Mobiles, media, and mass messaging in African politics

Within wider debates on the private sector's role in providing, protecting or respecting public goods such as safety and security, non-state media can have special responsibilities.

 

Last week I began preparing notes for a part in the EU Eurojust programme's network on genocide, crimes against humanity and war crimes, whose next meeting will consider the jurisprudence and practicalities around the potential liability of business entities and owners for complicity in, contribution to, or commission of the most grave international crimes.

 

Most attention focuses on classic scenarios such as a firm that provides lethal gas used in a death camp (IG Farben company's Zyklon-B gas in Nazi Germany). Colonial and post-colonial Africa yield some examples albeit ones that mainly have a less obvious chain of causation or imputed intention to profit from crimes against humanity.

 

The role of the media and telecoms sectors is less often considered, although a notable African exception is the role of a privately-owned local radio station in broadcasting hate-speech and incitement in Rwanda in the lead-up to that country's 1994 genocide. More recently, this year's Kenya elections witnessed a wave of efforts to prevent a repeat of the inflammatory private broadcasts and publications that occurred around the 2007-8 election-related serious ethnic violence. Across West Africa in the last decade, a flowering of non-state newspapers and talk-back radio has fuelled greater free political communication but has also witnessed private media houses acting as platforms for ethnic baiting and stereotyping of a sort that can have very serious consequences.

 

Such situations call for state regulation of private media self-regulation to constrain the production of harmful content well before it constitutes or contributes to the sort of conduct that raises the interest of prosecutors in The Hague. The inherent limits on freedom of expression and the normative weight of prohibitions on incitement to grave crimes mean that such situations raise merely obvious duties -- and not really any dilemmas -- for private media or telecoms outfits (although on-line self-publication raises particular challenges for internet service provider firms).

 

A somewhat different situation for media and telecoms firms around Africa involves not mass crimes or their precursors but the many ways in which commercial provision of communications services comes head to head with electoral or protest politics, mundane or menacing. It is where the pressure for self-censorship or altered operations comes from the state bureaucracy in a context where democratic principles and public order are both potentially directly at stake.

 

It is one thing if a valid law requires, for example, that in the interests of public order a private mobile phone service provider not enable political parties to send mass multi-recipient text (SMS) messages around election time. The issue becomes whether that law is reasonable and of general, impartial application. If not (for instance, if used by the state to suppress the voice of its political opposition or to monitor its communications), the telecoms company may need to make difficult calculations, including balancing its relationship with the government with its reputation or its principals' own principles.

 

In many cases, there may be no formal regulatory basis for state officials to request phone, media or social media firms to constrain their output or their customers' usage. Instead, implicit in such requests is a threat, for instance of non-renewal of broadcast or service provider licences in future. Where politics and business intersect in hard cases, it is far easier for armchair commentators to counsel firms to take a path of principled pragmatism than to have to actually walk it.

 

This week sees controversial elections in Zimbabwe to end the 2008-9 power-sharing arrangement. Homegrown independent mobile phone firm Econet has come under considerable pressure to agree to block mass SMS-sending by organisational users. Ostensibly, the request is premised on a need to preserve public order (Kenya took similar steps ahead of its 2013 election). Some argue that the net effect in the Zimbabwe / Econet case will be to favour one party over another. The firm has reportedly and perhaps understandably obliged.

 

Indeed, these Zimbabwe elections are showcasing more generally the evolving role of mobile and internet (and mobile internet) technologies in African electoral politics -- even if the vast majority of voters across the continent still appear to rely on radio for the bulk of their political self-education.

 

In addition to traditional media (a new private independent TV station recently began broadcasting into Zimbabwe from South Africa, via satellite), the country is experiencing new phenomena such as the 'Baba Jukwa' Facebook character who purports to disclose, from within the ruling party, its many intrigues; Google Africa has launched a one-stop Zimbabwe election hub site collating news and other stories; website votewatch263.org is attempting to mimic Kenyan 'crowdsourcing' experiences by providing a space for individuals to report issues related to the conduct of campaigning and voting; the Econet SMS measure is a first for the country even if state monitoring of communications there is not.

