Governance - a victim of crime?

Governance is an important part of a nation’s brand, particularly with regard to attracting foreign investment. The annual Ibrahim Index of African Governance, looked upon as a credible calibration by the international community, was released on Monday, when South Africa saw its ranking move down to 5^th place due to high levels of crime, despite high scores in public management and most other areas.

Mo Ibrahim foundation board director Mamphela Ramphele commented that, "South Africa is in the Top 10 in every other category... but [with crime] we are lounging down there with the Somalians of this day and Zimbabweans. It's not a pretty place." In fact, in the personal safety sub-category, South Africa was ranked 44^th – still above Cameroon, Nigeria, Chad, Mauritania, Zimbabwe, Sudan, the Democratic Republic of Congo and Somalia, but not exactly where the country wants to be.

Crime’s been a target area in South Africa for the last twelve months, given the country’s hosting of the FIFA World Cup amid global concerns about safety. So why the drop? Is the issue policing, poverty or politics? Ramphele identified the root of the problem in the "political culture" of countries: "In our country, South Africa, we have fantastic policies but the performance doesn't always match the policies.”

She draws a parallel between business and government. Activist shareholders keep businesses in line. What we need is citizens’ involvement to drive better governance. But for that you need citizens with the same interest and stake in their government as a shareholder does. In a country where 95% of the population don’t pay taxes, 95% of the population have no reason to fight for a system that makes better use of their money.

But what does the future hold for driving governance, and who are the leaders who are going to ‘up’ the calibrations and raise the rankings on a pan-African scale?

The Ibrahim Prize for Achievement in African Leadership was not awarded in 2010 for the second year running, with no candidate that promoted excellence in leadership. It will be interesting to see how initiatives like the African Leadership Network build a more cohesive community of leaders for the community that might raise the rankings and compete for the award.

Meanwhile, does South Africa forge ahead trying to tackle crime in an isolated manner, or will the country use this as a benchmark for treating the root cause of poor governance overall?

Private Sector Development in Africa – Perceptions and Realities

Can the private sector really be a driver creating opportunities for people to escape poverty and improve their lives? In theory, private sector development should be the ultimate driver of socio-economic development through job creation and its contribution to economic growth. In practice, several factors such as perceptions of Africa, insufficient policy frameworks and dependence on international aid have resulted in limited private sector impact to date.

After working in Africa for a while, one easily forgets that many outsiders still have a very “Live Aid” image of Africa. They do not know it as a region with one of the highest growth rates and a rising, well-educated middle class, but rather think of it as a place of war, famine and corruption. This persistent perception, despite recent progress and achievement, also disempowers Africans, engendering a sense of ‘passive victim’ rather than ‘accomplished entrepreneur’.

Investors who take the time to understand the continent and its opportunities tend to be well rewarded. The British firm Tullow is probably one of the most striking examples. Not too long ago, it was still a smallish outlet but its investment and belief in the African continent has already triggered the fundamental transformation of two economies and thereby the success of its own operations. The investment Tullow made in oil exploration in Ghana and Uganda has led to significant discoveries that have spelt a new and lucrative future for both countries.

Apart from the abundant natural resources found in most of her countries, Africa is also touted as the potential food basket of the world. Agriculture accounts for more than 50% of GDP and up to 90% of employment across much of the continent, but productivity remains low. And while there has been much talk about transforming the sector, the reliance on subsistence and small-holder farming has proven more than a stumbling block to developing diversified economies with higher levels of income, than an opportunity in itself.

For private sector development to work, African countries and its development partners need to create policies for commercially viable markets while promoting their country’s image and competitive advantage. An example of this is Kenya; after the arrival of a new high-speed internet cable, recognized the opportunity for Business Process Outsourcing (BPO) through the pairing of enhanced connectivity and its relatively large base of well-educated workers.

Ultimately, the promotion of value-add industries and the development of the required policy frameworks and infrastructure will allow the private sector in Africa to make significant progress in its development and contribution to job creation and poverty alleviation. The classic example of trying to sell chocolate as a finished product instead of selling cocoa as a raw material has lost none of its appeal.