It is inevitable that poor countries will compete for donor aid, Tanzania’s President Benjamin Mkapa told delegates at the World Economic Forum’s Africa Economic Summit in Cape Town on Thursday.
“We will be competing on which government is more effective, which government is more people-centred, which government is more representative … There will be competition there,” Mkapa said on the penultimate day of the three-day conference.
He was speaking at a plenary session on aid, and how best new aid recommended by the Commission for Africa report can be used.
Mkapa said competition in itself is not conducive to increased aid or better understanding.
He stressed that the report sets out what donor governments, recipient countries and the private sector should do — “so that there is a tripartite partnership there, which can lead to growth and translate into greater welfare and prosperity of the peoples”.
Mkapa said if recipient countries are slow, the chances are they will not receive aid very quickly.
“But if the developed countries or donation countries are also slow, it means the transformation of the African countries will be equally slowed down. So, to set the pace is the challenge we face together.”
Business ‘slow to take advantage’
Asked if business is asking the right questions with regard to aid, Steve Booysen, chief executive of Absa, said business has been slow to take advantage of the changing political landscape in Africa.
“The political landscape on the continent has changed dramatically and I think that business has been slow to follow that, and really to make a difference in the lives of people,” said Booysen.
He was part of a panel, including South African Minister of Finance Trevor Manuel, talking about how best to spend aid on the continent.
The Commission for Africa has recommended a doubling of aid to Africa, to about $25-billion by 2010, possibly doubling again after review a few years later.
Booysen spoke on the need for business to form partnerships to be successful, and the need for equal responsibility.
Business should engage with governments in setting governance structures and creating capacity, while not compromising on sound business practices or engaging in corrupt practices.
“I think business is at its best if it can compete on an equal level. I think that where businesses have too strong a relationship with governments, it sort of takes away the innovation and creativity that business is so good at.”
Turning to tax incentives, Booysen said these are not sustainable for development in a country, and business should not advocate for them.
“Business should really stand up and, with a dash of speed, take the opportunities that we have on the continent and really contribute to development.”
The Commission for Africa was launched by British Prime Minister Tony Blair in February last year. The aim of the commission was to take a fresh look at Africa’s past and present and the international community’s role in its development. — Sapa
Read more about the Africa Economic Summit on the World Economic Forum website