Posted on Friday, 20 November 2015 09:00

Mo Ibrahim: There is another way of doing business

Photos© Vincent Fournier/JAThe results of this year's Ibrahim Index show the pace of progress is slowing, especially on security and economic opportunities. Holding private businesses and institutions accountable is the only way to improve governance, Mo Ibrahim says

Three key events provided a special focus for this year's Ibrahim Index of African Governance, which consists of 93 indicators and is produced by the Mo Ibrahim Foundation: the North African uprisings of 2011, the recovery in the United States after its financial crisis, and the end of the commodity supercycle.

"Poverty and inequality are very difficult to measure. We need to get a handle on that"

Although governance improved over the 2011-2014 period in two categories – human rights and human development and participation – it declined in the other two main categories: sustainable economic activity and safety and rule of law.

Only six countries out of the 54 in Africa registered improvements in all four areas of governance. They were Côte d'Ivoire, Morocco, Rwanda and Senegal near the top of the index and Somalia and Zimbabwe near the bottom.

Speaking to The Africa Report in London, Mo Ibrahim argues that trends identified by the index point to the need for widespread educational reform and a much more activist strategy to finance the job-creating small and medium-sized enterprises.


The Africa Report: This year you released your first governance index since the end of the commodity boom. What changes are you seeing on the ground?

Mo Ibrahim: Unfortunately, many of our countries are dependent on commodities – mining activities, oil, gas – and they have failed to diversify their economies.

I hope it is a lesson for the future to diversify our economies and to move away from this total dependency on a single natural resource.

You look at what some of these resource-dependent countries have been doing and, again, corruption is a big issue. And if they don't use the natural resources of a country at a time of boom to raise standards and produce a cushion, they won't have anything for hard times when the market changes.

It's interesting to see some of our top performers in Africa are countries that are not resource rich, because that forces countries really to look at where they can grow their economy instead of just being laid back and dependent on oil or another resource. I hate to use that term 'resource curse', but[...]when you are resource rich you tend to be lazy.

On education, the Ibrahim Index says that although more pupils are being enrolled, the standards are not improving enough.

What kind of education are we giving young people? Only 2% of university graduates study agriculture; 27% study humanities. Shouldn't that be the other way around? So I ask our academics when was the last time they sat with some business people in their country to discuss what they need? Where are the jobs of tomorrow going to come from? What skills should we give to our kids?

Sometimes it seems that our education system and the people involved – civil servants, ministers of education or administrators in our universities and colleges – are living in a bubble divorced from the life outside. We need to revise our curriculum and what we are teaching our kids.

Alongside economic opportunities, levels of security and the rule of law have been falling, according to the index. Why?

Factors differ between countries. What happened in Libya affected us a lot – the huge amount of arms that actually came from the looting of the regime and from the weapons airdropped to all kinds of fighting groups. You know there are so many of those in Libya.

This flooded the Sahel with weapons. Clearly, we created a problem with Libya. You say, are we any better off now in Libya than we were under [Muammar] Gaddafi? The answer is no. So that is the problem in the Sahel [...]. There are also other problems arising from conflicts in Guinea and Mali.

Look at South Sudan. Why is this killing taking place? Why are these crimes being committed? We have like a million displaced people, even more, in South Sudan now. Why? It's just the naked ambition of warlords and political leaders whose only interest is personal power and personal fortunes, which appear to be linked together.

And then they use tribal connections or whatever to turn what's in essence a personal political agenda and greed into an ethnic fight in the country. You have some individuals there – each of them really want to own the country, so you can't see how peace would be achieved. How many agreements have we had? I think all those guys should be treated as war criminals – people dying, women being raped, villages being burned. 

What is the future of your governance index? Are you going to start looking at areas such as poverty or inequality?

This is a debate within the foundation. It concerns us that we don't have data on poverty. We have two organisations working on our behalf to try to collect more data on this.

Inequality is very difficult to measure also. We need to get a handle on that. You know, data is a big problem in Africa. We also need to tell people – statistics are so important because you cannot develop policy without data. And it amazes me that the development assistance community never thought of that.

What are the results? What are you achieving from that? You need to strengthen statistical partners. To strengthen statistical offices in Africa is not as sexy as opening a hospital. But if there is a statistical office and if people have data, we will be able to open more hospitals more efficiently in the best places to meet the right needs. So we need to really think about how we are going to deal with that.

You have talked about state governance, what about standards of corporate governance?

We find that without holding private businesses and institutions accountable, it is very difficult to get a handle on governance in our countries. It always amazes me how, when we talk about corruption, we only speak about corrupt politicians. And it was interesting to see that until the year 2000, bribery was legal in Europe. It was under business expenses and tax deductible. And we say we are all partners in corruption, guys. We need to deal with it on both sides in order, really, to move forward.

There is another way of doing business. Yes, business is about profits, that is the first objective of business. But it also should be about people and about the planet. If you want to have a sustainable, successful business, you cannot destroy your environment because you destroy your future. And you cannot alienate people because you are alienating your customers, so you have no future. So please get beyond the quarterly results and start to look at the future.

How can this short-termism be changed?

I believe, in the end, business is a force for good because business creates jobs, creates prospects. Government doesn't create jobs. Business brings prosperity and better prospects for us. The vast majority of businesses are ethical and doing the right thing, but still some of us are misbehaving and that tarnishes the whole community.

And it's time for boards to take responsibility and really act as proper boards of oversight over their own companies. And that is a problem. What happened to Volkswagen amplifies that issue. How can even great companies – one of the best-loved companies in the world for innovation and productivity – how can it end up being mired in this kind of scandal? That's an issue of governance. And we need to pay attention to that because it will come back and bite us on the butt!

Patrick Smith

Patrick Smith

Patrick Smith is Editor-in-Chief of The Africa Report. He has edited the political and economic insider newsletter Africa Confidential since 1992 and was associate producer on a documentary about the 2004 coup attempt in Equatorial Guinea commissioned by Britain's Channel 4 television.


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