Building Strong Institutions In Africa

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History has shown that only through strong institutions can a solid foundation for nation-building be established.

The Goal 16 of the Sustainable Development Goals is “Peace, Justice and Strong Institutions”. SDG 16 aims to improve people's lives by reducing violence, improving access to justice, and promoting effective, accountable, and inclusive institutions. Without a doubt, strong institutions are a prerequisite for a society to move towards sustainable prosperity and, strong institutions can birth future prosperity.

Strong institutions are considered to be the essential foundation for Sustainable Development Goals, SDGs. Building effective, accountable and inclusive institutions are painstaking work. As SDG 16 recognises, though, it is vital. Institutions can and do play an important role in reducing poverty, improving the rule of law and increasing economic growth.

SDG 16 is crucial for all countries but it is especially so for African countries for reasons well-known to all. It is a goal that should be smartly managed by African policymakers. The message is clear. It is about time, even a must, for African policymakers to pay a considerable amount of attention to building strong institutions.

Why are strong institutions essential for Africa's development?

Strong institutions are essential for Africa to deliver on its development goals and to achieve its envisioned political and economic transformation. Agenda 2063, Africa's blueprint and master plan for this transformation, outlines ambitious goals related to building institutions that can accelerate growth as the bedrock for making the continent prosperous.

What would it take for Africa to deliver on its development goals?

Visionary leadership and strong institutions are Africa's surest route to achieving economic growth and sustainable development.

Until 1989, Africa was characterised by many authoritarian governments. After that, democracy took root as countries abolished military dictatorships, undertook constitutional reviews and embraced multiparty politics and elections. This promoted stability, legitimacy and acceptance in African political spheres. The general expectation was that multiparty democracy would eventually lead to economic growth and development.

But almost three decades after the third wave of democratisation, it's not clear that the development dividend has been attained. Despite Africa's vast natural resources, it remains the world's poorest region. Persistently high public debt and corruption, coupled with unemployment, income inequality and poverty remain endemic.

Although the cause of underdevelopment in Africa is manysided, an irrefutable cause is a poor leadership. The inability of governments to drive their countries' development agenda continues to threaten democracy, with most countries reverting to autocracy.

In a fundamental sense, the crisis of African development can be said to be a crisis of its institutions. Learning from these past experiences, it is safe to say that the solution to the institutional challenge in Africa requires strong institutions of governance vital to delivering strong and prosperous institutions. Without strong institutions, a democratic political system cannot work, and these are pre-requisite for the sustainable development of any nation.

It is thus safe to say that building strong and stable institutions should be the priority of each African country. This begins with respecting the rule of law, encouraging free and fair elections, and respect for human rights.

If there is a lesson African leaders can learn from developed countries, it is the leadership's capacity to elevate their institutions from being mere tools by which to obtain and retain political power to vehicles for developing their countries, and citizens, and exploiting many untapped resources. These can be aligned with long-term strategies to deliver economic transformation for their countries.

Of recent, the spate of military coups and unconstitutional power grabs is once again rearing its ugly head on the African continent. Since 2021, have witnessed both successful and unsuccessful coup d'états in West and Central African countries.

This spate of military coups and unconstitutional power grabs can be said to be the result of weak institutions. When leaders are not accountable, they violate the rule of law, disregard human and rights and this presents an opportunity for conflict to thrive.

Allegations of poverty, mismanagement and endemic corruption were the fundamental justifications given for organising coups. In addition, the decadence of the socio-political and economic environment is the justification for coups in many cases, while elite power struggles may also be among the explanatory variables. Five military coups in the West African region in the past 18 months are a testament to the need for stronger institutions.

The resurgence of coups and upsurge in military interventions across Africa directly violates democratic tenants and represents a threat to peace, stability, and security on the continent. Most of these coups are taking place in countries that are transitioning to democracy after decades of authoritarian rule.

