Begin with the End in Mind

By Dale Dawson

In his best selling book, Seven Habits of Highly Effective People, Stephen Covey describes the discipline of “beginning with the end in mind” as the habit of personal leadership. By developing the habit of imagining life’s long-term goals, a platform is built from which to make wise decisions, avoid distractions and be productive. This habit also improves the chances of ending up where you want to go.

Africa is rising and young Africans are being encouraged to become “job creators, rather than job seekers” – a perfect mantra for leaders determined to build the private sector, expand the middle class and spread prosperity. The energy to accelerate Africa’s transformation clearly lies with its talented young people. They are imbued with a global perspective and convinced that while good government has a vital role, it takes entrepreneurs and private businesses to create jobs and sustainable economic growth. For the most committed and ambitious, the urgent question is: “How do you actually become a job creator?”

Young Africans are redefining success and rethinking traditionally accepted career paths. Historically, the surest road to success in Africa was to accumulate the most university degrees from the most prestigious international schools (right through to a doctorate with a fancy PhD title) and then get a secure position with a government or global NGO. This career path works well for job seekers in no-growth countries that have weak business environments and are dominated by heavy-handed governments comfortably dependent on the charity of others. Africa’s future job creators realize their careers must be more creative and daring if they’re going to be prepared to meet the needs of a free market and the opportunities of the new emerging economies.

The globally accepted standard for being “well educated” includes completing a dozen or more years of primary and secondary school, followed by four years of university undergraduate studies to obtain a bachelors degree. It’s the same predictable track and outcome for just about everyone – everywhere. As a result, for most of today’s successfully educated people, it is only after they earn their bachelors degree that life becomes truly creative. Like standing before a blank canvas with a palette of paints, for the first time recent college graduates have real career choices and the freedom to define success on their own terms. It is at this moment that the value of Covey’s habit of “beginning with the end in mind” really becomes clear.

For those called to be Africa’s job creators, college graduation is the perfect time to launch a career that prepares you to manage a profitable business; lead a team of people; create solutions for which customers will pay; and convince lenders and investors of your enterprise’s future success. These are just a few of the skills of an entrepreneur. Most are not learned in a classroom, but rather by working in the marketplace and usually for someone else at first. Don’t miss the opportunity to imagine your end and design your own bold path.

Developing African Entrepreneurs

By Daniel Larson

It is a generally-accepted premise that stimulating entrepreneurship in developing countries can lead to economic growth, increasing innovation, and alleviation of poverty. Because of these potential benefits, a number of African nations have made efforts to create an “entrepreneur friendly” business environment. Governments have put an emphasis on making it easier to do business, providing better access to financing, and building communication and transportation infrastructures. Additionally, many entrepreneurship training programs have become available for those who may wish to form new businesses.

All of these actions are helpful but will they lead to the development of significantly more entrepreneurs?

Click Developing African Entrepreneurs for the full article.

About Daniel Larson

Dan is a Managing Director with B2R and has spent the past year in Rwanda teaching financial analysis classes to finance professionals, conducting research on the benefits of childhood play activities, and helping to build a primary school in the Eastern Province. He is a retired investment banker who founded The EaglePoint Group, an investment banking firm that provided valuation and financial advisory services to corporations. During his 45 years of professional experience, Dan has worked with many entrepreneurs seeking venture capital financing, and he has additional experience in the areas of private placements, mergers, acquisitions and securities analysis. He received his B.S. and M.S. degrees in engineering from the University of Washington and his MBA in Finance from Stanford University. Dan has a deep interest in new early childhood development and education programs that could help to alleviate global poverty.

China in Africa: A New Model of International Development?

On April 26th, Sagamore Institute hosted China in Africa: A new model of international development? featuring the foremost experts on the topic to discuss tough questions about Africa’s development from Western, Chinese and African Perspectives. The event’s keynote speakers include Dr. Deborah Brautigam, author of The Dragon’s Gift: The Real Story of China in Africa and Professor of International Development at Johns Hopkins SAIS, Michael Fairbanks, co-founder of the SEVEN Fund, the OTF Group, ISOKO Institute and Senior Economic Advisor to President Paul Kagame and Dr. Richard Asante, Research Fellow at the University of Ghana’s Institute of African Studies and Visiting Scholar at Northwestern University.

Post Event Resources

Game Day
China in Africa: Myths, Realities, and Opportunities – Harvard Business Review
Dr. Deborah Brautigam – AudioPowerPoint
Ms. Ying Chen – Audio, PowerPoint
Dr. Una Osili – Audio
Mr. Michael Fairbanks – Audio, PowerPoint
Dr. Richard Asante – Audio, PowerPoint
Dr. Shunji Cui – Audio

Map: Africa’s Stock Exchanges

Today sub-Saharan Africa has 15 stock exchanges. In 1989 it had just five. As investors have increasingly considered Africa as a destination for investment dollars, countries have risen to the challenge by developing increasingly sophisticated institutions to help channel funds into productive ventures. Visit our interactive map here to learn more.