 

Democratic aspirations and political competition will continue to stimulate innovation in the use of mobile and internet technologies across the continent -- sometimes the innovation will come from pro-democracy groups, and sometimes from incumbent regimes (or indeed rebel or other armed groups who in Africa have taken a strong liking to platforms like Twitter).

 

By choice or circumstance, private sector providers will put or find themselves at the heart of this trend.

 

Jo

 

'Africapitalism': doing good by doing well

That corporations and individuals can 'do well while doing good' seems pretty obvious.

It is nevertheless a notion and neat catch-phrase central to new approaches to the role that business should play in society, or perhaps to what should count as a 21st Century definition of 'success' in business. Such approaches are variously described as progressive capitalism, stakeholder capitalism, creating shared value, triple bottom line (people-planet-profit), and so on.

Implicit in the idea of 'doing well while doing good' would seem to be that businesses make efforts to have a net pro-social impact. It connotes moderating / improving their social, enviro and governance footprint, and suggests both supplementing core business activities with explicit social contributions, as well as directing those core activities towards registering a wider range of impacts than the traditional 'bottom line'.

It is interpreted, of course, to contrast with Milton Friedman's retort that a business has no social responsibilities other than to seek profit: on this view, businesses do good (improve social conditions) when they do well, but their only responsibilities, as such, are to their shareholders, employees, tax-collectors and regulators. In any event the latter relationships mainly involve legal duties, not mere 'responsibilities'.

The idea of 'doing well by doing good' is perhaps a bit distinct, at least conceptually. It connotes a firm that prospers materially as a direct result of its pro-social contributions: improving its brand through philanthropic outreach, or attracting the best talent by developing a reputation for great social awareness, and so on.

Then there is the notion of 'doing good by doing well...'.

The latter appears to be the essence of 'Africapitalism' -- renewed discussion of which in last week's Gaurdian prompted this post.

Nigerian banker Tony Elumelu promotes Africapitalism as the (unquestionably sound) idea that Africa's development should be African-led; it should focus not on aid or government actions but on developing conditions conducive to free enterprise; government's role should be minimal and facilitative -- because by unleashing entrepreneurial spirit and commercial potential, African countries will inevitably improve the developmental conditions of all in society; business has a commercial interest in doing good (building more peaceful, healthy, educated, prosperous societies) because this creates conditions in which business may prosper further. The commercial incentive to do well can foster all manner of innovations that might make life for many Africans easier, more secure, less exclusive; more gender equal.

The focus should be on removing obstacles to African-driven free enterprise and profit-making, Elumelu suggests, because this will "touch" society in transformative ways not achievable under present conditions. By enabling Africans to do well, much social good will result.

There is much that is appealing, to my mind, about this approach. Elumelu reiterates the much-heard (and somewhat true) refrain that Africa need not mimic other societies but can leapfrog others' experiences and development stages, so as to develop its own variety of socially-embedded and communally-conscious capitalism ... in essence, a sort of Ubuntu Inc.

Yet Elumelu will know that Africa is not a blank slate. For every 'leapfrog' opportunity is a 'lag' effect from past and existing patterns of relations between business, government and society. Pervasive features of its various countries' political economy militate against any automatic 'trickling down' effect from the success of some; these bottlenecks cannot simply be dismissed by referring to Africans' greater propensity for familial and communal sharing as the basis for what will perforce emerge, organically, as a more benign capitalism. Income inequality in Africa's fastest growing economies is growing, not narrowing, for instance.

Elumelu is not Friedman reincarnated, nor is he just Africa's Michael Porter. The debate he has led this decade is a much-needed one; it is hard to argue against the reform thrust he proposes, given the myriad obstacles to building a successful business in many African settings. A more dynamic, capable, bigger, richer locally-owned private sector promises jobs, promotes pride in Africa's self-upliftment, and would give African governments the revenue sources to deliver better services and social support. The current momentum behind looking to the private sector for a lead creates many opportunities simultaneously to tackle development and sustainability challenges afresh.

Yet calls for reforms to free up profit-making opportunities and minimise predatory rent-seeking are not new. Perhaps a more interesting practical debate is how the local private sector (assisted by donors and foreign firms, where appropriate) can help build state capacity to tax and distribute fairly and transparently. Philanthropy is one thing, but absent such capacity and will by the state, doing very well in Africa will not do most people much good.

