Maurice Lam ’78 is not alone when he says that the future of Africa lies in private sector business. Dean Glenn Hubbard and Professor William Duggan’s upcoming book The Aid Trap (Columbia University Press), due to be published later this year, explores the topic.
However, Lam’s position as chairman of the Board of Investment for Mauritius offers a unique case-study perspective on how this future can be realized. After a series of reforms in 2006 to modernize industries and boost investments, the Indian Ocean island country increased its economic growth from 2.3 percent to more than 5 percent.
The first step, Lam told Public Offering in a recent interview, is to simplify the way business is done.
“Make it easy to do business in Africa by simplifying the rules and regulations,” Lam says. “We are doing this in Mauritius, and we have moved up in rankings on the World Bank’s Doing Business survey from 32 to 24. As a result, we have seen more locals investing in the private sector and more investors from overseas.”
Lam, who has also advised Uganda on investment opportunities, argues that African nations allow the opportunity for corruption by creating too many hurdles for success through complicated permit and fee systems.
“You leave yourself open to corruption opportunities when you have administration procedures where there is discretionary power,” he says. “So you must remove them.”
Lam, who was born in Mauritius, now resides in Singapore, where he runs a strategy-consulting firm for family-run businesses. He says a key to success in the private sector in Africa is political will.
“Political leadership has to be willing and particularly the finance ministers,” he says. “These countries lack revenue so you have to convince the finance ministers that the big picture will make more money for the government.”
Another key is business-sector support, in which Columbia Business School has been playing a vital role. In addition to Hubbard and Duggan’s book, students have been engaged in numerous entrepreneurial projects in Africa, including last year’s Master Class (see blog). The School is also working with universities in Kenya and Tanzania to develop better business-education methods.
Photo credit: Lionoche