Supporters of an ambitious plan to help Africa stand on its own feet will throw the floor open to global business in their bid to win financial backing for the initiative at an annual forum in Durban this week.
Organisers of the June 5-7 Africa Economic Summit say the time is right to get support for the home-grown African recovery plan, which aims to boost meagre levels of foreign investment in exchange for good political governance.
But analysts and businessmen warn that widespread corruption, a spreading HIV-Aids epidemic, restrictive US trade policies and chronic conflict in parts of the world’s poorest continent may make its goals even harder to reach.
”To some extent the plan has already succeeded in changing the debate about the future of Africa,” said Michael Spicer, spokesman for mining giant Anglo-American.
”But it’s still at a high level of abstraction. Business would like to draw the debate down to shorter-term, practical issues — like what it can do to contribute to fighting corruption,” he said.
Politicians at the annual forum, often criticised as an ineffective talk-shop, say they will take suggestions from business leaders on board as they prepare to present the plan to a Group of Eight industrial nations summit in Canada next month.
”In the last 12 months we have managed to get more African leaders to take issues of governance seriously — it’s a major turning point,” said Wiseman Nkuhlu, executive chairman of the New Partnership for Africa’s Development (Nepad), as the plan was cumbersomely baptised.
”I believe there is a willingness in developed countries to make Africa work. We will listen carefully to business and stakeholders — we just hope we can succeed in getting them excited about Nepad,” he told reporters last Friday.
Nkuhlu is also an economic adviser to President Thabo Mbeki, who is one of the main architects and champions of Nepad, along with President Olusegun Obasanjo of Nigeria.
The recovery plan aims to boost foreign investment into Africa to $64-billion per year — more than seven times its level in 1999 — and propel economic growth to seven percent annually, compared with 2,6% in the past decade.
In return, African leaders will promote democracy and good governance, to make their countries more attractive for investors. Although it has one of the highest rates of return on capital in the world, Africa receives less than three percent of the total direct investment flows to developing countries.
POLITICAL MOMENTUM SEEN
A ceasefire in Angola last month after more than a quarter of a century of fighting, and free elections in Sierra Leone for the first time in years, have been touted as examples of moves towards democracy and stability on the volatile continent.
”We believe the stakes are very high … there has never been an opportunity like this in recent history. There is political momentum behind Nepad,” says Frederic Sicre, managing director of the World Economic Forum.
But critics highlight the fact that marathon Congolese peace talks in South Africa produced only a partial agreement, while elections in Zimbabwe and Zambia in the past six months were criticised as deeply flawed by international observers.
Another potential deterrent for nervy foreigners is that hunger has reared its head in southern Africa again, partly as a result of drought and flooding, but also because of policy choices in the worst-hit countries — Malawi and Zimbabwe.
Some analysts say that the biggest threat to the recovery plan is sweeping US farm subsidies unveiled last month, which are likely to hit the agricultural mainstay of African economies.
”The passage of the US farm bill raises serious doubts … on how willing developed countries are going to be to open up their markets in this environment,” Standard Chartered Africa economist Razia Khan said.
”From an African perspective it will be very difficult to put their case forward to other countries when this has been going on in the United States.” – Reuters