CSR strategies for African corporations ought to be strengthened

By

Dr Jaya Shukla

Globalization has made corporations to compete high for gaining customers base and loyalty. As corporations pursue growth through globalization, they have encountered new challenges that impose limits to their growth and potential profits. Government regulations, tariffs, environmental
restrictions and varying standards of what constitutes “labor exploitation” are problems that can cost organizations millions of dollars.
CSR is one of the strategies gaining popularity recently among corporations in developing countries to enhance their competitiveness, maintaining brand image and encouraging brand loyalty.
Again, a firm introducing a CSR-based strategy might only sustain high returns on their investment if their CSR-based strategy were inimitable by their competitors and also if it is meaningful.
In competitive markets, a firm introducing a CSR-based strategy might only sustain high returns on their investment and they may only be a short-lived strategic competitive advantage to implementing CSR as their competitors may adopt similar strategies.
Although there are different approaches under CSR but most common is use of philanthropy. This includes monetary donations and aid given to local and non-profit organizations and communities, including donations for development of arts, education, housing, health, social welfare, and the environment.
Some organizations do not like a philanthropy-based approach as it might not help build on the skills of local populations, whereas community-based development generally leads to more sustainable development.
CSR Strategies: Africa
In most countries in sub-Saharan Africa usage of corporate social responsibility (CSR) strategy for enhancing competition is still in early stage.  Again among various African corporations very few corporations have strong independent CSR. In anglophone African countries especially in South Africa, interest in this issue is more pronounced and various initiatives in this direction have been launched. CSR strategy is also becoming institutionalised in Morocco, Tunisia and some other francophone countries over past few years.
In sub-Saharan Africa, corporate social responsibility is largely based on philanthropic initiatives in the fields of healthcare, education, employment, infrastructures and the environment. In Africa, the ultimate purpose of businesses is primarily social in nature: a business should yield a profit for its owner and the owner’s family but also for the community.
Over past few years an approach to CSR based on the Western model is starting to become established. At least two forms of CSR therefore co-exist in Africa – a Western-inspired form globally regulated by the ISO 26000 standard and an African form founded on the primarily social function of any business.
Rwanda
Big companies like BAT, BRALIRWA, MTN, BCR, KCB often publicize their Corporate Social Responsibility activities.
 BRALIRWA has used numerous CSR practices over the past six decades of operation in the country. Approaches used by BRALIRWA more social and community related ranging from sports and entertainment, boosting access to clean water in rural and urban districts, rendering support to vulnerable members of the community, building public infrastructure like schools, empowering environmental protection in activities such as tree planting, investing in social enterprises that benefit communities and boost national growth, to giving financing to women and youth to kick start their economic empowerment.
British American Tobacco is the second largest tobacco company in world and the most international, with its operations and products in every continent.
In 2007, Rwanda’s Ministry of Health placed a ban on all tobacco adverts and promotional activities. The initiative was specifically designed to dissuade minors. BAT was publicly in support of this. The company also supported Rwanda’s education sector through the donation of computer hardware, revamping university libraries and provision of scholarships to students in universities within the country.
Among other corporations like Bank of Kigali CSR initiatives rests on three pillars involving environment, Innovation and Education. Similarly CSR strategy of, MTN, KCB and I&M bank are more social including projects having impact on community. Such strategies used by most of corporations will not bring any competitive advantage to firms as they can be easily imitable and also the strategies are not very unique and sustainable.
Recommendations
Using Social Approaches or applying international CSR frameworks in Africa without any adjustment to local realities reduces the effectiveness of CSR initiatives. International standards in CSR must be adapted to local economic situations and cultural specificities. Social and Western approach must mutually acknowledge and enrich each other. Any CSR policy in African corporation must take into account the fundamental responsible practices in African corporate management. They should also follow compensative principle like if products of corporate entity have health issues they should incorporate health awareness and health initiatives in their CSR strategy. Again if their products and services have effect on savings they should include ways of enhancing savings in their CSR.
The writer is an economist and consultant based in Kigali, Rwanda