Are MBAs The Solution To Africa's Problems?

Two new programs hope that giving the continent more business-degree holders will boost production and outside investment. But is an MBA really an indicator of potential success?

Given their current reputation in the U.S., the idea of pumping Africa full of business degrees to save the economy might seem wrong-headed, or even a bit perverse. If MBAs have been responsible for irresponsibility, you might argue for quarantining the model, not exporting it.

But then there’s some evidence that spreading management knowledge is good for countries—especially for catalyzing economic development. Two new programs in Africa are aiming to fill that "management gap," by producing locally grown managers.

Although research is limited, studies do show links between management knowledge and economic success. Studies have found that countries with better management are more productive (PDF), as are businesses run by trained managers (PDF).

Nick Bloom, the associate professor at Stanford who co-authored those studies, says management training may be a better aid-investment than, say, hospitals, or schools. And others call management the "missing link" in Africa: key to building up local talent (by keeping would-be expatriates at home), and developing businesses.

"I was talking to a private equity guy recently—a bright MBA from Harvard," says Rebecca Harrison, head of the African Management Initiative, based in South Africa. "He’s sitting on money. They want to invest in high-potential small- and medium-sized businesses. But every company they go into has basic management problems. That restricts the money that can go into the continent."

Harrison says: "When you talk to entrepreneurs, they say there’s a lack of capital. But when you talk to investors, they have plenty of capital. The problem is finding well-managed companies," she says.

The African Management Initiative, a membership-organization, is backed by business schools and nonprofits. It’s building a hub for case studies, tutorials, and news. AMI hopes to add a buddy-vouching system, and, later, full certification of high-quality managerial talent.

The AMI also has created a blueprint for building a business school—a step-by-step guide for impoverished countries to start producing MBAs while cutting out the normal high expenses. The Tony Elumelu Foundation (TEF), named after Nigeria’s leading banker, is testing the model in Port Harcourt, Nigeria’s oil capital.

TEF also has an internship program which brings over MBAs from the U.S. and Europe to work in Nigerian companies. Wiebe Boer, TEF’s CEO, and a McKinsey alumnus, says the experience is more interesting than the typical summer internship back home.

Boer says MBAs are also bringing results at Nigeria’s infamously corrrupt government ministries. Many now have teams of management-trained advisers working above the permanent, often sclerotic bureaucracy.

"[The ministers] are building teams around them, eight assistants and advisers. We’re providing some," says Boer. "They are all ex-McKinsey people, MBAs, people with fund management experience. They are almost building shadow teams with guys who get stuff done, the critical stuff."

Boer believes management training leads to better management, period. "If you have any business—a hospital, a school, or whatever—and if it’s run by someone with some kind of management training, it’s usually going to be managed somewhat better," he says, maybe a little glibly.

I ask him if it matters to him if the Port Harcourt school ends up training managers for Shell and BP, rather than producing people to run hospitals or schools, or set up businesses. For now, he says, he cares more about jobs.

"After 50 years, BP and Shell are still dominated by expatriates. They should have thousands of Nigerians working for them. There is no major indigenous oil company in Nigeria. And there’s so much unemployment locally. It’s the kind of place you can get a school going."