Tuesday, October 13, 2015

Does Africa need lobbyists?

Christine Mahoney says local firms can push governments to win law, order and profit

Does Africa need lobbyists?


UPDATED: Africa needs engineers, teachers -- and lobbyists?

In Africa's largely informal economies, governments often take a predatory approach to the private sector. "It is difficult to start a business, since the governments charge countless fees and nickel and dime you every step of the way. If a company is successful, it is forced to pay bribes," says Prof. Christine Mahoney, a University of Virginia professor, Bucks County native and triple-Penn State graduate.

Mahoney last month was keynote speaker for a summit of Western aid agencies and African business groups that represent taxi drivers, traders, storekeepers and other small businesses from several countries -- in Dar es Salaam, Tanzania. They swapped strategies and tactics on lobbying local governments for laws and enforcement on property rights, licensing, taxes, market regulation and other basic building blocks of capitalism.

The American development agency USAID has lately joined a Danish-led, British-supported effort to help 'create 'business-supportive environments'" in African countries, Mahoney says.

This is the next step in a long progression that has included direct Western support of African governments (which fed "a lot of corruption,") non-governmental aid orgainzations (which had the unintended side effect of enabling governments to avoid basic services and responsibility for handling crises), and "civil society" movements (which helped lead to the "Arab spring".) The Tanzania meeting brought the aid groups together with regional project managers to talk about "best advocacy practices"; agency people prefer to call it "advocacy" though it's the same thing as "lobbying," Mahoney notes.

Lobbying often has a "bad reputation" in the West, "but it is part and parcel" of "a functioning democracy. When policy is developed, busines associations should be a big part of that" with other "civil society" groups. "That hasn't existed in many countries in Africa," she told me.

Mahoney calls Ghana's business associations, aided by the Danes and USAID, among the pioneers of "private sector or PS" organziations. In fast-growing Nigeria, business groups are struggling to gain a voice that could encourage the government to implement difficult reforms like the recent overnight removal of the national fuel subsidy in stages, instead of the recent "overnight" cutoff that forced small firms out of business. Kenya suffered a similar shock when the government boosted the tax on tea, the company's major export, without considering the impact of reduced demand on the small family firms that grow most tea. Mozambique, recovering from civil war, has welcomed local business-group formation.

The effort to organize small business and entrepreneurs "is significant. It reflects the fact that seven of the 10 fastest-growing economies globally are in sub-Saharan Africa," Witney W. Schneidman, a Bryn Mawr native who is Senior Advisor for Africa at the Washington law firm Covington & Burling, told me. "Africa is no longer a continent in crisis" but "a continent of opportunity," he added, and business lobbying can help.

U.S.-based Africa activists are warming to the idea, though they're still suspicious of business motives. "This sounds like a positive initiative to boost responsible investment," and "there are many bright spots in the continent," but 'we've had negative experiences with Chambers of Commerce in Congo, which have essentially been putting a good face on smugglers and warlords who trade in conflict minerals," notes Sasha Lezhnev, senior policy analyst at the Enough Project, a national organization co-headed by Philadelphia's own John "JP" Prendergast, which pressures Congress and the State Department to sanction companies that profit from civil wars and other Africa conflicts.

Mahoney is a Fulbright scholar who worked as a lobbyist in Europe. She took an interest in world affairs as a kid working for her aunt, event planner Karen Homer, whose HKH  Innovations runs the Lliberty Medal events in Philadelphia, and Homer's ex business partner Fred Stein. 

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PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

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Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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