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Is $5m the cost of good governance in Africa?
Ethan Zuckerman, 1 Nov 06
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Mo Ibrahim knows a few things about how money works in Africa. He built a hugely succesful mobile phone business - Celtel - in countries most companies would write off as impossibly poor markets: Chad, Niger, Sierra Leone, Malawi. He sold Celtel in 2005 to MTC, a Kuwaiti firm with operations in Iraq, Bahrain, Jordan, Kuwait and huge global ambitions - the company was worth $3.4 billion and had such a strong brand and management team that MTC has been running it as a wholly owned subsidiary, not wrapping it into their Arab operations.

His success gives him the chance to figure out how he’d like to “give back? to the continent - after the CelTel sale, he announced plans for a $100 million personal foundation to fund development projects in Africa, using the model of “investment with a heart?.

But most people probably weren’t expecting one of his first major philanthropic investments to be a large cash prize for African leadership. The prize - $5 million over ten years, plus $200,000 a year for life. Leaders cannot collect the prize until they leave office.

Ibrahim explains that the prize is designed to address a problem most of us haven’t thought about: what do African leaders do when they retire?

There is much gossip and speculation about what Tony Blair will do when he leaves office next year. Will he join the lecture circuit? Will he take on a series of directorships? Will he write his memoirs?

In Africa, the choices for heads of state are more sobering. Most leave office with no chance of sustaining a lifestyle equivalent to the one they enjoy while in office. The income of former heads of government may seem a trifling issue compared to the major problems faced by many of the continent’s citizens. In fact it is of fundamental importance in securing its future.

A situation in which leaders face three choices - relative poverty, term extension, or corruption - is not conducive to good governance.

He goes on to explain that the prize offers a fourth option - govern well and be fiscally rewarded, recieving a prize worth more than the Nobel prize.

Clearly a few hundred thousand a year isn’t going to be sufficient for some African rulers. The Economic and Financial Crimes Commission of Nigeria calculated that roughly $400 billion was appropriated by Nigeria’s military leaders, much of it ending up in bank accounts outside the nation. (A page from the admittedly partisan shows amounts found in bank accounts linked to different Nigeria generals - it claims the information is from the 1999 Financial Times, but I haven’t been able to verify the sourcing of the figures. It suggests that General Babangida and General Sani Abacha were each able to expropriate tens of billions of dollars… Then again, Mobutu Sese Seko, who many believed plundered $5 billion from Zaire over the decades of his rule, may well have stolen only in the hundreds of millions, given that he died leaving only a few million in his Swiss accounts…)

But the prize isn’t designed to convince the Mobutus of the world that good governance beats dictatorial plunder - it’s designed to reward leaders like Ellen Johnson Sirleaf, John Kufuor or Amadou Touré, who will likely leave office after fulfilling their terms and will need to figure out what you do after leading your nation. The hope attached to the Ibrahim prize is that retired African leaders might be able to be constructive civil society figures, perhaps in the way former American presidents like Carter and Clinton have been since leaving office.

(I don’t know José María the former president of Costa Rica, well, but I’ve had some excellent conversations with him over the years at meetings we’ve both attended. When he was leaving his position with the World Economic Forum, I asked him what it was like to be a former president looking for work. He smiled and gave an answer I’m sure he’s given a few thousand times: “You know, it’s a new direction for people in my situation. Historically, being a Latin American president wasn’t a job you survived.?)

I think Ibrahim may have an interesting solution to a real problem, but it’s easy to see why others might find the prize silly, depressing or embarrasing. I’m expecting to see more posts like Gathara’s, titled “Bribing Africa’s Leaders to Stop Corruption“, which reads in part:

Of course [Ibrahim] would never call it what it really is: a bribe. While heads of government on other continents are expected to deliver peace and prosperity with only their people’s gratitude and a pension as compensation, in Africa’s case this is considered a tall order. This prize reaffirms the view that African leaders (and by implication, the African societies that produce them) are irredeemably corrupt. It is a view widely held not just outside, but within the continent.

I’d like to think that there’s a middleground between idealism and reality that gives space for an idea like Ibrahim’s to succeed - find the folks who are leading their countries out of idealism, but give them a real reward for fulfilling our expectations. But I find Gathara’s objections compelling as well - there’s a need to expect good governance in Africa, not to reward it as something extraordinary.

