African Entrepreneurship Record

Chapter 1127: Chapter 136: Choices

East Africa’s recent spree of borrowing globally indeed sparked a carnival of various nations’ capital, and now is a crucial phase of capital outflow for many countries, with East Africa, this ”eternal iceberg,” surprisingly thawing!

Thus, a large amount of speculative money rapidly flowed into East Africa. As for whether the East African Government can repay it, no one doubts this, as East Africa is one of the world’s few Great Powers. No matter how much they borrow, it will eventually be repaid.

This has led to a consequence, during 1911 and 1912, East Africa’s unplanned economy expanded rapidly, resulting in the sudden emergence of numerous factories.

These factories were mostly built under the guidance of private and international capital, growing wildly. Of course, after the market opened, heavy industry and agriculture controlled by the East African Government also faced impacts.

However, this impact was of positive significance, as the growth of the light industry greatly boosted the development of East Africa’s heavy industry and agriculture, since light industry needed heavy industry and agriculture to provide raw materials.

For a while, East Africa’s economy developed comprehensively, displaying a vibrant scene of competition among all things. Naturally, under the new economic policy, many issues emerged, including security and overproduction, but under such overall positive economic conditions, they were all disguised.

And Ernst was well aware of this. Now, East Africa is like a gluttonous eater; if it doesn’t engage in some form of digestion, it will eventually backfire on East Africa. To prevent the economy from bursting, the best hope is the outbreak of the Great War; otherwise, if Europe and the world remain peaceful, East Africa will likely suffer the consequences.

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Kabwe City.

Kabwe Mining Company.

”General Manager Klein, here are the current orders. Now the national economic situation is thriving, the investment field is hot, and there’s a startup and factory building frenzy everywhere, driving up our factory’s order volume. At the current capacity, these orders might extend into the year after next, unable to meet the market’s current demand.”

Upon hearing the subordinate’s report, Claire also felt a headache and said, ”We’ve already completed the production tasks according to this year’s plan. However, not making money from these opportunities doesn’t make sense, especially those small orders, which are too complex.”

Currently, East Africa’s economy is overheated, so the demand for lead-zinc ore has greatly increased, which is the main business of Kabwe Mining Company. However, Kabwe Mining Company is a true East African state-owned enterprise.

Under the current new economic policy, East African state-owned enterprises also face dilemmas in dealing with the free market, mainly due to a lack of past experience.

En Luo, the marketing director, also said, ”Now the entire market is chaotic, with no order and completely different from our past trade forms. So, if we want to expand into the private market, we should adapt accordingly. Of course, we still have some advantages, as the mining industry hasn’t opened up to the private sector yet, granting us bargaining power, but we should be cautious of foreign competitors.”

Kabwe Mining Company is a seller, and with a certain degree of monopoly, it actually holds a dominant position in the market.

Project Director Will: ”In my opinion, the most important thing now is to enhance our capacity. If we can increase our capacity to three times the current level, all problems would be solved.”

After listening to everyone’s opinions, General Manager Klein looked towards the contemplative Chairman Morse and inquired, ”Chairman Morse, what do you think about our company’s current situation? Should we take measures to respond to these socio-economic changes?”

Morse: ”According to my thoughts, it’s natural to take initiative in reform. The current new economic policy is the nation’s major economic development strategy, and naturally won’t change easily. As an important state-owned enterprise, we should align with the central government on economic issues.”

Morse would not only consider the company’s economic benefits; political benefits were equally important to him. After all, as part of the state-owned enterprise management, whether the company could be profitable was relatively less significant compared to personal promotions. Of course, generally speaking, economic benefits are indeed important metrics of political achievements. If someone manages a large enterprise poorly, leading to annual losses, promoting such a person could risk national security!

Therefore, Klein said to Morse, ”I agree with the chairman’s idea. To align with the central government, the most sincere way is to earn more revenue for the nation. The current market volatility is our opportunity.”

”Thus, expanding capacity is very necessary. Although this year’s plan is complete, exceeding the task is surely a bonus.”

”Meanwhile, we can use this to secure some benefits for our company’s employees, such as higher wages and more overtime pay.”

”Although the market is hot now, it doesn’t mean we don’t have competitors, and the emergence of many enterprises will naturally increase labor cost prices, so we must respond to these changes.”

Klein is highly perceptive. Previously, a large state-owned enterprise like Kabwe Mining Company was definitely favored by many East Africans, but now that the market is open, people’s choices have diversified. If Kabwe Mining Company continues recruiting talent using old standards, it could lead to talent attrition.

Furthermore, in East Africa, Kabwe Mining Company can only be considered a regional enterprise, and Kabwe City certainly has less external appeal compared to nearby New Frankfurt City or the capital Rhein City, or even the southern Lusaka.

In summary, East Africa’s new economic policy is not very friendly to industrial towns, especially those with single industries. Just as the market has opened up, talent and resources are more likely to flow to comprehensive coastal or central cities.

For instance, Mbeya City has thrived under the new economic policy, whereas Harare faces the challenge of transformation, and Kabwe’s situation is even more critical than Harare’s.

This will indeed impact Kabwe City’s enterprises, including Kabwe Mining Company. Of course, mining enterprises like Kabwe Mining Company, as long as resources aren’t exhausted, face no risk of bankruptcy, but the lack of appeal to talent, especially young people, is undeniable.

Of course, this problem depends mainly on how Kabwe City’s government perceives it. If they choose to muddle along, Kabwe will inevitably become a relic of East Africa’s industrial Era.

If they find a suitable development path for the city, the success of Mbeya City could certainly be replicated, as Kabwe, although an industrial city, is also a city within East Africa’s capital circle, giving it inherent advantages.

During the three-five plan period, both East African local governments and state-owned enterprises face choices. Selecting the correct path will naturally prevent social elimination; while the opposite surely leads to social elimination. Of course, the free market, or the unplanned economic market, presents an even harsher battle, where many enterprises face daunting challenges even before they start, facing far harsher trials than state-owned enterprises. And those who emerge successfully from the sea of corpses and blood must be ruthless characters.