"Participation Builds Unity"
"MADE IN AFRICA - FOR AFRICA"
"Participation Builds Unity"
"MADE IN AFRICA - FOR AFRICA"
PRESENTS
NEPAD BUSINESS GROUP CONFERENCE
Sandton, South Africa
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The Nepad Business Group
Chaired by Alhaji Bamanga Tukur
“Mobilising the Private Sector in Support of NEPAD”
Sandton Convention Centre, Johannesburg
Participants:
There is general consensus that Africa has abundant resources, a proud history of civilisation and a resilient spirit of survival. But there is equal consensus that it has a dismal score sheet, it is a marginal player in the global world and it has a long way to go towards any meaningful targets such as reducing poverty, development etc. The emergence of the New Partnership for Africa’s Development has, hopefully, set the continent on a new trajectory but this is not an end in itself. It is a long process that needs support, partnerships, goals and finance.
The private sector, both domestic and international, has been identified as a key player in the programme and yet it remains, overall, fragmented, weak and lacking in capacity. In short, as matters stand, the African private sector is not well placed to play its rightful role as a driver of NEPAD. The NEPAD Business Group was established to link leading role players in the international private sector to the African private sector and to the NEPAD programme. Several country programmes have been established under the NBG umbrella, such as that in South Africa, which comprises around 300 top companies, the fledgling operation in Kenya, which was recently mandated to represent East African countries as a whole, and a team in Nigeria.
More than 150 delegates attended the conference, coming from SA, Zimbabwe, Namibia, Mauritius, the UK, USA, Senegal, Cameroon, Nigeria, Ghana, Mali, Kenya, Ethiopia, among others.
The conference, “mobilising the Private Sector in Support of NEPAD” was an attempt to highlight the role of the private sector in the initiative, to seek greater dialogue and unity and to debate the issues affecting business on the continent.
The NEPAD Business Group was endorsed during conference on Financing for Development, organised by the UN in Monterrey, Mexico in 2002. It was formed with the objective of mobilising the private sector to support and get involved in the planning, implementation and monitoring of the NEPAD initiative.
Alhaji Bamanga Tukur, head of the African business chamber, the African Business Round Table, which in turn chairs the NEPAD Business Group, told the conference that Africa had to regenerate itself as there was little sympathy for its weakness and marginalisation in the global marketplace. NEPAD is the blueprint for this revival; it is an important economic partnership which brings together the public sector, development partners and the private sector “ in a tripartite arrangement for economic rejuvenation.”
“The Private Sector, which is an engine of growth, has been the ‘missing link’ in our developmental efforts. The private sector must now be pushed to take the driving seat in the economic train of development moving across the continent. It must implement and translate into reality the promises made by the public sector. Development partners must play a role in sourcing funds needed for implementation. They must also provide technical and managerial expertise to both the private and public sectors. For this tripartite partnership to be effective, all the stakeholders must work in concert and play their roles efficiently. We must now walk the talk in terms of concrete, practical and realisable projects.”
Mr Tukur said it was crucial for the public sector to eliminate impediments for delivery and for the Peer Review mechanism to succeed in order for the whole initiative to succeed. Peer review was, he said, a test case for the willingness of all parties to take NEPAD seriously. However, the private sector had an important lobbying role to play in getting governments in Africa to move more quickly to free up the business environment to grow and create wealth. “A strong and organised private sector needs to stand up to governments to get rid of unnecessary taxes, stringent visa conditions between African countries, reduce regulation and red tape in creating the conditions for economic growth.”
“In most parts of Africa, the private sector is weak and organised business is fragmented which lessens its usefulness and effectiveness. Our task is to strengthen these organisations and provide effective representation across the continent to link into the processes of development. If the private sector is not aware of what is needed in NEPAD or what they can contribute, it cannot play a proper role. Communication of information is equally as vital. For the private sector, this is a must. The formation of the NEPAD Business Group has provided a solid foundation for a start.” He said the ABR, as chair of the group, was undergoing restructuring, reformation and strengthening to allow it to play its new and important role.
The NEPAD Business Group aims to have an Association established in every region and in every African country and Mr Tukur said he hoped that all the states in the regional economic groupings would give full support to the creation of NBGs in their respective regions.
