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Hindering FDI

Published: 17-JUN-05

Africa must accelerate reform. The developed world must increase and improve its aid, and stop doing things to hinder Africa’s progress.

Africa is creating stronger foundations for tackling its problems, with vast improvements in economic growth and in governance.

But Africa needs a partnership between Africa and the developed world, to make serious inroads. Now is the time for the world to get behind Africa’s efforts and make a major impact on the continent.

The developed world must support the African Union’s NEPAD programme to build public/private partnerships to create a stronger climate for growth, investment and jobs.

Eskom’s Pan-African grid vision is guiding many of the NEPAD projects. Like Eskom’s involvement in the southern African regional ‘power highway’ projects. The aim is to develop the power transfer capacity in the SADC region, to maximise the power trading potential of the Southern African Power Pool (SAAP).

But there some issues on the continent that have a major impact on foreign direct investment (FDI):


Improving accountability is the job of African leaders. They can do that by allowing more ordinary people in government and by improving institutions like parliaments, local authorities, trades unions, the justice system and the media.

The need for peace and security

The most extreme breakdown of governance is war. Africa has experienced more violent conflict than any other continent in the last four decades. Recently the situation has improved, but in other states violent it is still the biggest obstacle to development.

Investing in development is investing in peace.

The best way to tackle conflict is to build the capacity of African states to prevent and manage conflict. That means using aid in a better way to tackle the causes.

African regional organisations and the UN can help prevent and resolve conflict when tensions cannot be managed at the national level, through effective early warnings, mediation and peacekeeping. The small arms trade must also be controlled.

Flexible funding can be given to the African Union and the continent’s regional organisations, to create a UN Peace building Commission. But the co-ordination and financing of post-conflict peace-building must be improved, to prevent states emerging from violent conflict from sliding back into it.

Investing in people

Sadly one of the aspects of governance is that poor people are excluded from decision-making and from basic services the state should provide -like schools and clinics.

This is an urgent matter of basic human rights and social justice. But it is also sound economics: a healthy and skilled workforce is a more productive one, fulfilling their potential with dignity. Investing for economic growth means rebuilding Africa’s people.

Investing in education

Investing for economic growth means rebuilding African health and education systems, many of which are on the point of collapse. This requires major funding, but it is not just a question of resources. It is also about delivery and results. These are powerfully strengthened when local communities are involved in decisions that affect them.

The international community’s commitment to provide all children in sub-Saharan Africa with education- to equip them with skills for contemporary Africa needs adequate funding

The major issue of health

The elimination of preventable diseases in Africa depends on rebuilding systems to deliver public health services to tackle diseases such as TB and malaria effectively. Top priority must be given to improving HIV/ AIDS services, as the disease is killing more people in Africa than in any other country

Governments must also support orphans, vulnerable children and other groups who could be left out of the African growth story.

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