Tag: policy making

Bad policy is bad business: Reforming the African Business Environment

African economic policy does not have much wiggle room at the moment. The two policy levers that are most commonly used, tax policy (new taxes or tax breaks) and fiscal policy (spending money on things) cannot be used. We have no money so we can’t give tax breaks and we have reached our credit limits so we cannot borrow or spend more. There is no commodities boom to fill our coffers and there is no China riding to the rescue with loans and aid.

So, what can we do? How do we drive the investment and job creation our continent desperately needs without using tax policy or spending?

I think African policy makers have been lazy, or at the very unimaginative and inattentive. Economic policy encompasses a large universe of policies, laws and regulations that govern how the economy functions, how different entities interact with each other, what they are allowed to and what they aren’t, and even how they fail. How all of this is applied, how responsive regulatory structures are to a changing world and how often it changes, all contribute not just to economic policy but to the business environment. Creating a conducive business environment for MSMEs and large businesses is critical to having businesses that invest and create the jobs that we need.

I define a conducive business environment as one that gives businesses, investors and entrepreneurs a stable and secure operating environment, which puts the onus on them to grow rather than government to subsidize the economy. An environment that doesn’t let failure be a death sentence but an opportunity to bounce back. Creating this environment on the continent would help take our private sector from being resilient to being dynamic.

Predictability and stability

Businesses and investors think about today, tomorrow, next year, three years from now and a decade from now. In other words, businesses have plans. They plan to grow, and that growth needs investment, expansion and people (jobs) to make it happen.

The thing that businesses and investors crave is predictability and stability of the business environment. If a business or investor can understand what their operating environment will look like, they can make and implement their growth plans, invest in expansion and employment. Whether you are a motorcycle rider who wants to grow your income or big business making billions, the ability to plan for the future is critical.

African governments are notoriously bad at providing predictability and stability. Policy and regulatory changes seemingly come out nowhere, policies are suddenly reversed without warning, or changes are promised and soon forgotten about. A great example of this tax policy in East Africa. A recent IMF report showed that countries in the East African Community (EAC) have, since 1988 made an average of 13 changes to tax policy and law every year, that’s 1,845 changes since 1988. When on top of this you add unforeseen charges to other policies, laws and regulations it makes the African operating environment an ever-changing mess.

What governments need to do is simple, make multiyear (e.g. 3 year+) plans and communicate those plans as I have written about it before, good communication is good policy. Clearly articulating the intent of policy, what it is going to do, how it is going to work and when it will happen, may seem like policy 101 but it’s astounding how many times this has not happened. If you as a business or investor know what’s coming you can plan for it, integrate into your plans so that when it happens it’s not disruptive but wholly expected.

Connect the dots.

Policy, legislation and regulation do not exist in isolation. What happens in one sector, ministry or agency can have significant impacts on another. For example, if governments want to domesticate value chains and export more their trade policy, industrial policy, employment policy, financial sector policy must speak to each other in order to be truly effective.

Unfortunately, the situation we get most of the time is that policy in one area is made in isolation from another despite them being mutually reinforcing. Thus, businesses and investors are confronted by, at best disjointed, at worst contradictory policy that isn’t worth the paper it’s written on. For business and investors this creates confusion and uncertainty.

What is required is the for the policy development process to be inclusive of others in the public sector and those in the private sector who could have influence over it. For instance, if a government wants people to consume locally produced bread it must talk to the wheat farmers to understand how to increase production, to millers to understand how to increase wheat flour production, to bakeries to understand how to increase production of bread that people actually want. Then it must align the policy of the agriculture ministry, the ministry of industry, and the ministry of finance to make sure the interventions needed at the various stages of the value chain are aligned and mutually reinforcing. If not, the government will buy fertilizer for wheat farmers that isn’t suitable for them, the millers may have access to loans for expansion but no wheat to actually produce with and the bakeries will use the tax breaks on domestically produced bread to sell unfinished imported bread that just needs a few minutes in the oven.

While the example may seem preposterous, it’s an all too familiar tale on the continent. If governments don’t connect the dots, the impact of policy is like swimming upstream, lots of effort expended for very limited outcome.

Better bankruptcies

Walt Disney, Henry Ford, Heinz, Marvel, American Airlines, and General Motors. These entrepreneurs and companies have two things in common, they are immensely successful, and, at some point they had all declared bankruptcy.

One of America’s greatest innovations is bankruptcy protection. Instead treating bankruptcy as a shameful thing that killed the business and stained the reputation of its owners. In America bankruptcy is a chance for a reset or to start again. Companies that go bankrupt get protection, space and time to sort out their issues and emerge leaner and meaner. People who declare bankruptcy have the chance to have their debts discharged and to start again.

In Africa, we still treat bankruptcy like Europe did a century ago, as a disaster. People who go bankrupt are saddled with odious debts, companies that go bankrupt are broken up, sold off by creditors. It’s time to change this thinking, as America shows giving people and companies a second chance fosters innovation, it encourages entrepreneurs to take bold leaps and it enables people and businesses to bounce back from adversity quickly and effectively. African businesses experience a lot of headwinds, many of them stemming from forces (and regions) outside their control, changing insolvency and bankruptcy laws to be more American, may be the catalyst that enables African businesses to grow in the good times and innovate in the bad.

Bad policy is bad business.

It is incredibly frustrating watching African governments repeatedly miss the opportunity to drive growth without having to spend money or give tax breaks. There is so much that could be done to give the private sector the predictability and stability it craves to enable planning, investment and growth. To link relevant policy areas and reinforce the growth prospects of key sectors of the economy through mutually supporting government action. Or to simply help businesses understand what you are trying to do, and work with that in mind.

Instead, we have fostered uncertainty, and an adversarial relationship between governments and the private sector, which, in turn leaves the private sector surviving rather than thriving, and when businesses cannot survive, they are picked apart like a   with a carcass as part of the bankruptcy process.

Today the reality is, that while Africa would like to and needs to spend money and use tax policy to drive key development goals, we don’t have the fiscal room. The only way to create that room is for the private sector to grow and pay more taxes, and though it may seem like it, this is not a chicken and egg situation. How policy is crafted, communicated, and implemented has a real and significant influence on how companies grow and where investors decide to put their money.

We must do better at creating the environments in which businesses thrive and investors want to come to. Otherwise, an underperforming private sector will continue to stagnate, and our policy makers will be wasting air, money and perfectly good paper on strategies and plans that will fail.