“The world has realized that there is strength in unity. The private sector cannot afford to remain segregated and scattered, it must be united. We need to have a common platform, to speak with one voice on issues affecting us, and we need to promote the ideals of private enterprise culture in all our countries. We must resist the tendency and forces that seek to divide and fragment us. To achieve this requires sacrifice on our part, both individually and collectively.
HE Alpha Konare, Chairman of the African Union Commission, spoke strongly in favour of the private sector. “We believe strongly in the African private sector. Without its help, we cannot achieve great things.” Aid and handouts had not helped the development of Africa, he said, and the continent now had to build and mobilise its own resources.
“The private sector must help us to become fully functional and efficient. We must find a way to ensure permanent contact between governments and business. It is essential that we all think up concrete strategies to this end. We don’t want to find ourselves in a situation where African business is weakened at the time we most need it to be strong.”
“If we don’t work with the private sector and reinforce it, nothing will change in Africa,” he said.
The transformation of the OAU into the AU, he said, had given African leaders a new commitment to transforming the continent. In addition, the AU had, in the past few months, created special instruments for economic growth through NEPAD. “In NEPAD we have identified priority sectors and African leaders are working at a very high level to push the process.”
“The private sector is the foundation of the NEPAD process through partnerships with the international private sector. We have to be careful that these partnerships do not take place on the graveyard of the African private sector. We have to build our own resources.’
Konare said some of Africa’s oldest conflicts were beginning to resolve themselves. “We are convinced that it is through these processes that we are going to create solid foundations for the growth of Africa. One of the lessons we have learned over the past few years is that there is no peace and development without good governance, strong leadership and the private sector.”
“We must find a way to ensure a permanent contract between government and the private sector. It is essential that we all think up concrete strategies to do this. We don’t want to find ourselves in a situation where the African private sector is weakened and we have to stretch out our hands again to the international private sector.” He said strategies could include multinational strategies and the creation of regional companies working together to exploit raw materials. “Why can’t Africa share its own natural resources. Why can’t Africans work together to create legal frameworks and business frameworks so we can all work together?”
HE said the time was right for action. “We cannot waste our time having meetings, we must have concrete strategies and concrete plans and put them in place. I have told members of the AU we cannot just keep talking. We must move together with the private sector.”
“For this to work, we have to believe in it, we have to harmonise best practice and facilitation for the private sector to ensure security of investment. We are putting this on the table – in the AU we are putting in a programme to stimulate this security and stability in the business sector. We need to create an environment where there are clear and strong links between countries and sectors. Only once people see concrete results will we be able to get them on board. Only then will they start believing in NEPAD.”
He said the AU wanted to put together a database to pool services and to find the experts to help with development. It is also working on a plan for a pan-African radio station to highlight communications and needed help and advice from the private sector on taking this forward.
“In 20 years time, we will be a continent of 1.5 billion people but will this represent a market? Will these people be able to buy and sell? If we do not work now on education, HIV/AIDS and the provision of services, there will be no market in 20 years. “
Ambassador Isaac Aluko-Olokun reiterated Mr Konare’s point that a lack of concrete results would continue to make it difficult for Africans to come to grips with NEPAD. It was clear that it was the private sector that would begin to show these results by creating wealth and jobs but also by creating a culture of corporate governance. “But we cannot just create wealth, we need a vision to drive this forward.” He said it was only in South Africa that there was real co-operation and focus regarding public-private partnerships. “Other African countries need to replicate this.” There were also no capital markets on the continent worth speaking about except for South Africa. “People have to go abroad to raise money. We need to look at how we can develop a robust financial and capital market in Africa and governments must co-operate in this venture.”
Aluko-Olokun said: “Until we invest in ourselves, we won’t get results. We must believe in ourselves first. Many people in government have never been in the private sector before. Many of the bureaucrats who have to write the rules don’t understand the private sector. So the private sector needs to convince governments of their needs and outline their contribution. There must be greater cross-fertilisation.”
He called on the diaspora, particularly African-Americans, to play a greater role in the upliftment of Africa. The latter were 30-million strong, he said, with huge political and economic power in the most powerful country in the world. He suggested they should increase their advocacy efforts and form a strong lobby to ensure that the US government formulated pro-African policies in support of NEPAD.
