What Holds Us Back: Paternalism

Once U.S. companies are on the ground, African business leaders report their opportunities can be undermined by a posture of paternalism. If Chinese business leaders succeed in Africa in part because they confer dignity and equality in their relations, American businesses are sometimes hurting themselves with the opposite. “The U.S. relationship is influenced by the past, ” said James Mwangi. “You treat Africa the same way you did in the ’60s and ’50s, but we have changed.” Ironically, the change to which James refers comes from America:

You have provided a huge opportunity for Africans to get the best education, as good as the best that is being offered to American children. The young African executive, to a great extent, has been educated in American universities. His culture and socialization is very different from that of the people you dealt with in the ’50s. Yet you want to treat that Harvard graduate managing an African operation the way you treated his father, who was educated in a mission school in Kenya, under the lien of colonialism. Africa is changing faster than America is willing to change your practice and style of engagement.

James has seen the adverse effect on U.S. businesses in his own sector. Speaking of information technology systems in the banking sector, James said, “The American technology is of superior quality, much better than the technology from the East. But the pride and dignity of our people is priceless. People are willing to pay the price of lower quality if their dignity, respect, and esteem are upheld.”

The perception of American businesses as sometimes being paternalistic is not entirely their own doing. It is due in part to a lingering perception of U.S. public policy and diplomacy. Fairly or otherwise, many successful African businessmen perceive arrogance in some of the ways our government engages Africa. “When the Americans or American-controlled institutions come, ” said James Mwangi, “they interact with our African governments in this way that is quite weird. They do not say, ‘What do you need? ’ as the Chinese do. They say, ‘This is what you need.’”

Tony Elumelu feels that the tone of U.S. engagement can sometimes be demeaning in a way that has adverse effects on U.S. business interests. “When American presidents go to China, they talk about trade, ” he said. “When they come to Africa, they lecture us. They need to engage better, including with the African private sector.”

James I. Mwangi described a manifestation of this phenomenon in the way the United States treats Africans after they finish university in the U.S. “The U.S. has a resource in Africans graduating from top American schools, ” he said. “If the U.S. were more open to them staying and working in the U.S. for a few years, you would get several years of good utility from them. It would also cement a really favorable impression of the U.S. with many of the people who will be leading Africa in the future. That would serve the U.S. better than frog-marching these graduates directly to the airport upon getting their diploma, which essentially is what has been happening ever since 9/11.”

To be fair, the Obama administration has sought to shift the official dialogue to a more commercial footing. On June 14, 2012, the White House announced a new U.S. Strategy Toward Sub-Saharan Africa. The new strategy particularly emphasized spurring economic growth, trade, and investment. Secretary of State Hillary Clinton spent two weeks visiting nine countries across Africa to promote that agenda of increased U.S. economic engagement with the continent, accompanied by executives of U.S. companies.⁴ As of this writing, far-reaching immigration reform is moving through the U.S. Senate. If passed, it is likely to dramatically enhance the opportunities of highly trained Africans to work in the U.S.

Further, the U.S. development program includes several high-profile agencies whose mandate is precisely the facilitation of trade and investment, not charity. The U.S. Overseas Private Investment Corporation, the U.S. Exim Bank, and the Millennium Challenge Corporation each represents a significant apparatus of U.S. policy that promotes trade, investment, and a relationship of equals.

Despite these measures, many of the successful African executives I know think of U.S. government engagement in Africa as consisting of only one tool: charitable aid. I once accompanied ten African CEOs in a meeting with the Millennium Challenge Corporation (MCC). Founded by George W. Bush, the MCC is a great organization that finances development specified by the recipient country, including representatives of the corporate sector in that country. Shortly after the meeting started, the senior executive on the MCC side could sense there was some confusion in the room. To his great credit, he paused the meeting. “May I ask how many of you gentlemen have worked with the MCC?, ” he inquired. None of the CEOs raised their hands. “May I ask how many of you had heard of the MCC before this meeting was scheduled? ” None raised his hand. “Thank you, ” he said. “This is a very enlightening moment for me and for my staff.”

Though few Africans mention it, I believe one reason this perception of paternalism persists is the close association of the United States with Europe. In describing “U.S.” attitudes, several African CEOs described actions and policies actually promulgated by European countries. More than one CEO referred to an incident in which a diplomat is purported to have said the corruption of senior figures in the Kenyan government was tantamount to “vomiting all over the shoes” of Western countries. The diplomat in question was in fact British, but the story is nonetheless told and retold to reflect the arrogance of all Western countries, including the U.S. In this regard, the broad brush with which we once painted Africa is wielded as easily on us.

The benefits of U.S.–European coordination in development and in Africa policy are real and overwhelming. However, it is also true that the European relationship with Africa has roots in a colonial past. For many Africans (and Europeans), that past is very much alive today. The U.S. can lead its allies in establishing a new paradigm rooted in a relationship of equals. Policy makers would be well served to vet every policy and every communication with an eye toward reinforcing that new paradigm.

American businesses can also lead in setting the tone of interaction with Africa. When Tim Solso traveled to assess the opportunities across Africa, he went on a listening tour, mostly listening to Africans. And he had the humility to see where Cummins needed to change. “Being around African CEOs and listening to them talk about what their challenges are and what successful strategies work in Africa was incredibly helpful, ” Tim said. “I had a previously scheduled trip to South Africa, Zambia, and Zimbabwe, where we had distribution, and I could see how bad Cummins was doing and that the model, if you could call it that, was exactly what the African CEOs said would not work.” Tim is frank in his assessment of his company’s operation:

Basically, the old Cummins has a distribution system that was owned by a European trading company run by expatriates. Following my meetings with African CEOs, when I went I could see we were suffering from this colonial leftover or residue. The people that we had representing Cummins were expatriates, not Africans, and many were at the end of their careers. They were just going through the motions. We had centralized decision making, so decisions about Africa were made in Columbus, Indiana. I also saw that each country was operating on its own, whereas the African CEOs I know had told me they organized by trading regions. And then, finally, I saw we were doing no training at all on service.

Based mostly on what I learned from the Africans, we put in place two pillars of our strategy. We established five regional operations based on trading blocks. Within each region, we could see what our mix of business was going to be, and our priority countries. We also rethought what would be decided in corporate headquarters and what would be done in the field, with the vast majority of decision-making capability moved to the field. We replaced a lot of the European expatriates so that those decisions would be made by Africans, mostly in their own countries.

We also made a massive commitment of resources in finding people and training them to service our equipment. We realized that if we could take care of African customers quickly, it would be a huge differentiator. I was in Lagos, Nigeria, and we had lunch with a very small customer there, a plastic extrusion plant that manufactures lawn furniture. I was seated next to a woman who was the plant manager. She operated the factory 365 days a year, twenty-four hours a day, and about 90 percent of her power came from generator sets. At the start of lunch, she would not buy a Cummins generator. By the end, she said, “If you could have a technician that knows what they’re doing with the right parts at my factory to fix the gen set in two hours, I’ll buy your sets, no one else’s, and I’ll pay you whatever you want.” That stuck with me. In many of the markets in Africa, service capability is nonexistent. If you can deliver service, you massively differentiate your products and your company.

Building up a service capability across an entire continent takes time, and Cummins committed to the long term. “Each of our businesses committed $15 million over five years, for a total of $75 million with no expectation of return over that time, ” Tim said. “A large portion of that investment is going into training that local workforce.” It is that commitment of time that may most distinguish success in Africa from failure.

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