U.N. Global Compact Addresses Sustainable Development in Africa

By Michael Kourabas

Last week, 20 CEOs of Ethiopian companies gathered at the United Nations Global Compact's (UNGC) CEO Roundtable on Corporate Sustainability in Ethiopia.  The event was part of “Africa: Advancing Partnerships and Responsible Business Leadership,” a week-long conference co-sponsored by the UNGC. Held in Ethiopia’s capital, Addis Ababa, it aims to promote corporate social responsibility (CSR) in Africa and explore partnerships between the U.N. and the public and private sectors to advance sustainable development in the region.

Topics covered in the roundtable included women’s empowerment, “decent work,” education and job creation.  The event was touted by the UNGC as evidence of a renewed “commitment” to sustainability among Ethiopian companies and roughly coincided with the release of the UNGC’s new Africa Strategy document, Partners in Change: U.N. Global Compact Advancing Corporate Sustainability in Africa, which will serve as the UNGC’s overarching plan of action in the region.

There’s good reason for the attention on CSR in Africa.  First, according to the Africa Strategy document, by 2050 Africa will have the world’s largest workforce and will account for 25 percent of the world’s population, growing at a faster rate than every other region in the world.  Second, despite this growth, “only one-quarter of the top 50 African companies in 2012 are or have been Global Compact participants,” leaving ample room for improvement.  Third, according to the International Finance Corp., the private sector accounts for roughly 90 percent of employment in Africa.  All of these facts, particularly when considered in conjunction with Africa’s persistent governance problems, lead inexorably to the conclusion that private industry in Africa -- as opposed to government -- holds the key to sustainable development in the region.  For its part, the UNGC views its role in Africa as “paramount to creating the bedrock of social norms that move businesses beyond ‘Do no harm’ principles and towards a greater understanding of how the private sector can contribute to sustainable growth through responsible business.”

The elephant in the room, of course, is China.  Over the last decade, China’s two-way trade with Africa has grown by a remarkable 30 percent each year, and it is now Africa’s largest trading partner -- a title it has held since 2009.  The sheer increase in trade volume is staggering.  In 2000, bilateral trade between China and Africa was roughly $11 billion; by 2006, the figure had increased almost six-fold to nearly $60 billion.  Last year?  Bilateral trade between China and Africa reached $210 billion.

Investment by China in Africa has also skyrocketed, rising some thirty-fold in the past 1o years; and, according to Al Jazeera, foreign direct investment by China in Africa went from $500 million in 2003 to almost $15 billion by 2012.  Last year, China pledged $20 billion in loans for infrastructure development.  In other words, sustainable development in Africa will be nearly impossible without Chinese cooperation.

Yet, as China has (strategically) sprinkled new sports stadiums and infrastructure projects, like highways and hospitals, around the African continent, many African countries have been left “saddled with heavy debts and other problems, from environmental conflict to labor strife.”  As former Secretary of State Hillary Clinton once noted, Africa needs “a model of sustainable partnership that adds value, rather than extracts it.”

It should come as no surprise that China has not always been a model of social responsibility in Africa.  For instance, last year the Guardian exposed the existence of illegal Chinese gold-mining operations in Ghana and documented widespread excavation, toxic chemical use and alleged human rights abuses at the mining sites.  This prompted the Ghanaian government to establish a mining task force, leading to the eventual deportation of thousands of illegal Chinese workers and alleged retaliation from Beijing.

Of course, Chinese investment is a potential boon to the continent, which is in dire need of infrastructure improvement.  With increased oversight by African governments -- and a watchful eye by a burgeoning civil society sector -- Chinese investment can continue, but in a controlled and responsible way.  The UNGC’s Africa Strategy deals exclusively with the roles of individual African countries, in partnership with the UNGC and its “local networks,” and there is no mention of China in the document.  What role China has to play in sustainable development in Africa remains to be seen, but commitments by African companies -- such as those made in Ethiopia last week -- are nevertheless a crucial step in the right direction.

Image credit: Daniel Debebe Negatu/U.N. Global Compact via Flickr