SGOXXX10.1177/2158244014565977SAGE OpenIrwin 565977research-article2015 Article SAGE Open January-March 2015: 1 –12 Kenya’s Business Networks: An Inside © The Author(s) 2015 DOI: 10.1177/2158244014565977 Circle? sgo.sagepub.com David Irwin1 Abstract It has been suggested that business leaders—insofar as they are able to exert influence over public policy—do so through their personal networks rather than acting through, or on behalf of, wider groups of businesses. The purpose of this article is to explore the extent to which personal networks in Kenya give business leaders easy access to policy makers. The concern is that a few business leaders may be able to influence public policy, for good or ill, for public benefit or private gain, irrespective of the views of the majority of private businesses or, at least, the majority of businesses in their sector. This article takes a novel approach mapping relationships to explore the extent to which business leaders are appointed to public bodies. It finds little evidence to support the thesis that an inner circle of business leaders has undue influence. Keywords public private dialogue, interest groups, Kenya, Africa Introduction In sub-Saharan Africa, there are now six advocacy sup- port programs aiming, inter alia, to assist business member- Governments create the political and economic environment ship organizations (BMOs) to advocate change in public in which their countries’ businesses have to operate, usually policy. In Kenya, the Business Advocacy Fund (BAF), described as the “enabling environment” or “investment cli- largely funded by Danish International Development Agency mate.” In response, business associations seek to influence (DANIDA), provides financial and capacity building sup- public policy to make it easier for their members to “do port. In its first phase, lasting from 2006 to 2010, BAF business.” awarded 58 grants totaling US$1.2m to 37 BMOs to finance There is a desire in multilateral institutions such as the advocacy activities (BAF, 2013). A second phase lasts from World Bank and International Finance Corporation to 2011 to 2015. (Tanzania has Business Environment improve the enabling environment. That is why, since 2003, Strengthening for Tanzania—Dialogue; Ghana has the the World Bank has been publishing Doing Business reports, Business Sector Advocacy Challenge Fund; Nigeria has which rank most countries on a number of investment cli- Enhancing Nigerian Advocacy for a Better Business mate factors and give an overall rank of the “ease of doing Environment (ENABLE) ; Mozambique has Fundo para business.” This has encouraged governments to recognize Ambiente de Negócios; and Zimbisa has recently been that improving the enabling environment can make an enor- launched in Zimbabwe.) mous difference to whether they have a vibrant private sector There is a belief among some researchers, however, and to the rate of economic growth. Donors consider this including Useem (1984), that it is not business associations approach so important that the Donor Committee for but rather key individuals from the private sector’s “inner Enterprise Development guidance manual (White, 2008) circle” who make things happen. Useem does acknowledge stresses that that this is often on behalf of the wider business community but, au contraire, suggests that business people use their net- reforming the business environment is a priority for development works and influence to seek competitive advantage. agencies and governments because of the significant influence the business environment has on the development of the private sector and therefore on economic growth and the generation of livelihoods and jobs. (p. 3) 1Partner, Irwin Grayson Associates and Visiting Fellow, Centre for Strategy & Leadership, Teesside University, Middlesbrough, UK They recognize the need to involve the private sector in Corresponding Author: reform and go further, saying that they aim to build the David Irwin, Jacaranda, Long Rigg, Riding Mill, Northumberland, NE44 capacity of the private sector to influence public policy 6AL, UK. (White, 2008). E-mail: [email protected] Creative Commons CC BY: This article is distributed under the terms of the Creative Commons Attribution 3.0 License (http://www.creativecommons.org/licenses/by/3.0/) which permits any use, reproduction and distribution of the work without further permission provided the original work is attributed as specified on the SAGE and Open Access page (http://www.uk.sagepub.com/aboutus/openaccess.htm). Downloaded from by guest on June 5, 2016 2 SAGE Open Figure 1. Manu Chandaria: Networks. Source. Chandaria (2008) biographical note. Note. Manu Chandaria is (or was) a director of the companies (at the top of the graphic), the business associations (in the middle of the graphic) and public sector organisations and committees (at the bottom). The Hon. Gerald Ssendaula is perhaps typical of the inner (KAM) and was founding chairman of both the Kenya circle that Useem has in mind. In early 2012, he was elected Private Sector Alliance (KEPSA) and the regional EABC. Chairman