This article is written by Malado Kaba, the first female economy and finance minister of the Republic of Guinea and founder of Falémé Conseil, an advisory consultancy based in Guinea. She is part of the inaugural cohort of the Amujae Initiative, the flagship programme of the Ellen Johnson Sirleaf Presidential Center for Women and Development

We’re meant to think of the public and private sector as the odd couple — perhaps even more so in the developing world.

So much heated political debate is, after all, the result of friction between the two. And yet, in the last few years, that friction has started to cool. The odd couple may be starting to tango.

The Covid-19 pandemic has caused a decisive shift towards public-private collaboration. Businesses cannot thrive without an already thriving society, and so are beginning to recognise that in times of crisis, private and public interests are not just related but intertwined. Business meanwhile can do much to make a positive social impact. The best way to do so these days is to work with governments and apply their strengths in delivering goods and services.

The private sector therefore has to emulate what I suggest here are the three core strengths of government: the ability to convene partners, take a long view, and focus on delivering wide-ranging social impact.

The power to convene

Government’s ability to convene multiple stakeholders at different levels and across different sectors achieves a level of cooperation rarely explored in the private sector, which favours competition. Let me share an example of this in action.

Early on in the pandemic, four African mobile network operators teamed up with 36 African governments and the UN Economic Commission for Africa to launch the Africa Communication and Information Platform (ACIP), a mobile-based, free-to-use tool that provides public health advice to more than 600 million users.

The ability of governments to take the long view can positively impact multiple sectors as well as millions of lives

The nature of government meanwhile gives it a macro view of the economy. Election cycles aside, this means that governments (particularly those in developing economies) are better at working towards long-term national and international development goals. Rather than chasing an annual profit target, governments are working towards the Sustainable Development Goals (SDGs), such as ending poverty, improving industry and infrastructure, and reducing inequalities.

The ability of governments to take the long view can positively impact multiple sectors as well as millions of lives. Bringing together multiple sectors around a common goal is the most efficient way to promote inclusion and make progress. True, elections may disrupt the implementation of public policies, but the fundamental, overarching goals of supporting a population and fostering economic growth remain the same.

I’ve worked in the public, private, and development sector, and I’ve seen these strengths in action. More importantly, I’ve seen how they can directly benefit businesses.

When I served as Guinea’s minister of economy and finance from 2016 until 2018, the country was faced with enormous public domestic debt, amounting to around 15% of gross domestic product (GDP) in 2018. This was a bit unusual, as countries tend to have higher external debt. An audit completed shortly before I took office found that the government had failed to pay back a long list of private sector providers, more than half of which were commercial (goods and services, as well as capital spending). This was creating a potentially serious knock-on effect in the national economy.

Because the government had not paid these companies, they were unable to pay back loans to commercial banks, which increased the number of bad loans held by these institutions. This in turn negatively impacted the banks’ liquidity, meaning they were less available to lend to entrepreneurs, reducing the opportunity for inclusive growth and job creation. Had we failed to resolve this issue, the banks would ultimately have been denied the ability to operate in Guinea.

This would also have set Guinea’s development back considerably.

Playing to the first strength of government, I called upon the Banks Professional Association (APB) for a meeting. Together, we discussed how to deal with the government’s debt, which would alleviate pressure on the banks as well as indebted local companies. We worked with the APB to develop two lists: one of providers that were owed money by the state, and one of companies that had outstanding loans with banks. By cross-checking these lists, the government could target and prioritise their payments to the providers that were struggling to reimburse their bank loans, which would help the banks lower their volume of bad debt.

This meant that some of those companies could create wealth and employ people. The banks meanwhile were able to provide more loans to entrepreneurs. Together, these two effects improved trust between the government and the private sector. We showed the providers that we were prioritising the outstanding payments, and we showed the banks that we understood their position also.

The long view

Government’s ability to take a broader view of a country’s long-term path meant that it was uniquely placed to manage the problem. By bringing together multiple stakeholders, government was able to kill three birds with one stone.

Cutting down on the level of domestic debt contributed to making Guinea’s economy more robust and resilient.

Now more than ever, the private sector recognises the need for companies to take greater care of the environmental, social, and corporate governance (ESG) impact of their activities, as well as actively seek to deliver positive social returns

To return once more to the Covid-19 pandemic, similar collaborations have proven equally beneficial. Governments in countries such as South Africa and Rwanda have been able to convene private and third-sector actors to fill gaps in funding, skills, expertise, and networks, with positive results.

The Rwandan government supported the country’s private sector to produce critical personal protective equipment (PPE), and worked with the Chamber of Tourism to rent hotels as isolation centres. In Uganda, the government worked with mobile operators to make services more affordable for consumers. My own efforts in Guinea helped to connect young tech developers with funding for an app that improved Covid-19 contact tracing. All of these efforts have fostered innovative business solutions and prevented backsliding on human development indicators during the pandemic.

Creating impact

Yet, even before the pandemic, businesses were starting to take more of an interest in how their decisions impacted the world. Now more than ever, the private sector recognises the need for companies to take greater care of the environmental, social, and corporate governance (ESG) impact of their activities, as well as actively seek to deliver positive social returns.

As I said at the start of this article, we may well be witnessing the start of a more harmonious relationship between government and private enterprise. If that relationship is to last beyond the Covid-19 pandemic, both sectors will have to show willingness to learn from one another.

Just like any good couple, learning to tango. — Malado Kaba

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(Picture credit: Unsplash)