The Growing Supply of Good Governance

Government in Africa is a changing landscape. Changing in its players, of course, but also changing in its dynamics and prevailing ethos. Running through that landscape is a path of good governance, commitment, and capability. That path, once narrow, is growing wider.

As mentioned above, expectations are a driver of the quality of governance. The replacement of bad governance with good ultimately has as much to do with resetting expectations as with any formal interdiction. The interdiction will never stick, so long as the expectation remains.

Expectations are changing, particularly at the senior level, where governance intersects with popular politics. The democratic reforms discussed in chapter 3 have combined with the Arab Spring to create more pressure on senior leadership to deliver results. “For a long time, governments benefited from low expectations. It was in the interests of many in government to basically say, ‘Things really can’t be better, so let me get back to taking my share, ’” said James I. Mwangi. “People now see that things can be a whole lot better, and they expect their government to help deliver it. My hope is that in the next few years you will see a shift from government being seen as the path to wealth and advancement, to government being responsive to what delivers development and responsive to business needs.”

Sam Jonah’s top lieutenant, John Barton, has noticed the change in Liberia and Zambia. “When a government leader steps out in opposition to corruption, ” he said, “as President Sirleaf has in Liberia or President Sata in Zambia, it begins to change that expectation, both from the top down and from the populace towards the government.”

At the same time, senior positions are increasingly held by technocrats with both the skill base and the disposition to deliver good policy. While the trend is not universal, it is vastly more widespread than it was twenty or even ten years ago.

That change is demonstrated in Ken Njoroge’s experience winning the farmer subsidy contract in Nigeria discussed in chapter 4. I asked Ken about that contract because it seemed to me a multimillion-dollar tender run by the Nigerian Ministry of Agriculture would be a poster child for poor governance. Ken reports just the opposite. His story is compelling:

I’ve had a very different experience from what you might expect. I was flying economy to Nigeria, and by the bathroom we bumped into this guy who took an interest in what we were doing with mobile payments. Here was a Nigerian agronomist working with a think tank in Kenya and thinking, “Surely, the payment technology they’re developing here can be applied in agriculture.”

We started chatting and I said to him, “Forget about what the technology can do, let’s define the problem. What’s the problem? ” We had to pinpoint it. We started sketching the fertilizer sector in his notebook and we talked for over an hour. At the end, he suggested he arrange a meeting with the governor of the Central Bank in Nigeria. I was a little bit skeptical—you know, both of us are in economy class. But we agreed we would e-mail each other. On a Saturday, he called me and he said, “Look, I didn’t mention it to you but when we met I was on my way to Nigeria to be confirmed as agriculture minister. That’s done. Now I am the minister.”

That the minister of agriculture is not a political insider, but rather a technocratic agronomist, speaks to changes occurring in Africa. The rest of Ken’s story points to the widening path for good governance:

He invited us to Nigeria to present. And just as he had said, there was the Central Bank governor along with several ministers and a state governor. For me, that meeting was so profound. To understand the leadership in a country like Nigeria is not just politicians. They’re technocrats. They asked questions about farmer income, looked at the production of food, asked in detail about what the technology is and where it had been proven before. When they were done, they asked, “Can this be ready in time for the next farming season? ” and we said yes, we can do it in five months.

At that point, a man from procurement objected that the procurement process alone would preclude that timeline. The group asked whether he would stand in front of the president and explain that the solution was not in place this season because we sat in this room to argue process. We agreed the solution would need to be in place five months hence, in March. That’s exactly what happened.

Changes in governance that occur at the top penetrate slowly into the rank and file of civil service. The ministries represented in that meeting with Ken may not always be as focused as the meeting at the top. But the expectation leadership sets is the sine qua non for that change to occur.

Once expectations for governance do begin to change, they affect all players, and government’s expectations of companies have changed as well. Jay Ireland experiences expectations from African governments that may surprise some. “When I engage with African governments today, ” Jay said, “a principal concern of the government is whether a company is just in it for the short term, looking for a transactional gain and that’s it. They’re especially concerned if you don’t bring long-lasting employment and growth in the economy.”

I pressed Jay a bit on whether that was really the primary concern he heard from government, even in private. “Yeah, that’s what they think about, ” he said. “A lot of people in African government have been abroad, and have seen how it can be. Basically, people are exhausted with not getting what they pay for. That drives more accountable governments, and the preparation of better RFPs.^* They’re the ones demanding more transparency from us, on the supplier side, in terms of what products we’re selling and how we’ll deliver training, localize service, and build a long-lasting presence.”

