Author Archives: Lars Benson

The Role of Business in Advancing Political and Economic Freedom in Africa


This week nearly 50 heads of state will attend President Obama’s U.S.-Africa Leaders Summit in Washington, DC to discuss trade and investment, security, democratic development, and how to achieve a better quality of life for all Africans. The summit will bring together government representatives, business people from the U.S. and Africa, and leaders of civil society groups.

In many ways this summit will be the beginning of a hopefully much larger conversation on how the United States and 54 African countries can increase economic ties, strengthen democratic development, and create new economic opportunities and freedoms for Africans.

To help start this conversation, CIPE and Freedom House brought together several U.S. and African thought leaders to offer their insights on how to advance political and economic freedom in Africa at an event August 1. The purpose of the event was to reinforce the case that good governance and democratic values are closely linked to sustained economic growth, and to offer some actionable ideas on how to strengthen the U.S.-Africa partnership.

The panelists included: Kim Davis, Managing Director and Co-Chairman at Charlesbank, Hon. Donald Gips, Co-Chairman of the U.S. Chamber of Commerce Africa Business Initiative, Betty Maina, Chief Executive of the Kenya Association of Manufacturers (KAM), and Aniket Shah, Global Investment Strategist from Investec.

As Hon. Gips mentioned, many American firms are not even at the “starting line” with regards to expanding their business into Africa. There is no doubt that there are plenty of opportunities and that different countries on the continent are experiencing economic growth and a growing middle class of consumers that offer both African and international companies new opportunities to expand their markets. But for many reasons, few U.S. firms outside of the extractive industries are investing in Africa.

At the same time, Freedom House’s Freedom in the World Index shows that many African countries are not advancing political and economic freedoms, and in some parts of Africa are reversing previous gains. As Betty Maina from KAM pointed out, after the fall of the Berlin Wall there was a great promise “for a better life and democratic opportunity,” but Africans have not built the underlying institutions necessary for democracy to succeed – instead focusing almost solely on conducting elections.

“There is currently a despair about democracy and the fundamental ingredient to change this is the building of proper institutions,” Maina said.  As former Ambassador to South Africa, Hon. Gips, put it: “the hard part is what comes after the elections.”

So what can the business community do about the current state of affairs? Kim Davis emphasized that business has a deep interest in the rule of law. African countries need judiciary systems that work and business climates where contracts can be enforced. Keeping the system accountable requires freedom of the press, and African businesses need to push for greater press freedoms.

Read More…

Remembering Nelson Mandela


Today we all pay tribute to one of the world’s greatest democrats, who overcame many challenges and whose leadership and life inspired millions around the world.

Nelson Mandela spent 27 years in prison fighting against injustice of South Africa’s apartheid government. Shortly before entering prison in 1964 Mandela gave a speech about “cherishing the ideal of a democratic and free society in which all persons live together in harmony and with equal opportunities.”

This passion for trying to create a better world served as Mandela’s guiding principle and served him well when he faced the greatest challenge of his life in building a new nation of South Africa when he was elected President in 1994. At his inaugural he said “We enter into a covenant that we shall build the society in which all South Africans, both black and white, will be able to walk tall, without any fear in their hearts, assured of their inalienable right to human dignity – a rainbow nation at peace with itself and the world.”

Read More…

The Kenya Westgate Mall Tragedy

kenya attack

In the worst terrorist attack in Kenya since the 1998 U.S. Embassy bombing, 49 people lost their lives and over 150 people are injured in an assault on the Westgate Mall in Nairobi, Kenya. As of Sunday at 6PM this tragedy is still unfolding since the armed attackers are still in the mall and with an unknown number of hostages. According to the local new outlets, they claim to be from the Somali-based Islamist group Al Shabab and the reason for the attack is still unclear.

