A lack of leadership in Africa threatens economic progress

In a hotel lobby in Cape Town in 2009, I saw the largest amount of cash I have ever witnessed, being counted in wads from the designer holdall of a sharply-dressed young woman onto the counter. Earlier in the week, some Zimbabweans in the bar had been gleefully handing out 50 trillion Zim dollar notes - the worthless legacy of the country’s hyperinflation - but this was hard currency, and it was coming out in stacks. When I asked who she was, one of her accompanying delegation shrugged and uttered the magic word: “Mugabe.”

Even for the best-paid heads of government, the Mo Ibrahim Prize for African Leadership is a rich one. It offers $5 million over 10 years, and $200,000 per year for life thereafter; the kind of money only available to the kind of former leaders who can milk the after dinner speaking circuit in London and Washington DC. It has been awarded to the Mozambican peacemaker Joaquim Chissano, the Botswanan corruption-fighter Festus Mogae and Cape Verde’s reformist president Pedro Pires.

But for the second year running the panel have decided that no one warrants the award. No departing African leader has met the criteria by leaving office at the end of a constitutionally-mandated term as a democratically-elected head of government, having made a meaningful contribution to their country’s development. In the seven years since the inaugural award, it has only been given out three times.

It is a further hit to the international image of African leadership. A few days before the Ibrahim Foundation’s announcement, the African Union declared that the International Criminal Court should not prosecute sitting leaders, acting in solidarity with the Kenyan president, Uhuru Kenyatta, who is facing charges of inciting violence in the aftermath of his country’s 2007 elections - so is his vice president, William Ruto. Both have said their indictments are a distraction for a country dealing with the aftermath of the Westgate Mall terror attacks. Such a move creates perverse incentives for leaders to stay in power - if the retirement plan could be a room in the Hague Hilton, there is very little reason to go quietly from office. Term limits be damned.

Critics of the court note that all of the indictees at the ICC are Africans. So were their victims.

The victims of crime and corruption, of state failure and poor economic management, do not have much of a voice in Africa’s development debate, and the lack of accountability of their leaders has been manifest in the startling economic imbalances that still blight many African countries. Despite runaway economic growth over the past decade, poverty remains structural in many countries and inequality is huge. The growth has been captured by elites - sometimes legitimately, sometimes not. There is a statistic that is quoted endlessly by investors touting Africa’s ‘rise’: seven out of the 10 fastest growing economies in the last decade are African. Seven out of the world’s 10 most unequal countries are also on the continent.

In a session at the World Bank meetings in Washington DC last week, the institution’s chief African economist showed finance officials from the continent a graph comparing Africa’s poverty reduction to those of other regions. In 1990, East Asia and Africa all had similar poverty levels. Since then East Asia’s poverty rate has fallen by 44 points; Africa’s has fallen by eight.

The reason for this is that the structure of many African economies, a leftover from colonialism exacerbated by the client governments during the Cold War, is ideal for what economists call the extraction of rent. Primary commodity exports - minerals, oil and crops - still generate much of Africa’s foreign exchange earnings, and while there are improvements in transparency in contracts and increasing international pressure, this structure is vulnerable to politicking, patronage and graft, which has led to a situation where many of the old guard would hardly need Ibrahim’s money.

Take Angola’s José Eduardo dos Santos, president since 1979. In the unlikely event of his early departure from office, the money he and his family have amassed during the country’s oil-led economic growth should keep him secure in his dotage. His daughter, Isobel, is probably Africa’s wealthiest woman; his son, José Filomeno, was appointed to lead the country’s $5 billion sovereign wealth fund and is being positioned to take over the family business. This is not an isolated example.

The capture of wealth by the top few percent in political dynasties creates a self-reinforcing cycle of inequality that can only be broken by the strengthening of the rule of law - or by a decoupling of that system of privilege from the cash it thrives on, which means cutting off the money at the source.

International companies are still paying those rents, cutting those deals with administrations that abuse their positions, lauding the entrepreneurship and pragmatically courting the capital of individuals who have gained their position through graft and exclusion.

This is not an exclusively African problem: if is manifest in Eastern Europe and in Latin America; in South East Asia and in the Caribbean. It is an affliction of developing societies, participated in by companies and leaders from across the developed world as they trumpet the value of economic growth above all other metrics of state success. But you cannot grow your way out of inequality while your economy is structured around privilege.

Without legal accountability, awards like Ibrahim’s will not create incentives for change on their own. The prize offers valuable exemplars of what good leadership can be, but even if it was tripled in size it would not match the compensation of the most corrupt.

Pete Guest is a freelance journalist specialising in Africa and conservation and climate change. He is crowdfunding his new book, Africa Rising and Other Cliches with the publisher Unbound.