Jo

See some related posts: after this year's African 'Davos' (here); taxation and corporate responsibility in Africa (here); and last week's post on business and development in Africa (here).

See a recent Elumelu speech and his thoughts in more detail (here and here).

The US, China and investing in Africa's development

This week Nigeria's president is in China, and last week the US president ended a week-long Africa trip.

Both the Obama visit and the China-in-Africa story raise questions about maximising the sustainable development benefits of prevailing high levels of foreign commercial interest in Africa, while mitigating any harmful inherent or incidental effects.

The last decade's growth in the quantity of foreign investment, trade, loan financing and other commercial interest in Africa has not always been matched by its quality.

By 'quality' I refer to developmental indicators that lie behind high headline GDP growth rates: foreign investment has not necessarily decreased inequality or insecurity, nor necessarily increased inclusivity, institutional capacity, or the integrity of governance processes (one could list other metrics, but I ran out of words beginning with 'i'...).

Such presumed links between investment-related growth and multi-indicator developmental gains require measurement and research; one aspect that requires more data is whether there are, in fact, relevant qualitative differences (seen from the perspective of Africa's inclusive and sustainable development) between investment from OECD and non-OECD countries.

The China-in-Africa story of course has myriad dimensions. This blog's interest is the business-government-society nexus: there is scope for further empirical research on the nature and efficacy of Beijing's current attempts to regulate the social, environmental and governance (ESG) impact of both state-owned and quasi- or non-state Chinese commercial initiatives and businesses in Africa.

A related question is whether -- and in what ways -- the ESG impact of Chinese firms (or funded projects) is materially different from US, EU, Japanese or other OECD firms (or indeed those from the BRICS, Gulf and other regions). It is often assumed that Western firms' ESG performance in Africa is bound to be superior because of their greater exposure (especially if listed) to regulatory and reputational pressures at home; it is also assumed and that this exposure constrains Western firms' commercial performance (competitiveness) relative to firms hailing from countries that pay less attention to how their companies behave abroad.

Statements by senior US officials reminding Africans to be wary of 'new' (Chinese and other) partners play off or play into such assumptions. They may be well-founded, and indeed they are assumptions that inform some of my previous posts (for example, here) on home-state regulation as an issue in strategic competition for access to African resources.

Such assumptions have an intuitively sound ring to them. However, they are largely working assumptions, sometimes laced with presumptions about the relative moral high ground of Western firms that might not be borne out by facts; if we are to be honest, more research is thus needed on whether there is any clear categorical connection between the national origin of a firm (sometimes, with globalised commodity firms for instance, a rather artificial linking) and its inclination to engage in social investment or to refrain from doing harm. Do we know in fact whether Canadian firms operating in Africa invariably have a superior net ESG impact and corporate responsibility profile than Chinese ones?

Turning to the Obama visit, it highlights the significance of a related trend relevant to this blog's subject-matter:

Policymakers For development/aid policy types in the West, austerity is catalysing a re-think about both 'the private sector's development role' (the role of the private sector in helping meet development goals) and 'private sector development' (the role of development agencies in developing local private commercial activity and/or improving the investment climate, not for its own sake but as a means to achieving traditional development goals).

Private sector For their part, firms are seeing African developmental needs and aspirations as a source of opportunity. Perhaps the biggest 'i'-word in contemporary Africa -- whether viewed as a matter of human development or from the (narrower) perspective of investment risk/opportunity -- is 'infrastructure'. Deficits in 'hard' infrastructure such as ports, roads, rail, electricity deter investment, but also represent an investment opportunity, either to meet pent-up local demand or to facilitate access to exportable natural resource opportunities. It is an issue closely tied to the China-in-Africa phenomenon. Obama's visit announced the 'Power Africa' initiative to fund US engagement in improving electricity generation and distribution on the continent.

There are reasons for some scepticism about the nexus between private commercial ventures and pro-development outcomes. Investors cannot and should not displace government obligations. But much of the scepticism goes too far; there is surely far more reason for those interested in African development to see tremendous opportunities for harnessing the self-interest of firms (and the strategic competition of superpowers) in pursuit of pro-social development goals.

