|Sustainable Development and Persons with Disabilities: The Process of Self-Empowerment (ADF, 1995, 117 p.)|
|Section II: Building economic self-reliance|
|Chapter 7: Implementation and resource mobilisation|
Too often "resources" are identified with simply "money". At best, the definition is broadened to include land, machinery and inputs (e.g. raw materials) that go into production. But this is an inadequate definition of resources. At a broader level still, resources must surely include natural resources, such as water and land, and human resources, including experience, wisdom, skills, and the spirit of the people. "Resources," properly defined, thus fall into three broad categories, each with sub-categories.
Money is not a resource
Notice that "money' is not featured above. Why? Because money itself is not a resource. It is something with which resources can be purchased, and that's why we are all after it, but money itself is not a resource.
It is a medium of exchange (for example, you use money to buy things in the supermarket). It is a store of value (you can hold your savings in a post office savings account, for example).
And it is a standard by which values of different products can be compared, or of the same product over a period of time (you can compare the price of, for example, meat and milk using money, or of the rising price of meat over time).
But money itself is not a "resource." It cannot produce anything. Things are produced by a combination of "real" resources - such as land, human labour, machinery, skills, etc. Money can buy many of these. But, we must remember that not all resources are on sale in the market place - wisdom of ancestors, for example, or the spirit of the people.
First resource to mobilise is the Spirit of the People
Therefore, projects that start by looking for money first are bound to get into difficulties sooner or later. The first resource to mobilise is the spirit of the people who will be involved in production, and the other human resources that cannot necessarily be purchased in the market place. History is full of examples of refugee families with not a stitch on them becoming wealthy during the course of a generation. They start with will, determination, self-sacrifice, the family spirit, care and responsibility towards one another, and unity. They save from meagre incomes and build their material resources as they go along.
The examples given below of projects run by PWDs also demonstrate that the first resource is the spirit of the people. Without it, nothing moves.
Types of Resources
Second to mobilise is Competent Management
The second resource to mobilise, even before you come to money, is proper management. Without it, the best of projects will grind to a halt. The ILO manual on "How to Start a Small Business" has identified the following qualities for competent management, whether it is for a group or an individually owned project.1 It is important to bear in mind that people who succeed in business are usually:
Hardworking and determined to succeed. They can work for 8 to 14 hours per day without much rest. They don't give up easily even if they experience lots of problems after starting the business.
Self-confident and independent. They believe in themselves and in their ability to succeed, even if people around them are pessimistic.
Optimistic and realistic. They tend to look at the positive side of life rather than negative side. But they know that one's success or failure does not depend on fortune or luck. They know what they can do but also what they can't do.
Willing to take risks. They are willing to start a business even though they do not know if it will succeed. They are willing to try new things but they are not careless; they do the necessary research and planning before starting a business.
Trustworthy, responsible and able to listen to others. Their business partners and co-workers are able to trust them. They admit to their mistakes and listen to other people and take their advice.
Able to plan and solve problems. They are able to see ahead and plan for the future. They solve problems when they arise and if they fail, learn lessons from their mistakes and try to improve.
Leaders. They get along well with people. They are open and able to influence others. People take them seriously and like to listen to and take advice from them.
People who have these requirements are often said to have an entrepreneurial spirit. It is specially important that an individual starting a business or the manager/chairperson in a group has this spirit.
Third to mobilise are Local Resources
The third resource to mobilise, before coming to either donor funding or bank money, are the local resources land, water, minerals, domestic animals, wildlife, whatever. In most parts of Africa, many of these resources have been commercialised by foreign interests. In the name of "development" they are actually "underdeveloping" Africa. They take away most of these resources out of Africa to feed their own industries. Africa is not poor in resources; only Africans do not own them. In the long run, they have to struggle to regain control over those resources, or else they Will forever remain poor. In the meantime, whatever local resources are available must first be mobilised.
Fourth to mobilise is Money-capital
We have deliberately used the hyphenated term - "money-capital". What is needed is not "money" pure and simple, but money that can be used as capital. What is capital? Capital is money that can buy goods and services which enter into the process of production (and marketing). This, of course, includes not only raw materials and machinery but also labour-power, management expertise, and transport and storage facilities. PWDs should not look for money for the sake of "subsistence," or for advancing it to relatives for funeral expenses, for example. Money must be sought so that it can be turned into "productive capital."
Sources of Capital
It should be clear that what we are looking for is not money per se, but capital - that which can be turned into productive use. The next question is: Where do we get it from? We get it from several sources. Generally, however, they fall into three categories - own capital, grant (which is "free" capital, that which usually comes from a "donor" and does not have to be returned to him), and loan, or borrowed capital.
Conventionally, PWDs have depended on grants from charitable institutions or from the government. Up to a point this is justified, on grounds of "affirmative action" (a subject we discussed earlier). But no self-respecting enterprise can continue to feed itself on grants forever.
Grants can, in fact, be counterproductive: they can kill initiative, and those human qualities that we listed earlier which are necessary for any enterprise to succeed. So if you, as a new enterprise, need a bit of a grant as "starting capital" that's generally acceptable; but you must have some of your own capital (from savings), and you must get out of the grant situation as fast as possible. It is not good for your "spirit."
The Entebbe Workshop concluded a discussion on this issue with a recommendation that:
Existing alternative forms of saving and lending,
such as the tontines in most parts of West Africa, the Biika Weguze in
Uganda, the burial societies in Southern Africa, and other informal rotating
schemes should be built upon as the primary source of mobilization of savings
and community resources for income generating projects.
We must learn to save. Try to save a little even from the little you have. Burial societies in Southern Africa have accumulated literally millions of dollars from small savings of migrant workers. The tontines in West Africa do the same. If you cannot save, then you must regard yourself as not qualified to get into business in the first place. As the business grows, you will no doubt be able to save more. But if you have not acquired the saving habit, chances are that you will not save even from a larger enterprise.
Bigger enterprises raise what is called "share capital" from the stock exchange. That is also "owners' capital" because the shareholders own the enterprise. They take risk, and in return for it they expect to get, not interest on capital, but "dividends," or a share in profits.
Borrowed or loan capital
Loan capital is that on which you have to pay an interest - an added sum of money over and above the capital borrowed. Capital can be borrowed from several sources. Traditionally, "money-lenders" used to (and still do in many part of rural Africa) loan their accumulated wealth. They usually do so at exorbitant interest rates. They could tie you down in perpetual debt.
Commercial banks are the normal type of loan institutions. They usually require a "collateral" before they advance you money. This kind of loan teaches you to be disciplined about the use of the capital, for otherwise you stand the risk of losing your collateral.
Collateral is simply an asset you possess (such as land, or a
house) whose ownership you stake against the loan you raise - in the event you
fail to pay the loan, the bank takes over your asset.
Small Business or Industrial Development Organisations exist in most African countries to help set small enterprises. Their loans are usually cheaper, in that they normally charge a lower rate of interest on money (called "concessional interest"), and they can give you a longer "grace period" (a period when you don't have to pay the interest).
Donor NGOs also provide loans (as well as grants). Again, their loans are likely to be on "soft" terms Just as those of small business development institutions.
Finally, we must introduce another source of loan capital, called a "revolving loan scheme." It is a cooperative form of raising loan capital, one of the most innovative forms of raising capital for small enterprises. For this reason, and because it excited considerable interest at the Entebbe Workshop, we shall take it up again in a separate appendix to this chapter.
Fifth to mobilise are material and support resources
These are resources that have to be bought on the open market. They include not only material resources (such as machinery, transport and communications equipment, raw materials, etc.), but also human resources, such as skilled and unskilled labour.