The Private Sector: Key To African Development
Co-Chairpersons Summary Report
The first GCA Plenary to be held in Africa was hosted by H.E. Festus Mogae, President of Botswana, in Gaborone, October 25-26, 2001. In attendance were H.E. Yoweri Museveni, President of Uganda, H.E. Frederick Chiluba, President of Zambia, H.E. Jacob Zuma, Deputy President of South Africa, and H.E. Hage Geingob, Prime Minister of Namibia. GCA-Co-Chairpersons H.E. Meles Zenawi of Ethiopia, H.E. Sir Ketumile Masire of Botswana, Hon. Frene Ginwala of South Africa, Hon. Eveline Herfkens of the Netherlands, Hon. Maria Minna of Canada and Hon. Clare Short of the United Kingdom, along with Co-Chairperson Emeritus Robert McNamara, also participated. In addition, a number of eminent persons joined Ministers and senior officials from African and partner countries, senior officials of international organizations, parliamentarians, and representatives of the private sector and civil society, in the meeting.
The Plenary was formally opened with an address by H.E. President Mogae. Hon. Eveline Herfkens made an introductory statement on behalf of the GCA Co-Chairpersons, while the Executive Secretary of the GCA, Ahmedou Ould-Abdallah, also spoke during the opening session. Individual Co-Chairpersons, joined by participating heads of state and government, chaired each session. This summary report highlights the main issues considered during the Plenary, but does not fully reflect the richness of the discussion or the range of experiences shared.
In her remarks on behalf of the GCA Co-Chairpersons, Minister Herfkens suggested that the private sector has been the missing link in African development to date, and emphasized its central importance to economic growth and poverty reduction on the continent. She underlined that both African governments and international partners have a responsibility to create conducive conditions, while for its part, the private sector must increase productivity and competitiveness and exercise good corporate governance. Minister Herfkens also highlighted the need, in the aftermath of the September 11, 2001 terrorist attacks, to ensure that commitment and resources for development are maintained.
In his opening statement, H.E. President Mogae outlined some of the policies that had contributed to Botswanas economic growth since independence, also commenting on the need for action and cooperation at the regional level to create a favorable environment for the private sector. He underlined the importance of trade and investment to sustainable development, expressing his hope that in the years to come they would replace ODA as Africas main sources of finance, and affirmed his governments commitment to private sector-led growth. He emphasized that globalization should not only benefit industrialized countries, but should rather be a vehicle for broad-based improvements in living standards in the interests of global peace, security and human dignity. President Mogae also stressed the immense threat that Botswana and Africa as whole faces from HIV/AIDS, and appealed for the assistance of the international community in countering the pandemic. Like Minister Herfkens, President Mogae condemned the September 11 terrorist attacks, and expressed concern that poorer countries would bear the brunt of a global economic slowdown.
The discussions emphasized the importance of the private sector to economic growth and poverty reduction in Africa, and its crucial role in creating employment and opportunity for the vast majority of citizens. There was consensus that, perhaps for the first time since independence, the conditions exist for the private sector to make a full contribution to development and progress on the continent. However, there is need for concerted and determined action on the part of all actors governments, the private sector itself, and Africas partners if the promise of private sector-led growth is to be fulfilled.
The Role of Governments
Stability and security are essential pre-requisites, not only for foreign investment, but also for domestic private sector activity. With the exception of industry-specific investment, notably in the oil and mining sectors, investors are generally deterred by instability. As a result, the tendency is for short-term and speculative investment, rather than longer-term, productive private sector activity. Participants recognized that on-going conflicts in some countries create a negative image for the continent as a whole, and that it is therefore imperative for existing conflicts to be brought to an end, and future violence avoided.
In addition to peace and security, participants agreed that democratic, inclusive, transparent and accountable governance is central to the creation of a conducive framework for private sector activity. In most instances, this is only now being put in place, and many countries are still suffering from the negative effects of the highly centralized, statist policies and single party politics that were prevalent in the past. At times, governments remain wary of the private sector and civil society, rather than seeing them as partners in development. So too, entrepreneurs are often concerned about government commitment to reforms, and fear of policy reversals leads to a reluctance to make long-term investments. Although concerted efforts are required from both governments and the private sector to build confidence and trust, it is incumbent on governments to create a consistent and coherent policy environment.
