMBIAN MARKETS and trade, though reduced, continued on Christmas and other religious holidays. In Luburma marketplace, trading went on outdoors and within covered market halls. Since 1954, the marketplace has been expanded: stands where traders display their wares on cement slabs have proliferated; a new hall has been constructed; and numerous shops made of boards and tin have been erected. Each trade was located in a distinct section. In the southwest quadrant, for example, fish sellers plied their goods in a special hall. Considered a delicacy, fish are eaten with nsima, the Zambian staple of boiled pounded cornmeal. The supply of fresh fish fluctuates seasonally. The number of traders correspondingly varies greatly; it was about eighty at the time of our interviews in the fall of 1970. The fruit and vegetable trade was the largest area of market activity at the time of our study, engaging about two hundred marketeers, mostly women. They were located in an area of about one hundred fifty cement stalls. They sold a variety of commodities including onions, tomatoes, groundnuts, tobacco, spinach, cabbage, cucumber, cassava leaves, wild vegetables, finger millet, and hops, as well as small quantities of cooking oil and kapenta. Prepared-food vendors operated in an adjacent area. Tinsmiths, furniture makers and other craftsmen, along with radio, watch, shoe, bicycle, and motorcycle repairers, also worked in Luburma. Services were supplied by barbers, photographers, chemists, witch doctors, and herbalists. These service enterprises were dominated by men and were often quite profitable. The tinsmiths sold water buckets and charcoal burners. The furniture makers built chairs, tables, cabinets, and other relatively inexpensive, simple furniture. Throughout the market various traders sat on mats and sold plates, bowls, mirrors, second-hand clothes, meat-filled pastries, and a variety of other foods. Outside the market walls there was brisk trading in to­ bacco, firewood, and charcoal. Welders, panel beaters (auto

MARKET TRADE

body repairers), and mechanics engaged in automobile-, bicycle-, and motorcycle-repair work. Wholesale trade was conducted outside the market by traders who lived in parked trucks until they had disposed of their wares. In contrast to Luburma's great diversity, the Matero mar­ ket trade was dominated by the fruit, vegetable, and driedfish trade. Although some purveyors of other trades and crafts set up in Matero, they were comparatively few; how­ ever there were some twenty market shops. Chilenje market had about one hundred twenty traders and repairers and fifteen shops, while Kabwata market had a twenty-five shops, a large vehicle-repair section, and a few fruit, vegetable and fish sellers. As African market trade expanded during the past twenty years, the range of goods and services increased markedly. In addition to selling foodstuffs, firewood, charms, tobacco, and charcoal, Africans established numerous service enter­ prises and market shops or became artisans. However, cer­ tain activities declined. Bread once bought in markets was purchased in grocery stores. Sellers of snuff and tobacco decreased because factory-made cigarettes gained in popu­ larity. Because of changes in income, tastes, and diets, there was a decline in the trade in caterpillars, wild fruits, green relishes, and roots. Once singled out as "profitable enough to compete with other occupations educated men may fol­ low," dried-fish trading became much less popular because its profitability diminished (Nyirenda, 1957:44). Fish prices declined by more than half since the 1950s despite general inflation. The addition of vegetables and fruits to African diets increased the importance of those trades. CHARACTERISTICS OF MARKET TRADERS

We conducted 258 interviews in four markets, starting with 42 in Chilenje and 36 in Kabwata in late September 1970, and continuing with 90 each in Luburma and Matero

CHARACTERISTICS OF TRADERS

in early October and mid-November.5 Among market busi­ nesses, the type of commodity sold or manufactured was the most important variable determining the basic characteris­ tics of the enterprise. The sample consisted of the following marketeers: 83 fruit and vegetable sellers (32 percent of the total sample); 42 market shopkeepers (16 percent); 41 traders in miscellaneous commodities, including to­ bacco, charcoal, and prepared foods (16 percent); 30 fish traders (12 percent); 54 craftsmen: 21 tailors, 16 tinsmiths, 9 car repairers, and 8 carpenters (21 percent); 8 other marketeers: 2 barbers, 2 photographers, 2 herbalists, a radio repairer, and a watch repairer (3 percent). Such a sample provides a comprehensive portrait of the ur­ ban African market trader in 1970. We also studied several traders and craftsmen at close range to estimate their earn­ ings.6 To augment this primary data, we consulted public records, published information, and several knowledgeable informants. Eighty-eight percent of the traders were self-employed, and market trading was the sole means of livelihood for 97 percent. All but two of the twenty-six traders who were not self-employed worked for a kinsman. Two-thirds of the traders had no employees, and the remaining third usually had only one employee, almost always a kinsman. Kinsmen supplied one-third of the traders with their initial capital, 5 Though not a random sample, our interviews reached a representa­ tive cross-section of market traders and craftsmen in four Lusaka markets. In order to obtain a representative sample, we interviewed at different times of the day and started in different areas of the markets. β Our method is described in appendix two. The interview schedules are in appendix one.

MARKET TRADE

though nearly one-half saved it from earnings at a previous job, and the rest obtained it in other ways. One-quarter learned a craft or market trading from kinsmen, while slightly more than one-sixth were instructed by friends, and most of the rest learned it on their own. In contrast to the more complex businesses we studied, kinsmen and kinship provided more support for market traders and craftsmen, as they had also in the 1950s. Since the mid-1950s, market trade has been marked by changes in sex ratios in different market activities, in trad­ ers' skills and experience, and in the enlarged scope and scale of many market businesses. In the 1950s men domi­ nated the fruit and vegetable trade as they did nearly every other activity, except the sale of nsima, cooked rice, green relishes, pulses, roots, and mushrooms. In 1971 men con­ tinued to dominate the crafts, especially those requiring manual skills, the fish trade, the tobacco trade, and char­ coal wholesaling. But two-thirds of the fruit and vegetable traders were women, as were two-fifths of the shop owners, assistants, and other sellers. Women monopolized the prepared-food trade, and they were also entrenched in smallscale charcoal retailing. One-sixth of the fish traders were women who, unlike other market women, worked for their husbands. Thus women had come to dominate the fruit and vegetable trades, had continued to monopolize the sale of prepared foods, beans, nuts, spices, and kaffir corn, and had made inroads in the trade in other commodities. Eightyfour percent of these market women were married, and 20 percent were the main breadwinners in the families. Many obtained their initial capital for trading from their hus­ bands and were contributing to their families' upkeep. Both male and female traders were older on average than the adult population of Lusaka, though well over half the traders were between twenty and forty years old. Male trad­ ers had slightly less education than average for Lusaka male adults, while female traders had slightly more education than average for Lusaka female adults. The lower educa-

CHARACTERISTICS OF TRADERS

tional mean for male traders largely reflects their relative age, since most Lusaka males with postprimary education were in their early twenties and on average younger than the traders. Such a comparison indicates that market trade was not a particularly attractive opportunity for a young man with postprimary education. The increased experience of marketeers, however, is readi­ ly apparent. For 1954, Nyirenda (1957:43) reported that only 18 percent of the men had one or more years' trading experience; by 1959, according to Miracle (1962:174) this figure was 50 percent. Eleven years later 79 percent of our sample had at least one year's experience and 30 percent had been trading more than five years. Although he did not report an exact figure for female experience, Nyirenda (!957:43) wrote that "generally, they are not regular traders like males. In most cases they only come to sell some of their domestic supplies when they are in need of money." In contrast, 62 percent of female marketeers in our sample had more than one year's trading experience and 15 percent more than five years. They sold more than one commodity and by and large derived a regular income from their trad­ ing. Traders in Luburma and Matero markets generally had more experience than those in the newer markets of Chilenje and Kabwata. The fact that the market traders had lived (nine years) in Lusaka on average, about one year longer than the typical heads of Lusaka households, provides further indication of their permanence (Ohadike, 1970:13-14). The regional and ethnic origins of the marketeers by and large mirrored that of Lusaka's population. There were two exceptions: a disproportionate number of marketeers originally came from outside Zambia, while Central and Southern provinces were underrepresented. Table 2.1 pre­ sents information on regional origin. Since 1954 there has been a decline of traders from the Southern and Western regions of Zambia and the areas immediately surrounding Lusaka and an increase of traders from other regions. These

MARKET TRADE TABLE 2.1 REGIONAL ORIGIN OF MARKET TRADERS, IG70 AND 1954, AND OF LUSAKA ADULTS, 1970

Region East North Center and South West and Northwest Outside Zambia Not ascertained Total

Market Traders, 1970

Lusaka Adults, 1970'

Market Traders, i954b

43·°% 25-1%

47-7% 20.3% 16.0% 9-6% 64%

34·ο% 19·°% 11.8% 25-2% 10.6%

7-7% 6.2% 16.4% 1.6% 100.0% N = 256

—

—

100.0%

100.0% N = 273

" Zambia Central Statistical Office, 1971b. bNyirenda, 1957:39.

changes fit into the pattern of growth in Lusaka since 1954. As market trade tended to become a full-time occupation, the percentage of sellers from Central and Southern prov­ inces occasionally marketing village produce in Lusaka de­ clined. Much of Lusaka's great population increase is attrib­ utable to migration from Northern and Eastern provinces. The regional and ethnic composition of the marketeers reflected these shifts in origin. The increased proportion of non-Zambian traders has resulted from the economic reforms and other Zambianization policies which have di­ minished other opportunities for noncitizens, African and non-African alike. Earnings

Marketing was a means of making a living for settled, working-class Africans whose other employment opportuni­ ties in Lusaka were few. For women it served as a means of augmenting the family income or providing women and their families with a measure of financial independence. Market trade was the first occupation outside the home for the vast majority of women traders. Most married female

CHARACTERISTICS OF TRADERS

traders had husbands employed in blue-collar jobs. Only about one-quarter of their husbands did clerical or whitecollar work. The majority of male traders were drawn from blue-collar occupations. Only 8 percent previously held white-collar jobs, and even fewer had been cultivators or always self-employed. Only 3 percent of the traders were not Lusaka residents, and only 4 percent had lived in the capital less than one year. When market trade is compared with other possible oc­ cupations for men and women with similar backgrounds, its role in the Zambian social structure is clarified. Monthly earnings for females in personal and domestic service were twenty-three kwacha in 1970 (Zambia Ministry of Finance, 1971:44). In the same year our estimated median monthly earnings for female market traders was twenty-eight kwacha, and 25 percent earned more than thirty-five kwacha. Market trade thus compared very favorably with domestic service, the most common alternative employ­ ment opportunity for uneducated women. Although do­ mestic service often included free housing and other bene­ fits, its demands may be inconvenient for a married woman living with her husband and children. It also required a better knowledge of English than market women typically possessed. Market trade often resulted in a substantial gain in socio­ economic position for the married woman trader's family. The average African lower-income household in Lusaka earned 46.70 kwacha per month in 1969, the average me­ dium-income household earned 117.70 kwacha. Since a typi­ cal male head of household made between 60 and 80 kwacha from a manual job, the additional income from a wife's market trade would have moved the family from the lower to the middle-income group (Ohadike, 1970:3). The relative rewards of market trade for men were quite different. The average monthly earnings for Africans in 1970 were 30 kwacha in agriculture, 62 kwacha in manu­ facturing, 67 kwacha in commerce, 86 kwacha in trans-

MARKET TRADE

portation, and 118 kwacha in mining (Zambia Ministry of Finance, 1971:44-45). Skilled market craftsmen, such as carpenters and tinsmiths, as well as fish traders, other sellers, and tailors who earned between 35 and 70 kwacha, com­ pared well with low- and semiskilled employees in manu­ facturing. However, less skilled craftsmen and repairers, such as shoe repairers, and less successful sellers earned less than unskilled employees. The market traders did much better than agricultural employees, but much more poorly than miners and transport employees. Despite its growth in sophistication and capitalization since the mid-1960s, mar­ keting was no longer an attractive activity for ambitious, talented African men. Other types of business to be dis­ cussed below were considered more desirable and wage em­ ployment frequently offered better compensation. When we talked with marketeers about their future plans, only three expressed the intention of giving up the trade for another line of work. The majority planned sim­ ply to continue in the market, but many were hoping to expand their trade, perhaps by opening a small shop. Fully 81 percent expressed satisfaction with the trade. Opinions of market women were often favorable because trade "helped the family," and men were generally satisfied to be making money rather than being unemployed or work­ ing under a boss. Many complained about the long working hours, lack of customers, increasing competition, and un­ paid customers' debts. Success

Market trade was subject to the monthly cycle of com­ merce. After people were paid near the end of the month, trade was vigorous; during the rest of the month it fell off greatly. Since market traders kept no financial records, they had only a rough estimate of their weekly or monthly earn­ ings. However, they did know and tell us how much they had sold during a given day. Median turnover for all trad-

CHARACTERISTICS OF TRADERS

ers we interviewed was about 10 kwacha a day at the end of the month and 2.5 kwacha a day at mid-month. There were marked differences in sales by type of trade. Motorvehicle repairers and market shops had the highest sales; carpenters and tailors were next; fish traders, food and vegetable sellers, and other sellers and repairers followed in descending order. Of course, many of the repairers sold little more than their labor, while other marketeers had a substantial portion of the sale price invested in the goods they sold. Our measure of success was daily sales figures immediate­ ly after paydays. Though this is an appropriate measure of success for all categories of trade, comparisons of sales av­ erages may be confounded by a variety of factors. Knowing that sex and type of trade were highly correlated, we ana­ lyzed male and female traders separately. For market women, the median sales at month's end varied directly with length of experience: those with less than one year in trade had a median daily turnover of 4 kwacha; those with one to two years' experience, 5 kwacha; two to five years' experience, 8 kwacha; and over five years, 9 kwacha. For male traders, no linear relationship existed. The groups with least and most experience had sales of 9 kwacha at month's end, while those with an intermediate level of two to five years' experience earned the most, or about 12.5 kwacha. This finding reflected the presence in re­ pair work and in the dried-fish trade of older traders who did not do well in the market but had no better employ­ ment prospects. The availability of alternative opportuni­ ties generally determined who remained in trade. Because of various discriminatory practices, even the skilled females could not move readily out of trade into more profitable ventures as enterprising men did. Only among the male marketeers did a clear-cut relationship between schooling and success exist; those with no school­ ing had a median turnover of seven kwacha; those with

MARKET TRADE

primary education, eleven kwacha; and those with upper primary schooling, thirteen kwacha. There was only a small difference between women traders with upper primary edu­ cation and those without. Experience, not education, was more important to success for the female traders, who were typically clustered in relatively competitive unprofitable market activities. Because of limitations in our data, the relationships we found between the factors contributing to success are sub­ ject to qualification and to varied interpretations. Never­ theless, it is clear that both schooling and experience had a positive impact on success. Traders with more schooling started out on a larger scale in the more lucrative market businesses. If they persisted in their trade, they built up volume and clientele, which led to even greater success. Un­ successful traders dropped out of the market unless they had no other means of earning a living. Since men with no or little schooling, old men, and nearly all women had few options other than trade, they persisted even when they were relatively unsuccessful. ORGANIZATION OF MARKET TRADE

Market trade did not demand much education, experi­ ence, or training. However, the trader had to possess cer­ tain qualities to succeed. He needed perseverance to spend many hours every week in the market, and he needed inge­ nuity to meet competition and attract customers to his stall. Plainly, the nature of the product and the method of sales were the most important factors in determining success. The competitive nature of the market ensured that the tricks of the trade would be soon learned by almost any trader and that new, advantageous practices would catch on and spread rapidly. Because of the competitive nature of market trade, there was little if any variation in the prices charged by traders, and indeed, from one marketplace to another. For most

ORGANIZATION OF TRADE

goods, prices were stable, and little explicit bargaining went on with customers. Scales were not used. Food and vege­ tables were sold in pieces, heaps, cups, and tins, according to denominations of small coins. For example, onions sold at two for five ngwee, four for ten ngwee, and occasionally four large ones for twenty ngwee (one hundred ngwee = one kwacha). Customers chose among traders selling the same commodity at the same prices on the basis of visible differences in the size and quality of goods displayed. Four tomatoes that sold for ten ngwee could be small or large, overripe or just right. Heaps, spoons, cups, and plates varied in size. For some commodities the seller added a small amount, called the basela, at the end of the sales trans­ action, and customers often asked traders to increase the basela. Customers also selected craftsmen and repairers on the basis of workmanship and materials, as well as the ability to get a job done on time. Personal relationships between traders and customers affected trading patterns as well. Though neighbors and fellow ethnics sometimes re­ ceived favored treatment, this practice reflected the market­ eers' efforts to develop business rather than the fulfillment of social obligations. They were guided primarily by con­ siderations of economic interest. Market trade was specialized among producers, whole­ salers, and retailers. Farmers usually brought crates of fruits and vegetables early in the morning to the main bus station where market traders bought their supplies, but occasionally they transported their produce directly to the markets. Traders also bought fruits and vegetables at the National Agricultural Marketing Board depots and shops. Tinsmiths bought metal sheets from Steel Supplies of Zambia, which they then hammered into tins, buckets, and charcoal burn­ ers. Furniture makers bought timber at Timber Merchants of Zambia and also used crates and second-hand boards picked up around town. Second-hand clothes were some­ times bought from Europeans and their domestic servants and subsequently sold in the markets. Other commodities

MARKET TRADE

were secured from Asian wholesalers and the Zambia National Wholesale Corporation, and even from nearby retail stores. Automobile repairers stripped wrecks for used parts and occasionally purchased parts from the European dealers in the main business district. Although there was some uniformity among market busi­ nesses, what was striking was the variety of enterprises op­ erated by traders and craftsmen in all Lusaka markets. The interplay of personal factors, such as experience and school­ ing, with the actual operations of the market, is better un­ derstood through a more detailed examination of several types of market trade. Fruits and Vegetables

Trade in commodities commonly and routinely used in the diet of an average African constituted the simplest market trade. For this reason, competition was fierce and rewards low, but entry into the market was easy. Such trade was gradually becoming the province of women. This was a recent development in Zambia, where there had not been an established tradition of market women. We conducted an intensive study of the fruit and vege­ table market women in Matero market. They were located in the south section of the market hall which housed one hundred stalls, and on the outside, where there were four rows of about twenty-five traders each. Three out of four sellers were women; most were between twenty-six and forty-five years old, were married to husbands who were the main breadwinners in the family, and had children. Of the thirty market women we interviewed, however, six were their family's breadwinners. Four of these were divorced, one had an unemployed husband, and the other's husband was too old and ill to work. Over half the market women had no schooling. Most women had no previous employ­ ment, and about half had been trading less than two years. Most received an initial sum of money from their husbands, and a few from a brother or another kinsman, although five

ORGANIZATION OF TRADE

women raised money on their own, two by making and selling home-brewed beer. The sums received ranged from two to seventy kwacha, the median amount being ten kwacha. Sometimes the money had been obtained for pur­ poses other than trading, for instance for buying clothes, but the woman had decided to try her hand at trading. However, most reported they obtained money specifically for setting up a market trade. Using an estimation method described in appendix two, we found that about half of the fruit and vegetable market women earned between fifteen and thirty-five kwacha per month. Slightly fewer than 25 percent earned less than fifteen kwacha and slightly more than 25 percent earned more than thirty-five kwacha. Their median income was twenty-eight kwacha per month. Those selling compara­ tively few commodities and those selling only vegetables such as spinach, cabbage, cucumber, cassava leaves, and wild vegetables earned less than the onion, tomato, kapenta, 7 and cooking-oil traders. The market women selling finger millet and other ingredients used in making homemade beer earned much more than the average. Compared to traders in the 1950s, the typical trader dealt in more com­ modities, sold a greater volume, and earned more money. The activity of African women in market trade has en­ gendered some changes in the role of women in Lusaka. In the past, most females accepted a docile childbearing role. Some cultivated maize and other food crops in small plots in the towns. A few brewed beer and operated sheebeens, illegal beer gardens. Market trade represented a new area of activity, though it supplemented rather than supplanted the traditional role of wife and mother. However, the grow­ ing importance of women in market trade also signified the marginal, though stable role, that trade had come to occupy in Zambian society. Only a few women were able to ac­ cumulate enough capital to start a market shop or other 7 Kapenta is a small, dried, sardinelike fish, which comes from Lake Tanganyika and Lake Rukwa.

MARKET TRADE

more lucrative enterprise. Few had begun to engage in a more complex trade or craft. Fish Trade

The fish trade was a more complex, risky business than trade in fruits, vegetables, and the other commodities men­ tioned. Women traders typically lacked the necessary market experience and capital for it. Thus the trade in dried and fresh fish was pursued mainly by men. Of all marketeers, fish traders tended to be the least satisfied with their jobs; they frequently complained of excessive competition, trans­ portation difficulties, and the price of fish. They seldom stated that their trade had increased since they started. Although the reported median daily sales of fish traders were higher than those of fruit and vegetable sellers, varia­ tion was greater. Some dried-fish sellers made very little while a few fresh-fish sellers earned handsome livelihoods. The success and earnings of fish traders depended on consumer demand and the supply of fish at the fisheries, as well as on the difficulties of transporting fish from the fisheries to the markets. Much of the fish consumed in Lusaka came from the Namwala region on the Kafue River. Fishermen camped along the river's shore and sold fish di­ rectly to the fish traders who traveled there by truck. During the dry season, fish was abundant, but when the Kafue flooded after the start of the rainy season, fishing became difficult. Many fishermen stopped fishing, and many traders were also forced to halt their business. At the start of the rainy season in November, for example, there were sixty-two dried-fish sellers in Matero. By mid-January, after the Kafue had flooded, only twenty were trading. To get dried fish, most traders traveled by hired truck to the fisheries. There they bought fish from the fishermen, dried it in the sun or smoked it under a shelter in the rainy season, packed it into bundles or crates, and transported it on trucks to Lusaka markets. After selling it, they re­ turned to the fisheries for another supply. The price fisher-

ORGANIZATION OF TRADE

men received depended on the size and type of fish; some traders even bartered goods for fish. Another group of traders bought fish directly from wholesalers in Luburma market without traveling to the fisheries. Other traders remained at the fishery to buy and dry fish which their wives sold in Lusaka. Though trade in fresh fish was profitable, it involved high risks and a large initial outlay. The typical fish trader first gained experience by working for an established trader and selling fish in a market, drying fish in a fishing camp, or driving a fish truck. Establishing a fish trade required be­ tween 500 and 1,000 kwacha for a second-hand van and working capital. At this stage, the trader drove to the fish camps, transported fish back to town and sold them himself, or sometimes with the help of his wife. Successful traders bought other vehicles, hired drivers, and employed fish vendors in the market as their vans continuously moved back and forth between fish camps and markets. Fish transportation was hazardous. The trucks and vans were frequently under repair or out of order; the roads to the Kafue River and Lake Kariba were poor, and hired drivers were sometimes careless or inexperienced. Since fresh fish had to be stored in layers of ice brought from Lusaka, delays caused by the condition of the road, break­ downs, a shortage of fish, or too many buyers at the fishing camps resulted in a total loss if the ice melted. As the fish aged, they decreased in weight or decayed so they had to be sold within a day or two after arriving in Lusaka. A trip to buy fish could take as little as four days or as much as two weeks. A successful trip netted between 100 and 120 kwacha per truckload of fish. Kapenta wholesaling was conducted by long-distance truckers and other businessmen living on the shores of Lake Tanganyika, rather than by Lusaka-based traders.8 Long»The wholesalers were not market traders in the usual sense, since they often sold kapenta in many markets, hundreds of miles apart. We did not include them in the tabulations of market traders in this chapter.

MARKET TRADE

distance truckers bought kapenta at the Northern Lakes and sold it wholesale at Luburma market. Sometimes they drove as far as Kafue, Chipata, or the Copperbelt when business was slow in Lusaka. Kapenta was bought from fishermen at twelve to fourteen ngwee a pound and was subsequently sold wholesale in bags weighing about eighty pounds at ten to eighteen ngwee a pound depending on the grade. The retail price in the markets was about forty ngwee a pound. The largest kapenta wholesaler we interviewed was a Tanzanian Arab from Sumbawanga. He had come to Luburma market accompanied by four drivers, five lorry boys, and his son, with three truckloads totaling 1,000 bags. He estimated that it might take him a month to sell his load of kapenta in Lusaka and other Zambian cities. He sold kapenta throughout Zambia and Tanzania and owned a warehouse with room enough for 6,000 bags of kapenta, a retail shop, and six Mercedes trucks. Other kapenta traders operated on a more modest scale. One Malawi businessman hired a truck in Mpulungu on Lake Tanganyika and trans­ ported 80 to 100 bags at a time to Lusaka. A hotel owner in Mbala near Lake Tanganyika brought 200 bags at a time to Lusaka twice a month and took back goods needed for his hotel. Still another wholesaler belonged to a ten-man co­ operative on Lake Tanganyika. Seven of them caught and dried the fish, and the other three trucked it to Lusaka, the Copperbelt, Livingstone, and Chipata for sale. The coop­ erative owned the truck. A truckload was about 200 bags, and it took two to four weeks to sell. The fish trade exemplifies the complexity that underlay some market businesses. Its decline typified the changes that had transformed the role of markets in urban Zambia during the two decades before our study. As we have noted, fish trade was in relative decline because of smaller catches in Zambia fisheries, as well as changes in consumer tastes. Many Africans now can afford and prefer to buy meat. Furthermore, the government was becoming increasingly

ORGANIZATION OF TRADE

involved in the fish trade through its Lake Fisheries of Zambia. If the government were to stabilize the supply of fish, as it had that of vegetables and fruits through its National Agricultural Marketing Board, the selling of dried fish would become another field of activity for market women. In 1972, the fresh-fish trade remained risky and po­ tentially profitable for experienced and highly capitalized long-distance traders. Market Shops

Shops in markets were not mentioned in the market studies of the 1950s, yet in 1970 they had become one of the largest areas of market activity. Often called "teacarts," these shops were similar to the small shops in African neighborhoods. They gave added testimony to the relative decline of earlier areas of market activity. They sold general trade goods such as soap and cosmetic items, cleaning sup­ plies, cigarettes, baby supplies, clothing, stationery items, crockery and utensils, and toys, as well as foodstuffs such as biscuits, flour, rice, salt, sugar, small bags of maize meal, tinned food, powdered milk, cooking oil, soft drinks, milk, and buns. All commodities were purchased from whole­ salers. The shopkeepers did not compete directly with the other market traders, but they did compete with one another and with nearby shops outside the markets. Prices were uniform for standard packaged goods, but there was price competition in other goods such as toys, earrings, beads, baby and childrens' clothing, and utensils. Prices were higher than in the large Cairo Road department stores, but they were about the same as in the African shops out­ side the market. Of fifteen shops we studied in Matero market, nine were operated by women and six by men. Five of the women owned the shops themselves, two were in partnership with their husbands, and two worked for their husbands. Market shops thus provided a means for women to support them­ selves and their children independently of a male bread-

MARKET TRADE

winner. Of the five female shop owners, one was a widow, two were divorced, one had a retired husband, and the fifth was married to a taxi driver. Four of the men owned their shops, one worked for his father, and one for his mother. Only two shops had an employee who was not kin. A shop represented progress up the scale of economic enterprise for a previously successful market trader. Shop owners and managers had somewhat more schooling than other market traders, had been in business longer, and were more likely to have been born and raised in Northern Province. About half reported that they were able to save and bank some money and that their business had increased since they started the shop. Whereas the median estimated earnings of market women were twenty-eight kwacha a month, they were about seventy kwacha for female-owned shops in Matero market. Although some market shops were owned by women, few outside the markets were. Independent businesswomen had established themselves more often in markets than in townships and neighborhoods outside the market because of the relative ease of starting a market shop. No trade license was necessary in markets (the daily market fee took its place), and the initial capital outlay for market shops was lower than for other shops. Still, only a small number of market women owned shops. A Market Shopkeeper

Mutengo, who ran a shop in Kabwata market, started his business in typical fashion and faced common opera­ tional problems. Mutengo's small shop sold inexpensive clothes, soaps, cosmetics, cotton and thread, pens and note­ books, beads, maize meal, and other items, for a total of ninety-one commodities. Mutengo was about sixty-five years old and had had the shop since August 1969. He lived nearby in Libala township. The oldest son of a Mambwe cultivator, he went to school at Kawembe Mission near Mbala from 1917 to 1920. He learned to read and write

ORGANIZATION OF TRADE

and in turn became a teacher at the mission from 1920 to 1939. Dissatisfied with the low level of pay at the mission, he decided to become a carpenter. From 1944 to 1962, first on the Copperbelt and later in Lusaka, Mutengo was a carpenter for a series of employers that included the Public Works Department. In 1962 he became a door-to-door hawker selling second-hand clothes. When he became too old to be on the move continuously, he bought the market shop in Kabwata for 150 kwacha with money he had saved. Mutengo opened the shop at 7:30 A.M. and closed it at 6:00 P.M., when the market closed. Twice a week he cycled to Kamwala to purchase supplies from Asian wholesalers. He paid in cash but got no discount. He knew he could pur­ chase some goods cheaper elsewhere in town, but this would have cost him extra time ^nd run him the risk of an acci­ dent on the busy city streets with his loaded bicycle. The prices he charged were based on what the wholesalers ad­ vised and on what his competitors nearby charged for the same goods. The amount of his purchases depended on the quantity still in stock and on the amount of cash he had on hand. The median markup over wholesale prices was about 35 percent, but the range was great; it was lower for grocer­ ies, soaps, and other goods that were price controlled, and higher for creams, towels, and baby clothes. After paydays Mutengo had about one hundred sales transactions a day, worth a total of twenty-five kwacha; in the middle of the month, the number of his sales dropped to fifty with a daily take of about eleven kwacha. His monthly earnings were ninety kwacha.9 All of Mutengo's earnings were used to support his im­ mediate family and other relations; little working capital was left for the business. Of his four sons, one was a clerk at the Ministry of Education, one a messenger, one a primary school teacher in Ndola, and the youngest still at school in Form III. Two of his three daughters were married, and one was divorced. His household consisted of himself and 9 Appendix two describes how such estimates were made.

MARKET TRADE

his wife, his unemployed, divorced daughter and her child, and his messenger son, who earned twenty-two kwacha a month, as well as the son's wife and their three children. He had also helped support an unemployed brother, his wife, and their eight children for the previous three years. He said without bitterness that somebody had to help the family when it was in need. He was not interested in ex­ panding his business and his earnings at the expense of his family ties. Since he was in his mid-sixties, and since he would have needed about two thousand kwacha to expand his business into a medium-sized retail store located outside the market, he could not realistically have pursued such a course in any case. Mutengo's case nevertheless exemplified the difficulties that faced a small market shopkeeper who considered en­ larging his business or expanding into another business. He often had neither the financial nor human resources to do so, and his family obligations were a serious hindrance. As a result, even if he had achieved some measure of success, he would remain a small businessman.10 Although many of the most successful businessmen in Zambia began in enter­ prises at least as simple and small as market shops, most such shopkeepers do not progress further. Craftsmen, Repairers, and Other Marketeers

Besides those engaged primarily in selling various com­ modities, there were many marketeers who made items for sale or provided services. Some acquired their skills while working for a European or Asian enterprise, and they later exploited their experience on their own behalf. Others learned their skills independently. Such skilled marketeers provided a variety of products and services at prices and credit terms African consumers could afford. Because comio Businessmen who had successfully gone from a small enterprise to a more substantial one will be discussed in chapter four, while the importance of previous experience for business success will be examined in chapter six.

ORGANIZATION OF TRADE

petition among craftsmen, repairers, and other marketeers was intense, their earnings were often lower than the wages prevalent in employment. The principal craftsmen and repairers in the markets were carpenters, tinsmiths, tailors, and automobile re­ pairers. There were also repairers of shoes, radios and phonographs, watches, and bicycles. Partnerships existed among some craftsmen. Friends and kinsmen frequently provided a means of learning skills and entering a craft, but no institutionalized master-apprentice relations existed. TINSMITHS

The largest center for bucket makers was Luburma market. Some tinsmiths there had several employees. They offered a wide variety of pails, tubs, and charcoal burners for sale. These were necessities for Africans living in lowincome districts because running water, sinks, and bathtubs were not available in their houses. In the fall of 1970, some tinsmiths in Luburma market started painting water pails with brightly colored designs. Within two months tinsmiths in other markets were also using colored designs. To de­ termine the usual earnings of tinsmiths in Matero, their production processes and costs were analyzed. If a tinsmith worked six days a week, he would have earned about ten kwacha a week, or about forty kwacha a month, though earnings were higher for the more skilled tinsmiths. CARPENTERS

Carpenters making furniture were present in all markets, and Luburma market was the site of the largest enterprises. One carpenter learned the trade in two years from his older brother who made furniture in Chipata. In turn, he was teaching one of his nephews. Another carpenter, whose brother made furniture in the same market, employed a son and a nephew. He had been a bricklayer in construction work and learned carpentry from his employer. He started his own business with savings of forty kwacha. Most Africans

MARKET TRADE

bought the larger pieces of furniture, such as sofas, cup­ boards, and dressers, on credit. Both furniture makers com­ plained about the slow pace at which their customers paid their debts and the high incidence of bad debts. We studied a partnership in Matero market in some de­ tail. Both partners had been employed by a furniture maker in Luburma market but had recently decided to start their own business. Initial capital, spent mostly on tools, was seventy-two kwacha, the equivalent of one month's earnings for a fairly well paid worker in Lusaka. They reported earning more on their own than the forty kwacha a month their former employer paid. They made ordinary chairs, tables, table and chair sets, cupboards, and living-room sets consisting of a sofa and two cushioned chairs. They manu­ factured the entire product: they cut and planed wood, fit wooden frames together, polished, varnished, and stained, and made the seat for which cotton was stuffed into a plastic covering. Earnings were split equally between partners. Given their production capabilities and expenses, we estimated that they could earn between 60 kwacha and 80 kwacha a month. However, various problems kept their earnings below this amount. During the rainy season they often had insufficient work space because their shed was also used to store the finished furniture, which was usually dis­ played for sale outside the shed. They had to sell on credit, and many debts remained uncollected. They had 472 kwacha of outstanding debts when interviewed. SECTARIAN CRAFTSMEN

Members of the African Sabbath Church of God, a re­ ligious sect located in Maripodi-Mandevu, provided compe­ tition to market tinsmiths and furniture makers. They en­ gaged in a variety of business activities from basketry and leather work to taxis and trucking. They owned an electric generator and used power tools. They had a more complex division of labor than market craftsmen, since particular individuals specialized in producing different component

ORGANIZATION OF TRADE

parts. Children were apprenticed to their fathers and uncles at an early age. Each family ran its own production shed and marketed its goods by selling door-to-door in African neighborhoods. Prices were similar to those for market products, but their craftsmanship was superior. Members of the sect also produced articles not manufactured in markets, such as a three-foot metal box with hinged top used to store large bags of maize meal. TAILORS

Tailors acquired their skills by apprenticeship to a family member, working for an Asian tailor shop, or paying an experienced tailor from twenty to thirty kwacha for train­ ing. The biggest outlay for a beginning tailor was a sewing machine, which could be bought on installments. Few tailors were skilled enough to make jackets, trousers, or suits; most made African-style shirts, dresses, shorts, and blouses and school uniforms from material brought by the customers. Bad debts were not as severe a problem for tailors as they were for furniture makers. A Luburma market tailor who was thirty-eight years old learned the craft from his uncle in Katete. After working there for ten years, he came to Lusaka, worked as a barman, saved one hundred kwacha, and began business as a tailor. He made shirts, dresses, trousers, and safari suits. He was owed about one hundred kwacha. He had one employee. Although he and other tailors complained that the job gave them backaches, he enjoyed tailoring and found it a good way to make a living. One partnership working in Chilenje market consisted of a Zambian from Northern Province and a Rhodesian who got to know each other while working at the same Asian tailor shop. One was initially taught by his uncle, and the other worked in a Livingstone dress factory. As skilled tailors, they were capable of making suits, dresses, trousers, and shirts, in addition to mending cloths. Skilled tailors earned up to 200 kwacha a month, but those who

MARKET TRADE

made only dresses, shirts, and shorts earned considerably less. Earnings were difficult to calculate since they depended on client orders, and tailors were frequently idle. The Zambian low-income consumer favored store-bought, fac­ tory-made, European-style clothes. Few men and women in Lusaka wore the African-style shirts, dresses, and shorts that the less-skilled tailors made. REPAIRERS

Spray painting, welding, panel beating, and mechanical automobile repairs took place in all four markets. Some Africans in Lusaka owned used cars, and because such vehicles frequently broke down and accidents were numer­ ous, the repairers did not lack for work. Most car repairers had worked for expatriate garages or the government motor pool but left because of low wages, slow advancement, or discrimination. To get their own businesses started, they acquired a set of tools, a welder, and a helper. Many later hired other employees. Their major problem was the diffi­ culty African motorists had in paying for expensive repairs. Many required that their clients purchase major parts before accepting a repair job. Kampengele, a car repairer in Matero market for two years, was born in Mumbwa in 1933, attended school for seven years, worked on a farm as a laborer, then in a hotel, and later in an office as an orderly. Not liking these jobs, he helped out a friend who repaired bicycles. After gaining experience, he began to repair bicycles himself; later he began repairing motorcycles. He then became a spannerboy and mechanic's apprentice in a Mazabuka garage where he was much abused by the European mechanics, whereupon he worked in a garage in Kitwe, and later still in South Africa where he learned about diesel-engine repairs. When he started his car-repair business in Matero market, how­ ever, all he had was a set of tools. Kampengele repaired engines and gear boxes and did general repair and maintenance work on cars, trucks, and

ORGANIZATION OF TRADE

motorcycles. He employed two assistants who were not kins­ men. He would have been "happy to teach his brothers, but they don't want to do dirty work." He rented space in the market for twenty kwacha a month. He had to stop work on rainy days since there was no shelter. During a good week, he did seventy kwacha worth of repairs. He was owed about four hundred kwacha by people who had not picked up their repaired automobiles. Of the fifteen cars sitting in his lot at the time he was interviewed, four were ready to be driven away. Since Kampengele did not have enough business to keep him occupied full time, he engaged in the fresh-fish trade with a Landrover. One of his employees doubled as a driver. He also bought and sold wrecks and was building a small bar on the outskirts of Lusaka. He would have preferred to lease a garage from an oil company and expand his automo­ bile repair business, but though a skilled mechanic, he did not have enough money to negotiate a lease, and no bank would lend him the necessary money. So he spent time and capital in business ventures not related to his principal line of work. OTHER MARKETEERS

A photographer who had been a miner in Luanshya op­ erated in Luburma market. A friend in Luanshya taught him photography, and after saving 200 kwacha, he opened a studio in 1966. He bought film from an Asian photog­ raphy studio on Cairo Road and had it developed there. He made xo kwacha in sales each day at month's end, and 3 kwacha during the rest of the month. Charcoal was sold by men in the markets in large 100- and 200-pound bags. It was also sold throughout African neigh­ borhoods by traders operating from their houses. Used for cooking, it is an essential commodity because low-income Africans do not have gas or electricity in their homes. Char­ coal traders transported charcoal in trucks after buying it from producers near the forests. The son of a charcoal

MARKET TRADE

trader helping in his father's business in Matero market ex­ plained that they got the charcoal at a village specializing in charcoal burning and sold about twenty to thirty bags a week, keeping about sixty bags in stock. We estimated that they earned about seventy kwacha a month and that an­ other charcoal trader earned fifty-five kwacha. There were a variety of other repairers and sellers in the markets. Many women sold prepared foods, chips, buns, caterpillars, spices, and other foods, as well as plates, dishes, second-hand clothes, and baskets. Men repaired shoes and sold tobacco, groundnuts, chickens, sugar cane, and bicycle straps. One market trader sold sun-cured tobacco by the plug, cut off large rings of tobacco. He bought the rings from growers in Eastern Province, and transported them by bus to Lusaka. Nsima was prepared by women who sold it to customers with a little meat, relish, fish, or vegetables added. These male sellers and repairers generally earned considerably less than their counterparts among the car­ penters, tailors, and tinsmiths, and women earned less than the female fruit and vegetable traders. The products and services provided by the marketeers filled specific needs of the low-income African consumers and, in some cases, of those who worked in the markets. Few of these marketeers could ever accumulate enough capital or acquire enough skill to launch a larger and more suc­ cessful enterprise. However, markets were an alternative to salaried employment, where Africans could practice their crafts or skills, even if they made less money. MARKET COOPERATIVES AND POLITICS

Following a 1956 boycott stimulated by what the mar­ keteers saw as arbitrary regulations and excessive market fees, the Lusaka African Marketeers Cooperative Society Limited was formed and won control of the marketplaces (Nyirenda, 1957:57-63). Selling to African consumers, mar­ keteers were neither vulnerable to the colonial administra-

MARKET COOPERATIVES

tion's pressure nor dependent on the Europeans for their livelihood. They played an active role in the nationalist struggle. After independence, cleavages within the nationalist movement eventually split the Lusaka marketeers. Matero and Chilenje market traders favored UNIP and allied them­ selves with the more militant, uncompromising wing of the nationalist movement under Kaunda and Kapwepwe. Luburma market traders favored the ANC. In July 1964, the original cooperative society was disbanded, and two succes­ sors were formed. The pro-UNIP Zambia Marketeers Co* operative (ZMC) under Felix Chanda, prominent in Lu­ saka and national politics, controlled Chilenje and Matero markets, and the pro-ANC Zambia Market Company was established in Luburma market. After UNIP emerged as the dominant nationalist group, the Zambia Market Company was dissolved, and Luburma market was administered di­ rectly by the Lusaka City Council through marketing of­ ficers. A commission of inquiry later found that the city council had discriminated on political grounds against the Zambia Market Company (Zambia Office of the President, 1969:5-7). Yet Luburma market traders were still not al­ lowed to form their own cooperative society, a restriction that many of them resented.11 The Zambia Marketeers Cooperative had its difficulties as well in 1969 and 1970 when each of the ZMC markets formed its own separate cooperative society.12 In addition, the ZMC faced considerable problems after a fire in Kabwata market led traders to demand compensation for their losses and a 13,000 kwacha shortage developed at a ZMC 11 At the time of our study in 1970, UNIP enforced its authority in Luburma by means of a Youth Wing branch located there. Thus, in Luburma we secured permission from the Youth Wing to interview market traders, while the market cooperatives cleared us in other markets. 12 Three markets in Kabwata, Mutendere, and New Kanyama had been added to the original two in Chilenje and Matero.

MARKET TRADE

butcher shop that had been bought with the help of a gov­ ernment loan. In 1971, ZMC was in the process of liquida­ tion. During its relatively short life span, ZMC had some notable achievements. It successfully negotiated with the Lusaka City Council to move the markets to more desirable locations and build roofed structures and walls, to strength­ en tenure rights, and to retain low rents. Moreover, all of ZMC's successor cooperatives were functioning effectively in 1970. The Chilenje and Kabwata cooperatives each had about two hundred members, Matero had about three hun­ dred, and there were roughly one hundred fifty altogether in the other two. Each was run by its own elected officers. About half the traders interviewed in these markets were cooperative members, with female traders well represented. Officers collected the daily market fees and managed the assets of the cooperative. Several of the present and past of­ ficers of the cooperatives were important local political figures who held office in UNIP. Few officers engaged in market trade themselves, but some owned stores in African neighborhoods. Thus, market traders in Lusaka were an im­ portant local political group with many links to UNIP dat­ ing back to the nationalist movement of the late fifties and early sixties. CONCLUSION

Market trade developed in Zambia as urban areas grew during the colonial era. As the only unlicensed business open to Africans, market trade was attractive to many, de­ spite their lack of experience and capital. Their numbers indicate that a strong potential for African enterprise al­ ready existed in Zambia in colonial times. The growth of other forms of African enterprise since independence has relegated market trade to a secondary role. Describing the situation in the early 1950s, J. Clyde Mitchell wrote: "petty traders are but insecurely fixed in

CONCLUSION

their calling. They oscillate between trading and wage em­ ployment and tend to fall back on trading when for some reason or another wage employment is not available, or seek wage employment when their trade has fallen upon evil days. To some extent petty trading absorbs seasonally unemployed unskilled workers who choose rather to remain in town than return to their rural homes" (Mitchell in Nyirenda, 1957:31)· Market trade and marketeers, like so much else in Zam­ bia, had changed between the early 1950s and the 1970s. Not just the market traders, but the entire African urban population, was less volatile geographically and occupationally than in the decade before independence. Wives drawn from a stable working-class population had become entrenched as sellers in Lusaka markets. Lack of schooling disqualified these middle-aged women from competing suc­ cessfully with their younger and better educated sisters and daughters in clerical and office work. Although some suc­ cessful market women were able to open small shops with their savings, most used their earnings simply to supple­ ment their family's income. For many middle-aged men, market business had become a fairly permanent occupa­ tional pursuit and provided them with an average, respecta­ ble urban working-class income and standard of living. Other traders, of course, merely eked out a marginal living. Adolescents and young men better educated than their fathers were conspicuously absent from the markets. Most sought employment in white-collar jobs in the bureaucratized sector of the economy, despite the large number of applicants for each vacancy and the long periods of unem­ ployment and idleness for school leavers. For those un­ skilled and semiskilled male wage earners, who preferred self-employment, nonmarket businesses had become the road to material advancement, as we shall see in succeeding chapters. Although the number and variety of commodities and services in Lusaka markets had increased since the begin-

MARKET TRADE

ning of the federation, and although markets met many of the basic needs of low-income consumers, market trade had not effectively responded to important changes in Zambian society and had not maintained its relative position in dis­ tribution. Market trade was getting increased competition from the many small groceries and shops that had opened everywhere in the African neighborhoods in the late 1960s. Judging from urban budget studies, it as unlikely that more than 25 percent of African consumers' food expenditures in Lusaka was spent in markets, and it might well have been less. Of the four major items in the food budget—maize meal, meat, beer, and fish—only fish was bought in the markets, and in 1968 it represented slightly less than 10 percent of the total urban low-income budget (Zambia Central Statistical Office, 1970b: 19). The formation of a sizable African middle class in Lu­ saka, with tastes and lifestyles more like those of Euro­ peans than those of low-income Africans, had also affected consumption patterns. The relatively affluent and sophisti­ cated urban consumer did not patronize markets except to buy basic fresh foods. Markets were not the place where a middle-class consumer would have bought furniture, house­ hold wares, and clothes, though he occasionally hunted for bargains there. To some extent, market trade had been the seedbed of relatively large ventures. Several substantial present-day Af­ rican businessmen first started in markets or as hawkers. Be­ fore independence the markets provided the main avenue for African business activity. At the time of our study, the expansion of African business had come to depend almost totally on activity in new or previously closed sectors, rather than on the cumulative enlargement of previous economic roles. Those who continued to trade in markets were faced with declining profits and increasing competition. Their potential for growth was stymied by competition from both outside and within the marketplace.

CHAPTER III

Small Retail Trade

AFRICAN retailing in Lusaka grew from a handful of stores located in a few African neighborhoods in the 1950s to nu­ merous shops in every African residential area in the 1970s. Any observer who takes a casual walk through an African neighborhood in Lusaka or in any other Zambian city sees ample evidence of this growth. In some areas it seems as if there is a shop every few feet. Despite this proliferation, even rudimentary information was lacking about these businesses and their owners. Government officials, who pre­ sumably might be personally acquainted with some of the African businessmen, considered such shops insignificant operations. Consequently, little attention was paid to them when the economic reforms were proclaimed and imple­ mented. Yet an analysis of the role and growth of smallscale African retailing will illuminate a number of schol­ arly and policy issues. GROWTH OF AFRICAN RETAILING

What accounts for the rapid growth of such enterprises? To many scholars concerned with the larger issues of eco­ nomic development, small private enterprise is at best ir­ relevant. Others note that small demands from dispersed customers may be more efficiently handled by a distribution system that is decentralized and privately owned and man­ aged, than by large, centralized, government enterprise (Bauer, 1954:27-28). We are particularly concerned with de­ termining both the extent to which the proliferation of small businessmen is a response to extremely favorable economic trends and policies and the contribution small

SMALL RETAIL TRADE

businesses can make to indigenous development. In this chapter we examine the following matters: 1. The social origin of these businessmen, their prior occupations, and the relationship between business and local environment; 2. The patterns of demand and markets for small businessmen and their products and services; 3. Business operations and bases of success; 4. The degree to which small businessmen foster growth, innovate, acquire business skills, and accu­ mulate capital. In 1970, a million Africans in Zambia lived in urban areas, most in low-income households. In Lusaka, most lived in neighborhoods at some distance from the major commercial district, where expatriate businesses and state enterprises were located. As was true for market traders, rapid urban growth and increased purchasing power pro­ vided strong stimuli for expansion. The Lusaka population increased about four-fifths between 1963 and 1969, while average earnings of employed Africans more than doubled (Zambia Ministry of Finance, 1971:44-45). Even allowing for the increases in the cost of living, real purchasing power among Lusaka Africans more than tripled between inde­ pendence and the time of our study. In addition, changing consumer tastes meant that much of this increase would be spent in African shops. According to our estimates, approxi­ mately twelve thousand African retail stores were operating throughout Zambia in the early 1970s, and between twofifths and one-half of African consumer spending passed through these, mostly small-scale, African shops.1 Thus empirical study of the small-trade sector is indispensable in assessing the distribution of consumer goods to Africans, and also in analyzing the role of small traders in urban social change. To accomplish this, we conducted a survey of 1 See appendix two for these estimates.

AFRICAN SHOPKEEPER

small businessmen in two low-income districts in Lusaka during the winter and spring of 1970-71. THE AFRICAN SHOPKEEPER

In African townships and unauthorized settlements one finds tin-roofed mud-brick and cement-block shops often in need of a coat of paint. These are the places of business of the African retailer. Though shabby in appearance, these stores have names painted in large letters which indicate their owners' intentions: "Let's Go," "Let's Try," "My Own," and "Freedom." It was our purpose to find out whether their goals were being realized. The fact that no one had previously studied African shopkeepers in Zambia made the task a difficult one. From some preliminary inquiries we found that these small businessmen often did not know their monthly turn­ over and profits. Few kept business records beyond a list of customers' debts and purchase slips from wholesalers. Bear­ ing in mind this lack of accounting practice, we first under­ took several intensive case studies of businesses. We took inventories, recorded prices and profits, calculated pur­ chases from wholesalers and other expenses, kept a record of sales transactions for several days during different times of the month, and obtained much additional information about the business from the owners and through first-hand observation.2 This effort resulted in two central findings. First, the skills required to conduct a small shop in an African neigh­ borhood were quite minimal. In fact, a number of the businessmen could neither read nor write and possessed only a rudimentary command of arithmetic. Second, despite the low level of skills, the earnings of these businessmen were excellent. Some rivaled those of all but the most in­ fluential politicians and highest civil servants in Zambia. 2 Our techniques are more fully described in appendix two.

SMALL RETAIL TRADE

Thus the potential for accumulating the capital necessary to establish larger enterprises existed. In fact, as we will see in the next chapter, some of the largest African business­ men in Zambia today trace their origins to a small shop. At the same time, such an attractive opportunity for profit is bound to draw more Africans into such businesses, and this additional competition will reduce profits in the long term. Nswima's Grocery and Bottle Store

Nswima's grocery and bottle store, a common type of re­ tail outlet, illustrates well the characteristics and lucrativeness of such enterprises. Located at a busy intersection in Chilenje since 1955, his store was a medium-sized African retail business, larger than the average African store in the low-income shantytowns, but much smaller than the estab­ lishments of the leading African businessmen in Lusaka. Nswima, a man in his late sixties at the time of our study, was the illiterate son of a Bemba chief. In his youth he had spent ten years as a miner on the Copperbelt and in Rho­ desia, and later spent twenty-seven years working for Asians as a tailor in Kabwe and Luanshya. He said he made a habit, while in Luanshya, of saving about a third of his wages. By 1955 he had accumulated £500 and was ready to go into business. He picked Lusaka rather than Luanshya because his favorite daughter had married a Lusaka man. At first he put this son-in-law and one of his sons in charge of the grocery. After realizing that the grocery was doing poorly because they were misusing funds, he had a serious falling-out with both. Since then he has run the business himself, though his son-in-law took him to court in an at­ tempt to "take the grocery away from me." Nswima kept the store open daily from 6:00 A.M. to 8:00 P.M. and half a day on Sunday. He employed a grand­ son, a nephew, and one other unrelated employee. He could neither read nor write, nor did he use any method of book­ keeping. He simply remembered prices and quantities and always ordered the same amounts. He did not have a cash

AFRICAN SHOPKEEPER

register but instead stuffed the bills and coins into a brief­ case and a box. His employees transacted the sales while he made change. He sold maize meal, beer, soft drinks, bread, sweets, soaps, detergents, cigarettes, liquor, milk, tinned foods, oils, polishes, and other food and household items. He ordered his supplies frequently from about twenty-five wholesalers, always requesting the same amounts so he could keep track of his purchases in a simple fashion. Most suppliers delivered, but he did close his store two or three times a week, stuffed hundreds of kwacha into various pockets of his threadbare coat, and hired a driver to drive his ancient Peugeot to the wholesale area to pick up sup­ plies. We found that Nswima netted 680 kwacha a month profit from his business, a figure much higher than any ob­ server in Zambia—from scholars to government officials— thought possible for an old, illiterate African businessman.3 Nswima himself denied that he was well off. He lived fru­ gally in a modest house with his aging wife. Deeply reli­ gious, he never drank alcoholic beverages. A longstanding illness which caused severe pain in his legs forced him to remain seated most of the day. He spent considerable sums of money on a succession of European physicians, African witch doctors, and herbalists. None of the treatments was effective, and in 1972 he died. His personal life had become so tied up with his business that he could not imagine sell­ ing his business, hiring a manager, or letting a son take over so that he could retire. After his death, a son eventually did take over the store. Chamba's Store

Though unschooled, Nswima was much more successful than some other businessmen at a similar level with whom he was in direct competition. Chamba's grocery and bottle store presented a drastic contrast. It was approximately the same size as Nswima's establishment. Chamba, a substantial 3 For details, see appendix two.

SMALL RETAIL TRADE

Northern Province businessman, owned the store, but it was managed by his eldest son. It did much more poorly than Nswima's despite the fact that the son was much bet­ ter educated, younger, in better physical condition, and in many other ways would be considered more capable. The difference between the two stores points to a number of potential sources of success for small businessmen in Zam­ bia. Chamba's business consisted of a grocery and general trade section, with Chamba's son behind the counter, and a small bar at which beer and soft drinks were dispensed by two waitresses. For its size, the business was under­ stocked and had much empty space on the shelves. About half of the sales were realized from the bar. Chamba some­ times ran out of soft drinks, and occasionally beer. At times, he purchased beer from an Indian wholesaler at somewhat higher prices than those charged by Zambia Bottlers, his usual supplier. There was visible spoilage and breakage: broken beer bottles (on which businessmen pay a five-ngwee deposit), bread gone stale, and milk turned sour. The beer cooler broke down and was not repaired for two months, which led to reduced beer and soft-drink sales. Chamba also had employee theft problems. He fired one of his waitresses because she repeatedly pocketed small amounts of cash. Chamba had had four years of schooling and was able to write and count. Each evening he inventoried beer and soft drinks according to a method his father had taught him. He thus kept track of the number of bottles sold and the cash owed to him by employees. On the grocery and general trade side, the only records he kept were invoices from suppliers and credit sales slips. Like Nswima, he picked up some of his supplies but had the bulk of them delivered. When we calculated Chamba's net earnings, we found that he made about 270 kwacha a month from this store— less than half of Nswima's profits. Chamba's eldest son's

KAPWEPWE AND OLD KANYAMA

lack of concern in managing his father's store was obvious as we observed his business operation. He worked many fewer hours a day than Nswima, who spent virtually every waking hour at the shop. He was only paid 36 kwacha a month to manage his father's potentially lucrative store. When we commented on this low salary, Chamba explained that he wished to test his son for a time and that his son would be adequately rewarded if he worked hard because "he will be able to take over the business later." The son failed to conduct the business successfully, however, and Chamba eventually replaced him with a nephew and wife. By the time of our follow-up visit in 1972, they had in­ creased sales by about two-thirds and had more than doubled profits. Thus it was care in managing a business and not basic levels of skills and education that led to Nswima's much higher degree of success. The management skills and ac­ tivities required for small retailing success in Zambia are within the capabilities of many Africans. Even Chamba's store was profitable. KAPWEPWE4 AND OLD KANYAMA

Using the knowledge gained from intensively investigat­ ing Nswima's, Chamba's, and other businesses, we designed and conducted a survey of small African retail businesses in two low-income districts in Lusaka, Kapwepwe and Old Kanyama. These two and other similar unauthorized settle­ ments have accounted for Lusaka's rapid population * Before independence this settlement was called George, the name of one of the men who owned the land where the squatter houses were built. After independence it was renamed Kapwepwe in honor of Simon Kapwepwe, former vice-president and politician from the Bembaspeaking North. This was its name during our study. When Kapwepwe became involved in organizing the opposition United Progressive Party (see chapter seven), the government renamed the neighborhood Mwaziona ("You Must See") in a derisive reference to Kapwepwe's failed political attempts.

SMALL RETAIL TRADE

growth. By the 1970s the older African townships account­ ed for less than half of Lusaka's population. Large numbers of small and medium-sized businesses were scattered throughout African low-income neighborhoods, including Kapwepwe and Old Kanyama. Business growth has oc­ curred more rapidly in such settlements than in the town­ ships since trading in unauthorized settlements is not lim­ ited to a particular location established and allocated by the Lusaka City Council. The largest businesses here were comparable to those of Nswima and Chamba. The smaller businesses were comparable to Mutengo's market shop de­ scribed in chapter two. Measured by size and turnover, the typical African retailer in Kapwepwe and Old Kanyama fell within the range represented by our case studies. Located west of Matero and near the industrial area of Lusaka, Kapwepwe is the largest unauthorized settlement in Lusaka. The 1969 census reports 19,420 Africans living there in 4,224 dwellings.5 Since then, the population has increased still more. In early 1969 a Swedish research team counted the number of small enterprises and found 115 shops and teacarts, 6 beer bars, 2 markets, and numerous petty traders and artisans (Lundgren et al., 1969:17). By the end of 1970 the figure had grown to 150 small busi­ nesses. Kapwepwe thus represented a large and growing market for retailers. It was a highly competitive market since so many shops were located in close proximity to each other. In late November and early December 1970 we con­ ducted seventy interviews in the following kinds of estab­ lishments: 46 groceries, 13 teacarts, 8 grocery and bottle stores, 2 bars, and 1 butcher shop. Since a list of businesses in Kapwepwe and Kanyama did not exist, we had to de5 Information about the population of Old Kanyama and Kapwepwe was drawn from tables prepared by the Central Statistical Office specifi­ cally for this study. As of this writing, disaggregated statistics for such localities have not been produced generally from the 1969 Zambian Census (Zambia Central Statistical Office: 1971b).

KAPWEPWE AND OLD KANYAMA

velop an unorthodox sampling procedure.6 On different days we chose different starting points on the edge of Kapwepwe and interviewed every other businessman as we moved toward the center of the settlement. In this way, about half of all businesses were covered throughout the entire area. Only a handful of businessmen declined to be interviewed, though some were difficult to reach. As a re­ sult, in twenty-three instances we interviewed the manager (usually a wife, brother, or son) and less frequently a nonrelated employee. Sometimes they could not provide all the information we sought. Old Kanyama, with a population of about seven thou­ sand in 1970, is closer than Kapwepwe to the Cairo Road commercial district of Lusaka. In April 1971 we conducted twenty-nine interviews there among the owners and man­ agers of teacarts, groceries, and grocery and bottle stores. Twenty-five respondents gave us all the information we asked for. Old Kanyama dates from the middle 1950s, but in the late 1960s had experienced a spurt of growth in a westerly direction. Both areas are heavily working and lower class and en­ tirely African. Only about 10 percent of the adult male population in both areas was engaged in occupations classi­ fied as professional, technical, managerial, administrative, β The Lusaka City Council kept a record of each peddler's, hawker's, and full retail trade license issued. But peddlers and hawkers gave no address since they did not have a fixed place of business. Many of the full retail licenses, especially those issued to Africans, had only vague addresses indicating the name of an African neighborhood in which they were located, perhaps with a plot number. The city engineer's department did not have most of these neighborhoods mapped. Neither did these neighborhoods have streets in any meaningful sense of the word. They were crisscrossed by dirt tracks and footpaths. An unknown number of African businesses were also operating with no trade license or with one that had expired. Moreover, although the Ministry of Trade and Industry had registers of business and company names for Zambia, we discovered that most of the registered businesses were European and Asian.

