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Africa’s growth depends on good corporate governance

THE recognition that Africa’s growth will be realised only if the continent develops strong companies able to compete successfully in their home and in overseas markets is finding traction on the continent.

BY OUR STAFF

A two-day meeting in Harare last week that brought together delegates from African countries acknowledged that Africa’s economic growth would not be sustainable if the continent does not improve its reputation for corporate governance.

The delegates were from Kenya, Malawi, Mauritius, Mozambique, South Africa, Tanzania, Uganda and Zimbabwe.

The meeting of the African Governance Network (ACGN) was hosted by the Institute of Directors Zimbabwe (IoDZ) and the second this year, designed to scale-up and roll out good corporate governance on the continent.

The first meeting was held in Johannesburg, South Africa in January.
Edward Siwela, executive director of IoDZ, said in an interview with Standardbusiness: “We know from the experience of the developed world that governance is essential to sustained corporate success.”

This view was supported by Derek Browne, the chief operating officer for the Nepad Business Foundation.

The Harare meeting, he said, was taking place against the backdrop of an increasing realisation and desire to attract good investment to the continent.

The meeting discussed preparations for a major conference on corporate governance scheduled for Mauritius in October.
Jane Valls, the chief-executive officer of the Mauritius Institute of Directors, said they expected more countries that include Senegal, Morocco and Egypt to attend the conference.

“We hope we will be able to get all the institute of directors on board. We will launch the network in October. All the organisations are enthusiastic about corporate governance. Other parts of the world have such organisations but Africa does not.”

Renewed global hunger for Africa’s resources and, increasingly, its rapidly growing vibrant home markets are revitalising African growth. African companies have grown substantially and many are now regional.
Their success will initiate a virtuous cycle of improved infrastructure, growing intra-African trade and improved opportunities for millions.

Institutions from South Africa, Mauritius, Nigeria, Zimbabwe, Kenya, Tanzania, Malawi, Mozambique, Zambia and Uganda are all members of the new governance network.

The Nepad Business Foundation and the Association of Chartered Certified Accountants (Acca) are two of the partners who are collaborating on this initiative.

Acca director for sub-Saharan Africa, Jamil Ampomah said the accounting body is an active participant in global developments in corporate governance and risk management.

“We believe that our presence in 11 countries in sub-Saharan Africa, positive relationships with IoDs in the region and our 11 000 members in Africa will contribute to the success of the relationship with ACGN and help legislators, regulators, investment fund providers and others so that corporate governance and risk management develops to best serve Africa’s emerging needs,” Ampomah said.

Derek Browne from the Nepad Business Foundation says that in this context, the successful formation of the African Governance Network is highly significant.

“The initial meeting in January confirmed that a large number of credible governance organisations across the continent are on board. By building an Africa-wide governance framework, we are helping to lay the foundations for solid corporate growth and increased foreign investment.”

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