Africa needs its own CoP

“No more empty promises, no more empty summits, no more empty conferences. It’s time to show us the money. It’s time, It’s time, it’s time. And don’t forget to listen to the people and places most affected.” – Vanessa Nakate Ugandan Climate activist

In November 2021, the world came together for the 26th meeting of the Conference of Parties, CoP 26, in Glasgow. To build on the Paris climate change agreement and work towards keeping global temperature rises to 1.5 degrees or below. The outcome of summit was a disappointing agreement with weak promises to “phase down” instead of phase out coal, and a reaffirmation of the Paris agreement. Much of the progress hoped for at the summit was again punted down the road for finalisation at a future summit.

More relevant to us is to ask whether Africa’s goals were met. Frankly, no (you can read more here). On climate finance and technology transfers from the developed world to poor countries old unmet promises were remade, while African countries are already spending billions on climate adaption. On climate responsibility developed countries refused to accept responsibility for historic emissions and climate related losses.

The CoP process is not working for Africa, which despite being responsible for only 3.8% of emissions will be hardest hit by climate change, and through 26 CoP processes the progress on Africa’s climate agenda has been marginal. There is no reason to expect CoP 27 in Egypt in 2022 will be any different. In an earlier article I wrote about the need to strengthen African multilateralism, and climate change is an area that is ripe for that sort of initiative. Africa needs its own CoP, tailored around its climate needs and goals, mobilising climate finance and driving global climate action.

What should AfriCop look like?

Since 1992, world governments have met to forge a global response to the climate emergency. Under the 1992 United Nations Framework Convention on Climate Change, COP stands for conference of the parties under the UNFCCC, the supreme decision-making body of the Convention.

This can be replicated under the African Union, all that would be needed is a resolution under the Heads of State Summit establishing an African Conference of Parties. The key question is what would this AfriCop do what should be its purpose?

1.Get rid of the begging bowl

There are two realities of climate funding that Africa must deal with

  1. It is clear that the developed world cannot be relied on to keep its promise to provide $100 billion a year of climate funding. I
  2. Despite promises made by multinationals and hedge funds, the private sector cannot be relied upon to provide adequate climate funding or investment. The case of the UN backed climate fund launched with much fanfare and promises on the brink of collapse is emblematic of this.

As a result, it is time to get rid of the current funding strategy of holding out the begging bowl and develop a new funding model. This can and should be a core mandate of an AfriCop and there are several options available to Africa:

  • Africa could use its vast Fossil Fuel resources. Not by digging up the coal, oil, and gas, rather by selling it as a carbon offset. Realising the potential earnings and profits from these resources, while keeping that carbon that would otherwise have been emitted into our atmosphere in the ground. I explore the idea in more detail here.
  • Africa’s mineral wealth goes beyond hydrocarbons, lithium, cobalt, copper, and rare earths that are critical for the manufacture of green technology are all found in abundance in Africa. This resource extraction, where it leaves continent, needs to be taxed properly closing off avenues for transfer pricing and other tax avoidance strategies. Something I wrote about here
  • In 2016 the AU decided to implement a 0.2% levy on imported goods to finance the AU and reduce dependency on donor funding. This is an idea that can be revived, by imposing a tax on the carbon content of goods imported to Africa from industrialised economies most responsible for historic greenhouse gas emissions, the tax could potentially be waived if they meet their climate funding promises.

All these mechanisms would create funds in individual countries which they could use these as they please, maintaining the agency of those countries to decide what is most critical for them. A portion potentially going to one of the regional or African development banks to disburse to climate related projects or programs that have a continental or regional impact.

2. Develop and drive an African Climate agenda and voice

A dedicated AfriCop would be in the unique position of focusing on Africa’s climate needs and African solutions to climate change. And this presents two critical opportunities.

First to develop a much stronger foundation for the African Group of Negotiators when representing Africa at global summits and treaty negotiations, a stronger more united African voice would have a much greater impact on the world stage and would weaken the efficacy of divide and rule tactics.

Second, to build bridges and common positions with the other developing world countries and regions that face a similar climate dilemma (largest impacts with the least resources to mitigate or prevent them) developing strategies and proposals that can be put forward and pushed at a global level for the benefit of the so-called Global South.

Third, AfriCop can provide a constant consistent African voice on climate both on the continent and on the world stage. Not just coordinating and pushing an agenda but telling Africa’s story on the impact of climate and what we are and can do about it.

Conclusion

Some of you may be reading this thinking that Africa does not need yet another organisation to add to the plethora of regional and continental organisations across the continent that do little. I share that scepticism; however, of all things the Covid-19 Pandemic gives me hope.

After the Ebola crisis of 2014, the 26th Ordinary Assembly of Heads of State and Government to improve coordination among health institutions among African Union member states in dealing with disease threats set up, The Africa Centres for Disease Control and Prevention (Africa CDC) as a public health agency of the African Union to support the public health initiatives of member states and strengthen the capacity of their health institutions to deal with disease threats. The Africa CDC has exceeded the expectations of many throughout the pandemic, it has worked to coordinate responses across the continent, collectively acquire PPE, resources, and vaccines for the continent, spread learnings and experience from one country to all and worked to help government across Africa more effectively manage the pandemic.

Climate poses a similar challenge to health threats. Those threats pose a challenge to us all, second no individual country has the capacity and resources to face the challenge alone. Third, this issue affects aid and grant giving nations and like the pandemic, when they are under threat, Africa is an afterthought at best. Thus, similar conditions exist in climate policy as they did in health for a pan-African institution or initiative to find wide acceptance, buy in and cooperation among African governments and publics to make it viable. Africa needs its own CoP, its way to drive an Africa focused agenda both at home and on the global stage, and the elements exist for it to be viable and successful.

Charity is not policy.

Our donors, who art abroad, hallowed be thy purse. Thy aid come in dollars and pounds. Thy will be done in our countries, as promoted by Bono. Give us this day, our yearly funding. And lead us not into self-reliance. But deliver us from ourselves. For thine are dollars, the pounds and the euros, forever and ever. Amen – Elnathan John – Becoming Nigerian: A guide

On the 24th of February Ghana became the first country to receive a shipment of Covid-19 vaccines through the multilateral Covax facility. Throughout the pandemic (and one could argue throughout the post-colonial period) Africa has been the worlds charity case. Asking for and receiving billions of dollars of donations of PPE, sanitation supplies, and now vaccines. While all of this is lovely it is highly problematic. Relying on the generosity of the developed world to help us respond to crises or define our development agenda is tantamount to giving up our agency over those same issues, and it allows our political leaders to outsource responsibility for development or crisis response.