George Miseda, of Loita Capital Partners, also addressed financing issues. Development banks, he said, were generally “comatose” or ploughing money into projects that were generating only local currency. “The private sector can help governments ensure these problems are dealt with.”
Steve Godfrey, Director of the Commonwealth Business Council, asked how business could help NEPAD’s goals. “Of course business is not homogenous, or united in its views. But I think that there are some clear issues on which there is consensus.” Citing the December 2003 Commonwealth Business Forum in Abuja which brought together 800 business leaders from 34 countries, he said a number of main points were discussed which were pertinent to Africa.
First, was the compelling need to remove obstacles to the growth of economies - such as cutting red tape, reducing regulation, investing in training, tackling corruption – so African economies could become more internationally competitive.
Second, was investment in developing countries. While FDI does not ensure development it is necessary to establish viable economies. The private sector must be induced to play a key role in financing development in the poorest developing countries, he said. A key issue for emerging economies is capital suppression, not capital shortage. The key to boosting capital flows lies in freeing up capital values, which are artificially held down by regulatory and legal controls. This is frequently associated with weak fiscal and tight monetary policies, which result in high interest rates accompanied by unsustainable exchange rates and a crowding out of the private sector. Chronic fiscal deficits which disadvantage the private sector by causing high interest rates in the market place must be eliminated.
Third, better accountability and honest leadership. This has been a cause for particular attention in the corporate sector. A common basis for accountability and a code of ethics – applying equally to leaders in government, business both national and foreign, and indeed also in civil society is required at a national level. Corporate Citizenship and improved corporate governance are vital to the health of the overall business environment, encouraging investment, and improving the impact of business on broader socio-economic development.
Fourth, Information and Communications technology (ICT) which has the potential to advance globalisation in the interest of some of the poorest countries and communities. Bridging the digital divide is not just a slogan, it offers way to deliver services and opportunities that hitherto have been too expensive for the poorest and most remote people. In particular it can stimulate the informal and SME economic sector and create jobs and income.
Finally, trade. This could hardly be more important. It remains urgent to improve market access across-the-board, and this includes removing the often very high barriers between African and developing countries.
None of these points, said Godfrey, can be realised by business alone – only in partnerships between business and government to improve the overall environment. Many also require actions that unite national and international business operating in a country.
“The reform of economies and societies is a very long-term process. Progress needs to be measured against long term benchmarks, not short term political events, and this is a warning to those who seek instant successes for NEPAD.”
Godfrey said the setting up of some NEPAD Business Groups to marshal business participation in and support for NEPAD shows the way forward. “But even a cursory survey of the level of knowledge and information about NEPAD among the business community shows that is very low.” He listed the main challenges which needed to be addressed as:
The challenge for the NEPAD Business Group now is to find ways to strengthen the voice of national business in each and every country on the continent to ensure that reform is rooted at the national and sub-regional level. This work should be linked formally to the governance and economic governance criteria which NEPAD is developing as part of the African Peer Review Mechanism (APRM).
Reuel Khoza, chairman of Africa’s largest power utility Eskom and head of the NEPAD Business Group (South Africa) outlined the important role to be played by the private sector and by successful public-private partnerships. He added that the move from meetings to implementation could not be over-emphasised.
The SA NEPAD Business Group had 300 signatories to the NEPAD principles which included both national and transnational corporations, he said. They had committed to a number of objectives: developing best practice standards of corporate governance, including proper accounting and auditing procedures; further improving the effects of social corporate responsibility; and providing support to African governments in their efforts to acknowledge best practice. The group had developed four documents that translated the commitment made at the formation of the group into something tangible. They are the business convention on the elimination of corruption and bribery, corporate governance, accounting and audit practices and corporate social responsibility. He said the group was going to set up a Section 21 Company (not for profit) to run its affairs. To date its business had been done on a voluntary basis.
Business, he stressed, needed a stable environment in which to be able to leverage the opportunities offered by NEPAD. “Issues of co-operation are not only theory. These partnerships will lead to the provision of electricity throughout the continent,” he said, drawing on the successful experience of Eskom in the field of public-private partnerships. “We, as South African business, should be known less for what we say and more about what we deliver.”
Peter Ondeng, MD of the NEPAD Business Group in Kenya, told the conference that the group had been set up by the government of Kenya in September 2002 to co-ordinate the country’s participation in the NEPAD initiative. Chaired by the Minister for Planning and National Development, the NSC is made up a combination of senior government officials, captains of industry and leaders from civil society and academia.
