Business-government relations: the balance

This post is prompted by an otherwise inspiring story about a Ugandan man who set up an essential medicines factory in his country despite the many odds.

The buzzword in many African business and development circles is public-private partnerships. In time I'll blog about formal partnerships, which are mostly project-specific. But what follows are some brief thoughts about a related vital issue: relations between business and government -- the scope for better (but appropriate) channels of communication to unlock growth, development and conservation potential, and the pitfalls where these channels are too narrow, too wide, or not transparent.

In most settings I've experienced, the balance is off. Business either has 'too much' access to government, or too little.

My last blog was on The Times CEO Summit Africa. On one panel -- intended to illustrate the dynamism and promise of African entrepreneurship -- I heard Ugandan businessman Emmanuel Katongole speak about the challenges he faced setting up a local factory (with India-based partners) to manufacture anti-malarial and anti-retroviral medicines -- a tale of perseverence and patience. He described how prospects were grim until he eventually managed to see the country's president, Yoweri Museveni, who helped things happen. But while others at my table were impressed by the businessman getting presidential access and approval, part of me was stunned that it took a one-to-one meeting with the head of state before a man could build a small factory. Granted, Katongole needed to lock-in assurance that the Ugandan government would buy locally-made drugs. But if intended to illustrate entrepreneurship in Africa, it instead left one wondering how no-one else at the summit remarked on how odd it was that a man must meet the president himself before a small private business can contribute to a big public goal.

The point here is that across the region I cover, one is often confronted by extremes: either business finds government unresponsive, inaccessible and unimaginative (it often finds it hostile, parasitic or predatory too, but that's another issue); the result is often that opportunities go unmet to generate and implement ideas on where business and government can work together to address economic exclusion, poverty, insecurity, corruption or environmental harm. Or -- the opposite extreme -- some businesses enjoy unreasonably ready access to senior public decision-makers, but in channels and forums that are hidden from scrutiny.

(I put South Africa aside -- in my day job I focus a lot on Business Unity South Africa, the new Black Business Council and the challenges of business-government relations even on issues -- such as addressing young people's job-creation aspirations -- where their interests are in large part identical. In SA, racial legacy issues, among other things, continue to complicate business representation / umbrella groups.)

One shouldn't need presidential meetings to start a firm that can 'do well while doing good'; but also -- arguably -- it is alarming if some businesspeople can speak to the president while others cannot get a meeting with their local council official (*). Perhaps I'm naive -- business and government are either too close or too distant, whether one is in Dakar or DC, Lubumbashi or London.

In some settings, I don't think it necessarily inappropriate if big business has very close contact with the leadership of host governments. If a lone mining firm is prepared to risk entering an unstable post-conflict setting and develop resources that might kickstart wider recovery, it is understandable that they work closely with national leaders (of course, there are many caveats and risks here - especially where one is dealing with transitional unelected post-conflict administrations).

But given the amount of interest these days in the private sector's role in partnering government in Africa, there needs to be more attention to achieving the right balance between government that is unresponsive to business, and too 'responsive' -- to the detriment of other businesses and the wider public interest.

It is easy for critics to say that outfits like the US-based CIPE spread a gospel of market democracy that may be inappropriate for host societies or a front for building markets for Western firms. One should also be cautious about whether 'business' is a subset of 'civil society' or a different kind of actor alongside government and civil society. But at some level those like CIPE working to increase the capacity of local business to make itself heard by policymakers are involved in just as worthy an activity as those working to strengthen the independent media or other social watchdogs: where the private sector has appropriate regularised access to and influence on government, it can be one important source of demand or oversight on issues such as corruption. This may especially be the case where, as in much of sub-Saharan Africa, government or civil society capacity is weak.

There will always be a need to guard against proper input becoming improper influence, but donors and others should consider more support to inclusive, transparent business umbrella groups potential as contributors to good governance and developmental decision-making momentum. For the same reason it makes no sense -- as my doctoral research covered -- for African government officials or donor governments to hold extensive dialogue with often small NGOs while ignoring or avoiding business actors that may have a far greater local footprint (for better or worse), greater long-term stake in governance and stability, and greater understanding of what is needed to build peaceful and prosperous societies.

Jo

* I certainly don't intend to imply that Katongole benefited from improper proximity to the president: in his case it seems more about sheer persistence, but the point stands.