Beyond Friend or Foe: Foreign Investment, Responsible Business and Local Development in Africa

Abstract

In a paper co-written with Peter Knorringa in 2008, Bert Helmsing advocated a rethink of the role of the private sector in development. Especially among civil society representatives, views tended sometimes to hostile simplifications that did not do justice to the rather more nuanced realities on the ground. Instead, the authors stressed the diversity of motivations and behaviours of entrepreneurs in issues of local development, and perceived a move away from charity towards more active engagement in development initiatives. In view of the renewed emphasis on the private sector as agent for development in international cooperation and development policy, the importance of this subject has only increased since Knorringa and Helmsing published their paper. Heeding their advice to both welcome and critically engage the role of business, this paper examines the role of foreign investors (predominantly Dutch SMEs) in agribusiness in six African countries: Ethiopia, Kenya, Mozambique, Rwanda, South Africa and Zambia. Based on surveys and interviews in these countries, the CSR performances of these investors are examined in order to assess to what extend and how these foreign entrepreneurs actually contribute to local development. How responsible are these foreign businesses? And whast actually is the link between responsible business and local development?