It was recognized that without a strong private sector capable of providing employment and generating wealth, countries are unlikely to achieve their aims of reducing poverty and creating the basis for sustained and durable growth. Until recently, government attitudes and policies throughout most of the continent not only stifled the growth and vibrancy of the private sector, but also contributed to its decline. Now, although policies more favorable to the private sector are generally pursued, there is need for effective implementation. In some cases, government bureaucracies do not reflect the reorientation of the political leadership toward the private sector, vested interests serve to maintain the status quo, and politicians and civil servants protect their own business interests. Without a change of attitude on the part of government officials, and without tangible improvements in governance, it is unlikely that investors will be convinced that a new climate for business exists.
There was consensus that a dynamic private sector requires effective government at all levels, and that weak public sector institutions constitute a significant constraint. While opening up the economy and improving governance are of fundamental importance, specific actions by governments can also send positive signals and encourage the private sector. These include providing a sound legal and regulatory environment, including commercial courts and arbitration mechanisms; implementing measures to combat corruption and limit conflict of interest; decentralizing decision-making; and streamlining administrative procedures. Governments also need to develop the capacity to intervene and take appropriate measures to counter anti-competition practices. Although most attention has been focused on the executive, parliaments and the judiciary also have important roles to play. For the most part, parliamentarians do not represent business interests or fully understand the needs of the private sector, and as a result, legislation is frequently not supportive of business. Similarly, an expanded role for the private sector places new demands on the legal system and judiciary, and requires additional expertise.
In many instances, specific measures could also be taken to assist marginalized groups, such as women entrepreneurs. Participants recognized the imperative of empowering and supporting women, and the need to remove the constraints that currently prevent their full participation in economic activities. Frequently, women in business are still not afforded equal access to finance and training, and are disadvantaged by legal systems that do not provide them with equal rights or protections. Although small and medium enterprises are significant in terms of employment creation and as entry points into the private sector, their development has largely been neglected in Africa. Direct assistance for SMES, as well as for microenterprises which offer particular opportunities for women and the rural poor, could not only support their expansion, but also facilitate the transition from informal to formal sector activity. Participants noted that informal activities are an essential and at times the only safety net for the poor, and expressed concern that the informal sector is often the target of repressive policies.
Although many governments have established mechanisms such as investment promotion offices to attract new, and particularly foreign, investment, participants stressed that local investment also needs to be encouraged, and existing businesses supported. The private sector is influenced by deeds rather than words, and responds less to policy statements than to the reality on the ground. The experience of existing businesses influences potential investors, and foreign investors are more likely to invest if domestic investment is strong. It was recognized that the same factors that deter investment in African countries contribute to capital flight. Both citizens and investors are concerned about the security of their capital and will invest it where it will generate the best returns. In this regard, improved governance and consistent application of sound economic policies would help to build confidence, especially when coupled with good investment and reinvestment opportunities and an efficient banking system.
Government contracts constitute a major source of business for the private sector in most African countries, and it was noted that proactive local procurement by governments could substantially assist the development of domestic businesses. However, this has to be accompanied by prompt payment for goods and services. Participants also recognized that privatization offers considerable opportunities for the expansion of the private sector, and that strong government commitment to privatization sends a positive signal to investors. However, experience thus far has been mixed, and privatization has not always generated opportunities for domestic businesses. An appropriate model of privatization needs to be adopted, and the process well-managed. In this regard, the experience of privatization to date, from both Africa and other regions, provides valuable lessons for the future.
While most governmental action is concerned with national measures, participants also highlighted the need for attention to regional and international issues. Although the adoption of outward-oriented trade policies would facilitate the expansion of the private sector, such policies need to be accompanied by other supportive actions. In spite of stated commitment to regional integration, relatively little has actually been achieved in terms of harmonization of policies, and the high cost and complications of intra-African travel and transport add to the difficulties of the private sector. However, there have been some positive innovations, such as the establishment of the African Trade Insurance Agency, whereby several African governments have agreed to provide guarantees against political risk for private ventures.
