A new challenge for the EA business leader

• Why we should now beyond the Most Respected Company, and seek a most valued one.
• Business should embrace a new ethos to fight corruption.

Over the past few years, we in East Africa have celebrated the discovery of oil and diamonds. We pride ourselves on growing some of the world’s finest coffee, yet most of the coffee on our shelves is still processed in Europe. We should delay celebration to when we finally have a petrochemical industry, or when we produce some of the world’s best cut diamonds.

Some estimates say that, by 2030, nearly 50 per cent of all Africans will be living in the wider Eastern Africa. By 2050, at current population growth rates, nearly 60 per cent of all Africans will be East Africans. Together with our governments, we must ask ourselves how we will sustain this population with the appropriate number of jobs or business opportunities.

East African businesses must get down to basics and ask; where will the greatest imports originate from? China? Whose coffee will they drink? Will it be grown in East Africa and processed in Europe?

Unless we adopt an innovative approach to business, we will never realise our ambitions for economic growth and self-sufficiency in our part of the continent.

The South African influence is spreading across Africa, with companies such as MTN, Multichoice, Stanbic, Steers, Nandos and Shoprite extending their reach and becoming household names. However, no East African company has – as yet – left a substantive African footprint. The question businesses in East Africa may ask is; why are we not bold enough to tackle the continental challenge?

East Africa is already a well integrated economic region. Its economies boast high levels of convergence. Yet at this moment, we don’t seem to have leveraged our regional energies enough. Angola has the world’s – and Africa’s – fastest growing economy. Mozambique’s economy comes second. Both of these are post-conflict societies in recovery.

Now, consider that East African countries such as Uganda and Rwanda are also post-conflict societies that have been able to exploit the opportunity to start from a clean slate. Stable countries like Tanzania – and traditionally Kenya – boast a coveted record of economic and political stability. Why is it that not one of these countries is in the league of high performing economies?

Further to the above, I would like to highlight two underlying responsibilities - our corporate social responsibility, and our moral responsibility. Many private sector companies boast of having commendable corporate social responsibility programmes within the social and business environment. Yet I am sometimes unsure of the genuine commitment behind these programmes.

The environment in particular is of great concern to all and there is an emerging view that the best way to safeguard it, in a sustainable way, is to manage it as a triple bottom-line reporting issue – just as we run our businesses. It is time that East African businesses got together and started talking about how to enter the carbon trade business, for example. If we consider a future where half of this continent will be living in the East Africa region by 2030, we have to think very differently about environmental issues.

To create this new ethos, however, we need first and foremost to face up to our moral responsibility and deal with the question of corruption. In all East African CEO surveys, infrastructure and corruption top the list of concerns. However, we have never come together and closed shop for a week demanding that the port be cleaned up, or that immigration officials don’t stop shaking down travellers, or policemen don’t stop extorting money from drivers.

We have a great ability to shame the corrupt, and East Africans will be immensely grateful to us for any such bold actions. How can we put our money where our mouths are and start marshalling the collective will in the fight against corruption?

We know that it takes two to be corrupt, but is it right for us to go around the problem by outsourcing corruption because our companies should not be perceived to be a part of it? Surely, whichever company comes up with the solution to this problem deserves the prize of the Most Valued Company in East Africa – which might prove to be a more coveted prize than Most Respected Company.

As business leaders, we must take a hard look at the bigger picture. We must start thinking what it is that we need to do in order to foster a stronger collective region that can compete against countries such as Brazil, Russia, India or China.

If we adopt this mindset, then the question we would be asking ourselves would not be whether there should be free movement of goods and services among the East African countries. Rather, we would be asking when the COMESA region would be merging with SADC.

That way, there would indeed be strength in numbers.

• This blog post is derived from a speech Linus gave at the East Africa 2008 Most Respected Companies Awards.