K.Y Amoako on Leadership and Governance

“Leadership is what makes a nation great at all levels and on all matters.”

Marcus Courage for Stories Africa (SA): I’m delighted to be joined by Dr. KY Amoako. He is one of Africa’s foremost development experts, having spent over five decades at the vanguard and apex of African development working alongside leaders and policymakers from across the African continent. He began at the World Bank and then joined the UN in 1995, where he was appointed executive secretary of the Economic Commission for Africa. He overhauled that organisation over 10 years and helped transform it into the dynamic force that it is today. He then left there to found ACET, The African Center for Economic Transformation, a think tank that is headquartered in Accra, where he works with many African governments helping them to address some of the underlying structural limitations that constrain economic growth. KY, it’s an absolute pleasure to speak with you today. I’ve heard you speak before about ‘leadership, leadership, leadership, transformative leadership.’ We know that policies matter, and strong and capable institutions to implement those policies, matter; but what matters most of all, is leadership, and in the absence of effective policies and institutions, good leadership is absolutely critical. I want to ask you, what’s your assessment of the quality of leadership in Africa today?

KY Amoako (KY): Through the breadth of my experience in the development sphere in Africa, I have an intrinsic understanding of what works and what hasn’t worked. Africa has faced many challenges but we have made huge strides in the areas of poverty reduction and we’ve gone through structural adjustments. There is much discussion about the SDGs and the transformation of African economies and through all of this, we have continually stated the importance of policy and institutions. 

In my new book, titled ‘Know the Beginning Well’, I share my experience and talk about the importance of studying and learning from the past to inform the future. In the concluding chapter, I talk about the many issues facing leaders in creating a future vision for Africa in which we can all invest. As we are all aware, leadership is key in any transformation process, especially in regard to creation and implementation of policy, but we may ask the question why leadership, and leadership for what, when it comes to Africa? 

The end goal is economic transformation; for growth, for poverty reduction and for transforming our economy, so that we have value addition, export competitively, have productivity in what we do, and we increase, per capita, human wellbeing, incomes and jobs. Effective leadership is key in strategic change and achieving that end goal. In the book, I make a joke about the quality of leadership. I discuss the number of times I have met with colleagues over the years, and asked the question, what is the state of political leadership in Africa today? We then attempt to name the ten leaders that display the qualities we admire the most because they are delivering on all these fronts. We regularly struggle to name more than five. Unfortunately, the leadership to transform and achieve the goals of economic development have lacked vision, rigour and, in short, have not met the standard required.

(SA) Why do you think that is KY, because there’s no absence of quality leaders in other spheres of society. Specifically, we see great entrepreneurs and fantastic innovators who are doing amazing things in the world of enterprise; disrupting the medical sector, the education sector. Why the absence of great leaders in the political sphere?

(KY) To answer that question, we have to ask what are the attributes? What do we look for in political leadership? I spend a lot of time looking at political leadership. Leadership is what makes a nation great at all levels and in all aspects including the private sector, civil society and education. Political leadership is particularly important in poor countries. If you look at Asian countries that have seen significant transformation, South Korea and Taiwan are specific examples where there was a catalyst that inspired effective political leadership that really made a difference. 

The key attributes of leadership in my view are firstly, vision. Vision is fundamental to address how the future will look and how this can be achieved. Where do you want to see your country in 10-15 years? Articulating that vision is imperative. Secondly, creation and implementation of smart policies, which provide the scaffold to support the journey towards achieving that vision. For example, if a key issue to be addressed is industrialisation, smart policies need to be implemented to drive and manage change within this area. Thirdly, inspiration. Leaders have to inspire others to reach greater heights. ‘Great leaders surround themselves with great leaders’ and it is imperative that leaders surround themselves with people and a cabinet to inspire, in order to give of their best. Finally, we need leaders who govern selflessly. 

Those are, I believe, the four attributes. In the experience of Africa and other parts of the world, evidence suggests that, even though a leader may not have all these qualities, possessing two or three of these qualities has still made a difference in their own countries. I would make the point that it is not all doom and gloom. We have some very good leaders in top positions, and they’ve made, and are making, a difference.

(SA) I’d like to move on to another subject, African integration. I know from reading about you, about how much of an influence Kwame Nkrumah was on you in your early years and the type of pan-Africanism that he led and espoused. Do you think he would be disappointed about the state of African integration today? Or conversely, do you think he’d be quietly pleased as we are now on the eve of the operationalisation of the African Continental Free Trade Agreement?

