Talking business in Ghana

I co-chaired the EU-Africa Business Forum in Ghana recently (21-22 June), an honour I was less than sure about after the largely declaratory inaugural meeting in Brussels last November. But we tasked the four working-groups (trade, entrepreneurship, infrastructure and ICT) to come up with deadlined deliverables and the results (fed into the AU Summit) were not bad.

Given the political profile - lots of AU and EU people there, led by their respective Commissioners Maxwell Mkwezalamba and Louis Michel - the Forum has the potential to be quite a good way of getting across business concerns (I was for example able to make various interventions in support of more efficient intra-regional trade flows)... though, having now done three big meetings across Africa in three weeks, I am also mindful of the danger of over-stretch/overlap/dilution.

Trading insults: Doha disappoints again

There was a depressing sense of déjà vu to Thursday’s collapse in the Doha trade talks. The meeting of the so-called G4 – the US, EU, India and Brazil – was widely seen as a last chance to achieve the target of getting a deal by the end of the year.

Insults and recriminations quickly followed. The US and EU pointed the finger at Brazil and India for not moving far enough on opening up access to their manufacturing markets. Meanwhile Brazil and India argued that the US and EU were demanding too high a price for what were unacceptably unambitious reforms to their trade-distorting farm policies.

It is easy nowadays to become numb to bad news on trade talks. Last July's suspension of the trade talks was a particular low. The early optimism after the trade round was subsequently resumed seems to have been replaced with a tangible negativity about the prospect of the Doha talks living up to their much-hyped objective of being the first-ever “development round”.

But perhaps the greatest danger right now is fatalism. The fact is that a deal is tantalisingly close, and still possible. For the World Trade Organisation’s Director General Pascal Lamy, while a convergence of views among the G4 would have been “helpful”, it was not “indispensable”, and ultimately some, including Oxfam, are happy the process will now revert to a broader discussion among the WTO’s 150 members.

Staying focused and optimistic is vital, if only because failure would be disastrous. Trade is a far more powerful lever for poverty reduction than aid could ever be.

Above all, as negotiators try and find a way forward in the corridors of Geneva, they should remember that business (despite what a vocal minority may say) is overwhelmingly supportive of a deal for Africa. The US and EU should also bear in mind that the vast majority of businesses in their countries recognise the importance of a sound deal for more developed economies as well.

Straight talking at the WEF

The 17th African World Economic Forum kicked off on Wednesday with an opening plenary styled a “conversation” between two Presidents, an aspiring President, a Vice President and a lonely CEO.

Our hopes were raised by Tokyo Sexwale, the moderator, who assured us that this would not be another talk shop, but quickly dashed by President Mbeki who told us that there was nothing new to say about the challenge of Africa.

But this didn’t deter the energetic octogenarian President of Senegal, Abdoulaye Wade, who described the success that had been achieved by his country without the benefits of oil, minerals and other resources. The secret of success being “good friends with lots of money”!

This contrasted with the underlying message from President Mbeki who described the capacity challenges of the continent and posed the question – who will pay? Certainly not the World Bank if Obiageli K. Ezekwesili’s speech was anything to go by. Instead of providing solutions Ms Ezekwesili posed a long series of questions. One of these was how to get the private sector to come to the party and how to get business to recognise Africa was not one country. Cynthia Carroll, the new CEO at Anglo American, was left to answer on behalf of business and showed how hard it is for a business person to compete on a stage with politicians. She stressed the need for partnerships, best practices, good governance and flexibility of approach.

Tokyo Sexwale moderated the event with great charm, energy and humour. However it was clear his thoughts were on other things when instead of referring to the African continent he referred to the African National Congress.

Outside the plenary the tone of the meeting was very much one of quiet determination. Growth of 5-6% showed that Africa was doing the right things and that the right policy choices were being made. Governance was improving and individuals such as Mo Ibrahim vigorously enforced the point that Africa must achieve the same standards as the rest of the world in this respect. There was an attempt to tackle the difficult issues with a BBC debate on Zimbabwe which failed to really penetrate how the current problems could be resolved.

The conference followed the lead of Davos with sessions on climate change, thankfully without the hysteria that accompanied this topic in Switzerland and there was a particular focus on agriculture.

All in all while this year’s Africa WEF seemed to lack the energy and excitement of previous year (I’m sure there were less people in the bars at the Arabella Sheraton), it was more than replaced by a realism and steely determination to ensure that progress on the continent continues.

