Towards More Productive Public-Private Sector Engagement In Africa

by Michael Ikpoki | November 6th, 2017

In September 2017, Michael R. Bloomberg hosted the Inaugural Global Business Forum in New York. The meeting provided a platform for World and Business Leaders, including 50 Heads of State and 250 International CEOs (also from Africa), to discuss innovative and collaborative ways to address challenges and explore new opportunities towards global economic growth. There was consensus that increasing genuine dialogue and productive partnerships between the public and private sector can generate realistic, practicable solutions to difficult societal problems. Such dialogues will encourage business leaders to think about the larger societal challenges and enable co-created solutions with Governments including new investments in social services and infrastructure among others. With investments, resource management, new services, solutions and attendant wealth creation, private sector represents the engine of economic growth. However, businesses can only thrive in growing, productive societies.

What was striking to this writer on this Global Business Forum was the sheer candour in the discussions. Key private sector players in the United States of America were fiercely critical of the position of the U.S. Government on issues such as climate change, immigration and isolationism. Indeed, the private sector was championing new independent initiatives in these contentious areas. In thinking aloud about a similar kind of event in Africa, it is obvious that the language from the private sector is likely to much more measured and less audacious on contentious issues with Government. The reason is obvious. We have big Governments and Regulators in Africa who can wield a big stick against companies making politically “incorrect” statements. Most companies chose to err on the side of caution.

In Africa, It is generally acknowledged that the top risks to growing or aspiring businesses is the risk of misapplication of policies/regulation and a culture of self-serving politics. All of this adds up to create an environment of uncertainty that is not friendly for businesses. To restart the economic growth engine in Sub-Saharan Africa, the International Monetary Fund (IMF) has highlighted the urgent need for Governments to mobilize local and foreign investments into diversified economies in the Region. This can only happen when the economic, policy and regulatory environment is deliberately created for this very purpose of economic growth and prosperity. It will not happen by chance. Herein lies the problem. Apart from the economic imperatives, we have some demographic realities. Africa has a young and growing youth population, the fastest urbanization rate in the World and by 2034, will have a larger workforce than China or India!. We have to translate this into an economic advantage not a social burden. So we have a lot more to be candid about in Africa. A dysfunctional relationship between the private and public sector represents a grave risk our economic development in the Continent. There is an urgent need for much more objective, sincere and results-oriented dialogues between the public and private sector.

My four cents:

1. One big problem we have is most new Government spend so much time developing and branding big new economic development plans, new sector transformation plans, more plans to fundamentally old problems. Old plans are completely discarded for political reasons and in the process, the country loses valuable institutional memory which could have been applied to solving compounding socio-economic problems. Continuity is critical. Existing plans can simply be revised to address current realities instead of trying to reinvent the wheel with a brand new set of plans. Investment capital will be drawn to markets with evidence of growing successful businesses not an environment replete with plans. The language and actions in Government must be more urgent, working to specific actions by specific times to deal with specific problems, less about future plans, plans, plans. Shift from endless planning to excellence in execution. More action, less sloganeering.

2. Economic growth can only be achieved when the respective sectors in the economy are operating optimally. Specific sectoral growth can be more deliberate not accidental. This can happen where the public and private sector at sectoral level are working to a common picture of success, one Industry story. This calls for a sincere objective engagement between the Government/Industry-specific Regulators and private sector players to discuss and agree on imperatives for growth in their respective sectors. This can translate into an action plan where both parties, work on, commit to and are measured against realistic sectoral growth targets like quantum of Investments to be attracted (including conditions thereof), output to be delivered (value/volume of services) and human development impact (job creation etc.). Such a plan should have execution monitoring and evaluation systems to track progress thereof. Private Sector can mobilize investments and plan their businesses consistent with this plan. Governments will channel the power of the State towards meeting these clear growth objectives. Governments should and must continue to hold private sector accountable to relevant policies, laws and regulations but this will be within the context of a broader visible mutually-beneficial growth objective. This will limit arbitrariness, ill-informed actions or inactions of Government which create a toxic rather than conducive environment for business growth.

3. Reality is that in Africa now, Government policies, pronouncements and regulations represents the most critical success factor and biggest risk at the same time to any business, regardless of size. All of this challenges African business leaders and entrepreneurs as key stakeholders in the economy to develop the right engagement models with Government to meaningfully proactively participate in the relevant discussions relating to their specific sectors and the economy at large. This is generally an unfamiliar terrain for most CEOs, businesspeople and entrepreneurs who would rather simply focus on their business. Working constructively with Government has now become their business!. This relationship with Government must be managed with as much rigour, discipline and commitment as managing the core business. The dialogue between the Government and private sector must be predicated on mutual respect, trust and commitment on both sides. However, trust cannot be demanded, it has to be earned. Businesses are intrinsically part of the larger society and are now being called upon to a “higher purpose” in taking more deliberate interest in socio-economic issues in their countries of operation. Global CEOs like Paul Polman, Howard Shultze, Mark Zuckerberg are known as much for their well-informed engagements with Governments around the World as the services their iconic companies provide.

4. All this necessarily means that public Institutions need to be fundamentally reformed. It means that the public sector must be rewired to listen and understand business more than it listens to itself. It signals a shift from a strictly enforcement mindset to a more facilitatory mindset. A shift from a headmaster mindset to a partner in progress. A shift from political speak to accountability for concrete results. The United Arab Emirates is a great modern day example of a country that has embraced these changes with dramatic positive results. It will challenge Governments to set new standards for public sector management. Such standards should include for example ensuring the right culture fit for leadership in public sector Institutions and standardizing more realistic than political Industry performance metrics. Such standards should also provide a framework that enables relevant private sector engagement and more importantly, that such output are duly considered in taking policy and regulatory decisions.

The obvious question is whether all this work can work in Africa. The reality is that there is a new era of transparency, openness and accountability demanded from all Governments and companies alike in this new information age. It is challenging the age-old imperial model where Governments arrogate all wisdom to themselves to the exclusion of the organized private sector and civil society.

The World has changed and is still changing. Africa cannot be an exception.