While the lack of vaccines, testing capacity, PPE is blamed on hoarding by the rich world, which is true, it should also be blamed our own inability to manufacture vaccines, testing materials or PPE. This is down to the bad leadership which outsourced development policy to those, with money and good intentions with pet issues, those who think that intellectual property is more important than responding to a global pandemic.

As millions around the world get vaccinated and Africa, reliant on the charity of others gets left behind to become the Covid continent. Hopefully, it brings us to the realization that charity is not policy. Over the last year, I have devoted much (virtual) ink to looking at how Africa could re-imagine capitalism for itself, forge a post-pandemic vision of development, stimulate our economies and measures we could take to respond to the crisis. All of that is useless, if we do not take responsibility for our own development and recognize that charity is not policy.

The problem with charity as policy

The problems associated with development aid and assistance charity in Africa are well documented. The creation of bloated self-serving bureaucracies that have little or no impact while allowing ex-pats to live charmed lives on the continent. Trillions of dollars spent with little to show for it. The self-serving nature of most spending which is spent on consultants and companies from the originating country. The use of aid to push various geopolitical agendas and to buy the support of African governments. However, this is not the most corrosive aspect of aid and charity on the continent that comes in two forms.

First, it robs us of our agency. Our development agenda is decided in London, Berlin, Washington, Beijing, and Geneva, in board rooms at various foundations and charitable organizations. It rarely has anything to do with what the “targeted” African communities actually want or need. Should massive infrastructure projects be the focus of our development spending, maybe, or maybe not, but that agenda was driven by the multilateral development organizations. The various development fads of microlending, SME/entrepreneur/youth/gender empowerment, digital identity etc. have all primarily come out of western research and institutions. If African development is not driven by the stated wants needs and aspirations of its people, then it does not serve them but the agenda of others. Charity serves the agenda of those doing the giving, not the receiving.

Second, aid and charity enable governments to outsource their responsibilities. Why should the Nigerian government bother to provide real services to the people of the oil-rich Delta region when the Oil companies will spend billions in building schools, clinics, and roads as part of their CSR. Why bother devoting real resources and policy to healthcare, health research and public health finance if the Gates Foundation, US-AID, The Wellcome Trust, and other donors are all pumping money into it. When you outsource responsibilities, you lose control of them as others decide what the focus of the money will be. Thus, our health systems have severely undeveloped but critical elements (like blood services, non-communicable disease prevention, mental health treatment, pharmaceutical research development etc.) because donors have other issues (and more often specific diseases or issues) that they care about.

The impact of this is all too clear to see. Development when funded by aid and Charity is done to us rather than by us. And, when problems that are not a priority for donors, like a global pandemic, come to the fore we find ourselves without the capacity to properly deal with them.

Conclusion – taking back our agency

After its independence in 1947, India made a very deliberate choice, facing serious health challenges among its large population, one of the critical things that India needed to vaccinate millions of people against TB, Smallpox, Polio, and other infectious diseases. However, at the time, much like Africa today, India was reliant on the importation of often expensive pharmaceuticals and biomedicals. The Indian government very deliberately set about investing in indigenous pharmaceutical companies, enabling them to build up R&D capabilities and most importantly the capability to produce pharmaceuticals in India. By the 1990s when India’s economy was being opened up these companies combined rapid growth in their own large domestic markets with global partnerships and continued investment and supportive policy from the government to become global players. The greatest example of this is the Serum Institute of India (SII), set up in 1966 to produce immunobiological’s, it was a beneficiary of the Indian government’s policy and today is the largest vaccine producer in the world. The majority of the Covid vaccines delivered to Africa are made by the SII.

Doing away with charity as policy means taking a lesson from India’s book. Making, deliberate choices to invest in areas that will wean us off dependence. It may take us 20 years to build up the infrastructure to produce our own vaccines, but it will mean that the health of our people will no longer be reliant on whatever others have to spare to deploy programs like COVAX or GAVI.

This thinking isn’t just limited to the health sector but will require us to make very deliberate choices and investments in the design and deployment of our education systems, climate policy, food security, transport, and science and technology. Not just for jingoistic, populist reasons that sound good on the campaign trail, but to free critical aspects of our development from whims of charity and geopolitics and put them in the hands of Africans. If we do not, when the next crisis rolls around, Africa will once again find itself left behind, begging bowl held out dependent on the charity of others.

Where next for Africa: a new vision for new development policy

As Africa continues to battle the public health crisis and the socio-economic impacts of the COVID-19 pandemic, I have been amazed, befuddled and despondent all at the same time at the responses we have seen. How African medical professions have responded and coordinated with resources and budgets that are tiny in comparison to their international counterparts. How nations like Togo have moved to cushion their citizens and the ingenuity and innovation shown by individuals and companies have all given me hope. The hope that we have the imagination, drive, and generosity to confront and overcome any challenge. However, the police brutality and human rights abuses and in some cases the outright denial of the virus by some has also given me pause for thought and reminded us how easy it is for our demons to take advantage of a crisis.  

Like many, in both my work and my writing I have been preoccupied with, as Dr King once put it “the fierce urgency of now”. How do we stop the virus, protect livelihoods, and reignite our economies? These are all valid concerns that deserve significant thought and effort. However, it strikes me that we also could and should be thinking beyond the pandemic. Crafting a vision for our continent that takes advantage of the extraordinary opportunity before us.  

The global pandemic has broken norms, systems, and preconceptions, which had limited the range of possible actions and policies we were able to pursue. Out of crisis comes opportunity. 70 years ago, Europe used the devastation of a world war to remake itself as a bastion of social democracy and regional cooperation. That required vision. People who recognised that despite the devastation, there was an opportunity to break with the past and reimagine what Europe could be. And went on to sell those visions to politicians, and people to create a shared vision that could be worked towards. Today the member states of the EU may squabble, but they do not plunge into periodic globally destructive wars and their citizens enjoy a near border-less continent with broad strong social safety nets. 

What is our vision for our countries, regions, and continent? What can we rally around, work towards and achieve for us and our children? There is an opportunity to build a better Africa out of this global disaster and we must seize it.  