African Stock Exchanges and Going Public

You don’t have to “go public” to be a great business, but you need to be a great business to “go public.”

In modern economies, most businesses owners limit their liability by forming and conducting their business in a separate legal entity called a “corporation.” The corporation issues shares of stock that represent its ownership. For example, if a corporation issues a total of 10,000 shares of stock, someone who owns 4,000 shares owns 40 percent of the corporation (4,000 shares of the 10,000 shares outstanding).

“Going public” describes the process by which a corporation sells shares of its stock to “public” investors. As part of the going public process, the corporation and its shares are registered on a stock exchange where anyone who has the money can purchase the company’s stock and can become a partial owner of the business. Likewise, anyone who owns shares in the corporation can use the exchange to sell their shares to another “public” investor.  An efficient market is created when there are a significant number of sellers offering shares and buyers bidding for shares of the same stock.

The primary reason that a corporation “goes public” is to raise new funds to invest in its business. However, this method of raising capital is not available to early-stage or start-up businesses. It is only available to large, well-established, profitable companies that can assume the responsibility and expense of having public investors. Corporations with publicly-traded stock are subject to significantly more rules and greater disclosure requirements to ensure that all their shareholders are treated fairly and receive frequent and objective information about the company’s activities and financial performance.

Vibrant stock exchanges provide the capital to build great publicly-traded businesses – companies that grow their revenue and profits year after year; provide products and services for their customers; jobs for their employees; sales for their supplies and vendors, tax revenue for their communities and nation; and increasing wealth for their shareholders. They transform lives and communities. I know because I live in Arkansas, a small state in the U.S., which is home to some of the most successful public companies in the world – Walmart (retail stores), Tyson Foods (meat production), J.B. Hunt (trucking), Dillard’s (department stores), Murphy Oil (energy) and Alltel (telecom merged into Verizon).

Africa’s surging economies are expanding, developing and changing quickly. New businesses of all sizes are emerging and growing – micro, small, medium and large, well-established enterprises. Over the coming years, Africa’s business winners will begin to appear and access to new capital will become an essential ingredient for their success. When that time comes, Africa’s stock exchanges will make all the difference.

African Stock Exchanges: Winners and Losers

To better understand Africa’s financial landscape, this brief highlights the winners and losers of the stock exchanges in regards to ease of doing business within a prospective country, GDP growth, exchange rate fluctuations, size and governance. The analysis spotlights the unique risks and rewards for investors choosing companies listed on sub-Saharan exchanges and compares them to the companies traded on BRIC nation stock exchanges (Brazil, Russia, India, China).

According to the U.S. Securities and Exchange Commission, there are two primary motivations for U.S. investors (or any domestic investor) to invest abroad, the first is diversification of risk and the second is to take advantage of potential growth. However there are some unique risks when investing abroad. These include:

  • Change in Currency Exchange Rates
  • Political, Economic and Social Events
  • Less Information Available
  • Different Market Operations
  • Reliance on Foreign Legal Remedies
  • Lack of Liquidity
  • Dramatic Changes in Market Value

Currency Exchange Rates: Currency exchange rates are crucial when making an investment in foreign markets. Most foreign exchanges require payments and payouts in the local currency. If the local currency devalues the payout to the investor can be lower than the initial investment due to devaluation. As an example, let’s say you invest 100USD into country B. Country B’s exchange rate is 1USD to 1Unit. Let’s say that you buy 100 shares at 1Unit a piece. Let us now say that two years down the road you decide to sell your shares. The shares are still worth 1Unit per share but the exchange rate between the USD and the Unit is now 1USD to 2Units, meaning the Unit has depreciated. A return for the investor would still be 100Units but after conversion into USD you will be left with only $50USD. These fluctuations are not unknown across borders with some countries experiencing greater fluctuations than others.

The winner for minimizing exchange rate fluctuations within sub-Saharan Africa would most likely be South Africa’s Johannesburg Stock Exchange. On July 24, 2012 the JSE announced Quanto Futures. According to the press statement, “a Quanto Future is a Rand denominated commodity investment product that delivers the same payoff as a pure dollar denominated commodity investment, allowing investors immunity from exchange rate fluctuations between the rand and dollar.”[1] In other words, if the price of a commodity increases by 20% in US Dollar terms, then the value of the investor’s Rand position will also increase by 20%. The movement of the Rand relative to the US Dollar plays no part in determining an investor’s return.

Other countries that have had appreciating or more stable exchange rates in comparison with the United States over the past decade are Mauritius, the BVRM and the Rand Based exchanges of Namibia and Swaziland. In the past decade the Mauritian Rupee, the BVRM’s West African CFA Franc as well as the Namibian Dollar and Swazi Lilangeni (both pegged to the South African Rand) have seen their currency appreciate to the US dollar the past 10 years. The chart below shows the biggest winners and losers and how they compared to the BRICs over the past ten years.