G8 Summit: a total farce?

For Oxfam it was a failure to deliver, and for Bob Geldof “a total farce”. But was last week’s G8 outcome for Africa really that bad? For sure, little of the money announced for Africa was new, and the restated resolve by G8 leaders to meet their 2005 commitments comes against a backdrop of painfully slow progress on delivery.

But the NGO reaction – by focusing on money - misses one of the most significant achievements of this G8. That is, to a far greater extent than previous G8 Summits, the world leaders have recognised that – as in every economy – it is growth and private enterprise that offers the best long-term opportunity for making poverty history.

The most striking finding of a World Bank survey of 60,000 poor people was that the vast majority see self-employment, starting a business or getting a job as offering the best prospects for escaping poverty. African’s, themselves, are sick of hearing their continent being talked about in the language of charity, poverty and despair, urging instead for the focus to be shifted towards creating the conditions for enterprise, trade and employment.

The business community made this point clearly in advance of the Summit (in a letter to Chancellor Merkel, at the Africa Business Forum 2007 and in the publication “A Path to a Prosperous Africa”). It is therefore refreshing, though clearly less headline-grabbing, that the G8 framed its discussion on Africa within the topic of “Growth and Responsibility”.

The emphasis, though lacking many detailed commitments, was on the elements needed to stimulate growth, enterprise and investment: good governance, with a clear statement that the Africa Peer Review Mechanism “can serve as an effective tool only if its results are recognized and implemented” (a swipe at South Africa’s recent rejection of APRM’s recommendations?); support for the Extractive Industries Transparency Initiative (EITI) and an extension of its transparency principles to other sectors “where appropriate”; a reaffirmation of support for the Infrastructure Consortium for Africa; support for African countries’ efforts to improve the business climate, including through initiatives such as the Investment Climate Facility; and activities to strengthen financial markets and enhance the effectiveness of remittances. Special mention is also made of agriculture, with the G8 urged to increase support for the Comprehensive Africa Agriculture Development Programme (CAADP). Interestingly, the statement also mentions that the G8 Presidency is “planning a business leaders' campaign, including an investment conference aimed at improving Africa's image as a ‘continent of opportunity’”.

The big outstanding issue is trade, and on this the G8 made some positive noises about their commitment to pushing for a deal by the end of the year, alongside a boost for Africa’s capacity to trade – which was as much as could be expected at this forum. But of course unless this is followed through, no amount of aid will be enough to offset the damage that a collapse in trade talks would cause.

Clearly, accelerating delivery on their Gleneagles aid promises is critical. But recognising that these aid commitments are only part of the story is as important – and it is one clear success that the G8 has recognised this fact.

Africa Day: looking to tomorrow

London has been having a week-long party to celebrate Africa Day (25 May). In many respects, there is real cause for celebration. Much has been achieved by African governments and the international community. As a group of businesses with a deep understanding of the content, we in Business Action for Africa are optimistic about the prospects for many countries in Africa.

The latest edition of the Africa Economic Outlook, launched last week, paints a rosy economic picture: Africa grew by 5.5 per cent in 2006 – well above the long-term trend and for the fourth consecutive year, and this year it is expected to reach a healthy 5.9 per cent. To at least some extent, this reflects improved governance, investment climates and economic policies in many countries.

At a presentation at a Chatham House / CAPPS event last Friday, a senior representative of the NEPAD African Peer Review Mechanism (APRM), pointed to the leadership that has been shown by African Government’s to enhance governance. To date, twenty-six countries have signed up to the APRM and the country review process is underway in twelve. Ghana, Rwanda and Kenya have completed their reviews and have agreed to recommended plans of action.

And a third reason to be positive was set out in the most recent Doing Business Report of the World Bank. Africa is now one of the fastest reforming regions in the world, with two-thirds of African countries making at least one noteworthy reform in 2006 – helping create a better environment for businesses, small and large, to thrive and hence lay the basis for long-term growth and poverty reduction.

Fourthly, at a time when one of the engines of economic growth is high commodity prices, there is seemingly increasing uptake of the Extractive Industries Transparency Initiative (EITI) on the part of many mineral-dependant African economies. It may be that the embezzlement and misuse of revenues which characterised past commodity booms in some African countries, will not be repeated – or at least not to the same extent.

