Firm-level Perspectives on State–Business Relations in Africa: The Food-processing Sector in Kenya, Tanzania and Zambia

Abstract

Experiences from developed and emerging economies inform us that close state–business relations (SBRs) are crucial for economic development and structural transformation. Based on the positive experiences from other parts of the world, most African governments have begun processes to establish collaborative SBRs. Amongst other initiatives, these processes include amendments to existing laws to facilitate public–private interaction, direct support to existing business associations (BAs). This article draws on an analysis of survey data from 210 local firms, complemented with qualitative data from interviews with 41 firms, 20 key informants and a range of secondary sources on the food-processing sectors of Kenya, Tanzania and Zambia. The article shows that businesses in these countries have limited policy influence, find policies and programmes to be inadequate when targeting the needs and requirements of local businesses and that BAs in these countries are poorly organised. In spite of initiatives taken by the states and other actors, including an increase in the number of formal relations between state and businesses, it is difficult to conclude whether SBRs are collaborative or collusive. The article contributes to the existing SBR literature by adding a firm-level perspective and by enhancing our knowledge on the usefulness of key theoretical approaches to these issues in an African context.

Keywords:

• state–business relations
• Africa
• firm perspective
• food processing
• Kenya
• Tanzania
• Zambia

Notes on contributors

Dr Goodluck Charles is a Senior Lecturer at the University of Dar es Salaam Business School (UDBS) in the Department of Marketing. He holds a Ph.D. in Business Administration (Umea School of Business, Sweden and University of Dar es Salaam, Tanzania), Master of Business Administration (University of Dar es Salaam) and Bachelor of Commerce (University of Dar es Salaam). His main research interests include entrepreneurship and private sector development, public-private dialogue, policy advocacy, family business, micro-financing and business environment. He is the former Deputy Director of Director of the University of Dar es Salaam Entrepreneurship Centre, currently, working as the Director of the Centre for Policy Research and Advocacy (CPRA) and he is a member of the International Academy of African Business and Development (IAABD). His recent work has been published, inter alia, in the Journal of African Business, International Journal of Public Policy, African Journal of Economic and Management Studies, Journal of Education and Training and Business Management Review.

Søren Jeppesen is an Associate Professor at the Centre for Business and Development Studies, Department of Intercultural Communication and Management at Copenhagen Business School (CBS). He holds a Ph.D. in Business Administration from CBS and a Master of Science in Development Economics also from CBS. He is heading a large research project ‘Successful African Firms and Institutional Change (SAFIC)’ running from 2012 to 2017. His main research interests include developing country firms, in particular SMEs, and topics relating to private sector development, CSR, upgrading, linkages and state-business relations with a geographical focus on Southern and Eastern Africa. He has published in journals like Business and the Environment, Business & Society and the Journal of Business Ethics.

Dr Paul Kamau is a Senior Research Fellow at the Institute for Development Studies (IDS), University of Nairobi. He holds a Ph.D. in Development Economics (University of Nairobi), MSc. in Economics (University of Zimbabwe) and BA in Economics (University of Nairobi). His main research interests include international trade, employment, political economy, state-business relations, regional integration and industrial development. He is the Kenya National Coordinator of the Afrobarometer Research Network, the African Clothing and Footwear Research Network (ACFRN). He is also the team leader for the Global Competitiveness Report of the World Economic Forum in Kenya and a team member of SAFIC research project among many others. His recent work has been published, inter alia, in the World Economy, DBA Africa Management Review and IDS Sussex Bulletin.

Peter Kragelund is Head of the Department of Social Sciences and Business, Roskilde University. Peter holds an MA in Economic Geography from the University of Copenhagen and a Ph.D. in International Development Studies from Roskilde University, Denmark. His main interests include private sector development, changes in the global economy and emerging development actors. His work has been published, inter alia, in the Cambridge Review of International Affairs, Cornell International Law Review, Development and Change, Development Policy Review, European Journal of Development Research, Journal of Modern African Studies, Review of African Political Economy and Third World Quarterly.

Notes

¹It should be noted that collaborative SBRs did not do it alone. As demonstrated by Whitfield et al. (2015), collaborative SBRs were only one part of a broader set of trends that made Asian economies structurally transform.

²Food processing in this article denotes the transformation of raw ingredients into food (or one form of food into another form of food). It is a subset of the agro-processing industry, that is, the subcategory of manufacturing that processes raw materials and intermediate products originating in the agricultural sector (including forestry and fisheries). A number of subcategories of food-processing exist termed as sub-sectors, for example, the grain milling sub-sector and the edible oils sub-sector.

³Several categorisations have been proposed to distinguish ‘developmental’ from ‘predatory’ SBRs, that is, SBRs that lead to sustained inclusive growth and SBRs that hinder this, respectively. Terms include ‘malign’ vs. ‘benign’ SBR (Evans, 1997), ‘effective’ vs. ‘ineffective’ (Qureshi and Te Velde, 2013) and ‘collaborative’ vs. ‘collusive’ (Schneider and Maxfield 1997). These terms inform us that the relationship is seldom only ‘developmental’/‘benign’/‘collaborative’ or only ‘predatory’/‘malign’/‘collusive’, but forms part of a continuum.

⁴Research on these issues is not restricted to the examples described below. It also includes Anne Pitcher’s fascinating study of the link between party politics, privatisation processes and the development of capitalism in 27 African countries (including a detailed study of these processes in Zambia) that furthers our understanding of the link between the state and the private sector, that is, SBRs (Pitcher, 2012).

⁵No consolidated statistics exist in the three countries. Hence, the extent to which the interviewed firms indeed are representative of the entire sector in the three countries is impossible to determine accurately, but due to the mapping methods adopted, we are convinced that they present a fair view of the sub-sector in the regions studied.

⁶Some of the firms in the food-processing sub-sectors were members of different BAs.

Additional information

Funding

This work has been supported by the Consultative Research Committee for Development Research (FFU), Ministry of Foreign Affairs, Denmark [11053-CBS].