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The Curse of Entrepreneurship in Africa: If You Can’t Be Politically Tamed, You Must Be Prepared To Walk On Thorns

Brian Kazungu

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Brian Kazungu, 03/04/2021

In a continent that desperately needs investment for it to outdo is its poor governance induced perennial ‘curse’ of poverty, you would assume that anyone who stands on the feet of his brains in the pursuit of entrepreneurship is welcome but it proves otherwise in this ‘cradle of mankind’.

Africans have for a long time been wreathing in serious but avoidable economic pain because of the chocking, toxic and primitive manner in which its politics have been similarly administered by different ethnicities who run the affairs of mankind in the world largest continent.

While divinely endowed with vast expanses of precious minerals and arable land that can make it the global financial habitat for entrepreneurs, Africa’s economic reality is pathetic, deplorable and quite often heart-breaking even to some die-hard hopefuls.

The majority of its forward thinking citizens would rather risk lives to go and settle abroad in the midst of life darkening xenophobia, racism and human trafficking rather than to try and become the candles of light in their own motherland because of unproductive political heavy-handedness.

Corruption, cronyism and poor governance seems to have become established as the operating system that runs the ‘software’ of Africa’s political machinery which tramples on not only the basic human rights of its people but even on their hopes, dreams and abilities.

One such tragic story is that of Zimbabwean businessman, Fred Mutanda who is part of one of the continent’s notable pharmaceutical businesses, Caps Pharmaceuticals.

In one of the discussions that I have had with him, I came to know that over the years, Fred has endured and survived attempted hostile business take-overs, incarceration, defamation and blackmail which demands a strong heart for one to wish to live and face another day.

Recently, his company had to file an urgent court application seeking to nullify the appointment of the newly government chosen directors from taking any action on behalf of or from being involved in the running of Caps Pvt Ltd.

While commenting on that development, Fred, the majority shareholder in Caps Pharmaceutical Trust said that “the government doesn’t think the constitution applies to it since it just takes it as a piece of paper and considers itself to be above the law”.

His run-ins with the government when it comes to managing his business empire has been very protracted with the government losing several legal battles usually at the expenses of politically naïve and vulnerable tax payers who lack a say in how their own government is managed.

Recently, I sought his comment on an issue in which he was accused of externalising intellectual property in relation to a formula for a pharmaceutical product under the Caps brand.

My curiosity was centred on the circumstances under which intellectual property can be traded and monetized since I am part of the Connections2Communities (C2C) Corporate Literacy initiative.

More-so, I wanted to understand the circumstances under which such property can be under the direct supervision and intervention by the government to such an extent where he could be arrested for what I considered to be private commercial property.

Mutanda refuted any element of wrong doing regarding the intellectual property issue and revealed that even though it is subject to various Acts of the Law, he did not in any way violate the related legal provisions.

“Yes, Government has oversight through the legislation. Industrial Designs Act [Chapter 26:02] Patent Acts [Chapter 26:03] Trade Marks Act [Chapter 26:04] Copyright and Neighboring Rights Act [Chapter 26:05] Intellectual Property Tribunal Act [Chapter 26:08] and the Medicines and Allied Substances Control Act [Chapter 15:03] but I didn’t not violate any of those statutes.

He also further revealed that the charge for externalisation of intellectual property was unfortunately levelled against him as an attempt to replace the theft and fraud charge which he was initially accused of but which could not be substantiated in the court of law.

With the government basing on ‘proof’ that was surprisingly not even submitted to the courts, Mutanda said that he was accused of withdrawing considerable amounts of money from CBZ and Stanbic banks, yet he was not even a signatory of the bank accounts in question.

“It wasn’t my account. It was a company account, of which I was not even a signatory.” Mutanda narrated.

He greatly expressed dismay on the fact that he was initially wrongly charged for theft and fraud only for the charge to be changed to another wrongful accusation of externalisation even though the circumstances of the alleged crime were still the same.

 The soft spoken business tycoon said that he was left with no option but to refer the matter to the Constitutional Court in order to safeguard his rights even in the face of political persecution.

While using the Williams and Anor versus Msipha N.O and Ors SC 22/10 judgement, the judge said “in my view, after hearing submissions by the parties, the learned magistrate should have determined whether the facts alleged by the State constituted an offence or not.