I am very familiar with the Westgate mall and was last there in 2012 enjoying a wonderful lunch and visiting the Masaai market to purchase handicrafts.  As the largest mall in Kenya, many families go there for their shopping or to spend a leisurely Saturday afternoon (when the attack first took place). I still remember where I was on September 11, 2001, when the United States was attacked by Al Qaeda, and I am sure I will remember where I was when Al Shabab attacked a commercial center in Kenya. I was fortunate enough to be in Mombasa, Kenya at a seaside resort facilitating a two-day Kenya Private Sector Alliance (KEPSA) Board retreat.

A CIPE consultant, Rick O’Sullivan, and I were working with 12 people on putting together a plan to implement KEPSA’s 2013 National Business Agenda. Part of the retreat was focused on establishing the private sector advocacy priorities and one of the points we made was how unforeseen external events will sometime set the agenda for the government, private sector, and civil society. Little did we know that a few hours later a major event would transform the lives of so many Kenyans and their families.

Unfortunately, this tragedy directly touched the life of the Chairman of KEPSA, Vimal Shah, who lost his cousin in the attack. Shah stepped out of conference room  during the Board Retreat to briefly speak to his cousin who was managing a youth cooking event at the mall before the telephone call was cut short.

Today upon our return to Nairobi, we drove to a home near the unfolding tragedy to pay our respects to Shah’s family. Later in the day I had the opportunity to walk the streets and was planning on donating blood. The security forces and the Red Cross set up facilities in various locations across the city for people to donate blood. When I arrived at the designated Red Cross area in downtown Nairobi, there were five or six tents set up and thousands of people waiting in line for the opportunity to donate blood. Tonight it looks like this terrorism saga will continue until the hostages are released, but it is clear that somehow the Kenyans will also overcome this tragedy since they are already coming together as a nation to help those in need.

Lars Benson is Senior Program Officer for Africa at CIPE. As of this morning, the official death toll in the Westgate attack stood at 62 and Kenyan security forces claimed to have regained control of the building.

Kenya’s Imperfect Election

Kenyan citizens line up to cast their ballots in today's election. (Photo: Voice of America)

Kenyan citizens line up to cast their ballots in today’s election. (Photo: VOA)

Long lines as biometric kits fail, sporadic violence that has resulted in death, and accusations of vote buying have not stopped more than 14 million Kenyans from heading to the polls. The international community and many Kenyans are worried that today’s election could result in a repeat of the 2007 election that resulted in more than 1,133 deaths and hundreds of thousands of displaced people. While not perfect, it does seem that Kenya’s 10th election since independence in 1963 will not be a repeat of 2007.

The dynamic has changed. First, Kenyans showed when they approved the constitution in 2010 that they had a new vision for the future. Second, while many political campaigns are still based on tribal affiliation as in the past,  the current candidates do not want to be accused of instigating violence. Kenya has revitalized its judiciary and the heavy hand of the International Criminal Court seems to be in the back of every candidate’s mind. Third, Kenyans themselves realize that in 2007 they stepped up to the precipice and almost dissolved into a failed state, and this time around citizens and civil society have had five years of preparation to prevent a repeat of the past.

Read More…

Beating the Drums of War and the Latest Oil Conflict in Africa

A worker inspects a damaged oil pump in Heglig. (Photo: Reuters/Mohamed Nureldin Abdallah)

Sudan and South Sudan took one step back from an all out war on Friday when South Sudanese President, Salva Kiir, agreed to withdraw military forces from the contested oil-producing town of Heglig, which was occupied by South Sudanese forces after fighting on April 3rd. Heglig is claimed by both Sudan and South Sudan and remains one of the many unresolved issues since South Sudan became the newest independent country in June 2011.

The dispute over Heglig is part of a larger conflict between the two countries over borders, as well as other unresolved issues such as the transportation of oil from South Sudan to the Port of sudan, the status of the 500,000 South Sudanese living in the north, claims of state support to ethnic militias by both countries, and, most recently, Sudan’s aerial bombardment of several towns inside South Sudan.

