Africa needs to be proactive in defining an apt response to the ‘new normal’
The role of women is central to delivering meaningful environmental, social and governance strategies
The “new normal” is one of the most popular phrases to emerge out of a topsy-turvy 2020. What it means in practical terms is open to interpretation, but we can all agree that the way we move in the world and engage with our environment, employees and communities cannot be “business as usual” ever again.
After finance minister Tito Mboweni’s medium-term budget policy statement, the fissures in our economic and social sustainability have been further exposed and laid bare for all of us to take in. The hope that we can achieve the kind of growth and productivity performance needed to bring SA, and indeed the African continent, out of this quagmire without addressing the lack of inclusion in economic participation, the rampant corruption of our private and public sectors, the destructive and unsustainable nature of our “us” and “them” policies and politics, is nothing more than a pipe dream.
Pursuing corporate and national growth strategies that proactively and meaningfully embrace environmental, social and governance (ESG) factors has become a national and regional imperative. Tidjane Thiam, former CEO of Credit Suisse and the AU special envoy on Covid-19, wrote in the Financial Times in October that ESG is poised to bring distinct value for developing countries.
He points out that “particularly important in emerging and developing economies is the ‘G’ — governance. Why? Because companies will invest and create jobs in countries with good governance and where corruption is not tolerated”.
Referring to Steinhoff and Tongaat, Remgo CEO Jannie Durand noted in the Sunday Times in October that “business [in SA] needs to clean up its own act if it wants the high ground in criticising government”. One cannot divorce the environmental and social dimensions from this conversation. The Cape Town water crisis, the raging fires in Knysna, tropical cyclones Idai and Kenneth, are just some of the recent events that made climate change and the resultant social impact a priority in this region.
Developing nations in Africa in particular need to be proactive in defining what the appropriate response should look like for themselves, particularly as these nations engage with largely European and Asian funders in the financing of regional infrastructure projects. In this regard, the role of women is central to delivering meaningful ESG strategies when looking at appropriate responses to the challenges.
We are all aware of the data that supports the agenda to increase participation of women in the mainstream economy. The African Development Bank estimates the funding gap for African women across business value chains to be in the region of $42bn financing, including $15.6bn in agriculture alone.
Furthermore, the African continent has the highest percentage of women entrepreneurs in the world. According to the Global Entrepreneurship Monitor (GEM) 2016/2017 Women’s Report, the female entrepreneurship rate in Sub-Saharan Africa is 25.9% of the adult female population, meaning one in four women starts or manages a business. Women typically reinvest up to 90% of their income in the education, health and nutrition of their family and community, compared to up to 40% for men.
If you are not sitting at the table when the rules are being written, someone else is going to write them for you. The influx of foreign investment to fund infrastructure development on the continent should of necessity be supported by ESG strategies that understand and speak to the unique and specific challenges affecting the continent.
Europe is currently leading the charge on shaping the frameworks that measure quality ESG data and interventions and the resultant effects they produce. We should not be found sleeping at the wheel on this one.
If the adage that a rising tide will lift all boats is to be believed, then it stands to reason that a receding tide, as our economic performance clearly has been, will leave all boats grounded, and in our case potentially damaged. Ineffective and inadequate governance destroys both corporate and economic value.
The Covid-19 pandemic, and the disproportionate effect it has had on women-dependent family structures, has put into sharp focus the individual and collective obligation to proactively drive ESG strategies with this end in mind.
As the old African proverb says, smooth seas do not make skilful sailors. We need to brave these choppy waters with decisive leadership, and courage.
• Motloba is founder and MD of ESG risk management and advisory services firm Alchemy Africa.
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