To circumvent this regression into an era of coups and power-grabbing, Africans must ask. What is it that we should do today to make Africa what it should be? The obvious response would be that Africa must build effective, accountable and inclusive institutions. To deliver on this, Africa must:

Make democracy a greater priority, with a more consistent, coordinated strategy and programs; strengthen the pro-democracy systems of regional groupings such as the Economic Community of West African states and African Union — both in preventing coups and in responding when they take place; build better transitions to democracy when coups occur, through inclusive national dialogues that can shape local pro-democracy reforms, clarify the role of the military, and help civilian governments better meet the needs of their people. Also, lend greater support to civil society in countries at risk of coups.

Leaders with exceptional character and skills are critical to Africa's development. Incompetence in leadership in most African countries is not only the problem of people who occupy positions in government; it is a reflection of the leadership culture. Africa has witnessed different leaders with the same results for decades.

It is not too late for Africa to reposition its political systems and build strong institutions that can catapult it to prosperity. These interventions would be the lever Africa needs to shoot into a global position of strong institutions.

With strong institutions driving its development agenda, the world would witness sustainable prosperity and, strong institutions.

Access to financial services has been a major policy focus since the Bank of Ghana was established. Numerous policy interventions to achieve inclusive access to financial services subsequently led to the establishment of several non-bank financial institutions, including savings and loans companies, microfinance institutions, as well as rural and community banks. The late 2000s marked a notable change in the focus of the Bankʼs financial inclusion strategy towards Digital Financial Service (DFS), on account of significant penetration of mobile telephony across the country.

In 2018, the Government issued a five-year National Financial Inclusion and Development Strategy (NFIDS) to further drive Ghanaʼs financial inclusion efforts in a coherent and coordinated manner. Being the overarching policy document on financial inclusion, the NFIDS was developed through broad stakeholder collaborative efforts and benefited extensively from rich diverse views. The strategy effectively

addresses challenges to access to financial services and provides a roadmap for comprehensive reforms towards the wider development of the financial services sector.

Alongside these policy measures, the Bank continued to improve on the supervisory and regulatory frameworks of the payment ecosystem to create an enabling environment for digital financial products. For instance, passage of the Branchless Banking Guidelines in 2008 paved way for the branchless delivery of financial services by banks in partnership with mobile telephony service providers, thus giving rise to the mobile financial services in Ghana. Since then, the Bank has streamlined the regulatory environment with the passage of the Payments Systems and Services Act, 2019 (Act 987) to reflect the dynamism in the DFS space. The Act is anchored on proportionate regulation and risk-based supervision, thereby creating a conducive environment for inclusive participation of financial technology companies of varying sizes and business models. On the basis of sound regulation and supervision, this approach has unleashed a wide variety of innovative digital products and services into the payments ecosystem.

These initiatives have fostered the rapid adoption of digital financial services, particularly mobile financial services, and contributed in large measure to the increase in financial inclusion from 42 percent in 2014 to 58 percent in 2017, according to the Global Findex Survey. As at May 2022, total active mobile money accounts stood at 18.6 million, compared to 17.2 million in the same period of last year, representing 8.1 percent year-on-year growth in total active mobile money accounts. Also, active mobile money agents as at May 2022 increased to 454,000 compared with 386,000 in May 2021.

In the past year, merchant acceptance of digital payments received a major boost following the publication of the new Merchant Account Categorisation Directive by the Bank of Ghana. By this Directive, the central bank seeks to drive merchant acceptance of digital payments, especially among the Micro, Small and Medium Size Enterprises (MSMEs) through a proportionate on-boarding requirements to provide accessible and feasible use cases for digital payments thereby driving adoption. With the large share of MSMEs in Ghana, incentivising merchant adoption of digital payments holds significant potential for accelerating financial inclusion among individuals and businesses. The incentives provided by the Directive will therefore provide the needed digital footprints to address information asymmetry challenges and enable affordable and customercentric innovative financial services.

Modernising and building on Ghanaian traditional funds pooling system, popularly called “Susu”, the Bank introduced a Crowdfunding Policy in 2021. This policy has provided a regulatory anchor for payment service providers, in partnership with banks and with technological support, to provide individuals, groups, and associations with safe means of raising funds for social and economic purposes. The growing use of a Bank of Ghana approved crowdfunding product in recent times by religious groupings, associations, and corporate bodies for economic, social, health and environmental purposes reflect the timeliness and usefulness of this policy intervention in the financial sector.