SMALL RETAIL TRADE

or clerical and sales. The most common occupations re­ ported were laborer, bricklayer, carpenter, security guard, driver and lorryman, cabinetmaker and woodworker, and painter. The population of both settlements consisted pri­ marily of settled family households. Only 9 percent of the households were headed by females, and 87 percent of adults reported residence in the Lusaka area a year prior to the census. The population was almost equally divided between male and female, and nearly half was less than twenty years old. Although Kapwepwe and Old Kanyama, as well as the businesses studied, are quite similar and typical of other Lusaka low-income African neighborhoods, they do differ in their ethnic composition. African residential areas in Lusaka do not have distinctive ethnic characteristics in the sense that members of one ethno-linguistic group form a controlling majority in a neighborhood. Most migrants to Lusaka have come from distant districts and have settled in a haphazard fashion determined by the availability of unsettled land in and around Lusaka at a particular time. Moreover, Lusaka never had a sizable local group to create a division between locals and strangers, which is evident in some African towns. Nevertheless, the pull of kinsmen, language, ethnic, and regional ties does influence settle­ ment patterns. Compared to the total Lusaka population, Kapwepwe contained a higher percentage of migrants from Northern and Luapula provinces—Bemba and Mambwe speakers—and a lower percentage of migrants from the southern, central, and western parts of Zambia—the Tonga, Ila, and Barotse groups. In contrast, these latter groups were overrepresented in Old Kanyama. The Eastern Prov­ ince Nyanja-speaking group constituted the majority in both places. This contrast enabled us to investigate trading relationships based on ethnic and kinship criteria in addi­ tion to strictly economic ones. Kapwepwe and Old Kanyama Traders

The majority of small businesses studied sold food, bev-

KAPWEPWE AND OLD KANYAMA

erages, and tobacco, though some also offered a limited stock of clothing, fabrics, blankets, and household wares. They were almost always owned by a male head of the family who received considerable help in running the business from other family members. Only a handful were owned by women; fewer still were partnerships. A little over io percent of the traders still held full-time jobs else­ where, either because they had only recently started in business and did not wish to give up a source of income be­ fore trading proved to be profitable, or because another family member was capable of managing the store. Some were also engaged in some other trade—hawking, the kapenta trade, charcoal sales, building and construction—but only one businessman owned another retail store. In most cases, this was their first business; a little over 40 percent had been open for two years or less, and less than 10 per­ cent were in business prior to independence in 1964. About one-fifth of the businesses were relatively substantial and well established, with several employees. These were com­ parable in size to other African retail businesses located in the older, more commercially developed city-council-controlled neighborhoods of Lusaka. The traders were usually long-term Lusaka residents, not recent migrants. Only 20 percent had lived in Lusaka for less than five years, a figure somewhat lower than for the typical Lusaka heads of household (Ohadike, 1970:19). Be­ fore settling in Lusaka, most had been labor migrants on the Copperbelt, in Rhodesia, or in South Africa. About 70 percent were in their thirties and forties, while only about 15 percent were in their twenties. In contrast, 40 percent of the adult male population in Kapwepwe and Old Kanyama were young men in their twenties, according to the 1969 census. The trader's median level of education was standard three, with about 15 percent having had no formal school­ ing at all, and 25 percent having completed the upper pri­ mary grades, standard five or six. These figures represented somewhat more schooling for traders than for African males

SMALL RETAIL TRADE

of similar ages living in the unauthorized settlements. For instance, in Kapwepwe the median education for such males was standard one, and 42 percent had no schooling what­ soever. Of the ninety-two businessmen from whom we obtained information, fifty-three had been employed in manual oc­ cupations prior to launching their business. Thirty-two of these held relatively skilled jobs such as driver, miner, mechanic, or policeman. The other twenty-one did less skilled work as laborers, cooks, houseboys, messengers, and the like. Twenty-seven traders had previously been em­ ployed in white-collar occupations. These included eighteen whom we classified as having been in lower clerical or sales positions—shop assistants, typists, stock clerks, and barmen. Nine others had held positions of more responsibility and skill, such as store manager, medical assistant, foreman, and agricultural assistant. Only three of ninety-two moved di­ rectly from farming to business. Only nine reported that they had previously been in another self-employed occupa­ tion, such as market trader or hawker. This last fact sup­ ports our conclusion in chapter two about the lowly pros­ pects of market traders. Market trade is not a significant training ground for more complex business enterprises, even in the small retail sector. The occupations previously pursued by traders represent well-paid positions in the urban African labor market. Be­ fore founding their trading enterprises, then, many had received a regular monthly income and were in a position to save the capital for establishing a business. However, only a minority—those previously self-employed or in cleri­ cal, sales, and supervisory positions—had a chance to ac­ quire on-the-job experience in the conduct of business. Compared to the distribution of work activities among the male population of Kapwepwe and Old Kanyama, a dis­ proportionate number of traders came from the semiskilled and skilled manual occupations. In short, these retail trad­ ers and small businessmen had emerged from the large ur-

KAPWEPWE AND OLD KANYAMA

ban working-class population living in Lusaka settlements. They were in no way members of an outside trading group that decided to shift their business into the settlements. Instead, small-scale trade represented an opportunity for upward mobility for working-class Africans. The potential for a profitable business attracted those with the necessary initiative and limited capital. We found nothing personally unique about these businessmen. As we will see, they began their businesses in a very matter-of-fact manner, and few developed much beyond a rudimentary level. They were not a significant source of innovative behavior. An Ethnic Factor?

Contrary to theories that suggest the importance of cul­ tural factors, every major Zambian ethnic group contribut­ ed to trading and did so roughly in proportion to its size (see table 3.1). Bemba speakers from the North were some­ what overrepresented, and peoples from the South and West were somewhat underrepresented, but these differences are not striking. Moreover, there are straightforward explanations for these small differences which do not require an appeal to an ethnic factor.7 As described in chapter one, educational opportunities and the pattern of colonial development were uneven in Zambia. More intense early missionary and educational activity in the West and along the rail line in Southern Province meant people from those areas had more favorable chances for careers in the civil service dur­ ing the waning days of colonialism and in the postindependence years. Thus they were less inclined to seek novel employment opportunities in the emerging African retail τ In a study of higher civil servants and of university students, Subramanian (1970) found that a higher proportion were born in Western and Southern provinces than Lusaka males as a whole, with a corresponding deficit of civil servants and students from other parts of the country—that is, precisely the opposite pattern we found for traders, The explanations for both sets of findings are the same.

SMALL RETAIL TRADE TABLE

3.1

REGIONAL AND ETHNIC ORIGIN OF TRADERS AND OF KAPWEPWE, OLD KANYAMA, AND LUSAKA POPULATIONS*

Kapwepwe Origin Northern Zambia: Bemba Mambwe group Eastern Zambia: Nyanja, Tumbuka group Southern and Western Zambia: Tonga, Ila1 Barotse group Other Zambia and outside Zambia Total Number of cases

Old Kanyama

Lusaka

Traders

Adult Males

African Males

26%

»7%

5%

21%

51%

55%

45%

42%

47%

10%

9%

24%

38%

21%

9%

10%

'4%

'5%

"%

100%

100%

100%

100%

100%

70

5.015

1,804

91,200

Traders

Adult Males

3°%

29

'Zambia Central Statistical Office 1970a, 1971b. The Lusaka figure is for all males, including children, and does not include population in several un­ authorized settlements.

sector than were the less-educated people from the North. Migration patterns have also had an impact. In recent years Northern Province people have sought wider opportunities than those available on the Copperbelt alone and have made considerable inroads in Lusaka. After the opportuni­ ties for employment in Rhodesia and South Africa were terminated for political reasons, migrants from the West frequently sought work in Livingstone rather than Lusaka, because Livingstone was closer to Western Province. The basis of stratification in Lusaka residential areas was social class, not ethnic or language group. The same was true among businessmen. There was a higher percentage of traders from South and West Zambia in Old Kanyama than in Kapwepwe, but the same was also true for the total popu-

KAPWEPWE AND OLD KANYAMA

lation in these two areas. There was a higher percentage of traders from Northern Zambia in Kapwepwe than in Old Kanyama, but again that was also true for the settlement as a whole. Thus there existed a slight tendency for retailers to locate their businesses among a potential clientele with whom they shared cultural, linguistic, and ethnic affinities in much the same sense that in American cities kosher deli­ catessens are frequently established in Jewish neighbor­ hoods and pizza parlors in Italian ones. The lack of signifi­ cant ethnic specialization in retail trade in Lusaka kept this tendency to a minimum. Motives

Africans seized opportunities in this small-scale retail sector as they did in market trade. Coming from a variety of ethnic and cultural backgrounds, they expressed a nearly universal appreciation of the possible financial rewards of business. Some also indicated a preference for working for themselves, while others saw business as a dire financial necessity, the only remunerative opportunity. A former miner and bricklayer said simply, "I wanted to work on my own and wanted to make fast money." Another stated, "I wanted an easier job and wanted to work as I pleased." A former salesman working for a motor company stated, "I was fired from Duly Motors, and it was difficult for me to find another job." In short, their reasoning did not differ from that which might be expected among shopkeepers in Europe and North America. Most small businessmen were middle-aged men with families to support. They had limited chances of advance­ ment in paid employment even as their financial needs were growing. The labor market for them was fraught with in­ security: employers went out of business, and they lost their jobs, or they might be fired after a dispute with their boss. Starting a business for many, then, was no more risky than being an employee, while opportunities for improving their income were much greater in business.

SMALL RETAIL TRADE

These businessmen's choice of location was largely de­ termined by conventional economic considerations and per­ sonal ties. Retailers often referred to Old Kanyama as a "populous" place; it was a good site for a business because many people lived there. The owner of one of the largest businesses more explicitly mentioned access to a captive cli­ entele: "Plots are cheaper [in Kanyama] than in other places. People don't have enough money to go to town to buy food most of the time." Most retailers already lived in Old Kanyama before starting a business there and had built up a network of friends and potential clients: "I have lived here since i960 and have more friends here than anywhere else," and "There are a lot of people here who know me, and my house is here." Several other traders were attracted to Old Kanyama because they had kinsmen living there, some already in business, who advised them it was a good place for trading: "The man who sold me the teacart was a relation of mine and told me that business was good here." Another said: "My younger brother left home and settled here and had a teacart [in Kanyama] at the time." The great majority of the traders had every intention of re­ maining in Old Kanyama. These retailers, then, considered it a significant advantage to locate their business premises near their residence where they had established personal ties. Reputation and social standing in a community enlarged one's potential clientele. Clients' credit worthiness could be more accurately assessed if they lived in the same neighborhood. Given the absence of cheap, reliable, and fast transportation from one African neighborhood to another, the personal supervision of their business also necessitated such a choice of location for small businessmen. Moreover, these small businessmen did not have enough capital to purchase and operate a business in a "downtown" commercial district. As a result of the 1968 economic reforms, they were protected from competition with larger, non-Zambian enterprises in the low-income African neighborhoods.

KAPWEPWE AND OLD KANYAMA

At the same time, such a restricted field for enterprise meant that these businessmen had little chance to foster truly large establishments unless they ventured outside these settlements and the suburbs. The few success stories started their career with a teacart, expanded to a full gro­ cery by making additions to the building or by moving into larger premises, and then further expanded a full gro­ cery into a grocery and bottle store, or grocery and bar with refrigeration equipment. Only two of the ninety-nine re­ spondents had risen beyond this scale of business. Getting Started

With few exceptions, the businessmen stated they had saved all the initial capital for going into business. Banks, government agencies, and other institutions of the commer­ cialized sectors of the Zambian economy simply did not ex­ ist as a source of capital for starting or expanding small African businesses. Since most kinsmen and friends of the aspiring Zambian businessmen were low-income wage earn­ ers with no cash to spare for loans, businessmen had to save on their own. However, few Zambian wage earners were able to save much. Respondents' average earnings in pre­ vious jobs were 50 kwacha a month in Kapwepwe and 55 kwacha in Old Kanyama. The average amount invested at the start of business was 370 kwacha in Kapwepwe and 594 kwacha in Old Kanyama. These initial investments repre­ sented, on the average, over seven months' wages for the Kapwepwe traders and over ten months' wages for the Old Kanyama traders. Of the eleven businessmen who reported savings in excess of 1,000 kwacha, most had been miners on the Copperbelt or in Rhodesia or otherwise worked in wellpaid jobs in Southern Africa. They had accumulated sav­ ings over the years which they then invested as a lump sum in their business. These traders were in a position to enter retailing with a large grocery or grocery and bottle store. Those who started at the bottom with a teacart, on the oth­ er hand, initially invested an average of 329 kwacha.

SMALL RETAIL TRADE

Despite the relatively large amounts invested in the shops, especially when compared with the owners' previous earn­ ings, the premises of most traders were quite modest. Usu­ ally some shelves and a counter had been constructed by a local builder expressly for the aspiring businessman. Some shops were converted dwellings. One-fifth had been pur­ chased from another African businessman; a few were rent­ ed. When most traders first started their businesses, they were understocked. Most increased their inventory from earnings, which had been a fairly rapid process, at least for those still in business. Skills

Most businessmen learned how to conduct business from experience acquired in a previous occupation or informally from a friend. Some learned from kinsmen in business: "My father-in-law has a grocery in Chilenje. I was assisting him whenever I went to visit him." Over a quarter of the busi­ nessmen in Kapwepwe and over half in Old Kanyama had several kinsmen in trade. The majority of these kinsmentraders were located far from Lusaka either on the Copperbelt or in rural districts. For instance, of the sixteen kinsmen-traders of Old Kanyama respondents, three were in business in Old Kanyama itself, another three elsewhere in Lusaka, and ten outside Lusaka. Fully one-quarter learned by trial and error. Only the largest businessman in Kapwepwe had formal instruction in bookkeeping. Little education and lack of formal instruc­ tion in accounting proved no deterrent to entering smallscale retailing, since most businessmen had previous ex­ perience in a job and could receive help through social net­ works. Indeed, respondents did not think bookkeeping skills and education were crucial to success. Whether their meager skills hampered expansion was impossible to judge precisely; however, as chapter four shows, nearly all the larger businessmen possessed more education or had ac­ quired additional skills.

KAPWEPWE AND OLD KANYAMA

Because the businesses were small, labor needs were mod­ est. Twenty businesses were operated by one individual alone; most had two or three employees; and only four had a total labor force of six or more. The small businessman relied heavily on family labor, particularly his wife. In contrast to the few unrelated employees, close relatives were not regularly compensated in cash. Thus the labor force in small businesses tended to be composed of close kinsmen who were fed, housed, and provided with some irregular cash compensation by the owner. By putting otherwise idle family labor to work for them, small businessmen kept the nominal costs of running a business lower than if they had had to hire employees. However, as a more general analysis in chapter six demonstrates, the substantial African busi­ nesses tended to be formally and actually separate from the businessman's family. Perhaps this reliance on kin among the small retailer might have given an initial advantage, but proved a detriment to expansion, since kin expected some portion of future profits. Business Operation

The owner of a small business in an unauthorized settle­ ment in Lusaka daily faced an irritating round of difficul­ ties and inefficiencies. There were no telephones for placing orders to suppliers. Wholesalers and manufacturers' agents usually did not accept checks, nor did they extend credit. Shortages in some commodities occurred frequently. Sup­ pliers stopped deliveries when vans bogged down in the mud during the rainy season, and others did not deliver under any circumstances. Yet in other ways, running a business in Zambia was similar to running one in other parts of the world. Choosing between investment or con­ sumption, expansion or diversification, as well as setting prices, maintaining inventories, managing employees, at­ tracting customers, and balancing accounts are universal business tasks. Our investigation concentrated on the practices that may

SMALL RETAIL TRADE

lead to varying degrees of success in Zambia. A thorough analysis of such factors, and their somewhat weak relation­ ship to prior experience and education, is presented in chapter six for the whole range of Zambian businessmen. Here we outline the general level of business performance of the small-scale retail traders. During the interviews we sought to obtain information to illuminate this issue, in­ cluding data on sales, earnings, and business management.8 Small businessmen bought most of their supplies from Asian wholesalers, as the case studies of Chamba and Mutengo demonstrated. Few orders were delivered in the un­ authorized settlements because roads were in poor shape, and the orders tended to be small. Since traders maintained a low level of stock in relation to sales, transportation of supplies from wholesalers to stores was an almost daily problem for the businessmen. Most hired a car, but one quarter owned a vehicle. Most small businessmen extended credit to customers, but about a quarter of those interviewed extended no credit at all. A teacart owner stated typically: "I extend credit to trustworthy customers. About forty kwacha is owed to me in debts. Most of my debtors do pay their debts." The amount of outstanding debts appeared to be modest in re­ lation to turnover. Traders were aware of the danger of offering easy credit to customers. Another teacart owner with over one-hundred kwacha in customer debts appeared to have fallen into just such a trap: "Most customers [with debts] do not come to my teacart anymore, and I won't re­ cover most of the money." He was referring to the fact that debtors shifted their purchases to other retailers to avoid facing their creditor. Small debts were practically impos­ sible to collect through legal channels; indeed no respond­ ent mentioned this avenue for collecting debts. Success and Failure

About half the businessmen had a bank account. Twenty8 See the interview schedules in appendix one.

KAPWEPWE AND OLD KANYAMA

five reported that they saved money regularly. Thirty oth­ ers saved money occasionally, but would not give specific figures because, as one said, "it depends on the sales each month." In fact, several pointed to their savings as evidence of success. Other traders merely pointed to their shelves stocked with goods, or referred to the fact that they had in­ creased the size of their business. Precise information on turnover, gross earnings, and op­ erating expenses could not be obtained directly in inter­ views, since respondents themselves did not have the in­ formation and were unable· to express degree of success or failure in quantitative terms. We estimated net earnings as 12 percent of turnover for arriving at the figures in table 3.2.9 When asked for a subjective assessment, fifty-four of the ninety-nine businessmen reported that they earned more in business than they had in their last job. Nine were earning less, and one the same amount. Thirty-five had started business too recently to be able to tell, had previ­ ously been self-employed without a fixed wage, or for some other reason could not make an assessment. Over 90 percent of the Old Kanyama traders reported an increase, while somewhat over half of the Kapwepwe traders reported an increase and about one-sixth a decrease. Businessmen in Old Kanyama overwhelmingly reported satisfaction with their businesses. Those in Kapwepwe, while mostly expressing satisfaction, were on average less satisfied than their Old Kanyama peers. Not only do the general expressions of satisfaction seem justified in light of sales and earnings, but the difference in assessments be­ tween the two settlements is understandable when figures in table 3.2 are considered. One may also conclude that 9 This figure of 12 percent is Nswima's net earnings as a percentage o£ turnover. The corresponding figure for Chamba was 8.3 percent and for Mutengo 21 percent. In our judgment, the type of goods carried and sold by Nswima was more typical of Kapwepwe and Old Kanyama small businessmen than those of the other two. Appendix two has details of the technique used for arriving at these figures.

K 46 Ki25 K220

K i,830 (»)

(37)

(12)

K.2,567

K 822 Ki,063

Turnover

not

K25

the but

(3)

(1S) K308

(12) K128

N* K- 99

Net Earnings

N·

Net Earnings

K 384 K1,046

Turnover

* Because of insufficient information, estimates for ten businesses in Kapwepwe and one in Old Kanyama could be made. bSmall groceries are often referred to as teacarts in Zambia. A trading license for a teacart used to cost only half regular K50 fee for a retail trading license in urban areas. The 1968 Trades Licensing Act dropped this distinction, introduced a K50 retail license fee in prescribed areas (i.e. formerly European and Asian commercial areas) and a retail license fee elsewhere.

Small grocery, teacart" Grocery Grocery and bottle, grocery and bar, other

Size

Old Kanyama

Kapwepwe

ESTIMATES OF AVERAGE MONTHLY TURNOVER AND NET EARNINGS, BY SIZE OF BUSINESS AND LOCATION

TABLE 3.8

KAPWEPWE AND OLD KANYAMA

small businessmen were doing well compared to their pre­ vious monthly earnings in paid employment (fifty kwacha monthly average in Kapwepwe; fifty-five kwacha in Old Kanyama) and to African wages and salaries in general.10 Since unpaid family members often contributed to the business operation, net business earnings usually corre­ sponded to household income and thus can be usefully com­ pared with mean household income in Lusaka. Once again using Ohadike's (1970:3) classification of upper-, middle-, and lower-income groups, we see that the earnings of the larger businessmen in both settlements compared very fa­ vorably with the mean of 197 kwacha for the upper-income group. Smaller businessmen, those operating groceries in Kapwepwe and those operating groceries or teacarts in Old Kanyama, earned on the average very close to the middleincome mean of χ 18 kwacha. Only the owners of teacarts in Kapwepwe with no other income would be near the lowerincome mean of 47 kwacha.11 Therefore, the general level of business earnings were higher than what businessmen were earning before venturing into business, and most business­ men earned more than those with similar backgrounds in other lines of work. Favorable subjective assessments re­ flected the attractiveness of these estimates of net earnings. Successful retailing in such settlements was an avenue of socioeconomic mobility out of the urban working and lower class to parity, at least, with the new and growing salaried African middle class. Business success in the settlements, however, was not so quickly translated into conspicuous 10 These figures are usefully compared with government figures on monthly earnings of African employees in various sectors in Zambia: mining, Ki 18; manufacturing, K62; construction, K47; commerce, K67; domestic service, K23; all industries (excluding domestic service), K69 (Zambia Ministry of Finance, 1971:44-45). 11 The difference in turnover and earnings for teacarts in the two neighborhoods can in part be accounted for by a few visibly failing businesses in Kapwepwe. It will be recalled also that on the average, Old Kanyama traders operated somewhat larger businesses, as measured by total investment and labor force, than Kapwepwe traders.

Ill

SMALL RETAIL TRADE

consumption as was the case with larger businessmen living in middle-class African housing developments. To be sure, a few of the largest settlement businessmen had built modern-style homes with cement-block walls, glass win­ dows, and even a small fenced yard, but most continued to live in small structures built of burnt brick and plaster with a corrugated tin roof. High density and crowded buildings in the settlements made home improvement and expansion difficult. The wealthy lived elsewhere. Family Obligations

Business earnings were used mainly to maintain and expand the business, but traders did recognize obligations to less fortunate kinsmen beyond the nuclear family. A teacart owner with two children helped maintain "four brothers at school and two sisters because both of their parents are dead." A grocery and bottle store owner helped maintain "three of his brothers and two of his wife's sisters." Another trader who had four children of his own helped "his mother, sister, and three nephews." Few businessmen reported that they maintained no one. There were no com­ plaints voiced in the interviews about meeting such obliga­ tions. In any case, this was not a burden that only traders faced; it is a social norm for Africans with a steady income. In sum, the African small businessman had not cut his social, residential, or financial ties with kinsmen. Businessmen View Success

When small businessmen themselves offered a reason for success or failure in business, the prevailing view was that hard work and good customer relations led to success and that "drinking beer" and spending on girlfriends made for failure. As one respondent spelled it out: "Some business­ men are not successful because they are rude to customers, drink beer, and spend money on women." Another was equally explicit: "They mix business with pleasure and buy expensive things like big cars." Some respondents referred

KAPWEPWE AND OLD KANYAMA

to other factors such as "employing people who steal from you" or "extending lots of credit to customers," but none referred to the economic reforms or the general state of the economy. Self-discipline and restraint on consumption were recognized as the major factors in success; i.e. success re­ sulted from individual effort, not from macroeconomic fac­ tors largely beyond the businessman's control. Yet at the same time they cited external factors as significant prob­ lems in running a business: transportation and the difficul­ ties of securing supplies; too much competition following the great increase in the number of retailers; the activity of illegal traders who traded without a license and who operated out of their houses, and high prices charged by wholesalers. Business Milieu

Small businessmen were an individualistic, proud, com­ petitive lot. In the competitive atmosphere traders were reluctant to seek advice from one another and even more reluctant to help one another. If the trader was getting advice from any source, it was most likely to be from Indian wholesalers. One respondent stated: "I get advice mostly from the Indians who are more frank than fellow Zambian businessmen." Another underscored the same theme: "I would like to seek advice from my fellow busi­ nessmen, but I don't because most of them are unfriendly. I'd rather seek it from an Indian." To seek advice from another African was perceived as a threat to prestige. It represented an admission of inferiority unless the fellow businessman had been in business longer or was clearly more experienced and larger. One respondent said matterof-factly: "I can get advice from Kalulu only, because he started before me." Retailers wanted their business to remain in the family. There was a clear-cut preference for passing the business on to a son rather than any other relation upon one's death, regardless of customary inheritance rules. Often a business-

SMALL RETAIL TRADE

man would specifically mention his oldest son. Oldest daughters were occasionally named as successors, but wives were not. Brothers were sometimes mentioned when there were no male children or when the brother had been in­ strumental in getting the business started. Looking for H e l p

The self-reliance, care, and skills required to operate a business, as well as the impossibility—in many cases—of trusting others, are exemplified in the sad case history of Banda in Kapwepwe. This young man had inherited a bar on the Copperbelt when his father died in an automobile accident in 1966. Soon he was embroiled in an inheritance controversy with an uncle, but he managed to sell the bar and opened another one elsewhere on the Copperbelt. A manager was put in charge of it, but Banda did not set up a procedure for financial accounting with this manager. He suspected the Copperbelt manager of lining his pockets with the profits, but had no way of proving it. With cash also left to him by his father, he bought a farmhouse in Kapwepwe from an expatriate and converted it into a beer hall. Once again he was soon embroiled in a conflict, this time with one of the leading local politicians. Banda claimed this man coveted the premises for a beer hall of his own, although officially it was stated that the former farm­ house was earmarked for a medical clinic. He asserted that he was thrown into jail for ten days before he could clear the matter up by providing proof of the purchase. On top of this, his Kapwepwe beer hall was broken into and the chairs and tables stolen, even though he was employing a night watchman. As a way out of his difficulties, Banda was trying to line up support from another Lusaka politician, but it was not clear how this might help him, especially in solving his business management problems. The assets and cash left him by his father were rapidly diminishing. In another setting, a small businessman such as Banda might have turned to his banker or accountant for advice. But in

KAPWEPWE AND OLD KANYAMA

Zambia, these people are expatriates, and Banda felt un­ comfortable about approaching them. He simply did not understand the contexts in which they operated, nor would they have understood him. Most small businessmen did have some problems, but most appeared to cope with them effectively. Burglaries were common, as were petty theft by employees, systematic embezzlement by supervisors, inheritance disputes with kinsmen, disputes with local government officials over health regulations and building codes, and political inter­ ference. Given the small leverage they had with the authori­ ties, the larger business community, and their peers, small businessmen tended to rely on their own and immediate family resources, if these existed. Although there was a branch of the Zambia Traders Association (ZTA) in Kapwepwe and Old Kanyama, this association was dominated by the largest businessmen in the settlements, who frequently were also local politicians. In Kapwepwe especially, UNIP exercised strong—perhaps sole—control, since local government largely ignored the unauthorized settlements. When fights broke out at bars, UNIP officials acted as a quasi-police force. If matters got too violent, UNIP youth brigade members forcefully escorted the troublemakers to the nearest police station in Matero. Businessmen had to pay for these services and were also periodically assessed for a contribution by UNIP offi­ cials who needed funds for organizing party functions. When the condition of the major access road to Kapwepwe from the nearest paved road had deteriorated, UNIP col­ lected contributions, hired a road grader, and got the access road partially improved. The improvements went only as far as a grocery and bar owned by a ZTA official who was also a local UNIP leader. When a maize meal shortage at the Lusaka milling plants created chaotic conditions for distributing available supplies, ZTA officials worked out an allocation scheme with the manufacturers, which some claimed tended to favor the larger Lusaka businessmen. In

SMALL RETAIL TRADE

general, the pressure-group activities of ZTA (and its suc­ cessor, the ZNCCI) benefited the larger businessmen. Unlike the market traders with their cooperative associations, small retailers in the unauthorized settlements had not organized for collective ends. C o m p e t i t i o n a n d C a p t i v e Markets

Competition among small retailers was keen, and there were few price differences. Food, drink, and many house­ hold goods were sold at the same prices since the prices of these items had statutory ceilings set by the Office of Price Controller. Price differences existed for clothes, blankets, towels, bicycle supplies, lamps, pots, pans, and dishes, but the merchandise also varied in size and quality. Thus shop­ keepers competed on the basis of their relations with cus­ tomers, the convenience of their location, and the ability to maintain a sufficient stock of the most common consumer items, especially at the end of the month when wage earners were paid and purchased much of their monthly food sup­ plies. Some traders gained a competitive edge by adding a bottle store to their grocery, or a small bar and even a beer hall. In Kapwepwe and Old Kanyama there were no public places for entertainment and for meeting with one's friends aside from bars, taverns, and bottle stores. After work and on weekends men congregated in these places for convivial purposes, and much beer was consumed. They also smoked and bought food when they got hungry. The beer and drink business was very lucrative in Lusaka. Small traders, as we have seen, received the major share of low-income African consumer spending on food, tobacco, and beverages. Altogether,' purchases of these items repre­ sented 65 percent of the budgets of low-income urban Africans (Zambia Central Statistical Office, 1970b: 19). This substantial demand, coupled with the traders' modest busi­ ness expenses, was the secret of their success. The initial cost of building a store was low. Municipal building codes and health regulations were only indifferently enforced in

KAPWEPWE AND OLD KANYAMA

the unauthorized settlements. Land on which businesses were located was either free or very cheap. The Ministry of Finance usually did not tax small-business earnings. Trade licenses were cheap and were easily obtained. The business could be run mostly by the owner himself with the help of family labor, since no special skills were re­ quired beyond those that many urban Zambians had ac­ quired through their experiences in the money economy. The Zambian government's policy toward the Zambianization of commerce and distribution benefited the small businessman. Expatriate competition in retail trade was eliminated from most African neighborhoods, especially the unauthorized settlements, by the economic reforms of 1968.12 The ecology of Lusaka was also helpful. The dis­ tances from the settlements to the central shopping districts where expatriate and government stores were located were great, considering that African consumers mostly walked or rode bicycles and crowded buses. The main markets, which the city council regulated, were not located in the low income African settlements either, although smaller, un­ authorized markets were found in some. Moreover, shifts of taste associated with increased incomes favored the small African retailers over the market vendors. Thus competi­ tion from other sources, including itinerant food vendors and market traders, was modest and declining. However, the typical African retailer in Lusaka settlements had not yet made noticeable inroads into clothing, footwear, and some other soft goods, which necessitated a higher initial capital outlay and higher current overhead. These goods were still purchased in the cer^tral commercial districts and in markets. In sum then, the African small businessman main­ tained a strong overall competitive position in the unau­ thorized settlements of Lusaka, where half the population lived. 12 The impact of government policies on business success will be discussed in greater detail in chapter seven.

SMALL RETAIL TRADE

Prospects

Africans have responded quickly ,to new opportunities in trading. Small retail businesses have rapidly increased. In­ deed, the profits of these small African retailers were rea­ sonably attractive. African businessmen like Nswima and Chamba earned a gross margin of about 16 percent, and smaller shopkeepers like Mutengo 27 percent,13 which com­ pares favorably to the approximately 20 percent gross mar­ gin of expatriate "grocers with liquor licenses" and "urban general dealers" reported in the 1962 Census of Distribution (Zambia Central Statistical Office, 1965:9). Thus African businesses were taking the place once held by small Asian and European traders in the distribution system. They were doing so at a similar level of efficiency, at least in the final stage of distribution, even though competition had in­ creased, profit margins had been cut, and statutory price ceilings had been enforced. Yet we doubt whether this sector could have a long-term impact on economic growth. Most businesses had little capital, and their owners few skills. Only a handful were innovative. Most sold the same goods, at the same prices, by means of similar sales techniques. Expansion followed the same path. The premises were enlarged; a greater di­ versity of products was sold; a liquor license was acquired so an adjacent bar could be opened. The few small business­ men who rose to become substantial entrepreneurs will be examined in greater detail in chapter four. Nevertheless, small-scale, privately owned, African retailing had become a reasonably efficient means of distribution. As competition increased, experience was acquired, some capital was ac­ cumulated, efficiency improved along with the level of service to the low-income African customers. 13

See appendix two for these estimates.

CHAPTER IV

Challenging Expatriate Entrepreneurs

AT the peak of African enterprise in Zambia are the sub­ stantial businessmen who own and operate large complex businesses. Their level of business is very different from small-scale trading, artisan, and transport activities. We con­ sidered an African businessman substantial if his business had aggregate monthly sales in excess of 8,000 kwacha or if he was engaged in an area of business that had been the exclusive province of European or Asian entrepreneurs. In 1970 and 1971, we located and interviewed all but two such businessmen in Lusaka. They were already in day-to-day competition with Euro­ peans and Asians and included among their number many of the innovative African businessmen. They were creating models of black African success and had the most potential for influencing Zambian society and politics. Much of the entrepreneurial impetus and skills needed for an indigenous private sector in Zambia would presumably be supplied by these men. It is important to analyze the sources of growth for such a sector, its potential contribution to economic development, and the degree of its dependence on favorable government policies and good relations with Europeans, Asians, and other members of the new African elite. A study of their careers, business operations, and varying fortunes brings into focus the emerging potential of an African business class. Before independence, few significant African businesses existed in Zambia. The substantial number that have emerged since then indicates that Africans responded rap­ idly as soon as colonial barriers to African enterprises were removed. By necessity, many of this group quickly learned

CHALLENGING EXPATRIATES

the intricacies of relatively sophisticated enterprises. Their growth had been especially rapid, but a large distance be­ tween them and the non-African business community re­ mained. Even so the economic reforms had little direct effect on them. Only one of the substantial businessmen had taken over a non-Zambian business in Lusaka; only four had founded businesses in areas intended to be restructured by the reforms. At the same time, of the thirty-four European and Asian businessmen we interviewed, only four had been affected directly and adversely by the economic reforms, and each of them had managed to find other lines of operation. All others had found methods to avoid the reforms, as we describe in detail in chapter seven. The substantial busi­ nessmen owed their growth and elite position to broad socioeconomic changes and to particular circumstances that allowed them to seize new opportunities. Whether their po­ sition can be consolidated for further growth may also depend on circumstances and opportunities over which they may have no control. CHARACTERISTICS

The substantial African businessmen in Lusaka, on the Copperbelt, in the smaller towns, and in the rural areas were a very small fraction of all Africans in business: per­ haps ι out of 200. Yet they accounted for about 15 percent of the African-sector sales in trading and distribution, and perhaps 30 percent of the industrial output in African hands. The other African-controlled production in these sectors came from smaller African businesses: market traders, shopkeepers, and artisans. The businesses included factories, bars, brothels, small supermarkets, workshops, a pharmacy, an advertising agency, several contractors, sub­ contractors, and purveyors of special services. Of the busi-

CHARACTERISTICS

nessmen1 contacted, 17 had a retail operation in a predom­ inantly African residential area as their principal type of business; 17 were building contractors varying in scale from those employing a few men to those employing several hundred; 10 were engaged in specialized or wholesale trade or conducted a retail business in the downtown or predom­ inantly European areas; 6 were general subcontractors; 14 were engaged in some kind of manufacturing, mostly furni­ ture or metal goods; and 9 were in transport or the motor trade. The people interviewed owned or had a major inter­ est in a total of 158 businesses, excluding commercial farms. Fourteen percent of these African entrepreneurs went into business before the federal era began in 1953, 33 per­ cent during the federal period but before independence, 30 percent since independence but before the economic reforms took effect at the end of 1968, and 23 percent since then. On the average, substantial businessmen had been in business slightly less than seven years. Fourteen percent of the busi­ nessmen were younger than thirty, another 35 percent were between thirty and forty years old, 44 percent were between forty and fifty, but only 8 percent were older than fifty, and none were over sixty. Fifty-four percent of these business­ men had only one enterprise, while 24 had two, and 22 per­ cent had three or more. According to their own reports, 37 percent of the businesses had gross monthly sales averaging 5,000 kwacha or less, while for 42 percent the gross sales totaled between 5,000 and 20,000 kwacha.2 For the remain­ ing 21 percent, aggregate gross sales were more than 20,000 kwacha per month. 1 For equal partnerships each businessman was treated separately. This was not a major problem, since only two cases were organized in that manner—i.e. each partner was totally responsible for one divi­ sion of the business. Who was boss was obvious in all other partner­ ships. zThese figures are based by and large on information from balance sheets and profit-and-loss statements. A discussion of their reliability is in appendix two.

CHALLENGING EXPATRIATES

Substantial African businessmen were remarkably suc­ cessful. In Zambia as a whole the rate of return for retail trade was about 40 percent; for industrial businesses it averaged about 70 percent (Rihtman, 1971). For the sixtyfive of our respondents for whom complete data exist, sales averaged over 19,000 kwacha a month, and profit was over 46,000 kwacha a year. During the last year for which figures existed, 24 percent reported before-tax gains in excess of 50,000 kwacha, 52 percent had gains between 10,000 and 50,000 kwacha, 16 percent gained up to 10,000 kwacha, while only 8 percent reported losses. These figures include money paid out in salaries to the businessman and to the directors in the same family, and are much higher than comparable figures for retail traders discussed in chapters three and five. The rate of return on business investment for the substantial African businessmen ranged from nega­ tive figures to over 1,500 percent, with a median of about 70 percent for all African businesses—retail and industrial. ENTRY INTO BUSINESS

Prior to independence, the substantial businessmen typi­ cally had held more desirable "African" jobs. The majority (72 percent) were employed in such occupations as super­ visor for European contractors, foreman (usually of small factories), accounts clerk, or shop assistant in a retail store. Thus, these businessmen generally had distinct advantages in previous work experiences over the small-scale traders. The future businessmen learned skills, saved money, and gained knowledge of newly opening opportunities which they then exploited. Even before they went into business, however, many were earning more than the highest paid senior African civil servants.3 According to Mitchell and 3 Although the top salaries of the civil service in 1953 ranged from £326 to £668 and only 90 of over 10,000 African government employees achieved that salary range, 52 percent of the substantial African busi­ nessmen earned over £661 in their last job. This is based on a com-

ENTRY INTO BUSINESS

Epstein (1959:22-39), the prestige of manual occupations which many held was in the middle range—higher than domestic servants or waiters, but lower than African minis­ ters, headmasters, or secondary-school teachers. Most decided to go into business at a particular time in a rather matter-of-fact way. Kawembwe, an African contrac­ tor, described his start: H [a European official] wanted a carpenter, so I went to him. He had tried some carpenters to make the kind of box he wanted, but they told him they couldn't make it. I made the box, and he said I did a wonderful job. He offered me a job as roving carpenter for the Welfare Department at seven pounds ten shilling a month, plus ration in kind, which was very good money. So I started working for the city council in 1945.1 worked for them for one year. In my spare time I was still doing some private jobs. He recommended me to his friends as a very good carpenter. Now I could make a table on Saturday and Sunday and sell it on Monday for three pounds. So then I started thinking, if I can make three pounds for Saturday and Sunday, suppose I did this job full time, I'd get a lot of money, more than seven pounds ten shilling. I then went to H. I told him I would start on my own as a cabinetmaker. I said, when he asked, that I did not need any capital, because it was just a matter of working hard. I could go and buy a piece of plank for seven shilling sixpence. I would make a table out of that plank and sell it for two pounds fifteen shilling. So I left this council job. Although he became a successful free-lance carpenter working for both Europeans and Africans in the late 1940s, Kawembwe seized further opportunities. Once again his parison of Dresang's (1971:132-133) and our data. The substantial businessmen were doing well economically compared to most Africans, including the most highly paid civil servants or managers of large corporations.

CHALLENGING EXPATRIATES

relationship with Europeans paved the way, and he became the first African building contractor in Lusaka. Reverend N [a European missionary] said that they appreciated that I had built the mission school dormi­ tories for a very small profit [Kawembwe had con­ structed eighteen dormitories at a new girls' boarding school for a mission society]. So he got me a job with the Public Works Department to build the Boy Scout headquarters, which is still standing. The quantity sur­ veyors worked out the price for me, so I would not do it for less than I should. It was 3,500 pounds for the labor contract. I made about 2,000 pounds profit. This was in 1953. I was a man. While doing the Scout headquarters, I kept getting jobs, and another, and another. Then I put up a notice board there, "J°lm Kawembwe, African Building Contractor," because there were no African contractors at that time. As Kawembwe was the first African contractor, so there were many other firsts among substantial African business­ men, including the first African taxi operator, chemist (pharmacist), butcher, liquor-store owner, bar owner, gro­ cery-store owners in various African suburbs, petroleum distributor, advertising agency manager, importer-exporter, bus-line operator, factory owner, flooring subcontractor, upholsterer, exterminator, security-guard-service owner, dry cleaner, engineering-shop owner and drivers' training-school owner. As with the market traders and small-scale retailers, most substantial businessmen cited a desire for financial gain as a principal reason for going into business. Ninety percent of the substantial businessmen were making more money than they had by working for others. The second most popular reason, a desire for independence, is a common reason to begin an enterprise under one's own control any­ where, but takes on added meaning in Zambia. Indeed, this factor was cited by a higher proportion of these business-

ENTRY INTO BUSINESS

men than of the smaller ones. During colonial and federal days, as we have seen, Africans could not rise above certain positions and earned low wages. About two-thirds of the businessmen reported that their last job was valuable for learning the necessary technical, administrative, or finan­ cial skills required to operate their present business. Yet these were learned in a context of racial discrimination where competence went unrewarded and an ambitious Afri­ can was considered "uppity." It is not surprising, then, that some businessmen reported problems in their relations with employers and were often dismissed. Shona was a young man who founded what became a group of interrelated transport enterprises run by three brothers and a cousin. He had been fired from a job as a bus driver: Since I had spent the little I had over my getting mar­ ried [for a bride price], I thought of looking for work once more, after having stayed out of work six months. As a well-known figure, I was called by my friends for a job as a driver with Zambia Breweries, which I took. For a year I was with the Breweries. As I was working, I was taking correspondence courses. I was doing my salesmanship, which I always think gave me all the new plans. Every evening after work I used to practice hawk­ ing vegetables. When I noticed the profits, I thought of leaving the company I used to work for, but I had not sold enough. I was then fired without notice. That was the day when my life was fifty miles in front and fifty miles back. It remained for me to sort it out. With only twenty-eight pounds as my capital, I began buying African-made charcoal for sale. I worked so hard day and night to see myself die or live. After two months I had saved enough to buy myself a second­ hand van for transporting my charcoal. I used to pay five shillings per bag and sell it for one pound five per bag. That is the time I thought of calling my transport the Shona Brothers and Sons. Then the two brothers

CHALLENGING EXPATRIATES

were still working, one in Bulawayo and the other one in Lusaka as a police officer. When I had worked for two years, I thought of having some people to help me. By that time I had bought two big lorries, which I was using to carry mealie meal to Mongu [a provincial capital 390 miles from Lusaka over dirt roads]. When my brothers joined me, they thought of the bus run­ ning today. Here the impetus to business enterprise was clearly the loss of employment. Because he had been moonlighting and taking correspondence courses, Shona saw the potential gains in business and was not content simply to look for new employment. Once again the decision was based on the calculation of advantage. Like many other substantial and smaller businessmen, Kawembwe and Shona obtained capital necessary to start their businesses from personal savings or from a member of the family. Though the amounts seem relatively small, they are substantial compared to the average level of African earnings in Zambia. Four or five pounds a month was an exceptionally high African wage during the period Kawembwe founded his business, while ten pounds was equally high when Shona started out. Their initial capital repre­ sented half an average yearly wage. Because they ran relatively complex and large enter­ prises, the substantial businessmen required much more initial capital than smaller businessmen. Some 30 percent invested more than 5,000 kwacha, exactly 50 percent be­ tween 500 and 5,000 kwacha, while about 20 percent invest­ ed less than 500 kwacha. To raise the money needed for starting a business, about three-fifths of the substantial businessmen relied mainly on their own savings. Compared with European and Asian businessmen, the substantial Af­ ricans more frequently used outside aid, including both support from their family and loans from others (see table 4.1). The Europeans and Asians more often inherited the

ENTRY INTO BUSINESS TABLE 4.1 SOURCES OF ORIGINAL CAPITAL INVESTED IN FIRST BUSINESS BY SUBSTANTIAL AFRICAN AND EUROPEAN AND ASIAN BUSINESSMEN

Sources of Capital Personal savings Obtained from family Borrowed from financial institutions (banks, building societies, etc.) Other sources (political influence stock issue, etc.) Total Number of cases: No answer

Substantial African Businessmen

European and Asian Businessmen

60%

5%

67% 15%

36%

9%

9%

9%

100%

100%

74 4

34 0

needed funds. Some businessmen were helped, however, by the Credit Organization of Zambia.4 Others were aided in more direct ways by the ruling party. One businessman described this pattern well: "After independence I went to Kaunda and told him I was not well enough educated to take a big government job, which everyone expected that I would get. I had been very active holding various offices in the struggle. He asked me what I wanted. I told him I would like a store which I could run and have an income from. He said that he wanted me in government, but if I insisted, he would see what he could do. So he gave me a [city council plot] in—." This retailer was quite successful and had a tavern, a grocery, and a bottle store all at the location leased to him by the city, as well as a sizable commercial farm with an attractive bunga4 The Credit Organization of Zambia (COZ) was a loan fund set up after independence to aid Africans in agriculture and commerce. In part because many of the recipients considered the loans a payment for services they had previously rendered to the nationalist movement, only 23 percent of the loans were ever repaid.

CHALLENGING EXPATRIATES

low. He accomplished this by managing to convert a politi­ cal debt into a financial resource. In contrast, others followed a laborious path, saved over a long time with little notion of the end in view, and then had some luck: After I left home, when I was fourteen, I went with cousins to Livingstone. I worked there as a button boy for five shillings per month, one pound of salt a week, and ten pounds of mealie meal per month. There were 250 button boys, but I was promoted to supervise them. I bought a sewing machine on credit and did piecework for two years. Then the factory closed in 1934. I had not finished paying for the machine, but they gave it to me anyway. I then went to Bulawayo, and was em­ ployed as a tailor for N, and later for K. I worked for one pound five shillings per month, just enough for someone without a family. Then I worked for L for nine years, where I got my food and accommodation. I was a tailor, did not spend any money, and saved some thirty-six pounds. L was a very kind man. He helped me open a tailor shop in a small town in Southern Rhodesia. For ten months I was a tailor; then war broke out. The village was looking for a grocer, and I took the job. Persistent saving coupled with making the most of op­ portunities provided the impetus for this man's business career. However, others did aim at a particular business, accumulated savings, and then used loans to fill the remain­ ing gap. Many businessmen reported that their standing in the community before they began in business helped them secure and arrange loans as well as the necessary licenses, favorable sites, and business relationships. Their superior jobs, which depended on their ability and on favorable re­ lations with the Europeans and Asians, were the basis of their advantaged status. Many substantial businessmen started in a more modest

BACKGROUND

enterprise than their present one. Although almost half of them were in business before independence, only about 30 percent of their present main businesses were founded be­ fore then. Many had expanded by a factor of one hundred or more since their modest beginnings. Though some large loans were also used, four-fifths of the capital for expansion came from profits. In summary, the substantial businessmen entered business directly from the better jobs that were open to Africans in the colonial era. They went into business chiefly to make more money, but also to be more independent and to be freer of the racial domination that characterized Zambian society until recently. They chose a line of business that drew on the technical, financial, and administrative skills they gained while in the employ of others. They often decided upon the area of husiness they wanted to enter in a calculating manner, considering the relative advantages it offered to them, although the decision was sometimes precipitated by a particular change in circumstances such as the loss of employment. Many businessmen's hopes for monetary gain were amply fulfilled. The capital needed to start a business came mostly from savings, although family, institutional, and other resources were also used in some cases. BACKGROUND TO BUSINESS

The substantial businessmen were born into families that had the means to provide the few advantages possible for Africans in Northern Rhodesia during the colonial era. Though most Zambians were raised in families headed by cultivators, seven-tenths of the substantial businessmen's fathers were primarily employed in the cash economy. Close to one-fifth of these had the best available positions, such as miners, schoolteachers, or foremen; nearly another fifth were self-employed businessmen, and about one-third held menial jobs, such as messengers and domestic servants.

CHALLENGING EXPATRIATES

Plainly, in their youths the future businessmen were ex­ posed to the cash economy and its possibilities. Until recently, school fees were required in Zambia. The parents of most of the substantial businessmen paid these charges. Consequently, as table 4.2 shows, they were much better educated than the average Zambian living in Lusaka, TABLE 4.2 EDUCATION OF SUBSTANTIAL AFRICAN BUSINESSMEN AND LUSAKA AFRICAN MALES OVER TWENTY YEARS

Educational Level Attained Less than standard one Standards two to four Standards five and six Beyond standard six Total Number of cases:

Substantial African Businessmen

Lusaka African Males· 12.2%

5% 13% i7% 65%

34·°% 22-4% 3ΐ·4%

100%

100.0%

78

* 1969 census figures. Includes only official Lusaka, as of 1963; excludes some unauthorized settlements (Zambia Central Statistical Office, i97ib).

but few received appropriate training for a high position in the civil service or private-sector bureaucracy. Many were educated in manual arts which eventually proved useful in their early careers and later in business. A high level of schooling represented a great achieve­ ment during the colonial era. A number of these substantial African businessmen shared certain educational experiences. Many did the full program in less than the usual number of years; one passed three grades in six weeks, others had done six years' work in two years, and still others kept get­ ting promoted, easily passing examinations without spend­ ing full time in each grade or standard. Wherever they were living they exhausted the limited educational oppor­ tunities. If the last grade near home was standard six, they usually completed standard six; if it was Form 11, they got

BACKGROUND

that far. Three-fourths of them completed their schooling without interruption. A number reenrolled in school when they were older as new opportunities opened up, or when they moved near a higher-level school. Several were still taking part-time courses when we interviewed them. Most proudly display elaborately framed course certificates in their offices. The future businessmen moved around a great deal dur­ ing their youths. Though 70 percent of them were born in a village, only 50 percent spent their preschool years in one. Only 13 percent attended school exclusively near a village. About 41 percent went to school in a town, and another 46 percent attended a boarding school away from home. Abil­ ity, mobility, and their parents' financial position enabled them to progress in school, and education was translated into better employment chances. Kawembwe's account of one of his jobs illustrates this point: Very few of the carpenters had gone to school. They could not read or write or understand anything. While I was at school, I could read the plan and understand it and set it up. I was promoted to sort of foreman, be­ cause I could read and understand and take orders, so I was doing a very good job there. A good job, a big, sweet job. After the end of that job, they did not sack me. They took me now from Ndola to the Public Works Department Workshop. Some old people there got jealous of me, because I was making more than they were. They did not understand that that was my privi­ lege because I had a bit of education and they had none. So I got a sack [was fired]. Soon thereafter he secured a job teaching carpentry, then found another job as a carpenter when the teaching job proved to pay too little, went to work for the Lusaka Man­ agement Board, and eventually ended up with a business of his own. Good jobs were a result not only of good education, but

CHALLENGING EXPATRIATES

also of natural talent. Many businessmen had a natural aptitude for figures and were able to keep track of money easily. When one of Lusaka's largest businessmen (who had not gone to school at all) was asked how he had learned to run his business, he replied: "It is really just common sense. I am very good at figures. I just learned that, and the rest is common sense. Some people have it, most do not." With little competition, they were also able to learn jobs and later run businesses by trial and error. Many businessmen had traveled or worked outside Zam­ bia and had taken jobs that enabled them to learn some skills needed in business. They migrated mostly to South Africa and Southern Rhodesia which were more developed economically than Northern Rhodesia. There they learned skills but were often victims of racism. Some businessmen perfected their skills through formal training, and several were the first Africans ever admitted to various institutions such as certain trade schools. Upon returning to Zambia, they put their more advanced skills to good use. One migrant to Southern Africa was a successful electri­ cal contractor, though somewhat overextended. His ac­ count of how he learned to be an electrician indicates some of the problems that racism caused for a diligent African in South Africa. I wanted to go to a technical college there and learn electricity. But they said no, no African had ever gone to that college before, and they could not allow me to go. But I said that I wanted to go there and learn that trade. They said that it would do me no good, for even if I went to college there, there would be no way that they would certify me as an electrician. Finally, they decided to let me go and take the courses, but they would not give me any credit for them, or give me a diploma or a certificate or anything like that because I was an African. I was the first African that ever took those courses, but they would not want to admit that, even though I did very well in them.

BACKGROUND

Although there was some differential recruitment for sub­ stantial businessmen based on ethnic origin, as there was for retail traders and marketeers, no one group dominated this level of business activity in Lusaka (as table 4.3 shows). TABLE 4.3 ETHNIC ORIGINS OF SUBSTANTIAL BUSINESSMEN AND LUSAKA AFRICAN MALES

Ethnic and Linguistic Group Eastern origin: Chewa, Ngoni, Nsenga, Senga, Nyanja, Chikunda, Tumbuka, Kunda Northern origin: Bemba, Bisa, Lungu, Mambwe, Lunda, Chisinga, Ushi, Tabwe Central origin: Lala, Soli, Lukazi, Swaka, Lamba, Cokwe, Ila, Lenje Southern origin: Tonga Western and Northwestern origin: Lozi, Luvale, Lunda, Kaonda Rhodesian and other non-Zambian origin Total Number of cases

Substantial Businessmen

Lusaka African Males*

28%

47%

27%

21%

5% 8%

7% 9%

13%

10%

19%

6%

100% 78

100% —

' Zambia Central Statistical Office (1971b).

Quite clearly, however, there was a striking overrepresentation of non-Zambians and to a lesser extent Northerners, and a concomitant underrepresentation of Easterners. Rhodesians and other non-Zambian Africans were not as restricted in this area of business activity as they were in re­ tail trade. Many Rhodesians undoubtedly enjoyed the bene­ fit of the superior schools and more demanding jobs avail­ able in the South. After the economic reforms they were better equipped to take advantage of new business oppor­ tunities than most Zambians. In comparison to Easterners,

CHALLENGING EXPATRIATES

moreover, Northerners enjoyed similar advantages during a long residence on the Copperbelt, either as children or as workers. Lusaka typically represented the migration terminus for Easterners, who were mostly unskilled workers when they first came to town, but unlike small retailers, substantial businessmen were not, as a rule, drawn from the general unskilled urban population. Given the need for some train­ ing and capital, the underrepresentation of Easterners in the population was therefore predictable. Thus the same ecological, demographic, and socioeconomic processes that produced the ethnic distribution of small-scale retail traders and marketeers discussed in chapters two and three, here resulted in a somewhat different distribution. Yet the lack of ethnic dominance in trade held true even for the larg­ est and most sophisticated African businesses. BUSINESS AND FAMILY

The substantial African businessmen belonged to extend­ ed families. Many were the successful member of their family, the apwamamba (big man), and were often called upon for help by their kin. Substantial businessmen, how­ ever, preferred to isolate their businesses from their families. Most were reluctant to offer employment to relatives, and instead, they fulfilled kinship obligations by giving direct financial aid. They saw their businesses as their own crea­ tions, to be operated primarily for the benefit of their nu­ clear families. The businessmen occasionally did use kin to find markets or to provide technical assistance, but only about io percent of the substantial African businessmen had ever received any financial assistance from their fami­ lies. In even fewer cases had family members, usually the businessman's father, been of significant assistance in the founding of a business. Since these African businessmen had usually gained suc­ cess independently, they were reluctant to have kin hinder

BUSINESS AND FAMILY

operations. One-half said they would not employ relatives under any circumstances, while one-sixth were very cau­ tious and selective in hiring kin. While another sixth had no opportunity to employ them, only the remaining sixth employed them without expressing serious reservations. Such caution toward kin was not surprising since a myriad of relatives with the thinnest ties was likely to ask for work, especially if the businessman had a successful enter­ prise. Businessmen were forthright in expressing their attitudes toward employing kinsmen and describing the policies they followed. They were repeatedly faced with the issue and had given it considerable thought. One related: "NoI We will not consider a relative for employment. We are a cor­ poration. Each of the directors has many relatives. This way we do not have to hire any relatives. Each of us can simply tell our relatives it is company policy. Relatives are more likely to steal from you. They don't work as hard. How can you sack them?" Several used similar excuses when kin applied for employment, and others simply said no. Even those that did employ relatives often specified carefully the conditions or were prompted by unusual cir­ cumstances. One who employed kin explained his policy: "I have one of my wife's kinsmen working for me now, a nephew from Katete. He gets the same wages and is sub­ ject to the same conditions as the other employees. I would not have hired him if he were not capable of doing the work, and despite what my wife would do or say, if he is lazy or steals, then out he goes." Businessmen were more inclined to rely on their nuclear family than on their extended family for managing or su­ pervising their businesses. Often the wife assumed the role of trusted supervisor, especially in shops and other simple businesses. Though generally reluctant to hire relatives, the businessmen were quite willing to call on kin when they could provide expertise—for instance, a relative might be an accountant, engineer, lawyer, civil servant, politician,

CHALLENGING EXPATRIATES

or quantity surveyor. Sometimes a comparatively unskilled kinsman might be able to find a job if one of his closer relatives in turn ensured the continued procurement of contracts, supplies, credit, or government loans for the business. Although employment of kin was generally avoided be­ cause it hindered efficiency, businessmen did provide money and support for their kinsmen. Thirty-five percent support­ ed more than ten kinsmen, not including their spouses or children, while 27 percent supported from five to ten, and 18 percent supported one to four. Only 20 percent did not support any kinsmen at all. These figures do not even be­ gin to reflect the large number of occasional requests that successful businessmen got from kinsmen for school fees, transportation, housing, and school uniforms. Since such requests were often crucial to the relative's future, they were hard to refuse and were often honored, at least in part. The circle of eligible relatives often widened beyond young­ er brothers and sisters to distant cousins, nephews, and nieces. Sometimes the businessman also felt compelled to take into his household kinsmen who had suffered misfor­ tunes—for instance, a divorced sister who arrived with her children. Aging parents often received support as well. Such obligations affected the businessman's cash surplus as well as his life style. One large businessman estimated that he spent between 200 and 300 kwacha a month on his kins­ men, not including his parents who lived with him. Others organized their nonbusiness life around such obligations, bought a plot to be farmed noncommercially by some of their kinsmen, and lived there themselves. This tactic eased their obligation and perhaps provided their parents with a place to live. As one explained: There are twenty-seven, besides my wife and children, living on the plot. It is all right, though some of them are a bit lazy. I have put five through the university, my young brothers and several nieces. One I sent to the

BUSINESS AND FAMILY

UK for schooling. I don't really mind doing it. It is my responsibility. I would like it very much if some of those I helped would help. I wish they would be a bit grateful. But they forget. We are living on a plot, the food comes from there. Some will work, but some are very lazy. Most businessmen were married, and several had more than one wife though only one admitted it. They had a median of five children, slightly higher than the average found in a social survey of Lusaka (Ohadike, 1970:3-7), but the businessmen are somewhat older than the average in that sample. Some businessmen gave outright title of their businesses, their houses, and their bank accounts to their wives to en­ sure that their own wishes and not custom were followed after their death. All made plans to provide for their wives' support when they died, even if their own custom did not call for such provision. Virtually all expected one of their own sons to assume eventual control and inherit their business—again, contrary to tradition in some cases.5 Indeed, no matter how long they had been in business, most had considered how their enterprises would be con­ tinued after their death. They had a clear sense of their own mortality and realized that disease or an automobile accident could end their lives at any time. When asked about their future plans, they prefaced their answers with such remarks as, "If I am here a year from now," "if God gives me some more years," or "if I am still alive." Many had chosen one or more of their sons as the heir to the business. They based that choice on the abilities of their sons: "I wish Wills could take over this business, but he is 5 In some customs kinsmen share a deceased man's property, and his wife becomes the responsibility of her kin. A nephew (the son of a sister) would be the expected heir to the business, while the widow would be sent back to her family penniless. Such customs were not legally binding in the urban areas and were breaking down, at least among the elite.