Ultimately, too, debates over whether US or Chinese investors are more socially responsible and responsive in Africa can often miss the point, as I've argued elsewhere. The question is not so much the source of foreign interest, but the capacity and willingness of recipient African governments to ensure that private gain is not at the expense of the public interest.

Jo

ps - my first blogpost reflected on the difficulty of talking simplistically about 'the private sector' including where state-owned firms are increasingly active across Africa: here.

The G8 and Africa: trade, tax and transparency

Since the last post earlier this month, the most significant development at the nexus of business and society in sub-Saharan Africa has probably been last week's G8 summit, where the UK government promoted its 'Three-Ts' agenda (trade, tax and transparency).

This weekend a far smaller meeting took place here in Oxford, organised by the University's China-Africa Network (OUCAN) on 'Emerging Powers in Africa'.

The two very different events are related in at least one sense ... efforts in Western countries to regulate for more transparency in the way that companies interact with developing country governments still have some way to go in making a stronger case for such regulations among industry members that must compete with firms from settings, such as China, which do not impose such requirements.

One dimension of the UK government's agenda has been promoting greater transparency by UK-based extractive industry firms on what these firms pay to host governments. Africa accounts for many of the settings where shortcomings in government revenue transparency are a major issue for donors and lenders, local and transnational advocates, and increasingly for firms themselves (often at the behest of their financiers and insurers).

The G8 meeting followed shortly after the European Parliament voted on June 12 on laws (that will take effect in 2015) requiring European oil, gas, mining and logging firms to disclose payments above 100,000 euros made to host governments in relation to accessing or extracting natural resources -- even if the host government's laws prohibit such disclosure. The European regulatory initiative follows the US Dodd-Frank Act (which applies only to US listed entities' disclosure of payments) and reflects many years of 'publish-what-you-pay' advocacy and extractive industry transparency initiatives, the most notable of which was first supported by the British and other governments.

There are many dimensions to this topic, and what follows is only one thought-line.

One does not need to be an apologist for the extractive industries to acknowledge the force of their various arguments questioning such regulations.

One is the risk that Western firms subject to such requirements might be unable to compete for access to resources with less scrutinised, less scrupulous, and perhaps more socially indifferent firms from China and other 'emerging' powers. One can call this the 'Talisman factor', after the Canadian operator that withdrew, partly under pressure at home, from Sudan's conflict-affected oil sector; its concessions were taken up by firms with far less incentives to implement progressive environmental, social and governance norms.

One sees insufficient efforts by regulators (and their political principals at forums like the G8) to develop persuasive lines of argument about the strategic merits of such transparency regimes, in addition to their moral rectitude.

Late last year I blogged on the place of values and principles such as transparency in strategic competition for natural resources (here). It was a post calling for greater suasion on why such transparency regimes matter and why firms should embrace them.

Aside from indisputable matters of principle about the importance of revenue transparency, it is possible to make an argument that regulating for payment disclosures is not materially different from regulating for disclosure of other latent liabilities or political risk triggers. The market appreciates such information and, over time, appreciates those firms that are candid about disclosing material risks.

This sort of persuasion is important since regulatory compliance -- as experience shows and theory argues -- is far easier to secure where an industry accepts that the overall regulatory objective is of long-term value to it as a matter of business strategy (in addition to being warranted on the basis of being a responsible member of society).

That is, in order to get support from CEOs and boards we tend to speak of the need to make the 'business case' for voluntary corporate responsibility outreach. But making a 'business case' also matters for issues of compulsory regulation, because making it improves the prospects of fuller compliance.

The extractive industries are formidable forces when it comes to shaping the content of regulation, which should not be deferential to industry as a matter of course. Yet it seems hard to deny that politicians -- and the academics who advise them -- have not spent enough time acknowledging the commercial-strategic reality of collective action problems and the lack of a level regulatory field when it comes to strategic competition for natural resources. This means that they insufficiently frame moves to regulate revenue transparency in ways that persuade Western firms that these will improve those firms' long-term strategic positions.