Participants recognized the need for African countries to be more fully integrated into the global economy, and for mutually beneficial globalization to be encouraged. They therefore underlined the importance of African governments developing the capacity to engage in international trade negotiations and agreements. Indeed, even if the next WTO trade negotiations are designated as a development round, the interests of African and other developing countries will not be adequately served unless their governments have the capacity to negotiate favorable trading arrangements. To the extent that industrialized countries continue to employ protectionist practices and provide subsidies to domestic producers, African exporters will remain disadvantaged. Participants also urged African countries to take full advantage of opportunities that currently exist, and to capitalize on new initiatives.
Responsibilities of the Private Sector
It was agreed that in most countries, the private sector operates under a variety of very real constraints including poor infrastructure, lack of financing, limited access to new technologies, high transaction costs, and a poorly-educated workforce. However, participants emphasized that the private sector cannot expect governments alone to address such problems, but needs to take a more proactive stance to its own development. Although governments have to improve the policy environment, businesses should take advantage of existing opportunities, and define new areas of activity. In particular they need to diversify, move up the value chain in terms of production for export, and improve their productivity and competitiveness. It was noted that at times existing businesses support protectionist policies that benefit them but stifle competition. Such lack of competition often results in high costs and low quality products, disadvantaging consumers and eroding popular support for the private sector.
Both domestically and globally, African producers must produce goods at competitive prices. If they are to penetrate international markets, they need to understand the requirements of such markets and meet quality conditions and standards. They also have to understand how multinational trading agreements affect them. Although industrialized countries need to open their markets to African producers, it was noted that countries in other regions of the world have managed to increase their market share, often at the expense of African producers, even though they did not enjoy the preferential access afforded to Africa. Successful entrepreneurs in Africa, as elsewhere, have however managed to identify niche markets and develop products to meet emerging needs.
While it was accepted that investors make decisions based on their assessment of risk, opportunities and the policy environment, it was also emphasized that the private sector itself can help to overcome constraints. African businesses need to think proactively about how to enter new markets or expand their market share, undertake research to determine what opportunities exist, and be more responsive to the needs of customers. In many instances, they could also be more innovative and take advantage of new technologies, as well as look beyond the short-term. Frequently, the expansion of enterprises is hampered by lack of modern management techniques and a strategic vision. However, participants noted that throughout the continent a new breed of entrepreneurs is emerging, who understand the requirements of competitiveness and sound business practices. Although governments need to put in place and stringently enforce anti-corruption measures, both international and African businesses also have a responsibility to refrain from corrupt practices.
It was emphasized that multinational companies operating in Africa can do much to help the development of the domestic private sector. Actions such as subcontracting with domestic producers, and working to develop the capacity of local counterparts, could have a positive impact. At the same time, participants underscored the need for multinationals to pay equitable wages, provide training, and increase management opportunities for national employees. It was noted that consumers in industrialized countries are increasingly demanding that multinational companies act in a socially responsible manner and implement good corporate governance. In a highly competitive climate, this is leading to changes in attitude and more positive practices.
Although businesses obviously have to become profitable before they can engage in philanthropy, sound corporate governance is as important for African companies as for multinationals. While domestic businesses need to improve the quality and delivery of their products and become more competitive, they also have obligations to their employees and to the societies they are part of. Companies are increasingly expected to adhere to accepted standards regarding terms of employment, pay and working conditions, upgrading of skills and training opportunities. It is also incumbent on both African and multinational companies to respond positively to the HIV/AIDS pandemic through provision of health care and benefits.
By providing training and skills development, the private sector can help to develop needed capacity and utilize existing capacity more fully. In addition, an expanded private sector could help to reverse the exodus of skilled personnel as well as draw upon the considerable skills and talents of Africans living outside the continent. In terms of development of the African private sector, participants stressed that linkages between multinationals and local businesses, and between large companies and small and medium sized enterprises, can be mutually beneficial. Not only do such linkages provide business opportunities, they also encourage acquisition of managerial skills, transfer of technologies, and exposure to modern business practices. A similar positive effect can be gained as a result of linkages between companies in the formal and informal sectors, that can also facilitate the transition of businesses to the formal sector.
Participants emphasized that the private sector can make a positive contribution to development and to overcoming poverty, in terms of the employment opportunities it provides and in the wealth it generates. However, small-scale farmers, who probably constitute the largest group of private sector operators in most African countries, tend to be left out of debates on private sector development. Enhanced investment and business activity in rural areas could increase employment opportunities for the rural poor, as well as increase their productivity and access to markets. Similarly, private sector enterprises could enter into partnerships with communities in which they are based to help them invest in development. Improved social services, skills training and increased employment are among the positive outcomes of such ventures.
