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Opening Up Africa to Africa


Statement at the 4th Africa Governance, Leadership and Management Convention 2013
4th September 2013 , Leisure Lodge Resort & Golf Club, Mombasa, Kenya 

By

Olusegun Obasanjo
Former President, Federal Republic of Nigeria and Patron, Africa Governance, Leadership and Management Convention

Ladies and gentlemen

This is the fourth year that I have had the privilege and honour to welcome fellow Africans to the ancient city of Mombasa for the Africa Governance, Leadership and Management Convention.

In the spirit of the theme of the convention, maybe we should begin opening up Africa to Africa by passing a resolution that those of us who have been coming here for four years in succession should be made indigenes of Mombasa and citizens of Kenya.
Let me say that I am delighted to be back in Mombasa. Let me also congratulate the Kenyan people for the successful election that ushered President Uhuru Kenyatta into office. It is one of the significant signs of Africa’s maturing political landscape. I wish His Excellency, a successful tenure in office.

Ladies and Gentlemen, I am, indeed, pleased to welcome everyone to this year’s convention which has the theme “Opening up Africa to Africa”.

When the organising secretariat, jointly led by Mr. Ayodele Aderinwale, and Mr. David Muturi, visited me to discuss the focus of this year’s meeting, I was immediately pleased with their suggestion that we bring the issue of Africa’s integration to the front burner again.

Two critical factors informed our decision to shine the spotlight on Africa’s integration efforts. First, this year marks the 50th anniversary of the Organisation of African Unity and its successor; the African Union, which is the longest enduring attempt at integration by independent African countries. I joined in the celebrations in Addis Ababa in May.

In 1963 when leaders of independent African countries came together to form the Organisation of African Unity, they outlined some fourteen objectives that would drive the Organisation. Top on the list of objectives was “to accelerate the political and socio-economic integration of the continent.” This aspiration remains as relevant today as it were fifty years ago. The need to take a critical look at the success stories and challenges of achieving continent wide integration as epitomized by a number of the Regional Economic Communities will also help in providing critical inputs into the African Union 2063 Agenda which aims to achieve “an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in global arena”

Furthermore, this kind of reflection and exchange between stakeholders from the public and private sector will also assist in country level policy making particularly in identifying critical success factors that need to be enhanced and replicated and failure factors that should be avoided and eliminated.

Recent events have proven the necessity of the theme. Only two months ago, and fifty years after they identified integration as crucial to the continent’s development, African leaders gathered in Addis Ababa and agreed that“the ultimate goal of the Union is the construction of a united and integrated Africa.”

In that solemn declaration adopted by the 21st Ordinary session of the Assembly of Heads of State and Government of the African Union on 26 May 2013, African leaders outlined the following critical steps to deepen integration.

  1. Speed up the process of attaining the objectives of the African Economic Community and take steps towards the construction of a united and integrated Africa.
  2. Speedily implement the Continental Free Trade Area; ensure free movement of goods, with focus on integrating local and regional markets as well as facilitate African citizenship to allow free movement of people through the gradual removal of visa requirements;
  3. Accelerate action on the ultimate establishment of a united and integrated Africa, through the implementation of our common continental governance, democracy and human rights frameworks.
  4. Move with speed towards the integration and merger of the Regional Economic Communities as the building blocks of the Union.

Other aspects of the May 26 declaration were also critical to Africa’s integration efforts and the continent’s overall growth and development. They include;

  1. Accelerate Africa’s infrastructural development, to link African peoples, countries and economies; and help to drive social, cultural and economic development.
  2. Develop our human capital as our most important resource, through education and training, especially in science, technology and ‘innovation, and ensure that Africa takes its place and contributes to humanity, including in the field of space sciences and explorations.
  3. Take ownership of African issues and provide African solutions to African problems.
  4. Mobilize our domestic resources, on a predictable and sustainable basis to strengthen institutions and advance our continental agenda.

From my lived experience in and out of government, the success or otherwise of these beautifully crafted decelerations largely depends on the level of commitment, and in some cases involvement, of African leaders in the private sector.
While our leaders in the public sector have expressed commitment to integration, it is leaders in the private sector that must take the wheel and drive the process.

I say this because the quest for integration in Africa is not new. In fact, it is as old as independent Africa itself. It began in 1958 with the Union of African States, an organization comprising the then newly independent states of Ghana, Guinea, and Mali. Although short-lived, the impact of the Union of African States and the benefits of regional integration in the fight against Africa’s colonization were obvious to the rapidly growing number of African countries which gained independence in the early 1960s. This inspired the formation of the Organization of African Unity, primarily as a structure for the agitation of self-governance complete elimination of colonialism.

With almost all African countries gaining independence in the 1960s, came the desire for close cooperation among Africans. The continent was moved along two tracks in this regard – those who wanted close and immediate cooperation on political and economic basis and others who preferred gradualism.