However taking the values of appreciation and depreciation from the past five years show us a bit different view of the currencies within Africa and the BRICs.

Political, Economic and Social Events/Reliance on Foreign Legal Remedies: Some of the most important investor flags are political, economic and social events. Today information is at almost anyone’s reach whether online, in the news or through social media. Countless statistics have been created to measure variables such as capital flight, good governance as well as political and economic freedoms. A proxy that can be used for economic and political events influencing stocks is the Ease of Doing Business Index that was compiled by the World Bank. The Ease of Doing Business Index is Economies are ranked on their ease of doing business, from 1 – 183. A high ranking on the ease of doing business index means the regulatory environment is more conducive to the starting and operation of a local firm. This index averages the country’s percentile rankings on 10 topics, made up of a variety of indicators, giving equal weight to each topic. The Ease of Doing Business Index not only measures variables like how long it takes to start up a company but also the rule of law and protection for business. The rankings for all economies are benchmarked to June 2011. The losers of the Ease of Doing Business Index were Zimbabwe along with the BRVM nations which scored at the bottom of the world and sub-Saharan indexes. The average of the 8 nations can be seen below.[2]

Two subcategories to the Ease of Doing Business Report prove to be extremely relevant in our dealings with investment in Africa, protecting investors and enforcing contracts.

The Ibrahim Index of African Governance can also be used as a proxy to measure the political situation in sub-Saharan Africa. It is a composite index, constructed by combining underlying indicators in a standardized way to provide a statistical measure of governance performance in all African countries. The rating is from 1-100 with 100 being the best. Below the winners and losers can be seen from the 2010 index. Governance, as defined by the Board of the Mo Ibrahim Foundation, is inclusive from the viewpoint of the citizen. The definition is intentionally broad so as to capture all aspects of what a citizen has the right to demand from his or her state. It can be summarized by four over-arching dimensions: Safety and Rule of Law, Participation and Human Rights, Sustainable Economic Opportunity, and Human Development. It is important to note that since 2010 we can expect the BRVM average to have decreased further with political instability in the Ivory Coast and most recently, Mali.

Economic events can also affect investment. Further economic growth can attract investors to the possibility of huge returns. The following graph below shows the winners and losers of African GDP growth and compares them to the BRICS. To minimize these risks the World Bank has created the Multilateral Investment Guarantee Agency (MIGA) which offers coverage for five non-commercial risks. The coverage may be purchased individually or in combination protecting qualifying investors from currency inconvertibility and transfer restriction, expropriation, war, terrorism and civil disturbance, breach of contract or non-honoring of sovereign financial obligations. The types of foreign investments that can be covered include equity, shareholder loans, shareholder loan guaranties, and non-shareholder loans. All loans and loan guaranties, including those issued by shareholders of the project, must have a minimum maturity of more than one year provided that MIGA determines the project represents a long-term commitment by the investors. Other forms of investment, such as technical assistance and management contracts, asset securitizations, capital market bond issues, leasing, services, and franchising and licensing agreements, may also be eligible for coverage.

Lack of Liquidity:

As the U.S Securities and Exchanges Commission states, one of the risks of investing abroad is lack of liquidity. They describe a lack of liquidity as “Foreign markets may have lower trading volumes and fewer listed companies.  They may only be open a few hours a day. Some countries restrict the amount or type of stocks that foreign investors may purchase. You may have to pay premium prices to buy a foreign security and have difficulty finding a buyer when you want to sell.” Some African exchanges are very illiquid in the sense of limited trading volumes as well as total companies listed. Rwanda and Swaziland for example have 3 and 6 companies listed on their exchanges. South Africa, however, has 406 a number that beats out Russia’s MICEX (284) and comes close to Brazil’s BM&F Bovespa (470). Coming in second is the Nigerian Stock Exchange with a total of 198 listed companies. Nigeria’s volume traded amounted to 89,576,608,901 in 2011. The Johannesburg Securities Exchange saw a volume traded that was equal to 71,463,833,873. During the same time-period, the BRVM had a volume traded of only 19,799,503.



[2] Full tables can be seen at the end of this paper.


China in Africa

Mthuli Ncube is Chief Economist and Vice President of the African Development Bank. He holds a PhD in Mathematical Finance from Cambridge University. Michael Fairbanks is Senior Advisor to President Paul Kagame of Rwanda and co-founder of ISOKO Institute. He was a Fellow at the Weatherhead Center at Harvard University.

Published in Harvard International Review Fall 2012

Myths and realities about China’s ambitions in Africa abound: China is monolithic, mired in stale ideology, subverting the Bretton Woods system, and unwilling to provide global public goods. Another is that China has no “soft power,” that is, the ability to engage almost one billion Africans by persuasion, attraction and market relations rather than brute economic and military force.