CHALLENGING EXPATRIATES

a bit weak in the head. My next son Sabell is too young yet, so I do not know if he will be any good." "I have chosen Mike to take over. He has done his Form ν and is now doing his accounting. He is already helping me in this business, and I hope that he can learn all that is necessary." The businessmen, then, structured their family relations so that they partially satisfied the demands of tradition while following patterns much more like those of Europe and North America. They pursued strategies to insulate their business enterprises from extended kin obligations. They also attempted to meet extended family obligations while concentrating the bulk of their resources on their nuclear families. In chapter six we will consider whether such tendencies toward Western family patterns are neces­ sary for success in business. However, here we can say that small-scale retail traders and marketeers had vastly different and more traditional relations with their kinsmen than these larger businessmen. The substantial businessmen clearly treated their family of origin and their businesses as separate institutions. RELIGION AND LIFE STYLE Religion

Most Africans in Zambia are unchurched. Though the census does not collect information on religious preference, various denominations estimate church membership (per­ haps overgenerously) at only a few hundred thousand mem­ bers. The percentage of educated town dwellers who are church members or at least profess some religious belief, however, is much greater than in the population at large. A survey of an African suburb in Lusaka showed that about four-fifths of the interviewed adults claimed to be Chris­ tians, three-fifths said that they had been baptized, and about one-fourth attended church regularly (Wiley, 1971: 210). The substantial African businessmen were about as

RELIGION AND LIFE STYLE

religious as the average town dweller. Seventy-nine percent claimed to be members of some Christian church. Of these, 33 percent were Roman Catholics, 40 percent belonged to a conventional Protestant denomination, and another 10 percent were members of an independent African church. Seventeen percent of the businessmen belonged to a re­ formist sectarian movement, such as Seventh-Day Adventist and Watchtower. As we have described, missionary groups provided vary­ ing educational opportunities, depending on their policies and resources. Those religious groups with the highest per­ centage of substantial businessmen generally provided the most education for their converts and their converts' chil­ dren. Not only were members of reformist sects less well educated, but the government systematically discriminated against members of those groups that did not acknowledge the supremacy of secular authority. It seems likely that sec­ tarians were overrepresented among the substantial busi­ nessmen, although unreliable membership figures make this uncertain. Yet it was clear that the successful African busi­ nessmen were not coming predominantly from such groups. Although many of the businessmen were nominally Chris­ tian in various forms, their religious beliefs were not central in their lives nor a crucial spur to business activity. Indeed, some of the largest businessmen consciously rejected re­ ligion. The most common response of the nonreligious was that they no longer believed in God because it was of no help to them. A few others had rejected organized religion and had adopted an independent view. This rejection some­ times resulted from their perception of the missionaries as being insincere or from the churches' somewhat ambiguous role in the independence struggle. One account, while not typical, indicated such an attitude: "I no longer believe in God. I used to believe in God and Christ, as I was taught. But the whites don't do what they teach. They teach love, and then they keep us down, don't let us get ahead, and treat us like dirt. Is that what their Christ is all about?

CHALLENGING EXPATRIATES

That is why I do not believe any more, and that is why I do not go to church." Others have reverted consciously to African religion without ill effects on their business. One Westernized and aggressive businessman who had traveled widely said, "I am a pagan myself. I believe in the gods of my mother and father and of the Chewa people." Moreover, a majority of others who claimed membership in a particular church were not active. Our question on religion often evoked a pause, and then the respondent would say that he was a believer but no longer attended church. They cited "not enough time" and implicitly sug­ gested that religion only creates added obligations for a struggling businessman. One businessman reasoned: "Re­ ligion is for the big or richer man, not for the little man. When I become rich, then I will go to church." Commonly their answers indicated disrespect for the church and no embarrassment about not attending church. "My wife goes to church often, and I let her take care of that sort of thing." "I see the door of the church." "I try to go at least for Christmas and New Years." Thus one could say that they generally espoused attitudes of secular rationalism. Yet there were several important exceptions. Some sec­ tarians were deeply committed to their religion. A SeventhDay Adventist recorded in a file his own, his wife's, and his children's moral and religious progress. He did not drink or smoke, and he worked very hard. Even sectarians mentioned, however, that they did not have time to attend church as much as they would like. A few of the businessmen who belonged to conventional denominations were also devout and attended regularly. Many were still influenced by the religious and moral train­ ing they received at a young age. Kawembwe, the contrac­ tor, found his Christianity very helpful in business: "I think that the reason that I put doing a good job ahead of think­ ing of the amount of money that I was going to get was because of my uncle and what he taught me. He is a Chris-

RELIGION AND LIFE STYLE

tian. He taught me to believe there is no medicine, no magic, only hard work. This is what I believe, and I am a Christian also." Another businessman, while not a regular churchgoer, was greatly influenced by a maxim from his early Christian training. His office was very hard to find, although it was in the most prominent building in downtown Lusaka. When he moved in, he had not removed the former ten­ ant's name from the door. When he was asked why, he said, "If you act small, God will make you big. If you act big, God will cut you down." Most businessmen considered their success to be largely the result of their own efforts. This belief in work and achieved success was in part fostered by Europeans, espe­ cially the missionaries. Much like the early capitalists in Europe and North America, Africans who worked hard and succeeded were convinced that this formula was effective. Three-quarters of the respondents attributed business suc­ cess entirely to work and effort, while another 12 percent considered personal effort important along with other fac­ tors. Only 13 percent believed the main determinants of success lay in forces outside the businessman's control, such as luck, connections, or supernatural forces. Some did have nagging thoughts about the existence of certain super­ natural phenomena, but they all conducted their businesses on the assumption that effort and effort alone would en­ sure success. Work and Success

Many African businessmen worked long hours. Threefifths put in more than a forty-hour week. A minority, how­ ever, did not work very hard, some drank to excess, and some engaged in business only as a sideline. Only a few were interested in abstract standards of success and per­ formance such as craftsmanship and high-quality products and services. Indeed, those who brought up such topics did so mainly to indicate that adhering to craftsmanlike or

CHALLENGING EXPATRIATES

ethical methods put them at a disadvantage in competition with Asian businessmen. Few businessmen sought achievement for its own sake. Instead they were interested in the status and material pos­ sessions it eventually could bring: spacious elegant homes on large lots, expensive parties, tours to Europe or around the world, large American or European cars. It was pos­ sible for a businessman to achieve such trappings of wealth and position quickly in the fluid postindependence social structure. Some businessmen earned more than fifty times what they had when last employed. Despite the claims on their resources from relatives and others, they had more than enough to live comfortably and often luxuriously. Our assessments of living standards are somewhat arbitrary since we did not have access to the household accounts of the businessmen. Instead, we observed their houses and cars and inquired about other features of their lives. Larger businessmen had well-known residences, and many of the interviews were conducted in the businessmen's homes. Comparable assessments for European and Asian business­ men are not presented since all but a handful lived very well. Driving a large car gave its owner status, and many businessmen were quite car conscious. Among the substan­ tial businessmen were the owners of two Cadillacs, two Chevrolets, two Chryslers, two Jaguars, several Mercedes Benzes, Peugeots, Mazdas, Cortinas, ,and Datsuns. These cars were recognized by many people living or working near their places of business. Zambians also displayed their new wealth and status with expensive housing. Those who could afford it often bought a European farm or bought or built a house in a so-called low-density area where the Europeans lived. Some houses were quite luxurious, featuring swimming pools, sunken living rooms, large dining rooms, and large yards. The government had provided similar facilities for its higher officials, but as one businessman was quick to point out, "I

RELIGION AND LIFE STYLE

have my house, with its swimming pool, and my car. For instance, the permanent secretary lives in a house almost as good as mine. He gets a very nice car to use. But it is not his . . . what if he gets a sack . . . out he goes, no car, no house [laughter]." Some businessmen, however, lived in quite comfortable but smaller houses in the African suburbs that provided some social amenities. Often they bought the house them­ selves, but sometimes they rented from the Lusaka City Council. Others lived in houses of their own located close to their businesses. Even if they became prosperous, they might not move because of the inconvenience of living far from their business and because of their established posi­ tion as a "big man" within their neighborhood. About one-sixth of the businessmen lived in a luxurious fashion with a large house in a low-density area or on a farm, at least one expensive automobile, and other spend­ ing habits patterned on the African political elite and the Europeans. Another two-fifths lived comfortably with a similar though less grand house, a good automobile (for instance, a Peugeot instead of a Mercedes), and good cloth­ ing. An additional quarter lived moderately with a house in a medium-density area, an automobile such as an Austin Mini in good repair, and one other conspicuous possession such as a large hi-fi set. About an eighth of the substantial businessmen lived in a quite modest fashion with a good house in a high-density area and an operable car. The re­ maining few lived even more modestly in a simple house in a high-density area and often had no car or a very old one. This level was comparable to that of an employed worker in Lusaka. Some of the wealthier African businessmen also went on "leaves." They traveled widely throughout Europe, stayed at luxury hotels, and returned with new clothing, souve­ nirs, and toys for their children, as well as an occasional automobile. Two businessmen went around the world, and others added the United States to their itineraries. A few

CHALLENGING EXPATRIATES

successful businessmen have even flown their newly pur­ chased automobiles into Zambia. Such a consumption pat­ tern is not yet widespread, but it does set a standard of emulation for others. Because of the demands of their businesses and their humble backgrounds, most of the substantial African busi­ nessmen did not frequent social clubs in Lusaka as often as men in politics, the professions, and the civil service. Many of these clubs had only recently and grudgingly ad­ mitted African members, most of whom were well known to the European community, such as lawyers and corporate directors. If they were at all social, the more prominent and widely known businessmen gave and attended ostentatious parties. A dinner could consist of several types of entrees, various wines, and great quantities of other food. With a measure of success, many of the successful busi­ nessmen, and indeed African civil servants and managers as well, had begun to adopt European-style family patterns and were emulating the materialistic and explicitly nonAfrican life styles of the European elite. The postindependence position of the elite raises questions about the impact of these imported forms of culture in generating compulsive materialism among the wealthy and resentment among the poor. That a few businessmen lived in Westernstyle luxury amid general poverty while the rest of the papulation attempted to emulate the non-African life style of such a group could not bode well for Zambia's emerging postcolonial social structure. It remains to be examined whether the inequalities attendant on large-scale private enterprise can be justified within the Zambian context by the contributions these businessmen were making to overall economic development. CONDUCTING BUSINESS

By examining the operations of the substantial business­ men and comparing them with those of the market traders

CONDUCTING BUSINESS

and the shopkeepers, one can readily see the great advances African businessmen had made in the few years since inde­ pendence. Yet there remained a great gap between the sophistication and competence of even the largest African businessmen and many of the European and Asian expa­ triates. To understand the potential and limitations of these African businessmen, we now examine their business operations. Organization and Technology

Almost 60 percent of the substantial businessmen had in­ corporated their enterprises. Fully 90 percent of the busi­ nesses studied were managed by the principal owners, as were most of the European and Asian businesses. The only exceptions to the general pattern of self-management were those businesses that hired outsiders to fulfill certain techni­ cal functions, such as bookkeeping or quantity surveying, but even in these cases the owners retained final control. Most businesses were organized with the businessman as top manager, occasional foremen or supervisors, and work­ ers who supplied the labor. This lack of complexity reflect­ ed the relatively small size of the businesses and their simple level of technology and management techniques. As assem­ bly or other processes became more technologically com­ plex, however, the degree of organization increased. Some furniture makers had each man do all the operations neces­ sary to assemble a chair by moving from machine to ma­ chine. Others who were more complexly organized broke each job down into its component operations and assigned specific tasks involved in the assembly of each chair to a specific man. Several furniture makers used a division of la­ bor that included one man who cut the pieces needed for the chair back, another who planed and fit them, another who assembled them, another who constructed the whole chair from the precut component parts, another who sand­ ed the chair, and finally the man who painted it. Such a specialized organization of production used a simple assem-

CHALLENGING EXPATRIATES

bly-line process with ten to fifteen employees. These shops employed more complicated machinery and more coordi­ nated management techniques than the simple furniture shops employing each man as a carpenter. One factory, which produced furniture sold both to the government and through private dealers, represented one of the most sophisticated businesses, both technologically and organizationally, owned by an African. In this enter­ prise, the entrepreneur relied on his brother to oversee day-to-day operations, though every week he spent at least twenty hours at the factory himself. He had purchased the factory, in part with a bank loan, from the European for­ mer owners, but had built it up from a small shop employ­ ing about seventy-five workers to a true factory with about three hundred employees. The main production was done on an assembly line. There were occasional production and scheduling difficulties, which were causing severe problems. The highly educated owner had instituted numerous changes in the organization of production to improve effi­ ciency. Compressed air-driven hand tools were introduced, and each worker's tools were arranged so that he could get at chem more easily. Even though industrial sophistication was increasing, only about one-fifth of the industrial businesses were organ­ ized in a way that might be characterized as a simple assem­ bly line, and most of these were small factories. By contrast, all European and Asian manufacturing firms were so organ­ ized. Many businesses did try to schedule carefully the op­ erations of their workers at particular machines and to standardize a job, breaking it down into a series of simple steps. Of course, some businesses that purveyed specialized services required highly skilled labor but were not amenable to factorylike division of labor. These included contractors, subcontractors, advertising agents, and exterminators. To some extent the relatively low level of technology re­ flected the fact that many African businessmen had diffi­ culty employing the basic technology required for their

CONDUCTING BUSINESS

business. The experiences of two owners of a construction company illustrate this problem. After fifteen years of suc­ cessful construction on simple jobs such as schools and houses, these two men bid for a government contract to build a research station. Part of this job required work within small tolerances which turned out to be beyond their capacity. Eventually they persuaded another contractor to do that portion of the job, but in the process they took a significant loss and went back to simpler contracts. If they had not been able to find someone else to do the difficult and demanding part of their work, they probably would have gone out of business, since a contractor who resigned a government job without completing it was barred from bidding for such contracts in the future. Table 4.4 compares the way in which the substantial Af­ rican and the European and Asian businessmen learned or TABLE 4.4 MANNER OF ACQUIRING TECHNOLOGICAL KNOWLEDGE BY SUBSTANTIAL AFRICAN AND EUROPEAN AND ASIAN BUSINESSMEN

Manner of Acquiring Knowledge In school In employment On their own (e.g. independent study, trial and error, from friends) From hired experts Total Number of cases No information

Substantial African Businessmen 22%

European and Asian Businessmen

32%

15% 32%

34% 12%

15% 38%

100%

100%

76 2

34 O

acquired the technology needed for their respective busi­ nesses. The source of the technological gap is clear: the Eu­ ropean and Asian businessmen more often than their Afri-

CHALLENGING EXPATRIATES

can counterparts hired their technology from experts and less often learned by trial and error. In contrast to Africans, then, European and Asian businesses incorporated technol­ ogy much more systematically. The substantial African businessmen consequently had instituted few technical in­ novations. Furthermore, their lack of adequate technology or the resources and abilities to apply it successfully led to some business failures and near failures. Labor Force

Workers in the substantial African businesses included unskilled workers, skilled mechanics, clerks, accountants, bookkeepers, shop assistants, bar waitresses doubling as prostitutes, expatriate secretaries, and others. They ranged in length of service from a few days to many years and in wages from as low as 6 or 7 ngwee (10 cents) per hour to 800 kwacha per month. The usual wage for workers in the substantial African businesses was about 30 to 40 kwacha per month. Some businesses, such as Zambia's one Africanowned advertising agency, used only a very few highly skilled people, but others, such as large construction com­ panies, used hundreds of mostly unskilled people. About 85 percent of African businesses had fewer than fifty workers; about 25 percent had five or fewer. Some businesses with a small work force were inactive building contractors. African workers varied widely in skill and experience. Many were so poorly trained and so unaccustomed to indus­ trial or commercial discipline that they were virtually un­ employable in many jobs, while far fewer were quite highly trained and skilled, with long years of experience and proven competence. Many workers were unemployed and went from business to business in search of work. Job seek­ ers lined up daily outside most enterprises in the hope of getting employment. Generally, the fact that there were great numbers of workers with few skills created difficult problems in the selection and management of employees. Two-thirds of the substantial businessmen and three-

CONDUCTING BUSINESS

quarters of the European and Asian businessmen simply re­ cruited workers as needed from those who seemed qualified and came seeking work. Some businessmen found tliat they were constantly flooded with unqualified job seekers and asked their own workers to recommend people. In this way an employer had a more reliable pool of candidates, and since workers recommended friends, he could communicate with his workers in only one language. Such recruits were also subject to informal social controls by those who recom­ mended them. Though this manner of recruitment com­ monly led to charges of "tribalism," it was useful for busi­ ness efficiency. The businessmen used the government labor exchange, which was supposed to screen and refer qualified applicants, infrequently. One man stated the reasons: "No, I don't use the labor exchange. They are not much good. They do not screen the men they send out very well. They do not look at references or past work. If you ask for a welder, they will send you a painter. If you don't hire him, they will ask why. Then they will send you a carpenter. It is really much easier to ask around." The few businessmen who advertised vacan­ cies in the newspaper found themselves inundated with ap­ plicants, most of them unqualified. No matter what method was used for initial recruitment, almost all businessmen tried out their newly hired workers before offering them regular employment because of the variable quality of the African labor force. Often this trial employment was carried out on a day-to-day basis. If the employer judged that the worker could not or did not do his job, the worker would be dismissed readily. Particular pains were taken to assess his skill during this trial period. Some businessmen even used a formal test to determine if a man's references and supposed work history were accurate, since fictitious references abounded in Zambia. Once businessmen found competent workers, they would frequently go to considerable lengths to retain them. Such workers received wages far above average. As a result wages

CHALLENGING EXPATRIATES

often varied by as much as a factor of fifteen among the workers in a small shop, store, or factory. A businessman al­ so helped his valued employees find housing, receive medi­ cal care, and generally get ahead in life. Yet, as table 4.5 shows, nearly all substantial African and European and Asian businessmen reported problems arising from absen­ teeism and general lack of motivation. Although we did not have objective measures of these problems, informal observations indicated that they were real. As we noted, most businesses were operated by one man who, though busy with the other tasks of managing a busi­ ness, was head supervisor as well. He could not always check on his employees, and therefore about 40 pecent of the African businessmen had developed some type of control system to ensure that their employees worked when not un­ der scrutiny. Control systems ranged from such simple ac­ tivities as occasionally taking inventory and comparing it with the cash taken in, to setting formal production stand­ ards and quotas. While the imposition of such controls was new for African businessmen, they were standard procedure for European and Asian enterprises, which had been estab­ lished for a much longer time. In only one African business were workers paid by the piece rather than the hour. The great majority of businessmen had strong views about the low quality of the work force, though they were not as uncontrollably disgusted as European and Asian businessmen. One commented fatalistically. "They only work when they want to. If they don't want to work, they won't." As table 4.5 shows, about one-eighth of the African and a full quarter of the European and Asian businessmen re­ ported a theft that had caused a significant loss. Some thefts were carried out through elaborate plots, including compli­ cated rerouting and repacking of boxes, midnight raids on the business, and embezzlement of money or material over a long period. Yet most theft was of a petty type. The busi­ nessmen were quick to make distinctions when dealing with

CONDUCTING BUSINESS TABLE 4.5 LABOR PROBLEMS REPORTED BY SUBSTANTIAL AFRICAN AND EUROPEAN AND ASIAN BUSINESSMEN

Labor Problem Absenteeism Low productivity, laziness Minor theft (not threatening to business existence) Major theft Number of cases No answer

Substantial African Businesses

European and Asian Businesses

68%

90%

69%

96%

79% 12%

84%

75 3

31

26%

3

Note: Some businessmen reported more than one problem.

thefts, as the following account shows: "I try to find out why he stole it. If it is clear that he only wanted the money, and it could ruin my business, then I will immediately sack him and send him packing. If it seems that he needs the money for his family to eat, or school fees, or something like that, then I tell him he cannot do it again, and take the amount he stole out of his wages." Few businessmen called in the police, even in cases of major theft, and few of the cases that went to court resulted in convictions. In addition to actual theft and low produc­ tivity, the workers' personal use of business time and re­ sources created further management difficulties. For exam­ ple, men at furniture factories sometimes made furniture for themselves. Most businessmen were quite willing to let their workers build such things on their own time from scraps left over from normal production if the business had the facilities for it. However, if they found that workers were doing personal chores during regular hours, or using needed materials, then most docked the cost of the items from wages. Workers who persisted in these activities were almost invariably sacked.

CHALLENGING EXPATRIATES

Workers in Zambia received their wages once a month, but many businessmen gave their employees cash advances for emergencies and for getting through the month. There were occasional difficulties in meeting payrolls in Zambia, and some businessmen at times pleaded with their workers to wait until they had more funds and could pay them. Such pleas were often successful since the workers had little choice. Supplies

It was frequently difficult for businessmen to find particu­ lar supplies they needed even if they had sufficient cash on hand—a condition that was far from certain. Difficulties had been compounded by the reorganization of the supply­ ing companies from private expatriate companies to divi­ sions of semigovernmental monopolies. According to virtu­ ally all businessmen, these had proved more difficult to deal with than their predecessors. A greater percentage of sub­ stantial African than European and Asian businessmen had to rely on these semigovernment companies instead of on direct imports, mainly because of differences in size and credit standing between the African and other businesses. Supply problems affected virtually all businesses, large and small, African, European, and Asian. Seventy-six per­ cent of European and Asian businessmen viewed such prob­ lems as chronic, as did 53 percent of the African business­ men. Seven percent of the latter group saw the shortages as threatening the existence of their businesses. The Euro­ peans and Asians were more likely to report chronic prob­ lems getting needed supplies because they compared diffi­ culties with the relative ease of access to southern sources before the trade boycott with Rhodesia. African business­ men lacked such a standard of comparison since generally they had been in business for a shorter period. Still, they suffered the same problems and had fewer remedies than the larger and more experienced Europeans and Asians. While the study was in progress, there were shortages in

CONDUCTING BUSINESS

the following items from time to time: various grades of lumber, wood veneer, steel of all sorts, cooking oil, maize meal, candles, cement, nails, screws, automotive parts, vari­ ous types of tires, wheat flour, and bread. Businessmen im­ porting goods from overseas often faced long delays before actually receiving their shipments. One businessman re­ lated: "As we are talking, I am preparing to go to Dar es Salaam tomorrow where I have 52,000 kwacha worth of supplies tied up. I have been there several times before. One time I had to spend over one week before I could locate them and get them on their way." According to fifty busi­ nessmen reinterviewed, these problems had somewhat abated by late 1972. Businessmen used different strategies for dealing with supply problems. Though no method was totally successful, stockpiling was best. However, stockpiling required both a large volume of assured business and a large amount of cash or credit, and thus was possible only for the largest and most financially stable. The European and Asian business­ men had more access to cash and credit, but both were cer­ tainly at a premium for everyone in Zambia. Some African businessmen were able to accumulate stock­ piles, but were forced to adopt less effective measures, such as going in person to the usual suppliers or to those with the capacity to stockpile. One stated: "When I can't get what I need down at Steel Supplies, I go and see my friend John [a European] at Expat Construction Company. He is usually very sympathetic and will help me get what I need." Businessmen who could not obtain supplies crucial to pro­ duction (and could not improvise a substitute) were forced to lay off workers and wait until the supplies were again available. This problem of unreliable supply added con­ siderable uncertainty to conducting business, and wreaked hardships on smaller, less experienced businessmen, partic­ ularly when it was coupled with the common requirement to pay cash for supplies (sometimes even in advance).

CHALLENGING EXPATRIATES

Customers Although some companies relied on a particular govern­ ment agency as their main customer, most sold to no single client. About one-fifth sold their products mostly to the government, but there were few among the African busi­ nessmen who sold exclusively to the government. However, the private market for African products and services was still quite limited: little more than one-third of the sub­ stantial businessmen sold over half their output to private persons, and only about one-tenth sold mostly to private businesses. In a pragmatic way, they did not care to whom they sold but rather how much and at what price. They were motivated exclusively by profit, like this transport op­ erator: "I will send one of my trucks loaded with anything, down any road, if at the end I will make a few ngwee profit [said with emphasis]." This strong profit orientation and the marketing technique it implies were also common for Euro­ pean and Asian businessmen. In their search for gain, busi­ nessmen closely followed the market and changed their products to suit customers' demand. Businessmen used a wide range of methods for soliciting orders for their various businesses. Some retailers simply sat and waited, though others advertised at the cinema or in the newspapers. Purveyors of specialized services let their existence be known, solicited business, and waited for the telephone to ring. Taxi operators only expected their driv­ ers to repair to the taxi stand for new riders. In a more active way, furniture makers and other simple manufactur­ ers negotiated or tendered bids for contracts, supplied trad­ ers, or sold through agents. Contractors aggressively solicited new contracts through acquaintances as well as through ne­ gotiation and formal bidding. Because of their size and experience, European and Asian businessmen more often sold their output through agents or traders and advertised more extensively than their African counterparts. Substantial African businessmen, however, more often sought business by bidding for contracts. Be-

CONDUCTING BUSINESS

cause bidding for a contract required detailed cost estimates involving much work and some expense, it was usually more profitable to negotiate for jobs. However, for experienced businessmen with few contacts, bidding was the only possi­ ble way. Because of the economic boom in Zambia in the early 1970s, this process was relatively easy and ultimately lucrative for many. Competition One man had opened what proved to be a very successful beer hall, daily selling several thousand gallons of chibuku, the traditional beer. In a short time, however, his establish­ ment was virtually surrounded by seven new beer halls lo­ cated closer to his old customers even though the market had not increased. The taxi operators who had once found it easy to make large amounts of money complained that there were too many taxis in Lusaka. Such increased com­ petition was fast becoming a pervasive fact of business life in Lusaka. One of the most successful retailers described how increasing competition had affected him: "When I started in business, I could sell them anything at almost any price. Why, I had a store in the bush, and I could make 60 to 70 percent profit on most everything sold. It is not like that anymore. If someone comes here and something is priced maybe one, maybe two ngwee more than it is across the street or next door, then that is where he goes. Not only do they know prices, they follow them. They have become very price conscious. Of course, I sell much more today than I used to." There were three ways to meet competition. One could seek to operate more efficiently through better organization and thus make a larger margin of profit even on a lower price. Such changes included the use of simple controls and other management techniques or the adoption of a new form of organization. Grocery stores became self-service, though small in comparison to American or European stores. A workshop became a factory with an assembly line.

CHALLENGING EXPATRIATES

The second way was to change or modify output in order to get into a more lucrative market. A beer hall that was no longer profitable was converted to a restaurant, bar, and brothel. A brothel suffering from competition was mort­ gaged to start a factory. Those who sold only for cash be­ gan offering credit to some customers. These methods were being used increasingly by African businessmen to meet competition in Zambia. A third means of meeting competition was to engage in certain individual or collective practices to maintain or in­ crease one's market. These included such simple schemes as special or exclusive arrangements between businesses and customers and more complex mechanisms such as legal or illegal cartels. For instance, the African builders attempted to institute a system where only one builder would bid for each contract, thus allowing them to set a high price. This was successful for a number of months until some contrac­ tors decided to go it alone. The government did not dis­ courage such anticompetitive practices. In fact, they en­ couraged the subcontractors for painting, for flooring, and for other services to enter into similar agreements. Many businesses used special arrangements and connections to get and keep business. The substantial African businessmen used them to a greater extent than other African business­ men. One contractor was quite blunt: "At present we have four directors. We used to have five when we first became a company, but one is now assistant minister of state, the Honorable Nsenga. He can no longer be in our company, because of the new leadership code of His Excellency. [High government officials and party leaders were no longer sup­ posed to have any outside business interests.] It still helps a great deal to know him. One day we went to Bwanji [a very high government official] to discuss the plight of our com­ pany with him." Though at the time of our first interview the firm was in dire financial straits because of overexpansion, it had paid off virtually all its debts by the second time we saw the man-

CONDUCTING BUSINESS

ager. He was greatly aided by loans and contracts from vari­ ous government sources. On our third visit, however, the company was bankrupt. Government contracts usually were not granted repeatedly at inflated prices. Still, special rela­ tionships were quite helpful and often were mutually ad­ vantageous. The customer might be willing to pay more to a proven businessman, rather than risk having no delivery of what he wanted. Though all three means of meeting competition had a positive effect for the individual firms, the first two led to better or cheaper services to consumers. It was hard to judge whether Zambian businessmen responded to competition primarily by the first two methods or by the third (political intervention or cartel creation). However, it was clear that as competition increased, the level of services began to im­ prove in many African-owned enterprises. Whether this was a permanent trend might in part determine the contribu­ tion these businesses will make to Zambia's development. We will return to this question later. Credit and Finance

Only 9 percent of the African businessmen granted credit without reservation. Thirty-five percent extended credit on­ ly to the government or other large organizations, but fully 21 percent gave no credit at all and 19 percent only in spe­ cial cases. Another 16 percent claimed they were in the proc­ ess of canceling all their credit accounts. Because of the types of business they ran, the substantial businessmen often had no choice but to give credit to at­ tract or keep business. The government and many associ­ ated agencies demanded that their purchase orders be hon­ ored or that they receive other credit. According to some businessmen, these requests could not be refused even though such debts were becoming increasingly difficult to collect, at least from certain agencies. Other established pri­ vate businesses expected credit, and credit was often ex­ tended to more regular customers as an incentive to do busi-

CHALLENGING EXPATRIATES

ness. Such a policy did have a definite risk, however, as one of the larger Lusaka retailers explained: "I used to give credit, but I do not give it anymore. I am large enough so I don't have to. When one is starting out, it helps to give credit to attract customers. But it is hard to be careful enough. If you give it to the wrong man you not only lose your money, but you lose a customer. No one comes into the store when they owe money." Giving credit had many pitfalls, even for those businesses that were growing and appeared stable. Since they gave cred­ it, they were in effect financing their customers. Yet, be­ cause many substantial African businesses were undercapi­ talized, they were thereby hindering their own expansion. At the time of our interviews, only one-third of the sub­ stantial businessmen had never had a bad debt, while slight­ ly more than one-third had had less than 1,000 kwacha of such debts. The rest had had debts they considered uncol­ lectible in excess of 1,000 kwacha, including four who were owed more than 10,000 kwacha. These figures were approx­ imate and reflected the businessmen's optimism about their chances of collecting. One large bad debt could contribute heavily to future collapse. Few businessmen managed to re­ coup their losses through the courts. The caution substan­ tial businessmen showed in granting credit was often re­ lated to their past debt problems. Several methods were used to finance the continuing op­ erations of their businesses. Thirty-seven percent of the busi­ nessmen were mostly self-financing. External financing, how­ ever, was extensive: 78 percent had acquired loans from banks, 64 percent had used the building societies, and 27 percent were helped by various government sources. Real assets were particularly useful for obtaining overdrafts and other financing facilities. Banks and other credit sources usually required good collateral, such as a house, farm, fac­ tory, hotel, or savings book to secure a loan. Though substantial businessmen used such financing to a much greater extent than did smaller African businessmen, they used it much less than European and Asian business-

CONDUCTING BUSINESS

men. Most substantial African businessmen were near the end of the queue for bank and other loans—behind the gov­ ernment, state companies, and European and Asian Zambians who used the great bulk of the limited liquidity in Zambia. Many substantial businessmen had been refused loans by banks, building societies, and other credit sources. In some cases those refused had become embittered. As one com­ plained, "The banks are too damn British, they won't even look at an African." Indirectly corroborating this assertion, one white banker who was approached for help in identify­ ing respondents, said, "African businessmen? Did you say African businessmen? If you find one, bring him in; I would like to meet one." The government sources of financing (mainly Indeco Finance during the period of this study) re­ quired more complicated loan applications and more col­ lateral than banks, according to several respondents who had received loans from both sources. With lack of credit in times of need, many businessmen occasionally wrote a check they knew would bounce on an unsuspecting supplier or held off on wage payments to workers. A business offering credit often itself needed credit for smooth operations, but the suppliers to African business­ men did not readily extend it. Some businessmen were caught in a bind, as they had to pay cash for wages, sup­ plies, and other costs before revenues could be realized. Since they typically extended more credit than they re­ ceived, they were frequently short of cash. Many therefore faced occasional or even chronic cash-flow problems. At the end of the month many African businessmen found them­ selves forced to make an appointment with their bank man­ ager to obtain short-term loans to meet their payrolls. While 61 percent of the substantial African businessmen reported cash-flow problems, only 15 percent of the European and Asian businessmen admitted to such difficulties. Because shortages and other delivery problems put a premium on liquidity, ready cash was very important in Zambia. The management of cash and credit was clearly crucial

CHALLENGING EXPATRIATES

for an African businessman. Of the seventy-five substantial African businessmen in Zambia who reported on their meth­ od of financial management, sixty-nine kept complete sets of books, and sixty-four had them audited, though such books were not always up to date. Two-thirds of the busi­ nessmen used a systematic though usually rudimentary method of cost accounting. Many businessmen employed an accountant and from time to time an auditor, but account­ ants, like many other skilled workers, were in short supply. Other Problems

Though reasonably competent in handling the usual day-to-day operations, businessmen were frequently the vic­ tims of dishonest practices. These came from many sources —customers, creditors, or suppliers. As with other unfore­ seen occurrences, dishonest practices could be disastrous. One man was the third person to purchase a particular bar at the same time, and legal ownership had to be established in court. An Asian customer of a building contractor tried to fire him from a contract after the foundation had been laid (the most difficult part of such construction). The busi­ nessman later won a court settlement. A manufacturer found a particular trader unwilling to pay for merchandise the trader had already sold. Such problems can be resolved in a court of law, but substantial African businessmen were often at a disadvantage. Good counsel dispensed by account­ ing firms acting as company secretaries and treasurers could help in such cases. However, during our fieldwork, the pro­ prietor of just such a firm fled the country when he was accused in the press of overcharging for unneeded and fraudulent services. Lack of knowledge and experience made African businessmen attractive targets for swindlers. CONCLUSION

African urban businessmen, from small market traders to industrialists and contractors, had made great gains since

CONCLUSION

independence. Indeed, the largest were beginning to chal­ lenge to a very limited degree the exclusive dominance of European and Asian entrepreneurs. Yet questions as to the overall effect of these large enterprises on the Zambian economy and society remain to be answered. The following points, however, are clear: 1. The early backgrounds and careers of substantial African businessmen were heavily influenced by or conducted within the confines of European institu­ tions. 2. Their enterprises had· grown rapidly during Zam­ bia's economic boom, and some had become the rich­ est Africans in Zambia. 3. They had in part adopted Western-style family practices. 4. They emulated luxurious expatriate consumption patterns and life styles. 5. Though far beyond those of other Africans, their enterprises were not nearly as complex organization­ ally or as sophisticated technologically as many Euro­ pean and Asian enterprises. 6. Businessmen in Zambia faced many irritating prob­ lems which hampered efficiency, including supply shortages, cash-flow difficulties, and inexperienced labor. Plainly, Africans were eager to conduct business, though few had developed the skills, acquired the experience, and accumulated the capital necessary for developing enterprises on a scale large enough to contribute to major economic expansion. The prospects and limits of African enterprise in Zambia will be considered in chapters six and eight.

CHAPTER V

Rural Business Enterprise

ALTHOUGH the bulk of monetized economic activity was cen­

tered in urban areas, in the early 1970s seven of ten Zambians still lived in rural areas. The rapid expansion of Afri­ can business activity taking place in urban areas was being accompanied by a similar, though slower, growth through­ out Zambia's countryside and rural centers—the provincial and district capitals off the rail line. Many rural dwellers supported themselves by cultivating agricultural products primarily for their own consumption, but some sold an in­ creasing share of their produce. In an attempt to promote rural development the government constructed new schools, health centers, agricultural stations, and other facilities off the rail line. To man and service these installations, a new group of African and expatriate workers moved to the rural areas, at least temporarily. These workers, their families, related service workers, and cash-crop farmers made up an expanding rural market for consumer goods. A measure of development had taken place in some rural centers, and these had taken on an urban character, but most areas re­ mained sparsely settled and based on subsistence agricul­ ture. This emerging pattern was given official sanction in the Second National Development Plan, which called for zones of intensive rural development. With the expansion of the rural market, caused largely by government policy, Africans assumed an increasing role in the distribution of goods in rural areas. The economic re­ forms banned most lines of commerce to non-Zambians and had a direct impact on the Zambianization of trade. Few non-Africans continued to trade in rural centers and out­ posts. The Asians, who had previously constituted the ma-

STIMULI TO GROWTH

jority of expatriate traders, retreated to the provincial capi­ tals. However, the Asians who remained were Zambian citizens and operated some of the largest rural trading en­ terprises. To assess the new role Africans were playing in rural busi­ ness activity, we conducted surveys in the Eastern, Northern, and Luapula provinces and in Monze, a trade center on the rail line south of Lusaka and over one hundred miles from any major city.1 We were interested in how rural businesses compared to the urban ones already described. To what ex­ tent were they adding a self-generating impetus for eco­ nomic change? To what extent were they merely an artifi­ cial development maintained by government subsidies? In short, what did African-owned and operated rural busi­ nesses contribute to economic development? Once again, to answer these questions, we examined the actual activities of rural businessmen within their rural socioeconomic con­ text. STIMULI TO GROWTH

Rural African businesses have grown from about 4,000 in 1946 to over 10,000 in 1970.2 Though this represents an average annual growth rate of about 2 percent, most of the increase occurred during the few years betweeen independ­ ence and the time of our study. For instance, the number of trade licenses issued by the Chipata Rural Council in­ creased from about 350 in 1966 to nearly 800 in 1970. The average turnover in 1946 for an African businessman was about 70 pounds (140 kwacha). Although in 1971 many village stores were still operating at about the same scale, some rural African businesses reported turnovers of several 1 We also carried out a few interviews in Mazabuka, a town a few miles from Monze which had been designated an urban area for pur­ poses of the economic reforms, that is noncitizens were allowed to con­ tinue in commerce for a year or two more than in other areas. 2 See appendix two for this and other estimates.

RURAL BUSINESS

thousand kwacha. Most of the large African businesses were a recent creation. All in all, the numbers and size of African businesses had grown dramatically in the rural areas, and they were still growing. In part this growth simply reflected increases in popula­ tion, especially in rural centers where African rural busi­ ness had been expanding. While the total Zambian popula­ tion increased about 17 percent between 1963 and 1969, in the rural centers where we interviewed, population in­ creases ranged from 33 up to 112 percent (Zambia Central Statistical Office, ig7oa:A5-A6). A second and related cause of growth was the rapid in­ crease in African public-sector employment brought on by the new government installations in the three rural prov­ inces included in our study. Public employment grew 40 percent in Eastern Province, 16 percent in Northern Prov­ ince, and 24 percent in Luapula Province. As the govern­ ment spent more funds for rural installations, roads, and other improvements, public employment continued to in­ crease rapidly. Many employees earned high salaries com­ pared to other rural dwellers. The growing market resulting from increased employ­ ment and population might have been served by existing businesses. However, the implementation of the economic reforms in the rural areas meant that African enterprise achieved the dominant role. These reforms (described in chapter one) had their greatest impact in the rural areas, where from 1968 to 1970 an increasing range of commercial activities was barred to non-Zambians. In some rural towns nearly half the businesses were transferred to Africans as a a direct result of these policies. At the same time, the op­ portunities for African business increased, because Indeco Trading sharply decreased its rural trading activity shortly after it had bought many expatriate stores. Because of in­ efficiency, duplication of outlets, declining profits, and po­ litical pressure, 154 of 273 Indeco stores and shops in Zam­ bia were closed between 1968 and 1971, mostly in the rural

RURAL ENTERPRISE

towns and trade centers. Often these were among the largest rural businesses. Africans in rural areas quickly moved into this gap and have profited from new opportunities gener­ ated by Zambianization policies and the failures of state enterprises. RURAL ENTERPRISE

Our rural study included sixty-nine interviews with businessmen located along or near the Great East Road which extends from Lusaka to Malawi. Most of these inter­ views were conducted in the Eastern Province, but a few were carried out in the eastern part of the Central Province. This region of Zambia, which we call "East" for short, is de­ voted primarily to subsistence agriculture, but there were a few expatriate and some African cash-crop farmers who grew maize and groundnuts. Since independence, this area had been favored with new government projects and the at­ tendant increase in employment. We also completed forty-nine interviews in Northern and Luapula provinces and in Serenje district of Central Prov­ ince along the Great North Road. Much of Northern Zam­ bia has poor soil and for decades has supported only the poorest agriculture. For this reason a large number of mi­ grants have journeyed from the North and the heavily pop­ ulated Luapula Valley to the Copperbelt in search of em­ ployment in the mines. Before and during our study these areas of Northern Zambia were receiving a large share of government projects. For example, the Tanzam railroad, built with Chinese help, encouraged additional economic development. The sixteen businessmen interviewed in the South were engaged in business in Monze and Mazabuka in Southern Province. Both towns served as trading and transportation centers on the rail line for the richest agricultural district in Zambia. A few large European farmers grew maize com­ mercially, as did an increasing number of Africans, some on

RURAL BUSINESS

farms abandoned by Europeans who had left Zambia. Monze had been completely subjected to the economic reforms; a part of Mazabuka was exempt from its full effects, since it was officially designated an urban center. Perhaps because they lie in the heart of an opposition-party area, Monze and Mazabuka benefited from fewer government projects than the North and the East. Ninety-two percent of our respondents were men. The businesswomen were divorced or widowed. In 121 of the to­ tal 134 cases, we interviewed the owner of the business him­ self. If he was not available we questioned the managers, almost all of whom were relatives. Half of the businesses were located in provincial or district capitals, another 23 percent in large trade centers and large villages, and the re­ maining evenly divided among small trade centers, villages, and isolated roadside stands, the last all in the East. Since roadside stands were unaffected by the economic reforms and were insignificant for rural development, they were in­ cluded primarily to provide a comparison with large busi­ nesses. African businesses in rural Zambia were mostly retail stores. The businesses studied included twenty-two village shops and small groceries; forty-nine grocery and general trade outlets; twenty-four grocery and bottle stores and bars; twenty-three grocery and general trade stores much larger than average; and sixteen miscellaneous businesses, includ­ ing hotels, restaurants, bakeries, a photography studio, transport businesses, and small contractors. Virtually no in­ dustrial production in the rural areas was in African hands, and there was very little of any kind. The typical grocery and general trade store offered all kinds of food for sale, many lines of dry goods, fabrics, sandals, all varieties of clothing, blankets, kerosene lamps, pots, pans, buckets, cos­ metics, paper pads, pencils, pens, and many other diverse items from insect repellents to pacifiers. Some also sold tools and cycle parts. Some of the larger grocery and general trade stores were self-service supermarkets. Some trade cen-

RURAL ENTERPRISE

ters had a surprisingly large selection of goods, including luxury items such as dress sandals, high-heeled shoes, and elegant dresses manufactured on the Copperbelt. Indeed, in most district capitals and in every provincial capital, the range of consumer goods appoximated that in the secondclass trading area in Lusaka. Bars in the provincial and district capitals were large establishments served by many waitresses and capable of accommodating over a hundred customers, mostly male along with a few prostitutes. The sixteen nonretail businesses we studied were all located in provincial capitals and had been recently opened, often with the help of a government loan. They invariably were the first African businesses offering their particular service locally. Sixty traders had more than one business, and twenty had three or more. The multiple businesses tended to be clus­ tered together, although in some cases businessmen owned both a village store and a larger store in a provincial capi­ tal or large trade center. Others owned a large, recently es­ tablished business in the formerly Asian trading area and a smaller, older enterprise near the market. Only ten business­ men had an establishment in Lusaka or on the Copperbelt as well as the one in the provinces. Of the seventy-four busi­ nessmen with one business, only eleven operated a large business. The largest businessmen we studied, all but one from the North, had several stores and enterprises scattered through villages, trade centers, and administrative capitals, like the chain stores formerly owned by the Asians and Eu­ ropeans. The names of business enterprises, painted in large letters on the store front, were usually the name of the owner, the area he was born in, or the area in which the business was located. There were, however, some unusual names which provided insight into the owner's background and frame of mind. One large bar in the North was called the "10 Kwacha" bar, because the owner had started some years ago as a market trader with ten kwacha. One large, self-service

RURAL BUSINESS

store was named after the owner's grandfather, an impor­ tant senior chief of the local tribe. A grocery store was called "Mutazunguka Store" ("Don't be surprised"), mean­ ing "Don't be surprised if I succeed," according to the own­ er. In Kazembe, an establishment was called "Nsungamukoshi" grocery ("Save your neck"). According to the owner, many years ago his store had burned down, and he had lost everything. In despair, he wanted to hang himself, but a friend told him "to save his neck." Later he managed to re­ vive his business. A business in the East was called "Nsenjelekani" ("Don't be jealous"). The owner said he had first opened a store on the Ngoni reserve in the paramount chief's village. When he prospered, the chief became jealous and created difficulties for him. Later he transferred his business to the Great East Road and renamed it. In a few instances, political slogans such as "One Zambia, One Na­ tion" were written on stores taken over from Asians. For most respondents, business was a full-time occupa­ tion. Only a few combined business with gainful employ­ ment, and these were mostly traders who were not yet well established. Moreover, less than a sixth combined business with commercial farming or animal husbandry; not sur­ prisingly trader-farmers were much more common in the South and the East where the soil is good and animal hus­ bandry is not unusual. Of those who farmed commercially, about a third considered farming more important than their business, and another third saw it as equally impor­ tant. With a few exceptions, however, the largest rural businessmen did not farm commercially on a large scale. Some Life Histories

Since the fine-grained texture of a social milieu is inevi­ tably glossed over and often misunderstood in the sociolo­ gist's generalizations and statistical tabulations, we sketch in this section the life histories of some rural businessmen to provide context and meaning to our subsequent analysis of the place of trade in rural Zambia. Though not typical

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of rural traders who operated small village stores, the life histories we selected indicate how prominent rural business­ men achieved success. CHUMA

A successful Northern Province businessman in his midfifties, Chuma had built an itinerant trade into a flourish­ ing retail construction and transportation business. He was born in a small village and had received only standard three schooling. His father was employed as a mailman in the province. As a young man he worked two years in an Asian store on the Copperbelt. In 1945 he decided to trade on his own. Until 1955 he hawked second-hand goods to villagers all over the province on a bicycle, as many other future Northern Province businessmen were also doing at the time. Meanwhile, he built himself a house for which he burned his own bricks. In the process he discovered that he made sturdier bricks than most people did. With three sons and eight employees, he started making bricks for builders. He based his business first in the district capital and later moved to another more populated town. After six years he had saved 800 pounds, which he invested in a retail store located in the African trade section of the provincial capital Kasama. He made this decision because brick making was a seasonal business, yet he did not give it up altogether. When there was a demand for bricks, he hired the labor force of an entire village, taught them his technique, and put them to work. In 1971, he owned five trucks used to transport freight and to deliver his bricks to contractors. Two of his sons drove trucks for him. When his original store prospered in 1966, he decided to invest several thousand pounds in an­ other much larger retail store in the second-class trading area where expatriate businesses had previously been lo­ cated. Other successful African businessmen were starting to locate there as well. Another son became his bookkeeper in his new store.

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In March 1971, the turnover in his big store was about 3,750 kwacha. The store was divided into four sections: gro­ ceries, other food products, men's wear, and women's wear. Each section had a shop assistant in charge, and separate accounts were kept. He also had plans to expand brick mak­ ing into a full-fledged construction business and to build houses under government contract. As in many other cases, he got no help from financial institutions or individuals along the way. His business skills developed through long personal experience. Since he employed his older sons in positions of trust and importance, his large family of two wives and thirteen children was an asset rather than a lia­ bility. MWAN AKATWE

A young man recently in business, Mwanakatwe had a completely different career pattern and had not yet broken into the ranks of the large businesses. He was born in 1942 in a Northern Province village. Though his father was a "garden boy," he himself completed standard six schooling. After completing a two-year agricultural course he was em­ ployed in the Ministry of Rural Development, first in South­ ern Province and then nearer home in the North. After two years in government employment, he decided to save forty kwacha a month since he was "business minded" and had few personal expenses. While working in the villages he bought produce from farmers and had his houseboy sell it at a profit in town markets. When he had saved enough money, he resigned his civil service position and built a grocery store near a banana-growing project where there was a steady demand for store-bought food. He also talked to several leading traders about business and picked up some useful advice. A year later, he added a bar which brought in enough money to buy a small van and build a modest, modern-style house next door for his family. He used the van to supply his store, as well as to carry passen­ gers and goods for other traders. He drove to the Copper-

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belt for supplies since prices were cheaper there than at local wholesalers. He also delivered orders directly to teach­ ers and to the employees of the nearby banana project and thus beat the competition of three stores in his vicinity. Mwanakatwe was very ambitious and conscious of the fact that he was rising rapidly. He planned eventually to open a big store in the provincial capital next to all the other big traders. He had a keen sense for marketing. Al­ though cigarettes had low profit margins, he sold them be­ cause they attracted customers who bought additional goods. KANGWA

The third case is that of one of the largest businessmen on Lake Tanganyika. In 1971 Kangwa was in his late for­ ties. He was born in a nearby village where his father had been a small trader in fish and farm produce. In his youth he worked as houseboy for a European farmer who financed his four years of local education and taught him to drive a truck and make simple repairs. He left the North with these skills and from 1940 to i960 was a driver for the army and the civil service. He worked his way up from ordinary driver through instructor and senior driver to transport overseer, the first African in that job classification. While living in Lusaka and working for the government motor pool, he saved enough money to open a small grocery in an African neighborhood and also bought a small van. During his long leave, he bought kapenta from Lake Tanganyika fishermen and sold it in the Lusaka markets, a very lucrative endeavor. In i960 his parents died, leaving no one to look after his family back home. He somewhat reluctantly resigned his government position and entered kapenta trade full time, using a five-ton truck. He claimed to be the first full-time trader delivering Lake Tanganyika kapenta direct to Lu­ saka markets, some 500 miles away. Since he had an empty truck on his return trip to the lake, he decided to open a store there and supply it from Lusaka at no extra cost to

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his fish operation. It was the first African store in the lake­ side business block. He put a daughter and son-in-law in charge of the smaller Lusaka store. His lakeside business kept expanding, so he enlarged the premises several times. He realized high profits on some items he imported from nearby Tanzania and Zaire. He supplied a wide range of goods to Europeans working in the district. After the eco­ nomic reforms, he added a wholesale branch to his business. He attributed his success to the fact that he worked hard all his life. His reputation was so well established that a bank allowed him up to 10,000 kwacha in overdrafts. Two of his brothers also owned stores in the district. He set up his oldest son in a bar nearby; two more were work­ ing for him in his businesses, and one of his sons was study­ ing in Britain. He had thirteen children from three wives, drove a Mercedes, lived in a comfortable house, and was the branch treasurer of UNIP. He planned to open a hotel and restaurant on the lake because there were no suitable ac­ commodations for travelers in the area. Kangwa illustrates how repeated innovation and repeated "firsts" paid ofi handsomely. Indeed, as we will show later, innovation was strongly related to success among the African businessmen. NGONI

In the Eastern Province large African businesses were of more recent vintage, and the economic reforms had a great­ er immediate impact than in the North. Ngoni, a retired civil servant in his late fifties, was born and raised in the Lundazi area near Malawi. His father was a teacher and for a time was also an employee of an expatriate trading com­ pany. Ngoni received the best education Africans could get in Central Africa in the late 1920s by completing standard six at Livingstonia mission in Malawi. Starting in 1928 he spent forty years in the civil service and was stationed in many parts of the country. In 1943 he was sent to complete a bookkeeping course in Durban, South Africa. He had worked his way up from learner clerk to assistant district

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secretary by the time he retired. His principal work in the civil service was accounting. Two years before his retirement, he invested a portion of his earnings in a 500-acre farm near Chipata, which had been vacated by a European farmer. He did not buy nearer to his home district of Lundazi because the soil there was not as rich for farming. The venture into farming was not successful because he lacked farming skills and experienced difficulties with squatters. After the economic reforms, how­ ever, an Asian businessman who had to vacate his store in a nearby trade center approached him with an offer. He accepted and bought the store for 3,500 kwacha. Finding the combination of farming and trading too time consum­ ing, he decided to concentrate on the store, though he did continue to experiment on a small scale with both ordinary and hybrid maize. Meanwhile his retail business prospered. For a time, he consulted the Asian businessman about run­ ning the store. Within a year and a half, he managed to pay off loans to both the Asian businessman and a bank where he had borrowed 6,000 kwacha, using his savings account as collateral. His wife helped out in the store. All his chil­ dren were educated and have good urban jobs. PIRI

Quite a different life history was related by Piri, a young man in his thirties. He completed standard six and for a time helped his father, who was employed as a driver in Lusaka. Seeing no future for himself in town, he returned to Eastern Province in 1958 and started farming. Since his income from farming was low, he decided to bake buns and sell them throughout the province on a bicycle. Then for a time he operated a tearoom in the Chipata market. In 1963 he opened a small bakery in his home village. He slowly added other foods for sale and built a small store with a tin roof. In 1967, with village business slow, he went back to part-time farming, grew sugar cane and maize, and planted fifty orange trees. During this time his retail business slowly

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expanded. His shop became too small, and he was planning to build a larger one. His orange trees were growing well, and he was anticipating selling oranges in Lusaka in the near future. BANDA

The third Eastern Province case is that of Banda, a man in his late thirties, yet one of the largest and most prosper­ ous businessmen. His father was a cultivator, but he had completed four years of school. He spent four years in Rho­ desia studying photography and working as a photographer for European employers. In 1956 he returned to Zambia, and for nine years was a self-employed itinerant rural pho­ tographer. In 1965 he joined a building society cooperative, and after he became its secretary-treasurer, took a short course in bookkeeping. The cooperative soon collapsed, and he then opened a village store. When the economic reforms made some Asian stores available for sale in the district capital on the Great East Road, he bought two adjacent stores in short succession for about 6,500 kwacha. He was able to buy one on installments from the Asian seller. He remodeled the larger store and converted it into a self-service establishment. He had an of­ fice with a telephone. Many of his twenty-two employees and store managers were kinsmen. He bought a farm, but did not have time to grow maize on a commercial scale. He was also baking several hundred loaves of bread and buns daily in a large outdoor brick oven. He was building a large modern-style home, and he drove a large American sedan. He traveled weekly to the provincial capital where he deposited his earnings and sought the advice of the ex­ patriate bank manager. He was planning to open a garage and a motel, but had some doubts whether the govern­ ment would allow a private business to grow so large. ZIMBA

By way of contrast, it is instructive to present the case

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history of a businessman who had suffered setbacks and had little prospect of recovery. Zimba was in his late fifties and operated a small bar selling chibuku and an adjacent gen­ eral store with a few goods for sale on one of the main roads in Northern Province. He had been a labor migrant on the Copperbelt for about ten years; later he owned a small store in Ndola for another ten years. In 1957 when his parents were getting old, he went back to the North, and at the urging of his chief, opened a store near his home. His was the first African store in the area. At first he enjoyed some success and drove two nearby European-owned stores out of business. However, in recent years, several Africans had opened shops nearby and were doing better than he. He had a total of twenty-four children from four wives and said that "feeding" such a large family as well as helping other kinsmen was depleting most of his business earnings. A ven­ ture into farming and chicken raising was unsuccessful. He complained about doing business "in the bush," intense competition, and low profit margins. Among his misfor­ tunes were an employee who disappeared with one hundred kwacha which had been entrusted to him for getting the trade license renewed, another employee who had sold goods but kept money for himself, and customers who did not pay back debts. He had no specific plans, however, for dealing with any of these problems. Familiar patterns emerge from these seven case studies. Later in this chapter, we will consider whether they also ap­ ply to the whole range of rural businessmen. All these busi­ nesses necessitated but elementary management techniques. The services they provided, including innovations such as urban-style bars, appeared to have little significance for rural development. Among some of the businessmen, it is true, examples of initiative did stand out, particularly in adopting European business methods. Grocery and general trade stores did have an important role to play in the rural distribution system. However, the level and scale of opera­ tion of these businesses were low by expatriate business

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standards. One must remember that substantial Africanowned rural enterprises had been operating for only a few years. It is quite remarkable, moreover, that only two of these businesses had been taken over from Asians and were therefore a direct result of the economic reforms. The businessmen were for the most part middle-aged, and five of them pursued other careers before embarking on their business ventures. Compared to the average rural dweller who supported himself mostly by cultivation, they were exceptional. They had more education, held jobs which were often quite demanding and lucrative in their early careers, and came from families more closely linked to the cash economy than did most rural Zambians. Most of the businessmen of our case studies spent many years in urban settings. Indeed, the fathers of only two were culti­ vators, and one of these two businessmen was the least suc­ cessful. The pattern among these businessmen was remark­ ably similar to that in Lusaka: Africans in an advantageous position were seizing opportunities created by the political and economic changes that had occurred since independ­ ence. However, their enterprises did not contribute much to economic growth beyond the distribution of consumer goods. Nor did they offer an avenue of upward mobility to the average or even above average rural dweller. Social Origins and Careers

A knowledge of the characteristics of the rural business­ men will shed light on the potential of rural enterprise as a pursuit for rural Zambians and for those who have re­ turned from the cities, as well as on its impact on rural soci­ ety. In this section we present an analysis of rural business­ men along the lines of the last three chapters. Most businessmen were middle-aged or older men or wom­ en with families. They were typically well established in their communities, but other means of making a living pre­ ceded self-employment in business. The majority started their business career during their thirties in a smaller busi-

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ness than their present one; about a quarter did so before they turned thirty. Fifty-five percent had been self-employed for ten years or less, and only 10 percent had had their pres­ ent or main business for over ten years. Though somewhat over half were self-employed before independence, threequarters acquired their present or main business since then, and half since the economic reforms. Thus, economic and political changes since the colonial era had propelled many into rural business. Before going into business, traders had generally been em­ ployed in the monetized sector of the colonial and postcolonial economy. The rural businessmen for whom we col­ lected information had the following backgrounds: 28 had held unskilled jobs: houseboys, security guards, cooks, bricklayers, carpenters, spanner boys, messen­ gers, and common laborers; 26 had been in trade or in semiskilled blue-collar posi­ tions: drivers, miners, policemen, tailors, merchants, butchers, and soldiers; 18 had been in lower clerical or sales positions: shop assistants, store clerks, office orderlies, barmen, and typists; 16 had been in supervisory or white-collar clerical posi­ tions: store supervisors, foremen, medical assistants, and lower-level African civil servants; 22 had been in semiprofessional positions: teachers, ministers, army or police officers, trade unionists, and middle-level civil servants; 6 had been cultivators; 1 had been a cash farmer; and 1 had been a student. Compared to their age peers in the Zambian population, a larger portion of the rural businessmen held skilled bluecollar jobs and white-collar positions, which had necessi­ tated more than average schooling and had meant a lengthy urban residence. In these positions they acquired skills and

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a familiarity with modern life styles and outlooks useful in their rural business operations. The migration histories of these rural traders further facilitated the acquisition of skills: fully 90 percent left the province of their birth, which was almost always the location of their business. The vast majority spent five years or longer away, and many stayed for a much longer time on the Copperbelt, the line of rail, South Africa, Rhodesia, or Katanga. Businessmen from the North and Luapula largely went to the Copperbelt; those from the East and South migrated primarily to Southern Africa, Lusaka, and Livingstone. A few businessmen even spent time overseas, either in the armed forces during World War II or during training courses in the civil service. These businessmen also enjoyed much greater educational opportunities than their rural age peers. About half the traders had a standard five, six, or even higher schooling, even though during the colonial era standard six was the highest level open to all but a handful of Africans. On the whole, most traders had at a least a minimum level of lit­ eracy, and most had had broad and varied experiences which later proved useful for conducting a business in rural Zambia.3 Furthermore, just over half the respondents reported that their father had had some nonagricultural employment which, as we have seen earlier, would help in acquiring education and experience in the cash economy. Thus, even as youths, most traders had a headstart over the average rural Zambian. Although the typical pattern was for businessmen to have spent some years as blue-collar workers or lower clerical workers in the urban and more developed sector, somewhat more than a quarter had been in supervisory, semiprofessional, or middle-grade civil service positions. Upon retire­ ment, some former civil servants invested their lifetime sav3 If more village traders had been interviewed, the average level of schooling would have been much lower. The sample was purposely skewed to focus on the more substantial rural businessmen.