There are no winners in war — just different levels of losers. The latest flare up should not be considered an isolated event but rather part of a several decades long civil war, now involving two independent countries. However, the current dispute is somewhat different in that both sides are attempting to ensure maximum economic destruction. This conflict is all about oil and the potential revenues it generates in an otherwise poor and underdeveloped part of the continent.

The latest incident started in January 2012 when South Sudan completely shut down oil production after an ongoing dispute with Sudan over the cost of transporting the crude from landlocked South Sudan to the Port of Sudan in the north via pipelines. Sudan was demanding $35 a barrel — more than a third of the final price on the world market  — while independent experts suggest the fee should be between 50 cents and $3.50. In addition, it became public knowledge that Sudan was clandestinely siphoning off oil for their own refineries, which the Sudanese government has since argued was taken as “payment in kind” for its pipeline services. Sudan and its southern neighbor have been locked in negotiations over how to split South Sudan’s oil revenues since the Comprehensive Peace Agreement, which dictated a 50/50 revenue split, expired in 2011.

South Sudan’s actions drew popular support at home but are not sustainable over the long term. 98% of South Sudan’s revenues come from the export of oil. The government and Parliament of South Sudan quickly passed an austerity budget. But perhaps austerity is the wrong word — given that there are numerous reports that the government’s budget is 1/3 larger than the previous budget.

Critics of South Sudan’s actions in January, the last time the country cut off its oil exports, often state that the Southern response was not well thought out, but perhaps this was the opening for the SPLA army incursion into Heglig. By taking over Hegling in March, 2012, South Sudan deprived Sudan of 50% of their current oil production of 50,000 barrels of oil per day. Given Sudan’s international isolation and continuing economic deterioration the two sides are trying to resolve their remaining issues through a war of economic attrition.

Part of the key role of the state is to provide for the security, education, and health of its citizens. Although South Sudan’s recent withdrawal of troops is a commendable step towards de-escalating the current conflict, the issues of oil revenues, which both countries are so dependent on, remain unresolved. Neither state can afford or sustain an economic war of attrition and while the international community steps up its efforts to find a peaceful solution, time is not on the side of peace.

A New Way of Measuring Corruption in Kenya


Anti-corruption suggestion box in kenya (Source: Flickr user lauren_pressly)

Transparency International last week released its annual report, which suggests that Kenya is losing the battle against corruption. According to the report, Kenya ranked 154 out of 182 countries surveyed, indicating that both Kenya and Zimbabwe, who are tied, are at the bottom of the scale of countries worldwide combating corruption. The plague of corruption in developing countries has consequences. Corruption scares away foreign direct investment, creates poverty, leads to unemployment, limits the ability of governments to raise tax revenue, results in a misallocation of resources, poor economic development, and a lack of competition. Against a 19% inflation rate and high unemployment, Kenya can little afford the consequences of corruption.

Studies that measure public perception of corruption are a useful tool in comparing anti-corruption efforts (or the lack thereof) across countries, but they do not provide actionable data to combat corruption. In Kenya, the Center for Private Enterprise (CIPE) and its partners have recently tried a different approach. The Kenya City Integrity Project does not measure the level of corruption in Kenya. Instead, it looks at measures to prevent corruption and how effectively those measures have been implemented. And it does so at the city, rather than the national, level – the level where most corruption actually takes place.

Last week the CIPE, Global Integrity, and the Kenyan Association of Manufacturers hosted a series of roundtables in Kisumu, Mombasa, and Nairobi for Kenyan stakeholders from civil society, local government, and the private sector to discuss the study, which was conducted by four Kenyan research organizations in August 2011. As a new kind of corruption “scorecard,” the study covered transparency, anti-corruption, and accountability efforts in Kenya’s three largest cities, which contribute about 80% of Kenya’s GDP. The purpose of these roundtables was to engage all stakeholders in developing specific recommendations that the government could act upon to improve service delivery and minimize corruption.