In line with the rapid innovation in digital financial services, the Bank adopted the Regulatory and Innovation Sandbox approach to support the process. Currently, the sandbox provides live-tests of innovative digital financial service products, business models and supportive technologies in a controlled environment for possible market rollout. In 2019, the Bank took a major step to explore a central bank digital currency within the framework of the national digitisation programme. Since August 2021, the Bank, in collaboration with G+D of Germany, has commenced the multiphase pilot of the digital version of the Ghanaian cedi called the eCedi in a sandbox environment. The digital currency project presents yet another unique opportunity to design a technological representation of a fiat currency that will drive Ghanaʼs financial sector digitisation further and also facilitate the Governmentʼs inclusive digital transformation programme.

Looking ahead, the Bank of Ghana will continue to push the frontiers of innovation and inject dynamism into the financial service industry, supported by sound regulatory frameworks. This will provide a conducive atmosphere for nurturing the growth of the payment ecosystem and support the financial inclusion agenda.

The growing use of a Bank of Ghana approved crowdfunding product in recent times by religious groupings, associations, and corporate bodies for economic, social, health and environmental purposes reflect the timeliness and usefulness of this policy intervention in the financial sector.

Africa Has A Great Strategic Plan:

When the United Nations started framing its Sustainable Development Goals (SDGs) in 2012 – a shared blueprint for working towards global peace and prosperity by 2030 – Africa was the first region to submit its list of priorities.

The continent was quick to act as it was in the process of finalising its Agenda 2063 framework, which sought to articulate African aspirations for the coming decades. It was a product of the celebrations of the 50th year of the Organisation of African Unity, now known as the African Union. Such a symbolic year was a cause for celebration and prompted reflection on what kind of Africa member states wanted to build in the next 50 years.

As the continent battles to contain and recover from the COVID-19 pandemic, it is confronted with a similar moment of reckoning. And the answer is the same: unify around a shared framework for the future that provides strategic direction for meaningful change.

But it can't be all talk, no action.

From general agreement to tangible action

The UN's SDGs, like the aspirations contained in the African Union's Agenda 2063 framework, are bold and ambitious. But both sets of aspirations are painted with a broad brush. To a degree, it must be that way. Each nation has its own context, capacity and agenda, and the finer the tip, the harder it is to find agreement – the painting would never be completed. This is especially true when homing in on specifics for implementation, where leaders tend to disagree over the minutiae.

Take one of Agenda 2063's flagship projects as an example. On the face of it, the African Continental Free Trade Agreement is an amazing success story, and the most important integration project in Africa's history. Most African countries have signed and ratified the agreement. But, since it was officially launched in January this year, progress has been hampered by arguments over appropriate dispute mechanisms, clauses around rules of origin, and intellectual property rights.

It's a difficult task transitioning from general agreement – a shared vision of the future – to practical implementation that delivers on development progress. But failing to mobilise behind a common agenda, with tangible action, could have dire consequences.

This is one of the reasons we can't just leave things to governments. Those of us interested in advancing sustainable development in Africa need to find ways to broaden and deepen engagement and conversation

around these critical issues and create the space where the diverse capacities of multiple stakeholders can be leveraged to find innovate solutions to the many challenges that the continent faces.

To this end, events such as the upcoming International Summit on SDGs in Africa organised by the University of Cape Town can play a valuable convening role. The summit will enable countries to revisit goals and targets in the light of effects of the COVID-19 pandemic. Scholars from across the globe will be able to define a roadmap that considers recurrent financing challenges but also the signs of a much stronger commitment to social protection and managing climate change.

Collaboration needs to be real and practical

The pandemic serves as a good example here. Despite proclamations of goodwill and good intentions towards Africa, when push comes to shove, the behaviour of the continent's main partners has been selfish. It started with personal protective equipment, then with ventilators, and more recently with vaccines. For example, soon after the outbreak countries such as the UK and the US introduced measures to restrict exports of protective equipment. For its part the European Union remains resistant to calls to waive vaccinerelated patents.

