Kenneth Amaeshi, Uwafiokun Idemudia and Ndidi Nnoli, ECDPM Great Insights magazine, Winter 2018/2019 (volume 8, issue 1).
Africapitalism is about how the private sector can contribute to sustainable development in Africa, underpinned by the values of long-termism and inclusion. It recognises that the business case for sustainability depends on the stake a company has in the economy it operates in. Unilever put these principles into practice. It adopted a partnership approach with the Growing Business Foundation. Both collaborators utilised their internal resources and external relationships to catalyse a grassroots revolutionary network of mini-distributors. In doing so, Unilever made inroads in sales to the remotest rural areas, while rural communities gained not only access to new products, but also income generating opportunities and improved livelihoods.
Capitalism defined as ‘a mode of economic coordination… fundamentally anchored on the principles of freedom (liberty), individuality (self-interest), diligence (thrift and self-discipline), rights (private property), and equity (fairness)’ (Amaeshi and Idemudia, 2015: 213), is not new in Africa. As just one example, the Igbo people of South-Eastern Nigeria have long practised a mode of capitalism that promotes enterprise, competition and industry for the common good. Indeed, in this system, ownership is understood in a way that integrally and concurrently considers the interests of past, present and future generations. (Nnoli-Edozien, 2007: 16)
This is very important because one of the problems of capitalism in Africa is its misalignment with societal needs. Arguably, in Africa, ‘capitalism’ has been overly driven by agendas set by ‘outsiders’, who primarily see Africa as a market for exploitation and are obsessed with the profits such ventures can produce, without an adequately long-term view. This is reflected in the excesses of some multinationals operating in Africa.
Unfortunately, a focus on profit as the measure of corporate success tends to accentuate tensions between individual and collective interests. This is antithetical to the value of collectivism prevalent in most African societies, which many Africentric worldviews intuitively capture and modern extrapolations like Africapitalism take seriously.
Africapitalism, in a nutshell, is about how the private sector can contribute to sustainable development in Africa. According to Amaeshi and Idemudia (2015), Africapitalism is an idea and a discourse underpinned by values that reflect a spirit of long-termism and inclusion:
• Sense of progress and prosperity. The combination of financial profitability and social wealth
• Sense of parity and inclusion. Recognition that the benefits of progress and prosperity need to be equitably shared
• Sense of peace and harmony. The view that the simultaneous pursuit of profit and social wealth is primarily a quest for balance, harmony and peace, ‘a process of achieving human development… in an inclusive, connected, equitable, prudent, and secure manner’ (Gladwin et al., 1995: 878, emphasis original)
• Sense of place and belonging. An understanding of Africa primarily as a place (and not necessarily as a market) with meaning and value to people’s identities
Africapitalism is a form of entrepreneurship that seeks to meet Africa where the continent is in her development path.
As an idea, Africapitalism articulates a possible face of capitalism in Africa, which could be extended to other parts of the world. It is a discourse to galvanise a movement that will ultimately change the practice of capitalism in Africa. Positioned as such, Africapitalism becomes an aspiration for Africa’s renaissance – a force for change. It challenges the status quo, that is, capitalism in Africa, which has not transformed Africa. The problem is not necessarily the spirit of capitalism, as the harbinger of human freedom and economic emancipation, but the inherited form of capitalism practised in Africa, which is often at variance with the socio-economic development of the continent.
This misalignment creates lopsided outcomes, not least, economic banditry, corruption, inequality and poverty, which the Sustainable Development Goals (SDGs) seek to address. In this regard, Africapitalism is a call for the private sector in Africa, especially multinational enterprises, to contribute to realisation of the SDGs by taking into consideration the unique circumstances of the continent.
Most multinationals can easily re-deploy their productive assets across the globe. However, for indigenous firms there is little room to manoeuvre, as they have nowhere else to go – and this also applies to multinationals bound to a specific location (e.g., those in extractive industries). Therefore, the case for sustainability as core to business best practice also depends on the stake that a business has in the economy it operates in. The SDGs becoming imperative signifies a potential competitive advantage for those investors truly vested in an economy – indigenous and foreign alike.
For the SDGs to be achieved, constructive and concerted inputs are needed from government, business and civil society. Businesses become part of the solution of sustainable development when they enrol other actors in their institutional change initiatives (e.g., through standard setting and social projects). This might involve partnerships with non-business actors like NGOs. Collaboration can reduce free-riding and help overcome cultural barriers between development actors. We provide a practical example of how a multinational enterprise. In this case, Unilever – a leading fast-moving consumer goods producer in Africa – partnered with a local NGO to profitably increase its market share and touch lives.
Beyond its commitment to the Unilever Sustainable Living Plan, the firm’s local management realised that to increase its market share in Nigeria it had to expand its reach to villages with smaller populations in more remote parts of the country. These areas had millions of potential consumers but low purchasing power, no retail distribution networks, no advertising coverage, poor roads and limited transport/distribution options. Taking on such a challenge would not readily make sense to a business that sees the market narrowly as a space for the privileged few who can afford to participate in it.
