Africa: Corporate Council’s Steve Hayes - 'We’re Making a Difference for Africa’

24 March 2004
allAfrica.com
interview By Tamela Hultman

Washington, DC — Since Stephen Hayes became president of the Corporate Council on Africa in 1999, the Washington, DC-based organization has grown from 86 members to more than 200. A graduate of Indiana University with a Masters Degree in agricultural economics from Texas A&M University, Hayes served previously as a consultant to Winnington Limited of London, a private European holding company, and as president of the American Center for International Leadership.

Hayes has led the Council into a number of new areas of activity. This week, he issued an appeal to member companies to lobby Congress for an extension and enhancement of the African Growth and Opportunity Act, a trade bill adopted in 2000 known as Agoa. "More robust markets in Africa mean more opportunities for American businesses," Hayes said in a email to members. "Success in extending Agoa is essential for the future of US-Africa commercial relations." In a recent interview in the Council’s offices on 17th Street, Hayes discussed his priorities and hopes with AllAfrica’s Tamela Hultman.

How do you describe the Corporate Council? Are you a trade organization or something more?

Steve Hayes: That’s the question. We have a lot of tensions, mostly healthy tensions, around this very nexus. We can be a trade association only, and if we do that, we’d be doing the same things we were doing when I came in here - dealing with the issues with a very small staff. We’d be hosting heads of state with dinners, which have limited meaning, as far as I’m concerned. Or, we can really try to make a difference.

On the one hand, we have companies who are part of the corporate council because they want to increase their trade, and in essence that often means sales, to Africa. If our job is to serve our members, which it is - we have more than 200 paying members at this time - they aren’t going to be able to sell much to Africa - in fact, they aren't, if you take away the extractive industries - unless we can support African economic development. And that means we’ve got to address the issues of transparency, of financing, of their ability to sell. We’ve got to take on the issues of trade legislation, like Agoa.

My predecessor kept CCA out of the Agoa debate, and I can understand why he did. He took a much more narrow view, and I’m not critical of that. I felt that we needed to weigh in heavily, and we’ve emerged in a leadership position now in terms of Agoa. It’s a long-term vision. We are serving our members.

We’re trying to look at what are the critical issues that have to be addressed and who’s addressing them. What other organizations are addressing Agoa on the scale it needs to be addressed? Not many. Of course, Rose Whitaker (The Whitaker Group and AGOA 3 Coalition) has played a crucial and leading role, as has Paul Ryberg (Africa Coalition for Trade). There are a lot of others that are involved on Agoa, but there’s not a lot that can have the same influence on the debate as we can. I think we’re obligated to be a part of that. I think we make a difference.

But Agoa doesn’t go far enough. It primarily affects textiles and the extractive industry. Every country in Africa can’t make money on textiles. We’ve got to address agriculture. It’s an area that every country in Africa could be able to sell. We’ve got to open agricultural markets and we’ve got to figure out how to get the U.S. to invest in agriculture in Africa. Tourism is another area in where there’s incredible potential for U.S. investment. And there’s the continuing staple, oil and gas, which is still 65 percent of all U.S. investment in Africa.

So you have five areas of focus?

Yes, it’s Agoa and related trade legislation, financing, building partnerships, working with economic communities and Aids. I think we serve our members best: by addressing these issues so that they can make better investments.

Our companies can’t sell if they can’t get financing, and financing hasn’t been readily available. It’s difficult to obtain, even in this country - for investment in Africa or to sell to Africa. And it’s almost impossible for African business people to get financing. If they can’t get financing, how are they going to buy and sell? So that’s the second issue we’ve got to address. To me, it’s just a very pragmatic point.

The third area we’re looking at is investment in Africa. The investment in Africa right now from the United States is almost identical, or slightly less than it was ten years ago. There’s all kinds of reasons, but I think the governance issues are key. Conflicts have also had an impact, but I think a lot of that’s beginning to reverse. I hope so.