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ings in a business in their home area to which they brought some skills and financial acumen. The previously cited case of an assistant district secretary who bought a business va­ cated by an Asian illustrates this pattern. Similarly, one of the largest businessmen in Serenje joined his aging father's business after thirty years in the civil service. With his life­ time savings, he quickly expanded the small family shop in­ to a thriving business consisting of a beer hall, general trade store, beer distribution agency, and freight-hauling opera­ tion. Not all the civil-servants-turned-rural-traders waited until retirement. Some left government service and semigovernmental agencies when they were passed over for promotion; other young men joined the civil service in the lower ranks or became teachers after finishing school and left after they had saved some money. In aggregate terms, these career pat­ terns represented a transfer of skills, capital, and other re­ sources from urban into rural areas. However, they also pointed up the limited scope of much rural business activ­ ity. These ex-urban men might well have been simply repli­ cating some features of urban society in rural enclaves. Whether their efforts provided much benefit to the average rural dweller remains to be considered. Part of the answer to this issue may be provided by exam­ ining how these men began their businesses. The manner by which they decided to leave employment, move from the Copperbelt or elsewhere on the line of rail back to the rural areas, and begin their businesses provides insights into the impact such enterprises were having and can have on rural change. Establishing such facts by asking respondents di­ rectly why they made certain choices is at best a rough tech­ nique. Yet some useful information was obtained from such questions as, "Why did you decide to take up this business rather than doing some other kind of work?" "Why did you decide to do business here rather than somewhere else?" Most traders, like their Lusaka counterparts, simply wanted to make money. They expressed this in different

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ways. Some stated they were not making enough money to feed a large family; others reported that they had no choice because they were fired, their employer went out of busi­ ness, or they could not find a job. Still others contended that they had always been business minded and merely went into trade when an opportunity presented itself. As in Lu­ saka, some saw business as a way of achieving personal in­ dependence because they disliked working for others. Older respondents often mentioned the fact that trade was much less physically tiring than their previous work in mining or construction. The overwhelming majority traded in or very near their home areas, but they did not establish their businesses with­ in or even near the village of their birth. Instead most lo­ cated at a nearby trading center, the nearest district capital, or the provincial capital itself. Businessmen preferred to put a "safe" (longer than walking) distance between their businesses and where many of their kinsmen lived. We found a little less than a third of the businessmen had lo­ cated their principal businesses within five miles of their birthplace; about one-fifth each opened businesses that were five to twenty miles away, over twenty miles away but in the same district, and in another district but in the same prov­ ince. Only the remaining tenth were located in a province other than their birthplace. However, businessmen aspiring to expand are constrained in their choice of locations, since many villages are a good distance from district and provin­ cial capitals or other trade centers, where larger-scale trading is possible. Aside from expressions of attachment to home areas, the most common reasons given for business location were that the area was populous, opportunities were good, and there were many potential customers nearby. Why a few did not settle in their home areas can be easily explained. Some foreign-born traders from Malawi, Zaire, and Rhodesia had worked for many years in Zambia and chose to remain in the country. In another instance, a long­ time store manager for a large state-owned retail chain de-

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cided to open his own business in the provincial capital where he had worked rather than in his more remote home area since he was well known and had built up a good rep­ utation. In a few instances traders employed outside their home province married locally and decided to remain in their spouse's home area for business. None felt that con­ ducting business outside his home area adversely affected his prospects. However, even these few were all located in regions dominated by their own broad ethno-linguistic group. Thus, economic factors were the primary reason the rural traders founded their businesses, and political and economic changes clearly provided the impetus for the growth of Af­ rican business activity, although of course the influence of such factors was mediated for each businessman by his par­ ticular situation. These businesmen were not looking sim­ ply for profits; they wanted to maintain and educate a large number of children, to establish themselves as important figures within their families and communities, and to help their families through some difficulties. Not surprisingly, some ex-urbanites were loathe to live once again in villages that provided few amenities and preferred to live in rural towns. Some moved their establishments to rural centers af­ ter a stint in a village that proved too dull for their taste. Business in the rural areas provided a good income and some security for the businessman and his family. Not all traders actively chose the rural areas because they consid­ ered the opportunities for business activity there to be supe­ rior to those found in cities. Many of these comparatively advantaged urbanites returned home for a variety of other reasons, some of them linked to family obligations. In the rural areas there are few other opportunities suitable for men with such backgrounds. Choosing to be a businessman in rural Zambia was as devoid of expressed political and re­ ligious motivation as it was in Zambia's capital. It was sim­ ply the most commercialized pursuit available in rural prov­ inces.

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Family and Business

Given the strong family orientation of most rural busi­ nessmen, it is not surprising that they merged business and family more than did their Lusaka counterparts. Eightyfive percent of the businesses were owned by one individual, and they were usually managed by the owner-founder him­ self. The others were partnerships, most between brothers and only a few between other kinsmen. There were but three enterprises in the sample with nonrelated partners. Owners who did not run a business themselves usually chose a wife, brother, or son, and seldom an unrelated em­ ployee, to manage it. Over half the spouses of traders were working in the business; not counting spouses, about onethird of all employees were kinsmen. However, many busi­ nessmen complained that kinsmen employees helped them­ selves to cash and goods. Theft was a common employee problem. Opinions about employing and remunerating kinsmen varied widely among these rural businessmen, as did the actual practices they followed. In small businesses kinsmen were mainly unpaid, especially in close relationships like father-son and brother-brother. The unpaid family worker expected eventually to inherit the business or to receive his own start in a business sponsored by his kinsman employer. For instance, during his interview one businessman pointed across the street to a smaller store and said: "I gave that store to my younger brother because he worked for me with­ out pay for five years." In larger businesses, a policy limit­ ing kinsmen employees was more likely to be attempted and enforced, but even in these enterprises competent and hon­ est kinsmen were employed. One of the largest businessmen in the North stated: "If a relative is reliable, he gets a job. Normally we don't take brothers." If brothers were taken in, the justification was often that expressed by a successful businessman in the North: "We have large families, we have to help them. I employ them instead of giving away free money. I do all the supervision myself."

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Regardless of whether or not respondents employed kins­ men, they were under obligation to help support them, es­ pecially widowed and divorced sisters and their children, children of a deceased brother, and older relations. Like their urban counterparts, some rural businessmen developed a regular policy to cope with kin obligations. A Luapula businessmen employing over forty people had hired only one brother because he disliked employing relatives. Yet he said, "I do help my people." He allocated money to them from the salary he paid himself, rather than giving them money and goods directly from the business itself. However, he was atypical. More usual was the following account of a village trader: "I maintain four sisters and their children. Three have no husbands. The other one does, but he does not feed his family. I give them money from the store." Although supporting kinsmen and employing incompe­ tent or dishonest family members could be a liability, the family could also be an asset, especially when founding a business. It was not difficult to elicit stories about dishonest relatives and family quarrels that weakened or ruined a business. Yet some businesses prospered and grew because of cooperation among kinsmen. One of the largest business­ men in the North, who also led an active political life and owned a large commercial farm, relied heavily on his brother-in-law to conduct his varied enterprises, and was pleased with his brother-in-law's performance. Another business­ man in a district capital in the East used his five sons effec­ tively: three of them helped out in his largest, recently ac­ quired store; one son was employed in a Lusaka market shop which had been the original business; and the oldest son drove the five-ton truck used to supply the rural store and for general trucking. Indeed, to lose a reliable relative in a small business could be a tragedy for people not accus­ tomed to relying on strangers. In comparison to urban businessmen, these rural business­ men were not only more dependent on their family mem­ bers but also had more often gone into business explicitly

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to provide the means for meeting family obligations. Al­ though in some cases the most effective way to satisfy these obligations involved the partial separation of business as an institution from the family, in other cases kin could be ef­ fectively employed. These ex-urban businessmen used their superior education, skills, and experience to establish busi­ nesses, and thus "modern" institutions served "traditional" family demands. Business Investment

Although there were many similarities, the conduct of business in rural Zambia was markedly different from that in Lusaka. Transportation and supply patterns, credit, cus­ tomers, and management techniques were all affected by the rural economy and society. Four-fifths of the respondents owned their business prem­ ises: the others rented, often from the previous expatriate owners. Typically, they had built rather than purchased the store. At the time of our study village and small roadside stores cost 100 kwacha to 400 kwacha to build. Somewhat larger stores in the trade centers cost up to 1,200 kwacha. Medium-sized retail stores, roughly the same size as an Asian retail store in a trade center, were constructed for 3,000-4,000 kwacha. Large stores and bars as well as build­ ings housing both retail and wholesale business cost over 5,000 kwacha. In the sample of 134 businesses, 21 respond­ ents spent over 5,000 kwacha on their principal business premises. The average store represented an investment of about half a year's salary for a civil servant in a medium-level post and up to two years' wages for an urban blue-collar worker. In some cases these amounts came from pensions. This level of investment was beyond the means of practi­ cally all rural Zambians inasmuch as the real income, in­ cluding subsistence agriculture, for typical rural dwellers was in the range of 100 to 200 kwacha a year. Thus, rural businessmen could accumulate sufficient capital only in the

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urban economy. For all businesses the largest part of this expenditure went for building materials. In the North some enterprising businessmen cut building costs by hiring brick makers to make bricks for them and selling surplus bricks to contractors. They also drew up the floor plans and did all the construction themselves. Most Asian stores vacated during the economic reforms were sold for between 2,000 and 5,000 kwacha, not including the stock. Since newly constructed, spacious buildings could be erected for the same expense, many Zambians preferred to build rather than buy from an expatriate. Saving and Borrowing

In addition to building costs, traders faced the initial costs of buying sufficient stock and obtaining a trade license. These businessmen seldom secured any of their initial ex­ penses through credit arrangements with wholesalers and suppliers, bank loans and overdrafts, government loans, or loans from private individuals. Fully 83 percent had saved all the initial capital used in starting their business. The median amount saved was about 750 kwacha, while seven­ teen had saved over 5,000 kwacha. Savings were acquired during the period businessmen had spent in urban areas as wage workers or salaried employees. Most business expan­ sion was also self-financed, usually out of profits. In only a few cases did banks or government agencies play a central role in the acquisition or expansion of a rural business. Po­ litical sponsorship or pull was an important resource for a few businessmen, especially in securing government-agency loans. Even the largest businessmen were mostly self-financed. In Monze and Mazabuka, for instance, of the fourteen me­ dium-sized and substantial businessmen, eight were entirely self-financed, two partners split an 8,000 kwacha buildingsociety loan, and four businessmen managed to obtain a to­ tal of five government-agency loans. The average Indeco Finance loan was 4,500 kwacha. One of these Indeco Fi-

RURAL BUSINESS

nance loans was obtained after the trader had already man­ aged to take over an expatriate business on his own. In the East, of twenty-two substantial businessmen interviewed, on­ ly one trader obtained an Indeco Finance loan for buying out an Asian business. In five instances bank overdrafts had been of some help in financing a takeover. Other than these six, African businesses in our sample in the East were selffinanced. In the North, government-agency loans played a somewhat more important role than in the East, but their total impact was slight even there. Of twenty-six substantial businessmen, eight had obtained loans from either Indeco Finance, Credit Organization of Zambia, or Rucom Indus­ tries, Ltd. Except for two instances—one of them a large "political" loan of about 60,000 kwacha—the amounts were between 3,000 and 5,000 kwacha. According to agency re­ cords, two other large businessmen in the North (who were not interviewed) also received substantial loans. One was al­ ready a leading businessman when he obtained the loan. In addition to benefiting from a relatively favorable govern­ ment policy, more large businessmen were allowed bank overdrafts in the North than elsewhere. It is apparent that the largest loans from government agencies and indeed a large volume of the total were allocated in part by political considerations. Businessmen complained about what they felt was the low level of government financial support for Zambianization of expatriate enterprises and general business develop­ ment. Only about 4 million kwacha were lent by IFC (In­ dustrial Finance Company, Indeco Finance's successor) in all of Zambia. Some complained that loans were awarded on political grounds, but the scarcity of loans was widely perceived as the major problem. In fact, it was government policy not to finance the Zambianization of retail and wholesale trade but rather to help small industry and new services (baking, car and truck repair, dry cleaning, furni­ ture manufacturing, building-materials fabrication, food processing). In rural areas the job of finding business op-

RURAL ENTERPRISE

portunities and recruiting and training Africans to take ad­ vantage of them was assigned to Rucom, but Rucom did not concern itself with retail trade, nor did it offer loans to retailers. Some businessmen, however, did use Rucom loans in areas not intended by that agency. For instance, a suc­ cessful garage owner in Kasama used his Rucom-financed garage as collateral to secure capital which he then invested in a bar. Because of the bar's higher profit potential, he concentrated his efforts on it and ceased managing the ga­ rage with the care he had shown before. Rucom eventually failed because industrial and service enterprises were un­ profitable in the rural areas, and Rucom was therefore un­ able to attract African urban dwellers with the necessary skills. Trade, however, was profitable, as we shall see. As we have discussed before, the Credit Organization of Zambia was created at the time of independence to stimu­ late African enterprise in all sectors, especially agriculture. Loans had been made with little attempt to screen out un­ promising enterprises and unqualified entrepreneurs, and few were repaid. Its failures later made the government very skeptical, at least initially, of extending easy credit un­ der Indeco Finance or IFC. It imposed stringent require­ ments for collateral, screened applicants with care, and charged a high interest rate of 8.5 percent. Except in cases of political favoritism, IFC supplied little capital to unproven businessmen. Skills and Assistance Few traders had been employed in an expatriate retail business before starting their own, and fewer than 10 per­ cent had had a father or uncle in trade. Moreover, only about a quarter of the traders reported that skills and knowledge acquired in their previous employment were helpful, and but 5 percent had enrolled in formal book­ keeping courses.4 Exposure to the monetized economy dur4 These findings account for the fact that most rural businessmen did not keep books. Of the 134 respondents, 12 kept some accounts

RURAL BUSINESS

ing periods of migration to urban areas and superior edu­ cation gave some traders an advantage in acquiring the specific skills needed to conduct a business, but most had had to learn these skills through trial and error. Expatriate businessmen were often a source of direct and indirect assistance. One businessman who took over an Asian business obtained the advice of the former owner on pricing goods. Others simply observed already established traders: "I copied prices from Patel." "I would visit the big men who owned businesses; I saw how they did business; I cop­ ied them." Some reported getting more substantial direct help, especially during the days of the nationalist struggle when common interests united Asians and Africans against the colonial administration. A large businessman in the North, initially encouraged by the administration to get a construction firm underway, had a government loan abrupt­ ly canceled when he became a nationalist activist. A local Asian businessman advanced him the necessary sum in cash at that point, and he successfully stood up against admin­ istrative pressure. Even after the economic reforms, some African traders sought and received advice from Asian busi­ nessmen. Asians were a much more common source of ad­ vice than European bank managers or African competitors. African businessmen were highly competitive and saw each other as rivals. Even more than in Lusaka, they were reluctant to seek out the advice of fellow Africans for fear of losing face and reluctant to give advice for fear of help­ ing a competitor. One businessman said that since he was the oldest businessman in a trade center, he would not think of asking advice from "junior" businessmen. This trader was not as successful as some of the others he referred to as "juniors." Another trader reported in this context: "No one tells me the truth about his business. Africans don't themselves, 4 had a clerk or manager do it, and 20 regularly used the services of a bookkeeper: the rest typically kept no written records at all, or else kept spotty accounts difficult to interpret. Credit to custom­ ers was the information most likely to be kept.

RURAL ENTERPRISE

like their friends to succeed in business. My bar was closed for months; many were pleased to see that." The exception was cooperation between brothers, or less frequently, an es­ tablished senior businessman and a kinsman whom he helped set up in trade. Brothers were sometimes partners and often appeared to have worked out a satisfactory di­ vision of labor and of earnings. But that was atypical of African businessmen as a whole. Performance

Turnover in rural areas is more dependent on seasonal variations than in cities. Yearly variations can be large since a bad crop means lower agricultural incomes and hence lower consumer purchases. In Eastern Zambia, 1970 had been a bad year, and businessmen there complained about a business slump because "the people were hungry" and spent the little cash they had on food rather than on cloth­ ing and other goods on which profit margins were higher. Sales are low every year during the rainy season and during planting time as farmers run out of cash and are busy in the fields. After the harvest, turnover can be as much as five or six times the rainy-season figure and is at least two to three times as large. The increasing presence of salaried government employ­ ees in rural areas, especially in provincial and district capi­ tals, has cushioned the impact of the agricultural cycle on consumer purchases because these employees receive the same salary all year. Even off the main roads there were teachers, agricultural assistants, Ministry of Public Works laborers, and employees of state agricultural schemes, and the like who earned and spent the year round. As in towns, the spending of this salaried group was concentrated at month's end. Turnover figures for 107 of the 134 businessmen were es­ timated from information obtained during the interviews.5 5 In our survey, yearly turnover was estimated in the following way: turnover for the preceding month (usually February or March 1971)

RURAL BUSINESS

Thirty had monthly sales below 500 kwacha; 26 from 500 to 1,000 kwacha; 14 between 1,000 and 2,000 kwacha; 19 between 2,000 and 4,000 kwacha, and 18 above 4,000 kwacha, including 6 with sales greater than 10,000 kwacha. The median fell close to 1,000 kwacha. These figures refer to the month prior to the interview at the end of the rainy season. Sales from all businesses were included when re­ spondents owned more than one. The wide variation in sales reflected the great variation in business size. Most of the village stores were in the under-250 kwacha category. The businessmen with over 4,000 kwacha in sales generally owned multiple businesses, such as a combined wholesale and retail business, a bar and large general store, or a chain of stores. Generally, for stores of the same physical size, rural traders sold less than traders in Lusaka. Most businesses, both large and small, extended credit to customers, although they tried to restrict credit to good risks. Large businesses had more outstanding credit, but it represented a smaller portion of their monthly sales. Many businessmen complained about the difficulty of collecting debts. The worst offenders were reportedly not farmers but salaried employees, often teachers, who did not settle debts when they were transferred. Farmers were allowed only a small amount of credit. Bad debts alone did not explain relative success, since they affected nearly all businesses, was stated by the respondent; this figure was multiplied by twenty to make allowance for higher turnover in the four good postharvest months. In other words, we assumed on the basis of records and volun­ teered statements that during four months, turnover was three times, what it was during the other eight months. No such adjustment was made for large bars because they were located in provincial capitals, attracted a clientele primarily of wage earners and salaried employees, and did not report sizable seasonal variations. When we were unable to obtain monthly sales, we estimated them on the basis of daily sales for the preceding month as outlined in appendix two and made an annual estimate based on this figure as described above. As for the number of employees, this refers to paid employees only and thus excludes the owner of the business, his spouse, and other kinfolk not on a fixed payroll.

RURAL ENTERPRISE

though large businesses proportionately less than smaller ones. Large businesses had considerable advantages since they were able at limes to obtain goods on account from whole­ salers, usually on a thirty- to sixty-day basis. Small and me­ dium traders had to pay cash. Moreover, many large busi­ nessmen bought straight from the manufacturer or from wholesalers in large amounts at a lower per unit price. They were also more likely than small traders to get free delivery or to own trucks which facilitated speedy deliv­ eries and provided extra income by carrying goods for other traders. Yet even large businessmen often had trouble get­ ting bank overdrafts, buying goods on account, and paying wholesalers by check. The bulk of business transactions was on a cash basis. Volume and profits were quite attractive. Sixty percent reported that their businesses had increased since they started, while only 16 percent complained of a decrease. Moreover, by a four-to-one ratio, the traders reported that they were earning more than in their previous line of work. In line with reported levels of objective success, about 70 percent said they were satisfied with how their business was doing. Almost all planned to remain in business, and some had ambitious plans for expansion. Indeed, business was good for the rural trader, but they did have many difficulties, some of which were exacerbated by government actions. Aside from building the premises and acquiring a stock of goods, the major costs of business were the negligible wages paid to family workers and the low wages paid to others, modest licensing fees, token real estate rates (taxes), and relatively small income taxes. The Ministry of Finance had tried to tax only the largest busi­ nesses. Even some of these businesses could not fill out tax forms because they lacked financial records, and the minis­ try routinely underassessed them on the assumption that such operations must be unprofitable. Yet, the interaction between supply problems, transporta-

RURAL BUSINESS

tion costs, and the actions of the price controllers did cause real difficulties for businessmen and led to complaints. Not only did state companies have a monopoly on the whole­ saling business in some areas, and sometimes charged lower retail prices than did African businessmen, they also sup­ plied their own state retail outlets first. This would not have made much difference if goods had been in plentiful sup­ ply, but in the rural areas periodic shortages were common. Zambia had also established a policy of uniform national prices. Thus, a bottle of Coca-Cola in Chipata was supposed to cost the same as a bottle of Coca-Cola in Lusaka some 350 miles away. The transportation costs were to be ab­ sorbed by the government, but there was no subsidy for these costs between Chipata and smaller centers. African businessmen had to pay the extra expense themselves, be­ cause if they passed it on in the form of higher prices, they violated price-control regulations. The profit margins on some commodities, such as cigarettes, soft drinks, and sugar, dropped below 10 percent when the transportation costs in rural areas were included. After allowing for spoilage, breakage, and other risks, some traders were actually losing money on such items and had stopped selling them. Many items, on the other hand, had high profit margins, which made them quite attractive to sell. For instance, beer (which has a very high turnover) had a legal margin of about 18 percent in bottle stores and 28 percent in bars; margins for other high-turnover food, grocery, and household goods var­ ied between 12 and 27 percent. Transportation and Other Problems

The one serious problem with which rural businessmen had to deal continually was transportation. Rural Zambia is characterized by long distances and poor roads, and deliv­ eries from wholesalers and manufacturers were often de­ layed and at best uncertain. Many traders purchased trucks to enable them to get goods quickly when they needed them. However, because of the condition of the roads, the lack of

RURAL ENTERPRISE

repair and servicing facilities for motor vehicles, and un­ skilled drivers, there were frequent accidents and break­ downs, and repair costs were high. It was the goal of ZNWC, the government wholesaling corporation, to set up a rural van delivery for small traders, but in 1971 that remained largely unrealized and indeed was still unrealized four years later. The typical village store owner restocked his store by using his bicycle, or had orders delivered by a larger local trader who owned a van and charged him for the service. Because of the transportation and supply problems and the periodic shortages, when businesmen had goods to sell that were in short supply, they were very tempted to price them well above the controlled price. The word that beer, soda, or various canned goods were available in one store or another often set off a run on such items by the new salaried class. Many consumers hoarded when they could, knowing that whatever was available one day might very well be gone the next. The price-control regulations were complained about bitterly, mostly because of their effect during shortages. There is some evidence that in such situ­ ations these regulations were ignored. However, business­ men who overcharged were occasionally arrested. Other frequent complaints concerned the inability to get loans or overdrafts from banks and government agencies, the sharp business practices of some wholesalers, the lack of bookkeepers and business services in rural areas, compe­ tition from state trading companies, and the inadequate per­ formance of ZNWC. Specialized nonretail enterprises such as bakeries, butcher shops, photography studios, and con­ struction firms had specific complaints about the problem of finding and training reliable skilled labor and obtaining needed supplies and equipment. The lack of truck-repair facilities and shortages of motor-vehicle parts in rural Zam­ bia were frequently mentioned in interviews. Substantial Rural Enterprises

In rural areas we concentrated our attention on substan-

RURAL BUSINESS

tial African businesses because the successful implementation of the economic reforms depended in large part on the ability of Africans to step into the vacuum created by the prohibi­ tion on expatriate retail trade and the retreat of the state stores. While village commerce was unaffected in the short run, there existed a real danger of a sudden disruption in the distribution of consumer goods in the rural trade and administrative centers, where expatriate businesses had been prominent and where most of the new African middle class in the rural areas resided. Eventually, village trade and most rural Zambians might also be affected, which would lead to a decline in the standard of living and increased migration to towns. The large African rural businessmen were also important inasmuch as they were the most likely local source of rural development. The most straightforward measure of business size is turn­ over (total sales) which we collected for all the businessmen we interviewed. For the substantial businessmen, it varied dramatically from area to area. Sales were highest in the North where the fifteen large retail businesses averaged about 84,000 kwacha, and the eight bars averaged 45,000 kwacha during the year prior to our study. In the South the comparable eleven retail enterprises averaged 44,000 kwacha in sales, while the twenty-two trading businesses in the East averaged 28,000 kwacha. The difference in these figures is in part due to the differential effect of the economic re­ forms in the three areas. In the North only two-fifths of these large African retail businesses and none of the Afri­ can-owned bars were established after the reforms took ef­ fect. By contrast, in the South and East over 90 percent of the substantial businessmen had established their businesses since the reforms. The stores and bars in the North em­ ployed a larger number of people per establishment than those in the South and East. Allowing for increases in prices, these establishments were about the same size as those businesses classified as "rural general dealer" in the 1962 Census of Distribution (Zam-

RURAL ENTERPRISE

bia Central Statistical Office, 1965:12). The value of the average turnover of the rural general dealer, reported as 14,400 pounds in 1962, was about 43,000 kwacha in 1970.® These large African businesses were thus filling a large part of the gap left by foreign retrenchment resulting from the economic reforms. It should be borne in mind that most large rural African enterprises, except in the North, had been operating only a few years. The few expatriate estab­ lishments still in business in the rural areas had an average turnover of roughly 160,000 kwacha in 1971. However, these remaining non-African businessmen were the largest ever established in rural areas. Individual Success

Although turnover is the best single measure of size of business, it provides only a crude indication of net business earnings, the income of traders.7 We made two reasonable assumptions: (1) that profit margins as a percentage of turn­ over in the rural businesses were about the same as those in the 1962 Census of Distribution and as those in Lusaka in 1970; and (2) that expenses were a lower percentage of turnover in small stores than in large ones. A reasonable estimate of net earnings therefore was 20 percent for small retail businesses and 15 percent for the large enterprises. Given annual turnover estimates and these profit rates, one arrives at the following average net annual earnings esti­ mates for rural traders: 350 kwacha for village traders, 1,300 kwacha for small and medium-sized stores, and several thou­ sand kwacha for large businesses (4,000 kwacha in the East, 6,500 kwacha in the South, and 12,000 kwacha in the North). 6 One pound (£1) equals two kwacha (K2); the consumer price index rose from 100 in 1962 to 150 in late 1970. Thus, 196a pounds should be multiplied by three to yield the equivalent purchasing power in 1970 kwacha. 7 Net earnings are gross earnings less wages, taxes, licensing fees, depreciation, building and equipment repair, losses of all kinds, and other expenses.

RURAL BUSINESS

Self-employment in rural commerce compared quite fa­ vorably with urban jobs.8 At the village level, small shop owners earned more than peasant farmers and as much as those employed in agriculture. Small and medium traders in rural centers earned about the same as the Copperbelt miners who are truly the aristocracy of the African labor force. Depending on the region, large businessmen in rural areas earned from three to nine times that amount.9 Village retailers earned about as much as female market traders in Lusaka; large rural stores were roughly comparable to me­ dium-sized African businesses in Lusaka. A few large retail businesses in the North were producing the same level of income as some large Lusaka retail businesses. All in all, rural business was an attractive alternative to urban employ­ ment in contemporary Zambia, and rural districts provided opportunities for operating enterprises on a scale that matched all but the largest urban businesses. As in Lusaka, the earnings of large rural businesses were sufficient for self-financed business expansion and life styles that are affluent by Zambian standards. Hard working as some respondents were, they were neither ascetic nor frugal. The mark of success was a large automobile (a Mercedes in the North, an American sedan in the East), several wives, s According to the Economic Report, 1970 of the Zambia Ministry of Finance (1971:44-45) annual earnings of Africans employed in various industrial sectors were as follows: agriculture, 360 kwacha; personal and domestic service, 280 kwacha; commerce, 801 kwacha; transporta­ tion, 1,031 kwacha; manufacturing, 744 kwacha; mining, 1,412 kwacha. According to an ILO estimate for 1968 (Turner, 1969:9) peasant farmers' incomes averaged 145 kwacha. Our estimates of the annual earnings of Lusaka traders were as follows: market women, 335 kwacha; market shop, 1,080 kwacha; store in unauthorized settlement, 2,000 kwacha; medium-sized grocery and bottle store, 6,000 kwacha. 9 There is some indication that trade produced higher earnings than employment even in colonial days. According to Deane (1953:27, 267), in 1945 the average estimated earnings for self-employed Africans (shops, market sellers, hawkers, tailors, carpenters, etc.) was £24 a year. That figure was higher than earnings in all industrial sectors except mining.

RURAL ENTERPRISE

and a large modern house. The typical pattern was to dem­ onstrate success visibly, not to conceal it.10 Religion

There was no readily apparent "religious" or "puritan" ethic fostering business. As in Lusaka, no single religion predominated, and all were represented. As we have seen, religious affiliation, birthplace, and education were directly related. Of our 134 respondents, 22 percent were members of conventional Protestant churches; 21 percent were Ro­ man Catholic; 20 percent were members of the South African-based African Reformed Church; 16 percent belonged to one of a variety of sectarian groups including the Watchtower, the Seventh-Day Adventists, and the Jehovah's Wit­ nesses; 4 percent were in other churches; and 17 percent claimed no religion. The general rule was for Africans to adopt the Christian denomination of the nearest mission, which in colonial days had had a monopoly over education. Businessmen were about evenly divided between those who said they were actively religious and those who said they were not. As in Lusaka, some explained that religious ac­ tivities took time from their business endeavors. One of the largest North Province businessmen typically said, "Busi­ ness and politics come first." Several of the Seventh-Day Adventist businessmen had left or had been excluded from their church because they had taken a second wife—a sign of their success. Yet for a small number of respondents, religion had played and continued to play an important role. One Sev­ enth-Day Adventist not only thought that God had chosen him but pointed out; "Religion helps business; you don't smoke, you don't drink; and I'll never do it." This common 10 Large automobiles should not be put down to conspicuous con­ sumption alone. Large businessmen often have several businesses and travel a great deal for business purposes. On bad roads and for long distances, they do need reliable and speedy transportation. However, American luxury sedans are not particularly suited to Zambian con­ ditions.

RURAL BUSINESS

comment echoed the statement frequently repeated in Lu­ saka that the reason for business failure was spending time and money on women and beer, with all that implied for neglecting one's business. Innovation

As with Lusaka businessmen, we established in the course of the interview whether the businessman had been an in­ novator. We were further interested in exploring what im­ pact innovation had upon business enterprise.11 As far as could be established, three-quarters of the retailers engaged in only routine behavior; they followed in the footsteps of expatriates and African businessmen. A quarter, however, did innovate, mostly in the derivative sense of following ex­ patriate precedents. Six businessmen were the first to pick a strategic location for a business. Several businessmen estab­ lished small stores at crowded bus stops or bus depots and were the first to do so. Until competitors caught up with the idea, they made handsome profits. This initiative then al­ lowed them to open a new or bigger store when the original venture was imitated and competition decreased profits. These innovators exploited an untapped market before oth­ ers. In almost every instance, this type of innovation was successful. Eleven introduced a new service or product to rural towns, such as a butcher shop, a bakery, or a photography studio. All these innovations represented the introduction of products or services commonplace in urban areas. With the increase in the size and prosperity of rural towns, these innovators sought to exploit the diffusion of urban life styles and tastes in rural provinces, and in fact contributed to their spread. Success in these ventures was far from cer­ tain. For example, there was not yet a sufficient pool of po­ tential or repeating customers for photography studios in a rural town. One businessman opened a modern-style bar with a live band and elegant interior along the Great East We obtained such information by probing into the respondents' account of the history of their business activities.

RURAL DEVELOPMENT

Road some distance from the provincial capital. He was hoping to attract not just motorists and truckers, but peo­ ple from the capital. But he discovered that traffic was not heavy enough, nor were people in Chipata disposed to drive the distance in sufficient numbers to maintain his business. Others had problems getting supplies for a new service; for example, a butcher had difficulty securing a steady supply of government-inspected refrigerated meat. Four innovators adopted new techniques of production, management, or supervision, for instance, an improved method for making cement bricks appropriate to local la­ bor. Five cases were difficult to classify into any one cate­ gory—for instance, the use of expatriate managers who pro­ vided expertise. Several businessmen had adopted more than one innovation; nearly all of those classified as innovators of a new product, service, or technique also had at one time located a business in a previously unserved area. We found that those who had innovated in the rural areas were more likely to be succesful than were conventional businessmen. Twenty-five of the fifty-six substantial businessmen inno­ vated at least once, while only eight of the remaining sev­ enty-eight smaller traders were innovative. Although inno­ vation without careful management was risky, it could lead not only to personal success, but through emulation, to the diffusion of significant social and economic change. For the rural businessmen eventually to generate an internal dy­ namic for growth, however, would require more sophisti­ cated innovation than they had undertaken. Nonetheless, the initiative that some businessmen had shown in changing their business practices and the rapid imitation of successful innovation by others allow a measure of optimism that such a dynamic is not beyond the capacity of these African busi­ nessmen in the long run. AFRICAN BUSINESS AND RURAL DEVELOPMENT

Like many other countries, Zambia has a wide ruralurban gap in employment, income, services, and the stand-

RURAL BUSINESS

ard of living. Indications are that these differences have increased since independence. It has been estimated that the real purchasing power of employees in the money econ­ omy increased by two-thirds between 1963 and 1969, whereas the income of peasant farmers rose by only 3 percent (Rothchild, 1972:272). Although 64 percent of the population lived in six rural provinces in 1969, only 27 percent of all African wage earners lived there. Rural-urban differences have spurred the rapid migration from rural areas to the line-of-rail provinces. Between 1963 and 1969, residents of rural areas dropped from 79 percent to 71 percent of the total Zambian population. President Kaunda and UNIP sought to counter these trends by setting a high priority on rural development. This meant a considerable increase in government investments in the six rural provinces. In a 1969 speech, the president stated: "Up to now regional development has been the privilege of the line-of-rail provinces. This we can no longer accept for now we have a People's Government. . . . [Our goal is] to spread economic activity and to give considerably more weight to the development of the underdeveloped areas within the country. . . . Humanism in Zambia is a decision in favour of rural areas" (quoted in Rothchild, 1972:222). More money was diverted to the rural areas, at least on paper. Often, however, the demands of the urban dwellers were met by supplementary appropriations, while the rural development committees and administrators of central-gov­ ernment programs did not even spend their full allot­ ment. Because rural Zambia is so sparsely settled, a policy that had as its object the development of cash agriculture throughout the country would need subsidies for the trans­ portation of agricultural products to the urban areas where they were to be consumed. Because of the lack of infra­ structure—for instance, there was no electricity in general supply off the line of rail, and the roads were quite poor —significant industrial development away from the major

RURAL DEVELOPMENT

cities appeared unlikely. The government had, however, put a number of facilities in the rural areas, which were used by people from throughout the country. Many sec­ ondary boarding schools, which educated mostly children of urban dwellers, were situated in the rural areas, and the farmers benefited from some additional extension services and marketing depots. Although by the mid-1970s this policy of rural develop­ ment had yet to bear fruit for the bulk of the peasant farmers, one immediate result had been a rapid increase in public-sector employment in rural provinces and the equally rapid growth of some rural district and provincial capitals where many of the government employees lived. A large part of the market for African business consisted of the new salaried middle- and working-class government employ­ ees, and the African traders were serving them adequately. Trade did not provide a realistic avenue of social and economic advancement for the Zambian villager. The levels of skill, capital, and general experience of the ex-urbanite African businessmen, though modest in absolute terms, were far higher than those of the typical rural Zambian. However, family welfare was an important goal in the founding of many businesses, and a number of rural fami­ lies had been greatly aided when their kinsmen's business prospered. More generally, the increase in African traders in rural areas meant a substantial amount of rural private investment, a transfer of skills and talent from urban to rural areas, and a modest increase in African employment, since local labor was hired for the construction of new business premises and for employment in stores. Some em­ ployment was lost, however, because expatriate stores closed. On balance, the growth of African private enterprise meant a small but important transfer of resources from urban to rural areas. African businessmen also provided a wide variety of goods at the statutory prices throughout rural Zambia. The growth of African small business since independence shortened

RURAL BUSINESS

the distance between rural consumers and retail establish­ ments. Typically, every expatriate store that went out of business was replaced by at least one substantial, but smaller, African business and several small African shops. Profiteering was kept in check by price controls and com­ parison shopping. Whether a system of state trading outlets would have provided equal economic benefits is unclear. However, a state run, centralized distribution system with stores in the remote rural areas would have developed without the close connection to rural society that many of the private busi­ nessmen had. Branch-store managers would not have been as concerned about the needs of the areas they served, nor would they necessarily have shared the linguistic and ethnic background of the local residents. Many would only have looked forward to the day when they would be transferred to another branch, preferably in a city. Could state trading corporations have supplied consumer goods at a cheaper price to the majority of rural consumers? State enterprises did subsidize their rural branches from urban profits, and thus state stores in provincial and some district capitals sold some goods at a cheaper price than private stores. However, they did not extend credit to cus­ tomers, many of whom needed it at certain times of the year. The smaller state stores had been sold to private enter­ prise because they were not sufficiently profitable, and it had proved difficult to employ competent and honest store managers. All in all, the Africanization of rural distribution has had a small positive impact on the rural economy. This resulted from increased private African investment and a return to rural areas of Africans with some skills and tal­ ents. Such private investment was likely to continue since the majority of substantial businesses were just entering an expansionary phase. But African businessmen alone could not be expected to transform rural Zambia, though they were agents of change on a modest and local scale.

RURAL DEVELOPMENT

The larger businessmen were already much better off than the peasant farmers, and as a result, new inequities were being introduced among rural Africans. Colonial stratification had been based on racial categories; vast dif­ ferences in wealth did not exist among Africans. The price of Zambian-style development, then, was a growing gap among rural Africans. While the new officialdom, prosper­ ous traders, and large cash farmers were well off, the rest of the population did not participate in the new prosperity. The new stratum of prosperous Africans was brought into being and maintained by a government policy that had had but a limited impact on the peasant farmers' standard of living. Whether this disparity will become a permanent condition in Zambia is still not certain.

CHAPTER VI

Success, Family Patterns, and Life Styles

NUMEROUS African businessmen throughout Zambia have founded enterprises, expanded them, earned high profits, and gone on to new endeavors. Yet not all were successes —some failed outright, and others barely scraped by. We now turn from a discussion of specific business types to an examination of the social patterns related to African busi­ ness success and failure. First, we will see what factors ac­ counted for differences in individual success among African businessmen in Zambia in the early 1970s. Second, we will analyze the impact of family patterns on business success and vice versa. Since African businessmen are also family members, the relations between family and business are especially difficult to disentangle. Third, we will address some of the questions about the impact of African business success on wider Zambian society, including: how do vari­ ous levels of business activity and their rewards fit within the Zambian stratification system; what are the business­ men's expenditure patterns and life styles; what have the responses by both the businessmen and the public to Af­ rican business success been; and what attempts have been made to legitimize the role of businessmen within Zambia. Indeed, as we will see in the next section, to explain variations in business success, factors associated with busi­ nessmen's backgrounds, careers, and operations, especially innovation, were most important. Yet, many commentators have sought reasons for business failure in Africans' main­ tenance of traditional family relationships or other tradi­ tional social practices or beliefs; conversely, they attribute success to the adoption of Westernized patterns. As we have

SOURCES OF SUCCESS

seen, many businessmen did satisfy traditional obligations to members of their extended families. Some employed kin in their businesses; others used their business earnings to help maintain relatives. Therefore, we will examine these questions in more detail. At the same time, some social theorists see modest ex­ penditure patterns, especially if organized within the con­ text of an ascetic ethic such as the one prevalent among Calvinist Protestants in eighteenth-century Europe, as cru­ cial to the eventual overall success of business enterprises. To be sure, some African businessmen were very frugal and spent little of their profits on housing, automobiles, and other conspicuous signs of their success. Yet the lavish con­ sumption of others did not appear to hinder success. Fur­ thermore, such success had a large impact within Zambia both in providing a model for potential businessmen and in raising questions among Zambians about the legitimacy of such activity. SOURCES OF BUSINESS SUCCESS

To account for business success one must confront a vari­ ety of conflicting theories and explanations. One argument associated with Weber and others draws on the history of Calvinist capitalists in post-Reformation Europe. In such an explanation characteristics such as methodical reinvest­ ment of profits, restraint on consumption, and reliability and accountability in business dealings are seen as associ­ ated with a reformist religious ethic that makes worldly suc­ cess a sign of salvation. Zambians espouse a variety of reli­ gious beliefs, so whether a particular religious affiliation leads to such practices and thereby to business success may be examined. Other perspectives seek to account for success by stressing a particular personality attribute, such as achievement mo­ tivation, or a cultural trait acquired in the early family and community environment. Since we did not administer

SUCCESS AND LIFE STYLES

psychological tests to African businessmen, we are conse­ quently not in a position to explore such explanations di­ rectly. But, if cultural and personality explanations are valid, one would expect variations in success by ethnic group, since this variable would account for a wide range of cultural and personality differences in Zambia. Stratification research suggests that the cumulative ad­ vantages and opportunities resulting from an affluent fam­ ily background account for later success.1 In Zambia, this translates into having had a father employed in the mone­ tized rather than the subsistence economy. It also implies that those individuals who by some means or another were able to acquire more schooling and entered a well-paid, skilled, and demanding occupation would be in a favored position to accumulate capital and gain the experience and confidence needed to start business on a larger scale. Both these factors might well be associated with later success. The modernism perspective suggests closely related ideas. Individuals who have been exposed to an urban, commer­ cial, industrial environment learn a great deal of useful in­ formation and may change attitudes and behavior in order to adapt successfully to that environment. In the Southern African colonial context, the Zambian Copperbelt was the northernmost extension of the European urban-industrial environment. This suggests that the more years one spent away from villages as a labor migrant, and the further one penetrated into the more developed and commercialized Rhodesian and South African environment in the course of migration, the greater the likelihood of being exposed to experiences and opportunities that subsequently might help in attaining business success. It has been commonly thought that success is associated with a variety of skills and talents. The ability to read and ι Merton (19738:273; 1973^457-458) developed the concept of the "differential accumulation of advantage" to explain aspects of stratifi­ cation in science. We use it here as a concept to generalize the effects of a series of advantages throughout the course of a life.

SOURCES OF SUCCESS

write should be an advantage even in simple businesses, though it is not necessarily a prerequisite to success, as sev­ eral of our case studies have indicated. Bookkeeping, ac­ counting, and other management skills ought to be a great help in more complex business enterprises. These skills can be learned, and talents developed in a number of ways: through schooling, formal apprenticeship, learning on the job, help from friends, or the aid of a senior individual. Useful skills and knowledge can also be acquired through simple trial and error. Finally, one has Schumpeter's (1961) theory of economic development which posits that the truly successful business­ man, who is also the one most likely to have a lasting im­ pact on society, is the entrepreneur—the innovative busi­ nessman. Though Schumpeter presents no real explanation for the source of entrepreneurship, he does contribute the strong hypothesis that among businessmen, entrepreneurs should be the most successful. He also recognizes that al­ though innovation can bring the greatest rewards, it also has its risks. Our data enabled us to identify the more in­ novative businessmen in Zambia, and as we shall see, inno­ vation was the road to most success, especially in Lusaka. Analyzing Success

To be able to assess the relative contribution to success of such factors as those outlined above, as well as their inter­ relationships, requires a multivariate approach. However, not all factors relevant to the different explanations were investigated (or indeed possible to investigate), and further­ more several explanations have factors in common so our analysis can not be a definitive "test" of these explanations. Still in all, contrary to several prominent theories of so­ cial change and entrepreneurship, our analysis shows that neither cultural differences nor social origins are important for business success. Instead, differences in business manage­ ment and individual entrepreneurial talent account for suc­ cess. This conclusion is based on multivariate statistical

SUCCESS AND LIFE STYLES

analyses which simultaneously examine the effects of a num­ ber of variables, including cultural, social origin, career, and business-management factors. Our simple causal model ex­ plains a relatively large portion of variance in business suc­ cess. To be sure, our conclusions may not hold for other times and places, yet the findings for Zambia are striking, and valid general social theories should apply with equal force to both the third world and the developed world. Crucial for the interpretation of our findings is the defi­ nition of business success. Making money is usually consid­ ered the essence of success in business; the greater the amount of money earned, the greater the success. Moreover, a successful businessman does not simply have one good year; he has many good years. Windfalls do not represent real success unless they are reinvested for further profit. Thus the most obvious indicator of success is profit over an extended period. However, profits were volatile and difficult to establish accurately for most of the businesses studied, despite our efforts to compile as much financial information as possible. Therefore, we used monthly sales as the meas­ ure of success. These figures were more easily ascertained than profit. Though the amount of sales did not necessarily indicate the degree of success, it was based in large measure on past profits, provided they had been reinvested in the business. Perhaps the most persuasive case for using this measure is that monthly sales and yearly profits were very highly correlated in the fifty cases for which both figures were available (.85). As far as we can determine, for the type of business studied, profits and sales were closely linked measures of success. To assess both the impact of various factors on business success and their interrelations, we performed multiple re­ gression analysis, generally guided by the status-attainment framework.2 In addition to education and father's occupa2 We use the general strategy of the status-attainment perspective originally developed by Blau and Duncan (1967) and elaborated by several authors (e.g. Duncan, Featherman, and Duncan, 1972; Hauser

SOURCES OF SUCCESS

tion, we used several other variables to get at aspects of the businessman's origin, career, operations and management, and other factors. These were grouped into sets in temporal order corresponding to the immediacy of the variable's im­ pact on current business success and to the stages in the businessmen's careers and life cycles. These sets of variables are discussed below and are presented along with the zero order correlations with success in table 6.1.3 and Featherman, 1977). We have adopted the basic logic to analyze factors, arranged in temporal order, that could contribute to relative business success in Zambia, although the approach has usually dealt with entire working populations. We also take seriously objections to the approach (e.g. Burawoy, 1977) that criticize its focus on individual level variables, not on the social structure. However, we only use it to illuminate general patterns leading to African business success within Zambian society. For this same reason we first discuss bivariate rela­ tionships before performing multivariate analyses. We used a destratified sample for these analyses, described in appendix three. 3 A zero-order correlation r is a measure of linear association between two variables. Its value may vary between 1 (a perfect positive associa­ tion) and —1 (a perfect negative association). The closer r is to zero, the less the association between the variables. R2 expresses the percent­ age of variance accounted for between the variables. Intuitively, this indicates how much about the changes in one you can discern from changes in the other. Thus, if r equals .40 between variables A and B, 16 percent of the variance in A is said to be accounted for by the vari­ ance in B, or vice versa. The direction of the relationship between A and B is not taken into account by R2. Though an r of 1 or —1 would mean that 100 percent of the variance between two variables is ac­ counted for, few relations from cross-sectional survey data can account for more than 40 percent of the variance, even when several variables are used in the regression. Zero-order correlations may mask relationships among the fourteen independent variables. Part of the correlation between success and an independent variable such as complete accounts reflects the correlation of each with other prior variables such as educational level. In the same way, a weak correlation between two variables may be stronger if another variable is taken into account. The reader must therefore be guarded when moving from correlatfo'n and association to inferences about causes and influences. In a subsequent section we apply multiple regression analysis which does mathematically hold constant the impact of other variables and permits some more reliable inferences about the substantive significance of any one variable.

SUCCESS AND

LIFE STYLES

TABLE 6.1 ZERO-ORDER CORRELATIONS OF SUCCESS WITH FACTORS FOR

LUSAKA

HYPOTHESIZED CONTRIBUTING

AND RURAL AFRICAN

Lusaka Businessmen Operations and management Ever innovated Easy credit Complete accounts Concentration on business Business entry and experience Years self-employed Sponsored start Systematic training

BUSINESSMEN

Rural Businessmen

•45

•43 -•32 •31

.01

.21

.09

.03

.80 -.09

•52

.20

.21

.21

Prior career Previous occupation Extensive migration

•37

.36

.04

-13

Social class Education Father's occupation

•39

•34

.26

.06

-.04

-.16

—.16

—

.00

—

.10

—

•17

—

—

-•47

—

•37

—

-1I

— .08

-.04

Social origin Age Ethnic origin Eastern Northern Southern Other Region Eastern Northern (includes Luapula) Southern Religion None Catholic Reformed (African) Protestant (mission) Sectarian

-.05

.02

— .06

-.29

.10

•34

.04

-.04

SOURCES OF SUCCESS

Our goal has not been to produce the definitive assess­ ment of business success in Zambia. Instead, we have chosen to use a powerful tool—regression analysis—to shape our interpretations of patterns of that success. Indeed, as those readers who consult appendix three will discover, this anal­ ysis has a series of limitations brought about by the sample, operationalization of the variables, and the assumptions it requires. However, we feel that the results we obtained, the highlights of which we present in this chapter, shed consid­ erable light on the factors that led to business success. Social Origins In evaluating development prospects, it is crucial to know to what extent achievement and success were determined by factors that cannot be altered during the course of an indi­ vidual's life. We examined the impact of three of these asscribed and thus inalterable factors: age, ethnic group or re­ gion, and religion. The correlation of age with success is negative but small for the rural and negligible for the urban businessmen, as table 6.1 indicates. Age is not routinely considered an as­ cribed characteristic by many social scientists, yet like other inalterable factors it sets limits on the opportunities avail­ able to particular individuals, especially as they encounter important historic changes at different points in their life cycle. Except for extreme old age, when lack of physical energy and disease reduce the capacity to conduct business, age has no predictable relationship to success. However, one can hypothesize two contradictory effects for Zambian busi­ nessmen: on the one hand, the older businessmen might have had more experience which provided a competitive edge; on the other, they had less education and less recent experience with a highly monetized economy than younger businessmen and therefore lost out to "up and comers." Ethnic origin is also an inalterable and socially significant fact of life for businessmen. (Here, as elsewhere, we have used the official definitions of a linguistic group.) Compared with Lusaka's total adult male African population, people

SUCCESS AND LIFE STYLES

from the Eastern Province were generally underrepresented in African business, while those from the Western and Northwestern provinces were overrepresented. The degree of over- or underrepresentation was small. Indeed, the cor­ relation between ethnic group and success was also small. However, as table 6.1 shows, Eastern-origin businessmen generally did worse, while those from the South or else­ where did better. Since all but six businessmen interviewed in the rural areas were conducting business in their home linguistic areas, ethnic group was not a variable in rural Zambia. However, the success of rural business did vary among Zam­ bia's main regions (classified here as Eastern, Northern, in­ cluding Luapula, and Southern). This finding partly re­ flects our sampling bias (previously described) and Zambia's regional differences in economic conditions. It is impossible at this point to determine whether such an effect is the re­ sult of a contextual condition or of variations in ethnic performance. Subsequent analysis will clarify this point. Because religion is largely determined by what mission held sway near a Zambian's childhood home, it is included here among the ascribed characteristics. We distinguished among five groups: those espousing no Christian religion; Roman Catholics; members of the African or Dutch Re­ formed Church; the main Protestant churches such as the United Church of Zambia, linked to overseas churches and characterized by longstanding missionary activity; and inde­ pendent African churches and breakaway Protestant sects. Businessmen belonged to organized faiths in much higher proportion than the Zambian population at large. However, in Lusaka there was virtually no relation between member­ ship in a particular religious group and success. For rural businessmen, the positive association between success and membership in the main Protestant churches, and the nega­ tive association between success and the African Reformed Church were due in large part to the regional sampling bias already described. Eastern Province respondents were dis-

SOURCES OF SUCCESS

proportionately in reformed churches, and Northern re­ spondents were disproportionately members of the main Protestant churches. In any case, both these groups were Protestants, so that the findings do not indicate a link be­ tween Protestantism and success. All in all, the ascribed characteristics of age, ethnicity or region, and religion, had at most small correlations with success. Social Class We consider two factors directly related to a business­ man's standing within colonial society: his own educational level and the level of his father's occupation. These factors have been held by some to be extremely important to later achievement. Education may be the first step in a successful business career, even though we found many successful individuals who had only meager schooling. As we noted, businessmen both in the rural areas and in Lusaka were better educated than the average African adult male, though few had at­ tained the highest levels of schooling. Moreover, the amount of education was positively and quite strongly associated with success both in Lusaka and in rural areas. These find­ ings lend support to our previous analysis of the origin of businessmen in colonial Zambia. Having had a father employed in the cash sector, espe­ cially in a lucrative and secure job, would presumably have conferred considerable advantages—for instance, the chance to acquire more schooling. Indeed, there was a correlation between father's occupation and success for Lusaka busi­ nessmen while no such relationship existed for rural busi­ nessmen. Our later analysis will explain this difference. Career Factors Few businessmen proceeded directly from their family home or school into business. Most first pursued a career during which they gained skills, capital, and experience which they later used in business. We included two career

SUCCESS AND LIFE STYLES

factors that could have led to useful resources: level of pre­ vious occupation and extent of migration.