Dialogue, Cooperation and Partnerships
During the meeting, the significant contribution of dialogue, mutually beneficial cooperation, and effective partnerships was reiterated. Partnerships between government, civil society and the private sector, among governments, and between African countries and their partners form the basis of the new development paradigm that is emerging. The New Partnership for Africas Development (NEPAD) reflects this new paradigm and underscores the need for cooperative action to promote development, based on priorities set by African countries themselves.
Participants from both the public and private sectors underlined the importance of on-going dialogue and effective partnerships in creating a pro-business environment. They recognized that both sides have a responsibility to proactively promote positive relationships, and noted that although relations between the public and private sectors are improving in most African countries, misunderstandings and suspicion still remain. Dialogue would not only permit governments to better understand the needs of the private sector, but would also allow for the development of partnerships to address infrastructure, financing, and human resource constraints. Collaboration between governments, business and civil society are also needed to counter corruption and the HIV/AIDS pandemic, both of which threaten economic development on the continent. It was accepted that HIV/AIDS in particular requires a collective and comprehensive response.
While on-going dialogue can build the trust that underpins effective partnerships, participants also highlighted that action is vital. Governments and the private sector need to determine a common vision and work to implement it, and both parties must fulfill their obligations. To this end, joint monitoring of progress in implementing specific plans and agreements would help to ensure that policy pronouncements translate into action.
Examples were provided of mechanisms to promote dialogue and partnership that have been successfully institutionalized in several countries. Some partner country representatives indicated the measures governments had deliberately instigated to promote economic growth in close cooperation with the private sector. These included attention to economic and governance fundamentals, focus on education, particular emphasis on science and technology, and research and development in collaboration with, and based on the needs of, the private sector. They also noted that governments had professionally and assertively promoted their countries as attractive locations for investment. Similar success stories from Africa were also shared. Both Botswana and Mauritius have overcome considerable disadvantages at independence and achieved high and sustained growth for several decades through a combination of sound policies, prudent management, and collaboration between government and the private sector. In both countries, business is now an essential and active partner in development.
Private sector participants also emphasized the important role of private-to-private partnerships and of networking among businesses. This not only permits sharing of information and best practices, but can also result in collaborative ventures and exposure to new business practices and technological advances. Additionally, linkages between companies can help to promote investment and address the financing constraints faced by African businesses, and small and medium enterprises in particular can benefit from partnerships with larger firms. Such collaboration can also help to promote a favorable image of Africa by highlighting positive developments.
It was recognized that although the primary responsibility for development lies with Africans themselves, properly targeted external support is also needed. The relationship between Africa and its development partners is becoming more balanced and based on the self-defined needs of African countries, rather than on donor priorities. A new partnership for financing development is also emerging, focusing on mobilizing local resources and promoting foreign investment. However to support this, partner countries need to both open their markets to African products and reduce domestic subsidies, particularly for agriculture, that continue to disadvantage African producers. Participants also underscored the urgency for the next round of WTO negotiations to focus on development.
There is also need for greater coherence and consistency in partner country policies, and both development assistance agencies and African governments should adhere to their agreements and implement the actions they commit themselves to. Participants noted that while conflict is increasingly addressed by Africans themselves, the support of their partners is required. However, pledged resources have not always been provided in a timely manner, largely due to complicated and lengthy processes within development assistance agencies. Just as African governments need to streamline and speed up bureaucratic procedures, so too do their partners. Concern was expressed that, although a number of smaller countries have increased the amount of development assistance they provide, this is insufficient to make up for the reductions in aid levels from major development partners. To counter this, it was suggested that timetables for meeting UN targets for development assistance be established.
In recent years, closer attention has been paid to the efficiency and effectiveness of development assistance, and it is now generally accepted that aid provided in support of sound policies yields more positive results. This has led to greater selectivity by Africas development partners, and more emphasis on tangible impact. Recognizing that tied aid often inefficient and even counter productive, participants urged that donor procurement support local producers. They also encouraged more assistance to small-scale enterprises, noting that considerable successes had been achieved in this area. Increased dialogue between development assistance agencies and the private sector would help to define how support could best be provided.
