sharing in governance of extractive industries
Originally posted on The Resource T(r)ap
Last night, the Vale Columbia Center and the Columbia Business School hosted an event for Jonathan Berman’s new book “Success in Africa: CEO Insights from a Continent on the Rise.”
The author, a former Asia hand and New York native, opened the discussion with how he came to focus on Africa. Being an American who lived in Hong Kong and is now working in and on Africa (mainly Nigeria), I was happy to hear someone else go through the paces that I regularly do to explain their work in an area that ostensibly doesn’t concern them at all. Berman articulated well what sometimes fails me when asked why I (or what right do I have to) study Africa.
The response is simple; it is not a remaining vestige of colonialism or any other mode of perceived superiority that brings me and others like me from the "outside" to study Africa’s growth and development. It is the desire to bear witness to the frontier of innovation, opportunity, and well, “success” redefined on an unimaginable scale. Berman pointed to many others who have had a similar trajectory of spending time in Asia, seeing what break-neck speed growth looks like, and being captivated by all that comes with it. While it may not be possible to put a precise finger on it, Berman says, once you’ve seen things moving fast, you can spot it anywhere. Africa, as a continent, is moving fast.
Personal narrative aside, Berman’s motivation for the book, in part, is to rectify something I am surprised by almost daily. He said of his time travelling around Africa and observing incredible opportunity, “I was living in a parallel world.” He realized that a story that had come to be so familiar to him was virtually unknown upon touching back down in Europe or the U.S. “There was explosive growth, but almost no one knows that story.”
His three main takeaways from the book:
- Africa is a place of extraordinary opportunity,
-Africans built that opportunity more than anyone else,
-And for international firms in Africa, there is opportunity to achieve significant wealth as well as social wealth and capital.
Berman’s discussion of African moguls making their mark on the continent was a catalyst for a multivariate discussion covering innovation, governance, politics, corruption, and more. His fellow panelists, Antonio Pedro from UNECA and Columbia Business Professor Paul Tierney Jr., picked up on some of these themes and threw further threads out there for discussion. Some recurring topics emerged:
Firstly, the major buzz-country was Nigeria. From powerhouse CEOs like Nigeria’s own Dangote to an economy that will soon eclipse South Africa as the continent’s largest, panelists could not keep away from Africa’s most populated country (if you didn’t know, about 1 in 5 Africans is Nigerian).
Secondly, the major buzz-sector was commodities (with a focus on oil gas and mining). Of course, as someone who studies and advises on natural resource development, I was excited to hear so much attention directed to an area that is unmistakably the major driver of many countries’ growth stories. That being said, I didn’t necessarily agree with some of the panelists’ sanguine view of the effect of the sector on development.
Thirdly, we are still talking about “China.” A lot. From China’s investments on the continent to questions about euphemistic “competitive advantage” in bidding for contracts, the phenomenon that is “China in Africa” has not died down with this group. Not that the focus is a red herring, but I did appreciate Berman’s indication that it may not be China’s way of doing business that gets them in the door, its their willingness to give it a go (compared to more skittish American firms that fear investment uncertainty).
What I felt was missing from the discussion overall was the persistent and severe wealth discrepancy across the continent. Some may be having success, and yes there is the potential for that to translate to more inclusive growth, but that has yet to be realized. One trip from the airport in Lagos out to the McMansions of Lekki or the smart flats in Victoria Island highlights that it is not Africa succeeding, but a very select some in Africa succeeding. A “middle class” increasing its consumption of manufactured goods, to which Tierney referred, seems to be more of an aspiration than a reality. Ultimately, making the link between economic growth and human development is still an elusive task tied up in governance challenges. While Pedro says governance in Africa is improving, I have to wonder if it is only the kinds of governance mechanisms associated with attracting and keeping investment.
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