"Participation Builds Unity"
"MADE IN AFRICA - FOR AFRICA"
"Participation Builds Unity"
"MADE IN AFRICA - FOR AFRICA"
PRESENTS
COMMISSION FOR AFRICA
ACCRA - GHANA WORKSHOP
15-16 NOVEMBER 2004
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Statement from the Accra Business Round Table
Convenors:
Introduction
The meeting reviewed the myriad of international policies and initiatives for Africa, and urged the Commission to concert G8 efforts and those of the international community generally, in support of African-led initiatives – specifically the African Union’s socio-economic development strategy NEPAD.
NEPAD’s success requires a fundamental shift in perceptions and in relationships. In particular, the business community wants to see a fundamental change so that Africa relies on trade and commerce to sustain its growth ambitions, not aid. This goal is realisable but requires a significant investment in human capacity and infrastructure to break the cycle of poverty and dependence. Does the international community have the political will to make this investment, which will be sizeable for Africa, if small in global terms?
For Africa, the roundtable underlined the importance of improving governance, and for the role of civil society to be enhanced. The development of capacity in financial and legal systems, and governance structures is a priority for every country.
The private sector recognises the enormity of the challenge; but is positive about meeting it.
Six topics were addressed:
Trade Development and Growth
The rationale for earlier development agreements such as the Lome Accord was the idea of expanded trade with Europe. It failed due to the proliferation of non-tariff barriers (e.g. health and investment conditionality) and poor capacity in Africa which actually led to falling trade. The meeting expressed the following key message:
“The stark reality is that on the one hand, G8 countries support free trade, and aim to help Africa develop. On the other, their subsidies discriminate against agricultural products, and ever more complex and difficult trade regulations are put in place which stifle export industries, often in response to protectionist pressures from lobbies in industrialised countries. This is killing sustainable growth. In addition, African countries are ill-equipped to manage the opportunities, or meet the standards required in Northern markets. A radically different approach is needed”
There is support for the existing framework for continental development and regional integration as a strategic vision. In West Africa, regulatory reform is vital to overcome the additional barriers of the inherited Francophone and Anglophone legal and commercial traditions, and every effort should be made to tackle this. Examples were given of how difficult it is to trade across this divide, with some vested economic and political interests opposing integration. The responsibilities for tackling this rests with the region, but the G8 members could be asked to help West Africa countries to tackle these issues more forcefully.
..........The Commission should urge G8 countries:
..........African governments:
..........The private sector:
The private sector and African leaders also need to build a coalition with concerned civil society and leaders in the North who believe that the continent deserves a fair deal in trade. International trade practices should be subject to more scrutiny and need a watchdog capacity developed to monitor and publicise these issues.
Infrastructure
..........The G8 can assist by:
The Situation of the Private Sector in Africa
..........The G8 policies towards Africa could assist:
Tackling Corruption and Improving Good Governance
For business the key areas to target which affect the economy are the operation of the courts, contract awards and licensing. The issue is so important that it demands a bigger investment of time and funds to improve the systems
..........The Commission should recommend that the G8:
..........African Governments
Recognising the Informal and SME Sector
Large companies should be asked to adopt development policies for their supply chain which treats this sector fairly and enables it to grow.
Improving the Investment Climate: Cutting Red Tape and Policy Consistency
Health
Participants thanked the Honourable Minister for NEPAD and Regional Integration, Mr Kofi Konadu-Apraku for his address to the meeting. Special thanks were expressed to the roundtable chairman, Mr Osei Boeh-Ocansey, Director-General of the Private Enterprise Foundation (PEF), and to the President and staff of the PEF for making the conference arrangements.
Accra, 16th November 2004
Private Enterprise Foundation, Ghana
Commonwealth Business Council
The roundtable thanked the Commission for inviting input on the priorities of the private sector, and what recommendations could be included in the Commission for Africa report to G8 Governments, African Governments and the Private Sector itself
· The Position of the Private Sector in Africa
· Trade Development and Growth
· Tackling Corruption and Improving Good Governance
· Recognising the Informal and SME Sector
· Infrastructure
· Improving the Investment Climate: Cutting Red Tape and Policy Consistency
Poor trade development must be ended if the Millennium Development Goals are to be achieved.
