One of the most famous African Nation builders Shaka Zulu of the Great Zulu Empire first had a vision which translated into the great Zululand. He led the way in battles to fulfil his vision and in this column we discuss why entrepreneurs must lead the way.
A business idea starts as a vision often the vision takes many years to unravel and come to fruition. Many of these ideas are found in the graveyard because so many people passed on before they could take the first step to building their business ideas. The sad reality is that some business ideas die prematurely because the initiators lack the vision and leadership to carry the ideas beyond breakeven point.
Ray Kroc bought Macdonald franchise from the Macdonald brothers when he realized they had no vision beyond a few restaurants around America. In the back of his mind he saw a multi-million business that will eventually expand across all the continents. He saw greater possibilities and exemplified what true leadership could achieve.
It was not simple, first having to make sure that the burger in America, Africa, Asia and the rest tasted the very same as the one in all the other continents. He knew it could work although it required hardwork and sacrifice. His vision and leadership ensured that he ultimately achieved his dream.
Entrepreneurs should be able to see beyond now because the pain of personal sacrifice will finally pay with limitless abundance and financial freedom. You can only be able to endure the pain if you have faith and the ability to see what other don’t see. If you think your sacrifices are in vain or have the slightest doubts about your success rate you are likely to give up.
The other most important thing about leaders is that they are inspirational and motivate people into action. They set examples and subject themselves to the very same sacrifices and expectations that they set on their followers. By doing so they are being exemplary and inspire belief in those they lead. Martin Luther King sold his vision to the American people of a non-racial society and spurred civil rights movements and ordinary people into action.
You become a leader by the character and personality that you have and in the process become a role model to others because you stand for something. People share your vision and when people have bought into your vision they readily sacrifice for a cause most of the time with no direct benefits. That is why you will have employees sacrificing their time and working beyond expected time.
This brings us to the classic difference between leaders and managers in businesses; Leaders have vision and are concerned with the strategic direction of the company meanwhile managers operationalize visions and organize, plan and control resources to achieve the leader’s vision. There is a clear difference between the two though often confused because managers use positional power while leaders use the power of in influence.
Leadership and Management guru John C Maxwell defines leadership as influence and nothing more. The reason why it is important for business entrepreneurs to be leaders by leading the way and influencing action is to promote ownership of the dream. Leaders set the vision and seek buy in from employees.
The other astounding character of leaders is that they are courageous and are willing to take the risk themselves. They are often the first to try things and lead the way and are oblivious to risks at least in the eyes of their followers. The world rewards people who are daring and willing to get into the thick of things when everyone is sounding an alarm bell.
Leaders take action and do not wait for their vision to occur as a result of some mystic power. They are driving towards their vision all the time and their vision drive towards them. Vision and dreams cannot be fulfilled through inaction. Fortune has always favoured men and women who dared to act against all odds. When the Wright Brothers announced to the world they wanted to make a flying machine everyone thought they were mad. They failed once, twice, thrice but still dared to act. If they had not acted they probably will be no aeroplanes today. Achievement is nothing but vision in action
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This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.
The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.
Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.
He was speaking in Parliament on Tuesday delivering Parliament’s Finance Committee report after assessing a motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.
Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.
The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.
The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.
The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.
This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.
Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.
Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.
However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.
Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.
When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.
This as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.
Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.
The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.
Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.
In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.
Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.
Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.
Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.
Acknowledging the need to draw down from GIA no more, current Minister of Finance Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”
He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”