Systems Taking Root

As expectations rise for improved governance, the systems that enable that governance also have to grow stronger. Business leaders succeeding in Africa have experienced strengthened systems of governance at the technical, institutional, and strategic level.

Technology contributes to good government not only by increasing its speed but also its accuracy and transparency. “Today we have digital clearance of customs in parts of Africa, ” noted Jay Ireland. “You swipe your documentation, and it goes into the system. It’s not just efficiency. The more you move humans out of a process, the less there are chances for error or corruption.” ECP’s Tom Gibian described a similar experience on the northern edge of the continent:

If you’re using software for your inventory and you’re using cranes that can remember where they put something, versus writing it down in a ledger, technology can create efficiencies; capital can create efficiencies. We saw this happening in Egypt, where the government has said new ports will not have unionized custom officials, which lets them modernize faster. In order to get people to make private investments in port facilities, they have had to agree to create a customs infrastructure that will be not dragged into the preexisting muck.

Institutional systems that work well reduce the scope for human inconsistency, including corruption. Functioning institutions also widen the space in which one can operate predictably and cleanly. Centum CEO James Mworia reflected on business in his father’s day and his:

We’ve had a big man mentality in Africa a long time. I remember in the days of Moi, ^* whenever any big business would come to Kenya, one of the most important visits they would make was to State House to see the president.

I have been CEO since 2008. We’ve grown from six billion to twenty billion shillings in assets, ^† and we’ve made significant investments in regulated industries. I’ve never had to see a minister to work around a system. I don’t even know them. I don’t need to.

We are building a high-density development on a large parcel of land on the outskirts of Nairobi. Yet, I never had to see anybody. I put in my application, we submitted our documents, and they were reviewed by the zoning committee as per procedure. We never had to pay a bribe and now we are carrying on with the project. There has been so much change in this regard, but there’s probably a perception issue internationally and even among some people locally. Some people don’t realize how much this has changed.

In Mo Ibrahim’s experience, change has extended even into the courts, institutions that many would assume are a bastion of poor governance on every dimension. He describes his experience in three African court systems, litigating against the government itself. While few businesses wish to be in litigation with the government, it’s worth noting that Mo felt he could bring suit and win:

We have taken at least three governments to court in Africa and we won every case. In Zambia, for instance, we were asked to hand back some bandwidth, because of an alteration to our license. We refused because we had a clean agreement with the government, won in open tender. Our country CEO called me and said, “We’re going to court.” As it happens I was invited to a lunch with the president of Zambia that day. I went off to the luncheon and told the president, “Well, sir, guess what? We’ll be testing the courts in your country.” I explained the situation to him and he said, “You’re absolutely right to take us to court.” He let it proceed as normal. We had that experience in Zambia, in Malawi, and in Chad, and won in all three courts. People should not think that Africa is the Wild West. What happens when you take the government in China to court?

Not every business leader is prepared to rely on courts in Africa. Many build into their contracts an alternative dispute-resolution mechanism such as binding arbitration in a neutral venue. Nonetheless, Celtel’s experience, even in a remote market like Chad, speaks to the widening path of good governance.

Good government can be seen even at the most strategic level, in ways that have a material impact on businesses. Chapter 2 describes the effect that the Kenyan government’s Vision 2030 has on James Mworia’s ability to raise capital for the Two Rivers development. James is not the only one who speaks of that strategy. Unsolicited, Kenyan CEOs raise it, reference it, and plan around it. Leaders in other countries emulate it.

I asked Centum’s James Mworia why. “Typically, visions like that are used to politically hoodwink people, ” he said. “With this plan, they get done.” He continued:

If I look at the economic pillar of Vision 2030, there were key infrastructure projects identified. The expansion of the Thika highway—that has been done. Upgrading the airport—that is being done. Upgrading the Port of Mombasa—that is being done. The Lamu pipeline—that is underway. There was a political pillar, and part of that political pillar was enactment of a new constitution. That has happened. There were constitutional offices like the attorney general for which fresh appointments were going to be made. Those have happened. There was going to be a vetting of the judges. That has happened, very publicly.

Because so much is being created anew in Africa, there is ample opportunity to execute plans very visibly, or to fail to do so with equal visibility. When empowered constituents begin to depend on government’s plan, it reduces the opportunity for poor or arbitrary decision making or no decision making at all. While no plan eliminates poor governance, a good plan grows the space in which sound decision making takes place.

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