Despite their different views on Africa’s integration process, both groups generally agreed on the continent’s need for integration. Yet, the nature and character of the post-colonial African state made it unattractive for the political leadership in Africa to aggressively pursue integration. By the mid-1960s and 1970s, however, several economic arguments began to emerge in support of rapid integration. Indeed, it became obvious to African leaders themselves that most African states were too small or too weak to independently negotiate on the international scene. This gave rise to the birth of several regional economic communities which are commonly regarded as the “building blocks” of the African Union.

To be fair to them, regional economic communities have played a key role as instruments for the further integration of the African continent. Despite this, integration efforts in Africa have not seen enough success to give many Pan-Africans hope and satisfaction. Intra-Africa economic, political, cultural, or even military relations have at best been minimal and insignificant when such relations are compared to those between African states and European or Asian countries. Figures in the early 1990s suggest that the proportion of trade for instance was only 8.4 per cent in 1993 compared with Western Europe (69.9 per cent), Asia (49.7 per cent), North America (33 per cent) and Latin America (19.4 per cent). The situation has hardly changed today. And let me say here I do not buy the argument that we cannot trade among ourselves because we produce similar or the same commodities. In Europe Germany and France produce similar or the same commodities and they normally trade between themselves.

Our inability to trade and relate with one another has meant that we are unable to maximize and fully take advantage of the synergies and complementarities of our economies and take full advantage of the economies of scale and other benefits (such as income and employment generation) that a larger market integration would have brought about. Isn’t it sad that we still purchase roses and other beautiful flowers grown here in Kenya from fancy stores in London and other parts of Europe? Why is Kiwi shoe polish produced Kenya now widely distributed all over Africa? Cases such as these where products and services could have been sourced competitively from other African countries but were procured from outside the continent is the greatest sad commentary on our integration efforts.

Several factors account for this slow progress including lack of political will, weak inter-country infrastructural facilities, political instability, economic nationalism, suspicions of dominance by large states, divisions along colonial heritage, etc. Clearly, the challenges are mostly political in nature.

A major failing of these past efforts, therefore, has been the focus on the political leadership and the negligence of non-state actors in the integration process. Or put another way the political declarations are not synchronized with private sector efforts to move the process forward on the economic plane.

Indeed, it was not until the 1990s that African leaders gave non-state actors a strong voice in the continent’s integration initiatives. At the Conference on Security, Stability, Development and Cooperation in Africa (CSSDCA) organised by the Africa Leadership Forum (ALF) and held in Kampala, Uganda in 1991, there was, for the first time, an extensive analysis and synthesis of how to promote regional cooperation and integration for Africa's socio-economic development, security and stability which involved Africa’s civil society and other non-state actors. Participants at the conference agreed that "the process of integration is too important to be left to governments alone. Equally important is the need to encourage and promote active involvement in the integration process of various socioeconomic actors such as trade unions, chambers of commerce, academics, women, youths and other professional associations."

In subsequent forums, the ALF continued to impress on African leaders that the leading driver of integration is the private sector, after governments have provide conducive atmosphere. The result of these civil society interventions has been a significant shift of focus from state actors to non-state actors in Africa’s integration process.  This last point leads me to the second factor that makes our theme for this convention timely and significant.

In many more ways than are currently recognized, Africa’s private sector has proven effective in blurring state-border lines and promoting the free-flow of goods and services, capital, labour and markets. A significant catalyst for this cross-border commerce is the emergence of African multinationals which were non-existent about 20 years ago. The multinationals are Africa-based companies that are wholly founded by African investors with accumulated capital that can be easily moved within Africa. As a result Africa’s investment in Africa are becoming significant.

Recent reports indicate that African Multinationals are expanding across the region, building partnerships with players from other African countries, and opening up trade and manufacturing within the continent. This demonstrates that integration is about people and their constant aspiration for opportunities, and not so much about states and political institutions.

Kenyan, South African and Nigerian companies have taken the lead in this drive to explore the African market and integrate commerce on the continent. Examples of this include companies like United Bank for Africa (U.B.A), Multichoice, Dangote Group, Oando, Zenith Bank, Equity Bank, and DAAR Communications, among others. Their impact is well documented in publications like the 2010 McKinsey report, Lions on the Move: The Progress and Potential of African Economies, Pioneers on the Frontier: Sub-Saharan Africa’s Multinational Corporationsand books like Africa’s Third Liberation by Greg Mills and Business in Africa: Corporate Insights by Dianna Games. I am pleased that two of these authors are resource persons for this convention.