The system is broken, and the opportunity is open 

The global Coronavirus pandemic has fundamentally broken or changed a number of aspects of global politics, economics, and policy norms that Africa can take advantage of.  

1. Capitalism is being questioned  

Markets are powerful things that can do a lot of good. However, this pandemic has reminded us that when markets are skewed and inequalities exist those will be amplified by crisis, and, more fundamentally that markets cannot do everything. Public goods and services, like public health, cannot be privatised and subjected to market efficiencies without consequence. Markets must have limits. Out of their failure during this crisis, we can remake them, to be fairer and draw boundaries around where the logic of markets ends and the public good takes precedence and we can remake the social contract to have fair markets and strong public services reinforcing each other.  

2. Social safety nets are possible.  

Before the crisis things like basic income, housing for all, or UHC were all dismissed as too expensive, too unwieldy (especially for African governments) and potentially undermining hard work and personal responsibility. In a crisis that was no one’s fault, we have seen governments design and deploy large scale social safety nets like cash transfer programs and rapidly expand public health systems to protect the most vulnerable and deal with the crisis. This is can also be a reality beyond the pandemic, Basic incomes and universal health coverage can be done and will be powerful tools for ending poverty.  

3. We can make things  

The pandemic disrupted global supply chains and across the continent things that were once easy to import suddenly had to be made here. Lo and behold we have discovered that we can make things like Personal Protective Equipment, Ventilators and even our own tests. If we can make things, we must make sure we never end up in a situation where we cannot produce the medicines and medical supplies we need, where we cannot supply our construction industries or stock our shop shelves. In short, there is an opportunity to rethink our industrial policies (as I have previously written about) around industries and businesses that now recognise the need for resilient local supply chains.  

4. Corporate tax is cool again  

With all the government spending that is going on around the world, it will eventually have to be paid for somehow, and there are few better sources of revenue than the multinationals adept at gaming the system. As countries around the world clamp down on tax avoidance and evasion Africa can do the same. Reshaping its tax systems (as I have written about previously here) to tax profits where they are made. An Africa that can replace aid and debt with sustainable revenue is an Africa with her destiny in her own hands.  

5. Global political space 

Global geopolitics, for so long defined and defended by the USA is fragmenting. With the USA becoming more insular, China on the rise but untrusted, a Europe busy trying to hold itself together, Africa has an opportunity. To reject the notion that we are a playground for global power games and redefine ourselves as a leader on issues like climate change, tax and trade that have for so long befuddled others and negatively affected Africa. Even forge a new alliance with emerging and middle powers around the world who do not hold ambitions of domination but of shared prosperity and calm. 

6. We are young and hungry  

Millennials around the world are despondent cohort, our working lives defined by recessions, pandemics and polarising politics. However, in Africa, this is not necessarily the case. I am constantly amazed by the determination and refusal to give up that the continents young people display. Young African’s are inventing, innovating, and breaking barriers in culture, business, science, and politics. Rather than being depressed like our western counterparts we can be Generation Hope. We must harness the hustle, embrace the creativity, and nurture the deep yearning for a better tomorrow. A crisis of the magnitude we are experiencing now opens the door for us to experiment, to leap into the unknown led by a generation of hope.  

That vision thing  

In these opportunities, brought about by an unprecedented crisis, I see the space to construct a new development vision for our continent. A vision anchored in the dignity of our people. A vision that looks to achieve our own moon shots of ending poverty, disease, and desperation, where our fates are decided in our capitals rather than those in foreign lands. And where prosperity Is not built by climbing over the backs of others but through our innovation and drive that allows us to stand on the shoulders of each other.  

My writing usually addresses dry development policy subjects like budgets, trade, and labour policy, but fundamentally development policy is anchored in a vision of a better future. For the last 30 or so years, those visions in Africa have been stunted by uninspiring inhuman aims such as achieving middle–income status or industrialisation. The pandemic allows us to once again centre our development visions on the dreams of our people. Visions that we can identify with, rally around, work towards together and proudly proclaim our individual roles however small in achieving those goals.  

Without an underlying inspiring vision, our development policy is lost. It is misdirected into white elephant projects, filled with other people’s priorities, and spelled out in consultant gobbledygook and buzzwords. The crisis of the pandemic offers an opportunity to reclaim and reframe Africa’s development vision, let us seize it.  

Which Way for Africa? Development Policy in a changing world

Global political-economic realities are shifting. China’s economic growth has slowed to its lowest levels in 26 years. And in the rest of Asia key economies such as India and Japan are also facing lower than expected growth. Germany, Europe’s biggest economy is cutting growth forecasts as the EU struggles to find growth and grapples with Brexit. In South America, the two largest economies of Brazil and Argentina are struggling with a recession and debt respectively. And while the US economy is riding high at the moment it is beset by recession fears, and dominated by nationalist sentiment. Politically, the geopolitical certainties that have defined the post-cold war world (a strong and engaged USA, a non-aggressive China, a stable Europe, powerful multilateral institutions, and global norms that are respected and adhered to) are crumbling. All of this implies that the global economy and geopolitics that will be less stable, less cooperative and more competitive, right at the time when the global challenges of climate change, inequality and poverty require cooperation and consensus.

These dynamics have significant implications for African policymakers and leaders. As Africa is confronted by a changing world, we need to change our approach to and strategies for our development. We must ask ourselves what these changes mean for Africa, and how can we, as African’s take advantage of the oppurtunites and mitigate the risks.

What does this all mean for Africa

For Africa, these shifting global dynamics have three significant consequences.

  1. The path to development exploited by the Asian tigers is likely closed. This path relied on increasingly open global trade and capital flows to drive export-led development and Foreign Direct Investment. Globalisation is under pressure from an increasingly protectionist developed world that is seeking to protect its own stressed working and middle classes by restricting trade (or engaging in trade wars) and the decline in the influence of global norms and institutions that had sought to broaden the reach of global markets. This means that development strategies based on the Asian model of export-led growth driving industrialisation, employment and growth are less likely to succeed.
  2. The increased geopolitical competition will see Africa become a stage for global power competition, as they search for access to new markets, resources and diplomatic allies. This dynamic is already in full swing if one looks at the competing Africa strategies of the USA and China and a new focus on Africa from the EU and Russia.
  3. The traditional multilateral forums and institutions, like the UN, World Bank and IMF that helped drive development and have in large part defined development economics and policies since the 1950s, are losing influence and relevance. This means (hopefully in my view) that there will be more space for innovative approaches to development.

