Improving Corporate Governance in Africa

I arrived in Maputo, the capital and most populous city of Mozambique on Monday 15 February. The flight from Nairobi had been a good one. Maputo is named after Chief Maputsu I of the Tembe clan. A port city, Maputo is noted for its vibrant cultural scene and distinctive, eclectic architecture. I made my way to the Girasol Indy Maputo Congress Hotel at 99 R. Dom Sebasti?o, Maputo. It is a luxurious hotel complex located in Sommerschield, the choicest district in Maputo. You can enjoy the tropical climate in the leafy gardens. Located just 100 meters from the beach, you can rest well after an intense working day.

I was in Maputo to attend the release of the first edition of the state of corporate governance in Africa, a collaborative work between the African Corporate Governance Network and EY Africa. The report contained a high-level overview of the state of the corporate governance frameworks and systems in 13 countries, which include Egypt, Ghana, Kenya, Malawi, Mauritius, Mozambique, Nigeria, South Africa, Tanzania, Tunisia, Uganda, Zambia and Zimbabwe. As a first for a cross-country survey of corporate governance in Africa, the report is intended to establish a baseline understanding of what corporate governance looks like today in the 13 surveyed countries.

There is enormous opportunity to bolster investor confidence in African economies through improvements to corporate governance. The report highlighted how different countries are approaching this challenge, and contained examples of how some of these countries are navigating their economies and business communities through their individual in-country corporate governance development journeys. A key take-away from the report is that countries that take a pro-active stance in developing and maintaining sound systems of corporate governance stand to reap the rewards of improved economic attractiveness and investor confidence over a short-term and long-term period, with attendant benefits for the business environment and wider communities. 

The diversity and complexity of corporate governance systems across the continent showed as there is a unique story for each of the countries covered. While some countries are at an early stage in the development of their corporate governance frameworks, and in some cases are still working to overcome significant hurdles at the outset, others are leading the field and models for new avenues of corporate governance thinking. In many cases these countries also demonstrate implementation of corporate governance values and/or practices that are of unique importance in the African context.

The report showed that there are some significant areas of challenge in public governance, and that most countries surveyed face major structural challenges that must be taken into account. It also lends support to the generally understood reality that the important tasks of building sound corporate governance systems and ensuring they are effectively implemented, cannot be undertaken in isolation.

Important to appreciate is that all of the countries covered in the report have the key attribute of having established a corporate governance institute. They play a critical role in each country environment, through their director development and professional education programmes, and in some cases also through performing a wider advocacy role to influence corporate governance policy development. Their scope and role for contributing to development of sound corporate governance infrastructure simply cannot be underestimated.

Baroness Lynda Chalker, Chairman of Africa Matters and Joanne Henstock, Executive Director of EY Africa, performed the unveiling of the report with the support of Lynette Chen, the energetic CEO of NEPAD and Fred Swaniker.