Unraveling the intersection of business and politics in Africa

The time has come for African democracies to speak about the elephant in the room. The elephant is the role of business in politics and its influence on political decisions.

There is a growing feeling informed by research experiences on the subject of political financing in Africa, that money from the business sector has a negative influence on political parties, election campaign financing, and subsequently on governance in most African countries.

Studies by Alliance for Finance Monitoring (ACFIM) on commercialization and monetization of elective politics in Uganda have shed light on the fact that a number of local businessmen and women are getting involved in elective politics either as campaign finance benefactors or as candidates, with a view to gain access to and control public contracting processes and decisions.

It seems to be the business template of Indians and Chinese businessmen/business companies to bankroll the political party in power and powerful Parliamentary candidates to ensure steady access to public contracts, tax holidays, and legislation that is friendly to their business survival.

Conversely, in the quest to ensure regime survival through elections, incumbent political parties often seek and collect campaign finance donations from private businesses on quid pro quo arrangements. Indeed, it is often the companies that donated significantly towards the winning party’s election bid that end up winning the mega public contracts, especially in construction and military hardware deals.

This largely explains why procurement decisions on major public contracts are taken in presidential places rather than in Boardrooms of relevant state institutions. The same is replicated at local government levels where county/district Governors will ensure that public contracts go towards the companies that provided them with the campaign war chest.

SecretsKnown has thus, established an inextricable link between public procurement, the private sector, and political/campaign financing. A study by the National Democratic Institute on Party Financing Practices in 22 Countries, published in 2005, found that business interests often stifle political development by reportedly tending to favor parties in power, leaving opposition parties with limited access to campaign resources.

In some electoral jurisdictions in Africa, when it transpires that a private business/company has made campaign finance donation to a political party in opposition, that act is often interpreted as going against the party in government. Even a mere refusal to donate money to the ruling party can be, or is often, interpreted as an anti-government gesture.

Those who have running contracts with Government fear that they would lose them if they did not demonstrate full support by donating generously to the party in power. When this happens, the quality of the final product/service to be delivered is often compromised as the business owners try to recover what they spent on the political finance provisions.

Indeed, the lack of legal and institutional frameworks to regulate money from the private sector into politics is the source and origin of the political corruption that continues to bedevil development at the expense of development.

The influence of the private sector is largely the reason why elected leaders fail to make independent decisions because they have to please the “godfathers” who bankrolled their election campaigns. The behavior of elected leaders while in office and the nature of laws passed depict a sense of acting at the whims of “godfathers”.

When business interests control the financing of political parties and candidates, the quid pro quo becomes the principle in awarding government contracts. It is not uncommon therefore to find that relationships between the ruling parties and the private sector or between elected leaders and the private sector are fraught with corruption.