Participants voiced their concern that Africa would suffer in the aftermath of the September 11, 2001, terrorist attacks in the United States as a result of a global economic downturn, and called on Africas development partners to maintain their assistance to the continent. They also urged that development funds not be diverted to meet new global challenges such as disease, climate and the environment, or terrorism, although they recognized that action is needed on all these fronts. It was noted that Africa will be the principal focus of the G-8 at its 2001 summit, and that for the first time, focal points have been appointed in G-8 countries to develop an action plan to respond to priorities set by African countries.
The meeting recognized that the New Partnership for Africas Development is a departure from previous development plans for the continent, in that has been devised and elaborated by African countries themselves, and emphasizes partnership at all levels among African countries, among governments, the private sector and civil society, and between African countries and their development partners. Its adoption by African heads of state signals a new determination by African leaders to accept responsibility for the development of the continent, and a commitment to define and act on their own priorities. It was recognized that not all countries will move at the same pace, and that the success of NEPAD will depend on actions taken by individual countries. However, it was also recognized that NEPAD offers a framework within which assistance can be provided, and participants urged that it be supported.
Future Priorities of the GCA
Following a brief outline of the GCAs main activities since its last Plenary by Sir Ketumile Masire, Dr. Ginwala presented the Co-Chairpersons proposals for the future priorities of the GCA. She indicated that the three broad areas of peace and security, governance and transition to democracy, and sustainable growth and integration into the global economy, will form the basis of the GCAs agenda, within which the Co-Chairpersons will select particular issues for consideration on an annual basis. The GCA will focus on specific topics where it can bring added value, and will continue to raise sensitive and emerging issues, as well as revisit structural political and economic challenges facing Africa. Given that NEPAD provides a framework for moving forward, the GCA will work to encourage its effective implementation by, among other things, building consensus and support for specific aspects among various constituents.
Participants suggested a range of issues for possible consideration by the GCA, including peace, security and conflict management; regional cooperation; governance, including local government and strengthening of parliaments; HIV/AIDS; anti-corruption; financing of development; democratization; the role of civil society; and promotion of private sector-led growth. It was also proposed that the GCA could help African governments to prepare for participation in international meetings, be an advocate for Africa, promote greater equality in partnerships between African countries and their development partners, and highlight African successes. However, it was agreed that the GCA should limit its focus to issues where it has a clear comparative advantage, and not duplicate the work of other organizations. While recognizing that the GCA is not itself an implementing organization, participants confirmed the importance of action to ensure that the consensus reached at GCA meetings is put into practice, and encouraged it to promote sustained follow-up.
There was broad support for the GCA among participants, who commented on the success of the Coalition in promoting dialogue and understanding among African countries and their development partners, and acknowledged that the style of GCA meetings and the range of participants, as well as the issues considered, contribute to its added value. They recognized that its comparative advantage lies in its policy and political focus, and urged that this be maintained.
African countries should focus much more on the development of the private sector, because of its potential contribution to economic growth and poverty reduction. African governments, the private sector itself, and Africas external partners have to take action to facilitate and support the development of the private sector in Africa. There are considerable business prospects and opportunities available to both foreign and domestic investors and entrepreneurs in Africa should be considered, provided that there is an enabling environment for private sector investment.
A large number of African countries do have significant potentials in:
||agriculture and fisheries
||food processing and other agro-industries
||minerals and mineral based industries
||finance and other services
Numerous obstacles hinder the development of the private sector in Africa. The collaboration between government and private sector is vital to address the principal constraints to doing business in Africa.