Failure to make that determination could possibly lead to a violation of the constitutional right of the applicant to protection of the law.

In the mentioned case of Williams and Anor versus Msipha N.O and Ors, the court held that putting an accused on trial on facts which even proved do not constitute an offence is a violation of the right to protection of the law guaranteed by the Constitution.

As provided for under Section 175 (4) of the Constitution of Zimbabwe, regarding the violation of among other rights, Mutanda sought to be protected from the right not to be convicted of an act or omission that was not an offence when it took place – Section 70 (1) (k).

In an eye opening but harrowing narrative below, we see how a political hand can strangle the spirit and passion for entrepreneurship in Africa especially if young people can hear and see the terror that their role models grapple with under the oversight of their own kith and kin.

….The matter was reported to Mugabe who instructed Chihuri for police investigation. After investigations, Police wrote a report to Mugabe telling him that there was no fraud, theft or externalizations at CAPS. I don’t know at what point RBZ decided to use the ACC (Anti-Corruption Commission).

I was abducted by the Ant Corruption Commission. After a failed forced disappearance, that’s when they raised the false fraud, theft and externalizations charges. I was taken to the NPA but the DPP refused to charge me.

That’s when I approached the police to report my abduction, false charges and the seizure of my properties.

The police told me that it was a political issue and cannot be involved. That’s when they confirmed that sometime in 2011, Mugabe instructed Chihuri to investigate the case but found no criminal conduct. I remained on remand for 4 years until I approached the Constitutional Court. It’s a long story.

Please also note that the facts were not as per my application but as per the Prosecutor General’s response. How do you alter a charge of fraud claiming that I walked in CBZ and withdrew money to externalization of Intellectual Property?

It just shows you the judiciary is captured. By the way, that judgment was done a few days before the late CJ left office. Then he passed away.”

One commentator who felt aggrieved by Mutanda’s horrific journey in entrepreneurship likened the whole scenario to an animal farm with human actors.

“This is an animal farm yet humans feature prominently in it. This is very sad. It brings to the fore, an abuse of public power that is unprecedented. To be denied freedom on the basis of one charge and only for the charges to be altered after the fact. This is bizarre to say the least.” He expressed himself.

Many entrepreneurs across the African continent have had to endure the terrible political interference that which makes it difficult especially for people of African descent to start and run businesses in their own motherland without being victimized by those with political power.

However, unfortunately, even though it is given less priority as shown by the way how business people are treated, the value of entrepreneurship in Africa cannot be overemphasized and the need for business role models that an African child can look up to and relate with is of critical importance.

It is always disturbing to note that the reality on the ground always seems to prove that entrepreneurship can prove be the corridors of fire which threatens the prospect of better standards of living for the African child if the political machinery falls in wrong hands.

Indeed, it is possible for African governments to ride on the United Nations’ 17 Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development which declares the Ending Poverty in all its forms as one if its priorities.

This can be done through creating a good environment that inspires the African child to venture into entrepreneurship with a guarantee for the respect of the rule of law and good governance which prohibits political actors to freely borrow political power to settle personal scores.

For example , the World Bank https://bit.ly/351qMyY” estimates that by 2030 up to two-thirds of the global extreme poor may be living in fragile and conflict-affected economies, making it evident that without intensified action, the global poverty goals will not be met.

When you read such reports and then compare with how business people who are prepared to play a part in solving these problems are recklessly treated, you get the impression that Africa still has a long way to go even in just making the lives of its own citizens a little more tolerable.

In a book titled Primitive Politics and The Poverty Machinery, the government is described a set of structures and grouping of people who are mandated with the administration of societal affairs in a given nation or community.

Unfortunately, if you look at Africa at the moment and even through the lenses of history, you would wonder if there are any people who are administering the societal affairs of this continent or they are only political clubs in the champions’ league of destroying the cradle of mankind.