A shifting approach

A changing world requires a changing approach to the world from Africa, including our approach to development.

More space for new thinking

As stated earlier, the global multilateral institutions that have defined development thinking for decades are losing their influence and thus relevance. Beyond this, the great powers (namely the USA, China, EU and Russia) are primarily focused on domestic issues like faltering growth, fractious populist politics, inequality, and geopolitical competition in the Middle East and Pacific. What this gives Africa is the ideological and intellectual space to redefine development. Rather, than follow the lead of the World Bank or try to copy the Asian tigers, we have the opportunity to Africanise development (something I have previously talked about here). To decide what matters to us, how African’s envision their future and how we are going to get there.

Internal markets

As globalisation falters and countries become more protective around issues of trade, immigration and capital flows, we cannot rely on global trade and FDI to drive our development, something that African countries currently spend a lot of time trying to attract. Furthermore, outside of Asia, there are no significant high growth markets where we can build demand for African goods. What this means for us is that we can focus more attention on our own internal markets. On policies that foster intra-African trade, promote the growth of SME’s, enhance Agriculture, investing in science and technology and face up to the challenges of climate change together.

Focusing on our own markets and fostering growth that isn’t dependent on western capital looking for returns or Chinese demand for raw materials, will likely prove to more sustainable over the long term. It won’t be instantaneous and no one should expect miracles in the short term, but African markets are one of the last underdeveloped markets with high growth potential if we do not take advantage of our own markets someone else will.

Engaging smartly with competing powers

As the world shifts from being a unipolar dominated by the west/USA to one where there are competing world powers and interests, African leaders would do well to learn from the lessons of the cold war, and not latch themselves to one side or the other for better or worse. Rather, we need to understand and engage with the West and East strategically and cooperatively, acknowledging our own relative weakness in terms of economic, political and military power and having very clear achievable strategic goals. Using, smart consistent engagement with world powers to get the capital we need to help fund development.

A whole new world

A changing world can be seen as a problem or an opportunity. For Africa, I see it as an opportunity. One where we can reshape the development of the continent to one that happens on our own terms with the benefits accruing at home. However, it will be a problem if we do not change our approach to engaging with the world and development in a new global context. We may find ourselves at the mercy of global powers, with wasted investment in development strategies that are not applicable anymore. For the opportunity to become reality will require a coherent vision and then the boldness and imagination to execute it from our policymakers. Something, I have no doubt the continent possesses, the trick will be to harness it.

Good communication is good policy

In 2017, in his Jamhuri day (Kenya’s independence day) speech, President Kenyatta of Kenya announced his Big Four Agenda. To enhance the manufacturing sector, to build 500,000 affordable homes, to ensure all Kenyans are food secure and to build and deploy a universal health coverage (UHC) system to ensure all Kenyans have access to affordable health care. Since then technical committees have sat and designed the requisite policies, regulations and actions needed to make this a reality. However, in a recent conversation, I had with someone working on the UHC policy, I was struck when told that without better political support, and funding; UHC in Kenya would remain consigned to the realm of flowery speeches. A policy that could save millions of Kenyans misery and bankruptcy will die a slow death for lack of money and support.

Africa does not lack for good policy. Around the continent, there are reams of policy that could genuinely change people’s lives sitting on shelves in the offices of government departments, think-tanks, civil society groups and universities, all of them gathering dust. In the world of policy, good policy is often stopped by two things political reality and financial constraints. Ambitious policy rarely ever survives the gauntlet that those two constraints pose. In a previous post, I talked about reforms that would enable governments to better implement good and ambitious policy. In this post, I want to take a step back and examine how we can get good policy to the stage of implementation in the first place with proper funding commitment and political support built using effective and persistent communication

 

Embedding core policy support

Policy has to be sold. To the public, to those who will implement it, to experts, to civil society, to the media and even to digital influencers. This selling is done via communication with all those stakeholders. Crucially, this communication has to start before policy gets to the implementation phase. Public opinion has (as Samantha Power once put it) a circular problem. Circular, because public opinion is rarely roused on its own, it is usually provoked by public leadership (e.g. political or other community leaders making something an issue), and public leadership is usually itself provoked by public opinion (e.g. public outrage at a particular issue provoking a political response). Thus, when done properly, communicating policy is a journey. A journey that first builds a base of support for the ideas and goals behind the policy and how it is relevant and beneficial among key stakeholders. A presidential speech or two and some articles in the newspapers are not enough, you need to engage people who will form the core base of support in forums, spaces, and channels where they are comfortable and attentive.

Getting public support

Once you have that critical base of support you then need to sell your policies to the two most important groups of stakeholders; the public and people within government who have to implement it.

Effective broad public communication is not merely a matter of adverts or getting a popular musician or sportsman to tout a particular policy. It is a multi-channel and messenger affair. Rather than telling the public that some policy is good for them, you need to engage people, from the mass media right down to community forums and door to door campaigns. That way you build an understanding of the policy, its goals and benefits at an individual, community and mass level. By successfully selling a policy to the public, you can bypass the political viability problem. When people quote political viability as a problem, they are usually referring to the lack of political support for a particular policy. However, by building public support through smart and inclusive communications, you can create political viability through public pressure. And with political viability and support, you have the ability to get proper funding.

The people within the government are usually forgotten in policy advocacy campaigns, but it is crucial that you get the support of the people who will be implementing the policy. Do they understand it, do they understand the impact it will have on the lives of their fellow citizens, do they see what role they are playing in bringing those positive outcomes to life. If the people implementing the policy don’t buy into its chances of success diminish significantly. The people in government who are implementing the policy need to understand and back the policy because they, they are also the people who have to defend and sell those policies to the public and political policymakers and if they aren’t invested, then the investment of others likely won’t follow.

Communicating Policy Implementation and beyond

Getting support for a policy is not enough though. Communication does not stop at implementation. Rather communication is an essential element of implementation. Stakeholders and the wider public need to know and understand what is happening with a policy that they lent their support to, to get it off the ground. They need to understand what progress is being made, the successes, and achievements of the policy. Beyond keeping people up to date, this allows you to make mistakes, to withstand the inevitable missteps that happen in all complex programs. However, because you have been open and upfront with your stakeholders and the public about those mistakes and clearly communicated solutions for these problems, you will be in a much better position to recover from any issues with an understanding public willing to cut you some slack.