Unilever adopted a partnership approach, working with the Growing Business Foundation (GBF, an NGO established in 1999). Through the Nigeria Mbuli and Gbemiga projects (both terms translating to ‘empowerment’ in local languages), co-created by both organisations, they utilised their internal resources and external relationships to catalyse a grassroots revolutionary network of mini-distributors. In so doing, Unilever succeeded in merchandising its low unit pack (LUP) products in the remotest of rural areas via a multi-layered supply chain to serve the ‘bottom of the pyramid’.
GBF, in particular, leveraged its expertise from working with 4,000 micro-businesses in the Niger Delta and 9,500 micro-retailers across Nigeria’s 37 states. The partnership started small, with 100 rural businesses in 2014. By 2018, it had engaged 3,000 women in a commercial activity designed in tandem to achieve rural development and poverty eradication through jobs, wealth creation and building sustainable local economies, one community at a time. Moreover, the door-to-door sales model adopted by GBF brought the Unilever brand and health education programmes to 26,000 households.
This success story revolves around a commercial initiative driving innovative, cost-effective sales and distribution. It delivered win-win outcomes for both business and communities by drawing on the complementary core competences of the partners. For example, for business, new rural markets were reached, generating new sales revenues, with 10,000 new points of purchase. Consumer loyalty to the Unilever brand was strengthened, and Unilever strengthened its rural and urban retail and open market presence. For communities, the partnership created access to new products, income generating opportunities and improved livelihood.
We are thus left with the question: how does this all connect with Africapitalism and the SDGs?
First, based on a sense of parity and inclusion, we have argued that there is a need for a particular form of collaboration between business, government and civil society that is based on the weaving together of global ideas with local solutions towards the SDGs in Africa. Here, the goal is not simply to transfer practices or initiatives that worked in one context into another. Rather, the goal is to adopt and adapt such initiatives with consideration for the local context and knowledge. Hence, the role of Africapitalism here could be to encourage multinational enterprises to consider alternative approaches to business in Africa, including collaboration, to create an enabling environment for local ideas and to support local efforts geared towards addressing the SDGs, while improving business efficacy and efficiency.
Second, the need for overall progress and prosperity from an African perspective calls on businesses to better align their strategies to pursue the SDGs. The disjuncture between business and the sustainability agenda (or ‘corporate social responsibility’) means that while multinationals seek to contribute to poverty reduction in local communities, they may simultaneously lobby for governmental policy at the national level that indirectly contributes to poverty in local communities. This disjointed agenda undermines the generation of social wealth. For example, while oil companies in Nigeria may contribute to poverty reduction in the Niger Delta via social investments, they also actively lobby for weak environmental laws that make it possible for oil spillage to drive more communities further into poverty.
Third, the socio-cultural realities of Africa, based on a sense of place and belonging, require multinationals to pursue corporate social innovations, if their contributions to the SDGs in Africa are to be both meaningful and sustainable. One of the implications of a sense of place is the need for ‘social contracts’ such that problems, including environmental degradation, waste management, poverty, youth restiveness and unemployment, receive the attention of multinational enterprises. As such, the goal to help address social problems is based on the nature of the social relationships that emerge due to a multinational’s presence in a particular locale, with the objective of creating sustainable scalable solutions that serve both private interests and the common good.
Finally, multinational enterprises need to use their internal resources and external relationships to advocate for the SDGs and educate their stakeholders. This requires strengthening weak institutions where they exist and playing leadership roles in situations where their core competences can make a difference. It will also involve continuous organisational renewal and adaption to the dynamics of the SDGs in the contexts they operate in.
In sum, the values of Africapitalism can be a good guide for strategic business decisions and inform collaboration with civil society organisations and other stakeholders in Africa and beyond.
Amaeshi, K. and Idemudia, U. (2015) Africapitalism: A Management Idea for Business in Africa?. Africa Journal of Management 1(2): 210-223.
Gladwin, T., Kennelly, J., and Krause, T. (1995). Shifting paradigms for sustainable development: Implications for management theory and research. Academy of Management Review, 20(4): 874–907
Nnoli-Edozien, N. (2007). Ownership and Management Structures in the Economy: African Traditional Values Applied to Modern Issues of Sustainability and the Corporate Governance Function, 2007.
About the authors
Kenneth Amaeshi, PhD (@kenamaeshi) is the director of the Sustainable Business Initiative, and professor in business and sustainable development at the University of Edinburgh. Besides teaching and researching, he works closely with businesses and governments in Africa, Europe, and Asia, in the broad areas of sustainable finance, sustainability strategy, leadership, ethics, and governance.
Uwafiokun Idemudia, PhD is Professor of Development Studies and African Studies at York University, Toronto, Canada. His research interest is in the areas of Business and Development, Natural Resources and Development, and Conflict and Development. He has published widely in the area of corporate social responsibility in Africa.
Ndidi Nnoli-Edozien, PhD is a Nigerian social entrepreneur and corporate sustainability and responsibility (CSR) expert. She is the Founder and President of the Growing Businesses Foundation, and currently serves as the Sustainability Chief for Dangote Industries Limited, the most capitalized quoted company on the Nigerian Stock Exchange.
Photo: Gbemiga Rural Women Empowerment Programme. Credit: Courtesy of gbfng.org
This article was published in Great Insights Volume 8, Issue 1. Winter 2018/2019