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Editorial

The SMM Reconstruction Debacle: Chinamasa’s Controversial Decision Versus Reports and Recommendations from Investigators and the Reserve Bank of Zimbabwe

Brian Kazungu

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Patrick Chinamasa: Picture Credit - newzimbabwe.com

Brian Kazungu, 13/04/2021

Back in the early 2000s, Shabani Mashava Mine (SMM) was a breath of life and a reservoir of hope to the Zimbabwean economy, the people of Zvishavane and surrounding areas as this asbestos mining giant sustained livelihoods and contributed taxes to the fiscus.

However, the rays of light from this shining corporate star began to fade as allegations of externalization were levelled against Mutumwa Mawere, the shareholder of Africa Resources Limited (ARL), a company that was domiciled outside the jurisdiction of Zimbabwe.

SMM’s shareholding was directly held by SMM Holdings Limited (SMMH), a United Kingdom registered private company rather than by Mawere himself and as such, the whole debacle was mired in the confusion over ownership and control of companies.

Even though SMM has been placed under extra-judicial administration for over 17 years, no facts have been produced to support the allegation of externalization which Chinamasa and crew used in divesting and depriving SMMH of its control over SMM.

In subjecting SMM under Reconstruction, it was being alleged that proceeds from its sales of asbestos were being diverted by Mawere in South Africa and yet, SMM the exporter, sold its products through agents of which end customers would pay SMM through those agents.

These agents were only entitled to a commission, and so far, no evidence has been produced showing payments by SMM’s customers into Mawere’s personal bank accounts.

The controversial crime of externalization which still and only exists in Zimbabwe even after the removal of Mugabe and which seemed to be only targeted at selected exporters including SMM was once described by former Education Minister, Professor Moyo as satanic and barbaric.

Chinamasa’s involvement in the ‘SMM heist’ even though being at odds with investigators and RBZ reports is alleged to be merely based on hearsay evidence from Edwin Manikai and Afaras Gwaradzimba, former service providers to the company.

Gwaradzimba and Manikai who were SMM auditor and legal advisor respectively before the Reconstruction went on to become Administrator and Legal representative respectively against their former client, a move which was described as a corporate governance irregularity.

Even though the government, through the then Minister of Justice, Patrick Chinamasa appointed Afaras Gwaradzimba as the Administrator in exchange for a notable 6% income from the gross revenue of the business as a turn-around attempt, the result thereof was negative and deplorable.

The situation in the company deteriorated and many of those who depended on it for their survival including a staggering five thousand (5000) workers were left desperate as the so-called government recovery plan in the company failed to bear meaningful results.

In parliament, the SMM issue was hotly debated especially bordering on the legality and effectiveness of processes and provisions that were being implemented with some being said to be unconstitutional political interference by Members of Parliament such Job Sikhala.

Questions that now arise on this critical matter are, if the investigators and the Reserve Bank of Zimbabwe found no wrong doing in SMM and Mawere, what then enabled the government to do a fast track grab of this company using unusual political and ‘legal’ means?

 In a 20th July 2005 Parliamentary Debate under the motion ‘Economic Challenges Facing Zimbabwe’, Member of Parliament, Job Sikhala asked the Minister of State Enterprises, Anti-Monopolies and Anti-Corruption to shed light on the indebtedness of SMM.

The Minister of Justice, Patrick Chinamasa in response said “I have already alluded to my earlier responses, as at the 6th September 2004, when I issued the Reconstruction Order, SMM Holdings was indebted to the State in the sum of Z$115 billion between that date and April 2005.”

However, on the contrary, in his submissions to the late President Robert Mugabe, RBZ Governor, Gideon Gono said “Based on information available, the Bank has also tested the veracity of the declaration of SMM as “an Insolvent State-Indebted Company” upon which the Reconstruction Law was created and applied….

…Your Excellency, at law the above SMM liabilities at the time the Reconstruction Order was instituted did not qualify as state loans to SMM.”

More-so, an executive summary of the final report on the findings of an investigation into the affairs of SMM and allegations of externalisation against Mawere which was done by the Investigator, Assistant Commissioner, Mr. S. Mangoma etal cleared him and SMM of wrong doing by stating the following:

“We have established that there is no connection between the acquisition of SMM and the guarantees granted to SMM.  The guarantees were used to convert expensive short-term facilities into a medium term loan. 

The facility was structured and negotiated by SMM’s financial advisors, First Merchant Bank (FMB).

