It has recently been widely report-ed that Bill Ackman, an American hedge fund manager has finally ended his 5-year short position in Herbalife, an American multi-level marketing (MLM) company.
Mr Ackman has not been proven right in his labelling of Herbalife as a pyramid scheme, at least not fully, because in a historic Federal Trade Commis-sion settlement in 2016, the MLM agreed to pay a total of $200 million to nearly 350,000 distributors they were said to have deceived. The multi-billion-dollar revenue company, of course, celebrated this as a victory and continues to flourish in business, despite a restructuring imposed by the Federal Trade Com-mission and edgy wording in the set-tlement which didn’t completely vin-dicate them from allegations fronted by Mr Ackman.
There is a reason why I am citing this example which is the subject of a fascinating documentary named Bet-ting on Zero. Big corporate establish-ments like Herbalife have acquired a notoriety for making a killing out of our poor ability to make informed choices. Big oil, big pharma, big tobacco, even big soda, all have become synon-ymous with those greedy tendencies of the world’s leading corporations. Heck, even KPMG, a ‘big four’ finan-cial advisory firm which is supposed to be our saving grace when it comes to fraud was recently caught smack in the middle of a hot corruption scan-dal in South Africa.
Should it then surprise anyone that in the last two to three years there has been a sudden upsurge in bet-ting and gambling activities, not only in Tanzania, but also in most parts of the region? Kenya, for instance, upon recognizing either the need to moderate the negative social impact of these activities or her potential to collect more money from the indus-try, introduced a 35 per cent tax on gaming revenues. A few months later, in typical fashion of corporate estab-lishments refusing to ‘play ball’ with public interest, the tax has been chal-lenged in a bill seeking to revise it down to 15 per cent.All pun intended, my bet is that the lower rates in countries perceived more advanced, such as the UK’s 15 per cent tax charged on betting com-panies are what inspire moves such as Kenya’s.
Isn’t it baffling how we always import Western standards for everything without any iota of care for both the unique challenges we face and those we risk inheriting?
Alluding to my earlier point, the UK plays close attention to the way betting is advertised. They at least make an attempt to strike a balance between economic and social gains. In fact, since April this year, The Committee of Advertising Practice in the UK has banned betting adverts deemed misleading. Are our governments also passion-ately copying this? The answer is a resounding no. Our East African reg-ulators are the most reactive bunch around, only regulating pornography and anything else that appears dis-tasteful to the ‘old men’.My Minister Mwakyembe, himself touted as a media expert, appeared appalled by the mighty Diamond Platnumz’ apparent immoral social media conduct thus summoning the sensational singer for a much-needed reprimand. This begs the question, does the Minister really care about negative media effects as a whole?
I am of the school of thought that media has the power to construct reality, and I can give practical examples. Recently, it’s becoming impossible to tune to a local radio station without being bombarded by extremely misleading betting adverts.In a radio broadcast I heard recent-ly, the presenters narrate a story of a group of ‘Obamaniacs’ who react hysterically to meeting the former US president. The presenters then link this reaction to a betting scheme convincing the listeners that “this is how you will react when the massive prize money from the betting com-pany comes to you”.
They go on to tell a supposedly inspiring story of a young student who gets TZS 5,000 a day as pocket money who has quickly gone from rags to riches because he gambled 60 per cent of his income on a daily basis.Such a desperate and unorthodox connection is made between the two reactions in order to construct nor-mative behavior.
This mediated real-ity comes in the form of “mentions”, which essentially are a subtle way to insert product and service advertise-ments organically within the content of programs – and the radios charge a premium for those.Media’s overreliance on advertis-ing to drive business is leaving them in a very awkward place. In essence, this is taking away their watchdog and agenda-setting roles as they kow-tow to advertising companies and government for a profit. Is it possible to have a fully profit-able media that does not forgo its public service mandate? This is an interesting question which I will address in the next part of this two-part series.