||maintain peace and ensure stability and security
||implement governance in all its dimensions: participatory and representative political system, transparent and rule of law based regulatory and judicial system, and an efficient and motivated civil service
||improve the regulatory environment, including licensing requirements, custom procedures, tariff and tax structures
||facilitate and participate in investment in transport, communications, and other essential infrastructure
||develop the financial sector and restructure the banking systems as necessary components of Africas growth strategy
||develop human resources base with particular attention to education as well as to health. An educated and skilled manpower plays a key role in enhancing comparative advantages
The private sector should:
||take a proactive stance to its own development and adopt a more long-term investment perspective
||enhance the quality of its products, increase its competitiveness and become more multi-faceted, catering to domestic, regional and international markets
||address issues such as infrastructure and limited access to financing. A developed financial sector may be instrumental in attracting significant investment capital and even reversing and luring back flight capital
||pursue good corporate governance
||refrain from involvement in or contributing to corrupt practices
External Partners could:
Preparatory Meeting for the GCA Plenary
Ottawa, Canada, June 11-12, 2001
The meeting, which was chaired by Paul Hunt, Director General for African and the Middle East, CIDA, was attended by GCA Co-Chairpersons Hon. Maria Minna and Hon. Frene Ginwala. Senior government officials, parliamentarians, businesspersons and representatives of civil society from African countries and their development partners participated in the meeting (a list of participants is attached). After noting the importance of the issues to be considered, the Chairman called upon the Hon. Maria Minna, Minister of Development Cooperation and GCA Co-Chairperson, to open the meeting.
Minister Minna welcomed participants, indicating that the purpose of the meeting was to prepare for the forthcoming GCA Plenary. In her remarks, she emphasized the importance of the private sector to sustainable development in Africa, but also noted that building an adequate resource base for private sector-led growth requires that increased attention be paid to the social sectors, particularly health and education. Underlining their contribution to poverty reduction, she highlighted the need for greater attention to microfinance and small scale entrepreneurs, as well as to larger enterprises. She also outlined on-going efforts to promote Canadian private investment and business involvement in Africa, and encouraged the formation of public-private partnerships as well as increased involvement of the private sector in meeting infrastructure needs on the continent. Minister Minna reiterated that democracy, human rights, and respect for the rule of law are important considerations for both Canadian businesses and the Government of Canada.
Ahmedou Ould-Abdallah, Executive Secretary of the GCA, thanked Minister Minna and CIDA for hosting the meeting, and for their continued support to the GCA. He also praised CIDAs development approach to Africa, characterizing it as a genuine partnership with the continent. In explaining why the private sector had been selected as the theme of the GCA Plenary, Mr. Ould-Abdallah also underlined the important role that the private sector can play in the development of the continent, and in facilitating Africas integration into the global economy. However, he emphasized that much higher levels of domestic and foreign investment will be required if African countries are to achieve the economic growth needed to reduce poverty. Mr. Ould-Abdallah also indicated that the meeting would provide an opportunity for participants to express their views on the GCA, its value added, the issues it should address and how it should function. The GCA Co-Chairpersons will make recommendations concerning the future orientations and priorities of the to the Plenary in October 2001.
The Private Sector
Mr. Ould-Abdallah introduced the discussions on the private sector by presenting a brief report of a meeting of private sector representatives in Brussels, March 29-30, 2001. Although the meeting had affirmed the potential for business in Africa, it had emphasized the need for governments to create more conducive environments. The meeting had also focused on the private sector itself, and the importance of a longer-term investment perspective and improved corporate governance. Participants in the Brussels meeting had suggested an annual award for the African leader who had done most to improve the climate for the private sector. However, they cautioned that the award should recognize actual performance, and hence should not automatically be given every year.
Two participants from the Brussels meeting augmented this summary, indicating that the discussions had highlighted the importance of ethical private sector activity, and accountable and transparent management in both the public and the private sectors. The discussions had also underlined the imperative of empowering and supporting women, as well as the need for concerted development of human resources and the better utilization of existing capacity. Participants urged that the private sector be included in discussions between African countries and partner countries and organizations, and emphasized the need for true international partnership, including increased access to markets and an end to practices that disadvantage African producers and exporters. The meeting also recognized that regional integration would create larger markets and facilitate intra-African trade.
As in Brussels, the discussions in Ottawa affirmed the importance of the private sector to sustainable economic growth in Africa. It was recognized that, without a vibrant and diverse private sector capable of generating employment, African countries would be unlikely to achieve the levels of growth needed to reduce poverty and improve the provision of public services. In this regard, it was argued that the private sectors focus on wealth generation does not contradict the emphasis placed by governments, development assistance agencies and civil society organizations on poverty reduction. Rather, the two should be seen as complementary. Yet to date, the positive role of the private sector has generally not been understood in African countries. In part this is due to the past functioning of the private sector and its relations with government, which were often characterized by a lack of transparency and corrupt practices. However, several private sector representatives indicated that the private sector itself is undergoing change in many countries, and that a new breed of entrepreneurs is emerging. These new-style businesspersons are keen to contribute to the development of the continent, and to promote good corporate governance and sound business practices. But although they represent a major source of tax revenue for governments, their development is still often constrained by an adverse policy environment.