Previous occupation should have had clear-cut effects. A relatively demanding, lucrative occupation immediately prior to launching a business should have facilitated suc­ cess. Indeed, this variable was strongly and positively corre­ lated with success in both Lusaka and rural Zambia. In short, two factors that encompass most of what is meant by the socioeconomic status of the businessman before he went into business—schooling and previous employment—-were the most strongly associated with business success of any factors we have so far discussed. Further analysis will assess the degree to which this association with success was due to education and previous occupation in and of themselves, as well as the degree to which they led to other practices di­ rectly responsible for business success. Businessmen, as well as many other Zambians, have con­ tinually migrated to mines and other opportunities in Zam­ bia and throughout Southern Africa. During such migra­ tions they earned money, held jobs, and went to school, each an experience potentially important in business. An extensive migration history—the other career variable—should therefore be positively related to business success. At the same time, absence from Zambia denied the migrants certain opportunities such as gaining prime business loca­ tions and developing steady customers. They might thus be less successful than those who spent less time away from home. Extensive labor migration was weakly and negatively correlated with success in rural areas and had virtually no association among Lusaka businessmen. We shall subse­ quently check whether the effects of labor migration were actually virtually nonexistent or whether they were medi­ ated through some other variables. Business Entry and Experience

The next three variables measured the businessmen's most relevant prebusiness experience and their manner of entry

SOURCES OF SUCCESS

into business: years self-employed; whether they were spon­ sored at the start of their business career (sponsored start); and how they learned business skills (systematic training, as opposed to self-taught). All were positively associated with success, though the strength of association varied. Years self-employed, a direct measure of amount (though not necessarily of quality) of business experience, had a negligible relation to success. This low correlation reflected the inclusion in our sample of a number of old-time businessmen who had little poten­ tial for growth, as well as some young, inexperienced busi­ nessmen who had little experience but significant technical skills. Our subsequent multivariate analysis was necessary to disentangle effects like these that depended on age, experi­ ence, and other factors. A businessman was considered sponsored if he received help at the founding of his enterprise from an institution or from an individual other than a family member. This variable was strongly and positively associated with success in Lusaka, but less so in the rural areas. It indicates that help and encouragement on a personal basis—usually from previous employers, banks, or government agencies—did make a difference. This finding could mask features that were more truly personal characteristics of the businessmen, because sponsorship itself might follow from the recogni­ tion of a particular talent. Those who learned skills system­ atically (through a formal course or in an apprenticeship) were more successful than those who picked up skills on their own or from family or friends. It is striking that of these variables, the two most easily amenable to policy in­ tervention—help at the start and the teaching of useful skills—were positively correlated with success. Business Operations and Management The final set of variables measured aspects of business management and operation, including: a stringent rather than an easy credit policy; complete accounts, rather than

SUCCESS AND LIFE STYLES

spotty financial records or none at all; a full-time concen­ tration on the business rather than a dispersal of energies on a farm or other full-time job. For the rural businessmen all three were positively associated with business success; for the Lusaka businessmen only "complete accounts" was so related. In Lusaka many successful businessmen were virtually forced to give credit to their governmental and other large institutional customers. As we have seen, such customers usually paid. Many of the smaller businessmen, as well as some of the most successful businessmen, also had a second job with a governmentally linked agency, and many of the latter had large commercial farms. For a successful person, expansion by diversification might have been good business practice. Few of the rural traders were large enough to war­ rant adopting such a strategy. INNOVATION

A final variable, innovation, indicated not so much sound day-to-day business management techniques as the capacity to create and seize new opportunities. It is for this reason that Schumpeter (1961:57-94) saw this as the fundamental phenomenon underlying all economic development. For both groups, whether a businessman ever innovated had the highest correlation with success of any variable. Innovation was not easy to measure with a single, simple operational indicator. In our interviews, questions on ca­ reer, business entry, and management led to information on departures from existing practices and the adaptation of common business techniques and forms to new environ­ ments. Innovation was defined as a departure from estab­ lished practice in a given geographic area or particular mar­ ket, here taken to be the Zambian business environment. These departures and adaptations were classified as innova­ tion. Most of them consisted of the transfer by African busi­ nessmen of suitably modified European and Asian business practices into a new locale and into a new market of Afri-

SOURCES OF SUCCESS

can consumers. By these criteria, reorganizing a mediumsized African grocery store into a small supermarket serving an African township in Lusaka in 1959 was innovative. The selling of inspected and refrigerated meat in a butcher store to customers who previously bought meat only from slaugh­ terers was also innovative, as was operating an Americanstyle bar with comfortable seating, jukebox music, and a band where only beer halls had previously existed. Not all innovations were successful. One of the more spectacular failures was a specialty shop which imported very expensive, high quality boutique items for the expatri­ ates and the African elite. No store like it had ever existed in Zambia; it is unlikely that another will be established. In our terms the enterprise would be classified as innovative, regardless of whether it promoted the welfare of ordinary people, or whether it turned out to be successful. At the same time, not all successful businesses were inno­ vative. One of the most successful businessmen in Zambia was a retailer with fourteen nearly identical stores serving various African suburbs. All sold only the most common goods. Many other successful retailers were becoming in­ volved with transportation and construction in imitative ways. Often a successful taxi operator would simply add a few more cars to his already profitable fleet. Though inno­ vation often led to success for many businessmen, success was not predicated upon innovation. Significant, original innovations among African business­ men had yet to occur in Zambia. However, the successful adaptation of a practice observed elsewhere often provided a definite increase or improvement in goods or services, in­ creased reinvestment and employment, or reduced prices. The innovations we recorded and observed fell into three categories: most were in the area of marketing and sales; some concerned management and organization; and only a very few affected production in any way. We relied on self-reports as evidence of innovation. It seemed likely that such things as introducing soap into a

SUCCESS AND LIFE STYLES

village in the mid-ig40s would be remembered with pride. The memory of an unsuccessful innovation might not be as clear. Memories may fade; boasts may be misleading. Our definition of innovative behavior was very broad, and many businessmen classified as innovators had repeatedly intro­ duced innovations. Examples of new departures in marketing were plentiful. They included the introduction of products such as soap, refrigerated meat, bottled beer, advertising services, and of­ fice supplies into areas where these items either had not been sold before, or had been sold in an entirely different way. Businesses that were the first of a particular type run by Africans (and thus either aimed at an African market or at those customers who would find advantages in the cheapness of "African" work) were also classified as market­ ing innovations. Thus, the first African contractor, longrange fish trader, taxi owner, driving-school operator, ad­ vertising agency proprietor, clothing manufacturer, beer hall owner, bar owner, and the like were classified as inno­ vators in marketing. The innovators were frequently analytic in approaching a new type of business. One bar owner described how he decided to embark on an innovative venture: Before I started my bar, I investigated all the bars in town. I would go and sit and watch how they were op­ erated. There is lots of business at the end of the month, but even then few people drink, many throw around their bottles and break them, and often there are brawls with damage to the premises, police called in, and blood on the floor. Not only that, such bars cost a great deal to operate. One needs a band, many secu­ rity guards, and bar waitresses [prostitutes], as well, though you probably make money having these. If a fight breaks out, then you lose most of your profits. During the rest of the month your place is dead. I wanted the Farm to be a place where you could bring your wife, your children. One can play, one can

SOURCES OF SUCCESS

drink. There would be no fights—a nice respectable place. He said he had been influenced by travels in Britain and Germany. His modern-style bar soon acquired many regular customers from the new African professional-managerial group in Lusaka. His establishment was hired from time to time for wedding receptions. It had a snack bar, beer was served in a glass (an uncommon feature in Zambian bars), and other beverages were available. Though quite simple, these features were innovative for African-owned bars in Zambia. It was designed to be more pleasant than most barbrothels in Lusaka, and it required only two people—a bar­ tender and a janitor—to operate. No waitresses were needed since customers went to the bar themselves. A large initial investment and low operating costs led to high returns. One innovator who opened a fish-and-chips store in a dis­ trict capital in 1970 stated: "When I looked around, every­ one was doing the same kind of business. I tried to do some­ thing different, where there was less competition." He ran into difficulties, however, as an import license for a deep fryer ordered from South Africa was blocked by the Min­ istry of Trade and Industry. When interviewed, he was making do with second-hand equipment which kept break­ ing down. Other businessmen innovated by offering a specialized service or product for a specialized market. One such mar­ ket, as we have seen, was the new, relatively prosperous group of government employees in rural areas who bought a better grade of consumer goods than ordinary villagers and liked to be entertained in modern bars with comforta­ ble seats, an affluent setting, and live music. The first such enterprise was often very successful. The first African taxi operator subsequently introduced a rural bus service in an area where it had not previously existed. Still others introduced new products, often when the profit on other goods declined. Several began to manu-

SUCCESS AND LIFE STYLES

facture expensive items that had previously only been im­ ported, like blue denim jeans priced at eighteen kwacha a pair. Some innovated repeatedly. A Luapula businessman started in the Copperbelt fish trade, but it proved rather unprofitable. Then he and his brother opened a store on the river. He began to take his goods by boat directly to the customers along the river and to the islands where fisher­ men's camps were located. For two years, they were the only traders and made a handsome profit. When others followed their lead, they opened several branch businesses in the Luapula Valley. In the early 1960s, Africans were allowed for the first time to sell European beer to African custom­ ers, and the brothers obtained the first license to do so in the Luapula Valley. Innovations in the organization and management of a firm and in its technology were both less frequent and more complex than marketing changes. Innovations in these spheres required considerable expertise and significant al­ teration in the structure of business. In our sample they included novel methods of controlling labor, inventory, and stock; use of piecework rates; consistently and routinely ap­ plied cost analysis; and reorganizations of production with an emphasis on specialization. One contractor described how he developed such an in­ novation: "It was very difficult to get them [his workers] to work when I was not watching them. I would leave; they would play. So I decided to pay them for what they did, not how long it took them to do it. If they laid so many cement blocks, they would then be paid so much. Any fewer, I would dock their pay. There was grumbling at first, but I found that they can work harder. Faster jobs, faster pay­ ments, faster profits. It works." Though we scrutinized each businessman's entire career, we found that only about one-fifth of the Lusaka business­ men, and one-quarter of the businessmen in rural areas, ever innovated. Though it may seem surprising that more

SOURCES OF SUCCESS

businessmen innovated in the rural areas than in Lusaka, one must remember that we defined innovation within its social context. Innovations in rural areas consisted of less sophisticated actions, and we purposely concentrated our attention on the larger businessmen in the rural areas. In­ novators who were still in business were much more suc­ cessful than other businessmen. Moreover, the relatively sophisticated innovators in the spheres of organization and management had even greater payoffs than the marketing innovators. Multivariate Analysis of Success

While zero-order correlations are suggestive, they do not account for the correlations among the independent vari­ ables and are thus inadequate to assess interrelationships. To surmount this difficulty, we performed a multiple re­ gression analysis for both Lusaka and rural businessmen.4 The chief results of these regressions for the Lusaka and rural businessmen are presented in figures 6.1 and 6.2, re­ spectively. Even when other variables are controlled, innovation was by far the most significant factor in accounting for success among Lusaka businessmen. Other significant factors were keeping complete financial accounts, sponsorship, and ex­ tensive migration. In fact, these four variables explained * A multiple regression equation is the best linear fit when all of the independent variables are used to explain success. The equation (Y = B1X1 + a2X2 + a3X3 + . . . auXu + Error) expresses the joint effects of all fourteen variables in explaining success. It is analogous to fitting a surface to a set of points. The regression coefficients (beta coefficients in figures 6.1 and 6.2) represent the explanatory strength of single variables when all others are controlled—that is, held mathe­ matically constant. Beta coefficients are generalized measures of asso­ ciation; but since the impact of other independent variables is con­ trolled, they do not usually equal the zero-order correlation of the same variables with success. This multivariate technique makes it possible to disentangle complex patterns of influence, especially if the variables are ordered (as they are in our model) in terms of their relation with the dependent variable and with each other.

FIGURE CONTRIBUTIONS

6.1.

(BETA COEFFICIENTS) OF SELECTED FACTORS TO

SUCCESS AMONG AFRICAN BUSINESSMEN IN LUSAKA.

Ever innovated Easy credit Complete accounts Concentration on business Years self-employed Sponsored start Systematic training Previous occupation Extensive migration Education Father's occupation Age Ethnic originb Religion11

a

L e n g t h o f l i n e p r o p o r t i o n a l to effect Coefficients A3.3 a n d

reduced

equation

in

A r r o w h e a d indicates parentheses

A3.6.

''Categorized

222

from

( d u m m ) j variables, joint effect.

Based

direction. on

tables

FIGURE CONTRIBUTIONS

6.2.

(BETA COEFFICIENTS) O F SELECTED FACTORS T O

SUCCESS AMONG RURAL AFRICAN BUSINESSMEN."

Ever innovated Easy credit Complete accounts Concentration on business Years self-employed Sponsored start Systematic training Previous occupation Extensive migration Education Father's occupation Age Region'1 Religion1'

" L e n g t h of l i n e p r o p o r t i o n a l t o e f f e c t . A r r o w h e a d i n d i c a t e s Coefficients A3 5 and

from

reduced

equation

111 p a r e n t h e s e s .

Based

direction on

tables

A3.7.

''Categorized

( d u m i m ) v a r i a b l e s , j o i n t effects.

223

SUCCESS AND LIFE STYLES

success (i.e. accounted for as much variance) nearly as fully as all fourteen together.5 When all variables were considered together, extensive migration was negatively associated with success—contrary to the slight positive correlation in table 6.1. Education, good jobs, and the manner in which business was learned were all highly correlated with migration, but the independ­ ent impact of migration was negative. Those few business­ men who acquired good jobs, education, and skills while staying in Zambia fared better than those with similar backgrounds who spent years away from their native land.6 We can also show the relative contributions of the vari­ ables to the "explanation" of success in several stages: 6

23 29 40

44

69

percent of the variance by social origins: age, ethnic group, and religion (with ethnic group alone accounting for 5 percent); percent by social origins and social class: father's occupation and education; percent by social origins, social class, and career: previous jobs and migration; percent by the first three sets plus business entry and background: manner learned business, spon­ sorship, and years self-employed; percent by the first four sets plus business opera­ tions and management: credit policy, complete ac­ counts, and concentration on business; percent by all thirteen variables plus innovation.

5 For details see appendix three, especially table A3.6. β It should be noted that when other variables were controlled, father's occupation had a negligible effect on success in either setting, though it was initially associated with it in Lusaka. Once again this reflects the different social contexts of the two settings. In the rural areas, few of the businessmen's fathers were totally committed to the cash economy. Few advantages could be passed from father to son. In Lusaka, however, the businessmen whose fathers were advantaged were more likely to have migrated extensively, and the businessmen thus gained advantages through experiences outside of Zambia. Migration in and of itself, however, was a disadvantage for businessmen, so the net effect on success was small.

SOURCES OF SUCCESS

Social origins, the group of variables that reflected cul­ tural variation (including any effects that operated through other variables), had little impact on business success in Zambia. Social-class factors had strong effects. The particu­ lar experiences of the businessmen, their management prac­ tices, and most especially innovation, added a great deal ad­ ditional explained variance. The innovators were especially likely to be successful. About 39 percent of the variance in innovation itself was "explained" by using the other variables. Education, previ­ ous job level, sponsored start, and years self-employed were all positively associated with innovation, but there remained a large unexplained component, suggesting entrepreneurship to be an elusive, unsystematically distributed talent. Findings showing the strong effect of innovation on busi­ ness success in Lusaka must be considered in light of the most obvious bias in any study of business. Routinely, one only interviews those successful enough to stay in business. However, innovation is defined here as the application of something new within a given context, and it is likely that some innovations caused failures. To understand the factors that contributed to the survival of the more substantial businessmen in Lusaka, we analyzed data collected at three different times over a two-year period from about fifty sub­ stantial businessmen. Using a multivariate technique that allowed us to determine the variables that best "forecast" an outcome (in this case failure or survival), we found that innovation actually contributed to failure, and that survi­ vors were disproportionately less innovative.7 At least for the larger businesses, innovation was no guarantee of new riches. Indeed, bankruptcy was a distinct possibility. In addition to the large specialty store owner cited earlier, other cases of failure among innovators were uncovered. These included a bus line operator; a fiberglass boat maker; a large-scale housing developer; a pharmacist serving an ι For details of the multiple discriminant function analysis, see ap­ pendix three.

SUCCESS AND LIFE STYLES

African neighborhood; and a manufacturer of Westernized African clothing. Successful innovation may give an advantage to the inno­ vating businessman, which he can later cumulate to further advantage. The first storekeeper in a new area is likely to choose the potentially most profitable location. The first African who opens a driving school catering to Africans may build a reputation that future competitors will have difficulty overcoming. Some advantages of innovation are rapidly eroded; others persist or even increase. Thus, it is not surprising that those innovators who remained in busi­ ness were among the most successful, while innovation itself remained a risky strategy for business advancement at any time. Innovativeness in rural Zambia did not necessarily have the same meaning as in Lusaka. The basic pattern influenc­ ing success in both Lusaka and the rural areas was indeed quite similar, as a comparison of figures 6.1 and 6.2 will show. Innovation, complete accounts, and level of previous job were among the most important factors in both settings. At the same time, certain other factors had notably differ­ ent impacts in the rural and urban areas. For instance, mi­ gration patterns were important in Lusaka, but not in rural areas, where far fewer businessmen began their enterprises in a locale where they had acquired most of their working experience, education, and contacts. Nearly all rural busi­ nessmen had returned home, while some Lusaka business­ men had been in town since their very early years. Credit was widely granted in the rural areas, but it was less often allowed in Lusaka. Not surprisingly, rural businessmen who gave credit easily were less likely to be successful. Some of the most successful businessmen in Lusaka were either forced by their customers to grant credit or had customers with solid credit ratings. The fact that education and expe­ rience had more direct impact on success in the rural areas than in the urban also reflected the markedly different so­ cial contexts. Since educational levels were generally higher

SOURCES OF SUCCESS

for businessmen in rural areas, but varied less, a very high level of education clearly distinguished a businessman and gave extra advantages. Moreover, in Lusaka some of the most successful businessmen were very inexperienced but were employing technical skills that only young Africans would have had the chance to acquire. For the old estab­ lished rural traders, however, it is reasonable that experi­ ence itself was important. Contrary to many theoretical speculations, the social ori­ gins of businessmen had little impact on success. In the fluid postindependence social structure, technical skills and rela­ tively good education had facilitated success. But they were by no means essential. Businessmen mainly gained success because they saw the potential for new products, services, and organizational techniques, and they managed their ven­ tures reasonably well. The importance of innovation in our study reflected Zambia's changing political economy. In the colonial era, African economic activity was severely restricted. After in­ dependence, African businessmen moved into previously excluded areas with a burst of new enterprises. The most successful of these did not simply imitate their fellow Afri­ cans who had established conventional stores. Instead, they applied techniques or tapped markets that had been previ­ ously "un-African." Often they adapted products and tech­ niques to the African market, where they were indeed in­ novative. Not all these economic pioneers were successful. For businessmen with similar backgrounds, innovations ended in failure more often than relatively conventional ventures. Yet, those who were willing and able to innovate best realized the potential of this challenge—a relatively open field for business ventures and a new, increasing, and often different market. It is difficult to predict whether in­ novation will remain a lasting, dynamic feature of private African enterprise, as it was in the late 1960s and at the time of our study. Our findings might be the result of an

SUCCESS AND LIFE STYLES

exceptional conjunction of historical and economic circum­ stances that Zambia experienced during this period. As we have seen, various factors have been cited in the past to account for what some consider the lackluster per­ formance of an indigenous private sector—modest resources, the weight of African tradition, the experience of an op­ pressive colonial past. Our findings suggest, however, that these elements proved to be no barrier to Zambian Afri­ cans, who responded to an environment of novel opportu­ nities with extraordinary speed and ingenuity. BUSINESSMEN AND FAMILY

The role of businessmen in Zambia was embedded in a wider social network of personal relationships, many with kin. Even in towns, the extended family remained a signifi­ cant social unit. Obligations to the family, as well as claims on it, were extensive and taken for granted. Marriage and inheritance were family matters. Though the extended family was no longer a self-sufficient economic unit, family members continued to assist each other under many condi­ tions. The extended family's adaptability to change was evident in the migrant labor system pervasive in Zambia. Men who worked in town often sent some of their wages home and thus helped maintain the family and their ties with it. One author (Turner, 1969:9) estimated that about 30 percent of the cash income in rural areas came from such outside sources. Cash payments carried with them the expectation that the contributor might eventually resettle in his home village, reclaim land rights, and, if necessary, be cared for by his family. When a family member migrated to town, he expected to lodge first with the relatives who preceded him, and he, in turn, was expected to house his relatives, provide for them, and find work for them. Marriage was often still arranged at home with the parents presenting the towns­ man with a bride of their choosing from the village. Births

BUSINESSMEN AND FAMILY

and funerals also drew townsmen back home. Work absen­ teeism to attend such events was often mentioned as a prob­ lem by both European and Asian employers. As we have seen in chapters two through five, business­ men maintained a variety of relationships with kinfolk. In this section we will describe the patterns of relations be­ tween business and family among African businessmen and the effects of success on these patterns. Four issues were par­ ticularly salient: (i) help from parents and siblings during the establishment and early development of the business; (2) employment of kin in the business; (3) support of parents and extended kin from business earnings; and (4) relation of the business to the businessman's nuclear fam­ ily, his own wife or wives and children. The general issue to be addressed concerns the extent to which businessmen eschewed traditional extended family obligations and adopted Western-style family patterns. Founding and Family

Did the parental family provide a significant measure of support for the founding of businesses by African business­ men in Zambia? As we have seen, family resources did not generally figure directly in the founding of the businesses. Of the 134 rural businessmen, only 12 percent had help from their families, while 10 percent of the Lusaka busi­ nessmen received help from their family when starting their businesses. Indeed those businessmen whose family either invested financially in the business or provided inexpensive labor at its founding were generally less successful.8 However, a family tradition of business did contribute to success. The 10 percent of the businessmen whose fathers had preceded them in business were much more likely to be successful than the rest. While only 18 percent of all busi­ nessmen in Lusaka had sales above 5,000 kwacha a month, 74 percent of those whose fathers were businessmen were 8 All figures for the Lusaka businessmen are based on the destratified sample described in appendix three.

SUCCESS AND LIFE STYLES

that successful. Similar but less dramatic effects were found in the rural areas. With so few opportunities available for training, the advantages of having learned business at home were significant. One businessman recollected: "When I was very young I used to help my mother and father at their shop in Livingstone. I remember we would pile and then count the money, pence, shillings, and pounds. That was how I learned to know and do business. Few Africans now living in Zambia would have had such experiences as chil­ dren." Such experiences were a crucial way in which some nu­ clear families transmitted social advantages from one gen­ eration to another. The potential consequences of these findings for the children of the present generation of busi­ nessmen remains an open question. E m p l o y m e n t of K i n

Many Africans did not hesitate to ask their rich uncle for a job. Did the more successful businessmen employ more of their relatives than the less successful? Two possible results of employing kin are opposite in effect. The employment of kin could cut costs, since they could be enjoined to work at lower wages than other employees. However, this course was fraught with the risk of employing incompetent or lazy kin. The progressive businessman therefore might well avoid employing kin. Yet the successful businessman who had a large number of employees and high profits and turn­ over had more latitude for employing relatives than a strug­ gling small businessman. It was thus difficult to disentangle the effect of employing relatives upon business success and the effect of business success upon employing relatives. Our data indicate that although success and size of busi­ ness were positively associated with number of employees, they were virtually unrelated to the number of relatives em­ ployed, for both Lusaka and rural businessmen.9 The lack »In Lusaka, the average labor force of substantial businesses is a little over eight and the average number of nuclear and other family

BUSINESSMEN AND FAMILY

of association, despite the larger businessmen's ability to employ many more family members and relatives, indicates that the larger businessmen were proportionately less in­ volved with their kin in business than were the smaller. For instance, Kawembwe (see chapter four), who ran a success­ ful bar and contracting business, had as few kinsmen help­ ing him as Nswima (chapter three) had in his relatively small grocery and bottle store. A businessman did not necessarily alter his family relations with business growth. Kin simply did not become integrated into the business to any greater degree than before. This pattern was somewhat attenuated in rural areas where more kin were living in proximity to the business and where fewer opportunities existed for other work. Support of Kin The institutional separation of business from kin among the large businessmen was further evident in the strong relation between success and the number of kinsmen sup­ ported. While the larger businessmen were not more in­ clined to employ kin, table 6.2 shows that the successful businessmen in Lusaka supported on the average several more kin than their less successful colleagues. Over 60 per­ cent of the most successful businessmen supported more than six kin, and a fifth supported more than fifteen kin. The businessmen with sales below 1,000 kwacha a month who supported more than fifteen kinfolk (8.3 percent) had taken on an unusually heavy burden. Of course, the suc­ cessful could better afford to do so, and direct kin support was a less risky strategy for meeting family obligations than providing employment. A gift of cash or lodging took care of obligations neatly and avoided the danger of employing members in the enterprise is only slightly above two. These figures include the owner or his spouse if they devote full time to business. In contrast, the small and medium-sized Lusaka businesses have an average labor force of three, of which slightly less than two on the average are family.

SUCCESS AND LIFE STYLES TABLE 6.2 NUMBER OF KINSMEN SUPPORTED BY AFRICAN BUSINESSMEN IN LUSAKA

Number of

Sales

per

month

Kinsmen Supported"

1,000

Kwacha

or Less

1001 5,000

to

Kwacha

Over

5,000

Kwacha

Total

O

2!-7%

15-5%

15-9%

17-8%

1-2

25-8%

«6.4%

6-5%

22.7 %

3*4

18 . 4 %

'7-3%

2.8%

15-1%

5-6

22.1%

14-1%

13-1%

16.8%

7"»5

3-7%

!7-7%

41-1%

16.8%

16

8-3%

9·ο%

20.6%

10.8%

100.0%

100.0%

100.0%

100.0%

or more

Total

NOTE :

Destratified sample, see appendix three; missing observations =

116. N — 601

* Excluding nuclear family members.

someone whose conduct might lower business efficiency.10 With demands on them increasing, the larger business­ men were also more likely than the smaller businessmen to make the separation of business from family explicit. Some even adopted regular policies to deal with the family, because they believed that family obligations could over­ whelm their businesses unless held in check. One business­ man described his strategy: "If someone comes to see me with a request, and I have already spent what I spend on family that month, then they can just come back next month." Furthermore, a number of businessmen were inter10 The greater number of kin helped by the more affluent business­ men in comparison with small businessmen agrees well with Ohadike's finding that higher-income households in Lusaka are much more likely to be extended family household types than middle- and lower-income households. The typical African upper- and middle-income Lusaka household consists of the nuclear family and one or more relatives, usually adolescents being schooled in the city, whereas the lower-income households are more likely to consist of the nuclear family alone (Ohadike, 1970).

BUSINESSMEN AND FAMILY

ested to see that their assistance was profitably spent. A retailer who took an active role in family affairs illustrated this concern: "If someone comes to me and wants school fees for someone, and I know that he may not be helping that person, then I tell him, Ί will pay the fees, but you must give me the child [that is, send him to live with the businessman].' I will support him, encourage him, and make sure that he works hard. That way, I know that if I give school fees, it is spent on such fees and not on drink• » ingEven for those who intended to restrict claims from the extended family, the hold of family obligations remained strong and frequently reflected the businessman's affection. One explained: "When my family is away from me I miss them. I love them very much. When I was young, I was the one who raised my brothers and sisters. I fed them, washed them, took care of them. When they are not with me, I find that I yearn to see them." Despite his feelings, this businessman, like many others, was not willing to em­ ploy his family. Nor did he feel committed to support his more distant cousins. Quite typically, he fulfilled obligations on his own terms with a conscious aim not to jeopardize his business or his nuclear family's comfort. Progressive, am­ bitious, and successful African businessmen supported kin selectively. Wives and Children

Businessmen concentrated attention, resources, and ambi­ tion on their nuclear families, although they helped more distant kin to a considerable extent. Attention to the nu­ clear family did not lead to particularly small families. The median number of children of all respondents was be­ tween five and six, and between seven and eight for rural businessmen. Many businessmen would have yet more chil­ dren. Still, such family size was not uncommon for Zambia. Businessmen thus appeared to continue the traditional search for family security by investing in quantity of chil-

SUCCESS AND LIFE STYLES

dren. At the same time, they were mindful of quality as well. They went to great lengths to secure for their children the advantages they did not themselves possess when they grew up. This was especially true of schooling. In many interviews, businessmen proudly listed the grade levels reached by their sons and daughters. The brightest children were expected to inherit the business, and some children were already participating in the management of businesses, beyond simply helping out. This was even more true for wives who frequently as­ sisted in the business. In both Lusaka and rural areas, almost all businessmen were married. In Lusaka, 54 percent of the wives helped run the business, while 66 percent did so in rural areas. In both locations, the larger enter­ prises were likely to have a wife in charge of a second store or of a branch of the main business. There was only a weak relationship between success and number of children, even with age controlled. This would indicate that a large number of children was not considered to be a useful, visible display of success. Though one could not tell from the information we obtained whether a disproportionate number of successful businessmen took additional wives as a traditional mark of success and status, this practice was not uncommon, at least in rural areas. It must be remem­ bered, however, that whatever else they provided or sym­ bolized, a wife or wives who worked long hours behind a store counter could be a major asset to a business. Comparisons

The successful businessmen's concentration of resources and effort on the nuclear family, and the corresponding insulation of their businesses from their extended families, was not common throughout Africa, nor did it mirror the practices of Asian businessmen in Zambia. Asians usually organized their enterprises as joint family ventures that often included a number of brothers who lived in a com­ mon household with their wives and children. After expan-

BUSINESSMEN AND FAMILY

sion of the business, other relatives might be employed in managerial capacities as well. This arrangement is common throughout the third world with middleman minorities— for instance, Chinese in Southeast Asia, Levantines in West Africa, East Asians in the West Indies, and Asians through­ out East and Central Africa (Bonacich, 1973). In Zambia almost all employees and many suppliers and creditors of Asian businessmen were Asian. Suppliers and wholesalers often sponsored kin in business and offered them supplies and credit at favorable rates. These patterns of intense familial cooperation were suc­ cessful for the Asians in large part because of their minority status and particular standing in the Zambian social struc­ ture (Dotson and Dotson, 1968). Though not high by ab­ solute standards, the level of skills and resources of most emigrating Asians—all of whom ventured to Zambia be­ cause of their interest in trade—far surpassed that of the Africans. Furthermore, established Asians selected particu­ lar family members to follow them. In turn, those chosen were expected to further the business. In such a tight inter­ dependent community, strong sanctions could be applied against any Asian who did not work industriously, fulfill contracts, or generally enhance the Asians' lot. Those not meeting expectations could be fired from their positions, cut off from supplies and credit, and ostracized from the community with no one to turn to in an alien environment. Their minority status and internal social pressures, then, maintained commitment to the group and conformity to its norms. The Asians' solidarity and intragroup trust in business matters gave them a great edge in competition with the relatively unskilled and unorganized Africans. But the fusion of family, community, and business among Asians was a result of their particular status in Zambia. Africans did not have a similar means of social control over their kinfolk and business associates, and no social pressures and incentives existed for the adoption of the Asian formula for business organization.

SUCCESS AND LIFE STYLES

The emerging Zambian pattern of weakened ties to ex­ tended kin was also apparent in Kenya (Marris and Som­ erset, 1971:142-150), but much less so in Ghana (Garlick, 1971:88-106). This difference might in part reflect differ­ ences in these countries' economic levels. In a relatively prosperous country like Zambia, at a time when opportuni­ ties were increasing rapidly, there was less need than in Ghana to turn to kin for long-term help. Also, in relative prosperity such claims might be honored less often and more grudgingly than in times of hardship, because kin in need could be held responsible for their own misfortune. In an expansive and individualistic climate, some might shift concern from kin to the welfare of the next genera­ tion, particularly their own children. Another reason that might account for this difference in family patterns was simply variation in businessmen's geo­ graphical distance from kin. Over 90 percent of Lusaka businessmen were not born in the Central Province where Lusaka is located. Many were hundreds of miles from their family home. In rural areas, where most businessmen lived in their home areas, a higher percentage honored kinship obligations and a lower percentage separated business from family than in Lusaka. Garlick reports that kin relations in Ghana were strong and posed a considerable problem for businessmen in Kumasi, the center and former capital of the Ashanti area, where virtually all Kumasi business­ men had their family homes. By contrast, in Accra, further from the Ashanti area, kinship obligations were less of a problem for Ashanti businessmen. Rapidly expanding economic activity in Zambia has had considerable impact on families at the forefront of these changes. Although they met their traditional obligations, successful businessmen had also adopted more Westernized family styles than others: business and obligations to ex­ tended kinsmen were kept institutionally separate; the bulk of their efforts were concentrated on securing and main­ taining the positions of members of their nuclear families;

SUCCESS AND BUSINESSMEN

the wives were often made "junior partners"; sons and even some daughters were educated well and groomed to take over the businesses and to attain other high positions. Though selectively adopting the most useful aspects of the European middle-class family, these African businessmen maintained continuity with African traditions, successfully combining both. SUCCESS AND AFRICAN BUSINESSMEN

The emergence of African businessmen changed the Zambian social structure, particularly its patterns of stratifica­ tion. As some Zambian businessmen became successful, they became models for others. In choosing occupations, young Zambians considered the relative rewards in wealth, power, and prestige of various possible jobs. With business lu­ crative, not surprisingly many chose it as an occupation. However, the extent to which business was becoming an accepted or honored activity was still unclear. Did business­ men have high prestige? How did they cope with the emu­ lation and criticism they received? How did they view their own success or failure? Finally, were they able to com­ municate their own positive views about the contribution of business to Zambian development to a wider audience? In this section we will discuss the efforts of some business­ men to secure increased legitimacy for business, after first outlining the financial and other rewards of business com­ pared to some other activities and describing how this in­ come was being used. During colonial days the best an African could do was work for the government or for a European-owned com­ pany.11 Studies in the early 1950s show that Africans in 11 Although difficult to compare, several studies and commission reports of African earnings during the federal era show that African wages and salaries ranged from £30 to £80 a year for unskilled workers (Rhodesia and Nyasaland, 1962:14) to £210 to £668 for semiprofessionals and the elite Africans in the civil service (Dresang, 1971:132-133).

SUCCESS AND LIFE STYLES

semiprofessional jobs ranked at the top of the African pres­ tige hierarchy. Market shopkeepers were placed in the midrange, and true African businessmen were not even consid­ ered by the researchers (Mitchell and Epstein, 1959). Independence changed Zambia's stratification system by eliminating many barriers for Africans. Not only did some Africans realize much greater wealth than ever before, but the avenues to success were new. An African civil servant who might have earned the equivalent of 2,000 kwacha a year could earn up to 11,000 kwacha. The trader who be­ fore independence earned perhaps 1,000 kwacha might make up to 15,000 kwacha. The assistant sales manager of a European company who earned 2,000 kwacha might earn 120,000 running his own company. Some old-time African traders had incomes several times those of the highest-level government officials. Africans with similar backgrounds gen­ erally earned much more in business than in employment. While an unskilled worker could make 100 kwacha a year, a petty trader could earn 600 kwacha. Similarly, a clerical worker could earn up to 2,000 kwacha, but a small retailei could make 3,000 kwacha or more. Heretofore restricted opportunities in business at nearly all levels quite clearly had expanded rapidly and had led to great financial gains. The only Africans who could come close to matching the successful businessmen in income were those in managerial positions with foreign-owned corporations such as IBM, ICL, and Rothmans. Effects of Rewards

The African businessmen's consumption patterns called attention to their newly realized success but no more so than those of others equally successful. In general, the pat­ tern set by the British and other Europeans was emulated by successful Africans. The most successful businessmen's expensive parties, imported luxury goods, British schooling for their children, and large houses with swimming pools were beyond the reach of the civil servants and politicians

SUCCESS AND BUSINESSMEN

who depended mainly on their salary. Even the shopkeep­ er's comfortable house, old car, shirt and trousers imported from Britain, and radio-phonograph represented wealth be­ yond the reach of the ordinary unskilled worker or rural dweller. In Zambia there was an obvious income disparity be­ tween the elite of large businessmen, high-level managers, large farmers, politicians, and civil servants and the poor masses consisting of the urban working class and the even poorer rural dwellers. Within the new elite, many business­ men ranked among the most wealthy, though their prestige did not rival that of the highest-level civil servants and politicians. This pattern of increasing inequality had sev­ eral effects. First, the consumption patterns that predomi­ nated among the elite included many imported luxury items and non-Zambian purchases: automobiles, foreign travel, European clothing, records and phonographs, glass­ ware, china, and expensive home furnishings. Luxuries used up scarce foreign exchange and gave clear testimony to the power of Westernizing influences on wealthy Zambians. Many poor Zambians developed aspirations to the consump­ tion patterns and life styles of the rich. The nearly universal acknowledgement of the superiority of European or North American products (e.g. clothing from Sears Roebuck and Marks and Spencer) betrayed the Zambians' denigration of their own culture, as did the widespread use of now-banned skin lighteners. Tours to Europe, construction of the latest palatial house, and the newest luxury automobile flown into Zambia were the talk of the upper crust and a source of envy to the average Zambian. Jealousy was widespread, and personal accusations against businessmen became common. Sometimes resentment was given collective expression by prominent politicians. Yet, deferential respect was also paid to the prominent businessmen, even by powerful civil ser­ vants and politicians. By 1971, business at virtually every level had become an attractive financial alternative to wage employment for

SUCCESS AND LIFE STYLES

Africans, both subjectively and objectively. However, it carried with it more risk, less prestige, and less respect than some other roles. Nevertheless, the success of businessmen had encouraged others to go into business. The best testi­ mony was the rapid and continuing increase in the number of African businessmen and the volume of African business. Some government employees had become part-time if not full-time businessmen. A survey by a lecturer at the Uni­ versity of Zambia found the majority of students planning to work in the private sector, many in business for them­ selves. Other Zambians discussed plans to go into business after receiving government or other pensions. Legitimizing Success

The incredible improvement in living standards for many of the most successful businessmen in Zambia was expressed in the words of Kawembwe, the substantial building con­ tractor discussed in chapter four: "When I think of how it was when I was growing up, sometimes I had to go naked without a stitch; sometimes we had no food. We lived in a pole and dagga [mud and stick] hut, I cannot believe it. We are, I am so much better off." In 1971 he had a com­ fortable house, a new automobile, a large television set, and a secure income. To legitimize and make personal sense of such changes was difficult, especially in a society where the inequality of wealth was rapidly increasing, and folk views about the sources of success focused on wizardry and supernatural intervention rather than on achievement. For instance, one businessman was said to have killed his wife in order to advance his business, while another al­ legedly did the spirits' bidding by inflicting a fatal illness on his two young sons. Such stories were sometimes heard in bars and vividly and vehemently related when the storyteller was inebriated. In Lusaka such accounts were neither really believed nor completely dismissed. They took the form of rumors which followed businessmen, often without a kernel of truth. The man who was said to have killed his wife had only one

SUCCESS AND BUSINESSMEN

wife, and she was quite healthy. The man whose sons should have been in their graves because of fatal illness introduced one and assured us that the other one was also alive and well. Such beliefs did not contribute to the ready acceptance of business as an institution, nor did they enhance the status of businessmen. They did serve as an index of the jealousy with which business success was viewed in Zambia. Other criticisms included more straightforward expressions about businessmen's alleged dishonesty. Since their legitimacy was threatened by malicious ru­ mors, businessmen defended private enterprise and justified their lucrative rewards. They believed private business sig­ nificantly contributed to Zambian development. Many jus­ tified their fortune by pointing to their long hours and years of struggle, their willingness to invest and assume risk, and the fact that they created employment and provided needed services to the community. One contended: "If you operate a store, or if you operate any business, people think that you are a thief. They think that you are stealing from them, that you can just give them whatever they want for free. The politicians sometimes make statements encourag­ ing such ideas. I do not know . . . but I am no thief." An­ other commented: "If someone is successful in Zambia, then everyone is jealous of him. Many people act as if you took it from them. They forget the long hours, the investment you have made, that you are doing something for them." To gain public esteem, some businessmen publicized their own efforts and tried to impress their children with the value of their work. Several brief biographies and auto­ biographies had been written, and two businessmen had hired professionals to write their success stories. Others had written brief accounts of their lives to guide their children, emphasizing the struggle involved in achieving a higher standard of living. Newspapers, information agencies, and other media also publicized the life stories of businessmen. African journal­ ists felt pride in the achievements of other Africans and

SUCCESS AND LIFE STYLES

wanted to convey it to the public. The accounts highlighted the humble beginnings and "self-reliance" of the business­ men; for example, an African journalist for a house organ of a petroleum company wrote: Any dreams he had of achieving his present status must have seemed fantastic to . . . in 1942, when he left his home village of. . . . He was literally without a penny when he decided to seek his fortune and set out on foot to do so. In a few years he had obtained experience of a va­ riety of trades and occupations. He could look back on time spent digging dams, driving brewery lorries, and working as a railway porter. Humdrum jobs, in­ deed, but from each of them he gained experience of value in the years ahead (Caltex, 1970:30-31). Barriers on the way to success were superseded through personal fortitude: "His own recipe for success is simple: Ί do not drink, I have saved my money and I do have faith in my own efforts and in God,' he says. Ί was never jealous of other people's success. I knew they reached it by hard work, and I was sure I could do the same,' " (Caltex, 1970: 3 1 )· Such laudatory accounts stressing individualism and achievement provided a self-serving justification for high rewards and increasing inequalities and elevated the status of businessmen. The average Zambian did not accept them readily and remained ambivalent about business success. Many Zambians clearly resented the new affluence of suc­ cessful businessmen, even if they admired their achieve­ ments and granted them deference. To an extent, business and trade were still looked upon as the province of the alien Asian and lacked respectability. Appeals to pride in the achievements of African businessmen who were "as good as the Europeans" might improve the businessman's stature in Zambian society, but acceptance will, if it comes, increase slowly and will remain contingent on businessmen's future performance and public image.

CHAPTER VII

Policies, Politics, and African Businessmen

GOVERNMENT officials were frequently ambivalent about pri­ vate business, and their policies toward business vacillated in unpredictable ways. Consider the following sequence of events: economic reforms were proclaimed to Zambianize private business activity; economic inequality, especially that resulting from the activities of successful African busi­ nessmen, was roundly condemned; the government never came forward with a program to implement the reforms; the economic reforms proved to have only limited direct effects; businessmen were jailed for charging two ngwee over a fifty-four-ngwee price ceiling for a bar of soap; some imported goods were nearly impossible to find when sup­ ply routes changed because of foreign-policy priorities; busi­ nessmen objected, but nothing was done; a more stringent tax law was imposed; business profits continued high and remained untaxed; a leadership code banning outside po­ sitions for politicians and other high officials was pro­ claimed; politicians' wives and sons immediately went into business, and some African companies took on high offi­ cials as directors; state-controlled companies became official monopolies for the wholesale trade in certain imported goods, denied credit to African traders, and no longer made deliveries; favorable contracts were granted by these same companies to some African businessmen. This set of events indicated that no clear policy toward African private enterprise existed. Rhetoric often clothes reality, and the official ideology of the relationship between state and business in Zambia was no exception. Neverthe­ less, the inconsistent, visible political and rhetorical con­ frontation between the government and African (and in-

POLITICS AND BUSINESSMEN

deed, European and Asian) businessmen did give way to private accommodation. But accommodation benefited only a few businessmen and certain officials. National develop­ ment goals and the broad interests of the majority of Zambians were shunted aside, at least in part, by personal bar­ gaining. IDEOLOGY AND BUSINESS

Public ideology in Zambia uneasily straddled the divide between socialism and capitalism. Neither was fully em­ braced nor fully repudiated. Although private entrepreneurship was allowed and even encouraged in limited ways, President Kaunda was apprehensive and ambivalent about it: The fundamental clash between capitalists and noncapitalists seems more likely than ever. No one is more aware of this than I. Once you introduce a man to capi­ talism, he may acquire a taste for it, a taste for ac­ cumulating more and more for himself. He may acquire an individualistic approach. Do we not run the risk of opening the Pandora's box by letting out and en­ couraging this element of free capitalism? Will we not find in, say ten years' time, that capitalism is so en­ trenched that we are unable to eradicate it? Or more sinister still, will we not find that we have become tainted, and we have lost the desire to eradicate it? (Kaunda, 1969:50). In place of capitalism and socialism, Kaunda proclaimed the official Zambian national philosophy of humanism. It was a philosophy of action that was intended to reconcile the "powerful forces from the West, which have been ag­ gressively shattering in their individualistic competitive and possessive approach [and which] have had serious and grave consequences on the African society," with the way "our

IDEOLOGY AND BUSINESS

ancestors worked collectively and cooperatively" (Kaunda, 1967:12). Equality was an important goal of humanism: "I do not want to see a small group of Zambians owning large cars, plush houses; whose conspicuous consumption is a con­ tinued taunt to the rest of the nation" (Kaunda, 1969:60). Applied to business, practical humanism sought to limit capitalism without establishing an overly bureaucratic so­ cialism. It sought greater equality in the distribution of in­ come, but allowed some incentives for continued private enterprise. Kaunda emphasized the need for a pragmatic policy: "We make no apologies for the fact that Zambia is prepared to draw on the economic systems of both East and West, and harness them to our purpose" (1969:59). Government policies for achieving these various aims were ambiguous and lacked coherence. The government had not decided which areas were to remain capitalist and which were to become socialist, i.e. to have state participa­ tion in economic enterprises. It left an area for private African business, but no one knew its dimensions and boundaries. Would an indigenous African business be par­ tially taken over by the state if it grew too large? Amid pro­ nouncements and proclamations, some of which espoused socialism as a central tenet of humanism, businessmen faced an uncertain future. Although the relations between the state and private en­ terprise were not well defined, Kaunda's government clearly favored replacing European and Asian businessmen with Africans. At times the government expressed considerable pride in African achievement in business. Yet in line with humanism, government attitudes and policies were not con­ sistently favorable to business. Negative attitudes were in part a carry-over from British colonial rule. Colonial offi­ cials from the "better" classes looked down on the white settlers who operated farms and businesses. Asian traders were beyond the pale. Kaunda's government tempered these attitudes toward business enterprise, at least toward African

POLITICS AND BUSINESSMEN

business, but by no means abandoned them. The ambi­ guities of the situation found and still find expression in the rhetoric of humanism. Ambiguity and contradiction were also apparent in Zambian trade relations with Southern Africa. Freeing itself from total dependence on Southern African sources was a cardinal principle of government policy even though it upset established patterns of trade and severely disrupted business within Zambia. Yet, imports from the South were often allowed as exceptions. Within this overall ideological climate the role of all pri­ vate business, African, Asian, and European, was uncertain. Since capitalism threatens the egalitarian and communal ideals of humanism and may create a new class of affluent Africans who fit ill into the ideal humanist society, the businessman's role in postcolonial Zambia suffered from lack of legitimacy. The dynamism and efficiency of private enterprise were recognized by government officials, but they also feared the consequences of private enterprise. Ambi­ guities and rapid shifts in policy created discretionary power for individual bureaucrats. As a result, they were in a po­ sition to extract tributes from businessmen who wanted to make sure that policy implementation was not harmful to their enterprise. IMPACT OF ECONOMIC REFORMS AND OTHER POLICIES

The government's policy of encouraging the transfer of expatriate businesses to Africans has already been described in chapter one. We now assess the impact of these and other policies and then describe in more detail the pattern of public- and private-sector bargaining. Opinion about the economic reforms was divided. On the one hand, President Kaunda (1970:58) stated that "we set about to remove for­ eign domination of our economic life by acquiring control of most major means of production and services, while at the same time we established a firm foundation for the

IMPACT OF REFORMS

development of genuine Zambian businessmen. . . . I am pleased by the progress made by Zambian businessmen in the areas we allocated to them . . . it seems we have found the secret of getting rid of foreign business domination and promoting Zambian business in its place." On the other hand, a prominent African businessman remarked in an interview: "I think that it is an open secret. The economic reforms have failed." No one would deny that African enterprise had grown rapidly and that it had started impinging on activities that historically were the sole province of non-African busi­ nessmen. Nor would anyone deny that the takeover of many businesses by the Zambian government had dramatic ef­ fects, both positive and negative, on the Zambian economy and that the changing of supply lines and suppliers had unsettled business activity. It does not follow, however, that the growth of African business was due solely or even prin­ cipally to the economic reforms or to their supposed failure. To analyze accurately these policies requires an understand­ ing of their impact along with that of a number of other contemporaneous policies and socioeconomic changes. Government Retailing

Trade, and especially retail trade, was most directly af­ fected by the economic reforms. The Zambian government purchased majority control in four large retail chains: CBC Limited, a subsidiary of the British Bookers Group; OK Bazaars Limited, a subsidiary of the British and South African Anglo-American Mining Company; Mwaiseni Stores Limited, owned by a Cypriot Zambian citizen, and Susman Brothers and Wolfsohn, located entirely in the rural areas. The government did negotiate the terms of purchase, but the overall deal was established by decree. The four chains were reorganized as Indeco Trading, a subsidiary of the state holding company Indeco. CBC, which became ZCBC, had the largest sales of the four. It operated five department stores in Zambia's principal cities and over

POLITICS AND BUSINESSMEN

one hundred retail stores and wholesale depots elsewhere in Zambia. Two other retail groups, Standard Trading Limited of Kitwe and Copperfields Trading Company Lim­ ited (which together had eleven stores in built-up areas near large cities) were acquired shortly thereafter and put under ZCBC management. Indeco assumed control of ZCBC after the purchase of 51 percent of the shares of each com­ pany. The other 49 percent remained with the previous owner. ZCBC also signed a continuing management con­ tract with Bookers. OK Bazaars became ZOK under similar terms, and Mwaiseni followed the same pattern, though it was losing money before it was acquired for the Zambian government by the minister of state participation, the Cypriot who happened to be its previous owner. The Indeco Trading group was given an import mo­ nopoly position in a large number of goods, making it in effect both the supplier and competitor of African and other businesses. Even with its mandated competitive edge, Indeco Trading's profits were never substantial, and by 1975 had become deficits.1 To cut losses, 154 of 272 rural outlets were sold to private businessmen. These losses were 1 The rapid reorganization of Indeco and the other partially stateowned conglomerates were common in Zambia. We calculated that the expected tenure of a policy-level position at Indeco headquarters was less than six months in 1971-72. Organizational structure was often modified unexpectedly through proclamations. Sometimes Indeco came under the direct authority of the minister for state participation; sometimes it was under the minister of trade and industry. After one reorganization it was discovered that Indeco was under no governmental authority. Two weeks later the situation was corrected. Salaries of Indeco managers were much higher than civil service pay. Many young Zambians sought work at Indeco instead of with the government, even though they were obligated for a period of government service if they had received a government bursary for education, as virtually all had. When confronted with figures on Indeco's losses and the high salaries paid to the management staff, which was much larger than in the predecessor companies, one Indeco official at a gathering where several others were present said: "Whatl You would not want us to starve, would you?"

IMPACT OF REFORMS

caused by inefficiency, problems of reorganization and the fact that high salaries were paid to African managers while European management remained on contract. Private Retailing

In addition to government acquisition of major nonZambian retail chains, the economic reforms were meant to transfer non-Zambian businesses into private African ownership. The policies prohibiting non-Zambians from various types of businesses had diverse effects. Five loci of trading should be distinguished: first- and second-class ur­ ban trade areas in the major towns' business districts along the line of rail; African townships; unauthorized settle­ ments; rural towns and centers; and villages. Market trade was unaffected by the reforms since it was already nearly 100 percent African. Actual control of businesses in the first- and second-class urban areas remained mainly in European and Asian hands. In first-class areas of downtown Lusaka in the fall of 1972, there were over 400 retail establishments in European or Asian hands. Only 22 businesses were African, and only 5 of these had changed ownership as a direct result of the reforms. None of the five new African owners had had prior business experience. Four were formerly or concurrently employed in well-paid African positions in Lusaka, and one was a former chauffeur. A similar pattern was evident in the so-called secondclass area in Lusaka. Of some 108 retail and wholesale shops, 12 were owned by independent African businessmen. Ten of these businesses were established after the reforms took effect. Seven of the new African owners were either former government employees or former employees in the private sector. Only three previously established African business­ men took over shops in this area and only one after the reforms took effect. The other two Africans who founded businesses here came from relatively modest backgrounds: one had been a prostitute and the other a chauffeur. Thus

POLITICS AND BUSINESSMEN

the reforms in first- and second-class retail trade helped only a few Africans, mostly those already quite advantaged. African storekeepers enjoyed a monopoly position in the African townships since colonial days because expatriates did not consider such trade lucrative. To protect these small businesses, Indeco Trading was barred from such areas. The reforms caused a retreat by non-African business­ men from the African unauthorized settlements. Some busi­ nesses had been directly taken over, while other business­ men, fearing impending loss, pulled up stakes even though they might have met licensing qualifications. In these areas there were no set commercial blocks, and trade licenses were the only effective barrier to business. A few Asians still traded in the unauthorized settlements in 1972. Those that did were among the most substantial businessmen there. The impact of the reforms was mixed in provincial and district capitals. For example, by 1971 there had appar­ ently been no African takeovers of Asian businesses in the town of Chipata (the Eastern Province capital). However, a dozen new African businesses had recently been founded there. In Northern and Luapula provinces, most large African businesses had been established prior to the re­ forms, and only a few direct takeovers were evident. One of the largest African businessmen in the North had bought a chain of shops and related enterprises from an expatriate. In Monze, a small trade center on the line of rail in South­ ern Province, Africans had taken over expatriate businesses. Several of these Monze businesses were still struggling in 1972, though others prospered. Some takeovers had been financed by loans from Indeco Finance, but most Africans paid a large monthly rent to an expatriate European land­ lord who owned a large part of downtown Monze, which he had inherited from his father who had built it. Monze's position as a trading center declined relative to nearby Mazabuka, which was designated as an urban center and thus was not as affected by the economic reforms. Asians continued in trade in Mazabuka and stocked a large range

IMPACT OF REFORMS

of items needed by the farmers in the area. Monze lost much of this business when the largest shop in town, which was Asian owned, was closed. Several prominent African resi­ dents of Monze then successfully sponsored the owner for citizenship, and he subsequently reopened his business. This man willingly helped and advised several of the more suc­ cessful, though inexperienced, African traders. In the rural areas and small towns (other than provin­ cial capitals) far removed from the rail line, the reforms brought particularly pronounced changes. These areas are the true hinterlands of Zambian trade and did not account for a large volume of business activity, though the very ex­ istence of business in such areas does improve services. We did a detailed study of the reforms' effects in rural Chipata district near the provincial capital of Chipata. One-half of the sixty-eight affected expatriate businesses were taken over by Africans, while slightly over one-fourth were closed, and seven continued with Asian ownership. The disposition of the remaining six could not be determined. At least half of the Africans who had taken over an expatriate business were still renting the building from the previous owner, whereas one-fourth had purchased the premises outright or on time. The arrangements for the remainder could not be determined. Such a dramatic and direct effect was often the pattern in rural areas where the district development committees took an active role in the transfer of business ownership. Only in the rural areas, then, had the reforms directly and significantly contributed to the Africanization of private retail trade. The widely held suspicion about the limited effect of the reforms was confirmed by our findings. As one Zambian said when describing the stores in the urban second-class trading areas, "You will find the same Asians there." When we went from store to store this was indeed the case. Limitations

The Africanization of trade was far from complete large­ ly because the expressed intent of the reforms was easy to

POLITICS AND BUSINESSMEN

circumvent. In carrying out the reforms, the operative word was Zambian. Many Asians had a relative with Zambian citizenship, and many younger Asians claimed citizenship by birth. A few others had applied for and been granted citizenship. To comply with the new trade licensing act, a son, daughter, cousin, or nephew of an Asian businessman became in many cases the new "owner" of the business and trade license. These new "owners" then employed the for­ mer owner as manager. Control thus remained unchanged. Asians and European businessmen used other effective le­ gal ploys for retaining control as well. The first might be termed the "window dressing" approach. A prominent Afri­ can became the "owner" of a business which he agreed to "buy" over a period of years by paying for it from profits. The "former" owner would provide the financing and con­ tinue to be the manager of the business and often receive a share of the profits. Although this method was sometimes used legitimately to provide training for the new owner, more often it was used to circumvent the object of the re­ form. Another ploy consisted of offering a short-term lease to an African. The previous owner then waited for a son or other relative to reach his majority, cancelled the lease, and legally resumed business. Other non-Zambian owners closed their businesses with the same expectation. Covert devices for avoiding the impact of the reforms were even more prevalent. One of these was the irrevocable trust. An Asian would deed his business to an African law­ yer. The lawyer would then put the business in trust for the exclusive benefit of the former owner. Such trusts were not registered in Zambia. Since the African lawyer or one of his staff was the legal owner, he was allowed to obtain a trad­ ing license for the business. For such services the lawyer re­ ceived a fee, but the owner of the business continued in control as before. The implementation of the reforms was supervised by the district development committees (DDC). These bodies were supposed to approve any takeover in a particular area.

IMPACT OF REFORMS

Many DDCs complained that they had little influence. In some of the smaller towns where everyone knew everyone else's business, the DDCs often made sure that the businesses went into African Zambian hands. In the major towns, the reforms were more difficult to implement. Not all Africans were eager to invest in commercial business, which they saw as having unstable and uncertain prospects. Rather than putting up their own money, they preferred outside financing, but such funding was not available to any large extent. The extent to which these various ploys undermined the reforms was evident from the discrepancy between official statistics on business control and the result of our on-site survey. Government sources, including the Ministry of Fi­ nance and the Business Establishment Register, indicated that the number of expatriate businessmen dropped from about 2,000 in 1968 to 700 in 1971.2 However, our survey indicated that only a handful of businesses had undergone an actual change of control (though a somewhat larger number closed down). The fact that two prominent African lawyers had several hundred trade licenses registered in their names added credence to our interpretation. Consequences

The reforms were not solely responsible for the growth in African business, as some commentators have mistakenly al­ leged, even though they indirectly encouraged African busi­ ness activity in a number of ways. First, they hastened the exodus of the Asian and European businessmen from the more marginal areas of trade, especially in rural towns and outposts and in urban unauthorized settlements. Second, the reforms made European and Asian businesmen reluc­ tant to continue to invest in, expand, or change their busi­ nesses. Europeans and Asians felt very insecure in Zambia and were not as active in competing with African business­ men as they might have been. Third, the reforms signaled 2 See appendix two for this estimate.

POLITICS AND BUSINESSMEN

a change in the climate of African opinion about business. Africans came to perceive business as a realistic economic pursuit. In short, the reforms encouraged Africans to go into business and led to a retrenchment by non-Africans. In large measure, the reforms' impact was shaped by their ambiguity. Though proclaimed as measures to "Zambianize" part of the private sector, they were interpreted as a means of "Africanizing" it. The pronouncements of African politicians about "paper citizens" and "real" Zambians did not encourage non-Africans, Zambian or not, to plan for a lengthy future in the country.3 Knowledge of Uganda's ex­ pulsion of Asians only heightened their apprehension. The reforms, then, partly neutralized the non-African competi­ tors to African business. Non-Africans were interested in consolidation, not expansion, and in getting their resources out of Zambia. Thus the scope for new African ventures was increased. BUSINESSMEN IN THE POLITICAL ARENA

Some businessmen played a vital role in preindependence politics by contributing their resources at critical moments. One respondent said: "Yes, I was with the struggle. We all were. I gave money many times to both ANC and UNIP, to Kaunda and Nkumbula. At that time, when Nkumbula 3 Revelations of corruption in granting citizenship to Asians caused even greater uncertainty. When a trial of someone accused of selling citizenship was going on in 1972, many Indians were "on vacation" out of the country, awaiting its outcome and any revelations it might bring. In the wake of such charges the Ministry of Home Affairs was taken over temporarily by the military. One of the men most centrally implicated left the government and started a curio shop. It was al­ leged that he was not prosecuted because he possessed a file of corre­ spondence from high officials, on behalf of non-Zambians seeking citizenship, which he had delivered to his lawyer for safekeeping. The charges of citizenship sales, which were brought by a European in the Criminal Investigation Department, created apprehension among mem­ bers of the African elite.

POLITICAL ARENA

held the votes necessary to put Kaunda in, we had a meet­ ing with him. I told him, as did some others, that if he did not vote to put Kuanda in, we would never support him again. As you know, his votes gave us the first African gov­ ernment in Zambia." Since they were one of the few sources of funds, African businessmen significantly influenced the course of events in the nationalist movement. Accounts of their experiences testify to the risks and dangers of supporting Zambian in­ dependence. Political activists were the victims of system­ atic repression by the federation's government. Imprison­ ment was not uncommon, nor was physical force. Over thirty businessmen interviewed had spent time in jail for political and related activities. Some were only released when the struggle was nearing its end. Others left Zambia for some time to avoid imprisonment. One businessman told of his experience: Yes, I am an old freedom fighter. One night I took my taxi up to Kabwe, where the CID [Criminal Investi­ gation Department of the police] was holding Joshua Nkomo [a leader of the Zimbabwe independence move­ ment] under house arrest. We were to pick up a large trunk from him. We went into the house and took the trunk out. They searched the car, from back to front, and let us go. The next morning, they heard that Nkomo was in Dar es Salaam. . . . [laughter] Nkomo was in that trunk . . . we had smuggled him out . . . [laugh­ ter], . . . The CID looked very stupid . . . [laughter]. One day, not long after this, a CID man recognized me. He had been there at the house. I was in Kalingalinga, a shanty compound. He and his mate came at me with billy clubs. I tried to get my hand in the car, it was resting on the roof, and roll up all the windows. They caught my arm, beat it until it was broken in two places. See you can still see the scar. Such battle scars were proudly shown by several business-

POLITICS AND BUSINESSMEN

men, even if it meant rolling up sleeves or pants legs. De­ spite threats and attacks, many businessmen participated ac­ tively in "the struggle," as it is usually called. Businessmen who had a van or other vehicle often lent it to the national­ ists for a particular trip and sometimes drove it themselves. Several spoke with great pride of "the time I drove President Kaunda to . . ." Many also claimed to have been founders of UNIP. People were routinely sacked for engaging in such activity, and it was extremely difficult for a known activist to get another job. However, some we interviewed were somewhat unenthusiastic supporters, others were too young, and still others were not in Zambia when the nationalist struggle was taking place. Political Participation

The average businessman expressed loyalty to the govern­ ment and the ruling party, but most were not particularly active in party politics. Many were card-carrying UNIP members, but since the UNIP Youth Brigade carried out periodic card-checking campaigns, such membership did not indicate deep commitment. Some respondents viewed mem­ bership rather matter-of-factly: "I keep the card in my desk." "I am a member, we are all members. Haven't you joined yet?" "Oh, yes, I buy a card every year. But I am nonpolitical, nonpolitical." Although a large percentage of the more successful busi­ nessmen were members or officers of UNIP, they did not ex­ ercise much influence in it. They served instead as trustees of the party or helped raise money for it. They shied away from active politics and avoided taking sides in controver­ sial issues. During the preparations for most party con­ gresses, businessmen were asked to attend. Though they were quite willing to contribute to the costs of the congress or help in other ways, some were very reluctant to attend. As one businessman explained: "No, I am not going to the congress. Yes, I have been invited. First it was the district secretary, then the district governor. Now it is the minister

POLITICAL ARENA

of state for development planning. I do not want to go. It is held out of doors. If they make a decision, if something comes to a vote, I will be forced to take sides. If I do, some­ one will be angry." During the nationalist struggle, independence was an is­ sue of overriding importance which fostered great unity. Af­ ter independence had been achieved, unity often seemed ar­ tificial. Competition for personal advancement pervaded Zambian politics. Political issues were confounded with per­ sonal rivalries. Whether a subcabinet officer was appointed to the cabinet, whether a cabinet member was accused of corruption, whether another disagreed with the president did not have the same importance to the businessmen as the independence movement. One respondent who was quite active in the struggle, returned from exile, and went into business, typically explained: "No, I do not concern myself at all with politics. We won what we set out and de­ sired to win—independence. We have it now. We should take advantage of it. Why get involved with petty squab­ bles? It takes time, loses friends, and can hurt your busi­ ness." Many shared this view. They did not depend on party politics for their livelihood. They were uninvolved in na­ tional party politics and remained apathetic about most is­ sues. Influencing Government

Although businessmen were not active in party affairs, they had considerable influence on the implementation of economic policies through personal ties and to a much lesser extent through group lobbying. The African business­ man operated within the context of a confusing welter of nationalization, economic reforms, and reorganization of semigovernmental agencies—all of which affected their en­ terprises. Within this framework they fought for conces­ sions and favors, such as the lifting of unwanted restric­ tions or the award of government contracts. Although the

POLITICS AND BUSINESSMEN

salience of issues varied for the businessmen, most expressed some objection to price controls, credit restrictions, state im­ port monopolies, worsening prices and credit terms offered by the nationalized companies, and tax and labor policies. They rightly noted that beyond opening up opportunities by means of the economic reforms, government aid and en­ couragement to African businessmen were sporadic. How­ ever, many arranged special concessions for themselves through personal relationships in the government, the party, and elsewhere. Such personal contacts were very important in Zambia since it was difficult to influence policy in a di­ rect manner. The ad hoc nature of such contacts makes systematic discussion of them difficult. Yet, given the limited development of a private market in Zambia, such contacts with government officials gave some distinct advantages. They helped get a business started, secure needed supplies and recruit workers, sell products, secure loans, and meet competition. Such contacts were established through family, friends, and old political colleagues. Organized Influence

Business groups also attempted to influence government policies and actions through open lobbying on behalf of their members. These groups included the Zambian Na­ tional Council of Commerce and Industry (ZNCCI), the Zambian Builders Association, the United Taxi Association, the Driving Schools Association, and several others. Each group included some but not all of the African businessmen engaged in the same type of business. Only slightly more than half of the Lusaka and rural businessmen were mem­ bers of these business groups, but the more successful busi­ nessmen joined in disproportionate numbers. It was party and government policy to recognize only one organization as the spokesman for each interest group in the society, and business was considered as one such interest. As a result, there had been some organizational consolidation along ethnic lines and among business groups. Most African asso-

POLITICAL ARENA

ciations had reconstituted themselves and invited non-Af­ ricans to join, but no expatriate groups had disbanded. Expatriate groups included the Zambian Chamber of Com­ merce and its local affiliates, the Motor Trades Association, and the Masterbuilders Association. No Europeans or Asians joined the new African associations, though some substantial African businessmen belonged to the expatriate associations. Some expatriates held the African associations in contempt and contended that they were of no value. The policy of recognizing one specific organization en­ couraged some businessmen to join the ZNCCI, though the benefits of membership were not always clear cut. "Yes, I am a member of ZNCCI. It is important to belong, because there are certain advantages. For instance, when there was the shortage of mealie meal, you had to be on their list to get any delivered. I do try to stay out of their controversies. Some people want to use it for politics and make wild statements." Although business associations did attempt to influence policy, their impact was limited. In the following sections we analyze three instances of lobbying activity. They indi­ cate the range of issues that faced African business and the consequences of businessmen's organized political activity. The first case describes how a business association favored restriction of competition in the taxi business and was subsequently backed by government regulations. Other business associations were making similar attempts to limit liquor licenses, trading sites, contracting, and other oppor­ tunities. The second case describes the efforts of some busi­ nessmen to reverse government policy on imports and price controls. The government's policy of restricting trade with Southern Africa conflicted with the businessmen's short-run economic interests. Finally, we analyze attempts to secure additional funds for the implementation of the economic reforms. The disenchantment of businessmen with govern­ ment policies led some to support a new opposition party.

