Putting money on Africa’s future

The mobile phone has revolutionised Africa. With the number of users in sub-Saharan Africa rising from 90 million to 475 million in the past seven years, mobile phones are changing not only the nature of communication on the continent, but how Africans do business and hold their leaders accountable.

Few know this better than Mo Ibrahim, the Sudanese-born entrepreneur who created Celtel, the first pan-African mobile phone network, in the late 1990s. In 2005, when Celtel had about 24 million subscribers across 14 African countries, Ibrahim sold it for $3.4 billion (€2.6 billion).

Since then he has focused on philanthropy, setting up the Mo Ibrahim Foundation to encourage better governance on the continent. The foundation is best known for two initiatives: an annual index assessing governance in every African country, and the Mo Ibrahim Prize, which recognises democratically-elected African leaders who excel in office and, crucially, step down when they are supposed to.

The prize, which amounts to $5 million (€3.8 million) for each recipient, has been awarded three times in its seven-year history. The former Cape Verde president Pedro Pires won in 2011, Festus Mogae of Botswana in 2008 and Joaquim Chissano of Mozambique in 2007.

Ibrahim says he is not disappointed that no winner emerged last year. “The prize sends a message when it is given, and it sends an even bigger message when it is not given. The publicity around it means Africans start debating governance and leadership and that is a good thing.”

He believes the prize is important to highlight what he calls the "unsung heroes" of Africa. Most people's knowledge of African leaders, he argues, extends only as far as the likes of Mobutu, Idi Amin and Robert Mugabe.

“Africa is 54 countries and it has had maybe five to 10 notorious leaders over the past 50 years but that should not characterise our leadership. It’s like characterising European leadership only through peoplesuch as Hitler, Mussolini or Milosevic.”

Ibrahim brushes off critics who are uneasy with the concept of financially rewarding leaders for doing what they are supposed to do. He argues that the money provides the means to allow exemplary leaders to carry on their work once they give up power. “We are giving the prize for excellence in leadership, for taking tough decisions. The Nobel prize is $1.5 million [€1.1 million], given to people who are doing their jobs. Why does no one object to that?”

Continent on the move
Ibrahim talks passionately about the potential of a changing Africa. "It's a continent on the move," he says. Rising economic growth rates, fuelled in part by large-scale investment from the likes of China, India and Brazil, are creating a new middle class with more disposable income and higher expectations of their leaders. He is particularly interested in the fate of Africa's youth; more than two-thirds of the continent's population are below the age of 25.

“This generation is a game-changer because they are better educated than the previous generations and better connected; they know what is going on,” he says. “Everyone is walking around with their phones. They are able to express their feelings and views in the public domain and interact with each other. This is a new world. You have a population that is more sophisticated now and will not accept things that were accepted in the past.”

This youth dividend poses opportunities as well as challenges, depending on how it is handled, as the series of uprisings in north Africa in 2011 demonstrated. “The average age in Africa is 19 but what is the average age of African presidents? Over 60. There is a huge gap,” Ibrahim says. “What worries me is these same young people, if we fail to offer them the job opportunities or the training necessary, can be a source of major upheaval in our society, bigger than anything Africa has ever seen. The issue of youth is one of optimism but also a source of anxiety.”

With Nelson Mandela ailing and the death last year of Ethiopia’s prime minister, Meles Zenawi (hailed as a visionary by some, derided as an autocrat by others), Ibrahim laments what he calls the “leadership deficit” in a continent undergoing such rapid transformation.

“We don’t have any big beasts at the moment . . . Some leaders are aware of the youth issue, for example, but quite a number are not or are not paying enough attention to it.”

He is also concerned about the often lopsided nature of Africa’s economic growth.

“We can see that, of the gains made in the last 10 years, very little has trickled down, and that is dangerous,” he says. “If development leaves people behind, it creates a volatile situation. We have to pay attention to this disparity and inequality.”

The annual Ibrahim index of African governance, which evaluates countries in terms of human development, rule of law, political participation, human rights and sustainable economic opportunity, is one step in that direction.

“We need to hold governments accountable,” Ibrahim says. “Politicians feel uneasy about it because they are not used to it.” The index, he says, amounts to a “scorecard” for what African governments actually deliver. “Governance is measurable and we need to move from good speeches and intentions to tangible deliverables such as food on the table, jobs for the youth, hospital beds.”

Two-edged sword
Some fret that China's policy of "non-interference" as it courts African countries with huge trade and investment deals risks undermining such efforts towards greater accountability and transparency. Beijing's new engagement with Africa is a "two-edged sword," Ibrahim says.

“The Chinese do not have the baggage of colonialism in Africa and they should not lose that goodwill . . . but they need to understand that there is a premium for good behaviour. We need more transparent deals and processes. If you deal directly with dictators, you will win a battle but you’re going to lose the war because those guys are not going to be in place forever.”

But lectures from Europeans fearful of losing influence to China can often sound hypocritical to African ears.

“The behaviour of some European companies in Africa has not been exemplary either, especially in terms of the impact on the environment and the issue of not paying tax,” says Ibrahim. “The amount of money leaving Africa is double that coming into Africa and people are waking up to this.”

In recent years, officials here have sought to frame Ireland’s overseas-aid budget, which amounts to €623 million in 2013, in terms of how it could “open doors” to future trade and investment in Africa’s growing economies.

As Tánaiste and Minister for Foreign Affairs and Trade Eamon Gilmore puts it: "This is not only the right thing to do, it is also the smart thing to do." Ibrahim agrees. "It makes sense given everything that is happening in Africa." However, he is unhappy about what he says is a retreat from the continent by American business coupled with a disappointingly low level of engagement by the Obama administration.

“I don’t understand it. The US used to be at the forefront when it came to entrepreneurs, taking risk. Now we see signs of what is really close to cowardice. Why is US capital afraid to go to Africa when the Chinese, Indians and the South Americans are going there? Everyone is going to Africa.”