Jo

ps -- see also my previous recent posts on taxation and corporate responsibility in Africa (here) and corporates, contracts and clarity (here).

ps -- my colleague Hannah Waddilove blogged last week on the G8 summit in relation to African governments' revenue-raising dilemmas: see here.

Taxation and corporate responsibility in Africa

For those following African issues, of all the current topics of global debate about the social impact of business or public-private sector relations one stands out more than others: corporate taxation.

 

Here the tax-tightening agenda of developed but revenue-strapped G8 governments now somewhat aligns with that of developing African governments.

 

The recent 'Africa Progress Panel' report highlighted the extent of unrealised revenues lost to African governments through practices such as transfer pricing; the Zambian government, most notably but hardly alone, has continued in recent months to move on its promise to tighten compliance with existing tax and duty requirements on foreign firms in its mining sector.


 

The relationship between tax issues and corporate responsibility ones is fairly simple, at least in the resource extractive industries in developing African countries.

 

A principal (and principled) argument available to a mining firm under pressure to 'do more' for its host community or country is that along with paying its employees, it pays taxes to the government, whose responsibility it is to provide services and infrastructure to the population. On this classic account, it is the government, not the firm, that should be primarily accountable to the public about the use made of tax revenues. For instance, in March 2012 I heard Ivan Glasenberg, CEO of Glencore, make this argument forcefully if rather unsubtly during a panel on 'resource nationalism' in Africa.

 

Likewise, when faced with government attempts to raise a firm's taxes, royalties and duties, an argument available to a firm which has made extensive local social investments is that the firm should be spared further increases since it is carrying some of the state's social spending burden.

 

The public relations or political risk vulnerability for firms is that if it transpires that their effective taxation levels or volumes are in fact far lighter than is widely assumed, the first-mentioned argument loses its force.

This is particularly so for firms in sectors that despite their revenue by nature do not create a lot of local jobs, something that would otherwise help illustrate their social value even if their tax footprint is low.

 

Of course the dilemma for firms which spend heavily on their social investment side, believing that it is pointless to wait for the government to translate taxes and royalties into palpable gains for the host community, is that the firm's uptake of this responsibility removes the incentives on the government for doing so. Moreover, the firm may pay tax to the central government but be answerable for local conditions to a provincial or municipal government, whose relations with central government may be beyond the firm's control. 

 

Technically speaking, tax issues are matters of legal obligation -- one is either liable or not -- whereas issues of 'corporate responsibility' tend by definition to relate to things done despite there being no legal requirement to do them.

 

The recent first issue of our firm's 'Business and Society Monitor' observed that taxation is one issue that has largely not been framed in the language of 'corporate responsibility' -- no doubt for the legal / voluntary reason just mentioned, yet despite the close relationship between tax and corporate social investment discussed above.

Given the often blurred or highly technical nature of compliance (which underpins the distinction between 'avoidance' and 'evasion' of tax), the Monitor implicitly noted that it would be unsurprising if mainstream corporate ethics, corporate responsibility and related debates increasingly focus on taxation issues. A parallel development is that increasingly social investment issues are covered in investment contracts, so that they become legal issues; this can be in a firm's interest, since it delimits the extent of its otherwise open-ended non-legal responsibility.

 

Like the issue of revenue transparency that the UK will push at this year's G8, taxation issues relate to much broader questions for African policymakers about competitiveness in attracting foreign investment, in the absence of cooperation from peer (competing) governments on uniform approaches to revenue management.

 

One strategic consideration for major extractive industries in Africa is their interest in reducing the share of national revenue for which their industry accounts. That implies that those in the oil sector, for instance, should be interested in boosting the non-oil economy (and non-oil or oil-related employment) in their host country, increasing the number of tax-paying firms and decreasing their exposure as single dominant sources of government revenue. Initiatives such as Tullow Oil's 'Invest in Africa' scheme reflect an understanding that for an oil firm, a booming non-oil sector is directly in its commercial and government relations interests.

 

Jo

 

For a recent post distinguishing (corporate) responsibility from (government) duty, see here.

 

These issues are raised in multiple previous blogs, see for example here on social investment by the mining sector in Africa.