These myths, which cause some to conclude that China is interested in a “resource grab,” or aiming to displace the West, may cause strategic errors by other nations or the global governing institutions. It hurts the interests of Africans who have made great strides to eradicate poverty, build democratic institutions, and integrate into global networks of trade and investment.

Read PDF here.

Q & A with Maavi Norman

Maavi Norman is currently a Ph. D. candidate at Northwestern University and a recent Leadership Fellow with Northwestern’s Center for Leadership. He is also the grandson of Liberia’s President William Tolbert, a reformist leader who was assassinated in a military coup d’état in 1980. Keenly aware of the challenges that leaders face in their quest for bringing about progressive political and economic transformations and having experienced firsthand the grievous consequences of reforms unintentionally leading to political instability, Norman’s work blends academic rigor with a commitment to develop resilient leaders of integrity.

ISOKO Institute spoke with Norman about his work on leadership, leadership development and reform in Africa.

ISOKO: Could you start by introducing yourself and the work you’re doing?

Norman: My name is Maavi Norman and I am a Ph. D. candidate in the Political Science Department at Northwestern University. My concentration is comparative politics and international relations. I’m also a Northwestern Certified Leadership Coach.

My research focuses on political leadership in Africa. I am particularly interested in reformers: leaders that have made significant strides in positively transforming their political, social and economic systems of governance. I explore their motivations and impetus for undertaking risky reforms when the short-term consequences of those reforms (political instability, military coups) may outweigh the long-term objectives (such as increased economic development or more democratic political systems). I am also interested in the decision-making processes that shape the reform process, as well as the factors that account for political stability as reforms are implemented.

Specifically, I’m looking at Liberia, Senegal and Ghana during the late 1970s and early 1980s. I’m interested in this period because during the 1990s, after the end of the Cold War, there was a concerted push for democratization and good governance on the continent. There was more of a credible commitment by multinationals, organizations and western powers, including the U.S., who were really pushing for such reforms. But in the late 1970s and early 1980s there wasn’t really a serious push for good governance in Africa or other developing regions. Indeed, many “bad governments” were propped up by Western powers. Some scholars have gone as far as to label such foreign policy stances organized hypocrisy. Of course, these ideals may have existed, but during the Cold War many deemed these proclamations as mere rhetoric. They weren’t really backed up by policies and practices. So I’m interested in what motivated these African leaders during this earlier time period to really push for reforms on their own terms.

ISOKO: What are your hypotheses as to why they were able to implement those reforms despite a lack of external, credible commitments?

Norman: I attribute a leader’s inclination or proclivity to pursue risky reforms to their political orientation and worldview. While outcomes of reform efforts depend on their political management style and international engagement.

So right now, one of my hypotheses is that these reformers had some intrinsic motivation to usher in progressive change based on their unique political orientation and worldview. I believe that the reformers that I’m looking at were motivated to reform because they were personally committed to being better stewards of their country’s economic and/or political systems. And in the process they believed they could leave a legacy as well as serve as a model for future leaders. So you have these intrinsic motivations for why leaders wanted to push for reform.

Another factor is ideology. I believe that some of the ideologies that these leaders espoused were a driving force for them. For instance, in Liberia President Tolbert believed in Humanistic Capitalism. Because he was a successful entrepreneur and businessman prior to becoming president, he believed in the workings of capitalism. At the same time he was also committed to uplifting the citizenry from “mats to mattresses.” I think that that could have also been a key motivation guiding his reform efforts. As a result, economic growth, development, and a more democratic political system accrued under his leadership.

ISOKO: Who are some of the other leaders that you’re looking at?

Norman: I’m looking at Leopold Senghor of Senegal. He was the first president in Africa to actually step down from power. He introduced multiparty democracy and then relinquished power to his vice president. That, in itself, is an enigma. What motivated him to step down from power when relinquishing power seemed unfathomable to many of his contemporaries?

Might his education in France, tenure in the French National Assembly, and socialization in other democratic institutions have played a role in shaping his political orientation and worldview to be favorable to a more democratic polity? Or could it be the African Socialist Ideology Negritude that he espoused?

Another reformer is Jerry Rawlings of Ghana. After launching two military coups and killing and imprisoning scores of former political leaders, he embarked upon a reformist path. A self-proclaimed rebel, he challenged his left-wing compatriots and their leftist ideology. He was accused of “betraying the revolution” when he reversed from his socialist course and adopted IMF-friendly policies. He revived Ghana’s economy, making it one of the fastest growing economies on the continent in the 1990s. What motivated him to undertake these significant reforms, particularly when most other military rulers in Africa tended to be retrogressive? I believe it was a particular commitment to social justice inspired by his life experiences and values. Even in the face of numerous coups attempts and assassination he stayed the course.