Africa has been here before. Millions of people died of HIV/AIDS during 17 years of protracted negotiations over intellectual property rights to get a patent waiver. Many calls by developing countries to accelerate Trade-Related Aspects of Intellectual Property Rights waivers on antiretroviral drugs to save the lives of populations deeply affected by the spread of HIV/AIDS were ignored until the pharmaceutical interests shifted to ensuring large purchases by donors of their products about to lose their profit edge.

Now, Africa is asking for a waiver for COVID-19 vaccines and is facing the same discussions.

In any event, Africa shouldn't see relinquishing of intellectual property rights as a silver bullet. Materials required for manufacturing, the right supply chains, time to build stock, all need solving. Additionally, issues around ethics and law need to be considered.

Recognising this complexity the Africa Centres for Disease Control has launched no fewer than three initiatives – the African Union's Pharmaceutical Manufacturing Plan for Africa, the African Medicines Agency and the African Vaccine Regulatory Forum – aimed at establishing an ecosystem to enable manufacturing of vaccines in the continent.

All of this calls for discussion between a wide cross-section of stakeholders to prioritise areas of strategic focus, as well as scope actions that will accelerate progress before the next crisis hits. Collaboration can't be a chimera; it needs to be real and practical.

But collaboration also cannot take place in a vacuum.

A common trial

As new COVID-19 variants spread, the commonality of the trial we face is clear to see. To be purely tactical and try to tackle this disease with a narrow, temporary focus, allowing protectionism to rear its ugly head, will limit Africa's capacity to address the problem today. It will also do nothing to strengthen our resilience for the challenges of tomorrow.

It is here that the UN's SDGs and African Union's Agenda 2063 vision have a key role to play. While their time frames – the SDG's is 2030 – are long and their aspirations lofty, it's exactly these qualities that can help us to lift our heads when times are tough; to see the big picture and to know what we are aiming for.

Now, more than ever, leaders need to lean into the strategic frameworks they helped develop, but they also need to roll up their sleeves and work with a broad set of stakeholders to develop practical ways to achieve their aspirations within these frameworks.

It's only through this kind of strategic cooperation leading to effective implementation that we can hope to shape the future we want and avoid the one we don't.

The concept of Corporate Social Responsibility (CSR) has gained recognition and importance in both business and political settings, although most see CSR in terms of philanthropy. CSR initiatives are growing in Africa, opening up opportunities for development.

CSR represents a twofold opportunity for Africa. It can encourage inclusive and sustainable development while also improving companies' performance and their image. This is a win-win situation for Africa.

The development of CSR on a large scale across Africa will require the involvement of all actors to play in support to building a public and private sector coalition to promote CSR.

CSR refers to a company's contribution to the challenges of sustainable development and its responsibility with respect to the environmental and social (E&S) impacts of its operations.

In developing countries, conflict, lack of basic education skills, health threats and unemployment are all challenges that face African countries and the youth in particular. In the next decade, the mounting impacts of climate change can be added to this list.

CSR, which is now becoming an important part of corporate expansion strategies, is built around three major pillars: environmental, social and economic.

This policy, which aims at a more sustainable development, also integrates the duty of companies towards their stakeholders, in particular employees and customers.

The social and economic development of poor and rural communities is a universal priority. It is a central theme that dominates international trade discussions, drives government priorities and ultimately influences the long-term prosperity of a nation.

Against the backdrop of civil wars on the African continent, political instability in the Middle East and the fall-out of the economic boom in South Asia, youth unemployment threatens to keep youth, as a global sector, in a cycle of poverty.

Companies are well placed to make a considerable difference to those living in contexts of poverty and exclusion by applying CSR principles.

While a degree of support for purely well-oriented approaches will continue to be necessary, companies are potentially strong contributors to sustainable initiatives within the social development landscape, particularly in supporting livelihood strategies for those excluded from the formal economy.

Businesses that ignore corporate social responsibility run a risk to their bottom line and their brand. Having a bad reputation socially and environmentally can create serious effects on the overall profitability and success of a company, as consumers want to spend their money on products that they believe in, and engage with companies that follow ethical practices that meet their own beliefs.

For environmentalists, the inclusion of CSR in the growth of companies should make significant contribution to achieving the 17 Sustainable Development Goals (SDGs) set by the United Nation (UN) for 2030.