(KY) At the beginning of my book, I talk in detail about the things that have inspired me. I was 13 years old when Ghana gained independence. What I heard on the radio was Nkrumah talking about African unity, African integration, the continent of Africa being prosperous, and transformed. His vision was of ‘One Africa’, despite people at that time feeling that it was utopian, and there was a great deal of debate on whether he was too ambitious. The point is, the principles Nkrumah put on the table and the vision he painted for the continent – one where you cannot have fragmented small countries and artificial borders, because these cannot work to attain the type of development and human wellbeing we want for our people –  that is what inspired me. 

If we reflect on the vision that Nkrumah painted for Africa, yes, he would be disappointed because we have not made much progress in terms of achieving that vision of ‘One Africa’. A prosperous Africa is still very much a work in progress. We came up with the Abuja Treaty, for example with the Africa common market, the African Union and others, but we are still way behind. So far, institutions that were set up for African unity have by and large punched below their weight. That being the case, I feel the Africa Continental Free Trade Agreement is very encouraging. I was pleased to see that the leaders came together and reaffirmed these principles, and they’ve come up with a blueprint to achieve that. If we can achieve that, we will create a single market of almost 1.3 billion consumers with a commensurately high GDP aggregate growth. The potential prospects are great. 

(SA) KY, I know at the start of the millennium, you spent a lot of time working with presidents in Senegal, in South Africa, in Algeria and Nigeria, who were the leaders of the NEPAD initiative and they really restored Africa’s position in the global community, and regular invitations were extended to them to G8 meetings, giving Africa a unified voice on the international stage. When you speak to them now and in your own view, and does it disappoint you that Africa’s voice internationally is so weak? 

(KY) We spoke about leadership earlier and I will address that again in a minute. I was very fortunate to go to the UN Economic Commission for Africa in 1995 [as Executive Secretary] and around the year 2000 when there was a great deal of momentum. There were some African leaders that managed to generate collective leadership. This was a fantastic step; there was a realisation of the need to speak with one voice and that the continent needed to work together, to take the initiative. It was fantastic to see NEPAD, the African Peer Review Mechanism etc. and then active engagement with the G8 and others on an ‘African driven agenda’ for aid effectiveness and governance issues. I was fortunate to see that; they were very exciting times and they restored Africa’s position in the world. 

I feel that since then, we have made limited progress on the same front and not on the same scale. However, the responses of African leaders during the COVID-19 pandemic has been very encouraging, in terms of speaking with one voice. For example, the AU record, very early on in the pandemic; the African CDC rapid coordination, based upon WHO guidelines, with the African Medical Supplies Platform and the African Union COVID fund. President Ramaphosa, and others, appointed Ngozi and Kaberuka, some of my old friends, as special envoys and they really put the African agenda on the table; negotiating with the World Bank, IMF and others, and discussing the debt initiative. In that regard, I have been very encouraged to see the technical leadership in the way that some leaders have handled COVID-19 in their own countries. 

There’s still a lot of work to be done to gain more support for Africa, especially in terms of ensuring that Africa gets its share of the vaccine; this collective voice is very important. Yes, we’ve had our challenges in the 2000’s, even on the issues of HIV/AIDS, but the work on this came together. This collective, greater voice is of even more importance now, especially on issues like climate change. We have the COP26 coming up in Glasgow and what’s going to be the African position there in terms of mitigation versus adaptation? On all these issues, we need this collective voice and I’m hopeful that we will be able to show that.

(SA) I know that the climate change negotiators have been busy and have met a couple of times recently. So that’s encouraging.

(KY) On that issue there is certainly lots of work to be done. We need to encourage and ensure the private creditors, and ourselves, the official creditors, engage with the G20. 

(SA) Yes, I think debt is a really significant issue. Obviously, some of the indicators suggest that debt is nearing levels not seen since 2003, when people like yourself were at the forefront of negotiating debt forgiveness for Africa. 

(KY) It is a critical issue and getting the private creditors to be part of the conversation is imperative. We are seeing that what has happened in Zambia, on the debt default, is happening in other African countries. How we engage the international community with one voice and get the resources we need, that’s going to be a key issue going forward. 

(SA) Before I turn to the work that you’re doing at ACET, I’d love to just talk to you about a point that you raised just a little earlier on governance. So this year, disappointingly, the Mo Ibrahim Governance Index registered its first decline in overall governance for 10 years since it was founded. What do you put this down to KY?

(KY) Well, I think you need to take a bit of a medium-term perspective on the governance story. As you know, the Economic Commission for Africa pushes a lot on that. When I was at ECA, we came out with the first African governance report. We talked about indicators and raised the issue of capable governance and a capable state and I have been involved in this issue. 