of the East Africa Business Council (EABC). As Unlike many business people, who prefer to keep a lower EABC puts it (A. Nderitu, [then] CEO, East Africa Business profile, Chandaria (2008) has helpfully provided a detailed Council, Arusha, personal communication, March 24, 2012), biography on the Internet (Chandaria, 2008). he brings a wealth of experience, having worked with both His key appointments—in private companies, business the public and private sectors for several years. He headed association, and government committees—are summarized several ministries in Uganda during his time in government, in Figure 1. As can be seen, he is widely networked and has including the Ministry of Trade and Ministry of Finance, (or had) the confidence of political leaders who appointed Planning, and Economic Planning. He is now a businessman, him to a number of public sector and parastatal with interests in coffee farming, hospitality industry, real organizations. estate, and general trading. He is Chairman of Tropical Bank, Another private sector leader, Vimal Shah, is CEO of the Uganda, Chairman of the Coffee Farmers’ Association, Bidco Group, which he has grown from being small and Chairman of the national apex Uganda Private Sector unknown to one of East Africa’s most respected manufactur- Foundation, and Chairman of the Uganda Revenue Authority. ing companies, with manufacturing operations in Kenya, He is also a senior Presidential Advisor on finance matters. Uganda, and Tanzania. He is a former chairman of KAM and There are also people who started in business and then currently chairman of KEPSA. He is chairman of EABC’s became involved in influencing government. Manu Trade and Investment Committee. He is a board member of Chandaria, for example, a successful businessman in Kenya United States International University of Kenya and the established his own, very successful, business. He has been Kenya Polytechnic University College and a member of the appointed to the board of a number of other private compa- Presidential Investors’ Round Table of Uganda. nies. He has also been appointed, at different times, to a large None of these people appear to have political ambitions, number of government committees and task forces. He is a perhaps believing that they can achieve more by keeping out former chairman of the Kenya Association of Manufacturers of politics, though a former chairman of KEPSA has seen the Downloaded from by guest on June 5, 2016 Irwin 3 chairmanship as a useful stepping stone into the limelight in which all citizens’ interests are represented, and biased, in the hope of moving into a political career. If governments are which the views of business and professional interest groups serious about improving the enabling environment, they prevail. An interest group is simply an “organised body of need to talk to business leaders and are often keen, for rea- individuals who share some goals and try to influence pol- sons including respectability and legitimacy, to recruit busi- icy” (Berry, 1984, p. 4). This article, however, takes a nar- ness leaders to working groups, advisory committees, boards, rower view, focusing on business associations which and so on. In addition, however, government talks regularly “aggregate the collective power and interests of the private to key business associations. If a few business leaders with sector” (Heilman & Lucas, 1997, p. 142) in an effort to influ- good networks could make a significant difference, it would ence public policy. They are membership organizations obviate the need for business associations and the donors rather than campaign groups or pressure groups and often providing them with financial support might question offer other services to their members in addition to represent- whether it was worth providing. One possible indicator of ing them in public policy debates. Gilens and Page (2014) close relationships between a small number of business lead- assert that economic elites and business interest groups are ers and public sector policy makers might be the appoint- more influential, at least in the United States, than are mass ment of a small number of influential business leaders to member groups or individual citizens. public bodies. It is important to ask why businesses and business asso- In some countries, such as the United States, companies ciations might want to influence policy. Ridley (2010), quot- may well join business associations to exert influence on ing Milton Friedman, observes government but many also resort to the use of lobbyists who can work on their behalf. In Kenya, there seem to be very that “business corporations in general are not defenders of free few lobbyists. Asking around the BMOs produced just two enterprise. On the contrary, they are one of the chief sources of names. Keli Kiilu runs Corporate Regulatory Solutions, danger.” They are addicted to corporate welfare, they love based in Kenya. He previously worked for British American regulations that erect barriers to entry to their small competitors, Tobacco rising to take charge of their African division.