Ladies and gentlemen, within the last 15 years, these African Multinationals have rapidly expanded in Africa and in doing so have hastened the process of integration and improved relations between their home countries and host countries. For example, the Nigeria-based U.B.A Group operates in about 19 Sub-Saharan countries. As its deliberate policy of integration, a staff of U.B.A in Kenya, for instance, is required to see himself as a staff of the multinational U.B.A Group instead of U.B.A Kenya.

Closely related to the UBA example of how corporate Africa is removing borders is the case of the Kenya-based Equity Bank. The bank recently began its expansion into other East African countries by acquiring local banks. Reconciling employees of the acquired banks with Equity Bank’s corporate culture was time-consuming and expensive. To mitigate these costs for new operations in Rwanda and Tanzania, the company brought 100 employees from those markets to work at headquarters in Kenya before they began work at the branches abroad.

This throws up an interesting aspect of economic integration which is that it ultimately enhances social and cultural integration. Today, Africans are learning more about their cultures and those of other Africans because of companies like Multichoice. There is hardly any Kenyan with a satellite connection who has not watched a Nigerian drama on the very popular Africa Magic channel. In Nigeria, and I believe several parts of Africa, a song called Khona has been on the lips of young people for a while now because it has been actively promoted by African multinationals in the entertainment industry. I am told it is a song by the South African music group Mafikizolo. The effect is that Africans are more and more connecting with their brothers and sisters than it was decades ago. Wherever I go in Sub-Saharan Africa, people greet me Igwe! Obviously copying what they had watched in Nollywood films on African magic.

The success stories of the private sector in Africa’s integration efforts are many. It seems to me that whatever the public sector gives, the private sector makes greater. Let me illustrate this with the private sector-led telecommunications revolution that has enhanced connectivity in Africa and beyond.

In 1999, when I returned as President of Nigeria, the telecoms sector had only one licensed operator which was the state-owned NlTEL. The company had an installed capacity of 450,000 telephone lines in the entire country. Most of which were owned by government offices or officials by the way. Soon after, we began the process of liberalizing the sector. By 2007, owing to the mobile network, this number had increased to 38 million, making Nigeria the country with the world’s fastest-growing teledensity. By April 2010, the number of mobile phone lines had increased to 85 million, with many people subscribing to multiple lines. That number has exponentially grown to 113 million active lines as of December 2012.

To provide the infrastructure that supports this high teledensity, another Nigerian company funded by the Africa Finance Corporation, the Pan-African Infrastructure Development Fund (PAIDF) and a number of Nigerian banks, has built and is expanding a submarine communications cable with potential to connect at least ten African countries, including Nigeria, Ghana, Morocco, Senegal, Gabon, Cote-d’Ivoire, Angola, South Africa, Congo and Namibia. For these to continue to happen, these must be energy, mutual confidence and mutual encouragement between the private sector leaders and public sector leaders.

But the growth in Nigeria’s telecoms sector is not the focus of my illustration. I would rather we pay attention to the fact that all the major players in the sector are African multinationals. They include the likes of South Africa’s MTN and Nigeria’s Globacom.  The Zimbabwean mobile operator, Econet Wireless, was also a key player in the early days of the mobile revolution. Non-African operators liked Vodacom who thought the business environment in Nigeria was too unpredictable refused to take advantage of the mobile revolution at the initial stage. They realized too late in the day that the reforms were indeed real and profitable, much to the advantage of their African counterparts who had faith and moved on and reaped the benefit of their faith and enterprise.

I believe that this trend in Africa’s telecoms sector can be replicated in several other sectors to provide opportunities for African businesses in Africa. In this regard, the ongoing privatization of the power sector in Nigeria offers African companies a huge opportunity to move into a sector that urgently needs to generate and distribute well over 40, 000 MWs of power from its current 4, 000 MWs. If Nigeria will be an industrializing nation.

Despite my optimism that Africa can be a productive ground for African businesses, I am aware of the challenges that need to be urgently addressed.  There are issues of inadequate infrastructure that limits production as well as the movement of goods, people and even capital; weak institutions that are unpredictable and unreliable; labour forces that are unskilled; harsh political and business environments; intellectual property infringements; cultural differences that impede growth; corruption that drowns corporate transparency and integrity.

These issues have been well articulated by others. Our task at this convention, however, is not to merely rehash them. It is to take the opportunity to interrogate the urgent areas of intervention and come up with recommendations that will be widely circulated among policy-makers, for implementation to move African integration forward on the economic plane.

Let me conclude by saying that I believe Africa’s rapid economic integration is possible and it will happen but it will happen faster with the active involvement of the political leadership. At best, the expansion of businesses and the opportunities it will bring along will force the hands of political leaders into action. It is therefore not only politically wise but also strategic that political leaders recommit fully to efforts aimed at ensuring rapid integration across the continent by helping African businesses grow on the continent and beyond.

I thank you for your attention and may God grant us fruitful deliberations.

 

 

 

 

 

 

 

 

 

 

 

 

 

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