Can Business Elites Save the “Africa Rising” Narrative?

Major challenges are once again poking holes in Africa’s success story. Not only has the continent’s poor governance rating remained relatively unchanged since 2008, but also, according to the International Monetary Fund, economic performance this year fell to its lowest level in more than 20 years. The S&P Global credit agency downgraded South Africa’s credit to “junk status”; Nigeria is suffering as a result of the persistently low price of oil; and North African economies (especially Libya) have yet to noticeably bounce back since the 2010 Arab Spring. Indeed, the rosy ‘Africa Rising’ narrative that shined so bright a decade ago (coined by TIME magazine) is flickering precariously. A 2016 Financial Times headline (albeit on an article about commodity prices) aptly summed up the situation: “Africa: Between Hope and Despair.”

Will history repeat itself? Will age-old issues including civil unrest, corruption, and cowboy capitalism resurface as the modus operandi of those in charge of Africa?

We doubt it.

We’re cautiously optimistic, and one reason why is the new breed of change agent that has emerged in Africa in recent years: business elites. Africa’s super-rich have become actively involved in ensuring that the light keeps burning in Africa. These individuals are demonstrating a heightened social consciousness as they flex their financial muscle to fight social ills by (among other things): investing in young leaders, supporting social enterprises, and making mega-donations to curb poverty and disease.

The African elite response to the West African Ebola virus epidemic provides a good example: Despite inflows of aid from abroad, many African business elites donated substantially; their financial contributions outweighed those of most African states and even came close to matching big foreign donors.

Another factor we consider important? Besides the financial benefits they stand to gain in a growing economy, Africa’s business elites appear to be motivated by an economic patriotism aimed at ensuring the well-being of their home continent, in large part because many hail from less-privileged backgrounds. Patrice Motsepe—who recently committed to donating half his wealth to charity—began his journey towards becoming South Africa’s richest black man by working in his father’s tiny “spaza shop.” Similarly, during a speech at the launch of the Tony Elumelu Foundation Entrepreneurship Programme, Nigerian billionaire Tony Elumelu—born into a non-elite family—identified with an inherent African-ness in regard to development:

To be able to make it at home, on a continent handicapped by narratives of hopelessness, the fact that entrepreneurs from humble beginnings, like myself, like [many others], not only speaks to the potential for success in our homeland, but it gives hope to other budding African entrepreneurs, wherever they may be, that success is possible; that they can help build the Africa we want to live in.

Admittedly, that African business elites engage in social change activities poses an irritating dilemma. There is concerning evidence regarding rising income inequality, and a growing elite class. While the number of African millionaires has doubled since 2000, Africa’s poor are not necessarily better off. We thus do not propose handing over the reins to uber-wealthy business people as the sole drivers of economic development—states must play a leading role. Nonetheless, it is hard to ignore the fact that business elites have always been important drivers of economic development, and that the potential for them to do the same in Africa is great.

So the question then becomes: What is their best course of action? What sorts of strategies are available to business elites who want to drive change in Africa?

Four social strategies to drive positive change

Our recent research on African change agents (to be published later this year in the Routledge Handbook of Organizational Change in Africa) suggests four social strategies that may prove particularly useful. Each would be tailored according to the level of proposed change sought (the extent to which an individual engages in large-scale macro changes, for example addressing systemic issues regarding capitalism, or whether the individual advocates small-scale micro changes, which often involves local projects, such as building a school or donating to a humanitarian disaster) and the extent to which individuals seek to use their own businesses to further social change activities.

The strategies are:

Four social change strategies that may help Africa’s wealthiest businesspeople effect social change and drive economic growth.

Philanthropic change. Much has changed since J.P. Morgan, John D. Rockefeller, and Andrew Carnegie gained legendary status as the “fathers of philanthropy.” Today, philanthropy has moved away from narrowly defined charity work as elites become more actively involved in redistributing their amassed wealth strategically. In this respect, elites target specific social issues that are considered especially troublesome and set measurable targets to address these issues. A philanthropic change strategy involves separating core business activity from social change initiatives, which often involves using corporate foundations as a vehicle to do so.

The Dangote Foundation is a case in point, and vividly illustrates how business elites can pursue social change through philanthropy in Africa. The Dangote Foundation is associated with the Dangote Group, which is a construction and manufacturing corporation led by a Nigerian billionaire businessman, Aliko Dangote—Africa’s richest, and most generous philanthropist. The Dangote Foundation has donated to the World Food Programme ($2 million) and works in partnership with other foundations such as the Bill and Melinda Gates Foundation.

Corporate change. Social change can also originate from within corporations. This strategy often takes the form of corporate social responsibility (CSR) programs. C-suite executives embed sustainability, ethics, and “good” business practices within their companies’ DNA. Business elites emphasizing a corporate change strategy have a sharp eye for “win-wins,” or instances where their company’s bottom line and society benefit concurrently.

Nicky Oppenheimer, heir of the De Beers diamond company and Africa’s second-richest person, is one notable corporate change agent. Despite having sold his 40 percent stake in De Beers to Anglo American for $5.1 billion in 2012, Oppenheimer was instrumental in De Beers’ current corporate sustainability strategy. The company’s CSR program is expansive, and has included an organization-wide HIV/AIDS prevention program, the construction of several primary and secondary schools, and a number of large-scale infrastructure projects. These projects are all intended not only to benefit local communities, but also De Beers’ financial performance.

Visionary change involves reforming economic systems and social institutions. This strategy requires an astute understanding of how multiple systems interconnect; hence, a visionary change strategy embraces complexity. An elite individual therefore appreciates the “big picture” over what others may perceive as a sea of struggles.

Elumelu, mentioned earlier, is an exemplar. His vision is called Africapitalism, an economic philosophy that hinges on the power of the private sector as a vehicle for long-term, sustainable value creation. As Elumelu, in the Africapitalism manifesto, suggests: “It is in the philosophy that the private sector, both foreign multinationals as well as African business leaders to break free from the historical tendencies of exploitation and extraction of wealth and instead focus on generating profit through wealth creation.”

Finally, a change-based leadership strategy does not distinguish between daily business operations and intentions to stimulate large-scale social change. Instead, this strategy involves completely intermeshing business strategy with social change endeavours. Change leaders thus often reject notions such as CSR and may consider philanthropy a form of ineffectual charity. This final type of strategy is rare and, in fact, wholly absent as yet within the African context. It’s worth serious consideration, however. In Western contexts, business elites who have adopted a change leadership strategy include Al Gore (co-founder of Generation Investment); John Mackey (co-founder and CEO of Whole Foods); and Richard Branson (B Team and Virgin).

In 2000, The Economist magazine stated that “Africa’s biggest problems stem from its present leaders.” Today, we believe that the reverse may be true: Africa’s biggest solutions will stem from its present leaders.

Read more stories by George Ferns & Kenneth Amaeshi.