Is $5m the cost of good governance in Africa?

Mo Ibrahim knows a few things about how money works in Africa. He built a hugely succesful mobile phone business – Celtel – in countries most companies would write off as impossibly poor markets: Chad, Niger, Sierra Leone, Malawi. He sold Celtel in 2005 to MTC, a Kuwaiti firm with operations in Iraq, Bahrain, Jordan, Kuwait and huge global ambitions – the company was worth $3.4 billion and had such a strong brand and management team that MTC has been running it as a wholly owned subsidiary, not wrapping it into their Arab operations.

His success gives him the chance to figure out how he’d like to “give back” to the continent – after the CelTel sale, he announced plans for a $100 million personal foundation to fund development projects in Africa, using the model of “investment with a heart”.

But most people probably weren’t expecting one of his first major philanthropic investments to be a large cash prize for African leadership. The prize – $5 million over ten years, plus $200,000 a year for life. Leaders cannot collect the prize until they leave office.

Ibrahim explains that the prize is designed to address a problem most of us haven’t thought about: what do African leaders do when they retire?

There is much gossip and speculation about what Tony Blair will do when he leaves office next year. Will he join the lecture circuit? Will he take on a series of directorships? Will he write his memoirs?

In Africa, the choices for heads of state are more sobering. Most leave office with no chance of sustaining a lifestyle equivalent to the one they enjoy while in office. The income of former heads of government may seem a trifling issue compared to the major problems faced by many of the continent’s citizens. In fact it is of fundamental importance in securing its future.

A situation in which leaders face three choices – relative poverty, term extension, or corruption – is not conducive to good governance.

He goes on to explain that the prize offers a fourth option – govern well and be fiscally rewarded, recieving a prize worth more than the Nobel prize.

Clearly a few hundred thousand a year isn’t going to be sufficient for some African rulers. The Economic and Financial Crimes Commission of Nigeria calculated that roughly $400 billion was appropriated by Nigeria’s military leaders, much of it ending up in bank accounts outside the nation. (A page from the admittedly partisan AgainstBabangida.com shows amounts found in bank accounts linked to different Nigeria generals – it claims the information is from the 1999 Financial Times, but I haven’t been able to verify the sourcing of the figures. It suggests that General Babangida and General Sani Abacha were each able to expropriate tens of billions of dollars… Then again, Mobutu Sese Seko, who many believed plundered $5 billion from Zaire over the decades of his rule, may well have stolen only in the hundreds of millions, given that he died leaving only a few million in his Swiss accounts…)

But the prize isn’t designed to convince the Mobutus of the world that good governance beats dictatorial plunder – it’s designed to reward leaders like Ellen Johnson Sirleaf, John Kufuor or Amadou Touré, who will likely leave office after fulfilling their terms and will need to figure out what you do after leading your nation. The hope attached to the Ibrahim prize is that retired African leaders might be able to be constructive civil society figures, perhaps in the way former American presidents like Carter and Clinton have been since leaving office.

(I don’t know José María Figueres, the former president of Costa Rica, well, but I’ve had some excellent conversations with him over the years at meetings we’ve both attended. When he was leaving his position with the World Economic Forum, I asked him what it was like to be a former president looking for work. He smiled and gave an answer I’m sure he’s given a few thousand times: “You know, it’s a new direction for people in my situation. Historically, being a Latin American president wasn’t a job you survived.”)

I think Ibrahim may have an interesting solution to a real problem, but it’s easy to see why others might find the prize silly, depressing or embarrasing. I’m expecting to see more posts like Gathara’s, titled “Bribing Africa’s Leaders to Stop Corruption“, which reads in part:

Of course [Ibrahim] would never call it what it really is: a bribe. While heads of government on other continents are expected to deliver peace and prosperity with only their people’s gratitude and a pension as compensation, in Africa’s case this is considered a tall order. This prize reaffirms the view that African leaders (and by implication, the African societies that produce them) are irredeemably corrupt. It is a view widely held not just outside, but within the continent.

I’d like to think that there’s a middleground between idealism and reality that gives space for an idea like Ibrahim’s to succeed – find the folks who are leading their countries out of idealism, but give them a real reward for fulfilling our expectations. But I find Gathara’s objections compelling as well – there’s a need to expect good governance in Africa, not to reward it as something extraordinary.