Rawlings, Senghor, and Tolbert are very different leaders.  Assessing why their political orientation and worldview catalyzed them to undertake reform and investigating how their political management style and international engagement drove the process will be a valuable theoretical exercise with practical implications.

ISOKO: In your research on leadership, what are some of the baseline qualities you see in leaders across the board? So in other words, what are some of the non-negotiables that a leader has to have?

Norman: Well there is no cut and dry answer for that. There are no definitive characteristics or attributes that all leaders possess; however, I do believe that there are some traits, tendencies, or even practices that enhance leadership capabilities.

First would be resilience. This is the ability to transcend adversity, to be able to overcome obstacles, and to bounce back from crises or setbacks.  Being tested in such a manner strengthens one’s mettle, cultivating a spirit or mentality of perseverance.

Linked to resilience is the ability to take risks. A lot of leaders are expected to take on challenges, to really step outside the box and to try something new. I find that most great leaders are risk-takers. And as they encounter failure or are severely tested along the way, they learn from these experiences to become more effective leaders.

Self-awareness is another trait that I find valuable for effective leadership. A great leader is aware of their strengths and weaknesses while also being socially aware. They are able to see the proverbial trees and forest simultaneously, and have a knack for putting situations into perspective. Empathy is also important. Being able to connect, relate, and understand the predicament and perspectives of others. A leader’s ability to thrive in diverse settings, collaborative and hierarchical, is very powerful too.

Finally, I would say that leaders ask powerful questions, those that others overlook but gets to the root of the problem or situation at hand. In many instances, it is powerful questions that bring about change.

ISOKO: Can you give me a particular example of a leader that’s asked questions like that?

Norman: Liberia’s President and Nobel Peace Prize Laureate Ellen Johnson Sirleaf is an example of a leader who has asked a powerful question to affect change.  A few years ago, Dambisa Moyo wrote a book called Dead Aid in which she raised the issue of international aid not being used effectively in Africa. In response, President Sirleaf asked a powerful question: How can aid be used more effectively and efficiently in Africa?  She created the Liberian Philanthropic Secretariat. Its aim is to facilitate efficient sharing of information and collaboration between the government, civil society, and foundations doing work in Liberia. It is the first of its kind in the world. It is a testament of an African leader’s ability to recognize a problem and create an innovative solution for it.

ISOKO: So how do you go about developing leaders and especially the qualities that you mentioned?

Norman: Leadership is not something that you can learn simply by sitting in a classroom, taking a workshop or reading a leadership book. There are certainly theories that will help, but leadership has to be practiced. It is something that you learn as you get your feet wet, your hands dirty, and bumped upside the head a few times. This is acquired through experiences. Experience alone, however, does not create leaders. Two people may have the exact same experience with two drastically different reactions – one may grow and thrive while the other is left unchanged or negatively impacted. It’s about how you process the experience, what you make of it and the valuable insights you extract from it.

Thus, effective leadership development programs provide an environment where participants can engage in activities that simulate aspects of leadership in practice. Leading a team, collaborating on projects, dealing with or managing crises and conflict, problem solving, practicing persuasion or influence are all effective exercises. These activities push participants to really learn about themselves through critical self- reflection either individually, in a group or with a coach. Tools such as strengths assessments, 360-degree feedback, reflective journaling and leadership coaching are all effective for leadership development.

ISOKO: There are a lot of similarities between the common qualities of entrepreneurs and leaders. What do you see as the differences between these two?

Norman: The differences are a matter of degree and type. Entrepreneurs at the core are revolutionary. They revolutionize products, services and industries. All leaders however, are not revolutionary. Some are more interested in maintaining the status quo than anything else. Although you do have transformational leaders or political entrepreneurs, all leaders are not change agents. Entrepreneurship is also about risk-taking while many leaders are risk averse and extremely conservative. Progressive or reformist leaders on the other hand tend to take risk to bring about change. Leaders also rely on influence and power in a way that entrepreneurs might not have to.

ISOKO: Shifting gears a little bit. What is the relationship you see between leadership and good governance?

Norman: This is also a matter of degree and type. Good governance, as it relates to national leadership, is the manner in which a national leader manages the social, political, and economic affairs of a country. It is a style of leadership characterized by a decision-making process that is consensus-oriented, inclusive, transparent, rule-based, accountable, efficient, and the like. Good governance is a form of leadership but it’s not the only kind. In my opinion, it is a more democratic form of leadership, more participatory form of leadership, and I would even consider it to be a more transformational form of leadership.

ISOKO: What do you mean by transformational form of leadership?

Norman: Transformational leadership involves having a clear vision for where you want to lead a group, team, or country, and also getting buy-in from followers or the citizenry. The leader creates a sense of ownership or collective destiny. So for example in some African countries right now they have what they call visioning processes. This is where the leadership might say, “By 2020 I would like to have this level of development in my country.” But it goes beyond mere projection. It also involves a consultative process with the citizenry to figure out what they would like the priority of the government to be, how would they like to go about pursuing those goals, and what role they can actually play in the process. It really creates a sense of collective ownership of the long-term objectives at hand.