Communicating policy in Africa

African governments can be singularly terrible at communicating policy. Policy generally comes as a surprise, presented as a fait accompli something from on high that is good for development and thus good for you and you better not question it. Which ends up with people being suspicious about those policies, and the people who are charged with implementation see it as just another order they need to carry out (or look like they are carrying out as opposed to being invested in the policy and its success.

Policy does not sell itself, even if it is fantastic. It needs to be communicated to all the people that will be impacted by it. It’s an often-overlooked part of the policy process, especially in Africa. Around the continent, it’s not just Kenya attempting to implement some form of universal health coverage. South Africa is exploring plans, Lagos state is set to make it mandatory, Tanzania has a political commitment to do so. As Africa explores and tries to implement ambitious policies such as these, policymakers and governments need to understand that part of good policy is good communications. That through effective communication they can build broad effective support for their policies and in doing so create the political will that will give them the political and financial ability to actually implement them properly.

Public Service Reform – Making African Governments Work

A key element in development is effective government. Lots of countries around the continent have policies, plans and blueprints coming out of their ears, many of them fantastic. The problem is actually implementing these policies. Furthermore, governments are not just implementing agencies they also provide a range of public services to their citizens. However actually using these services often means navigating a minefield of corruption, bureaucracy and inefficiency that is both demoralising and dehumanising. Effective service delivery is just as important as effective development policy implementation and at the centre of both is the public service and its failings.

This is not a new problem, and over the last three decades, we have seen multiple efforts (usually donor-funded) around the continent aimed at reforming the public service, to be more efficient, effective, relevant and cost less. The problem with many of these efforts is that they are top-down, often designed externally that do not properly consider the people that they are trying to reform or the people in whose name the reforms are being pursued. To effectively reform the African bureaucracies, we have to rethink how we think about public service reform policy.

What is the point?

As with any policy, public service reform must have a goal at its core. Goals that are understandable to the wider public and local in their origin.

Most public service reform efforts are highly technical focusing on cost driven issues around wages, performance tracking and enhancement and efficiency. These things are important, but they are not visible. And when reforms are not visible, they cannot be seen and felt by the public at large, which means the reforms will run into political and institutional resistance. Most studies of public service reform efforts emphasise the need to depoliticise the public service and get political support for reforms. However, while political support is useful it is not a necessary condition for reform. If the reforms are visible, understood and can be felt by the public then political support can be formed from public support rather than the other way round.

With this in mind, it is crucial to ensure that the goals of public service reform are not purely back office, metrics-based ones but goals that have an impact on citizen-facing services. This ensures that you can bypass political resistance and that the reforms are rooted in local concerns.

Reforming bureaucracy is about people

Often, when public service reform is talked about in terms that dehumanise it. It’s about reforming systems, and structures, the target is a faceless bureaucracy, which no one likes. That’s all good and well until you remember that those bureaucrats are people, with concerns and aspirations of their own, families to support and careers they wish to protect. Too often public service reform is something that is done to people rather than with them. If you want your reforms to stick you need to get the buy-in of the people you are trying to reform. The public sector has decades of experience in appearing to comply with or blocking action. If you want compliance and reform, then it requires that reforms be done with the people in public agencies and departments. They must have a voice, feel that their concerns are taken seriously and have the goals of the reforms explained to them. In short, you cannot do public service reform without the buy-in of a key stakeholder, the public servants themselves.

The second area in which public service reform is about people is culture. All organisations and institutions develop a culture, which informs how people view and do their jobs, and the goals of their organisation. The public service has a culture, an ethos. For sustainable public service reform, you need to change that culture and ethos. The first key to that is making the public service something to be proud of. Explain and emphasising the role that public servants play, and its potential to make a positive impact. Working in the public service shouldn’t be something that causes others to roll their eyes or make jokes, it should be something people can be proud of. In doing so you can start to create a new culture of service and excellence, and that is precisely the culture we want in the public service.

Efficiency is fine, results are key, transparency is a must

As stated earlier, often civil service reform efforts focus on efficiency, which is important, but results are key, particularly results that people can feel and see. I know I have made this point previously, however reforming bureaucracy to be more efficient is useless when citizen facing institutions are services are terrible. Thus, efficiency is fine, but visible results are key.

On top of visible results. Public accountability and transparency are key to reform. If the government remains a black box, reforms will never take. In addition, it discourages bad behaviour by making those actors and agencies accountable to the public and their peers.

The best, the brightest… and the youngest

If public service reform has people at its core, the recruiting the right people is critical and recruitment can take advantage of Africa’s young people who are driven to solve problems and build a better future. Taking advantage of our best and brightest, of talented young professionals and university graduates. Recruiting and integrating them into the public, creating a new generation of motivated, professional and skilled public servants who can form the core of a reformed public service.

A great example of this is Liberia. After fourteen years of civil war by the time, Ellen Johnson Sirleaf became president the country was a mess, and the public service was a nearly broken institution. Recognising this, President Johnson started the President’s Young Professionals Program a two-year program “that recruits and places recent Liberian university graduates in important government roles and provides them with training and mentorship as they support the government’s top priorities”. A 2016 report by Princeton University showed that program had been immensely successful, and that “About 90% of the program alumni continue to working government and or are studying abroad on government scholarships. A few fellows have risen to become departmental directors or assistant ministers.” The Liberian example shows that attracting young talent into the public service is not only possible but with the right mentorship and training, they can make a real difference. Around the continent, we produce over 10 million graduates a year, half cannot get a job. While the government cannot employ all of them, the government can hire the best and brightest without nepotism or political consideration but on merit. One feature of public service reform is hiring on the basis of merit, whether it was the introduction of exams in imperial China 2000 years ago or U.S. Civil Service reform in the 1880s. There is no reason we cannot follow suit and recruit the best and brightest of our youth not just to help drive reforms but incubate them for the long-term.

Africanising public service reform

If we want to implement our development programs, we need an effective public service. If we genuinely want public services to be accessible and effective, they do require reform. These reforms must not only cut costs and improve efficiency but improve accountability, transparency, with people, their culture and most importantly results that positively impact the public at its centre. In other words, we need to Africanise public service reform policy itself because after years of trying we have learned that copy-pasting solutions without contextualising them to Africa never works.

