Globalist Analysis

Bad Management and Sub-Saharan Africa

Why has development aid not helped Africa all that much?

Takeaways


  • African business schools could be a true force multiplier that can accelerate meaningful progress on the road to the big-ticket items.
  • It is clear to anyone that the quality of management is the foundation of success — because it determines what economists call absorptive capacity.
  • Helping to strengthen management education amounts to "teaching a man how to fish" — when most direct aid to the poor is simply "handing out fish."
  • There is a tendency among donors to regard African management schools as catering to elites — or so the conventional thinking goes.
  • In Kenya alone, local business schools have produced over 100 teaching cases focused on local companies.

Why have massive amounts of aid not helped Africa’s development all that much? Why are terrible diseases still endemic when technical solutions exist?

One of the main reasons is hardly ever mentioned: Africa suffers from an acute shortage of able local managers.

In fact, management is hardly ever mentioned in the development debate — it is simply taken for granted. A search of four of the most widely used development economics text books shows no single reference to management.

And yet, it is clear to anyone that the quality of management is the foundation of success — because it determines what economists call absorptive capacity. Without proper on-the-ground management, money alone cannot solve problems. On the contrary, it tends to fuel corruption and capital flight.

We all have suffered from poor management — getting lousy service from hotels, car repair shops, airlines and so forth. We all know the huge difference between a well-run business and a poorly managed one.

Poor management is especially harmful when lives are at stake. A recent publication by Management Sciences for Health found numerous examples of waste and mismanagement in African health facilities.

Expensive computerized laboratory equipment is broken — because no one took precautions to protect the equipment from electrical surges. A container at a district hospital spills over with medical waste, despite an official waste disposal policy — because no one is charged with implementing and monitoring it.

In many places, tens of millions of dollars of drugs, supplies and equipment are misused, lost or stolen — because of the lack of effective controls and ethical leadership.

Why do deficiencies like this matter in the context of development? Quite obviously, the poorer the quality of management — the fewer jobs will be created, the fewer people will rise out of poverty, the fewer patients will receive good care and so forth.

One would therefore expect that a lot of official and private aid is dedicated to strengthening Africa’s management training institutions. Not so.

Aid planning has been decisively influenced by the United Nations’ “Millennium Development Goals” (MDGs). Hence, in recent years, aid has focused on the following:

  • Eradicating extreme poverty and hunger
  • Achieving universal primary education
  • Promoting gender equality and empowering women
  • Reducing child mortality
  • Improving maternal health
  • Combating HIV and AIDS, malaria and other diseases
  • Ensuring environmental sustainability
  • Developing a global partnership for development

A major problem with the MDGs is that, while all truly big-ticket items, they still focus on only a few of the elements necessary for sustained economic and social development — no matter how important these elements undoubtedly are.

Aid organizations took the — clearly erroneous — view that the eight MDGs should govern all foreign assistance aid programs. As a result, efforts in areas not included in the MDGs were either discontinued — or sharply curtailed.

While the second MDG addresses education, it does so only at the primary-school level. That glaring and harmful omission was recognized belatedly at the 2005 Gleneagles G8 Summit — at which the need to “revive African higher education” was heavily discussed.

Meanwhile, African universities receive little financial assistance from aid agencies. But wouldn’t African business schools be a true force multiplier that could accelerate meaningful progress on the road to the big-ticket items?

Many aid agencies object that the most promising African business schools are private institutions. In spite of all the talk about “public/private partnerships,” government aid planners are unlikely to include private business schools among their priorities.

There is also a tendency among foundations and private philanthropists to regard African management schools — especially private ones — as catering to elites. Aid should rather go to the poor, or so the conventional thinking goes.

What gets lost in this attitude is the crucial need for better management if development is ever to be sustainable. Helping to strengthen management education amounts to “teaching a man how to fish” — when most direct aid to the poor is simply “handing out fish.”

And truth be told, in Africa even fee-earning business schools do need aid. African schools have no endowments, and the fees they charge are modest. There are simply insufficient resources to finance research fellowships and other activities needed in order to attract and retain high-quality teachers.

Sustained institutional capacity-building requires additional funding. Strengthening local institutions is a difficult process that requires “patient money” — because it cannot satisfy the quick results most donors want.

To begin to tackle this problem, I helped establish a small nonprofit organization — the Management Education and Research Consortium, incorporated November 2003 — which uses an innovative network-based form of assistance.

Thirty of the world’s leading business schools agreed to form a Global Business School Network in coordination with the Consortium.

We view business schools as tools for national development. They can improve management skills not only in business, but also in government, civil society and social sectors such as health and education — what the French call tous azimuths.

The schools of our global network encourage their faculty — often in teams involving several leading schools — to engage with their African colleagues to promote capacity-building programs.

Since 2005, our programs have helped “plug in” African schools into a worldwide store of knowledge, and have helped modernize curricula, produce locally relevant teaching materials, as well as create an Association of African Business Schools.

Programs that focus on each African school’s perceived top needs — such as entrepreneurship education and leadership training — are underway in Ethiopia, Ghana, Kenya, Nigeria, Rwanda and other countries. In Kenya alone, local schools have produced over 100 teaching cases — focused on local companies, including small and micro-enterprises.

Best of all, the benefits flow both ways. African professors are taken out of relative isolation and given life-long mutual access to faculty from top institutions. At the same time, professors from the leading schools “re-enlist” again and again — because what they are learning about Africa enriches their knowledge and improves their own teaching.

Management skills are crucially important to economic and social development — even though they have been largely ignored by development economists, policy-makers and aid officials.

Networks of business schools and their graduates can be major drivers of innovation, improved corporate governance and economic efficiency in emerging market economies.

The challenge is to change the mind-set of donors and make them more aware that good management schools teach “how to fish” by training problem-solvers. Without strong managers, firms, hospitals, schools, local NGOs and other African organizations will continue to waste precious resources.

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About Guy Pfeffermann

Guy Pfeffermann is the Founder and CEO of the Global Business School Network. He was formerly the chief economist of the IFC. Follow him @GPfeffermann

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