Transformational leadership is unlike authoritarian leadership, which does not involve the people and their input. There is a personal commitment involved and a high level of buy-in from the population. You take their needs and their desires into consideration as policies are formed. And you are accountable to them as well.

ISOKO: Can you give me an example of transformational leadership that you’ve seen in African government?

Norman: The recent winners of Mo Ibrahim’s Good Governance Awards are certainly all transformational leaders: President Mogae of Botswana, President Pires of Cape Verde, President Mandela of South Africa, and President Chisanno of Mozambique. In addition to fostering economic growth, and introducing progressive reforms, they all stepped down from power peacefully when their terms were up, resisting the urge to extend their term limits.  This will undoubtedly have positive implications for the political culture in their respective countries.

In my opinion, President Sirleaf also exemplifies transformational leadership. Liberia has experienced significant growth and development in recent years under her leadership. Apart from the Liberian Philanthropy Secretariat, she has also signed numerous progressive legislation, including the Extractive Industries Transparency Initiative and the Freedom of Information Act. She has also been a fervent supporter of civil liberties, political rights and press freedom.

Another is Babatunde Fashola, Governor of Lagos State.  He is transforming Lagos into a megacity. He has significantly increased tax revenue by overhauling the tax collection service, allowing him to finance more reform projects.  He has also cleaned up the city and brought a high degree of order and security in a previously chaotic environment.  He seems to be committed to fighting corruption. Lagos has experienced unprecedented growth under his leadership.

ISOKO: The macroeconomic situation in Africa as a whole has been improving steadily since the mid-1990s. How do you see good governance, and likewise, good leadership playing a part in that turnaround?

Norman: There was a pretty interesting quote that I read a few months ago by Jackson and Rosberg that said: “Governance in Africa is more a matter of seamanship and one less of navigation—that is, staying afloat rather than going somewhere.” This quote really captured the prevailing attitudes of leaders on the continent up until the early 1990s. The short-term goal of political survival or personal enrichment was privileged over long term development objectives. I think the economic development that we see now comes from the commitment and ability of leaders to focus on long-term development goals.

Between 1968 and about 2000 there were roughly 108 successful and attempted military coups in Africa, which really characterizes the instability that has been so characteristic of African politics. In recent years, there has been more stability on the continent allowing leaders to focus on longer-term objectives as opposed to short-term personal survival. There are more and more leaders who are actually stepping down from power. Military coups and the civil wars are no longer the only ways that power is being exchanged. Most of these developments can be attributed to improved governance.  Because of better governance there is more of a focus on long-term economic goals and hence the better outlook for the economic prospects in Africa. Good governance, economic growth and stability are all reinforcing.

ISOKO: Focusing in on Liberia, what are some of the challenges to leadership development there?

Norman: I would say there are four main challenges. The first would be changing the mindset of what constitutes leadership. I recently had a conversation with a faculty at the University of Liberia about plans to launch a leadership development program there, and she made a comment that really stuck with me. She said that the most popular student leaders on campus are the one that are the most confrontational. They are generally those students who are the most outspoken, the ones who push for more drastic action, and the ones who are antagonistic towards the faculty.

I found that both curious and disheartening. But I think it really gets to the point that leadership takes different forms in different contexts. Leadership is situational and in their point of view the only way to bring about change is through really drastic, aggressive means.  Highly centralized, hierarchical, authoritarian leadership has been so ingrained in the political culture that a more collaborative/consensus style of leadership may be viewed as weak leadership.  It’s obviously not something that can happen overnight, but I think there has to be a change in mindset and political culture.

A second challenge is poverty. If you have a survival mentality, you really can’t focus on higher-level goals or aspirations. Just as with Maslow’s Hierarchy of Needs, when low-level needs are not met it’s very hard to focus on ethics, values, accommodation and things like that.

Traditions can also be a challenge. I think sometimes certain traditions might constrain the development of leaders. For example, in most African cultures there is an emphasis on age and respect for your elders, but the most effective leaders are not always the oldest person in the room. There are people in their twenties running multi-million dollar enterprises here in the U.S. and elsewhere. Hence, the older generation and the younger generations should be able to work together to effect change, with the tacit understanding that the oldest person in the room may not always have the best ideas on how to move things forward.

I think sexism is a challenge. In too many instances, women are not afforded the opportunity to lead because of their gender. Strides are being made across Africa with the gender parity bills mentioned earlier, two current female heads of state, and the new head of the African Union being a women.

So while these are challenges they are not insurmountable and they can be overcome in time.

ISOKO: How would you approach leadership development given those attitudes and approaches?