The report is the first ever attempt at the city level to understand whether relevant anti-corruption laws exist and whether they are being properly implemented. It is also unique in its depth, covering 177 different indicators. In an effort to understand the key governance and anti-corruption mechanisms that already exist, the study focused on systems that govern city elections, media freedoms, how city governments resolve conflicts of interest, city fiscal and budgetary management, and city administration and business regulations. This report answers the key questions on whether citizens have access to city government, whether citizens effectively monitor government services, and whether citizens can freely and effectively advocate for reforms.

The three city assessments do not seek to measure the extent of corruption but rather to understand the medicine applied to combat corruption: the public policies, institutions, and practices that deter, prevent, or punish corruption. The research was conducted by three Kenyan firms that understand the Kenyan realities – including the Kenyan Association of Manufacturers and Hakijamii Haki Yetu, the Civil Society Organization Network  – utilizing Global Integrity’s award winning research methodology.

Unfortunately, the study found that all three cities need to do a much better job implementing existing laws. Kenyan cities have policies and regulations in place that should allow for transparency and accountability in governance. However, although laws exist, they are not properly implemented. One of the quickest and most effective solutions to corruption in these cities would be for the city administrations to implement existing laws. The reality is that solutions combating corruption are often much more complicated than they appear.

The implementation gap (chart)

Source: Kenya City Integrity Project

In Kisumu, the study found, the media has the freedom to report on corruption cases without fear of intimidation. City elections for the most part are free and fair. There are regulations in place that are being implemented on public procurement of goods and services and there are frequent audits of government purchases. In order to potentially reduce corruption the city needs to create regulations to enforce asset disclosures so that the electorate can determine who is financing the political candidates. There are no codes of conduct governing the city’s executive and legislature. This means that any conflict of interests between city officials and the provision of services cannot be properly enforced. Finally, the city needs to integrate the work of different departments as part of a comprehensive strategy to develop the city, provide services, and attract investment.

The District Commissioner of Kisumu, Mr. Mabeya Mogaka suggested that “all stakeholders focus on hope. Changes are being implemented that include a 14 day requirement that all public officials respond to inquiries in writing. While this report was conducted in August, since then the city has elected new officials and we must give them time to assess what is going on and implement change. This requires that all of us government, civil society, and the private sector work together.”

Mombasa’s strengths include its efficiency in managing public finances, disclosing budgets, collecting taxes, and auditing city expenditures. The researchers spoke highly of the city procurement system for goods and services, but there is ambiguity in how tenders are awarded. Although systems exist, the research revealed that a select few companies or individuals are often the beneficiaries of public tenders. Another weakness is the hiring process for public officials. Civil service positions are advertised in local papers, but the selection process is not very transparent. Although Mombasa has embarked on several development projects, political patronage seems to dominate where projects are implemented. Although journalists are aware of corruption few stories actually make it into the paper as editors block certain stories for fear of losing advertising revenues.

Finally, Nairobi’s strengths include free and fair elections, excellent management of taxation and city audits, and the effective public administration and business administration systems that the city has put into place. Unfortunately, local businesses complain about the poor quality of service delivery in Nairobi even after paying taxes. Many businesses feel that the enforcement of city’s laws and regulations is selective and that there are not forums in place for business to provide input on policies or budget decisions. A business faces burdensome licenses and regulatory approvals and although citizens pay taxes, the quality of services remains poor.

Over the coming months, KAM and the local researchers will present the report to government and civil society along with concrete recommendations that include further engagement, enforcement of existing laws, creation of “one-stop-shops” for licenses and tax payments, and a proposal that high-ranking civil servants sign a voluntary code of ethics.

From stability to growth in Zimbabwe

Zimbabwe is at a crossroads. After ten years of inflation, burgeoning unemployment, and political turmoil, there is a possibility that the country is turning the corner. “Zimbabwe could see economic growth of 8.1 percent in the second part of 2010,” recently stated the Minister of Finance, Tendai Biti. The International Monetary Fund is a little less optimistic, projecting Real GDP growth rates of 2.2 percent for 2010 and zero or limited growth in 2011.

Read More…