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Kenya’s ‘tenderpreneurs’ are killing its entrepreneurs

Sep 08, 2013 Success, Sunday Nation

Our enterprise culture is one of Kenya’s greatest assets. Kenyans have a ‘can-do’ attitude, often overcoming great odds to establish businesses small and large. The rate at which we start businesses and sustain them is the envy of our neighbours. It is the engine that drives economic growth and creates employment, formal and informal.

What’s wrong with that picture? There is indeed a distortion of facts in it. Some of our highest-profile, seemingly most successful businessfolk are not entrepreneurs at all – they are ‘tenderpreneurs.’ And that is an altogether different creature.

The word tenderpreneur is believed to have originated in South Africa, but Kenya, too, is infested with them. You don’t need to think hard to guess at its meaning: a tenderpreneur is someone masquerading as a legitimate businessperson, using political contacts to secure lucrative government contracts (whether tendered or not). And the disease soon infiltrates private-sector procurement, too.

We all know it: many of this country’s great fortunes have been made from tenderpreneurship, not enterpreneurship. I often look at the flashy 4WDs and loud limos all around me on our roads, and wonder how many of those were bought with honest money, made cleanly, the proper way.

Is this a problem? Of course it is. Tenderpreneurship is a natural consequence of poorly regulated capitalism. Crooked people will naturally try to take shortcuts: why design and build proper products, nurture good brands and reputations, or invest in great employees when the easy answer is right before you? Just jump onto the tenderpreneurship gravy train, and you don’t need to do any of that. Grease the right palms of the right partners, and you too can supply shoddy stuff at eye-popping prices.

Every nation on earth has a tenderpreneurship problem; but the question is one of degree. In mature economies, safeguards have been built into the economic system to limit the damage these scavengers can inflict. In ours, we tend to shirk every opportunity to create consequences for corrupt procurement. We make ‘anti-corruption’ a smoke-and-mirrors charade, as successive leaders allow their political supporters to build election war-chests through the plunder of the public purse.

Because of this, we keep getting an endless stream of sub-standard public goods and services, at inflated prices. We keep leaking public revenues on the wrong supplies and wrong suppliers. If you’re wondering why you will be paying higher taxes for the foreseeable future, it is the chickens of many years of tenderpreneurship coming home to roost.

Tenderpreneurs have an even more insidious effect: if there are too many of them, they kill off legitimate entrepreneurs. Our economic rise will not come from creating a class of highly connected hawkers; it will come from being competitive in the world. And that requires excellent quality in our products, brands, supply chains and customer experiences.

When short-cutting insiders rule the roost, we create a huge disincentive for doing things the right way and building proper companies and partnerships. The field is always tilted; the odds are always stacked; the cards are always marked. The hucksters rule, and the true innovators and hard workers are stifled and discouraged.

An even worse situation is created when society looks upon its tenderpreneurs not with scorn or derision, but with admiration. That is sadly Kenya for you: a place where fortunes are admired, no matter how made. The fortunes may have come at the expense of education for our poorest and healthcare for our most vulnerable, but who cares?

Rapid, sustained and robust economic growth is just a pipe dream until we do things the right way. That requires concerted action not only from the executive and judiciary, but also from ordinary people. If we keep worshipping at the altar of ill-gotten wealth, we are only praying for our own long-term ruin.

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