Participants stressed the need for greater partnership between governments and the private sector, and for governments to send clear signals that the private sector is valued and welcomed. The public and the private sectors should develop a shared long-term vision and work together to translate it into reality. Several participants noted that, while relations between governments and the private sector have improved considerably in many countries, misunderstandings and suspicion still remain. There was agreement that the responsibility for improving relations and increasing dialogue has to be assumed by both the public and the private sectors. While some issues clearly remain within the purview of governments, there is considerable scope for public-private sector partnerships and collaborative efforts to address others.
The discussions also highlighted the fact that tensions and suspicions continue to exist between the private and the non-governmental sectors, which oftentimes appear to be in competition with one another. Although the non-governmental sector is primarily concerned with the poor, it was noted that the private sector is essential to generate the employment needed to lift people out of poverty, as well as the resources that will enable governments to improve delivery of essential services to the poor. A number of private sector representatives expressed concern that non-governmental organizations could perpetuate a dependency on charity rather than encourage self-reliance. However, non-governmental representatives emphasized that they target the poorest and most disadvantaged segments of society, which by and large lack the necessary skills and access to resources to engage in productive private sector activity. It was agreed that governments, the private sector and non-governmental organizations all have a responsibility to exercise and promote good governance, ensure accountability and transparency in their operations, and adhere to rigorous anti-corruption measures.
Several participants commented on the need for capacity building in both the public and private sectors. Human resource development is essential for an expanded private sector, but also for sustained poverty reduction. Although the primary responsibility for education lies with governments, the private sector can contribute by investing in skills training and by maintaining high standards. While recognizing the undeniable need for capacity building, participants also emphasized that existing capacity could be more effectively utilized. It was noted that the efforts of African countries to build capacity is likely to be seriously threatened by the HIV/AIDS pandemic. Participants underlined the need for governments and businesses to understand the potentially deleterious effect this would have on both the public and the private sectors in many African countries, and take action to address it.
Government Actions and Responsibilities
There was general agreement that democracy and improved governance would promote a more conducive climate for private sector activity in Africa. Governments were urged to implement macroeconomic and governance reforms to create a more transparent and predictable environment. They were also encouraged to adhere to known rules and standards, and improve the flow of information to the private sector. Reduction of bureaucratic red tape, simplified and streamlined regulatory procedures for registration and licensing, and improved customs and ports operations would all benefit the private sector. Participants also underscored the need for governments to assume responsibility for providing essential infrastructure and affordable utilities, as well as basic services such as education. They emphasized that this would not only improve the climate for the private sector, but would also contribute to overall development. In addition, they indicated that weak public sector institutions constrain the growth of the private sector in many countries, and stressed the need for public sector institutions to be run as meritocracies, with appropriate training and skills development for public officials. Given the impact of international agreements, governments also need to be more informed about, and engaged in, international trade negotiations, particularly at the WTO.
The Role of the Private Sector
It was agreed that there are business opportunities in Africa, and that return on investment can be high. But participants noted that much greater domestic investment and private sector activity is needed to encourage foreign investment. In addition, the private sector should focus on improving the quality of its products and on increasing its productivity and international competitiveness to facilitate export-led growth. Participants stressed the need for the private sector to move up the value chain in terms of production for export. However, they also emphasized the importance of developing diverse, multi-faceted private sectors catering to domestic, regional and international markets. Several participants indicated that new technologies provide opportunities for the private sector in Africa, and urged that they be exploited where possible. In this regard, the need for innovation and creativity to take advantage of the opportunities afforded by technology, such as trading by e-mail, was emphasized. It was also noted that the private sector in African countries needs to be proactive with regard to WTO requirements and negotiations, and to engage in dialogue with governments on these issues.
