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Effective Management of Africa's Extractive Industries: The Role of Ethics, Regulations and Multinational Corporations

Devconia LLC, based in New York, convened a high-level roundtable today entitled "Effective Management of Africa's Extractive Industries." The meeting focused on the role of ethics, regulations and multinational corporations.

Devconia LLC, an international business development and cross-cultural risk management firm based in New York (, convened a high-level roundtable today entitled "Effective Management of Africa's Extractive Industries." The roundtable focused on the role of ethics, regulations and multinational corporations (MNCs) in promoting equity and sustainable development in countries from which MNCs derive a significant portion of their income. The event was organized in collaboration with the Office of the Special Adviser to the President on Ethics & Values for the Federal Republic of Nigeria headed by Special Adviser Dr. Sarah Jibril, who was also the keynote speaker. Other collaborators included the National Minority Business Council and Brisk Research.

The roundtable was chaired and moderated by Mr. Kenneth Johnson, principal of Devconia LLC. Panelists included notables such as H.E. Mr. Jeremiah Nyamane Mamabolo, the South African Ambassador; Prof. Peter Eigen, Member of the Africa Progress Panel (APP), Founder and Chair of the Advisory Council, Transparency International and Founding Chair and Representative of the Extractive Industry Transparency Initiative; Mr. Natty B. Davis, Chair of the National Investment Commission of the Republic of Liberia; Mr. Brian Moriarty, Director of the Business Roundtable Institute for Corporate Ethics and Adjunct Professor at the University of Virginia's Darden School of Business; and Ms. Rosalind Kilkenny McLymont, of Africa Strictly Business. Participants included the Office of the Special Adviser on Africa, United Nations Secretariat, and representatives from the African Diplomatic Corps, as well as a cross section of the African Diaspora, international development practitioners, legal practitioners and scholars and leaders from the private sector.

While Mr. Johnson is a long-time proponent of the need for in-country value-added processing of Africa's natural resources as a means of local retention of a greater share of the value-chain leading to local and regional economic growth, a key impetus for this roundtable was the 2013 African Progress Panel report entitled Equity in Extractives. The APP is chaired by former UN Secretary General Mr. Kofi Annan, and comprised of ten distinguished individuals from the private and public sectors who advocate for equitable and sustainable development in Africa.

Peter Eigen, on behalf of the APP, followed the opening remarks with an introduction of the role and functions of the APP as an organization that facilitates coalition building and convenes decision makers to influence policy and create positive change for Africa. As to the management of Africa's natural resources, he pointed out the need for greater transparency in the extractive sector. Prof. Eigen also stressed that "the current employment impact of extractive industries in Africa is low," due to the fact that "offshore oil production does not lend itself to large-scale employment of local workforce." This issue must be addressed going forward.

Though the panelists acknowledged the need for MNCs to earn a profit and enhance shareholder value, they expressed a consensus that the best way to accomplish this objective is to ensure that local communities benefit more from their resources, as this is the only sustainable way to not only enhance shareholder value but strengthen brand equity.

In her keynote remarks, Dr. Sarah Jibril spoke of the "urgent need" to strengthen regulations and increase enforcement of existing laws to minimize corruption in Africa's extractives. "We must avert the continuation of the unethical extraction of Africa's resources that has caused needless wars, impoverishment and stunted development," she added. She also emphasized the need for multilateral organizations like the United Nations to play an even greater role in advancing equity in Africa's extractives.

The South African Ambassador, H.E. Mr. Jeremiah Mamabolo, concurred with the view that Africans must benefit more from their natural resources as a means of promoting greater equity and sustainable development in resource-rich countries. This perspective was shared by Mr. Brian Moriarty, Director of Business Roundtable Institute for Corporate Ethics, and also noted the adverse impact on future generations when natural resources are not properly managed.

Mr. Fritz McLymont, executive director of NMBC Global, stressed the importance of empowering small and mid-sized businesses as another means of extending in-country value creation from Africa's natural resources.

Mr. Natty Davis highlighted the need for African governments to honor past contractual agreements with MNCs even after a change in leadership. He added that this must be complemented by improved contract negotiation skills on behalf of the African people so that an "equitable agreement is struck at the outset," which will lend itself to more equitable share of their resources.

In closing, Mr. Johnson summed up the key proposed solutions derived from the session. These included capacity building and improvement of local skills, ensuring that a greater share of the value-chain goes to Africans, implementing tougher local and international regulations to reduce corruption, and better aligning "corporate social investing" with the broader national economic development plan. Ultimately, the goal is to foster a stronger, mutually beneficial relationship between MNCs and local communities.

Mr. Johnson noted the strong interest shown at the invitation-only event and stated that it affirmed the need for a bigger and more comprehensive conference in 2014 possibly focusing on advancing local value-addition in Africa's extractive industries.

About Devconia LLC
Devconia helps organizations successfully expand into high-growth emerging markets with a focus on Africa and also helps the respective governments create an enabling environment to attract Foreign Direct Investment consistent with sustainable local development while creating value for organizations.

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If you would like more information about this topic or to schedule an interview with Kenneth Johnson or Dr. Sarah Jibril, Nigeria's Special Adviser on Ethics and Values, please contact Ms. Linda Saunders at 1.646.397.8311

Categories: Project and Program Management

Tags: Africa, Business, Extractive Industries

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Linda Saunders
Devconia LLC