POLITICS AND BUSINESSMEN THE TAXICABS OF HUMANISM

Among other directives, the first set of economic reforms in 1968 suspended the rights of non-Zambians to hold new taxi licenses or receive renewals.4 Zambians thereupon en­ tered the taxi business with great vigor, and by June 1971 there were about 270 taxicabs licensed to Zambians in Lusaka. Taxis were necessary because there simply were not enough buses to transport everyone between work and home. In the morning and evening people piled up at taxi stands and bus stops waiting for transportation. The taxi business consisted mostly of jitney service, with taxis (usually Peugeot station wagons) following set routes. The largest fleet owned by one man was thirteen taxis; sev­ eral other operators had five or more. A taxi was driven twelve to fourteen hours a day by one driver, who was often paid a salary plus a share of the revenue. In other cases, the owner rented the taxi and its license for a set fee to the driver, who then kept all he earned in excess of these costs. In still other cases, Zambians rented their license for a set amount per month (usually 100 kwacha) to other Africans, sometimes Rhodesians, who then operated the business. To cut costs taxis rarely were serviced properly; they were often driven at excessive speeds and were often involved in acci­ dents.5 Taxi service had been a profitable business, with the average operator netting about 150 to 200 kwacha a month per taxi after allowing for depreciation, driver's salary, serv­ ice, gas, and other expenses. But competition had increased, and the government was faced with regulating both the un­ safe legal taxis and the illegal, unlicensed pirate taxis. Be­ cause of the poor quality of taxi service, the government had intended to regulate and improve service, but faced the i This section is based on interviews and discussions with taxi op­ erators, leaders of the United Taxi Association, the road traffic com­ missioner, and others at his office, as well as attendance at the Road Traffic Hearing in Lusaka, June 11-14, 1QV15 Zambia had an accident rate per auto roughly two hundred times that of the United States.

POLITICAL ARENA

resistance of the taxi operators who would have incurred added expenses. The established taxi operators, in turn, had an interest in limiting competition since many people were attracted to the business. By June 1971, though about 270 taxis were li­ censed in Lusaka, applications had been submitted for over 500 new taxis. At this point the minister of power, trans­ port, and works issued regulations limiting the licenses in each town to a specified number. In Lusaka 300 licensed vehicles were allowed. This regulation was made at the per­ sistent insistence of the United Taxi Association which stressed the theme of deteriorating profits and consequent difficulty in complying with costly safety and other regula­ tions. The state-controlled bus company also favored these restrictions. The new regulations, however, provided the road traffic commissioner with some clout since the taxi operators who failed to comply with safety regulations would lose their licenses. Also, by limiting competition, the government stabilized profits for the taxi operators and thus increased the likelihood of reasonable compliance with the more stringently enforced new regulations. In a June 1971 hearing on the issuance of thirty new li­ censes in Lusaka, the commissioner set the terms for entry into the business. At the outset he stated that a licenseholder would be required to have a taxi actually in opera­ tion. He then outlined four criteria for granting new li­ censes: first, one had to prove Zambian citizenship by presenting the National Registration Card. Second, one had to prove "financial stability." This required the submission of a bankbook or other evidence of ability to cover the costs of purchasing a taxi and outfitting it in accordance with the regulations. Third, one had to prove that he had the competence and knew the regulations for operating the busi­ ness. The commissioner would quiz the applicant, but after the first few applicants had testified, it became more or less pro forma. Finally, one had to show evidence that the taxi

POLITICS AND BUSINESSMEN

business was to be his sole, or at least his major, source of livelihood. This last criterion was more honored in the breach than in practice. An operator usually did not drive his taxi him­ self, but ran the business in his spare time as a sideline. Operating another business or holding a job was not a practical obstacle to being a taxi operator, and it helped by providing the necessary financial stability and business experience, which a novice lacked. The allocations were in fact first made to those who already had licenses. The larg­ est taxi operator in Lusaka, who had thirteen licenses, re­ ceived three more, the largest number awarded. Several others with multiple licenses received additional licenses, while the only new applicant receiving more than one li­ cense was a well-established and successful retailer. After licenses were awarded to those already in the taxi business, the wealthiest new applicants were taken. Those repre­ sented by a lawyer—a relatively costly expense—held a dis­ tinct advantage. Of the 216 people applying for taxi li­ censes only 78 actually appeared at the hearing because of the new restrictions on the taxi business. The remainder of the applications were dismissed by default. Thus, through lobbying and the recognition of some mu­ tual interest by the operators and government officials, com­ petition in the taxi business in Zambia was restricted. Ex­ isting operators became entrenched, and new applicants were awarded licenses only under special circumstances. As in many other countries, the licenses became valuable. Al­ most immediately, the taxi operators demanded the right to bequeath their licenses to their children or heirs when they died. Some even suggested that they owned the license and had the right to sell it (Zambia Daily Mail, 1971:3). At the same time, the taxi owners were applying concerted pres­ sure on the Road Traffic Commission and the police to en­ force the laws against unlicensed pirate taxis. They wanted their newly won public protection to be lucrative. Some months after the allocation of new licenses reported here,

POLITICAL ARENA

the state transportation monopoly went into the taxi busi­ ness itself. Since the difficulties of running such a decentral­ ized business and the rapid deterioration of the state-owned taxis soon proved burdensome and embarrassing, the taxi business returned completely to private ownership. The taxi operators' pressure group provided them with significant and direct benefits. With the restrictions on com­ petition, licenses became a rich prize. The pattern of ac­ commodation between the established taxi operator and the regulator was hardly in accord with the egalitarianism of humanism, the expressed intent of the new licensing regu­ lations, or indeed with the objective of transporting Zambians speedily and inexpensively to work. Accommodation with powerful groups was also common in the administra­ tive allocation of a number of other items, such as trading sites, liquor licenses, import permits, and real estate. THE HIGH PRICE OF SANCTIONS

The efforts by the ZNCCI to change the import policies of the government and remove price controls met with lim­ ited success. In this case, a crucial matter of national pres­ tige and foreign policy was at stake—the boycott of Rho­ desia. The boycott meant shortages and price increases for many commodities, including commonly consumed food products.6 The government did not accept the blame for these price increases; instead, it instituted a vigorous pricecontrol enforcement campaign aimed at the "overcharging" African and other businessmen. This policy caught the Afri­ can businessman in a squeeze because wholesale prices were controlled only at certain inconvenient outlets operated by the state-owned trading companies. From the outset of the price increases, the businessmen proposed a simple and obvious solution to their quandary: lifting both the import restrictions and the controls. Their β The cost-of-living index for low incomes (i.e. Africans) rose from 101.8 to 152.5 between 1962 and 1970 (Zambia Central Statistical Office, 1972:49)·

POLITICS AND BUSINESSMEN

efforts to change government policy were largely unsuccess­ ful. Though some import restrictions were lifted from time to time, the businessmen did not benefit from such limited measures. Jail sentences for price-control violations, in one case eighteen months at hard labor for overcharging two ngwee for a can of milk powder, further angered the busi­ nessmen. Their arguments in defense of trading with the South were predictable: If you are dying, and you need salt, and your enemy has salt and wants to sell it to you, what do you do? If they want the price of goods to go down, they can give me some import licenses. I will get a truck and go there . . . [he points to the South], You cannot keep goods in a shop. The people don't recognize the brands, they don't like the replacements, sometimes stale from Australia. But mostly they don't like the new prices which are several times higher for some things. If they change their policy on this, I will be the first to con­ gratulate the government. The secretary-general of ZNCCI declared at the time that the high prices were not brought on by overcharging busi­ nessmen, but rather by government policy. The government was "victimizing innocent Zambian businessmen" (Times of Zambia, 1971). Even though Kaunda was irrevocably committed to the boycott, some businessmen did attempt to have the policy changed. One respondent said: "I drove 400 miles all around here. I went to see my friend Zulu and my friend Kaonde. We arranged a time and date for a meeting. About thirty of us were invited to State House. We ex­ plained our problems. Many in the government, including the president, are sympathetic, and they have listened. Nothing has changed. Now they say that our problems are being considered. I am very much a nationalist. I fought for independence. I want Zambia to be prosperous." A brief easing of the trade ban for high-priority items brought little

POLITICAL ARENA

and only temporary satisfaction to the businessmen. In fact, the enforcement of price-control regulations increased de­ spite the appeals from the business groups that followed the jailing of businessmen. Their inability either to change the practice of blaming the high prices on businessmen or to ease the shortage of supplies led some businessmen to sup­ port the short-lived United Progressive Party (UPP) in 1972. Price-control enforcement was used to harass suspected members. Thus, the businessmen were not effective when they challenged a key government policy even though the policy exacerbated inflation and production problems. Their interests were ignored by President Kaunda in favor of national pride and his foreign policy. When one considers the cost of Zambia's attempt to iso­ late itself economically from its hostile neighbor to the south and the overall effects of such policies, businessmen's reactions become understandable. Zambia has spent an in­ credible amount of money in the attempt to reorient trade, the nearly 300 million dollars committed for the Tanzam railroad being only one of the more conspicuous examples. Foreign policy in Zambia was not, however, an issue open to debate and discussion. Nor were the livelihoods and liv­ ing standards of the politicians severely affected because the cost increases hit the low-income African consumers hard­ est, and the blame for the rising prices was placed on the business sector. REACTIONS TO REFORM

The larger African businessmen were not altogether hap­ py with the economic reforms, although they favored the goal of Africanizing commerce. Those who expressed whole­ hearted support of the reforms favored the idea of Zambian independence and the overall changes it had brought rather than any specific aspect of government policy. Many others thought that more money was necessary for the successful implementation of the economic reforms. Some respondents did not support them at all. Many of the more established

POLITICS AND BUSINESSMEN

businessmen commented bitterly on the reforms' impact: "I am against them. They are stupid. They unsettle every­ thing. All of the foreign money is going. [Why?] Would you invest in Vietnam?" In general, such businessmen were quite knowledgeable about the reforms and explained their criticisms in detail. In their eyes, the lack of planning and the government's minimal contribution to the financing of the reforms were serious shortcomings. "We have reforms. We have no program to implement them. How can they ex­ pect anyone to take over the shops? I could, but I am work­ ing quite hard enough as it is. But the ordinary Zambian, or even the not so ordinary, really has nowhere to get money for buying businesses. It is up to the government." As the organized voice of these criticisms, the ZNCCI per­ sistently called for more financial aid and a detailed pro­ gram for the take over of expatriate businesses.7 In part be­ cause of this prodding, some additional loan funds were allocated for implementing the reforms through the Indus­ trial Finance Company. Although a serious implementation plan would have undoubtedly improved the reforms' effec­ tiveness, businessmen had little success in altering govern­ ment policy. This failure partly reflected the difficulty and high cost of rapidly putting such ambitious proposals into effect. However, the businessmen's failure to convince gov­ ernment agencies of the need for planning also reflected their difficulty in gaining access to the technocrats responsi­ ble for implementing economic policy. These white expa­ triates tended to believe the prevailing myth that African businessmen were incompetent and were often personally opposed to the policies they were charged with carrying out. This lack of access and sympathy was in direct con­ trast to the close relationship that the taxi association had developed with the road commissioner's office. ι A blueprint for economic reforms was published, but no substan­ tive program was developed (Zambia Ministry of Trade and Industry, 1971), and even this blueprint was submitted only a few months before the final deadline for non-Zambian traders.

POLITICAL ARENA

Other businessmen complained that their contribution to the independence movement had gone unrewarded while others received all of the benefits of government policy. One related: "I spent years fighting for independence. Mr. Lunda was going to school and getting ahead all that time. What has he ever done for the country? Yet he gets thou­ sands of kwacha of loans. Thousands of kwacha. I have got­ ten none." This particular man had, in fact, once gotten a loan and like many others, had not paid it back. Even addi­ tional loan funds and a detailed implementation plan would not have relieved all bitterness because some believed they were still "owed" favors for their part in the fight for independence. As a result of their discontent with economic policies, some African businessmen both publicly and privately sym­ pathized with an opposition party, the UPP, which was be­ ing organized in 1971 and 1972. To gain the support of businessmen and urban workers, the new party manipulated issues linked to the economic reforms and trading relations with Southern Africa. During the time UPP was being organized, almost every important businessman was ap­ proached by its founders. However, although forty of the sixty-six larger businessmen who expressed an opinion criti­ cized some policies or actions of the Kaunda government, only three openly aligned themselves with the new party. One of them was related to the party's leader. This lack of support reflected a realistic assessment of UPP's chances of success and the risks of supporting the party. Favorable government contacts were at stake, and no one wanted to back a loser. As one businessman stated: "I am not a bit for it. I think Kaunda will smash it. He has the power. [The man then made a fist.] I do think that he will soon use it. Why would anyone want to get involved in that?" His foresight proved accurate. UPP was anything but successful. By representing the views of many dissidents, however, its existence was perhaps partly responsible for

POLITICS AND BUSINESSMEN

some temporary changes in government economic policies, especially the easing of trade restrictions with Southern Af­ rica. Ironically, only those who did not join benefited. The UPP was banned in 1972, and over 300 suspected members were jailed, including several of our respondents. Personal Politicking

For African businessmen the best strategy for achieving particular aims was to activate personal relationships in in­ dividual cases. In one instance, the government banned im­ ports of construction materials from South Africa necessary for the completion of a particular project. The businessmen requested and received permission to import them. It was much easier to ask for and be granted an exception than to modify policy proclaimed by President Kaunda. Many other cases of discussion and intervention with political and civil service officials were cited by the businessmen. Firms used political influence to obtain trading plots, government con­ tracts, government loans, import permits, and the like. One hotelier in a rural district was disturbed when the army appeared to have purchased the land surrounding his hotel on three sides and proceeded to erect a tall cyclone fence topped with barbed wire. He immediately called upon an old political colleague, a relative in the defense ministry, to find out what the army's intentions were. Another business­ man with a government contract that would have resulted in a very small profit, or even a loss, if it had been com­ pleted as originally negotiated, went to the Public Works Department and successfully obtained a 15 percent increase. Still another businessman was able to secure a ban on im­ ports of a certain type and style of clothing he was begin­ ning to produce in Zambia. African businessmen were not alone in gaining conces­ sions from the government through personal representation. Often Asian and European businessmen did so as well. In one instance, an expatriate who was starting to manufacture a previously imported product was able to get the tariffs

POLITICAL ARENA

raised and thereby securely protect his new business. An­ other expatriate was able to sell part of his enterprise to several prominent Africans. For this purpose, the transfer out of Zambia of over 2 million kwacha was allowed. In­ credibly, approval for more foreign exchange than was nec­ essary to complete the transaction was granted, though the destination of the additional 100,000 kwacha was never de­ termined. The officials who granted such favors often received gifts, loans, or loan guarantees from those who requested the favors. One well-known foreign contracting firm built pri­ vate houses for many prominent politicians. Whether the full cost of these dwellings was being paid was impossible to determine. Favors of jobs for family members, short-term cash loans, access to automobiles and other resources, how­ ever, were not as well known. For obvious reasons, it was very difficult to get clear-cut information on the prevalence of such transactions. Though such practices were wide­ spread in Zambia, they did not include, as far as we could determine, direct cash payments for government favors. Business activity was easily unsettled by changes in gov­ ernment policy or by arbitrary administrative actions. Thus the business sector was becoming dependent on the govern­ ment for favors, and a potential for systematic corruption opened up which may be consciously though covertly fos­ tered by abrupt policy changes. Under these conditions, business requests were frequently met only when they were also to the advantage of a particular government agency, political group, or individual. The resulting pattern of ac­ commodation favored established businesses. Although businessmen were unable to influence the po­ litical system collectively, through individual and joint ac­ tions, they were able to have an influence on the implemen­ tation of policy. Virtually all policies left much discretion to government officials. By mobilizing kinship, political, and other connections, the businessman could get his individual case heard and acted on by those in power. Explicit and im-

POLITICS AND BUSINESSMEN

plicit bribes and various favors often facilitated accommo­ dation. Political considerations impinged in the granting of loans, contracts, trading sites, and other important re­ sources. In one instance the controller of IFC (the succes­ sor to Indeco Finance) said, "We started out all right, but now approvals for a lot of loans come directly from State House." He then cited a loan amounting to over 1.2 million kwacha (compare this with the median loan of 4,000 kwacha). With so much at stake, it is not surprising that many businessmen lent automobiles to useful individuals, invited them to lavish parties, and helped them obtain credit. In some cases, businessmen had even brought officials into their own business as silent partners. The Disinherited Expatriates

During the independence struggle the Europeans largely supported the federation, even though they were not in fa­ vor of the policies that extracted revenue from Zambia for the benefit of Rhodesia. The Asians were ambivalent; in the end most supported the nationalist movement or accepted its eventual success. After Zambian independence and espe­ cially after Rhodesia's Unilateral Declaration of Independ­ ence, a number of European businessmen left Zambia. This exodus was accelerated by the proclamation of the economic reforms. The Asians professed loyalty to the new state but were often opposed to particular policies. Many were UNIP members and purchased congratulatory advertisements in the newspapers for each of the national holidays. The Asians were in an insecure position after independ­ ence, yet their position did improve with the cessation of numerous discriminatory colonial practices and policies. Asians with Zambian citizenship benefited directly from the economic reforms; those with British or Commonwealth passports were hurt. Although the ensuing economic boom made some of both groups wealthy, Europeans had their privileges challenged, and their wealth cannot be legally re-

POLITICAL ARENA

moved from Zambia. Neither group has been more than slightly harmed by government policies since, like the Afri­ can businessmen, they pursued the strategy of accommoda­ tion. European and Asian businessmen we interviewed, however, were quick to combine criticism of the Zambian economic scene and government policies with expressions of racial prejudice, though the Asians were more circumspect than the Europeans. One especially outspoken European businessman commented: "What do they [Africans] know about running a government or a business? Even one of their leaders [Mr. Musakanya] says that they should not complain, since they used to run around in the bush naked before we came. They [the Zambian government] don't know that you cannot have everything at once. How can one expect prices to stay the same, while you change your usual and closer supplier and then truck everything in from a congested port down a long dirt road?" Another European respondent said: "How can they ex­ pect somebody to work hard and build up his business, when any time Kaunda can get up on his hind legs and say, Ί want fifty-one percent.' Only an African could think such a thing. They don't work, anyway." Of the thirty-four European and Asian businessmen we interviewed, twenty-eight expressed an opinion about the government, twenty-five of them very critical. Only one respondent expressed outright support for the economic reforms, and he was a Zambian citizen who benefited from them. The silence of the other six hardly indicated warm endorsement. Despite complaints, loss of power and influ­ ence, and the adverse effect of government policies, most expatriate businessmen remained in business in Zambia. The reason is quite simple: they were making money and were usually prominent. Most had managed to avoid the direct impact of the economic reforms through trusts and other devices. At the same time the government made it difficult for them to sell their businesses, get their money out of the country, and leave.

POLITICS AND BUSINESSMEN

Even so, two-thirds of the non-African businessmen said they were considering leaving Zambia. However, many were finding that it was not so easy to emigrate. The Asians discovered that their British passports were of little value, especially if they wanted to go to Britain. They were reluc­ tant to emigrate to India. For some it would have been their first trip there. Moving to Southern Africa, even if it were possible, would have subjected them to many racial restrictions. The Europeans had greater freedom and con­ sequently less commitment to Zambia. They could head south. As one European said, "I always keep my car full of petrol, just in case." Like the Africans, the European and Asian businessmen consulted with the government, asked for favors, and offered advice, but they too had little influence on policy. The Asian businessmen proposed a strategy for implementing the reforms in retail trade. According to the proposal, an Asian businessman would have trained his African succes­ sor and then be paid for his business out of future earnings. The government and the Asian community were to finance this plan jointly. This proposal was the result of hard work by leaders of the Asian community and was open to nego­ tiation. Even though the proposal was in some ways in the mutual interest of both Africans and Asians, the govern­ ment summarily rejected it. The rejection resulted in bitter­ ness in the Asian business community, and relations be­ tween it and the government were strained. Banks proposed a similar plan, and it too was rejected. The government in Zambia did not need to listen to Eu­ ropeans and Asians. In fact, conditions made it politically dangerous to appear to do so. Yet many Asians and Euro­ peans had long-term associates among the Zambian elite. They lent money to the elite and helped out with expertise. Some had taken Zambian partners. One high African gov­ ernment official was involved in twenty-two enterprises with various members of the Asian community. The African po­ litical elite made friends among businessmen of all racial groups.

CONCLUSION CONCLUSION

Both Zambia's ideology and its government were ambiva­ lent about private enterprise, even that controlled by Afri­ can citizens. Zambia's economic reforms were a mixed bless­ ing for African businessmen. Although the goal of the reforms was the Africanization of private enterprise, results were modest and the benefits unequally distributed. Some Africans became wealthy, and others improved their eco­ nomic position, but it has remained far from clear that the Zambian population benefited directly by having a few more Africans or the state in commerce, rather than Asians and Europeans. Yet, the economic reforms and the Africans in business served as important symbols of African inde­ pendence and advancement. At the same time, abrupt disruptions in established pat­ terns resulting from the sudden changes of import, supply, and credit policies brought on by a trade boycott of Rho­ desia benefited neither businessman nor consumer. One might argue that unsettled business conditions were inevi­ table, given the confrontations in Southern Africa over the decolonization of Angola and Mozambique and the achieve­ ment of black majority rule in Rhodesia and South Africa. However, members of the Zambian political elite also ap­ peared to benefit from these policy vacillations and may well have manipulated them for their own ends. Uncer­ tain policies enhanced the discretionary power of civil ser­ vants. By periodically making proclamations against trade with Rhodesia and clamping down on particularly visible imports, Zambian political leaders enhanced their inter­ national prestige. Attempts to formulate an indigenous po­ litical ideology and to carry out policies in such a context might give them added stature among intellectuals and third world leaders. Businessmen reacted to these changing policies in a va­ riety of ways. Because of the considerable political experi­ ence that some African businessmen had gained during the struggle for independence, they stayed aloof from party

POLITICS AND BUSINESSMEN

politics. Instead, both business groups and individual busi­ nessmen negotiated with the government to win conces­ sions and to work out accommodations. The advantages of accommodation for businessmen and civil servants were widely recognized by both groups. It would be surprising if government officials were to encour­ age ideological opposition to business enterprise. Many were establishing farms and other business ventures while their wives were opening shops. The leadership code which was meant to bar politicians, government employees, and em­ ployees of partially state-owned conglomerates from busi­ ness activity was "reinterpreted." A businessman-politician simply received no salary for his political efforts, but he was able to reap considerable economic advantage from his political position. To the extent that Zambian politics actually was a division of spoils, the elite were likely to neglect the interests of the mass of the population, and favoritism was likely to become the general rule, despite public statements to the contrary. On the surface, the relationship between business and government remained unsettled and somewhat antagonistic. Yet officials and politicians gained new career alternatives, part-time occupations, and retirement prospects. Thus they developed common interests with the business elite. Should a full-fledged coalescence of businessmen, politicians, gov­ ernment officials, and managers of partially state-owned conglomerates take root, development goals would not re­ ceive top priority in the making or implementing of eco­ nomic policy. However, such a pattern was only incipient in Zambia. So far there has been little evidence of policies being followed simply to improve the lot of politician-busi­ nessmen; neither were all businessmen in politics nor all politicians businessmen. Indeed, there was evidence that some business failures stemmed directly from politicians' inept attempts at entrepreneurial activities. How African business and politics are mixing in Zambia remains an open question.

CHAPTER VIII

African Enterprise, Entrepreneurship, and Social Change

CENTRAL to our study of African businessmen in Zambia

are three closely related topics: 1. What forces give rise to indigenous business activity? Are the individual attributes and social and economic variables that favor entrepreneurship different from those that lead to routine business activity? What accounts for business success in a postcolonial Afri­ can setting? This first topic is that of entrepreneurial supply and performance. 2. The growth and performance of African business in Zambia allows a realistic assessment to be made of the contribution and prospects of indigenous private enterprise within a wider development strategy in similar third world societies. The second topic deals with the desirability of allowing for varied contri­ butions of private and public enterprise in develop­ ment strategy, and the consequences policy choices have on the social structure and political system. 3. Our findings suggest the potential impact of African private enterprise on Zambian society. The third topic addresses Zambian and other efforts to escape continued reliance on foreign skills and capital with­ out sacrificing growth. These three topics are linked by a common thread to de­ velopment (and underdevelopment) theory, entrepreneur­ ship, development planning, and modernization. Although the significance of a single case should not be exaggerated, valid general theories about modernization or development

ENTERPRISE AND SOCIAL CHANGE

should be applicable in disparate settings. Zambia was an appropriate research site for raising questions about these issues because it faces dilemmas common to many third world societies. Its dependence on non-African enterprise, expertise, and capital, was marked, especially in the copper industry. Yet Zambia's dependent development has created resources and national income sufficient to enable its gov­ ernment to organize an economic system that might raise the welfare of its African population. ENTREPRENEURSHIP

To most social scientists the entrepreneur is simply the modern industrial businessman (Kilby, 1971:3), but Schumpeter provided a different meaning. The characteristic mark of entrepreneurship is employing resources in a different way, in doing new things with them (Schumpeter, 1961: 68), or as Marris (1968:31) put it with reference to small African enterprises in Kenya, "an ability to assemble or reassemble from what is available to one a new kind of activity, to reinterpret the meaning of things and fit them together in new ways. . . . In the African countryside, an innovation may not seem, at the outset, very remarkable —a wholesale business, a restaurant at a crossroad, a bus service, a saw mill. But to achieve it, the owner must have seen what others had missed—an unsatisfied demand, a way of raising money, a source of skilled labor—and put them together." The entrepreneur is thus an innovator in economic ac­ tivity: he introduces a new good or a new method of pro­ duction, he opens a new market, he locates a new source of materials, he puts into operation a new organization in an industry. The entrepreneur does not simply fill a de­ fined role, nor is he the incumbent of a particular position in an enterprise. He is not defined by a particular person­ ality type. If an entrepreneur settles down to run his busi­ ness along routine lines, he ceases to be an entrepreneur.

ENTREPRENEURSHIP

Entrepreneurship often calls to mind captains of indus­ try and financial giants. By such measures, much of Zambian trade and commerce, and certainly the small-scale enterprises we studied, would be excluded. Schumpeter himself did emphasize innovation in manufacturing and methods of production, but not to the exclusion of other economic innovations. Indeed, he recognized a basic and important similarity in the functions of the "captains of industry" in the industrial economy and "the village poten­ tate who combines with his agriculture and cattle trade, say, a rural brewery, a hotel, and a store" in a less developed economy (Schumpeter, 1961:78). The latter is precisely the kind of entrepreneurship increasingly found in Zambia. In our study we found innovations in marketing, management, and organization, and occasionally in production. Some re­ spondents in our sample did in fact employ resources in a different way: they did new things with them in Schumpeter's sense. The Zambian entrepreneur typically created his enterprise by combining savings, family labor, skills, and experience in a way novel to Africa. In line with Schumpeter, one should emphasize that in­ novation and invention are not the same thing. An entre­ preneur need not invent a new technology or organizational strategy. What we mean by innovation in Zambia is cap­ tured in Redlich's (1955) term "derivative innovation," i.e. the adoption and diffusion of original innovations into new contexts. In Redlich's view, the adoption of technology, organization, production, and marketing in a new social environment is an innovative action that makes an eco­ nomic contribution. The Zambian businessman has before him the models of Asian and European enterprise and in­ creasingly also those of successful Africans. The business­ man who builds a self-service, supermarket-style store in a provincial town or a low-income African urban neighbor­ hood, after he has observed it elsewhere serving Europeans and middle-income Africans, is a derivative innovator, as is the African butcher who sells refrigerated, inspected meat

ENTERPRISE AND SOCIAL CHANGE

in a European-style butcher shop to African customers who previously bought meat directly from slaughterers, if they ate meat at all. Even with such an inclusive definition, the majority of businessmen in Zambia, as elsewhere, are not entrepreneurs. Most engage in routine business. Even the innovators inno­ vate but occasionally, some only once in a lifetime, as Schumpeter accurately foresaw. Nevertheless, though deriv­ ative and small scale, innovation does take place in Zambia and is highly correlated with business success, as was re­ ported in chapter six. And it is through innovation that economic development starts at the grass-roots level. The cases of several innovative businessmen illustrate this point graphically. In the 1930s few Africans washed with soap. One successful retailer, described in chapter four, introduced soap into a village in Rhodesia in the early years of the Second World War. Such a simple innovation does have wider consequences. First, it launched this man on his way to a lucrative business career. Because soap and other items were popular, the profits he made enabled him to expand. Expansion meant that his customers were better served. Second, although the use of soap was not common among Africans in Rhodesia during this period, it was not difficult for indigenous manufacturers to make, and indeed, Africans began to make soap. Third, other businessmen started selling soap as well, and more consumers purchased it. The level of living increased, and resources for expan­ sion were created. At the same time, employment was also created, and a larger market came into being. The introduction of meat, soap, bread, or any other product does not completely alter the economic and social situation of the innovating businessmen. Nonetheless, busi­ nessmen who innovate successfully in one line can use their accumulated profits in other areas. For example, several innovative retailers had by the time of our study established factories employing a total of nearly 1,000 people. The profits from their earlier business activities had financed

ENTREPRENEURSHIP

part of these newer ventures. One businessman interviewed had progressed from owning the first African beer hall, to the first African bar, to the first African hotel, to the first African-owned factory in Lusaka. Others have expanded from cattle raising to butcher shops. At the same time, through experience these businessmen learned skills and were teaching them to others. It is this process that Schumpeter (1961:54) referred to as "the fundamental phenom­ enon of economic development," and that Weber (1958: 67-68) described as one of the elements of the spirit of capitalism. Distribution and Development

As elsewhere, most of the economic activity of African traders and businessmen in Zambia was routine rather than innovative. Aside from a few exceptional cases, small-scale trade cannot be a primary means of capital accumulation and entrepreneurial training leading to industrial enter­ prises, commercial farming, and ranching on a large scale. Yet distribution can enhance the welfare of consumers, by providing services and facilitating indigenous economic de­ velopment and change. The small-scale, labor-intensive, decentralized, private distribution network consisting of African traders in mar­ kets and small retail stores in the African neighborhoods of Lusaka, and in villages, trade centers, and district capi­ tals in the provinces provided many services to the African consumer. The typical African household had little storage space and no means of refrigerating perishables; consumers had little cash on hand for most of the month; they could not buy in large quantities. Instead, they had to buy small amounts daily, with luck at low cost in time and transpor­ tation. Markets and small stores a short distance from the vast majority of consumers allowed them to purchase fresh milk and bread, a few fresh vegetables, a bottle of beer, a cup of cooking oil, one or two fresh or dried fish, two as­ pirin tablets, a small bar of soap, a small heap of charcoal

ENTERPRISE AND SOCIAL CHANGE

for cooking and a Coke bottle full of kerosene for lighting, five pieces of candy for the children, one envelope for mail­ ing a letter, a small sack of maize meal, and dozens of other consumer goods of the most ordinary kind at reasonable prices and in the small quantities they needed and were able to afford at any particular time. Markets and small stores also allowed them to purchase a simple yet sturdy table and chairs on credit after a small down payment, to have their watch, radio, bicycle, and sandals repaired, to buy a bucket for drawing water at a public tap and a thread and needle for mending, and to have a school uniform made for a youngster. To be sure, for dresses, suits, trousers, shoes, blankets, pens, plates, and fabrics, choice was much greater and prices somewhat lower in the main commercial district where the state corporations and European and Asian stores were located. But these purchases were rela­ tively infrequent and constituted a smaller share of the lowincome budget than the daily necessities of life bought in the small African retail sector. In rural areas, African retailing was more concentrated in general trade goods than in food. The range of consumer goods available in all but the smallest village store was impressive. Rural Zambians had a wide choice of fabrics, clothings, footwear, household wares of all types from flash­ light and radio batteries to powdered milk and cosmetics, and many other goods, if not in their village, at least in a nearby trade center or store built at a crossroads. More­ over, retailers tended to extend credit during the months before the harvest when rural dwellers were short of cash. In urban as well as rural areas, prices usually conformed to the statutory ceilings. Temporary shortages reflected not so much a breakdown in the distribution system locally, but national shortages in certain commodities which occurred from time to time. In sum then, the basic necessities of life as well as other consumer goods were available to the vast majority of Zambians through a distribution network that had been financed almost entirely from the savings and

ENTREPRENEURSHIP

business earnings of the retailers themselves, and therefore was not dependent on state subsidies. Distribution was serving the consumers well. This routine distribution system resulted from the ac­ cumulation and diffusion of successful innovations. Slow change in the distribution system is a continuous process and leads to indigenous economic development. In several provincial towns we interviewed bakers who had recently started producing loaves of bread with modern equipment. These men must be contrasted to the bakers in most small towns, who produced a limited quantity of buns in outdoor brick ovens. Some consumers had already acquired a taste for bread during prior urban residence, but a wider clien­ tele was also adding bread to its diet. One baker was ex­ perimenting with daily van deliveries of fresh bread to nearby village stores and was optimistic about expanding rural sales and increasing his output. Yet in the same re­ gion, though much further from the line of rail, another baker with similar equipment and production capabilities had difficulty obtaining a steady supply of unspoiled flour and selling his limited output through his bakery and other town stores. However, bread baked in modern equipment with unspoiled ingredients is generally of higher quality than buns baked in outdoor ovens, which often have an irregular consistency, taste, and doneness. Should bread slowly catch on in rural Zambia, spreading from rural towns to nearby villages and later to more remote villages, one could say that the diet would be improved, and the standard of living of the rural population, all else being equal, would become marginally higher. Furthermore, the shift to bread would generate demand for workers in production, trans­ portation, and maintenance, to mention only the most di­ rect consequences. An increase in commercial activity might then provide other entrepreneurs with an opportunity to make further innovations, which, if successful, will in time become routine. Such are the links between distribution, changing levels of welfare, entrepreneurial activity, even-

ENTERPRISE AND SOCIAL CHANGE

tual accumulation of capital, and development. It may be a truism that production and distribution are inextricably linked and together lead to economic development, but it is one that is often overlooked in scholarly concentration on industrial change. The changes in distribution we have just described are not earth shattering in their individual impact, but they take on importance when others adopt the same and similar practices. New products and improved services to customers increase welfare and raise standards of living. They also create new jobs. The productive reinvestment of entrepre­ neurial profits stimulates further economic growth. It is a mistake to think that all innovation occurs in large govern­ ment-sponsored projects. Nor is it valid to equate entrepreneurship with purposive planning, as Stinchcombe (1974: 72-75) recently proposed. Large enterprises—governmental or nongovernmental—may go through the motions of plan­ ning and yet continue routine economic activity. Small businessmen too busy to plan may on the other hand intro­ duce innovations based on their close knowledge of a par­ ticular market, organization, or technique. It is not plan­ ning but innovation that is the mark of entrepreneurship. Despite the mundane appearance of much of what we have categorized as innovation in Zambia, it does add up to sig­ nificant social change. The Supply of Businessmen and Entrepreneurs

Are the conditions that favor new businesses the same as those that facilitate entrepreneurial activity? The answer to this question is by no means self-evident. If the condi­ tions are similar, then more businessmen necessarily means more entrepreneurs. It is possible, however, that the in­ crease of businessmen may outstrip the incidence of inno­ vation and thus lead to diminished prospects for any in­ ternal development dynamic. Economists tend to link the supply of businessmen with expanding opportunities: more opportunities, more busi-

ENTREPRENEURSHIP

nessmen (Kilby, 1971 "-3)- This proposition gains support from the Zambian case. With the expansion of consumer demand and with the abolition of political and adminis­ trative barriers to African enterprise, many new Africanowned enterprises were established throughout Zambia. The burgeoning number of businessmen reflected the rewards of a business career compared to other opportunities. Although the low level of skills, sophistication, and capital of these new businessmen limited the quality and size of their ven­ tures, the creation of new opportunities—not some sudden increase in resources—accounted for the dramatic growth in their ranks. A low level of skill was not a practical ob­ stacle to commercial business activity. To be sure, continued growth will depend on increased skills and accumulation of capital, but these resources, as we have seen, may be acquired in the course of operating a business. To determine whether such growth leads to entrepreneurship requires an empirical investigation. For Schumpeter, entrepreneurial activity and routine business activity were markedly different: "The choice of new methods is not simply an element in the concept of rational economic action, nor a matter of course, but a distinct process which stands in need of special examina­ tion . . . the carrying out of new combinations is a special function, and the privilege of a type of people who are much less numerous than all those who have the 'objective' possibility of doing so. Therefore . . . entrepreneurs are a special type and their behavior a special problem" ( 1 9 6 1 : 80-81).

Schumpeter assumed that the entrepreneur will encounter hostility and resistance from vested interests threatened by innovation, legal and political impediments, and consumer skepticism and conservatism. Because of these obstacles, Schumpeter stressed that entrepreneurs must possess tough­ ness, determination, and the capacity to overcome resist­ ance. He noted that these same qualities might also drive people into noneconomic spheres of action, such as politics,

ENTERPRISE AND SOCIAL CHANGE

the military, and the arts. He recognized a variety of mo­ tives for entrepreneurship, in addition to material and he­ donistic ones: the desire to be independent, to be one's own man; to succeed for the sake of success; to prove oneself superior to others; the joy of creation. He was quite ex­ plicit, however, that his concept of entrepreneurship did not stand or fall with any particular "psychology of the entrepreneur" or any set of motivational assumptions (1961:92-94). Whatever the specific aptitudes and motives for entre­ preneurship, Schumpeter (1961:59) thought that they are normally distributed (in the statistical sense) in any popu­ lation as are presumably other aptitudes like the ability to sing. That is, a minority is quite deficient in these abilities, the majority in the central range of the distribution pos­ sesses them to some extent, and the minority in the upper tail of the distribution is well endowed and will provide most economic innovations. In dealing with the question of whether such qualities may be in low supply or com­ pletely lacking in some populations, Schumpeter contended that "it is . . . not true that habit or custom or non-economic ways of thinking cause a hopeless difference between the individuals of different classes, times, and cultures" (1961:80). Thus he is generally optimistic about the entre­ preneurial endowments of non-Western peoples. Although Schumpeter considered entrepreneurs a crucial, if not the key, factor in social change and economic devel­ opment, he did not theorize about the sources of entrepre­ neurial activity in different cultures and societies. Some re­ searchers working in the contemporary third world have tried to trace entrepreneurial activity to social and psycho­ logical sources. Their discussions often start with the ob­ servation that development is difficult and slow in third world countries and that entrepreneurship must therefore be scarce. There must exist many and formidable obstacles to development and entrepreneurship—some social struc­ tural, some cultural, and some psychological. These ob-

ENTREPRENEURSHIP

stacles are conceptualized as fundamental, deep-rooted char­ acteristics of the societies and personalities under discussion. The part played by external constraint and the lack of re­ sources is deemphasized. In the psychological variants of these theories, a lack of entrepreneurship is linked to an absence of achievement motivation (McClelland, 1961), of the Protestant ethic (Weber, 1958), of psychological mod­ ernism (Inkeles, 1969), or of some other personality trait. Some of these theorists (e.g. Hoselitz, 1964, 1970) assume that entrepreneurial activity in third world settings is nega­ tively sanctioned deviant behavior since it is not in accord with cultural values. These theories suggest a number of hypotheses to be tested with the Zambian data. First, whole populations could have a high incidence of certain psychological charac­ teristics which either hinder or facilitate their entry into and success in business activity. Second, particular cultural patterns (e.g. religious beliefs, inheritance rules) might have similar effects. Third, social patterns such as extended kin­ ship or sharing with members of one's ethnic group might inhibit or encourage enterprise. Although we did not make a definitive study of the psy­ chological attributes of the Zambian population, it is most improbable that the average Zambian is unusually highly motivated to achieve. Zambian cultural and social patterns, including the widespread extended family system, are also improbable candidates for explaining the growth and ex pansion of African enterprise. Furthermore, the low levels of skills, training, education, and resources of the African population do not provide optimism about the prospects for business enterprise in Zambia. Yet, despite these obstacles, Africans rushed into business after independence. Clearly, this development did not sig­ nal a radical change in the personality, culture, or social structure of the whole population. It is unrealistic to sup­ pose that Zambians simultaneously experienced a conver­ sion that facilitated growth. Instead, that growth can be

ENTERPRISE AND SOCIAL CHANGE

more simply explained by an upsurge of opportunities for Africans resulting from economic expansion and political changes after independence. Moreover, neighboring Malawi, where ethnic groups and customs are identical to those in much of Zambia, did not experience the same increase in African business activity. Unlike Zambia, it is extremely poor and did not have an economic boom after independence. Thus our study strongly supports the contention that opportunity fosters enterprise. Though many Africans were in business, it is nonetheless possible that the psychological, cultural, and social factors referred to earlier may have mediated the effect of new opportunities. They might determine which Africans seized such opportunities. Our findings, however, show that all categories of Africans are being drawn into each area of business. No ethnic and no religious group is gaining a large advantage over the others. Furthermore, the busi­ nessmen are, if anything, even more supportive of their ex­ tended kin than other Zambians. No deviant group in Zam­ bia is prominent in business activity. Instead, a variety of Africans are engaging in business because it represents the best opportunity for them in view of their skills, resources, and realistic alternatives. Looking at business success, we found little evidence for effects that resulted from religion, ethnicity, or family. In­ stead, for all businessmen, prior experience and competent management account best for success. Innovation was, of all variables, the most strongly associated with success. Or putting it another way, it is the entrepreneur who is the successful businessman. Though nearly all innovations are derivative of the practices of European and Asian business­ men, they are a significant advance in African business so­ phistication. Innovation is more difficult to account for than success in business, but it, too, is associated with superior educa­ tion and a complex, prebusiness occupational experience, and not with ethnicity or religion. Entrepreneurship in

ENTREPRENEURSHIP

Zambia is distributed something like the ability to sing, as Schumpeter (1961:80) suggested. Yet singing lessons and the availability of a piano are useful in developing that ability, though they may be insufficient for untalented sing­ ers, and the extraordinarily gifted may not need such aids at all. Entrepreneurs in a Non-Western Context A number of problems, difficulties, or obstacles to enter­ prise and economic growth do not stand up under close scrutiny because entrepreneurs may find ways of bypassing them and even of turning them to their advantage. In a seminal paper entitled "Obstacles to Development: A Clas­ sification and Quasi-Vanishing Act," Hirschman (1965) questions the common assumption that the existence of the extended family discourages development because it dilutes individual incentives and mandates distribution of resources gained through successful enterprise. If people have a strong commitment to the collective welfare of their extended family, they may well exploit it for assembling resources in an economic enterprise: "The special relationship existing among [family] members permits them to undertake new tasks requiring cooperation without prior mastery of such complications as hiring labor and keeping accounts. Fur­ thermore, the members may pool their resources not only for consumption, but equally for investment purposes; and thus it may be possible for them to finance business ven­ tures as well as advanced education for the more gifted among them" (Hirschman, 1965:387). The advantages and importance of strong kinship ties in the early history of Western capitalism have been documented (Redlich, 1958: 184), as they have been also for many middleman minorities (Benedict, 1968; Khalaf, 1966). Accordingly, it is best to bring an open and skeptical mind to any consideration of the alleged advantages and disadvantages of particular so­ cial arrangements for development. Entrepreneurs may dis­ cover the right formula for enterprise in a diversity of social

ENTERPRISE AND SOCIAL CHANGE

settings. In the case of rural Zambian businessmen, the pull of their extended family has drawn many back from city jobs to establish enterprises in the provinces.1 These men operate their businesses for the benefit of the family and usually with the family's help. They have brought a modest amount of innovation to rural Zambia. Though most of these men were not innovators, they have creatively adapted to a new situation. COMPARISONS Entrepreneurial Supply

To what extent are our findings peculiar to Zambia? To what extent are they generalizable and useful for theory? To answer these questions at least suggestively, we will compare our findings with those from some other African countries: Garlick's (1971) study of Ghanaian traders; Marris and Somerset's (1971) survey of Kenyan businessmen; and Nigerian industrial businesses portrayed by Kilby (1965), Nafziger (1969), and Harris (1971). Businessmen in Nigeria and Ghana had greater business expertise developed through longer experience than those in Zambia and Kenya. The two former countries faced less European penetration and domination than Kenya or Zam­ bia. At the same time, Ghana and Kenya are poorly en­ dowed with natural resources and did not have bright eco­ nomic prospects. Zambia and Nigeria, on the other hand, had experienced rapid economic expansion. Not surprisingly then, African business enterprise in the late 1950s and early 1960s in Ghana significantly differed from what we found in Zambia in the early 1970s. Garlick's 1 Among rural businessmen, success was not as strongly associated with the explanatory variables as it was in Lusaka (see chapter six). In­ novation was important as a factor leading to success in rural areas, but it did not have the overriding importance it had in Lusaka, in part because the average rural innovation was less of a departure from routine business.

COMPARISONS

study, however, dealt primarily with what we call substan­ tial businesses. There was an abundance of petty traders in Ghana, but Africans had also a stronger foothold in me­ dium-sized businesses dealing in imported goods and had on the average been in business longer than in Zambia. This difference is due largely to the different colonial his­ tories of the two countries. Ghana had never been a white settler colony, and the absolute size of middleman minori­ ties (Indians and Levantines) as well as their numbers in commerce were smaller than in Zambia—and that in a population double in size. Though "there was so much activity in the distribution sector in West Africa that growth in the size of some African firms seemed probable" (Garlick, 1971:1), Garlick's main finding was that there was a shortage of entrepreneurship, dynamism, innovation, and risk taking among Africans: "While Ghanaian traders did not lack business acumen (as evidenced by their switching to different commodities in order to take advantage of mar­ ket fluctuations, and by their diversion of earnings from trade into other investments, either higher yielding or more secure), they were, nevertheless, rentiers at heart. Their long-run objective was to escape the uncertainties of com­ merce and to be able to live off the yield of secure assets (real estate and cocoa farms)" (1971:146). This finding runs counter to our account of Zambian business activity. However, there are some important dif­ ferences between Ghana at the time of his study and Zambia fifteen years later that might well explain the more cautious business orientation of Ghanaians. Two differences particu­ larly stand out: (1) Ghana's economy was stagnant, while Zambia's was expanding; (2) profit margins in trade were below those we calculated for Zambia and were less at­ tractive (taking into account risk) than investment in cocoa and real estate. These two alternatives or any similar invest­ ment opportunities simply did not exist in Zambia. Unlike the Zambian pattern of businessmen originating in all ethnic groups, Garlick (1971:30) found that the Akan

ENTERPRISE AND SOCIAL CHANGE

group, in particular the Ashanti in Kumasi and the Kwahu in Accra, was predominant (86 and 90 percent respectively). Though unexpected in Accra since the Kwahu homeland is hundreds of miles away, this finding reflects historic pat­ terns in the ethnic division of labor in Ghana and cannot be used for drawing conclusions about the salience of cul­ tural factors for the supply of businessmen. The status of businessmen in Kenya in 1966-67 at the time Marris and Somerset (1971) conducted their study more closely resembled that of businessmen in Zambia than in Ghana. Kenya also had been a settler colony, but Asians there far outnumbered Europeans. Although Marris and Somerset do not provide numerical trends in the number of businessmen by ethnic group, non-Africans in Kenya clearly dominated trade even more completely than in Zam­ bia. At the time of their study, Africans were in an expan­ sionary phase. They were breaking out of market trading and petty shopkeeping into commerce, manufacture, and services of about the same size and complexity of operations as the substantial urban businessmen and large rural busi­ nessmen in Zambia. Kenyans were also facing everywhere the challenge of established Asian and European businesses. These foreigners, especially the Asians, held an increasingly insecure position as their citizenship status and future role in an independent black African country were called into question. Therefore, like Zambian Asians, they were cur­ tailing their business operations and thus providing Afri­ cans with the opportunity to establish themselves in new ventures. Kenyan businessmen were strikingly like their Zambian counterparts. They were not a religious minority in the areas where they conducted business. Their social origins and occupational backgrounds were advantaged relative to their age peers. Their position as businessmen was not in any sense deviant or marginal, though it lacked social stand­ ing compared to higher civil servants and salaried employ­ ees. Their stated reasons for entering business were eco-

COMPARISONS

nomic and vocational, as in Zambia. They did not have a sense of being a cohesive business class with common inter­ ests. Much as in Zambia, they adopted European role mod­ els of business enterprise. In Kenya, however, the Kikuyu were overrepresented by a factor of two in commerce and by a factor of three in industry, whereas no one ethnic group predominated in Zambia. Marris and Somerset cite three dimensions on which the Kikuyu differed from other Africans in Kenya: (i) They had experienced the most deprivation and the most uprooting of their traditional way of life and had played the predominant role in nationalist and postindependence politics; (2) they had had the most exposure to European life styles and attitudes and were most experi­ enced in the ways of a modern economy; (3) they had more resources for entering business, including access to political sponsorship. Because Marris and Somerset's sample was drawn from recipients of a government loan program, their finding about Kikuyu overrepresentation in business may be somewhat biased. Kikuyu were also overrepresented in government and might well have favored other Kikuyu with loans. In addition to economic and vocational motives for un­ dertaking and succeeding in business, Marris and Somerset found that the desire for achievement, social prestige, and recognition, as well as the sudden removal of barriers to occupational mobility, were important stimuli for Kenyan businessmen. Such was also the case in Zambia. However, they further contend that patriotic sentiments about business's contribution to national development played an important role in the psychology of the entrepreneur—cer­ tainly a larger one than we found in Zambia. The impor­ tant group of Kikuyu businessmen had had a more intense collective, nationalist experience in opposing the colonial regime in Kenya than Zambian businessmen had, and the climate of opinion in Kenya immediately after independ­ ence was more politicized than it was in Zambia at the

ENTERPRISE AND SOCIAL CHANGE

time of our study. It would be interesting to find out whether patriotic sentiments have persisted among business­ men in Kenya. The Nigerian studies did not focus as comprehensively on all manner of businessmen, since each study was limited to one industry or type of business. However, according to Harris (1971), there was little systematic overrepresentation of any ethnic group in Lagos businesses, and most provin­ cial industrialists conducted business in their home prov­ ince. In sum, there is little evidence from the cases of Ghana, Kenya, Nigeria, and Zambia to support notions of marginality, deviance, or minority status in the origins of business­ men. In three cases (Zambia, Nigeria, and Kenya) the upsurge in business activity can be traced to significant changes in the economic situation and political cilmate. In Ghana, independence was followed by an economic re­ cession which did not encourage sustained private enter­ prise. Expressed motivations for business, though diverse, emphasized first and foremost pecuniary gain. Throughout the continent African businessmen have responded posi­ tively to economic opportunities. Entrepreneurial Performance

The findings of these studies about success and failure can be compared as well. All use concrete criteria of suc­ cessful performance: firm size, turnover, growth rate, growth of assets, survival, or some combination of these. EDUCATION

Some common trends emerge for all the businessmen studied. Though the average level of education of African businessmen was quite high compared to their age peers, the correlation between education and success in all studies was low, especially when other factors were taken into account.2 In Africa schooling is not necessary for entry into 2 In our Zambian sample we did find a sizable correlation (.387 for

COMPARISONS

business and is but a small advantage for success in business. ETHNICITY

Findings about ethnic differences in business success tend to be weak or nonexistent, and the few observed differences have alternative interpretations. Harris (1971:338-341) re­ ports that there was some tendency for the Ibibio, Edo, and Ibo entrepreneurs to have larger and more successful firms than the Yoruba and Hausa, but the relationship is not statistically significant. Since ethnicity and region were highly correlated, and size and success of firm might be in­ fluenced by the economic structure of a particular region, even these weak correlations cannot be unambiguously at­ tributed to ethnic differences. Garlick (1971:30, 42) writes that in Ghana turnover was higher in Accra than in Kumasi and that Accra businessmen tended to be Ashanti whereas Accra businessmen were Kwahu. But since both groups are Akan, closely related linguistically and cultur­ ally, cultural factors can have little significance in explain­ ing this difference. Marris and Somerset did not analyze performance by ethnic group. In our Zambia study, to re­ peat, associations between turnover and ethnic group were low to negligible for Lusaka businessmen. The modest as­ sociations observed among rural businessmen were due to an intentional bias in the samples and vanished when mul­ tivariate techniques were used. CAREER

In all studies, an occupational background in agriculture was uncommon. With this exception, businessmen had var­ ied occupational histories. One might well expect that a particular occupational experience would be linked to suc­ cess because of the opportunities of acquiring useful skills Lusaka businessmen, .340 in rural areas) between education and turn­ over. However, it decreased to close to zero when other factors were controlled. Education did have an indirect effect on turnover through innovation.

ENTERPRISE AND SOCIAL CHANGE

and appropriate management styles. According to Harris (1971:344-346) former traders in Nigeria had higher average success than former craftsmen, professionals, or white-collar employees. Yet the associations were weak and differed among industries. In Zambia, we found a small association between occupational background and success in the rural areas, and none in Lusaka. THRIFT

Thrift and a disposition to defer gratification are fre­ quently thought necessary for success, since conspicuous consumption can lead to a squandering of business earnings and a neglect of business. Nevertheless, none of the studies attaches much importance to spending patterns for the eventual success or failure of established businesses. Marris and Somerset do portray businessmen in Kenya as more ascetic than those we studied in Zambia where business success often led to a comfortable modern house, a large car, and sometimes a second wife; but profits were higher in Zambia. However, businessmen in both countries men­ tioned inattention to business and excessive time and money spent on women and drink as the principal reasons for business ruin. FAMILY

The pressures on businessmen to meet social obligations to family and more distant kin (including employment of inefficient kin) are a frequently alleged obstacle to business success. As Marris writes (1968:30), "it is often said that the traditions of African family life inhibit individualism and the accumulation of capital, that the obligations of kinship drain the resources of an incipient entrepreneur. No sooner does a man rise above his kinfolk than he is overwhelmed by imperative demands which rob him of the profits of his enterprise. He cannot save money to expand his affairs, and sooner or later either fails or becomes dis­ couraged from further effort. The ambitious and talented

COMPARISONS

are ruinously exploited by their less able and vigorous family." African businessmen in all the settings studied com­ plained of social obligations to their families and saw them far more as a liability than an asset for business success. Nevertheless, there is no clear indication that kin obliga­ tions are a significant factor in success or failure. It is dif­ ficult to establish quantitatively the degree of financial drain entailed in social obligations, not to speak of loss of time devoted to the business and inefficiencies in business operation. However, Harris (1966), Nafziger (1969:31), and we all found that the number of supported dependents was positively associated with success, even though the successful businessmen might spend proportionately less than their less successful counterparts. In contrast, Garlick (1971:88-106) attributes great weight to the liabilities of meeting extended family obligations and of matrilineal inheritance. Family costs, such as school fees for one's children and those of kinfolk, represented a heavy drain. It is unlikely, Garlick argues, that a businessman's educated children would join the business as skilled em­ ployees or partners because of the low prestige of business in Ghana. Garlick also found that the chances of sole pro­ prietorships surviving from one generation to the next were slim because of the prevalence of matrilineal inheritance in Ghana, even though businessmen did attempt to establish testamentary wills. Unlike those in Ghana, the substantial businessmen else­ where had learned to insulate and protect their businesses from excessive demands of kinfolk for financial subsidies and employment. Many planned for the continuance of their business after their death and took steps to ensure that their wishes would be followed. In contrast to much conventional wisdom, then, none of the studies indicated that nuclear families, specific occupa­ tional experience, much schooling, or austere life styles lead to business success.

