Why Is The Richest Diamond Capital of Africa So Poor?
When I arrived at this mining town Dundo, I didn’t expect to see what I saw. Then, I discovered it was related to UBI.
Dundo is the capital of a northern Angola province and one of the biggest mining towns in Africa. It’s a town jam-packed with diamonds.
Yes, Angola is the 4th richest country in Africa in terms of natural resources.
Before landing in a town close to Dundo, all I heard were stories about diamonds and how diamonds are abundant around those lands. So, I’ve obviously built an image of wealth around that place.
I arrived early at the airport in Luanda (capital city of Angola) to take my flight to Dundo. To my surprise, I had to sign a document declaring why I was travelling to Dundo and a non-disclosure agreement. I also had to bribe the government official to accept my documents.
I was surprised not about the bribing (that’s very common) but about the bureaucracy required to simply travel to another province.
I started to think, “Hmm… they might be trying to hide something in that town.”
When the plane was about to land, I looked through the window and asked myself: “Hey, where is the airport landing strip?”
The “airport” landing strip was just dirt, and the airport building was rather underwhelming.
Once I arrived at the Dundo “airport”, I was interrogated again by the police and local government officials, asking me exactly what I was doing there. I told them the truth: I was visiting the site of a new hotel that my client was planning to build.
After they held me for about one hour, they finally released me, and I took the road on my way to Dundo.
After driving for about one hour on a pick-up truck, I finally arrived at the mining capital of Angola.
Do you know what shocked me the most about this mining city?
I’ve travelled all over this African country, and almost everywhere I went, I saw tons of small businesses, people hustling, agriculture, and people selling everything you can imagine by the side of the road.
Up until then, I’ve covered thousands of kilometres in Angola, and there were small businesses everywhere.
Angolan people are true entrepreneurs, and because of the lack of formal jobs, a massive percentage of the population are solopreneurs or have small businesses.
Except in this mining town.
No one sold fruits, vegetables, or chickens by the side of the road. There were no food stands, almost no restaurants, no shops, no beauty saloons and no agriculture.
The only hotel in the region (where I stayed) had cockroaches, there was no running water, and no electricity at night.
Why was the mining capital of Angola the most underdeveloped and poorest place I’ve visited in Africa?
I even visited a fair with big diamond exhibitors while I was there… Money was being made, but businesses and infrastructure were nowhere to be seen.
This was truly unexpected for me… so I decided to ask around and found my answers.
Endiama is the state-owned diamond company of Angola. They have a 100% monopoly over the diamond business, and obviously, they don’t want any sort of competition.
To prevent individuals from venturing into the diamond business or trying to find diamonds themselves, they have implemented a sort of UBI — Universal Basic Income. Every family receives money from the government and a monthly basket with different food items for the entire family.
At a superficial level, this sounds good, but the end result is bad.
The result is they killed most economic activity in this province by giving UBI to the residents. There’s no incentive for business, entrepreneurship and ambition.
Talking about UBI, I’ve written an in-depth exploration of how UBI will eventually impact our society. Feel free to check it out:
UBI experiments around the world have this kind of result. They kill the human ingenuity and the will to move things forward.
At a surface level, these policies seem well-intentioned.
If you dig deeper, they are about control and tyranny and keeping the population quiet, dependent, and docile.
Despise the free lunch. No matter where you are.
If throwing money at things would solve the problems, poverty would have been solved long ago.
What is offered for free is dangerous.
A free lunch, especially from a government, comes with the price: the price of your soul.
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