Roundup: Africa urged to develop better corporate governance policy to increase investments

Corporate governance holds key to the sustainability of businesses and investments in the African region, and governments should develop better governance frameworks to enable smooth operations of businesses, said financial experts on Thursday.

Speaking at the just concluded third edition of the African Export-Import Bank Annual Customer Due Diligence and Corporate Governance Forum in the Rwandan Capital Kigali, experts emphasized on the importance of improved corporate governance in order to attract massive foreign direct investments.

Rwanda hosts the meeting from 26th to 27th, under the theme "Sustainable Practices in Africa: Progress through Technology and Collaboration."

The forum organized by Afreximbank and the Rwanda Development Board brought together more than 200 financial experts, bankers, regulators and corporate entities to discuss current practices and evolving trends in customer due diligence and corporate governance.

Afreximbank is the foremost Pan-African multilateral financial institution devoted to financing and promoting intra- and extra-African trade.

"Poor corporate governance makes almost impossible for investments to flourish. We need to devise corporate governance structure in our economies across the continent so that we create an enabling environment for transparency, accountability, responsibility and fairness," said John Rwangombwa, governor of National Bank of Rwanda (BNR).

He noted that weak corporate governance often results in failed financial institutions, adding that market-wide corporate governance improvements need to be facilitated and supported by the regulator.

Rwangombwa said that stronger corporate governance policies could alleviate this risk, which has a potential to negatively impact the growth of African economies.

The two-day event deliberated ways African nations can leverage technologies, cross-border cooperation and collaboration among regulators, financial institutions and corporates to build robust customer due diligence and good governance systems.

However Dr. George Elombi, Afreximbank Executive Vice-President, said that weak corporate governance practices present difficulties for small and medium enterprises and family-owned business.

"African economies ought to revise their corporate governance strategies to help businesses identify their shortcomings and be able to benefit the community, and the country through providing employment, attracting investment and promote competition in the market place," he added.

Participants at the meeting concurred that business principles and standards need to be tailored for individual markets and economic activities. However, such standards should be both internationally and domestically credible.

The Afreximbank Annual Customer Due Diligence and Corporate Governance Forum was first held in Dakar in October 2014. The second edition took place in Seychelles in 2015. Endit