Journo calls on US/Africa summit to discuss ethical investment

Monday, 4 August, 2014

The Africa Progress Panel is a panel of “ten distinguished individuals from the private and public sector who advocate for equitable and sustainable development for Africa,” chaired by Mr Kofi Annan, former UN Secretary-General (and Nobel laureate, of course). Last week, they issued a piece on their website by journalist and Research Fellow Stephen Yeboah on how “fair and ethical investments are key to Africa’s economic transformation.”  Thepiece calls on the upcoming US-Africa summit in Washington ("...the first time a sitting U.S. president has invited so many African heads of state and government") to take the opportunity "to lay down some ground rules for ethical investment that benefits the greatest number of Africans."

This piece is deliberately an overview and offers little concrete discussion of what’s needed, but makes some, very broad, points with which it’s hard to disagree (“Ethical investments in agriculture are particularly important [in Africa], because agriculture’s potential is huge.”).

What makes it of more than passing interest from our point of view, though, is the brief case study of the Ahafo mine in central Ghana, operated by Newmont Gold Ghana Limited (NGGL), a subsidiary of US-based Newmont Mining Corporation. As the author points out as a device to frame his arguments about the leverage that large companies can have in Africa, “NGGL’s revenues [were] US$528 million in 2009, about 10% of Ghana’s total exports and 4.5% of its total foreign direct investment.”

Sobering figures… but Yeboah says nothing more about Newmont after that, rather begging the question of what they’re up to in CSR terms. It seems a little unfair to point out the fact that Newmont have a mine and a lot of money and then make the general point that companies should be doing more in Africa, without discussing the specifics, good or bad, of the Newmont case.  Still. What he does cover, too broad but broadly right, is as follows; have a look at the original piece for a useful overview of this topic as it relates to the upcoming summit.

- “Investments are not made in a transparent and accountable manner. As a result African governments lose huge sums of money.”
- “Making investments fair, ethical and mutually beneficial ought to be at the heart of discussions as 50 Africa leaders gather in Washington D.C at the historic U.S.–Africa Leaders Summit [this week]”
- “The oil, gas and mining sectors tend to operate in enclaves that have weak links to the local economy… [and] Africa too often gets unethical investments that stifle efforts to foster inclusive growth, reduce poverty, and enhance food and nutrition security.”
- “Africa loses an estimated 5.7% of its GDP annually in illicit financial flows, principally because of tax evasion.” 
- “Agriculture and fisheries suffer from chronic underinvestment and from unethical investment.” 
- “Africa needs to transform its economy so that growth benefits all and reduces poverty and inequality. Investment is a vital ingredient of such a transformation – but only if [it is] transparent and fair.”