Norman: I’m big a big proponent of looking at best practices in other regions, so I think that case studies, for one, would be valuable. Students could learn valuable lessons from considering alternative ways of bringing about change that does not involve violence as well as novel ways of addressing societal challenges. The non-violence movement in India, for instance, was used as a model for the Civil Rights Movement in the U.S.  Gaining insights and strategies from effective leadership in different contexts can be invaluable.

Furthermore, I think it’s easier to be critical and antagonize administrations when you don’t have a more nuanced understanding of the challenges they face. So giving students the opportunity to understand the challenges that leaders face by allowing them to serve in positions and to lead a team or to lead a group. Simulations can really get them in the position to understand some of the paradoxes that upper levels of leadership deal with and give them a better sense of what it takes to be a leader.

ISOKO: For the Africa’s emerging leaders, what are the three most important things they need to keep in mind?

Norman: Take risks. Step outside your of your comfort zone. Secondly, don’t be disappointed by failure. Failure provides a great opportunity to really learn about yourself, the world and about institutions. It allows you to set yourself up for a comeback. Failure, though painful, is a great teacher and moving forward from it will make you stronger and more effective.

Thirdly, I would say look forward as you look backwards. It’s important to reconnect with your history and your heritage even as you look forward and chart a new course. We all are part of a larger narrative as individuals or as leaders. Get an understanding about where you fit in your family’s trajectory, your organization’s trajectory, and your nation’s trajectory.

ISOKO: Thanks for taking the time.

Norman: My pleasure.

“Big Bosses” Don’t Build Great Companies

By Dale Dawson

Each year we hire some of Rwanda’s top high school graduates to work as interns for Bridge2Rwanda. When asked what they like most about their job, the most common response is that they like feeling like they are part of the team. They’re always surprised that they are invited to small meetings with those in charge to discuss the daily goals, plans and tasks. They are often asked for their ideas. Even with little or no job experience, these students recognize a significant difference in management style from what most of their family and friends experience.

Leadership matters. More than any other factor, it determines the effectiveness of every organization whether in the private, government or social sectors. While we know that there are as many leadership styles as there are personalities, the question we need to answer in order to build successful businesses and strong societies in Africa is, “What are the common characteristics of leaders who build great organizations that significantly outperform their peers?” The answer may surprise you.

In his best-selling book, Good to Great, Jim Collins answered just this question. He identified the eleven greatest U.S. companies measured by their performance over many years compared to their industry peers. He then identified the characteristics that all eleven companies had in common, including the leadership style of their CEOs. Collins defined five levels of effective leadership and concluded that every one of the great companies had a Level 5 leader with the following characteristics:

Level 5 leaders are ambitious first and foremost for the cause, the organization, the work—not themselves—and they have the fierce resolve to do whatever it takes to make good on that ambition.

A Level 5 leader displays a paradoxical blend of personal humility and professional will.

Leaders who build great organizations don’t let their ego or fears get in the way of building up the capacity of their team to accomplish the mission without them. Authoritarian, close-to-the-vest leaders do not build great organizations. Great organizations are built by dedicated, disciplined teams who share a common vision and where each individual team member is prepared and empowered to assume full responsibility for their part. Leaders of great organizations care about the organization’s long-term performance and its ability to grow and adapt after they are gone. They realize that all individuals die, retire or move on, and that great organizations are built to thrive beyond the tenure of any one person.

President Paul Kagame of Rwanda is one of the great Level 5 leaders of our generation. I have been privileged to work with him for several years and contrary to the image often portrayed in the international media, his fierce ambition is first, foremost and completely focused for Rwanda and its people, rather than for himself. He is preparing his country to continue its remarkable growth and development after his second presidential term concludes in 2017. His Excellency is humbly working to make every Rwandan feel like they are part of the team.

Q & A with Jacqueline Muna Musiitwa

Jacqueline Muna Musiitwa, Esq is Founder and Managing Partner of Hoja Law Group, a boutique law firm based in New York and Kigali, Rwanda. The firm represents governments, businesses and non-profits in aspects of political, corporate and intellectual property law. Hoja Law Group also advises investors investing in Africa and African businesses contracting with foreign businesses.

Musiitwa is also Founder of Transitional Trade, a non-profit whose mission is to promote social trade, investment and entrepreneurship in post-conflict countries and transitional communities.  She is the 2011 Ibrahim Leadership Fellow at the World Trade Organization.  She was previously an advisor to the Rwandan Minister of Justice on legal matters related to trade, investment and regional integration. Musiitwa has also been an Adjunct Professor of Law at universities in the US and Rwanda.

Musiitwa is a thought leader, speaker and writer on African issues. She is an Archbishop Desmond Tutu fellow 2011 (African Leadership Institute) and a Young Global Leader 2011 (World Economic Forum).  She has completed executive education at the Harvard Kennedy School and Oxford Said School and holds degrees from Davidson College and the University of Melbourne.