You’re stressing the importance of partnerships for your members and for their counterparts in Africa?

You can’t do much in Africa, or anywhere else, without some type of partner. But how to identify those partners? We have established partnership programs funded by USAID -- SAIBL (South Africa International Business Linkages) and WAIBL (West Africa International Business Linkages). Combined, they’ve brought in more than $400 million dollars in contracts. That’s quantifiable. It’s been audited by an independent British firm. It’s created jobs. It’s a long-term vision, but American companies have already benefited directly.

We have 19 subcontracted staff in South Africa, and we broker business transactions between South African businesses - the euphemism that’s used is "traditionally disadvantaged’, which means about 90 percent of the population, again using the South African euphemism - black, coloured and women-run businesses. And those tend to be small businesses, of course. We try to match them up with U.S. partners, and there’s been $380 million in contracts coming through that.

The West Africa program is a bit different. We do workshops throughout West Africa. We do workshops on infrastructure where groups like Caterpillar and Bechtel benefit by being able to sell things. We bring together 100 to 150 businesses from different countries; they bring their proposals. We bring in financing institutions like the Export-Import Bank and private banks, and we get four or five funded. They get financed right there, to buy U.S. products.

We brokered the deal that set up shea butter transactions between the United States and Africa. In the past, companies here, particularly African-American companies that use a lot of shea butter in cosmetic products, have had to buy it from Europe.

We’re also working with Comesa [Common Market of Eastern and Southern Africa]. We’ve got a permanent staff presence there. We have become a major bridge between those countries through Comesa. And I think that’s why the U.S. government, more and more, comes to us. We have a close relationship with the administration, and I think we’d have one with a Democratic administration because I think we fit a need.

The fifth area is Aids.

You have established a program, with funding from the Gates Foundation?

Yes. Look, if we’re not addressing Aids in the workplace, our companies aren’t going to stay there. We have to address it. If this isn’t addressed, investment isn’t going to increase. That’s just the way it is. It’s very pragmatic. The corporate community is leading the way on education in the workplace, leading the way on research. We’re obligated to be in this or we’re not doing what this council ought to be doing.

The companies that are members of the Corporate Council vary a lot in size. Do the interest of your largest members and your smallest members diverge a great deal?

There is a tension between the large companies and small to medium-sized businesses. We’re not trying to be all things to all people, but we do have a membership that is far more diverse now than it was five years ago, when I came here. We were almost 80 percent large companies, and now we’re 38 percent large, 32 percent small and 30 percent somewhere in between.

The small companies come to us because they don’t have the resources to spend a lot of time in-country, trying to figure out who’s the right partner, how does the system work. They need us to help identify potential partners. SAIBL and WAIBL have been very helpful. Also, we are putting some of our smaller members in contact and in contracts with some of our larger members, particularly in the oil areas.

Some of our traditional members, particularly on the board, don’t understand SAIBL and WAIBL because they’re large corporations who don’t relate to the small business area. They ask, why are we doing this; what’s that got to do with me? The small businesses need an organization that is more activist, that helps them find partners, helps them find financing and so forth.

What ExxonMobil and DaimlerChrysler need from us is very different from what a lot of our small and medium-sized businesses need. The large corporations don’t need us to do business in Africa. They need us to help protect their interests in Africa. [They] need an organization to promote their aims, when it’s not politically in their interests to promote it by themselves. We provide that; we provide the access.

When I came, we had maybe one or two out of the 86 companies that were African American managed and directed. We have more than 30 now. We had three African Americans on the board. Now one-third of our board is African American. That’s another tension, keeping the the intricacies of American racial politics in balance as well and trying to be fair to everybody and inclusive.

You mentioned that foreign investment is remaining level, not rising in Africa. Last year, CCA co-sponsored the Commission on Capital Flows to Africa, and you recently hosted a Capital Flows to Africa conference on Wall Street. How do you think these efforts will produce results?