In April 2003, the National Steering Committee established a national secretariat to implement its decisions and serve as the national focal point for NEPAD. A Chief Executive Officer recruited in April 2003, heads the Secretariat, an autonomous body established by an Executive Order. The specific duties related to this mandate are: to convene regular co-ordination meetings of the NEPAD reps in East African countries; to facilitate regular and frequent sharing of information and experiences among the participating countries and RECs; to organise regional forums for bringing together key stakeholders around the various NEPAD themes; and to co-ordinate with the NEPAD Secretariat in SA on issues of particular relevance to East Africa.
Ondeng said it was important for the Kenya Secretariat to narrow its scope in the medium term to a few specific measurable and achievable objectives. It is proposed that the Kenya initiative be guided by the following three medium-term objectives:
He said one of the sharpest criticisms that had been levelled against the initiative was that it was developed without the necessary consultations that would have enabled a broader ownership of the vision. “It is important that the future evolution of NEPAD be as inclusive a process as possible that would allow for active and popular participation and ownership. If NEPAD is to succeed as the new framework for Africa’s renewal, then the underlying determined “spirit” of the vision must become a common framework for all who yearn for the realisation of Africa’s renaissance.”
Dr Khalid Al-Masour, a lawyer from the US with Al-Mansour & Associates, spoke strongly of the need for Africa to align itself with globalisation. “Unless we understand the globalisation process, we are irrelevant.” Africa’s chances of catching up with the global economy were not good and grew increasingly unlikely every day. “On a scale of probabilities we are probably not going to make it.” He said time for Africa to catch up was running out. “International banks are withdrawing from Africa. That should tell you something.”
He said the world had already established rules of engagement and Africa needed to learn how to play. Africa, complacent after decades of aid, believed the world was still the same place. “We thought we had time to regroup as we had done before.” This mindset was potentially disastrous because the rest of the world had moved on, cognisant of its own survival. In addition, Africa had a poor skills base, little technology and did not even own most of its own natural resources. If it was to have any hope it needed to unite behind a common goal and NEPAD offered this opportunity. He said the Chinese, Koreans and other Asian countries had managed to build themselves into global players despite having been in much the same situation as African countries several decades ago. He said while China had a huge population, so did Africa but the latter had not managed to translate its numbers into a market. He ascribed the difference to Asian countries’ sense of discipline, focus and goal-driven behaviour. He suggested African countries exploit a common identity and lose the obsession with nationalistic behaviour and personal enrichment.
Al-Masour, too, suggested that African-Americans could make a bigger contribution with an estimated $5bn a year moving through their hands. He suggested they did not trust Africans as Africans did not trust them. It was time for the two groups to get to know each other.
Henry Castelnau, Delegate of the French Council of Investors in Africa (CIAN), said that although NEPAD originally captured the enthusiastic attention of the business communities in the North, there was now a growing scepticism about it.
“For decades, most of the African leaders have been state-economy minded. So, when 5 of them signed a document in the 60 pages of which, private business involvement was mentioned no less than 25 times, acknowledging that international aid cannot be effective without a proper involvement of private investment, the Northern business communities welcomed that true conceptual breakthrough in Africa.
“Alas, that original vision was soon damaged by one out-of-the-blue piece of news: NEPAD needed at least $64bn. There was, no less suddenly, a proliferation of projects, all stamped NEPAD, which required public funding, in flagrant contradiction with the specific philosophy of NEPAD. The North interpreted this as a new attempt at raising aid funds from its governments, therefore from its taxpayers. This frightening figure seemed to have raised in many circles the spectre of a new bureaucracy, that of NEPAD. For our part, we believe that several technical functions of the NEPAD Secretariat should be entrusted to the private sector so that the Secretariat remains a lean and mean machine. We are also of the opinion that the already large number of meetings, conferences, seminars, and the like, should be drastically reduced.”
“NEPAD furthermore seems to lose its focus when it pretends to be implemented by and over the whole African continent. We believe that NEPAD must be gradually implemented by small groups of countries which have in common their commitment to all NEPAD’s criteria and objectives. African governments cannot expect new investments if they do not implement good governance, starting with a respectful handling of their collaboration with their own private sectors, not to mention their foreign investors. A good starting point is the development of Public – Private Partnerships. It should be obvious that the best champions of the NEPAD cause are our very own private sectors, the companies established in Africa, be they indigenous or joint ventures between these and foreign investors.”