The good news is that governance has improved. It does depend on what you define by governance, and the Mo Ibrahim indicators, when you look at them, show clearly that over the past decade, other than a blip last year according to his numbers, the overall governance performance has progressed. Today, over 60% of Africa’s population live in countries where overall governance is better than in 2010. Some countries are making progress on human development or economic opportunity, others are making progress on peace and security. Overall trends have been positive. Contradictorily, I feel, despite these positive trends, the public perception of overall governance has deteriorated in the last 10 years. I think one of the reasons for this is potentially because citizens have much higher expectations now which, of course, is a good thing. Governance does require corrective action in some countries, but overall, I think the progress has been positive. 

(SA) At ACET I know that you do a lot of work promoting partnerships between government and industry and creating the right enabling environment for industry. It’s a central premise of your work on transformation. And I know that you believe passionately that industry and the state should have complementary roles and need to work collaboratively together. Yet there are still too few examples of genuine, transformative collaboration, between industry and governments on the African continent, and still too many business leaders cite political risk, policy uncertainty, regulatory ambiguity as real obstacles to their companies’ abilities to invest at scale. I wanted to get your views on this, and to touch a little bit on democracy, because in my own experience, election cycles deter companies and investors from making investment decisions. They wait to see the outcome of an election before investing.  In many countries we have a four or five year election cycle, and in the 12 months preceding an election, in my experience, investment stalls. It’s very damaging to economic growth. So, I want to get your perspective on the quality of collaboration between industry and government, and secondly, to get a perspective on politics and election cycles and how that affects investment flows.

(KY) You have hit the core of the issue we work on at The African Centre for Economic Transformation. As memory serves, we completed our first African Transformation Report in 2014, where these issues arose. We realised that partnerships between the public and the private sector in countries all over Africa, but especially in small countries, is fundamental to good economic policies and transformation. So, we devised and laid out what we call the ‘complimentary rules’ between government and the private sector. 

In my 40/50 years of experience, it is my belief that governments have a key role to play. They must ensure macroeconomic stability and provide the environment in which the private sector can thrive. They should streamline regulations to encourage and cut red tape. We also feel strongly that the private sector should spearhead the creation of jobs and implement the best procedures to upgrade technology and processes. That being said, a strong private/ public sector partnership is needed; inclusive education, bridging the skills gaps, building infrastructure, so on and so forth, are fundamental and require collaboration. Without that, you will not be able to move the economy or country forward. 

Even when creating and setting the national development vision, there should be a strong dialogue and collaboration between the private and public sector, where both sides come together and see what needs to be done. So, when you say, ‘it’s not happening in many countries’, I think you are right. Currently we are not having this dialogue, we don’t have an understanding of each other’s’ role. The role of the private sector is critical, and when you look at investment to GDP ratios in Africa, they are very low. The statistics show that we are not there yet so I agree with you, there is a need to do much better for the domestic private sector, in particular. 

Foreign private investors should be invited in, and in that regard, as I think you are aware, two years ago, my organisation The African Center for Economic Transformation, put this on the table. As a result, we had the African Transformation Forum where we had President Akufo-Addo, President Kagame, Aliko Dangote, and other private sector people, addressing the question ‘How can we get the private sector and the public sector to work together?’ As you can imagine, there was a very interesting dialogue. The issue is important and there are some good examples in some countries. We have attempted to initiate peer learning and bring governments and the private sector together from various countries to share experiences; we have found this to be a powerful tool for learning from each other. We need to do more of that. It is of fundamental importance and the point is, that the private sector matters. 

On the second point, regarding the governance issue and multiparty democracy , in my book I spend a substantial amount of time addressing this issue. As I said, transmission is a long-term process and it turns out that countries that have stable governments, and where you can have predictability in policies, progress fastest. The so-called developmental states have been better at that because they have a government that can be in power for a substantial amount of time, between ten and fifteen years. They have a long-term vision they can follow through on, providing there is transparency and accountability. Multiparty democracy has its ups and downs and my own country, Ghana, is a typical example of where governments come in and policies change. For this reason, we have a monitoring system called the Transformation Index that we use to measure African countries, and highlight countries like Rwanda and Ethiopia, that have done very well. Ghana is perpetually, back and forth, back and forth, so there are issues to identify and address. I still feel strongly, as I say in my book, it’s not a one size fits all. Every African country is different, their history is different, but there are some fundamentals that we need to understand as we move forward. 

