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Africa Progress Panel

Read the Africa Progress Panel's (APP) new fortnightly Bulletin. It is intended to provide Panel members, their staff and key stakeholders with a snapshot of the issues and events of central concern to the APP.

Africa and the credit crisis

In his article this week, BBC journalist Martin Plaut, asks the question: Can Africa gain in the credit crisis? Banks are far less exposed than their Western counterparts, but depressed international demand is likely to impact on economic growth, according to the IMF.

But fundamentally, as Plaut argues, better economic policies and democratisation mean that, "once the dust settles from the current credit crisis, the prospects for African growth look distinctly promising".

Former President of Botswana wins the Ibrahim Prize for Achievement in African Leadership

Kofi Annan announces today the former President of Botswana as the winner of the Ibrahim Prize for Achievement in African Leadership.

Festus Gontebanye Mogae, the former President of Botswana, has been announced today as the winner of the 2008 Ibrahim Prize for Achievement in African Leadership. Established to recognise and celebrate excellence in African leadership, the Ibrahim Prize is the largest annually awarded prize in the world, consisting of US$5 million over 10 years and US$200,000 annually for life thereafter. The Foundation will consider granting a further $200,000 per year for ten years towards public interest activities and good causes espoused by the Laureate.

Announcing the 2008 Ibrahim Laureate in front of an audience of London’s African diplomatic community, civil society representatives and the media, Kofi Annan, the Chair of the Prize Committee, said:

“President Mogae’s outstanding leadership has ensured Botswana’s continued stability and prosperity in the face of an HIV/AIDS pandemic which threatened the future of his country and people.”

Kofi Annan went on to praise President Mogae’s stewardship of the Botswanan economy. He said:

“Botswana demonstrates how a country with natural resources can promote sustainable development with good governance, in a continent where too often mineral wealth has become a curse.”

The Ibrahim Prize has been established by the Mo Ibrahim Foundation, launched in October 2006 as an initiative to support great African leadership. The 2008 Ibrahim Laureate was selected by the Prize Committee of six eminent individuals. The Prize Committee assesses democratically elected former Executive Heads of State or Government from sub-Saharan African countries who have served their term in office within the limits set by their country’s constitution, and have left office within the last three years.

The announcement of this year’s Ibrahim Laureate comes a fortnight after the publication of the 2008 Ibrahim Index of African Governance in Addis Ababa. Assessed against 57 criteria, the Ibrahim Index ranks sub-Saharan African nations according to governance performance. The Ibrahim Index is one of a number of independent and authoritative sources which the Prize Committee uses in its deliberations.

On hearing the outcome of the Prize Committee’s deliberations, Mo Ibrahim, the founder of the Mo Ibrahim Foundation, said:

“I am delighted that the Prize Committee has selected President Mogae as the second Ibrahim Laureate. He is another example of outstanding leadership from the African continent. I offer President Mogae my warmest congratulations and best wishes.”

Global Competitiveness Report shows encouraging progress for Africa

The World Economic Forum’s Global Competitiveness Report, released on the 8^th October adds to the picture of an improving climate for business in Africa.  In sub-Saharan Africa, South Africa (45), Botswana (56) and Mauritius (57) feature in the top half of the rankings, with several countries from the region measurably improving their competitiveness. Côte d’Ivoire (110), Ghana (102) and Malawi (119) join this year’s ranking for the first time.

The United States tops the rankings, followed by Switzerland, Denmark, Sweden and Singapore.

The survey is designed to capture a broad range of factors affecting an economy’s business climate. The report also includes comprehensive listings of the main strengths and weaknesses of countries, making it possible to identify key priorities for policy reform.

Business and governments review investment climate progress at UN meeting

To coincide with this week’s UN High Level Meeting on Africa’s Development Needs, the UN Office for Partnerships and Business Action for Africa joined forces to organise a meeting to gauge progress on improving Africa’s investment climate.

A favourable investment climate is vital for economic development and African policy-makers recognise that obstacles to both domestic and international investment are seriously impeding Africa’s development.

This event, chaired by Bert Koenders, Minister for Development Cooperation of the Netherlands, served as an opportunity for heads of African governments and business leaders to explore and discuss how the business and investment climate can be improved through effective public-private cooperation frameworks.

Amir Dossal, Executive Director, UN Office for Partnerships, noted that encouraging regional growth is threatened by rising food and oil prices and instability in financial markets. At a time of global economic insecurity, Africa needed a healthy and robust private sector to help maintain productive economies and to generate greater levels of investment, trade and job creation.

Bert Koenders, Minister for Development Cooperation of the Netherlands, when framing the discussion, pointed out that business needs predictability, stability and an efficient regulatory and legal infrastructure to thrive, in addition to more regionally integrated trade infrastructure.