The acquisition of SMM was not guaranteed by the government rather it was a leveraged buy-out in which the assets of SMM were used to acquire the shares in its holding company under an arrangement approved by the RBZ.”

In contrast to the above, Chinamasa adamantly blamed SMM’s debacle on Mawere who he regarded as financially imprudent, and said if only the owners had not externalised US18.5 million dollars and a lot of foreign currency in Rands and Canadian dollars, there wouldn’t have been any state intervention.

“If that had not happened, the company could have been very viable and we would not have had any reason to interfere at all in its operations……If he (Mawere) had run the operations in a prudent manner, he would have been able to come out of debt, but he did not.

There were huge interests where he (Mawere) would go into SMMH, dip into the till to go and buy other things like Schweppes instead of ploughing back into the company what would have been made from the sales of the proceeds of the company.

That was not being done. Instead, the money was being used to buy other companies and he lost control completely to the creditors and we happened as a State to be one of the creditors.” Chinamasa reiterated.

However, Gono refuted Chinamasa’s perception of corporate dynamics in the SMM matter by clarifying that state institutions which transacted with SMM had autonomy in those dealings and thus their credit to the asbestos maker could not be ‘blanketed’ as State credit

“The RBZ’s Productive Sector Facility (PSF) loans, MMCZ’s loan, ZESA bills, NSSA bills and ZIMRA bills, whilst they could be linked to the State indirectly by extrapolation, were nevertheless still debts between SMM as a legal entity and each one of these institutions in their own right as creatures of statutes, and not directly the State.

….A further complication that I see weakening the State’s moral, constitutional and legal standing is that the loans provided to SMM were never triggered by any formal contract between the State and SMM. The State has to this date failed to produce any such direct contract.” Gono explained.

The former Reserve Bank Governor further decried the possible negative impact of the continued placement of Mawere and SMM under specification and reconstruction respectively citing that it was likely to stain the country’s image and affect investment.

As things went, and as things stand, the State is, therefore, exposed to the risk that the investor community may conclude that the letter and spirit of property rights, human rights and company law is not being followed in so far as the rights of shareholders, debtors, creditors, employees and any other relevant parties are concerned. This is not good for Government’s and the country’s image, Your Excellency. The RBZ Governor pleaded with President Mugabe.

However, contrary to investigators’ findings and the RBZ’s recommendations, Chinamasa took the whole issue the other way round claiming that his actions were in the interest of the State and the people of Zvishavane.

“The whole Zvishavane community rotates around SMMH. So the government had to intervene in the national interest in order to rescue the company in order to order to ensure that the company continues to be a leading foreign exchange earner in our economy”. Chinamasa said.

Interestingly, even though he is a lawyer and was the Minister of Justice, his actions including the appointment of Gwaradzimba as the SMM Administrator were challenged in Parliament and reported as unlawful in reports by investigators and the by the Reserve Bank of Zimbabwe.

The Act and process of Reconstruction in the SMM matter was controversial from the onset with fears that it was designed to mischievously take over companies from their legal owners while in some instances Chinamasa seemed to be contradicting himself in its interpretation.

In the parliamentary report (Vol 32, No 16), he was quoted as defending the constitutionality of the Reconstruction route by inferring that it was a judicial instrument since it is done subject to confirmation by the High Court.

“The Reconstruction Order is done through the judiciary as the Reconstruction Order issued by the Minister of Justice is subject to confirmation by the High Court.” He said

However, in an affidavit, he said that “At the time I issued the Reconstruction order, there was no provision in the Reconstruction Regulations which required me to seek confirmation of a Reconstruction Order by a Judge or Court.”

Gwaradzimba’s appointment as the SMM Administrator has also always been mired in controversy.

Even though he was appointed as the Administrator on his personal capacity, he controversially used his company AMG Global as a Government nominee in SMMH’s share transfers of which SMMH has recently raised a red flag on a possible fraudulent share transfer in the matter.

Investigators in the SMM saga found Gwaradzimba’s appointment to be a conflict of interest since he was a former SMM auditor. “….it is the considered opinion of the Investigators that the appointment of Gwaradzimba and Manikai was ill considered and, therefore, inappropriate…” The investigators said.

In the same vein, the RBZ also regarded his remuneration in the SMM deal to be ‘unscrupulous’.

