Economic Growth and Development in Africa

July 14, 2017Duke Law News

John Simpkins '99John Simpkins '99

Nelly Wamaitha LLM ’17, an attorney from Kenya, describes herself as a skeptic of foreign aid structures and delivery in Africa. “I don’t think Africa’s problems can be solved with some Herculean effort that Africa does on its own, it’s obviously going to be a cooperative effort,” said Wamaitha, who practiced corporate law in Nairobi and London and studied theology at Oxford University before coming to Duke. “That having been said, the world has really botched up Africa in the past.”

A spring-semester seminar titled Economic Growth and Development in Africa offered Wamaitha and 12 classmates, a mix of JD and LLM students and PhD candidates from the Nicholas School of the Environment, a chance to consider how development policy could be improved. Taught by John Simpkins ’99, the former general counsel of the United States Agency for International Development (USAID), the students examined development from an array of perspectives: those of host-country and foreign governments, businesses, for-profit and nonprofit development agencies in the private sector, philanthropic organizations, and project-finance lawyers. In addition to writing weekly papers reacting to their assigned readings, they prepared capstone papers in which they researched specific policy challenges, made recommendations, and analyzed the likely impacts of those choices.

Wamaitha focused her report on “illicit financial flows” (IFFs), tackling the problem of capital that is generated in Africa but does not stay there. IFFs are mainly facilitated by the actions of multinational corporations and crime. Corruption in Africa makes a much smaller contribution to IFFs than is generally assumed, while tax evasion and avoidance by multinational corporations with African operations is particularly problematic, Wamaitha said. Bristling at the common perception of Africa as “a taker, not a giver,” she said “study after study has shown that Africa is a net creditor of the world because of this illicit flow of capital.

“This is money that should be paid by corporations as taxes to African governments, but they find ways not to pay, some of them legal and some not legal. The money Africa loses is actually absorbed into the economies of its development partners.” Among Wamaitha’s policy recommendations: that aid-granting nations mandate disclosure of income generated in Africa by multinationals in order to ease tax collection and that they target aid at improving tax legislation, inspection, and regulation within African nations. “There is a lot that can be done on a country-to-country level between the development partners and African governments to stop this outflow,” she said.

Her classmates’ policy papers reflected the diversity of professional interests and experience the students brought to the seminar, addressing such matters as intellectual property protections for traditional knowledge, how China’s mix of impact investment and project finance is working to promote development on the continent, how ethnic heterogeneity might impede economic growth in Côte d’Ivoire, land-tenure reform and land ownership as a base generator of economic growth in Ethiopia and Rwanda, marine-resource management in Tanzania, and minority shareholder protection in South Africa.

In addition to giving his students a foundation in law, history, politics, and culture relevant to the sub-Saharan countries they studied, Simpkins said he aimed to help them understand how to produce policy analysis that would be relevant in a professional context. In crafting their capstone papers, they were instructed to imagine they were writing for someone who would demand a clear and concise statement of the challenge being addressed and the solutions proposed, and an equally full and concise analysis of their potential implications if implemented.

He also engaged his students in simulation exercises, such as one involving a negotiation between a South African company and the government of Botswana over a mineral lease. Following the exercise, they considered how that case actually unfolded. “It gave the students a better sense of what some of the issues are — the legal issues as well as some of the cultural and historical considerations that arise when a South African company wants to do business in Botswana,” he said. “They saw how many things that exist as atmospherics around the actual deal itself can play an important role in its consummation.”

Simpkins credits a practice-oriented seminar at Duke Law that engaged him in research and analysis for the Constitutional Court of South Africa with helping confirm his long-term interest in a career in international development. Returning to teach, he was gratified, he said, by the level of engagement and the diversity of insight among his students, some of whom had previously worked in development or in Africa: “It was truly an atmosphere in which people were learning from each other.”

John Epling JD/LLM ’17 agreed, noting that he appreciated the interdisciplinary background of his classmates, such as those of the internationally trained attorneys from the LLM program and graduate students studying energy and environmental policy, and praising the way Simpkins structured the seminar. Epling said he came away with a “holistic” exposure to the challenges and dynamics at play in Africa and a range of ideas and approaches that he thinks will be useful as he begins practice at Allen & Overy in London, where he is likely to be exposed to transactions in Africa and other emerging markets.

“He had a very balanced approach,” said Epling. “We had opportunities to look at some systemic issues, but then went into granular detail and looked at specific case studies in specific countries. We looked at constitutional issues and heard from lawyers from an international law firm that does project financing in Africa. Each component informed the other in interesting ways.”

For his final paper, Epling investigated constitutional mechanisms for insulating Uganda — a country devastated economically by the dictatorship of Idi Amin in the 1970s — from military coups, in the interests of facilitating economic development. Epling, who witnessed economic development challenges in Afghanistan during a 2012 deployment as a U.S. Marine Corps officer, said he entered the seminar with a longstanding interest in development in Southeast Asia and the Middle East, as well as in nations’ transition from military to democratic rule.

“I was interested in using Uganda as a case study, not just to inform my understanding of military regimes in Africa, but also to see if I could gain insights into military regimes and constitutional reform that might be applicable in other parts of the world as well,” he said.

The class had its genesis in a student-run ad hoc seminar on development trends in Africa designed by Liz Wangu ’16 in her third year and supervised by Professor Trina Jones. Simpkins, Jones, and Wangu submitted the course proposal for Economic Growth and Development in Africa to the curriculum committee, and Wangu, now a first-year clerk at Clifford Chance in Washington, D.C., returned to Duke in March to lead a class session on project finance with one of her law firm colleagues.

“Coming back to Durham and seeing how the idea to develop coursework and programs focused on Africa had come to life was beyond gratifying,” she said. “I truly believe that Africa is on the rise and that there are pivotal roles for attorneys to be involved in its growth story. I am also especially thankful to John Simpkins and Professor Jones for being so instrumental in creating such an initiative at Duke Law.”