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  • Corporate Lobbying: A New Mechanism for African Business Success

    13/11/2019

    Businesses are the bedrock of every continent. As the businesses grow, unemployment reduces, disposable income of households increase, socio-economic development improves and people have better standards of living. Yet, the situation in many countries on the continent points to the contrary: African businesses are underperforming or failing at a very high rate and lag behind their global competitors. In Ghana for example, about 75% of business fail within five years of start-up. This is unacceptable, because the failure of these businesses only deepen the economic woes of Africans and limits the continent’s ability to rise out of poverty. Moreover, the businesses that survive in Africa still lag behind their global competitors. The first question then is:  how do businesses in developed countries navigate the dynamic political and institutional environment for success?

    Sub-Saharan Africa is home to some of the world’s fastest growing economies and projected to be the world’s next frontier for entrepreneurs with its varied economic opportunities and emerging markets. The Stanford Africa Forum in 2011 projected that Africa will have a larger workforce than China or India and overlooked developing opportunities by 2040. The African Continental Free Trade Area was launched in July 2019 to provide opportunity for African businesses to compete globally and accelerate economic development on the continent. But the World Economic Forum notes that, the success of the trade bloc depends largely on how well national policymakers and African businesses are mobilized to take advantage of the growth opportunities available. This only echoes Rosa Whitaker’s assertion that “support for Africa is broad, but not deep”.  The second question then is: how can African businesses harness the support and goodwill that the continent enjoys for growth and success?

    Rosa Whitaker, named one of the world’s most influential lobbyists for Africa by the Africa Report in 2014 answers both questions when she says “…you have to push to get things done. I would like to have seen a unified policy agenda from Africa, not just a wish list”. She was speaking in response to how African governments can change US policy for the better. The same is true for African businesses’ approach to government and regulatory agencies. Lobbying and its manifold mechanisms and tactics to influence policy to create conducive environment and propel business operations for success has gained less attention in Africa. Beyond providing high quality products and services, international standards certifications, and reducing market uncertainties, African businesses must lobby policy makers to achieve conduce environment for business operations. In so doing, businesses must push a new frontier of dynamic lobbying to raise their fortunes and propel the development of the continent as a whole. Lobbying is the attempt to influence legislators in setting policy by taking a more active and wide ranging approach than simply submitting a proposal or speaking out against an issue. It generally requires involves the media, politicians and key people from your organization in an integrated strategy designed to ensure a positive response to your proposal and increase the chances of achieving objectives. The Transparency International defines lobbying as “any activity carried out to influence a government or institution’s policies and decisions in favour of a specific cause or outcome. Even when allowed by law, these acts can become distortive if disproportionate levels of influence exist by companies, associations, organisations and interest groups”. Lobbying, therefore, generally entails attempt to influence decisions and policy outcomes of government, legislators or members of regulating agencies (Ninua, 2012). To achieve this, mechanisms such as direct communication with government officials, participation in public hearings, support for draft bills and reports on policy issues, and media engagement (Chain, Hogan & Murphy, 2010).

    In Ghana and many other African countries, lobbying is considered undesirable activity which distorts democratic values. Proponents of this view hold that public interest must be embodied in democratic public institutions. This stems from the situation where special interest groups have hijacked democratic systems to their advantage by subverting public interest. However, there is a more positive view which considers lobbying as an indispensable democratic right, evidenced in freedom of expressions – in the form of petitioning governments or interacting with decision makers. In so doing, lobbyists contributes immensely to the enactment of quality and broad base legislation, public activity and policy making by providing expertise, feedback and industry insights.

    Why should businesses lobby? To win contracts, to enter new markets, to protect position in existing markets and to influence laws, regulation and policies that affect operation. The impact of lobbying on business performance has been demonstrated in several studies. For example, corporate lobbying leads to higher shareholder value, increases competitiveness of businesses, yields greater return than any other investment, a non market strategy to create value for the business. It must be noted that to eschew the excesses, lobbying must be transparent, not opaque. Good practices of self-regulations (often industry specific) and regulation to some degree by the state are necessary.

     

    This text was written by Moses Kanduri (http://bit.ly/33NXbYA), member of the Professional Advisory Board of Lobbying Africa Limited. Lobbying Africa’s Professional Advisory Board is the company’s independent tactical advisory body.

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