Comments from speakers focused around five themes:

I) Business has an important potential role to play in tackling poverty and accelerating progress towards the MDGs

Jeffrey Sturchio, Chair of Business Action for Africa noted that it is increasingly recognised that the most powerful contribution that the private sector can make to development is to do business responsibly and successfully through core business activities: through products and services, and the opportunities created for employees, suppliers, distributors, and local communities. A tangible illustration of this point is provided by data that shows Foreign Direct Investment to developing countries reaching a record $536 bn in 2007, 20% up on 2006 – compared to total Foreign Assistance by donors declining by 8.4 % to $103 bn in the same year.

II) Getting the investment and business climate right is key priority
In addition to creating strong and transparent governance standards, the need to streamline complex business regulation, accelerate regional trade integration and improve physical infrastructure were also identified as key drivers for development by Louis Michel, European Commissioner for Development and Humanitarian Aid.

A number of success stories were cited by Omari Issa, Chief Executive of the ICF, demonstrating that progress is being made. For example, as a result of work undertaken by ICF to improve efficiency and reduce the cost of doing business, it is now possible to register a business in Rwanda in 48 hrs – it had previously taken considerably longer. In addition, to make it easier to access finance in Rwanda, Burkina Faso and Sierra Leone, ICF is working to introduce land registration procedures to enable owners to use their land as collateral. ICF has also established programmes to help improve the efficiency of business legal procedures in Zambia and Tanzania, to improve customs administration in East Africa and Senegal, and also to help tackle counterfeiting and piracy.

III) Investors are responding to concerted reforms and innovative problem solving approaches

During the session, examples of successful partnership based projects and the growing attractiveness of the region for investors included Seacom, a venture that involves the laying of a new fibre optic cable that will deliver significant increases in broadband internet capacity to the region (up to 50% increased capacity). Bruce Wrobel of Sithe Global Power pointed to the fact that the project took only 12 months to go from concept to finance, with a further 18 months to implementation, with cable laying starting in June 2009.

Another example of a successful partnership based approach is the manufacturing of mosquito nets in Tanzania, provided by Hiromasa Yoneura, President and CEO of Sumitomo Chemicals. As a result of bringing together government support, local entrepreneurial flair and innovative cutting-edge technology, 10 million nets / year are currently being manufactured, which has also created jobs for 3,200 local people. The project will expand to 19 million nets / year by the end of 2008.

IV) Small scale business and agriculture key priorities
It was noted that the private sector in Africa is largely made up of small scale businesses, largely operating in the agricultural sector. Amos Namanga Ngoni, President of the Alliance for a Green Revolution in Africa, identified increasing agricultural productivity as key to poverty reduction and ensuring food security. Currently, despite the fact that 70% of the population is in the agricultural sector, only 4% of government budgets and 4% of Official Development Assistance is channeled in to supporting agriculture. There is a need for governments and the private sector to collaborate to encourage greater investment in improving agricultural productivity, through greater access to fertilizers and pesticides, in addition to providing more inclusive financial services to help farmers mitigate against the risk of uncertain weather patterns and access financing.

V) Partnerships offer the best way to make progress
It was noted that given the scale of the challenges, the need for collective action through public private partnership approaches was critical. The growing number and variety of partnerships – in areas as diverse as governance reform, water sustainability, agricultural productivity and human development and healthcare - demonstrate that it is increasingly possible to deliver successful economic and development outcomes.

Record breaking year for regulatory reforms in Africa

The World Bank’s Doing Business 09 Report, released today makes encouraging reading for policy makers, businesses and investors looking for signs of an improving business climate in the Africa.

These countries should be congratulated and encouraged to renew their efforts in making their countries easier places to do business – for companies large and small.

The report tells us that Africa had a record breaking year for regulatory reforms that make it easier for companies to do business. 28 countries completed 58 business-friendly reforms and three of the world’s top 10 reformers of business regulations are in Africa this year: Senegal, Burkina Faso, and Botswana.

Senegal made it easier to start a business, register property, and trade across borders.

Burkina Faso introduced a new labor code and reforms for registering property, dealing with construction permits, and paying taxes.

Botswana cut the time to start a business, facilitated trade, and strengthened investor protections. Postconflict countries, Liberia and Sierra Leone, along with Rwanda, were among the regions’ most active reformers of business regulations.

Mauritius moved up to 24 in the global rankings on the regulatory ease of doing business and continues to provide inspiration for reform and good practices to other economies across Africa. The runner-up in these overall rankings is South Africa at 32, followed by Botswana at 38.

Accelerating regulatory reform, alongside improvements to the overall investment climate and governance standards show us that Africa is laying the foundations to ensure that economic growth can be both sustained and more widely shared.