He called for the harmonisation of business law in Africa. Such a project has already been signed by 16 Francophone countries.
Aziz Dieye, Partner in Charge of Cabinet Aziz Dieye in Senegal, said with the advent of NEPAD, African countries needed to choose the priority areas, the preferred judicial and legal models, and to prioritise sectors and invite investors accordingly.
Dieye outlined several potential problems and challenges. These included whether priorities in terms of sectors were to be imposed and whether providers of capital could choose certain projects over others despite NEPAD priorities, what the guarantees were offered to investors in NEPAD projects and what entity would offer such guarantees; whether institutional instability could co-exist with a conducive enabling environment; what assurances could be given that African economies would not continue to be exporters of profits to other countries; and how to harmonise the policies, rules and laws governing investment on the continent.
He offered the following methodological approach:
Ben van der Ross, soon-to-retire head of Business Unity South Africa, a collaboration of several major business organisations, said integration of business organisations was not an easy process and any mergers, or formal collaboration, were usually proceeded by extensive processes of negotiation over a long period of time. “This is a process that we have just gone through in South Africa, and some of the lessons we have learned could well assist employers on the continent in coming together to participate in NEPAD.”
In the past year in SA, two new business organisations have been born – Business Unity SA (BUSA) and the Chambers of Commerce and Industry South Africa (Chamsa) – in an atmosphere of trust and co-operation that was probably unprecedented in the history of employers’ organisations in the country. Business South Africa (BSA) and the Black Business Council (BBC) – which have merged to form BUSA - will cease to exist at the end of 2003, while the four big national Chambers will begin working together.
“We believe BUSA can act as a driver of economic growth and job creation by influencing policy in an effective and co-ordinated way. It can help to improve South Africa’s competitive edge by creating certainty in policy-making and stability in the legislative environment. So too, in an increasingly globalised world, a strong business voice can help to promote South Africa more effectively abroad so that we reduce the economy’s vulnerability to volatile portfolio investment by attracting more long-term foreign direct investment. Importantly, it can address the perceptions that make international investors cautious about emerging markets and increase South Africa’s access to international financial flows. There is no reason why these challenges can’t be translated into goals for employers on the African continent.”
“Disunity in South African business organisations had its roots in our past. Organisations operated on racial lines, with separate representation for black and white business people. It is as though, for a very long time – far too long – black business and white business were driving in different cars along different roads. Recently, though, we both reached the same intersection and had to look very carefully at the route we want to take in the years ahead. We realised that we simply could not keep on travelling down the same roads to the same places just because they were familiar and secure. We had to search our map books for a new road to lead us to a different destination. Most importantly, we had to agree to travel there together.
“This, perhaps, is the key lesson from South Africa’s business organisation unity processes that can be learnt by organisations continentally. What we need to do as employers on the African continent is to mobilise stakeholders to work together to achieve participatory and consultative processes of policy-making and implementation. Admittedly, the challenges faced by employers on a continental scale are larger and more complex than those in any individual country, but they are not so very different that the South African experience cannot serve as a broad template for continental employer interaction with NEPAD.”
“It should be recognised that employers’ organisations throughout the continent are already organised, albeit in particular spheres of activity. The Pan-African Employers’ Organisation (PEC) is a continental body comprising the most representative employer organisations in African countries. While the PEC might not yet function at its optimal potential it certainly provides a firm foundation for intra-continental discussions by employers. It also maintains extremely close linkages with the International Labour Organisation (ILO) and the International Organisation of Employers (IOE). There are regional groupings and the International Chamber of Commerce (ICC), with its head office in Paris, France, is the voice of world business. As with the PEC and the regional African employers’ groupings, there is possible scope to make use of the ICC and its structures in co-ordinating African inputs into NEPAD. (It is already a member of the NEPAD Business Group).
We should try to re-invent the wheel where employer involvement in NEPAD is concerned. Rather, we should try to use the existing structures to achieve this end. In particular, we need to maintain open channels of communication through consistent dialogue by: sharing information on areas of common interest; pooling resources and expertise where appropriate; developing partnerships; using our existing global networks to mutual advantage and benefit; improving the integration of related activities; and conducting joint activities where these are to our mutual benefit.