But amidst the celebrations, it is important to take a sober look at what more needs to be done. Although it has improved, growth is still some way short of the annual 7 per cent needed to meet the Millennium Development Goals. It remains to be seen what the follow-through will be from the APRM process; and how many of the countries who claim to be implementing EITI pass muster when the validation process is activated later this year. Moreover, while it is certainly getting easier to do business, Africa as a whole remains the region with the highest regulatory obstacles for would-be entrepreneurs and corruption remains widespread.

As for the international community, G8 Governments meeting shortly in Heiligendamm (June 6-8) must get back on track to deliver on past aid commitments and they must do more to stimulate growth and investment. Above all, the world’s governments – particularly the in the EU and the US – must reach a deal on the Doha international trade negotiations. Failure – driven by pressure from a narrow set of vested interests – would be a real blow for African countries and their people and for the world economy. Business should be active in pushing our political leaders to make the small compromises that now are needed to achieve a deal.

A breath of fresh air: a business solution to Indoor Air Pollution

This weekend the United Nations’ main environmental body hit the headlines when Zimbabwe was controversially elected to its chairmanship.

Zimbabwe’s leadership of the Commission on Sustainable Development (UNCSD) has outraged most western countries but was backed by many developing world countries.

Wrangling and bizarre (to say the least) outcomes of UN votes are nothing new. In fact, they are almost to be expected. That these organisations exist to help the world’s poor and the environment is sadly forgotten amongst the infighting and point scoring of international diplomacy.

One positive outcome, however, from the 15th session of the UNCSD was the publication of the first-ever country-by-country estimates of the impact of Indoor Air Pollution (IAP).

More than three billion people depend on solid fuels including biomass (wood, dung and residues) and coal for cooking and heating. The smoke from these stoves causes the premature deaths of more than 1.5 million people a year, according to the World Health Organisation (WHO).

This makes IAP one of the 10 most important global threats to public health – yet its profile compared to TB, AIDS, Malaria and other killers is extremely low. This is partly because of a lack of data. These new figures are the first time individual country estimates have been published. They are therefore to be warmly welcomed.

They reveal 80% of worldwide deaths from indoor air pollution occur in just 11 countries -- Afghanistan, Angola, Bangladesh, Burkina Faso, China, Congo, Ethiopia, India, Nigeria, Pakistan and Tanzania.

China and India lead the incidence of IAP with an estimated 400,000 people dying prematurely each year in each country. That's equivalent to two superjumbo jets a day crashing in each country and killing every passenger.

The problem is just as bad across African countries taken together with 79,000 dying in Nigeria, 56,000 in Ethiopia and 47,000 in the Democratic Republic of Congo alone. And for every death, dozens more will suffer from illnesses caused or exacerbated by IAP such as TB. That raises the number of women and children silently enduring serious health problems every day from IAP to the tens of millions and takes this into the realms of biblical plagues.

The world should pay more attention. Women should not be dying as a result of preparing meals for their families.

Most similar health scare stories from the South are accompanied by calls for massive cash donations from the North. In the case of IAP, the Shell Foundation believes instead that the best way to tackle this deadly problem is through the application of business thinking. Through our “Breathing Space” programme, we’re promoting the use of commercial product development techniques to help design stoves that get dangerous smoke and emissions out of the homes of poor people. And we’re setting up sustainable supply chains to cost effectively manufacture affordable, attractive stoves and distribute them to people’s homes in the remotest rural areas. We have a vision to sell 20 million clean stoves in five countries over the next five years and take a hundred million people out of harm’s way as far as Indoor Air Pollution is concerned. Now that will be something to make a fuss about on the global stage.

Fresh thinking on Africa: "A homecoming for jobs in Africa"

There are two things that I have come to believe very strongly. First, it is time to change the language used to talk about Africa - away from "charity", "aid" and "poverty", and towards "enterprise", "trade" and "job creation". In short, towards the language that African's themselves use to talk about Africa.

And second, it is time to recognise the enormous contribution that the Diaspora is making, and can make, through their remittances and skills. Governments and business should focus on how this can be facilitated.

It is for these reasons that I have been particularly impressed by the recent video produced by Afford - the UK Diaspora organisation. It documents the visit by a group of Diaspora to Sierra Leone to work as business advisers and mentors to Sierra Leonean entrepreneurs. We need more programmes like this.