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Celtel is a hugely cool company. A month or so ago they ended roaming charges between Kenya, Uganda and Tanzania, and they plan to do so throughout Africa. The really cool thing is that the airtime credit transfer by SMS now works across those three countries - people already use it as currency, and now it's international.

Posted by: Alex (Not Steffen) on 2 Nov 06

Let's not exaggerate the importance of this gadget prize. It is a fairly standard Anglosaxon approach of looking at international problems and trying to solve them with charity, prizes, awards (get Ossama's head, you get US$25 million), bumper stickers, Geldof-concerts, gadgets, T-shirts, etc... It is a strictly unimportant bit of news.

I'm not saying T-shirts and awards don't help to draw attention to issues, but in the real world, real people are working on real and boring structural measures that really work. Also, Anglosaxon culture should watch out that it doesn't come to see the entire world as a playground for awards and charity events. They are already dangerously sliding down this slope (with their hopes pinned on Bono and Bob Geldof, etc...). This award is just another example of the trend.

Posted by: Lorenzo on 2 Nov 06

This is a great solution to a real problem in the world and universally applicable. Most countries probably have some form of retirement perks for leaders who step down from office but this is only a paper perk for many fragile governments. When a leader is ousted by the opposing political faction, then the 'paper' perks vanish in thin air. So the first order of business when a leader comes to power is to fend for the future of his family. This is the norm n the third world. Providing an official package like what Celtel is doing gives immediate confidence and security for a "good" leader to do his thing and do it well. This simple truth never crossed my mind and I never connected my own 401K preoccupation with the retirement needs of "forced into curruption" leaders.

Ethan, I am dissappointed, however, with your comment that it is "really a bribe". Is the US Ex-President's library perk a bribe, is my retirement pension from having worked hard in the strength of my youth and middle age a bribe and is your own retirement fund and anticipated social security income a bribe?

Thanks though for bringing this problem and solution into sharp focus here.

Posted by: Subbarao Seethamsetty on 2 Nov 06

Ethan, I retract my complaint, it is Gathara and not you who said that this is a bribe. Sorry.

Posted by: Subbarao Seethamsetty on 2 Nov 06

But the question is: will a leader who can make US$ 5 million per week by doing what Ibrahim doesn't want him to do, see US$5 million at the end of his entire career as a serious incentive? I don't think so.

The point is that this bribe is not nearly big enough a bribe.

Posted by: Lorenzo on 2 Nov 06

Moreover, let's not forget that the corruption in Africa actually works. It is a distributive economic system that is just the continuation of ancient social gift economics.

French anthropologists - vastly more in touch with realities in Africa than their moralistic Anglosaxon counterparts - have written interesting things about this:

Jean-Pascal Daloz, Patrick Chabal, Africa Works: Disorder As Political Instrument
(about the functionality of corruption as a redistribution of wealth drawing on the gift logic)

Jean-Francois Bayart, The Criminalisation of the State in Africa (African Issues).
(on why certain social and political mechanisms that are perceived as "criminal" in the West, are actually beneficial to some African societies).

Too many NGOs and development thinkers who plead for 'transparency', 'accountability' and 'good governance' are in fact neocolonialist pushers, trying to force Western ideas of governance on Africa. They urgently need a course in African economic anthropology.

Africa's system of corruption is not necessarily bad. It has a complex and useful function.

Therefor, the question is not how we should get African leaders to be better governors. Instead, we should learn better to understand the system, so that we can appreciate it and turn it into a more formal economic framework.

Posted by: Lorenzo on 2 Nov 06

Subbarao Seethamsetty,
The Merriam-Webster Online dictionary defines a bribe as money or favor given or promised in order to influence the judgment or conduct of a person in a position of trust. It is undeniable that Mo Ibrahim's prize is designed to influence the conduct of African leaders who occupy a position of trust. The same cannot be said of the US Presidential Library perk or of your pension.

Corruption is not an African way of doing business. It is a system through which a few individuals rip off the rest of the continent. With the continent losing 148Billion a year from the vice, it is ridiculous for anyone to suggest that we should somehow find a way to live with it.

Posted by: Patrick Gathara on 5 Nov 06



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