“…..the fact still remains that Mr Gwaradzimba, the Administrator is getting payments set at 6% of gross proceeds, of all SMM companies which is even more lucrative than shareholders themselves, let alone revenues to Government.” Gono raised an alarm.

It is therefore disturbing to note that regardless of overwhelming evidence against the Act and the process of Reconstruction in the SMM matter, it was allowed to continue at the expense of various stakeholders including shareholders, the community and the country at large.

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Editorial

Community Building through the Development of a Shared Understanding – Lessons From C2C

Brian Kazungu

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Brian Kazungu, 02/01/2021

I have quite often seen individuals coming into groups for a certain purpose and yet to suddenly witness a serious disintegration of the same groups without members having achieved that which brought them together in the first place.

Even though this sudden breakdown of groups seems to be a common reality, I never understood why such things happen until I became part of the Connections2Communities (C2C) powered by the 1873 Network.

The C2C initiative seeks to empower and capacitate people to collaborate in solving problems as well as in collectively utilizing opportunities as compared to doing it individually.

It achieves these goals through facilitating literacy programs on matters of interest as well as through engaging in networking activities that creates business opportunities for its members and it also advocates for the improvement of systems and policies which helps to make people’s lives better and enjoyable.

In this regard, one of the best lessons that I have learnt from being a C2C member in relation to group success is the need for developing a shared understanding in the whole team on whatever project that has to be undertaken.

I discovered that it is important for members to talk things through before they commit to work on something as this approach helps to get issues clarified so that people can get the same and clearer picture of what must be done, how it must be done, by whom and for what purpose.

When this is not done, many people may labor under a mistake in way that generates tension, brews confusion, causes burnout as well as interference with mission accomplishment.

I also noted that developing a shared understanding does not undermine the essence of diversity and more-so, it does not mean that people lose their individuality in the course of engagement but it rather helps to bring out the strengths in members in a way that limits or erases the weaknesses and limitations of others.

On various C2C platforms, I have had an opportunity to participate in brainstorming sessions where members come up with different innovative business solutions to address various challenges especially those which are faced by people from time to time.

A case in point is a virtual meeting conducted yesterday by C2C members including Lovemore Chanengeta, Jajit Singh, Mutumwa Mawere, Janice Greaver and Joseph Mudekunye.

The agenda of the meeting consisted of issues such as promises and challenges of building community power around a problem as well as the pros and cons of community approach versus adopting an individual approach.

Also touched on were issues on fears or concerns about working together as well the idea behind ecommerce platforms like The Mall of Things and their relationship with the C2C initiative.

In such meetings, I have had an opportunity to interact with people like Mutumwa Mawere whose approach to conversations usually provokes others to look at issues that may otherwise remain overlooked when people are not challenged to think deeply and widely on such matters.

The same also applies to Jagjit Singh from The Royal India Restaurant who has a rare ability to make people to quickly and easily understand certain things that they may be finding to be looking or sounding complicated.

I have also come to cherish the frame of thinking, open mindedness and attention to detail displayed by Janice Greaver when she asks prying questions that helps to ensure that critical issues are exhausted before people can blindly pursue projects without a shared understanding.

In building sustainable groups through shared understanding, I have also seen that there is need for people like Lovemore Chanengeta who have an ability to clearly explain projects, products and services in way that community stakeholders can effectively grasp before or during engagement.

When such minds meet even together with people like Joseph Mudekunye who believe in the power of the Forth Industrial Revolution (4IR) to address problems associated with buying and selling through the adoption of e-commerce platforms, it then means that current challenges get to be effectively addressed from different perspectives for the common good.

As such, in short, the development of effective community initiatives needs collaboration which is based on a shared understanding by different players in their diversity who openly combine their strengths to solve problems for mutual benefit and for the common good of society at large.

Through the C2C initiative, I have come to know that without a shared understanding on matters of interest, even the best of ideas can fail and mankind will always succumb to challenges but when there is a shared understanding goals will be efficiently achieved to everyone’s advantage.