Dr Kalu Idika Kalu, Chairman of consulting firm BGL Ltd and former minister in various Nigerian governments in the portfolios of transport, finance and national planning, looked at how resources could be mobilised for NEPAD. He suggested that NEPAD needed to emphasise reliance on primarily domestic resources to fund the programme and ensure maximum self-reliance in developing the regional economy.
Domestic sources of funds for NEPAD include:
His suggestions were complemented by the mention earlier in the conference of a proposed African Renaissance Bank. The proposal, made by Dr Babacar Ndiaye, Life President of the African Development Bank and Honorary Chairman of the ABR, proposed a capital base of $1bn to be offered for subscription as follows: 10% to African governments or institutions; 50% to the African private sector; and 40% to international private investors.
HE Joan Guriras, Owner and Director of JWG Advertising, Namibia, said there were concerns about perceptions that NEPAD was a done deal as it had been done outside the realities of Africa. Half the continent – women – had not been consulted widely in drawing it up and the programme reflected male-biased economic and development priorities. Women, in particular, who largely occupied the ranks of SMEs, were an undervalued resource, she said, and should be more widely used in developmental planning.
She said there was not adequate buy in to the concept throughout society unlike in a country such as Malaysia where everyone from the head of state to street cleaners know what the government’s economic policy was about. “There is a failure of ownership.” She said multinationals and other foreign investors made their decisions on the basis of how Africa could facilitate the realisation of their goals, not those of Africa. “As a result, they should not be relied on as mechanisms of social change.”
CEOs in Africa, while addressing shareholder concerns, also had to plough back more than they did currently, into the continent. “We need a greater relationship and partnership in assisting governments to achieve some of their objectives. Financial institutions in Namibia are now realising returns of more than 23% which is not the case elsewhere. This tells me that shareholders are getting more than they should and communities less than they should. Business people need to think of development as more of a long-term plan than they do.”
Professor Ibrahim Gambari, giving the dinner address, brought greetings from UN Secretary General Kofi Annan who, he said, had strived to involve the private sector and civil society and mainstream their views and concerns in the activities, goals and objectives of the UN.
“His initiatives in establishing the Global Compact in 1999, to provide an overall framework for co-operation between the UN and the private sector, as well as his Global AIDS Health Fund, underscore his belief in public-private partnerships for the good of all. He has been at the forefront of efforts to demonstrate that development goals are achievable if the business community and the private sector as a whole dedicate themselves to making profits as well as to promoting the well being of the people and human security in the countries in which they operate.”
Gambari said the most promising vision and programme for ending the paradox of a rich continent with poor peoples is NEPAD, an initiative that needed to be complemented by both domestic and foreign investment. “Indeed, the economic reforms implemented in Africa during the past decades were aimed at raising the level and efficiency of investment. Hence, through the divestiture of activities which the private sector can do better, governments have been able to reduce waste and gain the fiscal space needed for greater investment in the social sector and infrastructure. It is in this connection that the role of the private sector is of critical importance because, in a real sense, a true and growing private sector would enhance competitive forces and promote competitiveness.”
NEPAD, he said, was a process that had generated enthusiasm and international support from bodies such as the UN General Assembly, the G8, the European Union, TICAD etc. In its aim to address the major obstacles to Africa’s development, NEPAD is thus not only a programme for the economic and social transformation of Africa, it was also a vision for political renewal. Therefore, a symbiotic relationship was emerging whereby NEPAD held much promise in terms of increased investment in Africa while at the same time, the implementation of its programmes and projects would also benefit from such investments. “This is not to suggest that NEPAD by itself has erased or will eliminate all the constraints that have hindered investments in Africa”.
The obstacles to ending problems of investment in Africa are well known. Key among them are the absence of peace and security in a number of African countries; weak or inadequate infrastructure, a lack of sound legal and regulatory frameworks and problems around the enforcement of contracts. NEPAD programmes and priorities, especially in the economic and social sectors, respond to many of the constraints to private investment and public-private partnerships. The challenge, of course, is in the implementation of these programmes, which will depend on the commitment and actions by African governments as well as on private sector investment, both domestic and foreign.”