African countries, which place the SDGs at the heart of their development policies, are faced with rapid urbanisation, internal and external migration, an extroverted economy and the effects of climate

change.

“Achieving the MDGs in Africa requires innovative planning approaches and effective global coordination, as envisaged in Agenda 2063, which structures all the actions that should lead Africa towards sustainable emergence,” explain Abdoulaye Sene (Administrative Secretary of the Dakar 2022 Water Forum).

Toshiba Africa has strong commitment to CSR in Africa for this reason. They are involved with many projects across the continent. To express the essence of their corporate philosophy, Toshiba Group's basic commitment is “Committed to people, committed to the Future. TOSHIBA.”

Toshiba Africa CSR partner is the Langa Education Assistance Programme (LEAP) that runs independent schools that provide fee-free education for some of South Africa's most marginalised communities. It's a good fit for Toshiba; a strong proponent of science and math education and Toshiba Africa has worked with LEAP3 for residents of Alexandra Township in Johannesburg since 2017. Toshiba Africa has donated to LEAP for their school facilities such as books for their library.

There is the Save the Children, Tanzania where Toshiba Group supports this early childhood development project in the Shinyanga area of Northern Tanzania since 2014 The Toshiba Group has donated a total of 10 million Yen (more than US$77,000) to the project that has been used to build and operate 10 community childcare facilities in Tanzania.

These community childcare facilities foster caring, educational environments that support the upbringing of 1000 children and provide meals that help improve nutritional standards.

BMW South Africa supports the fight against COVID-19 as they provide nine hospitals and four clinics, including upgrades to emergency facilities, three emergency support cars, PPEs, an ambulance, as well as 750 beds and additional screening facilities.

They also loaned 17 BMW locally built cars to the South African Red Cross Society to help it reach marginalised and poor communities that have been badly impacted by the COVID-19 pandemic. 144 schools have benefitted from support from BMW SA; Ntsha-Peu Primary School near Shoshanguve Township in Pretoria received a ZAR4m (US$220,000) investment and world-class upgrades.

As part of the programme, the school has had a new computer lab installed that can accommodate 80 learners at a time, and, in partnership with the Gauteng Department of Education, is supplied with 'alwayson' internet.

The core of Goil Ghana CSR business has been in water and sanitation. Goil has thus continued with its portable water supply project by delivering mechanised boreholes to several deprived communities spread across the length and breadth of the country. Over the last three years for example. Goil has been providing a minimum of 10 boreholes every year to deprived communities.

The Kenya Airways CSR programme aims at delivering sustainable educational programmes to support future generations. Some accomplishments related to education project includes putting up school infrastructure such as a dormitory at Esageri School for the Deaf in Baringo county; a science laboratory at Songeni Mixed Secondary school in Makueni county; two classroom at Ongora Primary School in Rongo County, and a dining hall at Namunyak Girls Secondary School in Narok county.

As a responsible corporate citizen, NETFUND prides itself by contributing towards the positive transformation of life in the areas of environmental, social and economic well being of the society in which it operates. NETFUND has embraced the national tree planting campaign with the theme Panda miti Penda Kenya (Turn up for Kenya). This initiative ensures improved forest cover and biodiversity in their areas of work.

In Bomet County, NETFUND worked with county officials to plant 5,000 tree seedlings in Chepalungu forest, an indigenous forest and complex ecosystem that need efficient management.

NETFUND also works with NEMA and other organizations to lead and sustain environmental clean-ups in the major cities of Kenya and promote the use of alternatives to plastics.

Africa's economic performance and trends, combined with its demographic vitality, points towards a brighter future for CSR on the continent. Socially responsible investments models are beginning to spread widely in Africa, thanks to initiatives by major companies in the mining, infrastructure, agro-industry and ecotourism sectors. These practices often involve high valueadded subsidiary businesses that have a strong ripple effect on the local economy.

The higher visibility of these initiatives could help to trigger a wider awareness of CSR in Africa and promote its development. Yet CSR cannot become deeply rooted unless businesses and local organisation can individually and collectively develop their own tools for disseminating its practices, based on the founding principles and realities of their societies.