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Editorial

Six Smart News (Media) Values that are Key to Continued Stakeholder Engagement

Brian Kazungu

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Picture Credit: Media Pool

Brian Kazungu, 27/12/2020

The media industry is a broad and mass life transforming field that can be mutually beneficial to all its stakeholders, since when well managed, it is the source of information for critical and strategic decisions by many individuals and institutions across the globe.

The actions taken by many people and organisations across the world are influenced by the information that they get especially in the form of news through various platforms including newspapers, radio, television and online publications.

Such a fact has over the years provided a mutually beneficial platform to many stakeholders including the news publishers, readers, businesses and non-profit organisations who all utilise the same platform for their respective different reasons.

Readers utilise news platforms to get a wide range of information that they can use in their planning be it for career, travels, relationships, security and investments among others.

On the other hand, businesses and other institutions do consider newspaper sales, online traffic, radio listenership and television viewership when deciding on the platform to use for advertising their products.

The news publishers themselves make their money from these adverts, online clicks and sales of newspapers among other sources of their revenue.

As such, the reality and prospect to profit from news publication has caused a continued increase in the number of players in the media industry who would like to at least have a slice of the cake of media profits.

Based on the above narrative, it is therefore important for news publishers to reconsider the matrix of news values that they adopt because these values determine the number of audience and advertisers that they get and thus determining viability, profitability and expansion.

In this contemporary world where people across the continents are getting smarter every day, it is critically important for news publishers to also get smart and adopt news values that relate with smart people who are so particular about the quality and value of information that they consume.

This is the reason why I have come up with a set of news values that I consider to be SMART because they help people make quick and effective decisions about their personal lives and their institutions while ensuring viability and profitability to the media industry.

These six smart news values are based on the following questions:

  1. Emotional – does the issue/story address the emotions: does it affect personal, group or societal mood, and does it have anything to do with happiness or sadness?
  2. Change of Status – does the issue/story talk about or result in an upgrade or downgrade, progress or recession, success or failure
  3. Opportunities and Threats – does the issue/story talk about immediate or future danger, victory (gains) or losses, potential or weakness
  4. Solution or problem – does it talk about or result in problems or solutions, better or worse outcomes, heroes and villains
  5. Mystery – does the issue/story talk about or address issues beyond ordinary human comprehension, is the issue a mystery buster or brings about a mysterious phenomenon?
  6. Societal Impact – does the issue/story talk about issues and circumstances that affect people on a grand scale whether in the short or long run

Starting, establishing and expanding a media institution, especially a news house, based on these values will ensure that there is a continued stakeholder engagement because such values address the issues that affect human life across all age groups in different societies every day.

People in their diversity across the world, want a media (news) platform which ensures that their concerns are addressed, their emotions are attended to, their dreams are made true, their victories and successes are celebrated, and their potential and immediate danger is eliminated or mitigated.

On emotions, people must be given a platform to express their feelings and be given insight on how to deal with emotions as they arise.  

The same applies to the issue of status in the sense that in the ups and downs of life, success or failure may be encountered, as such, there is a need for a platform that talks about how to upgrade and manage a good status and how to handle a decline as it manifests.

A media or news platform must also be able to broadcast opportunities to various people as they arise and also warn people about issues and circumstances that pose an actual and potential danger to life and property so that losses may be avoided while status and emotions are protected.

When the above is being addressed, the news platform will be partly and automatically addressing the issues to do with problems and solutions.

More so, people in their generality are quite often existing as a collective, be it as a family, workmates, schoolmates, church mates or even fellow citizens among other possible groupings, as such,  issues that affect them as a grouping needs to be addressed effectively and as a matter of urgency.

Issues and circumstances that affect a large grouping of people at once e.g. disease outbreak, natural disasters and even war among others has a greater appeal to readers and thus must be considered critical in the operative dynamics of media institutions.

Failure to fine tune a media approach based on these media or news values in this contemporary world is likely to render a media house irrelevant, non-viable and  unprofitable at the commercial expense of its investors and emotional expense of other stakeholders.

News values are quite dynamic across geography and time but the ones listed here seek to give a media platform some timeless relevance and provide value to its wide range of stakeholders.

Brian Kazungu is an Author, Media Practitioner, Entrepreneur and an Opinion Leader.

(Website: https://muckrack.com/brian-kazungu), @BKazungu – Twitter

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