Prof Gambari said that despite the modest increase in ODA to Africa in the past two years from $17.7bn to about $18.61bn in 2002 (after a sharp decline in the 1990s), and even if the deadlock in the WTO and Cancun were broken and access for African goods into markets of the developed countries is enlarged significantly, the challenge for Africa would still remain increased production and productivity. The current low level of goods (especially industrial) and services must be reversed. Increased production to meet the demands for consumer goods by the growing African population and for export must become a major preoccupation for the continent. The private sector also needed to invest more in infrastructure and in the production of goods for domestic consumption and export. “But for the African private sector to rise to this challenge, it must transform itself into a vibrant, pro-active force, drawing upon its own capacity building and making greater investment in technical and technological skills.”
“In an era of globalisation, the world has been witnessing a high level of capital mobility. However this mobility has been towards countries with the greatest maximum returns. Unfortunately, with the exception of the sector dealing with extractive industries, the global capital mobility has been marginal in the case of Africa. African governments must take specific actions to attract foreign and even domestic capital, including the establishment of market exchange rate mechanisms, effective legal frameworks, efficient financial institutions and better and predictable policy incentives. These efforts must be complemented by those of the private sector.”
“Multinational corporations (with rates of return reportedly higher than those of other regions) should be encouraged to form partnerships with the indigenous private sector on the continent. Such a partnership could take advantage of the Enterprise Free Zones while also taking industries to the hinterland of African countries, as economic conditions permit.
Such public-private partnerships would enhance the absorptive capacity of African countries for foreign capital and to control the diversion of resources, or capital flight. In this regard, it is ironic that Africa, which received the least share of FDI and perhaps needs it the most for socio-economic development, is the one with the highest percentage of its private wealth being held outside the continent. According to President Wolfenson of the World Bank, “37% of African private wealth is held outside Africa, whereas for Asia the figure is 3% and for Latin America it is 17%” (Africa’s Moment, Washington DC, 1998). This situation must be reversed.”
Africans, he concluded, had to lay the foundations for a tripartite African Compact including NEPAD and the Public and Private Sectors, an alliance that can engage with the international community.
The vote of thanks at the conference was given by Samuel Dossou-Aworet of Petrolin, one of the conference sponsors and an ABR member. He said the conference had illustrated the willingness and determination of all stakeholders to:
We therefore invite you to convey the messages of hope born out of this gathering to your respective countries, to all the fabric of African society: men and women of good will, the youth, the African entrepreneurs, the decision makers in the public and private sectors; civil society. We must all unite and mobilise our strengths in the implementation of the NEPAD programmes and to act as a catalyst for the development and prosperity of Africa.
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OFFICIAL SUMMARY OF EVENTS
8 December 2003
Executive President, African Business Round Table Conference
December 8 2003
· Dr Babacar Ndiaye, Life President African Development Bank and Honorary Chairman African Business Round Table
· Alhaji Bamanga Tukur, Executive President, African Business Round Table and Chair, NEPAD Business Group
· Prof Ibrahim Gambari, UN Under Secretary and Special Adviser on African Affairs to UN Secretary General Kofi Annan
· HE Alpha Konare, Chairman, African Union Commission
· Mr Steve Godfrey, Director, Commonwealth Business Council and International Representative NEPAD Business Group
· Ambassador Isaac Aluko-Olokon, NEPAD Steering Committee Member and Head, Nigeria NEPAD Group
· Mr George Miseda, Vice President, Loita Capital Parnters, East Africa
· Mr Cader-Sayad-Hossen, VP, Association of SADC Chambers of Commerce & Industry
· Mr Reuel Khoza, Chairman of Eskom and head of the NEPAD Business Group (South Africa)
· Mr Peter Ondeng, MD of the Kenya NEPAD Business Group
· Dr Khalid Al-Mansour, Al-Mansour & Associates, New York
· Mr Henry Castelnau, Delegate, French Council of Investors in Africa
· Haiko Alfeld, Director – Africa & Middle East, World Economic Forum
· Mr Aziz Dieye, Partner in Charge, Cabinet Azis Dieye, Senegal
· Mr Ben van der Ross, Head of the Interim Secretariat of Business Unity South Africa
· Dr Kalu Idika Dalu, Chairman, BGL Ltd and former Nigerian Minister of Finance, Planning and Transport
· HE Joan Guriras, Owner and Director of JWG Advertising, Namibia
· Mr Admassu Tadesse, Senior Adviser, Development Bank of Southern Africa
· Mr Lansana Kouyate, Former Secretary of Ecowas
· Better co-ordination. The private sector liaison set up at the NEPAD Secretariat was a good start but more finance and capacity was needed, which the private sector could provide. The office and NBG need to provide a one-stop source of information of NEPAD projects, and provide information to businesses – both individual companies and business associations;
· A communication and “engagement” programme - not only materials and information, but actual dialogue to explain what NEPAD is, and how business can participate. International bodies are willing to help. The CCA in Canada asked me to convey its willingness to support such capacity building, and the ICC secretary General, when she spoke on our behalf at the CCA Conference on Africa with President Bush, made the point that strengthening national business groups’ capacity to partner government in reform should be the main priority of NBG. Working with diaspora groups in the OECD countries is an important resource as there are over 5 million professionals of recent African descent in Europe and North America;
· Measures to remove obstacles to investment and growth at a national and regional level. We need to develop practical projects which expand on the many initiatives which are fragmented, and get the support of major investment funds – the Bank and IMF, donors – for an effort led by African business.
