When Europe scrambled for Africa in the 19th century, it broke up the continent geographically and administratively in structures opposed to the long-held structures of indigenous nations. Along with African indigenous nations, Native Americans, and other indigenous people, have experienced similar horrors around the world.
In some cases, whole populations were wiped out. In Africa, there was a period where so many people were dying or being transported elsewhere that the continent’s population growth dramatically slowed, or even dwindled.
But the 21st century presents a different proposition for indigenous nations around the world. For example, Africa’s population is one of the largest in the world with the fastest growth rate. In 2100, one in three people in the world are expected to be of African descent. This suggests a rise in both formal and informal power as people move up the socioeconomic scale, however, this is not guaranteed as several challenges in health, education, poverty, etc. remain significant.
Many African indigenous nations face these challenges because they remain at the periphery of the modern society, located in rural regions. Most African countries are faced with how to dramatically improve even basic services in rural communities. In some countries, it is more significant where the majority of people still live in rural communities like in Ethiopia. As a continent, Africa’s urban population just hit around 50% in the last few years, which means at least 500 million people still live in underserved rural communities.
When you hear this, you may wonder what different proposition is presented to African indigenous nations. The proposition that is presented to a significant number of these nations is land – the undeveloped land on which they sit is hidden wealth.
Before getting to the opportunity for African indigenous nations, let’s look at the story of Native American nations. Native Americans were removed from their traditional lands and placed on reservations in the 19th century in the United States. Since then, most of these nations have been in decline on the periphery of U.S. society but something changed the landscape for a number of these nations because they were given self-autonomy long ago. In essence, they are nations within a nation and rule their lands separate from, but still within the bounds of, the U.S. government.
This one concession made by the U.S. has pushed a new cash revenue stream into Native American communities – casinos. Many U.S. municipalities traditionally prohibited gambling, so as large casino operators were looking for places to expand they found partners in Native American communities. The casino business is an example of a mix of curses and blessings because they have amplified social ills like alcoholism in Native American communities but at the same time made these communities awash in cash. In fact, when the economic crisis hit the U.S. in 2008, these nations were sitting on billions in cash.
The Native American nations’ experience with casino businesses demonstrates the possibility of non-traditional business opportunities for both indigenous communities and business industries. African indigenous nations with self-autonomous status may present a unique business case for communities, as well as businesses and investors.
With the increase in global demand for commodities, water, food, and minerals in the next twenty years, African indigenous nations with these undeveloped assets are inherently wealthy. Couple that with self-autonomy, unique business models built on partnership between the nations and businesses are very possible.
The Royal Bafokeng nation in South Africa is an excellent example of how an African indigenous nation is developing its natural wealth and its people. In fact, Royal Bafokeng, with a population of approximately 300,000, sits on one of the largest sources of platinum in the world. Royal Bafokeng was also susceptible to its lands being taken over during the colonial and apartheid era. However, the nation bought the land, becoming private land owners. The nation was able to defend its private land rights in South African courts successfully.
The nation is still led by its traditional royal family. King Kgosi Leruo Molotlegi is the current monarch. However, the assets of the nation are organized as a community-based investment enterprise called Royal Bafokeng Holdings (RBH). The asset portfolio is becoming more diversified with mining (69%), telecommunications (10%), cash (10%), services (7%), infrastructure (2%), financial services (1%), and manufacturing (1%). RBH has invested in companies like Vodacom South Africa, DHL Express South Africa, Zurich Insurance Company South Africa, and Astrapak South Africa. The portfolio was worth approximately USD$5 billion in 2010. Royal Bafokeng citizens are the major shareholders in RBH through a trust.
On the social development side, Royal Bafokeng has a vision and social development plan. Some of the major components are a college and the Royal Bafokeng Stadium, which was one of the stadiums used for the FIFA World Cup in South Africa in 2010. The nation also invests in enterprise development, education, and arts and culture.
The nation is a part of South Africa but operates under a combination of indigenous laws and South African national laws. While not elected, King Molotlegi operates under Bafokeng laws which incorporate mechanisms to ensure that his majesty, or any other monarch, carry out the will of the people. There are also multiple levels of local government, e.g., elected village representatives which represent their communities in the King’s Consultative Council. While not democracy as Western people understand it, these mechanisms help ensure that the will of the people is heard and carried out. The corporate structure of RBH, however, reflects typical forms of corporate governance, including board of directors, shareholders, and executives.
Royal Bafokeng is not an isolated nation and embraces both its traditions and what the world can bring to them. RBH has external business investments and partnerships to leverage the asset portfolio. On the social side, King Molotlegi reaches out to others to enrich the lives of Bafokeng citizens. His majesty recently visited New Zealand to seek out partnerships in education and culture with the Maori, an indigenous people in New Zealand.
Royal Bafokeng is the architect and administrator of its future, as well as being a steward of inherited resources that can benefit both the nation and the world. It has been able to hold on to its traditional identity and customs while still embracing the modern world.
Other indigenous nations need to recognize and operate in this position even when struggling with major challenges like poverty. As more African indigenous nations understand this position and focus on community wealth building versus personal wealth, they will be able to tap into the wealth their assets hold. While Royal Bafokeng is a model, each African indigenous nation will create its own unique space.
For businesses and investors venturing into Africa and looking for land and resources, they may have to get away from the concept of private ownership. Indigenous land is, by and large, community property under the administration of traditional leaders. Leasing land will be a more likely model to gain access to land. In a country like Zambia, which has a lot of arable land and abundant water resources suitable for large scale farming, over 90% of the land is owned by indigenous nations. Even in countries like the DRC where the government owns the mining rights on local lands, indigenous nations still reside on the land and agreements must often also be reached with them about business plans.
Most importantly businesses and investors will need to seek strategic partnerships with indigenous nations instead of “takeover” models of business. First, African governments are increasingly limiting predatory business models. In Zambia, indigenous nations cannot just sell a large chunk of land to foreigners. In the DRC, foreign investors need to establish local facilities to bolster local economies instead of just extracting the minerals. From a competitive perspective, indigenous nations will be able to pick and choose with whom they work as demand increases, leaving those with the wrong business models out in the cold.
Also, as the citizens of the indigenous nations benefit from the increased value in their assets, they become desirable consumer markets. Royal Bafokeng with a population of 300,000 represents the size of a medium-size city consumer market.
The rise of African indigenous nations is an emerging shift that will rapidly advance in the next twenty years. It won’t become readily apparent in the next five years, but as global demand for resources increase and the nations position themselves, we should see indigenous nations taking new positions in economic, political, and social spheres in Africa and the globe.
Featured image is the interior of the hotel at the Bafokeng sports campus. Source: Royal Bafokeng