· to progress the WTO Doha Round and quickly remove agricultural subsidies that harm Africa’s agricultural sector.
· expand support to Africa to facilitate trade negotiations and their implementation in terms of both technical skills and market promotion. There is a particular need for support from experienced trade negotiators, especially for the Doha Round discussion in 2005.
· accelerate support for regional trade integration.
· have to involve business directly in trade negotiations and in managing trade issues. This is not happening, and lack of coordination between public and private sector is harming national economic interests as a result.
· tackle trade barriers within Africa and with other countries in the South, to broaden Africa’s trade relationships
· has to do more to improve corporate governance and the application of agreed regulations in trade agreements
Investment in infrastructure –such as roads, rail and air transport, and energy (including renewables) is fundamental to competitiveness. Every business adopts “private solutions” to these problems – e.g. the generator that every business buys to compensate for interrupted electricity supply – which are costly and inefficient. Deteriorating infrastructure has to be tackled and this requires a bigger emphasis on long term public-private partnerships.
· Providing technical and managerial skills to African countries to improve capacity through their development agencies, and insisting on more transparent public procurement practices for infrastructure;
· Advocating the adoption by African governments of a new model for infrastructure development, in which the private sector invests in and manages public infrastructure in partnership with the state, with long term sustainability achieved through user fees, planned maintenance and efficient management; and
· Providing a massive injection of concessionary long term capital to help kick start private-public partnerships, and reduce the risk/improve the incentives for private capital.
NEPAD envisages a major role for business. However, the situation of private sector is still weak in Africa, and there is a need for more efforts by the private sector itself in developing its collective lobbying and policy development work.
· highlight the importance of improved dialogue on policy between government and business in the G8 Action Plan for Africa;
· Examine how as part of the G8 Action Plan, aid could assist capacity development in the private sector,
including financing instruments which support investment directly with the private sector, not just through government intermediaries;
· Encourage multinational companies to expand their support for the development of sustainable growth through better corporate governance and social responsibility; and
· Support a long term information and cultural exchange programme which engages the international and African business community, civil society and the media to create a positive image and more balanced information about African countries.
Corruption is now easier to talk about. The solution to the problem of corruption depends on understanding that it is partly an economic as well as ethical problem. The key areas are public services and to address it requires:
· systems which reduce the scope from discretion in decision-making
· transparency in criteria by which decisions are taken
· enforcement
· greater accountability from donors, from civil society and professional bodies
· strengthen the accountability of countries in the international system through political dialogue, and link resources to the application of the APRM, and compliance with good governance; and
· toughen international controls on illegal financial flows and work to assist the repatriation of stolen funds located in the international system.
· Should implement transparent contracting; and
· Launch national campaigns to tackle corruption involving youth, civil society and business to promote values in society
The private sector should adopt corporate codes of ethics, and strengthen corporate governance systems, and invest in training and education needed to make them applicable
The SMEs provide the biggest number of jobs and their difficulties are well known – access to finance, technology and the knowledge, especially the ability of small entrepreneurs to adapt to legal or policy changes set by governments or purchasers. But is lacks political influence. These constraints hold back the sector and mean that the economy is literally operating at “half strength”. Government policies vary at the national level, but the emphasis is still on the formal sector, and there needs to be a change in mind set from governments, with much more positive support for high growth sectors, and to improve the ability of these operators to graduate from the informal to formal sector – bringing benefits to society as a whole.
Removing the obstacles to doing business and policy consistency is critical to stimulating domestic and foreign investment. Difficulties in registering companies, and unnecessary red tape increases cost of doing business. The meeting encourages the Commission to support the private sector initiative to identify and find practical solutions to working with government to remove these barriers
HIV/AIDS, malaria and polio in Africa are all major health threats and each needs to be accorded priority.
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