1. Broadened ownership of the NEPAD process in Kenya and the region.
2. Unlocked investment opportunities in regional priority projects.
3. Participation by East African countries in the African Peer Review Mechanism (APRM).
· Clearly defining who the different stakeholders were and how partnerships should be formed and conducted with respect to private sector, governments, foreign investors etc. with the emphasis on creating a domestic vision, rather than an external one, and requiring governments to be more than guarantors;
· Setting out precise rules determining the public actors, the private actors, the roles and responsibilities for each partner, their credibility, the level of respect for the commitments made, the establishment of trust the the existence of adequate means or resources;
· Adopt a common definition of the rules of the game – who does what, when to do it and how to do it – with proper follow up mechanisms and an implementation schedule.
· Governments should not try to take control of private sector activities as “intruders” or “trespassers” through the intermediary of NEPAD. The economy needs to be in the hands of the private sector.
the public sector (savings from budgetary appropriations, capital receipts etc.);
private sector funds (from private banks and other financial institutions through special financial instruments);
and direct fund mobilisation by NEPAD through the issue of bonds and other capital market instruments guaranteed by member governments and targeted at specific projects within the sectoral work priorities of NEPAD in one member country or joint projects within the region. In terms of the latter, this could include, typically, power sector projects (hydro, thermal, generation, transmission and distribution, and marketing); communications; joint large-scale industrial, manufacturing and agri-business projects; steel and aluminium projects; shipping, trans-African road and rail projects; air transport, postal and telegraphic projects and development of minerals.
· Join forces with the private sector and governmental institutions to pull Africa out of marginalisation;
· Translate into concrete actions the trust of the African Union in the African private sector and its commitment to work for the reduction of handicaps to the promotion and the development of the African private sector;
· Replace the distorted image of a doomed Africa with the image of an Africa that fights and wins;
· Set up government policies that are conducive to
- the harmonisation of the rule of law throughout Africa
- the free movement of goods and people (why not create an African passport even if it is to be given out selectively at the beginning)
- the enhancement of responsibility for African business people who, by their active engagement, deserve to be partners of choice of the African Union and NEPAD
- the development of road, aeronautic and maritime infrastructures as a catalyst for the creation and development of regional companies and inter-African commerce
- the development of financial institutions particularly, with priority being given to the creation by the African and international private sector of the African Renaissance Bank to meet the needs of the African private sector
- the creation and continuous updating of a human resources data bank which would also keep track of the talents of the African diaspora
- the development of incentives ensuring the security of goods and capital in order to curb, if not stop, the drain from Africa
- the development of pan-African telecommunications infrastructure to promote inside and outside the African continent, particularly at the heart of the diaspora, an authentic African culture and a positive and dignified image of Africa
- attract and channel the capital and expertise of the African diaspora for the development on the African continent.
Sharon Stocks
Africa@Work
Tel: +27 11 234 9338 - Fax: +27 11 234 9337
Henry CASTELNAU
Delegate for Southern Africa
CIAN
Conseil Français des Investisseurs Français en Afrique
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