Other than a policy aimed at hiring young people, I have tried to stay away from advocating specific policies. This is because while the challenges facing public service reform may be similar in many African countries the local context also makes them wholly different. What’s needed is a policy approach from which solutions can follow. An approach that recognises that public servants are citizens and stakeholders in the process of reform, that the culture of public service needs positive change, that the public needs to see concrete results if they are to support reforms and that transparency is crucial if the reforms are to stick. Despite all the failed attempts at public service reform, I don’t think it’s hopeless, I think we just haven’t tried the right approach yet.

 

Avoiding Demographic Doomsday: Redefining Employment in Africa

One of the central challenges facing much of Africa is unemployment, in particular youth unemployment. The African Development Bank estimates (see figure 1) that of Africa’s approximately 420 million young people (aged between 15-35) only one-sixth (16.6% or 70 million) are in formal employment. One-third are partially or vulnerably employed, and half are not employed at all. That means 140 million young African’s are at risk of losing their job at a moment’s notice and 240 million have no job and little prospect of one.

(fig.1. source African Development Bank)

This is a disaster. Half of Africa’s youth, their potential contributions to society and personal dignity and well being, is wasting away. Is it any wonder that these young men and women are risking life and limb on horrific journeys to try and get Europe for the prospect of a better life?

This though, is only half of the story. Africa’s youth population is expected to double to over 850 million by 2050. If the continent cannot find a way to harness the potential of its youth, then the continents demographic dividend could turn into a demographic doomsday. As young unemployed Africans with no stake in the economy and no prospect of a better life turn to dangerous radicalism, extremism or crime as a way out; migration will be the least of our worries.

Thus, the question becomes how do we avoid this demographic doomsday scenario? One answer is to rapidly grow the formal economy and employment via industrialisation. This is the path that much of the continent is trying to pursue. Investing in infrastructure, ease of business reforms, business incentives and trade expansion, all aimed at spurring economic growth and employment. Frankly, it has not been enough. While growth has been positive it has not been at the rate we need, and not nearly enough jobs have been created.

What is needed is a policy for the biggest non-agricultural employer on the continent, the informal sector. The majority of those in informal business (and many with jobs who have a side hustle) depend on the informal sector for their livelihoods.

Alongside agriculture, the informal sector is the foundation of the African economy and its time our policies and laws caught up to that reality. Doing so would help solidify fragile livelihoods as well help drive growth and opportunity in the economy. We can start by changing our laws to redefine employment to include the informal sector and investing in the skills, knowledge and capabilities  of those in the sector.

The Informal Sector in Africa

The informal sector can be broadly defined as activities or enterprises that produces and sells good or services but are not formally registered and do not pay taxes.

The International Labour Organisation (ILO) estimates that the informal sector represents 41% of GDP on the continent and 66% of total employment in Sub-Saharan Africa and 52% in North Africa, and that eight in ten (80%) of young workers end up in the informal sector. These figures tell us an important fact about the reality of employment in Africa, that most people earn their livelihoods through their own ingenuity and drive, hustling, and either working for or running small enterprises, they don’t have an employment contract or get a pay check. Thus, the laws, regulations, and protections of labour and employment laws are irrelevant to them. The second key thing that stands out about Africa’s informal sector is its resilience and adaptability. It has survived the ravages of one party States and dictators, near collapse of the economy in the 1990s, endemic rent-seeking and corruption, changes in weather patterns and the cycles of economic booms and busts.

It is time that government policy focused on enabling, harnessing the sector by integrating it into the wider economy, not at the exclusion of wider policy goals such as industrialisation but as part of it.

Redefining Labour and Employment

The first step to integrating the informal sector and the people in it to the wider economy is through legal definition and recognition. Just as labour and employment legislation across the continent recognises, regulates, and protects people in formal employment; similar legislation for informal sector could provide the people and businesses in it with legal protection and a foundation upon which they can build and grow.

Informal sector legislation and policy would not simply be applying the rules of the formal sector to the informal sector (which would be ignored anyway); rather it should be crafted for the needs of the informal sector and would include the following:

  • A valid legal definition of an informal sector business and job with a simple way of registering it. Registering an informal business should be as easy as getting a SIM card or a mobile money account. The goals are not to tax or regulate the sector but for registration to be a gateway to the enabling and protective elements of the laws and policy.
  • Simplified contracts and small claims courts. A constant risk in the informal sector is that you do not have the protection of the law, if you make an agreement with someone to buy or sell something it is based on their word alone. Providing a simple contract template that all can use gives buyers’ and sellers’ basic rights (such as refunds on non-delivery of goods or services). A small claims court to enforce disputes under these specific contracts quickly (rather than the expensive, laborious and slow normal court system) would engender trust and facilitate business.
  • Banking and credit access. Make it possible for informal enterprises to use their registration to open bank accounts, access credit and use their assets (e.g. a motorbike) as security for loans.
  • Provide access to national health, pension and welfare schemes. Most national health, insurance, pension and welfare schemes are based on a (formal) employee contribution model, where a portion of your salary is contributed to various schemes. On a continent where most people are not in formal employment it means that these schemes are underfunded, and many do not include everyone. Providing a way into these schemes for the informal sector like a simple subscription or yearly fee would be a way to both expand them to the wider population as well as boost their funding
  • Allow informal employees and businesses to organise. Allowing the informal sector to form co-operative societies, unions and associations would open new avenues to credit (through the pooling of savings in co-operatives), better working conditions and more powerful voice to advocate for their interests.

Legal definition and recognition opens the door to the protection and progress of the livelihoods that depend on the informal sector. Laws may be boring, but they are crucial.

Capacity Building

Legal recognition is only half the equation, for the informal sector to move from being a source of subsistence for individuals to a source of growth for the economy. Africa needs to give the people in it the tools, skills and knowledge to create, recognise and take advantage of opportunity.

The first aspect of capacity building is coupled with legal recognition. Changing laws is ineffective if the people they are aimed at are not aware of the changes and how to take advantage of them. Thus, the capacity building exercise would be a public education exercise, focused on making people within the sector aware of the changes and how to take advantage of them.

The second is around skills and knowledge training. Putting together programs that train people on key aspects of business administration, opportunity identification and marketing, crucial skills needed if they are to successfully invest and expand beyond subsistence.

The Informal Economy as an Opportunity

Most policies that African governments have come up with around the informal sector are focused on formalisation and extracting taxes and most policy around employment growth is focused on expanding formal employment. While these goals make sense, they ignore the reality of the crucial role that the informal economy plays in livelihoods and the economy of Africa.

