Corporate Governance and State-Owned Enterprises in Africa and Political Leadership

Corporate Governance and State-owned Enterprises in Africa and political leadership.
Until the 1980s, African economies were largely state-controlled. In economic terms, state control
was reflected in the following:
(1) The predominance of state-owned enterprises in all sectors of the economy;

(2) the administrative control of interest rates and credit allocation to companies and various sectors
of the economy;
(3) exchange rate controls.
Concomitant with the state-controlled economy was the lack of a democratic culture and institutions.
For many African countries, dictatorship by either military or civilian governments was the order of
the day. The traditions of rule of law, transparency, accountability and social justice, which underpin
governance, both at the national and corporate levels were non-existent. In State-owned Enterprises,
the government appoints the directors or managers who make day-to-day decisions about the
enterprise and exercise property rights. Through the directors the government made decisions
regarding investment, production, procurement and personnel matters. As a regulator, the government
sets technical standards of products, product prices and sometimes gives directives on cross-
subsidization (Otobo, 2000).
Peace.
Three decades of conflict have left a number of African countries with governments, civil societies,
and institutions in ruin. Thus, although poverty may well be the root cause of the social and political
chaos we are witnessing in Africa, peace is the sine qua non for development. Conflict renders it
difficult for economic actors to plan and undertake activities necessary for the creation of wealth.
Poor political and economic power in the hands of small, privileged and entrenched elite similarly
continue to bedevil many countries in Africa.
Strife is now recognized by most African leaders as being intolerable, a subject of regional concern,
and often a matter for regional attempts at reconciliation and peacekeeping. The international
community cannot come through the Somalia, Rwanda, and Liberia ordeals without acknowledging
the wisdom of paying far more serious attention to preventing future crises.
In setting out its ten-year agenda, the Special Initiative addresses peace first. Furthermore, it does so
in a way totally consistent with Africa and donor views. The initiative calls for the creation of a trust
fund to assure finance for peacebuilding actions by the Organization of African Unity. This approach
is endorsed in the DAC's recent Guidelines on Conflict, Peace and Development Cooperation that
urges donors to encourage regional organizations to develop comprehensive frameworks for the
promotion of conflict prevention and peacebuilding and orient their support for capacity-building to
help regional organizations act as a bridge between the international community and the states of the
region.
Nurturing democracy
The consensus at the governance forum in Addis Ababa was that although democracy is a difficult
process requiring vigilance and reinforcement, it is absolutely essential to good governance.
Recognizing that non-participatory systems of governance are no longer viable, Africa's heads of state
have made democracy a key part of their collective agendas over the past seven years.
Already, the great majority of Africans are voting for their representatives. They vote enthusiastically
and at participation rates that a number of developed countries can only envy. The issue now in Africa
is not whether to democratize, but how and how soon.An agenda to bolster democracy was developed
in the First Annual African Governance Forum. It includes suggestions for African states to: Meld
successful traditional systems and mechanisms of citizen participation with modern ways, Strengthen
the institutions of democracy, Enhance public education on democracy and Establish indicators of
progress toward improving the building blocks of democracy: for example, political liberalization,
transparent systems, the rule of law and human rights, and improved democratic structures. The task
now is for countries in Africa to move forward from where they are. For many countries, narrow
political considerations, personalized power and corruption have undermined the process of
democracy and responsive governance.
Role of civil society.

In much of Africa, however, a fundamental transformation of the relationship between the state and
civil society is needed if democracies are to endure and good governance prevails.
Fortunately, as we have mentioned before, civil society is booming in Africa. Unfortunately, some
leaders see civil society organizations as political competitors that need to be controlled rather than
fostered. A case in point is Kenya situation where organizations like Kenya Human right have been
viewed as political competitors leaving even the members who demand for corporate governance
issue been beaten up and locked in cell. What civil organizations want, however, is legitimization,
recognition, policy dialogues, collaboration in implementing development in appropriate sectors, and
political room in which to develop.
The African civil society agenda is far reaching. The call is for: Helping policy makers see the merit
of a flourishing civil society and promoting best practices on the enabling environment for civil
society and expanding the ability of civil organizations to be constructive participants in policy
formation and implementation.
Helping civil society contribute to the maturation of Africa's policy and economy is the continuing
aim of the African Charter for Popular Participation in Development and Transformation. The Charter
was sponsored by ECA in 1990 and adopted by people's organizations and international agencies as
well as by Africa's heads of State. It views popular participation as both a means and an end, "a
fundamental right of the people to fully and effectively participate in the determination of the
decisions which affect their lives at all levels.
The UN's Special Initiative also contains two pertinent civil-society components: strengthening sub
regional civil society organizations that foster peace in Africa and strengthening civil society
organizations working on development.ECA in cooperation with leading Africa civil society
developed African Civil Society Resource Centre. The centre mandate is to strengthen the capacities
of African civil society organizations, promote dialogue between them and governments, and
facilitate the involvement of civil society organizations in conflict resolution, peace building, and
democratization. Helping civil society flower in Africa is a major way to promote the agenda of
today's meeting.

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Corporate Governance and State-owned Enterprises in Africa and political leadership.

(1) The predominance of state-owned enterprises in all sectors of the economy;

Role of civil society.

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