ENTERPRISE AND SOCIAL CHANGE MANAGEMENT

Business success in Zambia was achieved through specific practices the businessmen used to conduct their businesses. Those who kept account books and used technology well became successful. Marris and Somerset found that sound management, as measured by quality of bookkeeping and systematic cost accounting, was associated (though weakly) with success in Kenya. In the Nigerian bread industry study, Kilby (1971:31) documented that three-quarters of potential profits were lost because of raw material wastage, damaging of bread during baking, and extensive employee pilferage. He at­ tributes these problems to "failure to regularly maintain equipment, inadequate coordination of material purchases with product orders, a disinclination to utilize written re­ cords for purposes of control, and the absence of conscien­ tious supervision in the work place." Harris (1971:351) similarly found that in Nigerian industry "the level of ef­ ficiency within the firms was extremely low . . . closer super­ vision, better organization, improved layout, and quality control are desperately needed on the production side. . . . The general standard of financial management is also very low." Firms in Nigeria that excelled in such aspects of man­ agement flourished. Sound management thus emerges as important for success in the studies under review. Management and supervisory weaknesses were traced in these studies to the solo style of management common throughout Africa. The present generation of businessmen consisted typically of the owner-founders of enterprises who were inclined to run them as one-man shows. The busi­ nessman's penchant for controlling everything himself was reinforced (and perhaps created) by the difficulties of hir­ ing capable, honest, and technically competent supervisors. After a business reached a certain size, however, an owner who was unable to delegate responsibility would be forced to contend alone with both routine matters and pressing

COMPARISONS

emergencies. Inevitably, important problems would be over­ looked or slighted. This management weakness was singled out as an impor­ tant barrier to success in Nigeria by both Kilby and Harris. It was also in evidence in the smaller and less complex businesses studied by Garlick and by Marris and Somerset. With respect to Ghana, GarIick (1971:139) writes: "The problems of finding business associates and reliable subor­ dinates, the demands of the family, and indeed the whole social structure and ethos reinforced this tendency to keep business to within the size which one could manage." Marris and Somerset (1971:116) present evidence that among the large Kenya businesses a solo-management style retards success and growth. Ironically, then, the very same qualities of ambition, energy, and individualism which initially made for success may later impede it. The one exception to these findings was in Zambia where a solo-management style was also quite common, yet did not lead to difficulties. When Zambian businessmen di­ versified, they typically added adjoining and complementary businesses and tapped a wider range of opportunities. Per­ haps the lack of observed negative effects of solo manage­ ment in Zambia was due to the fact that few businesses there had grown to the size and level of complexity where its weaknesses become manifest. MARKETS

Marris and Somerset found that a competitive advantage was the principal source of success. Competitive advantage was in turn linked to type of business: retailers faced little competition from outside their locality but had a limited market and few competitive advantages within a district. The manufacturers of a standard product had a large mar­ ket but faced competition from non-African and even over­ seas enterprises. Both types of business were among the less successful in Kenya. In contrast, wholesalers, service indus-

ENTERPRISE AND SOCIAL CHANGE

tries, and manufacturers of specialized products were typi­ cally more successful. They had a localized yet much wider market than retailers, but did not attract much competition from large non-African firms (Marris and Somerset, 1971: 165-169). In our study innovation, especially marketing innovation, was most highly and directly linked with success in Lusaka, though less so in rural areas. Since innovation frequently confers at least a temporary advantage over one's compe­ tition, our study provides support for the Kenya finding. Though Harris (1966) found the same incidence of inno­ vators among Nigerian industrialists as we found among Zambian businessmen, he does not report the effect of in­ novation upon success. Conclusion

A common pattern emerges from this comparative review of studies of African businessmen. Sound management and competitive position are the keys to business success. As­ cribed characteristics like ethnicity and parental social class have low to negligible effects. Acquired characteristics like schooling, experience, and training, are but mildly associ­ ated with success. These results should not be surprising. African entrepre­ neurial performance is accounted for in much the same way as entrepreneurial performance elsewhere. Success de­ pended on variables within the control of the businessman himself. His cultural heritage did not inevitably stack the cards against his success. Nevertheless, the milieus of African businessmen are not those of developed countries. Personnel with technological and managerial skills were in short supply. There was a lack of familiarity with the complex division of labor neces­ sary for business enterprise beyond a certain size. Isolation of African businessmen from the major economic actors and institutions (banks, accountants, business services, often run by non-Africans) was difficult to break down. The African

ENTERPRISE IN DEVELOPMENT

businessman's solo-management style was perhaps a tem­ porary adaptation to these milieus. There were many ways in which businessmen might improve their operations, and they did show a willingness and capacity to do so. In no country studied did the researchers find the robber barons and the heroic capitalists familiar from American and European history. Nor was a decisive movement toward class consolidation portrayed by any researcher. African businessmen were constrained by historical circumstances to play a more modest role in shaping the direction of their societies than entrepreneurs in the capitalist countries. The colonial legacy, the limited economic and human re­ sources of their countries, and government policies and actions delimit the role of African private enterprise. In the foreseeable future, the state and large foreign enter­ prises will remain the most important economic institutions in most African countries. AFRICAN PRIVATE ENTERPRISE IN ZAMBIA'S DEVELOPMENT STRATEGY

With the rapid growth of African business in Zambia, its overall efficiency and general role in Zambia's society and economy become important questions. What part can and should private African business play in Zambia's de­ velopment efforts? What consequences does its growth have on the social forces shaping Zambia? Put simply: do the advantages of private enterprise outweigh the costs? We do not intend to provide an answer based on a preconceived ideological attachment to private enterprise or to state own­ ership as the necessary or most effective strategy. Policy analysis for a society committed to a mixed development strategy, as Zambia is, must deal pragmatically with empha­ sis, direction, and results. The issue is whether more or less private enterprise should be encouraged and by what means. Our findings indicate that African business activity had a positive impact on economic growth in Zambia. That does

ENTERPRISE AND SOCIAL CHANGE

not mean that subsidies or favored treatment should be accorded African business activity, nor does it mean that local laissez faire capitalism is the best path. But the em­ phasis on big projects is an unfortunate carry-over from the past emphasis on big-push notions of economic develop­ ment as well as a consequence of misplaced governmental attempts to build prestige through automobile plants, steel mills, and other forms of conspicuous development. The big-push approach ignores a large measure of the actual economic activity taking place in many third world socie­ ties. Furthermore, the capacity to organize and carry out development in a centralized manner did not exist in Zam­ bia, nor in most other less developed countries (Hirschman, 1958). Many Zambian semigovernmental enterprises were poorly managed, had a confused sense of mission, and ex­ perienced numerous other difficulties. Despite the largely unsuccessful performance of government agencies, it has become fashionable in Zambia and elsewhere to give short shrift to indigenous private enterprise in development strategies, even though it is a logical substitute for the state sector for many activities. Efficiency

It has been argued, with little recourse to data, that the African business sector was less efficient in Zambia than the private non-African sector. Be that as it may, inefficiency was definitely rampant in the Zambianized (i.e. national­ ized) state sector. To the extent that inefficiency reduces profits, it creates a drag on growth because profits are re­ quired for reinvestment and for development expenditures. Although there is no guarantee that a private company with African ownership would reinvest profits into pro­ ductive endeavors, there certainly would be little or no reinvestment without profits, and some disinvestment might occur if capital was used to meet deficits. State-owned com­ panies also need profits. Their profits could, of course, be used for social welfare expenditures, but that would be an allocative decision to be made only after the profits were

ENTERPRISE IN DEVELOPMENT

earned. For economic growth, the state enterprises must also invest their retained profits productively. The profit rate on capital is one of the best indicators of the relative efficiency of an enterprise: if capital is well employed, then profits should be high. Conversely, if capital is poorly employed, or if expenses are unusually high, profits should be low. In Zambia, according to figures pre­ pared for the Second National Development Plan, private retail businesses were very profitable: they earned a rate of return on capital of about 38 percent (Rihtman, 1971). Businesses in our case studies approximated this rate of re­ turn as did other African businesses for which figures were available. In fact, the smaller businessmen earned even higher rates of return. According to the same developmentplan figures, nonretail business enterprises averaged an ex­ traordinarily high 68 percent rate of return on capital. Once again, this figure was very close to what we found for African businesses in the same category. Thus a busi­ nessman could get his capital back in less than two years. Indeco Trading, by contrast, earned a return of about 8 percent on capital even after it had divested itself of un­ profitable rural stores. African businessmen who had taken over these very stores seldom voiced the same complaint. Indeco's industrial companies had rates of return between 14 and 30 percent. Since 1972, the very high rates of return for private businesses have declined, and Indeco has had several yearly losses. Clearly private African businesses are efficient compared to state enterprises.3 3 Rate of return on capital is simply profits before taxes divided by capital. For instance, a grocery store with an average inventory of 4,000 kwacha and a value of a,000 kwacha for the premises and fix­ tures would represent a capital investment of 6,000 kwacha. If profits, net of expenses, amounted to 4,000 kwacha per year, the rate of return on capital would be 66 2/3 percent or 2/3. From the data presented in chapters two through five and appendix two, the reader should realize that such a return was not uncommon in Zambia at the time of our study. Such figures should be compared with an average return in the United States of about 10 percent and for Indeco Trading of about 8 percent (Rihtman, 1971)·

ENTERPRISE AND SOCIAL CHANGE

Furthermore, in certain ways they might serve customers better than do state stores. In rural areas all stores stocked and sold the same range of commodities. Certain goods (some blankets, maize meal) were priced somewhat lower in some Indeco stores than in privately owned stores. These price differences occurred for two reasons. Indeco bought such commodities centrally in large quantities at a lower per unit cost than private retailers paid Indeco wholesale. It was also Indeco policy to keep the prices of some basic necessities below their statutory price ceilings. But, unlike many private stores, the state stores enforced a no-credit policy (a reduced service) which created hardship for the rural population whose incomes were seasonal and fluctu­ ated widely from year to year. Indeco should have been in a position to subsidize rural outlets from earnings in its profitable urban stores. Even so, in the long run, a staterun distribution system cannot continue to subsidize some lines of commodities indefinitely without charging higher prices on other commodities or recovering losses from gov­ ernment revenue (as Indeco was forced to do). Because African businessmen had established themselves in rural areas, a net transfer of resources and skills to rural areas had taken place. These resources and skills not only served the rural population, but were used in innovative ways that created more resources. African businesses pro­ vided employment for rural Africans and a setting for learning useful skills. They made it possible for a number of Zambians to continue to live in rural areas and thus slowed the exodus to the cities. Because of their strong local ties, rural businessmen had a stake in the prosperity of their local areas. Managers of state stores were more likely to have as their goal a higher (meaning urban) position in a large bureaucratic enterprise. Thus, they were not as con­ cerned with the well-being of the district in which they were temporarily employed. The proliferation of small Af­ rican retailers since the early sixties also meant that the distance between consumers and stores diminished, and

ENTERPRISE IN DEVELOPMENT

shopping was becoming more convenient. Indeco was mov­ ing in the opposite direction by consolidating its operations in fewer large stores in the major towns and provincial capitals. Similar patterns occurred in urban centers includ­ ing Lusaka. Other retail services provided to the rural or urban sec­ tors by state planning might not be related to local needs. For instance, in an effort to comply with a directive to par­ ticipate in rural development during the Second National Plan, the Dairy Produce Board made two proposals. The first, actually put into effect, was to purchase a fleet of refrigerated vans for transporting imported cheese and other products to rural areas and to sell these items at subsidized prices. Transportation costs amounting to four times the retail price of cheese in Lusaka were absorbed. This opera­ tion continued for over two years until an austerity budget forced its abandonment. An even more wasteful proposal for transporting ice cream to rural areas and selling it there at Lusaka prices in accordance with the uniform na­ tional price policy was only squelched because the national airline could not guarantee enough space on a regular basis to fly it, and because freezer trucks in surface transport could not be serviced off the line of rail. Private endeavors must either show a profit or be scrapped. Government agencies are not rigidly constrained. The use of govern­ ment revenue for introducing and subsidizing the con­ sumption of urban-style perishable goods in rural areas (perhaps at the cost of local production initiatives) can be instituted despite a lack of demand because of the power of some government agencies. To be sure, not all govern­ ment projects should be evaluated by their profitability, but there is no reason for committing scarce resources to meet nonessential needs. Businessmen and the Salaried Middle Class

It has been said that African businessmen make too much money and set a bad precedent by spending too much of

ENTERPRISE AND SOCIAL CHANGE

it on luxuries. In Zambia, some were indeed wealthy and far from ascetic. However, patterns of conspicuous con­ sumption and luxurious life styles were also common among government officials, managers of semigovernmental agen­ cies, private-sector managers, and professionals. In fact, it was the rapid growth of middle-level managers within Indeco—with no demonstrable effects on efficiency, but with clear-cut effects on wage costs and thus on profits—that was in part responsible for Indeco Trading's unimpressive per­ formance. Zambia's partially nationalized sector has been cited by one author as an example of a new dynamic pat­ tern for the third world (Martin, 1972). But, the govern­ ment has in fact chosen to subsidize what Sklar (1975:199) calls the "managerial bourgeoisie" without any indication that they are doing a good job. Not only did state managers earn high salaries and live well, but their projects routinely received favored treatment for credit, supplies, and con­ tracts from partially state-owned agencies and from the gov­ ernment itself. African businessmen found it difficult to compete against such an advantage. An ominous sign was the growing connection between managers of partially state-owned conglomerates, govern­ ment officials, and politically well connected businessmen. Indeed, many government officials were turning their pub­ lic position to private economic gain. The politicians' in­ terest in business, however, might have one beneficial side effect. The existence of a prosperous private sector as an alternative to public life might lead to a lower level of po­ litical tension than that found in many African societies. If a politician knows he can retire to run a lucrative busi­ ness, he may not hold on to power with the tenacity evident in many other African states. Indeed, a number of Zambia's politicians retired in just such a manner to a life of wellpaid business activity, in some cases partially financed by government loans. Alternative Strategies

The positive, if modest, effects of private African enter-

ENTERPRISE IN DEVELOPMENT

prise in Zambia, and its demonstrated efficiency in certain areas, especially compared to the wasteful activities of the partially nationalized sector, argue for an increased role for African private business. We do not, of course, suggest that the copper mines and other major enterprises be turned over to African private enterprise. Particularly in commerce and small industry, however, it is reasonable for the African private sector to be encouraged rather than thwarted by government. Such a strategy costs little. With a limited commitment of scarce government resources, the growth of African private enterprise would expand employment, pro­ vide new services to consumers, teach new skills and tech­ niques, and adapt old ones to new areas. The businessmen would bear the risk of growth. Even so, African economic activity would continue to be limited by its historically weak position in the international political economy. No African government can afford to ignore the advan­ tages of moving from an economy completely dependent on foreign capital and enterprise to one dominated by African business activity. African businessmen in Zambia were more likely than expatriates to perceive unfilled needs and to set about filling them. African Zambians were more committed to Zambia than Europeans or Asians who usu­ ally planned to retire elsewhere. Africans were more likely to operate their businesses and to invest with long-term advantage in mind, if the political climate seemed favor­ able to business. Europeans and Asians, by contrast, were more interested in realizing short-term profits and trans­ ferring them out of the country. African private enterprises were establishing a signifi­ cant sector of locally controlled capitalism, even though the exclusion of nonnationals from trade was slowed by numerous devices such as the blind trusts, Zambianized companies, and other loopholes described in chapter seven. Nevertheless, the growth of African private enterprise con­ tinued apace. Africanization of business did not require government subsidy; it only needed some protection from state competition to get off to a good start.

ENTERPRISE AND SOCIAL CHANGE

In contrast, as the state brought overseas firms under its formal control, effective local control and significant bene­ fits were often delayed by management contracts and stockpurchase agreements requiring the repatriation of a large share of profits and capital. Such frustration of local con­ trol characterized many areas within the Indeco, Mindeco, and Findeco conglomerates. DEPENDENT INDEPENDENT ZAMBIA

Schumpeter and other scholars writing about entrepreneurship or modernization, and some development plan­ ners, have been concerned primarily with factors that are internal to third world societies: population, education and skills, resources, social structure, culture, urbanization, and the like. Other scholars have recently given much at­ tention to the place of the third world societies within the international political-economic system. From this perspec­ tive, the entrenchment of capitalism in the industrial coun­ tries of Western Europe and North America has radically altered the economic prospects of the latecomers on the historical stage. Dependency theorists have stressed the disadvantageous position third world societies have in relation to the capi­ talist core, the so-called metropole. Colonial economic poli­ cies resulted in the exploitation of the third world, and the penetration of Western capitalist market forces accounts for its present poverty. Some contend further that the af­ fluence of the developed world rests on the underdevelop­ ment of the poor nations. The formerly colonized peoples who seek to establish business enterprises must compete with both a network of foreign-owned business concerns in their recently independent countries and imports from foreign-based enterprises. No matter what strategy of devel­ opment is tried, the potential for self-sustaining, autono­ mous economic growth is thus severely limited by outside forces.

INDEPENDENT ZAMBIA

These approaches rest on a broad conception of the sweep of history and provide little by way of concrete analysis of the actual situation in third world societies. They imply that one should wait for the inevitable unfold­ ing of a predetermined historical process. One prominent scholar despairs of real change in Africa until the world capitalist system's "internal contradictions will bring it to an end in the twenty-first or twenty-second century" (Wallerstein, 1974:2). Another theorist contends that growth in a number of third world societies creates little more than the replication of the class structure of the metropole, with a small elite benefiting while the rest of the population remains in poverty (Frank, 1974). Recently, the issues raised by the dependency theorists have been examined by social scientists familiar with third world societies who are critical of the modernization ap­ proach but recognize the need for changes in the depend­ ency perspective as well. Though the relations of the pe­ riphery and metropole are unequal, they need not be a zero-sum game (Cardoso, 1974). The focus shifts to an ex­ amination of the terms of exchange between third world countries and the metropole. One contemporary scholar (Portes, 1976:81) has urged that the "emergence of a na­ tional bourgeoisie, of entrepreneurs" and the "process of exchange, among the state, transnational finance, and na­ tional entrepreneurial groups" be given particular atten­ tion. Another scholar (Brenner, 1977) has argued that the dependency perspective often leads to the neglect of factors associated with internal class and other social formations. It is such factors, he argues, that lead to differences in de­ velopment patterns among dependent countries. Approaches that recognize severe constraints to develop­ ment, yet recognize as well the possibilities for change are useful for understanding Zambia. The copper industry spurred development and produced wealth, though the wealth is maldistributed. Only a scant investment in serv­ ices benefiting the bulk of the African population was made

ENTERPRISE AND SOCIAL CHANGE

by the colonial administration. There is a shortage of skilled African manpower. The migration of Zambians to urban areas created an inefficient agricultural system and wide gaps between the rural and urban standard of life. One thus has a situation in Zambia that Cardoso (1974: 69) referred to as dependent development. Does the legacy of dependency present insurmountable difficulties for Zam­ bia's goal of achieving economic independence and devel­ opment? In what ways are African businessmen abetting or eroding dependence? African Business and Economic Independence

Early changes in Zambia can be linked directly to the expansion of the capitalist system from Europe and North America particularly England to trans-Zambezi Africa. In the early period of colonial contact, Africans lacked literacy, basic information, skills, capital, and other re­ sources necessary for establishing trading and manufactur­ ing enterprises on the European scale. As argued in chapter one, the production and trade of indigenous goods, as well as trade in imported goods, were discouraged among "na­ tives" by colonial economic policies. Europeans concen­ trated on import trade, first-class trade, commercial farm­ ing, mining, and manufacturing. Asians who followed were encouraged to trade among Africans by colonial adminis­ trators eager to generate economic activity. The Asians formed a distinct ethnic, religious, and cultural group and became a cohesive minority pursuing a specialized set of economic activities.4 ASIANS AS MIDDLEMtN

The Asians in Zambia at first considered themselves tem­ porary migrants and planned to return home when they had become wealthy. Moreover, their legal position was not as well established as that of European settlers. They * Bonacich (1973) has worked out a general theory of middleman minorities useful for understanding the position of Asians in Zambia.

INDEPENDENT ZAMBIA

therefore engaged in trade and other economic activities in which assets were relatively liquid. In their book on Asians in Zambia, Dotson and Dotson (1968) describe how the mistrust of outsiders and a prefer­ ence for working with each other led to vertical organiza­ tion of particular Asian business activities: for example, import-export, wholesale, retail, and service. Their accumu­ lated economic power enhanced their competitive advan­ tage over the unorganized African businessmen. Asian chil­ dren acquired the attitudes and skills necessary for business success and thus inherited a great advantage over African businessmen. Though many Asians chose to resettle else­ where, significant numbers of the later Asian generations continued successfully in lines of economic activity pio­ neered by the original Zambian Asian immigrants. IMPACT OF THE AFRICAN CHALLENGE

At present Zambian businessmen are challenging the Asian business group. Most major economic enterprises still remain in the control of Europeans or continue to be man­ aged by them. Zambia's position as a major copper producer has determined much of its infrastructure and generated the secondary and tertiary industries linked to copper. To what extent, then, did independence and the rapid growth of African business activity contribute to a syn­ drome of dependency? Particularly, how did growth affect the structure of efiEective demand, increase or decrease the centralization of the focuses of production and distribution, and exacerbate the high-spending consumption patterns of the new elite? Indeed, we have argued that the advent of independence in Zambia and its accompanying changes largely served to dismantle barriers to African enterprise. African business activity was in large measure built on the consumption expenditures of the African working class in the urban areas and the salaried middle class and cash farm­ ers in the rural areas. The satisfaction of this enlarged ef­ fective demand by Africans has meant a decentralization in

ENTERPRISE AND SOCIAL CHANGE

both distribution and, to a much lesser extent, production. Shops in the villages and the unauthorized areas and the increased level of competition in urban and rural trading centers not only have satisfied most of this demand, but have meant that better services were being provided to Afri­ can consumers in diverse locales. Small-scale contractors, factory owners, and others helped bring about similar changes in production. Small increases in effective demand were also created by the employment provided by African businessmen. The profits from such ventures were used by a few busi­ nessmen to support high cost consumption patterns. How­ ever, all the African businessmen together only contributed one small group to the new high-spending Zambian elite, which was composed primarily of politicians, civil servants, and managers of private and partially nationalized com­ panies. As we have described, most business profits were either reinvested in the business or used for family expenses. In the rural areas many businesses were created with such family needs in mind. Thus, one can say that independence in Zambia has led, at least in terms of the contribution of African business­ men, to a small shift in effective demand provided by the employees and families of African businessmen and to a decentralization of the focuses of production and distribu­ tion provided by the proliferation of shops in rural and ur­ ban areas and the growth of small-scale industrialists. At the same time there has only been a modest increase in conspicuous consumption. In short, there was little evidence that African businessmen in Zambia in and of themselves were contributing much to the syndrome of dependency, and indeed their growth had signaled a modest movement in the opposite direction. Such a shift had come at the expense of Zambia's middle­ man minority, the Asians. One could say that a slight move­ ment toward "economic independence" meant that Afri­ cans began to replace and go beyond the contribution to

INDEPENDENT ZAMBIA

domestic product made by the Asians. Thus, the ethnic di­ vision of labor in Zambia, which had been a product of the colonial economy and its place in the world economy, was in part being eroded by forces set loose by political inde­ pendence. We do not mean to say that the shift was all that dramatic, only that it was occurring. Yet it will be a long time, if ever, before African business rivals copper as a contributor to the GNP. Even excluding the dominant mining sector, Africanization of industry has barely begun (see appendix two). Private African industry accounts for about 1.5 percent of all noncopper output, or about 5 percent of all nonnationalized industry. Retail trade is the one significant area of African activity. Be cause about three-quarters of retail output is now African­ ized, Zambia's economy is now about 10 percent in private African hands (or about 30 percent if the dominant mining sector is excluded). Even so, one must be struck by the ef­ fects Zambian businessmen have had. Zambia itself may be­ come more dependent, but it is hard to see how the African businessmen are adding much to such dependency. Indeed, quite the opposite seems true. For these reasons we agree with those who say that it is crucial to take into account the impact of internal social groups in trying to understand the effects of external dependency relations. Prospects for Development

Can the Africanization of the private sector coupled with similar efforts in the state sector eventually lead to an in­ digenous pattern of development that produces an internal dynamic of its own? This question is one that many third world countries face. Although the private African sector in Zambia was small and unsophisticated, its efficiency in cer­ tain sectors was not in doubt. The prognosis for the state sector was not optimistic. Indeco received large subsidies from the government, contrary to its mandate for operating on sound commercial principles. Low copper prices have forced Zambia to take extraordinary measures to obtain

ENTERPRISE AND SOCIAL CHANGE

foreign exchange needed to import essential commodities. Zambia must also continue to import certain agricultural products. Indeed, the failure of agricultural development has been the most glaring problem in this still largely rural country. One should not expect private African enterprise to cre­ ate an internal growth dynamic by itself. Given encourage­ ment, private enterprise can at best play a marginal though significant role. It is likely that Zambia will continue to de­ pend on its volatile copper revenues to finance the infra­ structure, manpower training, and agricultural develop­ ments which are the main bottlenecks (Elliot, 1971:1-18). Whether the government will spend revenues effectively to overcome these problems or squander them in high salaries for the managerial bourgeoisie and in high-cost construction and other projects remains an open question. Zambia's development prospects are good. It is blessed with more wealth than most third world societies. To be sure, this wealth was created within a small foreign-dom­ inated enclave of the economy, and it is based on a product whose value fluctuates wildly on the London Metal Ex­ change. Yet the market economy, urban environment, and labor migration created a population that possesses to an increasing degree the skills, information, and economic re­ sources necessary for pursuing economic activity. Zambian values and institutions are not hostile to economic innova­ tion. Nor are wealth, money making, business, and trading despised and discouraged. Role models and institutional precedents for businessmen and enterprises have been avail­ able for some time with the presence of foreign enterprises, and increasingly also of African businesses. Under these cir­ cumstances, special features need not be singled out to ex­ plain the supply of businessmen. Education, socialization, and the acquisition of skills and of capital needed for entry into business explained who chose business, and aggre­ gate economic variables accounted for the volume of Afri­ can business activity. The disincentives to and negative

INDEPENDENT ZAMBIA

sanctions against business activity more often originated with the policies of the political leadership than with cul­ tural and psychological sources. Government policy toward middleman minorities, foreign business enterprises, and state enterprise played an important role in the level and performance of African business. At the time of our study the Zambian social structure had not yet frozen into a firm mold. Our study and our findings alone cannot foreshadow its future shape. Zambia's exposed geopolitical position on the rim of Southern Africa, where the confrontation over black majority rule has entered a decisive phase, and its continued role as a major copper exporter set the limits within which social change can re­ alistically take place. At worst, a successful business class might become yet one more element in a ruling oligarchy. Despite much rhetoric, Zambia's resources had been less ef­ fectively used to transform Zambian society than might have been the case. The limited replacement of privileged Europeans and Asians by privileged Africans in business as well as in other spheres of society does not constitute fun­ damental change. We do not mean to stress the civic virtues of a business class. African businessmen, however, have not been responsible for undermining the egalitarian promises of the independence movement nor for corrupting the public-service orientation of officialdom. A political leadership unwilling or unable to limit the spread of an ethos of pri­ vate gain and enrichment under limited capitalism is un­ likely to do so under socialism. The die has not yet been cast. On balance, Zambia would not be worse off by allow­ ing a modest role for African private enterprise, and it might well be better off.

APPENDIX

I

Conduct of Fieldwork and Interview Schedules

THE FIELDWORK

The fieldwork was carried out between 1970 and 1972. Oberschall arrived in Lusaka in July 1970 and became a research affiliate of the Institute for Social Research, later Center for African Studies, at the University of Zambia. He spent August and early September in a round of in­ formation-seeking talks with university staff, government officials, bank officials, United Nations personnel, and oth­ ers concerned with development in the African private sec­ tor of the economy. He also canvassed records and reports related to the research topic. In the later part of August and early September, he re­ cruited three Zambian research assistants who served as in­ terpreters and interviewers, prepared a study plan, and drafted a preliminary interview schedule. Sampling plans based on the records of the Ministry of Trade and Indus­ try and the Lusaka City Council, had to be abandoned. The records were incomplete, and it proved impossible to find the businesses from the addresses given, since there were no street names and house numbers in much of the areas of Lusaka where African businesses were located. Al­ ternative but less rigorous procedures for sampling had to be improvised and are described in the appropriate chap­ ters. In mid-September, the interviewers were trained, and pi­ lot interviews with market traders completed; the question­ naire schedule for market traders was put into its final form. From September 20 to the middle of November about

FIELDWORK

three hundred interviews with market traders were com­ pleted in the four largest African markets. Also during this period, from October 5 to October 24, four intensive case studies based on daily participant observation of African businessmen were conducted, and a complete analysis of their financial records was undertaken. These businesses were subsequently followed up once a month. Two one-day field trips to the Kafue River were undertaken to study the fish trade. Beveridge arrived in early October 1970. His research dealt primarily with the substantial African businessmen. He compiled a list by visiting every credit source and any­ one likely to know of such businessmen. Through a snow­ ball process, all identified substantial African businessmen in Lusaka were located and all but two interviewed. Fifty of these seventy-eight businessmen were contacted twice more for follow-up interviews, once in July or August 1971, and again in October or November 1972. The information collected from the substantial businessmen was more exten­ sive than that gathered for the smaller businessmen. Beveridge repeatedly visited seven businessmen for intensive study. Detailed biographical information was similarly col­ lected for five additional businessmen. To provide a stand­ ard of comparison, Beveridge interviewed thirty-four Asian and European businessmen. He also visited several govern­ ment projects and enterprises and maintained extensive re­ lationships with informants, government officials, managers of semigovernmental conglomerates, and private-sector em­ ployees. Beveridge visited virtually all nongovernment-owned shops and other retail outlets in the second-class trading area around Luburma market and in downtown Lusaka be­ tween February and May 1971 to ascertain the registered ownership of each business. He attended hearings of the Road Traffic Commission June 11 through 14, 1971. Dur-

APPENDIX I

ing all his work Beveridge employed a Zambian research assistant and interpreter. From mid-November to mid-December, OberschaIl and the three research assistants completed 120 interviews with small and medium-sized African businessmen in several Af­ rican neighborhoods in Lusaka. In mid-December, a study of the African Sabbath Church of God, a religious sect whose members were active in many lines of business, was started. In the latter part of February, Oberschall prepared for two field trips into rural areas. From February 25 to March 15, he and Halford Chikuse completed sixty-seven inter­ views in Central and Eastern provinces. From April 4 to 18, they completed fifty-two interviews in Northern and Luapula provinces. In the latter part of April, thirty more in­ terviews with small and medium-sized businessmen were completed by Chikuse and Oberschall in an African town­ ship in Lusaka. From May 17 to 21, Beveridge and Oberschall made a short field trip to the Monze-Mazabuka area of Southern Province where they completed twenty interviews with Af­ rican businessmen. Also in May, they prepared two policyoriented papers based on their research findings for the Trade Subcommittee of the Manufacturing and Trade Committee of the Planning and Development Section in the Ministry of Finance, which was then writing the Second Zambian National Development Plan. Oberschall left Zambia in June 1971. Beveridge followed in September but returned for a follow-up study of substan­ tial businessmen in the fall of 1972. Throughout the entire period and all phases of research, the cooperation received from university staff, government officials, and most impor­ tant of all, the African traders and businessmen who were the object of the study, was excellent. A letter of introduc­ tion, written and signed by the permanent secretary of the Ministry of Trade and Industry, explaining the purpose of the study and urging cooperation from respondents and of-

FIELDWORK

ficials, did not once have to be used in interviews or in talks with informants. THE SCHEDULES

During the study, we developed and employed several different interview schedules. These were interviews for: 1. market traders; 2. urban retail traders; 3. rural businessmen; 4. substantial businessmen in Lusaka; 5. European and Asian businessmen in Lusaka; 6. substantial African businessmen in 1971; 7. substantial African businessmen in 1972; 8. businessmen in first- and second-class areas of Lu­ saka in 1972. Complementary and comparable information was elicited from all categories of business. We used whichever schedule was most appropriate for the particular business. Except for the first schedule, all were written in English and trans­ lated by interpreters, if necessary, during the interview. To avoid needless repetition, we present below the schedule used in rural areas and briefly indicate how the other sched­ ules differed from it. Rural Businessmen Date: ... Time start: Type of business: ... Sex of respondent: Male Name of business:

.. Interviewer: Time end: Location: Female

Opening Statement: greetings; explain purpose of interview and identify yourself, if needed; make appointment to re­ turn, if needed, etc. 1. Who does this business belong to? Are there any busi­ ness partners? Are the partners related?

APPENDIX I

2. Who actually manages the business from day to day? 3. Is this business open every day; open throughout the year? 4. How long have you had this business? 5. Did you buy the business from someone, or did you start it up yourself? What did you pay for it? From whom did you buy it (Asian, etc.)? 6. Do you own or rent this building? How much rent do you pay? Who do you rent from? What did it cost to buy or build the building? 7. What work did you do in the years before you started in this business? How much were you earning in your last job, per month? Is that more or less than you are earning now? 8. Have you ever lived and worked in a town? Where? For how long? What did you do there? How long ago was it? What made you decide to leave town and come here? 9. Why did you decide to take up this business rather than doing some other kind of work? 10. Why did you decide to do business here rather than somewhere else? 11. Do you have any other work or business besides this one? 12. What about a farm: do you have a farm? What crops do you grow for sale? Do you raise cattle or other ani­ mals? Which is more important to you, your farm or this business? Which is more profitable? 13. Do you have any family members who are in business? Which? Where? What do they do? 14. Do you have any family members who are working for government? Which? Where? What do they do? 15. When you started this business, how did you learn to conduct this business? (Previous experience, assistance from someone, formal training. . . .) 16. When you first started this business, how much money did you start with? How did you obtain this money? Savings, loans . . . ?

FIELDWORK

17- Since you first started this business, has it increased, de­ creased, or stayed about the same? Why is that? Now I WOULD LIKE TO ASK YOU ABOUT THE WAY IN WHICH YOU OPERATE YOUR BUSINESS.

18. Can you tell me about how you obtain supplies? Do you have a car or a van? Do you get deliveries? Who do you buy your supplies from? Cash or credit? Are there shortages? Other problems? 19. About how many kwacha per month do you spend to keep the business running? 20. What are some of the things you sell here that are in great demand? And that are not in demand, do not sell well? 21. Are there some times when business is especially good? When? And are there some times when business is par­ ticularly slow? 22. On a good business day (at month's end), how many kwacha worth of goods do you sell? And on a bad day (middle of the month)? 23. Do you feel there is a big enough difference between the price at which you buy and the price at which you can sell? 24. How many employees do you have? Are they relatives? What do they get paid? Does any one else not an em­ ployee (wife, children, relatives) help you in this busi­ ness? 25. Did you have any difficulties in selling or renewing your trades license? 26. Do you extend credit to customers? Which ones? How much money is altogether owed to you in debts by cus­ tomers? Do you lose money because customers do not repay their debts? 27. Do you keep any records or books? Sales, purchases, credit, other . . . ? 28. What do you do with the money you make in this business? 29. What in your opinion makes some people successful

APPENDIX I

in a business such as yours, and others less successful? 30. Have you ever borrowed or tried to borrow money for business purposes from a bank, COZ, Indeco, a provin­ cial or district development committee, a friend or rela­ tive, other businessmen? How much was it? When? What happened? 31. Do you have any plans for extending the business, start­ ing another business, selling this business, doing some other kind of work? When? What will you do? 32. Who will succeed you in this business (inherit) if you decide to retire, or if anything happens to you? 33. Do you ever seek advice on business matters? From whom (friends, relatives, government officials, other businessmen)? What have you discussed with them? Were they helpful? 34. Are there any problems or difficulties in running this business that you haven't told us about yet? 35. All in all, are you satisfied or dissatisfied with this business? Why is that? Now I HAVE ONLY A FEW QUESTIONS LEFT TO ASK YOU ABOUT YOURSELF, BEFORE WE ARE FINISHED.

36. When were you born (how old are you)? 37. Where were you born? Village, district? How far is it from here? 38. What did your father do for a living? 39. What language did you first learn to speak at home? 40. Have you ever been to school? What was the last grade in school that you completed? 41. Are you married? What work does your husband/wife do? Does he/she help in the business? 42. How many children do you have? How old are they? Work, school? 43. How many other people do you help maintain? Who? 44. How long have you lived in . . . ? Where do you ac­ tually live? 45. Are you planning to remain here for the rest of your life?

FIELDWORK

46. Do you belong to any church? Which? Do you par­ ticipate actively in your church? 47. Are you a member of any business or trade association, society, or cooperative? Which? What does it do for your business? 48. In your opinion, have opportunities for Zambian busi­ nessmen improved, worsened, or stayed the same in the last two years? Why do you think so? THANK YOU. IT WAS MOST INTERESTING TALKING TO YOU. I HOPE YOUR BUSINESS WILL PROSPER. AFTER INTERVIEW: DESCRIPTION OF BUILDING, CONTENTS, PHYSICAL CAPITAL (e.g. REFRIGERATION EQUIPMENT, CASH REGISTER), ARE PRICES DIS­ PLAYED? SOME PRICES. EVALUATION OF RESPONDENTS: TRUTHFULNESS, COOPERATION. FOR ASIAN TRADERS ONLY: CASTE, RELIGION, CITIZENSHIP, WHAT PART OF INDIA OR PAKISTAN, MIGRATION HISTORY, ETC. Market Traders

The schedule for market traders was in the Nyanja lan­ guage, had fewer questions, and contained fewer follow-up probes. Some attitudinal questions (e.g. those asking the respondent what he liked and disliked about market trade) were modified for the other schedules. The core informa­ tion sought was similar to that in the rural businessmen's schedule: type of trade and manner of operation; prior job history; entry into trade; personal and family char­ acteristics. Urban Retail Traders

The schedule was essentially the same as the rural ver­ sion, though somewhat shorter; less extensive information was sought on labor migration and previous jobs. Some inappropriate probes (e.g. what made you decide to leave town and come here?) were not included. Issues that were

APPENDIX I

not salient in the urban areas (e.g. are you planning to re­ main here for the rest of your life?) were dropped. Substantial Businessmen

Questions about ownership and management were more precise and included a direct question about corporate form. An accounting for the time the owner devoted to business and other activities was asked for. Other ques­ tions included sources of initial capital by monetary amounts; physical capital by amount; legal services and their costs; sales over the last period available; profits; whether sales were reported; wages for each category of employee, and what they did; and policy for hiring and controlling employees. We also asked who the suppliers and customers were; what was bought and what produced; how the firm was managed financially; what the future plans for the business were; how profits had been used in the past; what the businessman's attitude toward government policies was; and if the businessman had problems he wished to talk about; a detailed occupational history was also re­ quested. In the second interview relevant questions from the first interview were repeated, after which changes in manage­ ment, ownership, sales, production, employees, suppliers, profits, and sales were discussed. Changes in family or or­ ganizational affiliation were ascertained. More complete in­ formation was obtained about who the respondent had lived with in his youth, his schooling, his citizenship status, his current political activity, and his activities during the independence struggle. Questions about expectations for children, impressions of the European and Indian com­ munities, the economic reforms, and causes of business suc­ cess were asked. In the third interview changes in the busi­ ness, the family, and attitudes were once again documented and discussed. Progress on plans indicated in the earlier interviews was ascertained.

FIELDWORK

European and Asian Businessmen

The interview of European and Asian businessmen was essentially the same as that of substantial African business­ men. However, greater detail about their reaction to po­ litical changes was sought. Downtown and Second-Class Businessmen Ownership Check

In 1972 we also conducted a brief check of the ownership, management, and trade licenses of businesses in the firstand second-class trading areas of downtown Lusaka. In­ formation was sought about the identity of the manager and owner, the age of the business, and the identity of the owner of the trade license.

APPENDIX II

Earnings and Growth Estimates of Businessmen and Traders

EARNINGS AND SALES

Because of the rapid and recent growth of African busi­ ness and trade in Zambia, and the businessmen's lack of experience and formal training, few records existed of their sales, earnings, wages, and profits. Obviously, such infor­ mation is necessary for understanding African business ac­ tivity, and much of our research effort was spent obtaining it. For some categories of businesses—in particular market traders and small retailers—we did a detailed observational study in a few select cases to arrive at indicators and weights from which good estimates of sales and earnings for the whole category could be generated. We present some of these case studies below and discuss procedures used for other businessmen in a more general way. Market Traders FRUIT AND VEGETABLE TRADERS

It was not possible to obtain data on total sales, gross earnings, and profits from traders directly. The method used for estimating earnings involved listing: (i) the dif­ ferent commodities sold by a trader; (2) the selling price of each; (3) the total amount available for sale and the amount sold in a week; (4) the source of each commodity and its purchase price; and (5) the total sales at month's end and in the middle of the month. From these figures, we estimated earnings by making certain calculations as in the following example. Kolungulu was a substantial trader selling five commodi-

EARNINGS AND GROWTH

ties: tomatoes, onions, kapenta, Olivine cooking oil, and soft drinks. For many market women such a combination was not unusual. 1. Soft drinks were purchased at 85 ngwee a crate and retailed at K 1.20—a 35 ngwee profit. She sold one crate every two days and thus earned K5.25 a month from sales of soft drinks. 2. A kapenta bag of about eighty pounds was bought for K15 to K18 and retailed at 10 ngwee for a quar­ ter pound—a profit of about 20 ngwee a pound. She sold one bag a month and thereby earned about Ki8 a month from kapenta sales. 3. Tomatoes were bought at between K2 and K2.50 a crate and retailed at 4 for 10 ngwee. There were about 140 tomatoes in a crate, for a profit of about K 1.50 a crate. Kolungulu sold a crate of tomatoes in three to four days; eight crates a month earned her Ki2 a month. 4. Onions were bought for Ki.50 to Ki.80 a crate; they retailed at two for 5 ngwee. Profit per crate was about K 1.50. She sold a crate of onions in three weeks and realized about K2 from onions each month. She said onions were not profitable, but she sold them to attract customers. 5. We could not get precise information from her about how many bottles of cooking oil she sold a week. Other market women, however, talked in terms of five bottles a week. They were purchased at 52 ngwee and retailed at 5 ngwee a small cup— a profit of about 30 ngwee per bottle. We therefore estimated that she earned about K6 a month from cooking oil. Kolungulu's gross monthly earnings, then, were approxi­ mately K42. Expenses consisted of the daily market fee of 15 ngwee and occasional bus or taxi fares to the Central Market vicinity for fetching supplies. Her sister's daughter

APPENDIX II

helped her but did not get paid in cash. Spoilage was dif­ ficult to estimate. All in all, her total expenses came to perhaps Kio a month. This would make her earnings from her market stand K32 a month, a handsome addition to the family earnings for a woman with only grade one schooling. Earnings for a half-dozen fruit and vegetable traders were estimated in a similar manner. FRESH-FISH TRADERS

The fish traders' earnings were estimated on the basis of the costs and the income from round trips from Lusaka to Namwala and to Lake Kariba. After accounting for de­ preciation, shrinkage, and wastage, we estimated a profit of about 60K per trip, or about 15 percent of total sales. Our figures are slightly lower than Beatty's (1969), but this difference largely reflects his neglect of vehicle depreciation. OTHER TRADERS

For each category of trader, we used similar methods to estimate the earnings reported in chapter two. The other traders had somewhat different costs of doing business and sold different sets of commodities or services, but the same general procedures were applied. Small Retailers

A relatively elaborate technique, which included draw­ ing up inventories and using sales and purchase records, was employed to gauge the sales and earnings for a few shops and stores in the markets and African neighborhoods. Our study of Nswima's store in Chilenje illustrates the procedure. We used two separate estimates of sales and earnings: one was based on daily sales, the second on whole­ sale purchases and the retail markup. Similar methods were used for the businesses of Mutengo and Chamba. NSWIMA'S STORE

Because of a lack of storage facilities in African houses,

EARNINGS AND GROWTH

spoilage of food in the hot climate, and the low level of cash on hand, customers tended to purchase frequently and in small amounts at Nswima's and other stores. On week­ ends, sales and customers tended to rise noticeably above the average. For a week in mid-October Nswima averaged 150 kwacha in daily sales from an average of 525 customers. For about five days at the end of the month, when Lusaka employees got paid, business doubled or tripled. In fact, business was so brisk that our research assistant had dif­ ficulty keeping track of all sales transactions under the crowded conditions that obtained in the store at peak hours. We therefore estimated Nswima's monthly turnover as 5,250 kwacha on the basis of the daily sales figures and the as­ sumption that sales doubled at month's end, i.e. twentyfive days at 150 kwacha and five days at 300 kwacha. As a second complementary procedure, we made another estimate of turnover based on purchases from wholesalers and the markup from wholesale to retail prices. This tech­ nique provided additional insights into business operations and allowed estimates of gross and net profits as well. For lack of space in the store, and because of the risk of theft, Nswima did not stock large quantities of goods be­ yond what was displayed on the shelves or stored under the counter and in two small storage rooms in the back of his store. When we inventoried on October 12, 1970, he car­ ried 189 types of goods worth 2,576 kwacha at retail prices. He purchased supplies frequently and in relatively small amounts from about twenty-five wholesalers, many of whom delivered and gave him a 2.5 percent discount because he always paid cash. Fortunately, Nswima had kept a complete set of purchase slips going back to October 1969. In Oc­ tober 1970, when we first contacted him and studied his records, we asked him to keep them in a file which we then periodically collected. His monthly purchases for a seventeen-month period are shown in table A2.1. June and July 1970 were exceptional months because the store was broken into twice, once in May and once in June,

APPENDIX

III

a n d m a n y goods were stolen. N s w i m a c o u l d n o t tell us the a m o u n t of the loss. H o w e v e r , he restocked the store each time to his usual inventory. Because of this u n u s u a l cumstance, these t w o m o n t h s were o m i t t e d i n TABLE

cir-

calculating

A2.1

NSWIMA'S M O N T H L Y

PURCHASES

(in Kwacha) Year

Month

Amount

Year

1969

October November December January February March April May

5.033-90 5,698.77 5,760.01 4,880.80

1970

1970

3.557-50 4,868.08 4,680.95 4-999-28

1971

Month

Amount

June

7,312.23 6,724.76 4,100.63 5,200.08 5,586.82 4,477.96

July August September October November December January February

5.550-73 4,816.27 5,007.10

his average m o n t h l y purchases. F o r the other fifteen m o n t h s , m o n t h l y purchases averaged K.4,948. T h e r e was n o t m u c h v a r i a t i o n f r o m m o n t h to m o n t h a l t h o u g h D e c e m b e r tended to be h i g h because of Christmas. S u c h stable sales reflect the

nature

of

his

business

which

was

figures

mostly

in

staple f o o d s a n d d r i n k , a n d n o t i n c l o t h i n g , fabrics, a n d housewares. I n order to calculate his gross profit a n d turnover f r o m these figures, we classified each purchase b y a c o m m o d i t y category a n d calculated the average m a r k u p for each comm o d i t y category b y c o m p a r i n g wholesale prices o n the invoices w i t h retail prices. T h e results are i n table A2.2. N s w i m a ' s average m a r k u p was 18.5 percent. H i s m o n t h l y average gross profit was therefore K g 15 (K.4,948 times .185). A n estimate of his m o n t h l y sales u s i n g this m e t h o d is then K5,863

^ 4 , 9 4 8 plus K 9 1 5 ) . C o m p a r i n g this estimate w i t h

the earlier estimate of ^ , 2 5 0 based on d a i l y sales, the discrepancy is K 6 1 3 , or a b o u t 10.5 percent of the larger esti-

328

EARNINGS AND GROWTH

mate. It seems quite reasonable to conclude that Nswima's monthly turnover is roughly !£5,500. TABLE A2.2 DISTRIBUTION OF NSWIMA'S PURCHASES AND AVERAGE MARKUP OVER WHOLESALE PRICES, BY TYPE OF COMMODITY, OCTOBER 1969 TO OCTOBER 1970

Commodity Bread Maize meal Beer Soft drinks Tobacco Sugar Tinned beef, fish Polish, wax, oil Whiskey, other liquor Soaps, detergents Milk, milk powder, baby foods Other

Percentage of Total Purchases

Markup

10

"•3%

35

14.0%

10 2 10

40-5% 6-5%

6 1

so.o%

20.0%

5

55·°% 25·ο%

2

30.0%

5 5 9

33·°% 16.0%

33·°%

We were interested not only in his gross profit, but also his net profit. For this figure his expenditures had to be cal­ culated and subtracted from gross profits. His expenses are presented in table As.3. In these figures spoilage and depreciation were estimated. Spoilage was not much of a problem, since Nswima did not sell perishables except for milk and bread, which he tended to sell out each day. Dam­ aged merchandise frequently could be returned to whole­ salers. The depreciation of his store, automobile, and two refrigerators was calculated on a ten-year scale applied to current estimated market values. His other business expenses need some explanation. The license fees were a statutory requirement, as were the ad­ vertisements. Nswima paid a firm of solicitors K63 yearly to take care of both licenses and advertisements. The city-

APPENDIX II TABLE A2.3 NSWIMA'S BUSINESS EXPENSES

(in Kwacha)

Annual License fees Solicitors' fees Income tax License advertisements City-council levy

Subtotal

Incidental and Depreciation

Monthly 185 63 200 32 28

Electricity Water/ sewerage Employee wages Employee food Driver and gas

508

4 3-75 56 30 20

"3-75

Auto repair Store painted Spoilage Auto deprecia­ tion Store Deprecia­ tion Refrigeratorequipment depreciation

43 72 3oo 50 400

80 945

Total yearly expenditures: 2,818.

council levy was for the rent of the land on which his store was built. Since he was illiterate and did not have any in­ formation on expenditures, turnover, or profits, he was un­ able to file an income tax return for his business. Instead he was assessed a flat rate of K200 by the Finance Ministry. His biggest monthly expenses were employee wages, and he incurred the additional costs of payments in kind since his three employees were fed twice a day in the store at no charge. Although most wholesalers regularly delivered by van, Nswima did have to make two or three business trips a week to the main business district in Lusaka. For this pur­ pose he hired a driver whom he paid Ki per trip. He owned an old Peugeot, and during the year October 1969 to Oc­ tober 1970, he had K43 worth of repairs on the car. He also had his store painted for K72. On a monthly basis, his business expenses averaged K233. Subtracting this sum from his gross profits of Kg 15 yields an estimated net monthly profit of about K680. This figure does include of course his own wages. It should be remem­ bered that Nswima worked a fourteen-hour day six days a

EARNINGS AND GROWTH

week plus a half-day on Sundays, month in and month out, although he occasionally closed the store for an hour or two when he attended a funeral. Net earnings of K68o represent 12 percent of estimated turnover (5,500 kwacha). Nswima's losses from the two thefts lowered his business earnings. In June and July, his usual purchases were ex­ ceeded by 4,141 kwacha. This figure is the best estimate of the value of his losses. Spread over two years (a period for which these thefts were the only ones Nswima experienced), the loss amounted to 173 kwacha a month, and his average net profit would then be reduced from 680 kwacha to about 500 kwacha. Since theft was an increasing problem and constituted a very real risk for retail businesses, and since there existed no means of insuring against it for African small businessmen, one might be justified in using the es­ timate of 500 kwacha for average monthly net business earnings. This represents 9 percent of the estimated turn­ over rather than 12 percent. However, Nswima's well known and well stocked store was more enticing as a target for theft than many other businesses we studied. Using Nswima's and other case studies we settled on a means of estimating earnings. We inquired about the sales at the end of the month and during the middle of the month. We assumed that month-end sales rates would be maintained for five days, and mid-month rates for twentyfive days. On the basis of our case studies, such a method would be within a margin of 10 to 15 percent of actual sales if the interview questions were answered properly. In any event it provided a reasonable measure of relative re­ tail business performance. In some instances, small busi­ nessmen did have precise information about monthly sales, and in these cases we used their figures. Substantial African and European and Asian Businessmen

Similar figures on expenses, revenue, and earnings were obtained for most of the larger businessmen from direct questions about their balance sheets, profit-and-loss state-

APPENDIX II

ments, sales, margin, capital invested, and the like. Most answers referred to the current sales and revenues, known to the businessman but often not yet confirmed by an ac­ countant or auditor. Because of the great cooperation re­ ceived from most businessmen, we are confident that the revenue and profit figures provided usually represented the best estimate of which the businessman was capable. Many businessmen helped us collect data by retrieving figures for us, which we would record at a later visit. Summary It may be useful to summarize here the estimated net earnings and their bases for African businessmen and trad­ ers that have been provided throughout the book. For Lu­ saka, several case studies of full-time fruit, vegetable, cook­ ing-oil, and kapenta market women in Matero market (one of whom is described in this appendix) led to an average annual earnings estimate for that trade of 335 kwacha. For small groceries, teacarts, and market shops, we estimated average annual earnings of 1,080 kwacha, based on case studies such as that of Mutengo described in chapter two and the turnover figures reported for Kapwepwe and Old Kanyama in table 3.2. For stores in the unauthorized set­ tlements, on the basis of Kapwepwe and Old Kanyama turn­ over figures, and applying the 12 percent net margin de­ rived from the Nswina case study, our annual earnings estimate is 1,800 kwacha; for medium-sized stores and grocery and bottle stores located along the major roads in African townships, the average earnings estimate is 6,000 kwacha. We were reluctant to make earnings estimates of typical village traders on the basis of only a handful of interviews in Eastern Province. For the small and medium-sized stores scattered throughout rural areas in trade centers, in district capitals, at crossroads, and in large villages, we estimated an­ nual earnings of 1,300 kwacha, based on procedures ex­ plained in chapter five. For the largest rural businessmen,

EARNINGS AND GROWTH

from whom we obtained the most reliable and complete in­ formation, we estimated earnings of 6,500 kwacha in Monze and Mazabuka, 4,000 kwacha in Eastern Province, and 12,000 kwacha in Northern and Luapula provinces. In terms of sheer numbers, these businessmen are, however, a small minority of all rural traders, perhaps as few as 5 percent of the total. GROWTH AND SCALE OF TRADE AND BUSINESS ACTIVITY

It is difficult to estimate accurately the growth of African business in Zambia because the older and even the recent statistics on African business activity are of poor quality. Yet growth estimates are needed for a number of reasons. First, they are useful for establishing the extent to which Africans have challenged the economic dominance of the expatriate businessmen. Second, they are necessary for as­ sessing the impact of the economic reforms and other poli­ cies. Third, they are important to help place our study within the wider Zambian economic and social context. Though fully satisfactory estimates are impossible to make, it is feasible to ascertain the orders of magnitude of changes in African business activity by using available information and making reasonable assumptions and extrapolations. Growth of African Retail T r a d e

In 1931 Davis (1931:200) referred to 689 African trade licenses in Zambia. In 1945 Deane (1953:275-285) counted 4,410 licenses and one year later 5,249. The Davis figures were produced incidentally during an early mission study of the effects of mining activities on Africans. The Deane figures were the result of careful work done to establish the total national income in Zambia and its distribution. She explicitly included the subsistence sector and other African activities often omitted from such calculations. Though they are both based on official statistics, it is likely that Deane's figures are more accurate than Davis's. Not

APPENDIX II

only is it likely that coverage of African traders would be better in 1945 and 1946 than in 1931, but the scope and care of Deane's work encourages confidence in her data. The large difference between the 1931 and 1946 figures al­ lows one to conclude that African trade definitely grew quite rapidly between 1931 and 1946, though the magnitude of the growth may not be easily ascertained. Growth would be expected as a result of the recovery from the Great De­ pression and the start of a postwar boom. In any case, African trade grew faster than the population, which in­ creased from 1.4 to 1.7 million during the same period. According to the 1969 census, 12,481 Africans were clas­ sified as employers, 2,291 in urban areas and 10,240 in rural areas (Zambia Central Statistical Office, ig7oa:B59). This figure represents a reasonable approximation of the num­ ber of African businessmen at the start of the 1970s. Be­ cause the Zambian census has unknown reliability, we used another estimation technique as a check on these figures. For three rural districts and two urban neighborhoods in 1970, we obtained the information shown in table A2.4. TABLE A2.4 POPULATION AND TRADE LICENSES IN RURAL AND URBAN AREAS

District

Number of African Retail TradeLicenses

Population per

Population Trade Licenses

Rural Chipata (excluding the town itself) Petauke Mazabuka

794 331 4go

260,000 125,000 161,000

Urban Kapwepwe Old Kanyama

150 29

19,400

129

6,95°

24Ο

327 378 329

Because Mazabuka is somewhat more affluent than the 334

EARNINGS AND GROWTH

typical rural district and because of the longer history of African stores in the Ngoni areas near Chipata, the Petauke ratio is probably more typical of rural Zambia than the other two. In our judgment, Old Kanyama is more typical of urban African neighborhoods than the more recently settled Kapwepwe. If then the Petauke and Old Kanyama ratios of 378 and 240 are applied respectively to the total African population living in rural (2,977,600) and urban (1,004,000) areas in 1969, one obtains an estimate of 7,877 rural African retail stores and 4,183 urban stores, for a total of 12,060 stores. This second estimate agrees well with the earlier censusbased total of 12,481, although the rural-urban proportions differ considerably. On the strength of these two independ­ ent estimates, we conclude that there has been a substantia] increase in the number of African businesses since 1946. In fact, the growth rate for the entire twenty-five-year pe­ riod is 6 percent a year. At the time of our study, the num­ ber of African businesses was still increasing. Changes in European and Asian Trade Five hundred fifty-four European and 396 Asian trading enterprises existed in 1945. By 1946 there were 560 Euro­ pean and 429 Asian enterprises (Deane, 1953:272-275). The 1962 Census of Distribution (Zambia Central Statistical Office, 1965:2)—which counted few, if any, African busi­ nesses—lists 1,650 retail businesses. The Register of Business Establishments (Zambia Central Statistical Office, 1966, 1969), which probably counts only the largest African busi­ nesses, found 2,215 retail establishments in 1966 and 2,503 in 1969. The Ministry of Finance (Wellons, 1972) reported privately that retail and wholesale licenses had been issued to 3,154 Asian, European, and corporate (one can assume mostly European and Asian controlled) names for 1969. The 1969 Census (Zambia Central Statistical Office, 1970a: 59-60) found only 612 European, Asian, and colored em-

APPENDIX II

ployers. However, its simple classification scheme—employ­ er, self-employed, employee, not seeking work, seeking work—probably does not reflect well either the structure of an incorporated business in which the owner is an employed manager or the possibility of one owner having many li­ censes. Discounting these census figures through 1969, then, it is likely that the number of expatriate retail businesses had grown at a somewhat slower pace than African busi­ nesses. According to figures from the Ministry of "i nance (Wel,: censes de­ lons, 1972), the number of non-African tr. clined between 1968 and 1971 from over 3,10^ to less than 900. The likely actual disposition of these businesses is dis­ cussed in chapter seven, and the figures should be viewed skeptically. In any case, official statistics were quite unsat­ isfactory for estimating recent changes in the number of non-African and African businesses. Size of Business a n d Scale of T r a d e

Deane (1953:272-275) estimated that in 1945-46 the aver­ age European and Asian business grossed about £9,100 (Ki8,2oo) a year, whereas the average African business grossed £70 (K140). European and Asian enterprises ac­ counted for about 96 percent of the total retail turnover of £9 million (K18 million). The dramatic growth in African trade is based on the rise in African income and hence con­ sumption. In 1945 Africans spent K6.g million on consump­ tion—K5.2 million at retail—about 36 percent of total pri­ vate consumption. By 1970 Africans spent K335.1 million or 65 percent of total private consumption. Of this, K217.8 million was spent at retail, the rest in markets, on housing, and on other commodities. If one makes reasonable assumptions about what percent­ ages of various types of goods Africans buy from Africanowned stores and if one refers to the low-income (i.e. Afri­ can) consumer budget survey (Zambia Central Statistical Office, 1970b) for estimating the total amounts spent for

EARNINGS AND GROWTH

various groups of commodities, one can estimate the portion of total African consumption passing through African re­ tailers. We estimate that African retailers get: 100

percent of maize meal purchases, or 14.4 percent of the low-income consumer's budget 75 percent of beverage purchases, or 7.2 percent of the budget 20 percent of meat purchases, or 2.3 percent of the budget 50 perr' 'of other foods, or 9.7 percent of the bud­ ge'.' 25 pen\" * of clothing and footware purchases, or 3.4 percent of the budget 20 percent of household stores purchases, or 3.4 per­ cent of the budget

In sum, African retailers gained 38.3 percent of total Afri­ can spending in retail stores, i.e. K83.4 million. Purchases of maize meal, clothing, beverages, and other commodites bought in the markets should not be included as purchases in retail stores. Commodities bought in mar­ kets and from hawkers and peddlers are, of course, counted in the consumer budgets. Thus our estimates of purchases from all African retail sources is conservative. If one as­ sumes that purchases in markets represent about one quar­ ter of African consumer spending in retail stores, then the percentage of total African retail spending spent in African shops and markets might be as high as 51.1. Thus the turn­ over of all African retail businesses was between K83.4 and Ki 11.3 million. Using these figures for African retail spending based on national accounts, budgets, and various estimates, we calcu­ late that African retailers had an average yearly turnover of about K8,ioo in 1970. This figure is not far from what we estimated from our sample study and much higher than the K140 calculated by Deane in the immediate postwar period. It represents a growth rate of 17.5 percent a year. African

APPENDIX II

businesses have grown dramatically. Our estimates are con­ servative since we assume that only low-budget customers shop in African stores and that European, Asian, and state stores have all the European and Asian and some of the African business. The expatriate businesses have grown as well. Assuming that all 2,503 registered retail establishments in 1969 were expatriate owned, the K.210.6 million spent in such shops would bring the average turnover to K.84,240. Similarly, assuming that the 1,412 retail businesses reporting a com­ bined turnover of K43.8 million in the 1962 Census of Dis­ tribution were expatriate owned, average turnover in that year was roughly K.62,000. Deane reported the equivalent of Ki8,20o for 1946. Thus one has the approximate growth rate of 5 percent per year compounded from 1946 through 1962. From 1962 through 1969, the growth rate is roughly 4 percent. Adjustments for changes in the cost of living might well wipe out most of these gains. Industrial Businesses

When Deane did her study in 1946, little African indus­ trial and other specialized economic activity existed. In 1970-71 we found that the large specialized African busi­ nesses averaged about K.225,000 turnover a year. This meant that the average business produced about K.75,000 worth of output which includes wages, salaries, profits, etc. As­ suming there were about a hundred such businesses in all of Zambia (there were forty-two in Lusaka alone though the capital contains less than one-half the urban popula­ tion), they produced an output of about K7.5 million per year. In 1969 this amounted to about 1.5 percent of indus­ trial output excluding the mining sector, or about 5 percent of nonnationalized industry. Mining accounts for 40 to 75 percent of Zambia's total output, largely depending on the international price of copper. In 1969 mining represented K.819 million, or twothirds of the gross domestic product, manufacturing K271

EARNINGS AND GROWTH

million or about one-fifth, construction about K147 mil­ lion or about 10 percent, and water and electricity about K41 million or about 3 percent. Commerce accounted for about 12 percent of the gross domestic product of which about three-quarters was Africanized (including markets). Combining the figure for commerce (Zambia Central Sta­ tistical Office, 1971a: 10-11) with the African industrial sec­ tor, we find that not even 10 percent of the economy was in African private hands, though it was 30 percent Afri­ canized if the dominant mining sector is excluded.