For those who have followed ISOKO Institute’s Q & A series, ill-defined laws (to varying degrees across the continent) have emerged as a common inhibitor to attracting FDI to Africa. ISOKO Institute was privileged to speak with Ms. Musiitwa on matters related to law and investment.

ISOKO: In our interview series, the lack of rule of law has emerged as a common inhibitor to attracting FDI to Africa. First of all, would you agree that this is a top inhibitor to attracting FDI? Why or why not?

Musiitwa: Rule of law is one of many inhibitors to doing business in Africa.  Once this and other related problems such as corruption and creating credible institutions (legal, accounting, trade related etc) are adequately addressed, then Africa’s competitiveness internally as well as with the rest of the world will increase.  If Africa wants be a true global player it has to play by the rules.

ISOKO: For those readers that may not know, what is rule of law?

Musiitwa: Rule of law is comprised of several elements: fair and impartial courts; clear laws and precedents that are respected and followed (in the case of common law countries); local enforcement of foreign judgments and arbitration awards; and strong legal and supporting institutions e.g. accounting, anti-corruption.

Rule of law is not only necessary for the proper functioning of society, it is critical for investor confidence. Though law is an evolving field, having laws that do not change at the whim of government or industry increases investor confidence. Without rule of law the operating environment is too unpredictable, which increases both the cost and risk of doing business.

The enforcement of laws is the role of government; however, the private sector and civil society also have a role to play as far as monitoring activities domestically to make sure that the investment climate remains prosperous. When aspects of the investment climate are deteriorating, it is essential for them to either bring this matter to the government’s attention where necessary or work among themselves to rectify the situation.

ISOKO: I realize that legal frameworks will vary a great deal from one country to another and perhaps even from one region to another, but can you paint a picture of the legal situation that foreign investors might encounter upon coming to Africa? In other words, when someone says that a lack of rule of law is a problem in many African countries what do they mean?

Musiitwa: Every country has a unique legal system.  Even though the various systems can broadly be put into common law, civil law and other legal systems, countries usually have locally adapted ways of making and enforcing laws.  Therefore, it is important for investors to be familiar with local laws and to retain good local counsel to advise on local aspects of deals.

However, there is an increasing trend towards regional integration in Africa. For instance, the African Union aims for a continental free trade agreement by 2017.  So far, many of the existing regional blocs have made progress. For instance, the Organization for the Harmonization of Business Law in Africa (OHADA) is a system with sixteen members that has streamlined business laws and implemented institutions in order to attract foreign investment not only to their individual countries but also to West and Central Africa as regional blocs. Further, the East African Community has taken significant steps towards execution of the common market, customs union and ancillary matters related to integration.

Oftentimes the phrase “rule of law” is used too broadly.  I think it is necessary to do the research about specific countries and identify their respective challenges.  Otherwise, many problems risk being masked. A problem I have consistently faced has been the lack of laws or the lack of clear laws. For instance, I was working on an energy deal in a country and the country did not have strong laws dealing with energy generally, much less dealing with the complexities of the commodity being dealt with in the contract.

ISOKO: Whose responsibility is it to remedy these types of issues?

Musiitwa: It is the role of government to build and sustain transparent, fair and sustainable institutions that support a country’s investment climate.  The judiciary must ensure that it is impartial.  The legislature must be well informed about various issues before passing the requisite laws.  The executive must also identify issues of national importance and ensure the macro goals are accomplished.  Government has the duty to inform as many people as possible of the investment opportunities available.

Investors must also demand and prod the government for the necessary legal and regulatory infrastructure they need in order to effectively operate.  Investors (foreign, local and diaspora) have different needs, so unless they specify what they need there is the risk that government will not create the most applicable laws for their needs.

ISOKO: Where do you see progress being made in this arena? Is there an African state, province or city that has a model legal framework?

Musiitwa: Rwanda has done a phenomenal job of improving its investment climate over the years.  The World Bank’s Doing Business report, which ranks countries based on various indicators that determine ease of doing business in countries, has consistently ranked Rwanda as a top performer.  South Africa, Mauritius, Botswana also consistently do well.  However, these statistics should be viewed with other indicators such as those dealing with governance as well as corruption.

ISOKO: Where do we go from here?

Musiitwa: One of the constraints to investing in Africa is that there is not always readily available information about what is going on in industry. As such, research institutions and think tanks have a critical role to play in not only identifying problems but also coming up with innovative and multi-disciplinary solutions to problems.  Immediate and ongoing needs include the need for better data collection and compilation of statistics related to investment and writing briefs to be distributed to potential investors and the government.  Additionally, some governments need assistance putting laws, regulations and policies on the Internet.

The private sector in Africa is in many ways still defining itself.  Multinational corporations, state owned corporations, SMEs and microenterprises rarely speak as one or a few voices.  As such, if each level of the various groups of industry would share information and lobby government as a single group concerning the laws they need to be more effective, it would be beneficial in informing government of industry needs.