Much ado about “Governance”

africaAs entrepreneurs facing the worst economic crisis in our lives, it is pretty difficult to keep our businesses’ afloat; let alone take the time to follow all the “reform” talk going on around us.

This week alone, Kenya proved that it did not have the political goodwill to try the perpetrators of 2008’s post election violence and even mediator Kofi Annan is in town to assess the implementation of Agenda 4 of the Accord.

Another development this week is the publishing of the Mo Ibrahim Foundation’s Index on Governance. The word “governance” the way it is bandied about seems to be akin to the word “impunity” which doesn’t seem to have a standard definition. To us business people, governance comes in the form of having public services such as a steady supply of electricity and water. It is also important when it comes to that monster we call “corruption”. In essence, good governance translates into fewer indirect costs.

According to the website, “the Ibrahim Index measures the delivery of public goods and services to citizens by government and non-state actors … using indicators across four main pillars: Safety and Rule of Law; Participation and Human Rights; Sustainable Economic Opportunity; and Human Development”.

So what does the Ibrahim Index tell us about the effect of (good) governance on business? In a nutshell the following:

  • Good governance ensures our personal security.
  • Human rights are not divisible from business competitiveness.
  • Social unrest is not good for business.
  • Judicial independence and the strength of the judicial process are important for business.
  • Transparency, accountability as well as corruption in the public sector adversely affect business.
  • Countries scoring high on the Index have a superior quality of infrastructure coupled with the provision of reliable utilities.
  • Economic policies that promote sustainable business are vital.
  • Rural provision of public goods are essential for growth.
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About yipe
Yipe an acronym for the Youth Interactive Portal for Enterprise is an organization that assists entrepreneurs to start up and manage their small businesses.

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