APPENDIX

III

Multivariate Analyses of Business Success

WE used correlation, regression, and discriminant function

analysis to trace the sources of business success among Afri­ can businessmen in Zambia. The discussion in chapter six is largely based on analyses reported more fully here. This appendix describes the samples used, how variables were operationalized, and the types of analyses performed, and gives most results obtained. While the logic behind the mul­ tivariate techniques we employed is simple, the results were sometimes complex because of the intricate patterns of rela­ tions uncovered. Most findings are presented in tabular form, but we have refrained from discussing many of these interrelationships because of their complexity. Instead, we highlight only those findings we feel are especially striking or important. However, the reader is welcome to judge whether our interpretations do justice to the full set of re­ sults. CORRELATION AND REGRESSION ANALYSES

Though we performed multiple regression analyses, as a prelude correlations among all variables were computed for both the Lusaka and rural businessmen. In a sense we used regression analysis to elaborate on the relations por­ trayed by correlations. However, as discussed in chapter six and reported below, our major interest was to examine the effects of a series of sets of variables arrayed in temporal order on success as well as on one another. Both correlation and regression analyses were generally appropriate for our data on business success. Success was

MULTIVARIATE ANALYSES

measured by sales per month and therefore was an interval scale—it could be divided, it had a zero point, and each unit was the same. Changes or differences in such variables are meaningful, since they can be denominated in unam­ biguous units—here, kwacha. Some of the independent variables used were nominal or ordinal—they consisted of sets of unordered or ordered categories. In some cases, it was difficult to decide whether to construe some variables as nominal or ordinal. Therefore regressions for education, father's occupation, previous occupation, systematic train­ ing, and migration, were performed coding variables both ordinally and as sets of categorized dummy variables. In no cases were results affected. Furthermore, we tested for a number of possible interaction effects (e.g. education and innovation; father's occupation and migration pattern), and in no case were they of the magnitude that would seri­ ously change our main results. We also tested for some nonlinearities, but we found none that were important. Since we only used regression as a tool to disentangle patterns of effects, we do not consider these more complex analyses here. Finally, we used the logarithm of success as well as raw figures as our dependent variable, but since the find­ ings were in all ways similar to those we obtained using raw values, we only present the latter results since they lend themselves more easily to intuitive interpretations. T h e Samples

Because of the vastly different social and economic con­ texts, regressions and correlations were performed sepa­ rately for the Lusaka and rural businessmen. In Lusaka we interviewed virtually every substantial businessman (a pop­ ulation) and many smaller businessmen in Kapwepwe and Old Kanyama, as well as those located near some of the African markets. We excluded the smallest retail shop­ keepers from this analysis because too few had been inter­ viewed. Here we assumed that we had interviewed abso­ lutely every substantial businessman and that the smaller

APPENDIX III

businessmen constituted a sample of all other African busi­ nessmen, except the very smallest. What portion did the smaller businessmen we interviewed represent of all such businesses in Lusaka? We needed to have an estimate, so that we could assign a reasonable weighting factor to the smaller businessmen and thus run our analyses on a destratified sample. We could not use the simple percentage that our sample represented of all Afri­ can businessmen in Lusaka (adjusted to take into account the substantial businessmen we had interviewed), because no figure existed for all African businessmen in Lusaka. However, figures had been collected by the Zambian census that provided totals for African business employers in Lu­ saka (Zambia Central Statistical Office, i97oa:B59). To ar­ rive at an estimate of a reasonable weighting factor, we computed the percentage of nonsubstantial African busi­ ness employers that was represented by the number of em­ ployers in our sample of smaller African businessmen. To do this required a series of computations and assumptions. First, we eliminated all those businessmen in our two sam­ ples who employed only family members. This was done to make our definition of business employer comparable to that of the census. Thus, we found that 70 of the 78 sub­ stantial businessmen and 42 of the 112 smaller businessmen were employers. Next, we subtracted the number of sub­ stantial business employers we had interviewed from the figure for total African business employers recorded by the census. According to the census figures there were 398 small business employers. Thus, because we assumed that we and the census counted the same individuals, 70 was subtracted from 398, leaving us with 328 smaller business employers. Finally, we divided this number of smaller business employ­ ers from the census by the number of smaller business em­ ployers among our sample of smaller businessmen. We thus arrived at our weighting factor of 7.8, after dividing 328 by 42. When the 112 smaller businessmen in our sample was multiplied by this factor we got an estimate of 874 smaller

MULTIVARIATE ANALYSES

African businessmen in Lusaka in 1970. When the substan­ tial African businessmen were added to this, we calculated that there were 952 African businessmen in Lusaka (not in­ cluding market traders and the smallest retail shopkeep­ ers). At about the same time our survey of African business­ men and the Zambian census were being conducted, Mytton (1972) carried out a random sample survey of those aged fifteen and older in urban Zambia for the Zambian Broadcasting Service. Among his 1,643 respondents 18 were businessmen, or one in 91. In 1969 the population of Lusaka was approximately 354,000, of which some 100,000 were aged fifteen or older (Zambia Central Statistical Office, i97oa:B55). When this number was divided by 91, we ar­ rived at an estimate of about 1,100 African businessmen in Lusaka. Since this estimate is not wildly different from that arrived at by our weighting scheme, we feel that our weight­ ing factor is roughly satisfactory. We tried a number of weighting factors in our analyses; all provided virtually identical results. Because non-Zambian Africans, most of whom were from Rhodesia, have had a very different migration experience and have had the advantage of much better educational and occupational opportunities, non-Zambian businessmen were eliminated from the analysis to simplify the interpre­ tation of the results. However, their inclusion would not greatly change them. Despite all of our efforts to manipu­ late our two samples so they would provide the closest ap­ proximation possible to a sample of all African businessmen in Lusaka, biases still remain. We have overrepresented trading enterprises, those from certain specific locales, and those that are on the average larger. For these reasons, and the fact that we did not have an overly large sample, we treat these correlation and regression analyses as explora­ tory, not as definitive. Furthermore, we can only remind the reader that the ru­ ral samples (described in chapter five) are biased. We did

APPENDIX III

eliminate the very smallest rural businessmen from analy­ sis because only a few were interviewed. In the rural areas, our analyses simply suggest the main patterns that existed in 1970 and 1971. More complex inferences are beyond the scope of our work. Operationalization of Variables

To perform the analyses reported here, some variables were recoded into categories different from those used in presenting our data in other portions of this book. We will discuss our operationalization of variables in the same order in which they were entered into the analysis. Age is grouped into ten-year intervals. Under twenty years old was coded as 1, twenty to twenty-nine was coded as 2, while seventy and over was coded as 7. Thus we have a seven-point scale, which when multiplied by 10 under­ states the actual age by about five years. Because we did not have enough respondents from each ethnic group, we grouped ethnic origin into four categories—Eastern origin, Northern origin (including Luapula), Southern origin, and other origin. The other category was excluded from the regressions. We used Northern, Eastern, and Southern loca­ tion for the rural businessmen, as described in chapter six. The Southern category was excluded from the regressions. For religion we used the categories no religion, Catholic, Reformed (African), Protestant (mission) and sectarian, as described in chapter six. The sectarian category was ex­ cluded from the regressions. Father's occupation was grouped into four categories (ranked ο through 3): villager; unskilled, trades, services, semiskilled, and lower clerical; self-employed and business­ man; higher clerical, semiprofessional, and professional. A seven-point ranked scale was used for education (from ο through 6). Previous job followed a four-point scale (0 through 3) that was similar to that for father's occupation. However, those reporting they had been self-employed, who were thus

MULTIVARIATE ANALYSES

in a sense saying they were in business before they went in­ to business, were coded as not having answered this ques­ tion. Commercial farmers were grouped with higher cleri­ cal, professional, and semiprofessional occupations. The scale thus goes in order: cultivator and housewife; unskilled and lower clerical; semiskilled, skilled, and trades; higher clerical, professional, and semiprofessional. Extensive migration was a two-point scale: no migration, some migration, or extensive migration in Zambia; and ex­ tensive migration outside of Zambia, mostly in Rhodesia or South Africa. Systematic training was a three-point scale (from ο through 2): learned on own; unsystematic train­ ing after starting business; systematic training through prior work experience or class work. Sponsorship was a threepoint scale (from ο through 2) which went from no sponsor­ ship through family sponsorship only, to sponsorship by an institution or expatriate. Years self-employed was simply the year the businessman started continuous self-employment subtracted from 1971. A businessman was said to concen­ trate on business if he did not hold another job or conduct a farming operation of any sort. Complete accounts were coded on a four-point scale (from ο through 3): no records; one type of record; two types; complete accounts. Easy credit was coded on a four-point scale (from ο through 3): no credit, except government purchase orders; some special cases; credit on the basis of criteria; liberal use of credit. The operationalization of both innovation and success is discussed in chapter six. One cannot conclude anything from the differences in means between the Lusaka and rural samples, since larger businesses were heavily overrepresented in the rural areas, while a weighting factor was applied to destratify the Lu­ saka sample. It should also be noted that some variables were very difficult to operationalize (e.g. the independent existence of a business ethic) so our analysis is by necessity incomplete. Still, we feel that the categories or scales used to operationalize most variables capture the underlying di-

APPENDIX III

mensions we were attempting to measure in the best manner possible, given the various limitations of data and sample. The Analyses

First, we computed correlation matrices, as well as means and standard deviations, for the rural and Lusaka samples separately. Most correlations between various independent variables and success are discussed in chapter six. We omitted businessmen not reporting sales, which included nineteen businessmen in the rural areas and the weighted equivalent of twenty-six businessmen in Lusaka. Other cases with missing information were eliminated only from particular correlations in order to preserve all information possible, since such nonresponses were not systematically distributed. Because of the uncorrected biases in the rural sample and the fact that the dependent variable had a much smaller mean and standard deviation there than it did in Lusaka, we concentrated more of our attention on the analyses for Lusaka. When comparing the matrices of correlations for each case, as shown in tables A3.1 and A3.2, one immedi­ ately sees that few correlations between variables were as high for the rural case as for Lusaka. Next we performed a multiple regression analysis be­ tween all variables in our model and success for the Lusaka and rural cases. Then we performed the same analysis after eliminating those variables that did not contribute much directly to the explanation of success. In this way we were using regression analysis to give us the best description of the relations between a set of independent variables and success. Tables A3.3, A3.4, and A3.5 present the standard­ ized coefficients, the regression coefficients, and the standard error. Because rural businessmen have much lower sales and standard deviation of sales on the average, and given the same general level of measurement error, it was more diffi­ cult to account for success for them than for the Lusaka businesmen.

TABLE A 3 . 1 ANALYSIS OF SUCCESS FOR AFRICAN BUSINESSMEN IN LUSAKA, CORRELATIONS, MEANS, AND STANDARD DEVIATIONS®

Standard DeviaMean tion

Variable Sales per month (kwacha) Y Ever innovated Easy credit Complete accounts Concentration on business Years selfemployed Sponsored start Systematic training Previous occupation Extensive migration Education Father's occupation Age Eastern origin Northern origin Southern origin Other origin No religion Catholic Reformed (African) Protestant (mission) Sectarian

Y

Xt

X2

X3

X4

4394-7 8286.0 800 •349 •453 - 086

Xi x2

.142

X3

1.767

1.049

453

X4

•679

.467

013

—.024

.106

.015

W,

6.916

6-353

087

•053

.068

.160 - . 1 3 1

W2

•342

.681

523

•550 —.076

•398 -.248

W3

1-299

•743

210

•289 —.042

•303 -.109

Vi

1.786

•903

366

•435 -.123

.408

•in

—.112 •489 —.060

a 53

V2

.588

•774

039

.191 —.127

.412 -.103

Si

2.062

1.507

387

•424 —.102

•425 -.105

Ri

•734

.911

259

.206

.004 - 0 5 3

3-772 1.038 - °43

—.070

.098 —.006

.041

—.180

.018 -•194

.044

T2

•489

.500

- 160

T3

•343

•475

004

T4

.066

.248

105

T6

.102 .080

T„ T,

•335

172 •303 .271 — 020 •472 - 050

T8

.224

.417

- 062

T„

•223 .138

.417

098 041

T 10

•345

•o75

—.008 -.089

.089

.026

.071 .222 •173 .029 —.on •139 -.031 .041 -.098

.082 .023

-•095

.102

.048

.046 —.112

•°53

.008 -.105 —.014

.128 -.185 -.023 .167

•095 —.210 .036 .181

347

APPENDIX

III TABLE

W1

Variable Ever innovated Easy credit Complete accounts Concentration on business Years selfemployed Sponsored start Systematic training Previous occupation Extensive migration Education Father's occupation Age Eastern origin Northern origin Southern origin Other origin No religion Catholic Reformed (African) Protestant (mission) Sectarian

348

A3.1

w2

(continued) w3

Vx

V2

Sx

Rx

XI x2 xa X4 W, W2 -.069 .026

.287

V1 -.176

.409

.284

v 2 -.141

.146

.226

•309

S1 -.276

.500

.287

.478

-.188

•394

.074

.302 -.151

W3

R

1

.498 -.130 -.068

—.261

T 2 -.132 -.182 —.240

.025

TX

.202 .364

•177 -.421 -•378 .005 -•143

.063

.207

.063

•097

—.032 —.080

.128 -.065

T 4 -•055

.083

.186

-•095 - • ' 3 5

.071

T 5 -.047 .013 TE T, .177

.130 •092 .071 .040 .067 -•059

T3

T8

.020 -.169 - 0 3 3

.065 T„ -.161 T M -•075 —.022

•033 .050

.012

.080 .205 —.011 —.022 .140 -.098 —.106 -.136 .077 .071 -.013 .051 - 1 4 3 -.068 -•°37 .108 -033 .006 —.062

•097

.050 —.120 .085 •058

M U L T I V A R I A T E

TABLE

Variable Ever innovated Easy credit Complete accounts Concentration on business Years selfemployed Sponsored start Systematic training Previous occupation Extensive migration

T1

T2

A3.1 (continued) T3

T4

T5

T6

T7

T8

T9

xt x2 x3 x4 W1

W2 w3 V1 V2

S1

Education Father's occupation Age Eastern origin Northern origin Southern origin Other origin No religion Catholic Reformed (African) Protestant (mission) Sectarian

ANALYSES

R1 T1 T 2 -.223 T3

.085 -.707

T4

.000 —.260 -.192

T5 •235 -•330 -.243 .026 •033 .021 T6 T , —.070 —.042 .115

.090 —.062 —.040 -.051 -.091 -.209

T 8 -.068

- . 1 8 1 -.15.1 - . 1 5 8 -.382

T9 TM

•542 -.381

.069 -.266 •°75 -.304

.166 .086

.106 •209

.043 - . 1 5 8 -.381 -.288 .286 - . 1 1 8 —.284 - . 2 1 5 - . 2 1 4

' Businessmen of Zambian origin only (N = 653 weighted).

349

APPENDIX

III

TABLE

A3.2

ANALYSIS OF SUCCESS FOR RURAL AFRICAN

BUSINESSMEN,

CORRELATIONS, MEANS, AND STANDARD DEVIATIONS'

Mean

Variable

Standard Deviation

Sales per month (kwacha)

Y

1,810.2

1.759.0

Ever innovated Easy credit Complete accounts Concentration on business

X1

•415

x2 x3

.217 .880 2.472

X4

•785

•379

.488

Years self-employed Sponsored start Systematic training

W1 w2 w3

Previous occupation Extensive migration

10.77

.326

7.99

Y

X1

x2

X3

x4

•431

- •315 -.321 •305 .212

•139

.031

.119

.117

•049 -.116

.132

.241 -•035 .201 .146 -.258 .217

.623 .682

V1 V2

1.785 .500

.361 •956 .233 - 0 9 5 •353 .127 •749 --.132 -.103 •055 -.238 -.015

Education Father's occupation

S1

2.147 .901

Age Eastern region Northern region Southern region No religion Catholic Reformed (African) Protestant (mission) Sectarian

T1 T2 T3 T4 TE T, T8 T„ T 10

350

3.968 .516

•337

.147 .168 .200 .211 .232 .190

.195

.209

1-255

.340

1.044

•059

.135 -.082

-043 .244 .110

.309 1.516

.296 .192 -.264 R1 .092 •034 —.024

•944 - •157 -•155 - •474 -•392 •475 •373 .238 .240 •356 .171 •376 - .044 .036 .502

.402 .018 —.008 .410 — .286 —.204 .424 •336 •153 .021 •394 - .041

.238 .052

.058 •133 —.176 .251 -•309 -•372 .207 .407 -•233 -.043 .167 -.019 .169 -.058 .054 -.156 .018 •043 .113 -.054 -•35o -.212 •054 .188 •097 .036 .065

TABLE

Variable

(continued)

X1 X2 X3 X4

Years self-employed Sponsored start Systematic training

w1 w2

Previous occupation Extensive migration

v4

Education Father's occupation

—.122 .047

.123

V2

—.170 -.005

.176 —.016

S1

-•341

R1

-.054

W3

Age Eastern region Northern region Southern region No religion Catholic Reformed (African) Protestant (mission) Sectarian

-.089 .280 —.242 —.027

T,

-•273

T8 T9 TM

.043 —.022

T2

TABLE

Variable

Tx

v1

v2

.017

S1

R1

.142 .044 -.160

.165 .469 -.166 .221 .200 -.002 -.096 .129 -.115

.143

-.213

•279 -•354 -.216 -.234 -.164 -•3'9 •35' -.409 -.094 .150 .148 .211 -.263 .219 •135

•435 T3 T4 Te

W3

w2

W1

Ever innovated Easy credit Complete accounts Concentration on business

Ever innovated Easy credit Complete accounts Concentration on business

A3.2

.129 .034 .170 -.147 .284 -.047 .003 -.052 -.069 .116 -.211 .011 .063 .147 .047 .090 .110 •075 - . 1 7 5 -.126 -.317 -.054 -.247 -.001 .130 -.017 .123 .102 •134 •3'5 .110 -.132 —.024 -.011 .007 -•199

•277 A3.2

(continued)

T2

T3

T4

Te

T7

Ts

T„

x2 x3 x4

Years self-employed Wx w2 Sponsored start Systematic training W3 Previous occupation Vx Extensive migration V2 Education Father's occupation

Sx RI

Age Eastern region Northern region Southern region No religion Catholic Reformed (African) Protestant (mission) Sectarian

Tx T2 T3 T4 T„ T, Ts T„ T 10

.136 •°79 -.297 .050 -.230 -.032 -.029 .250

-.736

-•429 -.296 •155 -.083 —.108 .063 -.078 .015 -.225 •449 -.368 -.142 -•232 -.258 -.417 •453 —.017 -.247 -.274 -.283 -.230 •053 •254 —.218 —.242 -.250 -.265

• Businessmen of Zambian origin only (N = 95).

APPENDIX

III

TABLE A3.2 REGRESSION ANALYSIS O F SUCCESS FOR AFRICAN BUSINESSMEN IN LUSAKA

Dependent variable (Y) = sales (kwacha per month) Multiple R = .834

Years self-employed Sponsored start Systematic training Previous occupation Extensive migration Education Father's occupation Age Eastern origin Northern origin Southern origin No religion Catholic Reformed (African) Protestant (mission) Constant

F = 33.42**

Standardized Coefficient B

Variable Ever innovated Easy credit Complete accounts Concentration on business

R 2 = .696

X1 x2

Unstandardized Coefficient B

.695** —

-033

Standard Error of B

16,512.6** 610.4

1,086.1 645-3

x3

.167**

1,316.0**

415.2

X4

.023

412.4

737-2

W1 W2

-.019

-

24-3 1,183.9*

71.6 604.5

w3

-.015

-

171-5

435-1

V1

.026

233-9

441-9

v2

—.210**

S1

.024

131.2

280.3

.058

530-9

388.9

-

927-3* 931-3 181.5 279.3 3.378-1* 811.4

427.8

T3 T4 T6 T7

.116* .056 .010 -.008 —.110* —.046

1.389-3 999-3

T8

—.040

—

802.7

1,189.4

T9

—.027

-

556-3 3,036.8

1,031.0

T2

•097*

— 2,248.9**

.002

.065

543-1

1,192-4 1,112.8 1463.9

N O T E : The significance level of the F ratios for the coefficients is indicated by * at the .05 level and by ** at the .01 level. Significance levels should be interpreted with caution. For a clear technical discussion of the matter, see Kerlinger and Pedhazur (1973).

352

R1 T1

MULTIVARIATE

TABLE

ANALYSES

A3.4

REGRESSION ANALYSIS O F SUCCESS FOR A F R I C A N BUSINESSMEN IN LUSAKA

(Innovation Excluded) Dependent variable (Y) = sales (kwacha per month) Multiple R = .665 Variable Easy credit Complete accounts Concentration on business Years self-employed Sponsored start Systematic training Previous occupation Extensive migration Education Father's occupation Age Eastern origin Northern origin Southern origin No religion Catholic Reformed (African) Protestant (mission) Constant

x2

R 2 = .443

F — 12.27**

Standardized Coefficient B

Unstandardized Coefficient B

Standard Error of B

—.067

—1,220.2

870.8

x3

•249**

1,970.6**

558-3

X4

•099

1,758.2

989-5

W1 w2

•135 •344**

176.0 4,185.8**

95-i 772-5

w3

.001

13.0

588.1

V1

.140**

1,282.4**

590-1

v2

—.1960**

—2,102.0**

734-2

S1 Ri

Ti T2 T3 T, T, T,

.121

663.9

376.0

.060

548.4

525-7

.063 -•147 ) —,i88*> .081 -•043 j -.082 1 —.027 \ .008

TS

•035 1

T,

.088

J

5°3-5 -2,429.9 -3.289.5* -1,418.8 -2,519-8 - 468.9

577-i 1,584.2 1,472.6 1.9767 1,876.7 1.350.7

690.4

1,602.6

1,746.2 -4,580.4

1,378.9

N O T E : The significance level of the F ratios for the coefficients is indicated by * at the .05 level and by ** at the .01 level. Significance levels should be interpreted with caution. For a clear technical discussion of the matter, see Kerlinger and Pedhazur ( 1 9 7 3 ) .

353

TABLE A 3 . 1 REGRESSION ANALYSIS O F SUCCESS FOR RURAL AFRICAN BUSINESSMEN

Dependent variable (Y) = sales (kwacha per month) Multiple R = .645

Standardized Coefficient B

Variable Ever innovated Easy credit Complete accounts Concentration on business Years self-employed Sponsored start Systematic training

R 2 = .416'

F = 2.17* Unstandardized Standard Coefficient B Error of B

X1 x2

.169

718.1

538-2

-•199

-1,073.2

710.3

x3

•159

356.1

274.4

X4

.030

106.4

439-8

.170

37-4 94-7

W1 W2

.034

w3

—.004

Vx

33° 326.7

9-3

297-4

.166

3°5-9

242.3

v2

.017

39-4

298.9

Education Father's occupation

Sx

.047

66.1

202.1

Rx

.009

15-9

203.7

Age Eastern region Northern region No religion Catholic Reformed (African) Protestant (mission) Constant

Tx

—.048

TS

—•>97

Previous occupation Extensive migration

Ts

-.069

T6

.130

T,

.096

T„

.036

T„

•234

-

•069

-

89-3

265.3

-

690.4

704.6

-

.120

253.7

716.8

608.9

699.0

419.6

692.0

'54-7

722.7

9692

647.7

889.4

N O T E : * indicates F ratio significant at .05 level. None of the F ratios for the coefficients is significant at that level. • Because of the large number of variables and the relatively small number of cases involved in our rural analysis, it is useful to adjust the R2 to take this into account. R 2 is often used for this purpose (e.g. Theil, 1 9 7 1 : 1 7 8 ) . R 2 = R 2 — [ (k — 1 ) / (N - k)] [1 - R2] where N is the number of cases, and k is the number of independent variables. R~2 = .238 for the regression in table A3.5.

354

MULTIVARIATE ANALYSES

The unstandardized coefficients can be interpreted as the amount of additional sales produced by an additional unit of each variable. For nominal and dummy variables this means the presence of a particular attribute; for ordinal variables this means the average change of one category. In the latter case, it may be very hard to interpret the mean­ ing of such a change. However, since it is in fact impossible to change any businessmen's attributes, the multiple re­ gression technique is really a very powerful descriptive strategy. The results for Lusaka indicated that innovating businessmen had on the average sales of over 16,000 kwacha a month higher than the noninnovating; keeping more complete financial accounts brought in an additional 1,316 kwacha; better-sponsored businessmen sold 1,184 kwacha more than less well-sponsored businessmen; and more ex­ tensive migration resulted in the loss of over 2,200 kwacha. Though there were variations in sales in terms of ethnic group and religion, they accounted for virtually no vari­ ance when all variables were considered together. This might mean that ethnic group affected something that in turn affected success, or it could mean that there was really little or no effect of ethnic group on success. When innovation is not considered, as shown in table A3.4, we found that much less of the total variance could be explained, and factors correlated with innovation (e.g. level of previous job, education) became somewhat more important. However, this analysis also clearly points to the strong and independent effect of innovation on the success of businessmen who have persisted in business. In rural Zambia, by contrast, innovation resulted in 718 kwacha in additional sales, easy credit in 1,073 kwacha less, and complete accounts in 356 kwacha more. One extra year of self-employment led to an extra 37 kwacha a month in sales, while a previous job one level higher resulted in an average of 305 kwacha more. Both the pattern and magni­ tude of the relationships were somewhat different in the rural areas. Religion had a measurable effect. Businessmen

APPENDIX III

from sectarian denominations (the excluded category) had lower sales. In further analysis with fewer variables, how­ ever, religion showed only a minimal effect. Regression equations using independent variables showing a strong re­ lationship with success are presented in tables A3.6 and A3.7 for the Lusaka and rural samples respectively. Next, we attempted to see which variables were associ­ ated with those that were strongly associated with success. Therefore in Lusaka the sources of innovation—complete financial accounts, sponsored start, and extensive migration —were explored using regression analysis. Since we were using a causal strategy with six stages and fourteen factors, we could disentangle the indirect effects of each variable. Thus, sponsored start, business experience, level of previ­ ous occupation, and education led to innovation. One can say that sponsored start had both a direct effect on success and an indirect effect through innovation. Other such pat­ terns for Lusaka can be discerned by examining table A3.8. However, since innovation had such a strong effect on sucTABLE A3.6 REGRESSION ANALYSIS OF SUCCESS FOR AFRICAN BUSINESSMEN IN LUSAKA (Reduced Equation) Multiple R =

.823

.677

Standardized Coefficient B

Variable Ever innovated Complete accounts Sponsored start Extensive migration Constant

R2 =

Xl

.710**

F=

1152.70*»

Unstandardized Coefficient B

Standard Error of B

16,860.0**

1,010.9

329-7 492-4

Xs W2

• 133**

1,053.0»»

.104*

1,263.9»

V2

—.167*·

— 1,786.0**

390-9

762.9

NOTE: The significance level of the F ratios for the coefficients is indi­ cated by * at the .05 level and by ** at the .01 level. Significance levels should be interpreted with caution. For a clear technical discussion of the matter, see Kerlinger and Pedhazur (1973).

MULTIVARIATE ANALYSES TABLE A3.7 REGRESSION ANALYSIS OF SUCCESS FOR RURAL AFRICAN BUSINESSMEN (Reduced Equation) Multiple R = •591

R2 = -349

Unstandardized Coefficient B

Standard Error of B

Xi X2

.249* -.223*

1,055.8* — 1,202.2*

471.0 600.9

X3

.182

408.0

242.5

W1

.I4O

30.8

24-3

V1 S1

.I72 .I46

317.2 205.0 291-97

2ΐ5·3 170.9

Variable Ever innovated Easy credit Complete accounts Years self-employed Previous occupation Education Constant

F = 5·99**

Standardized Coefficient B

NOTE: The significance level of the F ratios for the coefficients is indi­ cated by * at the .05 level and by *» at the .01 level. Significance levels should be interpreted with caution. For a clear technical discussion of the matter, see Kerlinger and Pedhazur (1973).

cess, it is relatively unimportant to know that less educa­ tion, a father with a lower occupation, and being older to­ gether were likely to lead to more migration, which is also related to ethnic origin. Similar patterns are presented in table A3.9 for rural businessmen. Indeed, one can see that the sources of innovation in rural areas included experi­ ence, youth, previous job, regional location, and religion. Education and sponsorship, which were important in Lu­ saka, were not important for innovation in the rural areas. Whether this was due to the biases in the rural sample, or differences between Lusaka and the rural areas in social and economic context cannot be discerned. Thus, we present the regression analyses we performed using sets of variables arrayed in temporal order to analyze the sources of business success in Zambia. Because of the many limitations in samples, data, and operationalization of variables discussed here, we were unable to arrive at de-

t .102

.687 .727 .528

t t t

.780 .625 •392

t

t t

•569 .822 .676

T6_9

-.105 —.196

t

t

R1 T1

•393 .267

t

S1

t .169

.226

t

V1

-.167

.131

•384

.104

w2

v2

•193

.166

t

Wi

.450

X3

•133

X1

NOTE:

•3t>3

•550

•835

t t

t .540

t

-.237

t

W1

LUSAKA

•777 .630 •396

.278

•527

.850

t

.128

t t .122

•133

.190

•452

•313

t

.417

.130

Dependent Variables W2 V1

SUCCESS FOR AFRICAN BUSINESSMEN IN

X3

.710

Success (sales) Y

Ag.8

•877 .480 .230

t

T2-4 •194

—.216 .266

—.162

V2

( P A T H COEFFICIENTS) A M O N G VARIABLES IN REGRESSION ANALYSIS O F

-j- indicates nil or insignificant relationship. • Categorized variables, joint effects.

Ever innovated Complete accounts Years selfemployed Sponsored start Previous occupation Extensive migration Education Father's occupation Age Ethnic origin" Religion' Residual coefficient Multiple R Multiple R 2

Independent Variables

INTERRELATIONS

TABLE

.226

.880 •475

t t

-•330

•239

S1

.908 •419 .176

.124

t

-•370

R1

•145

t -.126 .186 .150

.889 .458 .210

.140

t

t

.172

t .146

t t t t

.807

W1

w2

w3

V1

V2 S1

R1 T1 T2_3 ' 16-9

•591 •349

t

.182

X3

t t

t

•249 -.223

•259

X1

x2

Success (sales) Y

AMONG

•932 .361 .131

t t t t

t t

.886 .464 .215

t t t t

•927 •376 .141

.778 .628 •395

•972 •234 .056

t t t t

•225 •194 •135 .121 t .224 .118 -.236

+ .083 •235

t -.287

-.189 .101

.164 t t

t

.864 •503 •253

.940 •339 .115

.198 .321 t t

--.181 --.088 t t

V2

t

V1

OF

.463

Dependent Variables w, w2 w3

.232

•154

—.270 t

.122

t

X3

t

•253

x2

BUSINESSMEN

VARIABLES IN REGRESSION A N A L Y S I S

SUCCESS FOR R U R A L A F R I C A N

(PATH COEFFICIENTS)

N O T E : f indicates nil or insignificant relationship, * Categorized variables, joint effects.

Ever innovated Easy credit Complete accounts Years selfemployed Sponsored start Systematic training Previous occupation Extensive migration Education Father's occupation Age Region" Religion* Residual coefficient Multiple R Multiple R 2

Independent Variables

INTERRELATIONS

•932 .360 .130

t

t -.292 .126

S1

.962 .269 •073

t .158

-.177

R1

APPENDIX III

finitive results. However, for both the Lusaka sample and the rural businessmen, innovation emerged as an impotrant source of business success, albeit a much more important one in Lusaka. The patterns were different in other ways between Lusaka and the rural areas. The extent to which this merely reflected the biases in our rural sample is un­ known. However, analyses such as those we have performed are an effective technique for assessing the crude associa­ tions and correlations that various variables have with suc­ cess and the patterns of interrelationships that underlie such success. In interpreting such analyses, however, one should always bear in mind the social and economic con­ text for which they were performed. DISCRIMINANT FUNCTION ANALYSIS

To analyze factors facilitating business survival, a dis­ criminant function analysis was performed among the reinterviewed group of fifty substantial businessmen. This method constructs and estimates a maximum generalized distance function between the groups of survivors and fail­ ures by combining variables.1 We found that fifteen vari­ ables combined could correctly reclassify forty-eight of the fifty cases as either successes or failures. This was done, providing information on the probability (number) of sur­ vivors and failures. Presented in table A3.10 are the coeffi­ cients (standardized and unstandardized) and various other statistical measures. The standardized coefficients can be in­ terpreted as the contribution to classification of each vari­ able. They are an indication of the factors associated with survival or failure in the early 1970s in Zambia for the substantial African businessmen. 1 For a discussion of the computational and statistical bases and uses of discriminant function analysis see Van de Geer (1971:243-272).

M U L T I V A R I A T E

TABLE DISCRIMINANT

FUNCTION

SUBSTANTIAL

AFRICAN

ANALYSIES

A3.10

A N A L Y S I S O F SURVIVING A N D BUSINESSMEN

IN

LUSAKA,

FAILING

1970-72

Means Variable Concentration on business Technical innovation Completeness of accounts Type of business Relevance of last job (technical) Level of father's occupation Labor controls Action against theft (severity) Extensive migration Technological level Family employees Educational level Innovation (general) Relevance of last job (supervisory) Wife in business Chi square = 41.193

Standardized Coefficient*

Failure

Success

(N=14)

(N=36)

.361 .312 .291 -.247

•357 •143

.611 .306

.786

•972

•929

.667

-.246

1.598

1.243

•233

.500 .071

.694 .250

•429 •57i

•389 •472

.222 -.208

•175 -.168

1.071

•155 -•133

•357

1.111 .500 .694 1.306

.643 1.214

-.096 .091 .091

1.380

1-324 •333

•357

Df = 15 Sig = .000 Canonical correlation = .799 Predicted

Classification results

Success 35

Actual Success Failure

1 48 correct

Failure 1 13 2 incorrect

" Negative sign means that a positive increment in the variable is associated with failure.

361

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Subject Index

achievement motivation, 10, 285; and success, 205-206 African business and businessmen, 3, JO, 13, 228, 275, 279-280; and Asian businessmen, 309; and dependency, 311; and economic growth, 299-300; and economic independence, 308; and economic reforms, 26568; and family, 228-37, 289; and nationalist politics, 254-56, 257; and Rhodesian policy, 273-74; Asian and European models, 277-78; associations, 258-59; causes, 275; colonial period, 38-39; compared with expatriate businessmen, 305; compared with salaried middle class, 303-304; compared with wage-earning and self-employed occupations, 238; consumption patterns, 238-40, 309-310; earn­ ings, 237, 332-33; efficiency, 300; federal period, 39-40; growth and scale, 3, 332; im­ pact oni society, 204; individual lobbying, 257-58; opportunity and politics, 304; personal politicking, 268-70; political participation, 254-59; precolonial, 34-36; prestige and legitimation, 204, 237, 241-42; role in Zambia, 298-99; success, 205-28, 237-42. see also market trade and traders, market trade types, rural African business and businessmen, small African retail trade and traders, sub­

stantial African business and businessmen, success African Sabbath Church of God, 80, 81, 316 Africanization, 3, 313; cultural, 6, 7; economic, 7, 9-10, 15-17; extent, 311, 339; resistance, 251-52. See also economic re­ forms, nationalizations, Zambianization Angolan civil war and effects, 45 Asian businessmen, 14, 176, 188, 310, 311, 331-32; and colonial­ ism, 35-36, 308; as middlemen, 308-309; change in scale, 33536; circumvention of economic reforms, 252; colonial status, 270, 271; family organization, 234-35; federal period, 39-40; interview schedules, 323; po­ litical stance, 270-71; size and scale of trade, 336; trade licenses, 336. See also expatriate businessmen banks, 185-87; and credit to African businessmen, 185-86, 193; and economic reforms, 50 British South Africa Company, 17-18, 21-24. See also colonialism CBC Limited (Bookers Group), 247 Central Province, 63-64, 165. See also Lusaka Chilenje and Chilenje market, 57, 63. 92

INDEX Chipata, 250, 251, 334*35· See also Eastern Province civil service, 4, 43 class structure, 3-5, 307; and business success, 213, 224; and inequality, 5, 203, 239, 243; postcolondal, 14. See also stratification, success colonialism, 5, 7, 15; and eco­ nomic development, 22; and mining development, 24-25; and sponsorship of market trade, 55; business activity, 308; com­ petition among European powers, si; economic policy, 38-40; effect on village life, 23-25; independence struggle, 40-43; influence after inde­ pendence, 42-44; labor policy and labor supply, 23-24; life style of Europeans, 32-33; so­ cial restrictions, 25-26, 27, 2829, 32-33, 41; tax policy and African labor, 22-23; trade re­ strictions on Africans 36-37, 56; "trusteeship" by colonial office, 31-32; wage scales, 33. See also dependency, discrimi­ nation, economic reforms, Zambianization consumption patterns, 200, 33637; business and salaried middle class, 303-304; low in­ come, 336-37, 338; substantial African businessmen, 141-44; Zambian elite, 309-310 copper and copper mining, 15, 17' 43. 46, 3". 3'3! and de­ pendence, 25, 40, 42, 276, 312; growth and scale, 338-39 credit: government loan pro­ grams, 185, 186, 187, 193, 250; loan requirements, 49; to rural businessmen, 185-86, 190, 193;

to small retail traders, 108; to substantial African business­ men, 157-59 Credit Organization of Zambia (COZ), 186, 187 Dar es Salaam, 45, 153, 255 dependency, 3, 53, 276, 305, 306308, 309; and consumption versus reinvestment, 310; and indigenous enterprise, 275; the­ ories of, 12, 306-307. See also colonialism, development development, 3, 12; "big push" approach, 300; constraints on, 307-308; indigenous, 13, 228, 275, 311-312; neocolonial theo­ ries, 12; rural, 162, 163, 199, 200-203; strategy for private enterprise, 12, 299-300; theory, 275, 284; third world cultures, 284. See also dependency Devonshire Declaration of 1923, 3·-32 discrimination, 25-26, 32-33; as motive for enterprise, 124-25; in education, 30-31; in hous­ ing, 27; in labor, 28; in trade, 41. 56 District Development Commit­ tees, 252 earnings and sales. See African businessmen, Asian business­ men, European businessmen, market trade and traders, small African retail trade and trad­ ers, substantial African busi­ ness and businessmen East-West rivalry, 6-7, 244-46 Eastern Province, 64, 163, 165, 168, 212, 332; and substantial African businessmen, 133, 134; migrants from, 98, 133-34. See also Chipata, Petauke

INDEX economic reforms, 14, 47-51, 53, 164, 174, 176, 243, 273; and independence, 43-44; and sub­ stantial African business, 120; circumvention, 251-52; de­ pendence, 45-46; impact, 53-54, 246-54; land tenure, 52-53; limitations, 251-52; neglect of small retail trade, 89. See also Africanization, government policy, nationalizations, Zambianization education, 4; and entrepreneurial performance, 223, 226, 292-93; of market traders, 67-68; of rural businessmen, 178; of small retail traders, 91, 99-100; of substantial African business­ men, 130-32; under colonialism, 30-31 efficiency, 300-302 enterprise and entrepreneurship, 3, 4, 10-11, 275; ability, dis­ tribution of, 284; among nonWestern peoples, 284, 287-88; and Africanization, 11; and welfare, 281-82; and Zambia, 277, 285-87, 312-13; as purposive planning, critique of, 282; en­ trepreneur defined, 275, 283; innovation and business success, 207, 283-84; motives for, 284; obstacles to, 283-84, 285; oppo­ sition to, 282-83; theories of, 10-11, 12, 207, 276-77, 282-85, 292. See also dependency, de­ velopment, success ethnic groups, 18, 344; and suc­ cess, 211, 293; identification, 5; market traders, 63-64; small retail traders, 104; substantial African businessmen, 133-34, 149. See also migration European businessmen, 14, 175,

271, 272, 331-32; circumven­ tion of economic reforms, 252; colonial period, 34-36, 38-39, 308; continued control, 309; federal period, 39-40; interview schedules, 323; size and scale, 335-36; trade licenses, 336 European farms and farmers, 165-66 expatriate businessmen, 47-48, 187-88, 194, 195, 198-99, 201, 202, 268-69; and politics, 27072; group associations, 259 explorers, 15, 17 family, 228, 236; and business assistance, 229-30; and eco­ nomic development, 287-88; and entrepreneurial performance, 204, 228-36, 294-95; influence on Asian and African business organization, 234-35; market traders, 65-66, 77-78; rural businessmen, 182-84; small re­ tail traders, 112, 113-114; sub­ stantial businessmen, 129-30, 134-37 Findeco (Financial Development Company), 50 foreign companies, 4, 15, 49, 55; trading corporations, 8 Ghanaian businessmen, 289, 290; comparisons with other Afri­ can businessmen, 288, 292, 293, 295> 297; family patterns, 236 government policy, 3, 10, 313; al­ ternative business strategies, 12, 304-305; and anticompeti­ tive practices, 156-57; and economic development, 162, 164; and imports, 263-65; and private enterprise, 164, 249-51, 273"74> 275; an d rural devel-

INDEX government policy (cont.) opment, 200-203; and small retail traders, 117; business loan programs, 185, 186, 187, 193, 250; credit to non-Zambian firms, 48; effect on bus­ iness growth, 10; licensing, 260-63; mixed development strategy, 53, 299; price con­ trols, 51-52, 192-93, 202, 26365; social and political effects, 275; taxes and tax policy, 52. See also economic reforms, nationalizations, politics and political system, Zambianization Humanism, 244-46 ideology, 6, 243-46, 273, 274 Indeco, 48-50, 247, 302, 303, 311 Indeco Finance (IFC), 52, 186, 250, 266, 270 Indeco Trading, 164, 247, 301, 304; and small businesses, 250 independence struggle, 4, 40-42; contribution of African busi­ nessmen, 254-56; and Zambian government policy, 15 innovation, 282, 286; and business success, 216, 221, 225-27, 298, 335-56; and economic develop­ ment, 278; case studies, 216-21, 278-79; defined, 276-78; diffu­ sion of, 281; distinguished from invention, 277; impact on rural business, 198; sources of, 225, 356-57. See also success international trade, 4, 44 Kabwata, 56, 63 Kapwepwe settlement, 85, 332, 354-35: case study, 114-115; ethnic composition, 98; popu­ lation characteristics, 95, 96, 97

Kaunda, Kenneth David, 41, 42, 43, 85, 264-65; and economic reforms, 46, 47, 48, 49; and rural development, 200 Kenyan businessmen, 288; com­ parisons with other African businessmen, 288, 290-92, 293, 294, 296, 297-98; ethnic com­ position, 291; family patterns, 236 labor, 4, 5; African, 56, 162; African colonial, 28-29; Afri­ can colonial unions, 27, 32; blue collar, 178; clerical, 178; colonial, 29-30, 237-38; co­ lonial wage scales, 33; Euro­ pean, 25, 28-29; expatriate, 162; foreign, 43; government exchange, 149; in Kapwepwe and Old Kanyama, 97-98; in substantial African business, 148-52; manpower problems, 42-43; migration patterns, 102; proletarianization, 25; pub­ lic sector, 164, 178-79, 189; skilled, 9, 25, 43; white collar, 87. See also class structure, stratification life styles. See consumption pat­ terns Livingstone, 5; labor migration patterns, 102 Luapula Province, 39, 163, 220, 250. See also Northern Province Luburma Market, 56, 59-60, 63, 79, 315; fish trade, 73, 74 Lusaka, 5, 39, 55, 62, 119, 163, 165, 167, 211, 213, 261, 278, 293, 303, 315, 316; businesses, 221, 338; business success, 225, 226, 227; city council, 85, 86; earnings and sales of business­ men, 332; effect of economic

INDEX reforms, 249; family patterns, 236; fish trade, 72, 74; inno­ vation and success in, 220-21, 355; labor migration patterns, 102; markets in, 56, 57; popu­ lation and earnings, 90; resi­ dential stratification, 102-103; survey sites, 95; unauthorized settlements, 26, 56, 95-96, 167; women's role, 71. See also Cen­ tral Province, Chilenje and Chilenje market, Kabwata, Kapwepwe settlement, Luburma Market, Matero and Matero Market, Old Kanyama Lusaka African Marketeers Co­ operative Society, 84-85 Macmillan, Harold, 41 Malawi, 165; comparisons with Zambia, 286 managerial bourgeoisie, 304, 312 market places, 56; cooperatives, 57, 85, 86; government of, 57; nationalism in, 84-85; political alliances and cleavages in, 8486. See also market trade and traders, market trade types market trade and traders, 3, 13; age, 62-63, 87; characteristics, 60-64; commodities traded, 59, 60, 61; compared with other occupations, 64, 65-66; compe­ tition in, 68, 69, 70; consumer market, 84; consumption pat­ terns, 55-56, 88; earnings, 6467, 71, 324-26; education, 6768; experience, 67-68; interview schedules, 321-22; manufactured goods, 59-60; non-Zambian, 64; occupational background, 65; regional and ethnic origin, 63-64; sales, 66-67; saIes strata-

gies and trading patterns, 6669; service enterprises, 58, 60; sex, 62-63, 87; significance for African enterprise, 86-87; social mobility, 55, 65-66; specializa­ tion, 61; sources of capital, 61-62; success, 66-68, 76; wom­ en, 64-65. See also market places, market trade types market trade types, 59-61; car­ penters, 79-80; charcoal, 83-84; fish, 72-75; fruits and vegeta­ bles, 70-72; repairs, 82-83; sec­ tarian craftsmen, 80-81; others, 83-84; shops, 75-78; tailors, 81-82; tinsmiths, 79; wholesale trade, 60, 74. See also market places, market trade and trad­ ers Matero and Matero Market, 56, 60, 63, 70, 332; artisans, 80, 82-83; fish trade, 72 Mazabuka, 165, 250, 316, 334-35 methodology, 13, 285, 288-99; fieldwork, xiii, 60, 90, 91, 119, 165, 314-15, 316, 323; interview schedules, 317-23; multivariate analysis of business success, 208-211, 221-23, 340-61 metropole, 306-307 migration, 5, 63-64, 98, 133-34, 200; and business success, 214, 221-23, 226, 345; labor system, 23, 25, 228; to Kapwepwe and Old Kanyama, 98. See also ethnic groups, labor Mindeco (Mining Development Company), 49 modernization and modernity, 3, 7, 275; and business success, 206; psychological, 285. See also dependency, development, west­ ernization Monze, 163, 165, 250, 251, 316.

INDEX Monze (cont.) See also Mazabuka, Southern Province multinational corporations, 4, 8, 43, 238. See also copper and copper mining, dependency, economic reforms National Agricultural Marketing Board (NAMB), 74 nationalizations, 49; and shut­ downs, 50; banks, 50; "51 per­ cent club," 53; insurance com­ panies, 51; retail chains, 247, 248. See also economic reforms, Zambianization Nigerian businessmen. 288; com­ parisons with other African businessmen, 292, 293, 294, 295, 296, 297, 298 Nkubula, Harry, 41. See also Zambia African National Con­ gress Northern Province, 64, 163, 213, 250; migration patterns, 102, 133-34 Northwestern Province, 212 Nyerere, Julius K., 43 Old Kanyama, 95, 96, 97, 98, 332, 334-35; ethnic composition, 98 Petauke, 334-35. See also Chipata politics and political systems, 4, 5; and African businessmen, 25456, 257; government favors, 269; lobbying case studies, 259, 260-62, 263-65, 265-67; lobbying, individual, 257-58, 258-59, 26870; under colonial rule, 31-32, 40-42; Westminster parliamen­ tary model, 42. See also eco­ nomic reforms, government

policy and independence struggle population, 5, 164, 334 Protestant ethic, 10, 197, 205, 285 religion: as factor in success, 212; missions and missionaries, 1920, 32, 35; of rural business­ men, 197; of substantial Afri­ can businessmen, 138-41. See also African Sabbath Church of God Rhodesia, 270, 278; trade boy­ cott with Zambia, 44-45, 102, 273. See also government policy. Rucom Industries, 186, 187 rural African business and busi­ nessmen, 166, 221, 344; and agricultural development, 312; and family, 182-84; and farm­ ing, 168; and price controls, 192-93, 202; bread baking and selling, 281, 289; capital sources, 185-87; consumer market, 200; credit granted, 190; earnings and sales, 189-90, 194-97, 33233; effect of agricultural cycle on, 189; expatriate competition, 162; impact of economic re­ forms, 251; innovation, 220-21; large scale, 193-94; life his­ tories, 168-76; non-retail, 167; religion, 197; retail, 27g, 33435; social origins and careers, 176-81; success, 212, 226, 227 Second National Development Plan, 162, 301, 303 slave trade, 15, 22 small African retail trade and traders, 14, 55; age, 99, 103; and competition, 116-117; and ethnicity, 104; capital, sources

INDEX of, 105-106; case studies, 92-94, 315, 326-31; commodities, 98-99; credit practices, 108; earnings and education, 91; earnings and sales, 108-111, 326-31; education, 99-100; ethnicity, 101-103; family patterns, 112, 113-114; government policy and success, 117; growth, 89, 333-35; innovation, 278-79; interview schedules, 321-22; la­ bor, 107; location, choice of, 104; market share of, 90; milieu, 112-113; occupational alternatives, 103; occupational histories, 99-101; operations, 107-108; prospects, 118; re­ gional distribution, 101-103; residential location, choice of, 102-103; sales strategies, 98, 102-104; sex, 99; skills, 106; success, 108-111, 112-113 social clubs, 144 South Africa, 45, 102 Southern Africa, 246, 268, 272 Southern Province, 63-64, 165. See also Mazabuka, Monze state enterprises, 49, 193, 243, 300301; competition with African businessmen, 165, 192; efficiency compared with private business, 301-302; Lake Fisheries of Zambia, 74-75; retail, 247-49. See also CBC Limited, economic reforms, Findeco, government policy, Indeco, Indeco Finance, Indeco Trading, Mindeco, Na­ tional Agricultural Marketing Board, nationalizations, Zambianization stratification, 4, 6, 32, 33, 144, 204, 237; African bourgeoisie, 5; African businessmen, 14; co­ lonial influence, 29, 237; cu­

mulative advantage, 206; labor force, 29-30; occupational re­ wards, 238; status attainment perspective, 208η. See also class structure, discrimination, labor substantial African business and businessmen, ng, 316; age, 121; and technology, 145-47, 161; business skills, 132; capital, sources of, 123, 125, 126-29; compared with European and Asian businessmen, 161; com­ petition, 155-57; consumption patterns, 141-44; credit sources, !58-59; definitions, 119; earn­ ings and sales, 121-22, 331-32; education, 130-32; employ­ ment practices, 134-36; ethnic origins, 133-34; family back­ ground, 129-30; family patterns, 134*37; Industrial growth and scale, 338-39; interview sched­ ules, 322; labor force, 148-52; markets, 154-55; non-Zambians, 133, 343; prior experience, 122-29; recruitment motives, 124-25, 129; religious beliefs, 138-41; success, 119, 360-61; types, 120-21 success, 205-28, 237-42, 340-61; and achievement motivation, 205-206; and competition, 29798; and cumulative advantage, 206; and aducation, 206-207; and family, 230-31, 233-35; and management, 296, 298; and skills and talent, 206-207; cul­ tural explanations for, 205-206; definition, 208, 292; factors in, 66-68, 210-217, 221-28, 275, 292-98, 344-46; folk explana­ tions, 240-41; in other African countries, 292-98; legitimation

INDEX success (cont.) of, 240, 242; operationalizing, 340; regression and correlation analysis of, 210, 222, 223, 34041, 352-57; resentment of, 240-41; rural businessmen, 212, 226, 227; small African retail traders, 108-111, 112-113; sub­ stantial African businesses and businessmen, 119, 360-61; theo­ ries of, 204-205. See also inno­ vation supply problems, 152, 159, 192 Tanzam Railroad (Tazara), 45, 165 Tanzania, 43, 45 technology, 145-46, 147, 161 third world societies, 4, 12, 13, 306-308. See also dependency, development tribe. See ethnic group Uganda, 254 United Federal Party, 41 United National Independence Party (UNIP), 41, 47, 85, 115, 254, 256; and businessmen, 256; and rural development, 200. See also politics and po­ litical system United Progressive Party, 265, 267, 268 urban-rural differences, 5, 42, 200 urbanization, 5; life style, 25-26; population, 90 Western Province, 212; labor mi­ gration, 102 Westernization, 26, 27, 29; and

business success, 204-205; con­ sumption patterns, 238-40; family patterns, 236-37. See also modernization and mod­ ernity women, 71; market shopowners, 75-76; market traders, 64-65, 66, 67, 71, 87; rural businessmen, 166 work ethic, 140-41, 242 Zambia, 15-17; development prospects, 311-312; ethnic groups, 18; geography and climate, 16-17; geopolitical po­ sition, 16, 17, 313; gross prod­ uct, 15, 333-39; languages, 18; population, 42. See also co­ lonialism, government policy, and politics and political system Zambia Market Company, 85 Zambia Marketeers Cooperative (ZMC), 57, 85, 86 Zambia Traders Association (ZTA)1 115-116. See also Zambian National Congress of Commerce and Industry Zambia η African National Con­ gress (ZANC), 41, 45, 254 Zambian National Congress of Commerce and Industry (ZNCCI), 259, 263-65, 266 Zambian National Wholesale Company (ZNWC), 193 Zambianization, 46, 49-50, 64, 162, 165, 243, 245, 246-47; dif­ ferent than Africanization, 254; problems, 305-306. See also Africanization, economic reforms, nationalizations

Author Index

Barber, William J., 24-25, 37 Bates, Robert H., 23 Bauer, P. T., 89 Beatty, D.M.F., 326 Benedict, Burton, 287 Blau, Peter M., 208n Bonacich, Edna, 235, 308n Bostock, Mark, 46n-47n Brenner, Robert, 307 Burawoy, Michael, 209n Caltex Magazine, 242 Cardoso, Fernando Henrique, 307-308 Chaput, M. J., 46n Christie, Roy, 43 Davidson, Basil, 21, 24, 30-32, 40n Davis, J. Marie, 22-23, 35, 38, 33334 Deane, Phyllis, 33, 36, 38, 196n, 333-36 Dotson, Floyd, 235, 309 Dotson, Lillian O., 235, 309 Dresang, D. L., 123n, 237n Duncan, Beverly, 2o8n Duncan, Otis Dudley, 2o8n Elliot, Charles, 312 Epstein, A. L., 28-29, 123, 238 Featherman, David L., 208n-209n Frank, Andre Gunder, 307 Gann, L. H., 22, 26, 35, 37-39 Gardiner, J. E., 20, 56n Garlick, Peter C., 236, 288-89, 293. 295. 297 Hall, Richard, 30-31, 40n, 45 Harries-Jones, Peter, 29 Harris, John R., 288, 292-98 Harvey, Charles, 47n

Hauser, Robert M., 208n-209n Hirschman, Albert O., 287, 300 Hoselitz, Bert F., 285 Inkeles, Alex, 285 Jackman, M. E., 42 Kaunda, Kenneth D., 40n, 47-52, 244-46 Kay, George, 22 Kerlinger, Fred N„ 352n-353n, 356n-357n Khalaf, S., 287 Kilby, Peter, 276, 283, 288, 296-97 Lundgren, Thomas, 96 McClelland, David, 285 Marris, Peter, 236, 288, 290-91, 293-98 Martin, Anthony, 304 Meebelo, Henry, 23 Merton, Robert K., 2o6n Miracle, Marvin, 30, 34, 36, 40, 55. 63 Mitchell, J. C., 26, 28-29, 86-87, 122-23, 238 Mulford, David C., 4on Mytton, Graham, i8n, 343 Nafziger, Estel W., 288-95 Nyirenda, A. A., 56, 60, 63, 64n, 84 Ohadike, Patrick, 63, 65, 99, 111, i37» 232 Pedhazur, Elazar J., 352n, 353n 3561. 357n Pollock Norman, Jr., 21, 24, 35 Portes, Alejandro, 307 Redlich, Fritz, 277, 287 Rhodesia and Nyasaland Central Statistical Office, 237n Richards, Audrey, 25

381

INDEX

RIhtman, R. A., 122, 301, 301N Roberts, Andrew, 34 Rotberg, Robert I., 40n Rothchild, Donald, 44, 200 Schumpeter, Joseph, 207, 216, 276-79, 283-84, 287 Siddle, D. J., 19 Sklar, Richard L., 304 Somerset, Tony, 236, 288, 290-91, 293-98 Stinchcombe, Arthur L„ 282 Subramanian, V., 101n Theil, Henri, 354 Times of Zambia, 45, 53, 264 Times 0/ Zambia, Business Review, 47 n Turner, H. A., 196n, 228 UN/ECA/FAO, 42 Van de Geer, John P., 360n

382

Wallerstein, Immanuel, 307 Weber, Max, 279, 285 Wellons, Phillip A., 335-36 Wiley, David Sherman, 138 Wood, Anthony St. John, 33 Young, Alistair, 46n Zambia Central Statistical Office, 42, 45, 56-57, 64n, 88, 96n, 102n, 116, 118, 120n, 130n, 133n, 164, 194-95, 263n, 33436, 339, 342-43 Zambia Daily Mail, 262 Zambia Ministry of Finance, 6566, 90, 111n, 196n Zambia Ministry of Trade and Industry, 266n Zambia Office of the President, 85

LIBRARY OF CONGRESS CATALOGING IN PUBLICATION DATA Beveridge, Andrew A 1945African businessmen and development in Zambia. Includes bibliographical references. 1. Zambia—Commerce. 2. Businessmen—Zambia. 3. Africanization—Zambia. I. Oberschall, Anthony, joint author. II. Title. HF3903.Z5B48 338'.09689'4 79*83978 ISBN 0-691-03121-5