The commission [led by] Jim Harmon, who was our chairman and is a former chairman of Export-Import Bank, came out with a report that is very good. The issue is how to follow up these recommendations. We put together the conference, on Wall Street with Citigroup hosting and with Stanley Fischer, the vice chairman of Citigroup as opening speaker.

We’re hoping that there are a number of things will come out of this and that the capital flows out of Africa will begin to abate and in fact reverse. There were investors from the United States who’ve never been involved in Africa. Projects that are needing financing [were presented]. We think that this could help. It’s a real slow process through the government bureaucracy. We think we can speed that up if we get the right projects and get the private sector more involved.

Overall, you’re encouraged by what CCA has been able to accomplish?

We make a difference. I don’t know anybody that could have the year that we had last year. I can’t imagine any [other] organization getting the President, Secretary of State, Secretary of Commerce, the U.S. Trade Representative all speaking at their conference, and 16 African heads of state or heads of government at the same time. And not just a summit. We did two major Agoa conferences. We got the Commission on Financing out. We doubled our own work in Africa by adding the agriculture work. We’re working with Comesa and playing a fundamental role. If I can be presumptuous, I think the reason that the reputation of the organization has grown a lot is because of the quality of the programs and because they’re very targeted.

And looking ahead?

We’re going to start bilateral conferences with key countries: Nigeria, Angola, eventually South Africa, I hope, and start to address [the question] how do you get beyond just simply the extractive industry? And how do you get more small businesses working? They need them badly.

Nigeria is tough. We’re working with the Nigerian Economic Summit Group. Their conference is in September. And what we’re looking at it becoming a U.S.-Nigeria business meeting of sorts.

My challenge right now is translating the vision of this staff to others now. We've expanded, I think, as much as we can in terms of the issues that we’re dealing with. I think we’re dealing with the most important and critical issues between the U.S. and Africa. I think we've got the critical issues and that’s what we’re going to address for the next few years.

What keeps you awake at night in terms of the challenges that you struggle to address?

There are so many. Boy, do I ever stay awake at night! I bet I don’t sleep four hours a night anymore. I really believe in this staff I’ve built. When I came in we had 10 and went down to six. We have 35 staff now. Membership dues and revenue don’t cover the organization.

Finding the balance between private sector and government funding - that’s one issue. Keeping us focused and efficient on the five primary goals. Keeping some growth. Trying to build an endowment. Everyone assumes we’re wealthy. This organization has no endowment. When we came in, there was a $2.7 million debt, essentially. It’s gone, but we’ve got to build on that.

And then, you know, the tensions. We’ve got members who compete against each other. For instance, in one country, which is in a bit of chaos, we have one member who is supporting the government [and] another member who feels robbed by the government. Various oil companies are concerned about, you know, why are you helping that other oil company and not mine today? Those issues come up over and over and over.

If this organization became only for large companies or only for small companies, I don’t think it would have any real impact. This organization has, as much as any in the country or in the world, the chance to make a difference in Africa. And I think that we’re doing the things that need to be done.

It’s a small drop in the bucket of everything that needs to be done, I know. However, as I told the annual meeting: "If it’s not us, who?" And to the companies, I said: "If it’s not you, who’s going to make the difference in Africa? Tell me."

CLARIFICATION: Mr. Hayes has requested that one sentence included in his interview as originally published be clarified: "I made comments which were intended to highlight the significant contribution being made by Citigroup in Africa through its network of branches across the continent (Citigroup is present in 17 African countries), its wide-ranging product offering, and its diverse customer base. One of these comments was unclear as reported and I wish to set the record straight. My point was that Citigroup has been doing very well in Africa as an investor and as a company able to take returns out when needed. Citigroup's commitment and success in Africa were clear at the recent Corporate Council on Africa Conference on Investing in Africa, which Citigroup sponsored. Citigroup is a prime example - and there are many others - of a business that invests and operates well in Africa."

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