Employment in the informal sector is not wrong or inconvenient, it is normal for Africa. And, for Africa’s development to be truly African it must not only be led by Africans but work for the majority of Africans, many of whom are employed in the informal sector.

Few if any of the development initiatives pursued by governments and institutions across the continent are aimed at furthering this sector. This approach ignores and underserves a sector which has been the foundation of the African economy, which has, since independence proven to be resilient, innovative and frankly, African.

Redefining employment in Africa to recognise and support the informal sector will not hamper or stop industrialisation or the growth of formal employment. Rather it is about understanding that the giving the hundreds of millions of Africans whose lives depend on the informal sector a stake in the economy and the opportunity to grow, is not only good for the economy it is good for people, and if that is not what development policy is about it is what it should be about.

 

Development or democracy? A false choice that creates bad policy

“We spoke and acted as if, given the opportunity for self-government, we would quickly create utopias. Instead injustice, even tyranny, is rampant”. – Julius ‘Mwalimu’ Nyerere

There is an ongoing debate fuelled by the perception that democracy has not delivered the development that was promised during the 1990’s and early 2000’s when many African countries bowed to domestic and international pressure and instituted multiparty democracies. The argument centres on the fact that while many countries have seen some economic growth it has not been nearly enough, and the continent continues to be plagued by persistent poverty. That if you look at the fastest growing economies on the continent, such as Rwanda and Ethiopia, they have strong leaders, who can push through big reforms and policy without all the political horse trading and gamesmanship that usually kills them. They then point to East Asia, pointing out that China, South Korea, Taiwan and Singapore all developed under some form of authoritarian regime. In short, the argument is that by putting democracy before development Africa has put politics before development.

This, in my view, is nonsense, development at its core is about improving the conditions of people so that they may live their lives with dignity (I develop this more fully in this post). For that to happen policy and policymakers have to be responsive to the needs of their people and the people need to able to hold those wielding power to account. It is the only way to ensure that development remains the goal rather than the personal goals of the benevolent dictator in charge.

The arguments against democracy, and why they don’t apply

The argument most often trotted out in favour of benevolent dictatorship in the development vs democracy debate is what I call the Lee Kuan Yew argument after the former authoritarian prime minister of Singapore who charted the city state’s extraordinary development path. The argument is; that like Lee Kuan Yew, authoritarian leaders can commit to policies that ensure political stability, the rule of law and economic transformation. My response to this is simple, while Lee was ruling Singapore the vast majority of Africa was being run by a succession of autocrats, dictators, and despots. From Mobutu, to Amin, to Houphouët-Boigny, to Moi etc. (one could go on for quite a while with such a list), none of them brought long-term political stability, rule of law and economic transformation to their nations. Almost all of them were corrupt, saw the law as a suggestion, fostered division rather than national identity and enacted haphazard polices that privileged short-term personal and political interests that slowed, stopped or reversed development. The evidence from authoritarian rulers in Africa, Latin America and Asia shows that Singapore is the exception not the rule and Africa cannot afford to return to that.

The second argument brought to bear is that of East Asia. Many point to South Korea, Taiwan, China and Singapore who all achieved significant development under some form of authoritarian regime. However, this argument ignores the significant differences between these states and their African counterparts. First, apart from Singapore these states are relatively ethnically homogenous with a cultural and national identity that goes back centuries if not millennia, with a common history, culture, identity and language it is easier to forge a national consensus. Secondly South Korea, Taiwan, and Singapore were all key strategic U.S. allies in the cold war. This meant that not only did they get significant economic assistance the West was willing to turn a blind eye to policies that they would have (and have) lobbied against in other countries that were key to the East Asian economic miracle, such as import substitution and the protection of domestic industries. Third, they all had ways of keeping leaders accountable in some way or form, in China for instance one must rise through the party and when in leadership you are accountable to the party. It’s not perfect but it enforces discipline and has broader goals than a singular despot.

Democracy as policy

So, what does democracy have to do with development policy? In my view the link is clear, democracy makes policy makers and political leaders accountable to the people. Thus, to gain and retain political power they must respond to the needs of the people. However, this does not seem to be the case, as voters on the continent are more frequently mobilised by ethnic or religious politics than by debates around the best path to development. However, the answer to this is not to get rid of it, rather it is to make democracy better. For the past 30 years democratic reforms on the continent have tended to focus on the man (it is almost always a man) at the top or the elections themselves, rarely on citizen participation, particularly informed participation. For development policy to meet the needs of people it must be responsive to the people themselves, and the answer to this is to look beyond elections. Elections, the act of regularly choosing our leaders in a fair process, are vitally important to democracy but they should not be the only feature. When that happens, it leads to what we see in Africa today, where the political debate and climate is focused on winning the next elections. Regular citizens tend to be forgotten until the next election campaign comes around. Thus, to my mind what is needed is a way to ground policy in views and needs of the citizenry.

In Botswana they have something called a Kgotla. A public meeting usually headed by the village chief, in which deliberations are conducted and decisions are arrived at by consensus. All residents in a village are entitled to attend and can speak. The results of these deliberations are then used to form the basis of district development plans and the 5-year National Development Plans, which are then passed by parliament as legislation that guides government policy. Since independence Botswana has not only experienced stable democracy but has also been the African economy that has grown the fastest and most consistently since independence. This has been in large part due to good leadership, which holds itself and its policies accountable to the people they govern. Unlike election campaigns where politicians promise things to people and we have to hope they can follow through while in office, this system of citizen participation ensures that the voice of the people, their concerns and their priorities are not only heard but are an integral part of the policy making process.

Vox populi vox dei – the voice of the people is the voice of god

When it comes to the democracy vs development debate, I do not see a debate, I see the wrong question. The question should be, how does Africa improve its democracies to make them more responsive to the needs of her citizens. One clear way to do that is to proactively ground the policy making process in a democratic process. To create a process, which doesn’t just invite people to comment on legislation (which some countries have) but actively seeks the views of the people whom the policy will affect. For instance, if a country wants to come up with a new agricultural policy it will actively go out and seek the views of its farmers from the subsistence farmers to the industrial farmers in an open and deliberative process that allows farmers to explain the challenges that face them and their ambitions for their farms, families and communities. This would help create a policy in which they have a stake and are willing to work for and with. More broadly by grounding the policy process in a democratic process it could make policy in Africa something that is done with, by and for the people rather than to the people, and achieve real development.