A fund to help Africa overcome obstacles to trade and investment is set to launch its first projects in East Africa after strong backing from corporate donors, officials said on Tuesday.
The Investment Climate Facility (ICF), a private-public partnership backed by the G8 group of the world’s richest nations, said latest contributors to the fund included Microsoft and South Africa’s Standard Bank.
Niall FitzGerald, the ICF’s co-chair and also chairperson of Reuters, told a news conference in London the fund had received commitments of $120-million towards its $550-million target since its launch at the World Economic Forum summit in Cape Town last June.
”So 2007 will be the year in which we begin to make a difference,” FitzGerald said.
The ICF wants to help African countries improve their regulatory environments, reform tax regimes, reform property rights laws and tighten contract enforcement codes.
Fitzgerald said the fact that 25% of commitments came from the private sector demonstrated the confidence big business had in opportunities opening up in Africa.
”Investors are taking a fresh look at Africa and the multitude of opportunities the continent can offer,” FitzGerald said. ”We think this reflects the wider market opportunity.”
In recent years a significant number of African countries have registered strong and consistent growth. This and deliberate reform measures, such as those led by New Partnerships for Africa’s Development (Nepad), have spurred investment interest, notably in telecoms and banking.
Home-grown initiative
Previous attempts by institutions like the World Bank to tackle trade barriers and obstacles to investment in Africa have made little impact, but ICF co-chair Benjamin Mkapa, a former president of Tanzania, said the ICF was a largely African-driven initiative whose time had come.
Mkapa declined to elaborate on which East African countries were soon to qualify for ICF assistance and what specific projects they had proposed, saying only that negotiations should be complete in coming months or even weeks.
The ICF’s first CEO, Omari Issa, whose appointment was announced by the board of trustees at the news conference, said the projects would be largely concerned with helping to eliminate bureaucratic bottlenecks, speed up customs clearance and remove impediments to intra-African trade.
”We do have barriers at the moment,” said Issa, who was previously executive director and chief operating officer of Celtel International in The Netherlands.
He cited infrastructure as a key barrier to trade between African countries.
”If you were to go from Gabon to Burkina Faso [both in West Africa], you actually fly over Burkina Faso to Paris to go back to Burkina Faso,” Issa said.
”So if you wanted to get goods from Burkina Faso, which exports a lot of agricultural goods, it’s very difficult to get those products to Gabon or any other African country. They have to ship those through Europe in most cases,” he said. – Reuters