(SA) Thank you for those insights, you talked about the importance of private capital. You made a distinction between foreign and domestic investment, which I’m interested to hear you elaborate on, and let me put this question to you. It’s been my observation that since COVID-19 struck, it’s obviously created enormous economic damage to economies, not just in Africa, but all over the world. We talked a little bit about the sort of fragility of the debt sustainability of some nations, and you referenced Zambia’s default. It seems to me that at this moment in time all countries, but specifically African countries are in precarious debt positions and should be seeking to crowd in more sources of private capital. But instead some nations are pivoting to a form of economic nationalism, giving preferences to indigenous businesses, largely because of fear of disruption to international value chains caused by COVID-19 mobility restrictions. Does it worry you, this economic nationalism and the propensity that we’ve witnessed in the last six months to advantage local domestic businesses over international ones?

(KY) I think the way I look at it is, okay, what do we need to do to get out of the present situation we are in and to build back better? The challenge faced as a result of the pandemic has had a really huge impact on our economies; GDP is supposed to decline by 5% overall this year in African countries. Per capita income for the first time in over 20 years or so is going to be negative; a huge economic impact. We need to address the short, medium and long term, so economic nationalism is not the way to go. I think in the first instance, there were some immediate reactions that have been prescribed because of supply chains etc, but what are the real issues to be addressed? I think there are four fundamental things that African countries can do, to bounce back and start on a growth trajectory. 

Resource mobilisation and management is going to be key. In fact, at ACET, we have come up with a 10-point Action Plan, which we have sent to many African governments and to the AU. It includes leadership, resource mobilisation and management and taxation policies. Tax to GDP ratios are still too low in African countries, we need to improve these. 

There are so many things we can do internally to improve the effectiveness and transparency of the way we use our own resources. Overlapping government initiatives, to include public expenditure management and also the business environment and investments, are all going to be key. Now that we are squarely in an era of digitisation, we need to crowd in venture capital for entrepreneurs, we need to support innovation ecosystems; there is so much that needs to be done in the short term, medium term and long term, to get back on the growth trajectory and on the transformation agenda. In that sense, the good news is that a lot of African countries that I’m aware of, and that I’ve seen exhibited in Ghana and other countries, have come up with their own action plans that address many of these issues. Working with the World Bank, for example, we brought chief economists of governments into webinars and had open discussions surrounding these questions. I’m pleased to say that many countries see the need to move in this direction. It is my view that we should not let the crisis go to waste, as I made reference to earlier, we should learn from the past, and see what it would take to rebound and to get on the growth trajectory. It is essential that countries have their own action plans to move forward, looking 10 years from now. That’s what we need to be doing.

(SA) I’m going to move on to one final question before I let you go. When we founded Africa Practice in 2003, running a business that made money was viewed rather disdainfully. Everyone assumed that we were setting up a charity. Thankfully, for the last decade or more, there’s been a universal recognition that private sector investment is a critical component for  economic and social transformation in just the way that you’ve elaborated. And yet too many African nations are still very much dependent on donor aid. You’ve spent the latter years of your career working very much at the intersection of industry and government trying to get the enabling environments right for economic lift off in countries. And with a heavy recognition and onus on an enabling environment for private capital, but you also spent an awful lot of your career in the international development sector, where aid, for a long time, was really the only show in town. Do you ever regret having spent so much time in international development, rather than industry  and trying to find enterprise solutions to development challenges?

(KY) No, I don’t, not at all, and I’ll explain why. We started this conversation about Nkrumah and his vision about what Africa needed to do. I was attracted to the government agenda in that same sense, and my whole career, after leaving Ghana, centred around issues that were on the African development agenda. I think that is what attracted me. Of course, I have moved into the private sector, and what I learned and achieved in government has allowed me to see what works and what does not; what we can learn from the past informs the future. I learned a lot about the importance of partnerships, that aid doesn’t work all the time, how to take ownership of aid effectiveness agendas. We can’t depend on aid and in its decline, we need to do more for ourselves. Therefore, the whole issue of economic transformation is a partnership, it is in the private sector, the public sector, and the need for progressive leadership from both. All of these lessons that I have mentioned are based upon the experience and opportunities I have had. Essentially, that is what has driven me, and I remain an optimist. After all these years, I think the best contribution that I can make, is to share my experiences, and that is what we are doing at ACET, to help and support future generations. 

In my book ‘Know the Beginning Well’, I talk with some emotion about the future of Africa and that I see Africa through my granddaughters’ and my grandsons’ eyes. What will the Africa they see be like in 20 years from now? That is what it is all about. We must learn and there are a lot of opportunities but also several challenges. The transformation agenda is huge, but if we can learn from the past and draw lessons, I feel confident that the transformation we are looking for will be realised, unfortunately not in my time but hopefully in my grandchildren’s lifetime. That is my hope!