Developing SMEs and Microenterprises
The discussions reiterated the important role of small and medium enterprises (SMEs) both in terms of employment creation and as entry points into private sector activity. However, to date, the development of SMEs has largely been neglected in African countries. Although non-governmental organizations and development assistance agencies have provided some support, this has often not been on a sustainable basis, and structural and policy constraints have not been addressed. Participants indicated that SMEs have to be become more business-oriented and to function as viable commercial ventures. It was suggested that linkages between SMEs and larger businesses could facilitate their development, as well as their adoption of sound business practices. Access to affordable credit remains one of the biggest constraints to the expansion of SMEs, in spite of good repayment rates and a high return on investment in most African countries. In this regard, participants underlined the importance of creating the necessary credit and banking infrastructure to provide sustainable commercial financing for SMEs, and the need to ensure access by women entrepreneurs.
The discussions also emphasized the importance of microenterprise development, given that this reaches the most marginalized members of society, and offers opportunities for women and the rural poor. It was noted that a focus on microenterprises could facilitate the transition from the informal to the formal sector, and help to reverse the informalization of African economies. However, it was also noted that specific strategies need to be adopted to promote microenterprises. Such strategies need to cover the provision of financing, including the high transaction costs of administering microenterprise lending programs. The limited availability of financing for onward lending to microenterprises is a major constraint, in spite of the generally good repayment record of such schemes. Although a number of non-governmental organizations have successfully implemented microenterprise development projects, participants cautioned that the difficulties of creating viable microenterprises need to be clearly understood.
Support by Africas Partners
Although much of the discussion focused on government policies and actions required of the private sector, participants also commented on the role Africas partners can play in promoting and supporting the private sector. This includes encouraging governments to implement necessary policy reforms and helping to build capacity by utilizing in-country expertise, as well as providing specific assistance to the private sector. Given that access to affordable financing is a major constraint faced by entrepreneurs, donors could usefully provide export credit financing, as well as funds for microfinance and microenterprise schemes. In particular, participants urged development assistance agencies to acknowledge the contribution the private sector can and should make to development, and to include private sector representatives in their dialogue with African countries. They also stressed the importance of real partnership, including enhanced access to markets in developed countries and specific measures to encourage investment in African countries. In addition, participants commented on the need for more stringent regulation of the international banking system to prevent the transfer of illegally obtained assets from African countries, and also for repatriation of such capital once it has been traced.
In addition to the plenary discussions, private sector representatives met in two smaller breakout groups to consider experiences of privatization and trade-related issues. A number of lessons can be learned from experiences of privatization to date, including actions governments need to take during the privatization process, the relative advantages of different models of privatization, and labor issues and workforce restructuring. If undertaken properly, privatization offers considerable opportunities for local investors, and involvement in privatization can facilitate the development of the domestic private sector. The importance of regional integration was noted with regard to intra-African trade. In addition, it was recognized that African countries, with few exceptions, have not been actively involved in WTO negotiations. It was recommended that private sector actors should be aware of the WTO rules that affect them, and ensure that government negotiating positions are properly developed and prepared, and that such positions reflect their views and concerns.
The session on the GCA was introduced by CIDA with a brief presentation that outlined the purpose and mandate of the GCA and raised a number of issues for consideration. As indicated by Mr. Ould-Abdallah in his opening remarks, this session provided an opportunity for participants to comment on the strengths and weaknesses of the GCA, to assess its continued relevance and value added, and to make suggestions for its future focus.
Several participants commented on the usefulness and importance of the GCA to date in promoting dialogue and understanding among African countries and their development partners. They noted that it has served as a bridge, and has facilitated exchange of information in a neutral setting. At the same time, it has provided an opportunity for African countries to share experiences and learn from each other. In particular, the uniqueness of the Forum was noted, especially with regard to its willingness to address sensitive political issues, the diversity of its participants, and the informal nature of its discussions. Participants indicated that the credibility the GCA has established and the support it enjoys have enabled it to engage political leaders and to bring important issues to their attention. Additionally, they commented on the role of the GCA as an organization that opens doors, creates linkages and addresses new issues. Its ability to bring together a range of people from disparate backgrounds with differing agendas to consider important and sensitive issues and determine pragmatic conclusions and realistic positions was seen as part of its value added. The importance of its role in sensitizing policy makers to emerging issues was also recognized. However, it was suggested that the GCA could focus some meetings on specific groups, such as the legislature, in order to contribute to capacity building.
While it was agreed that addressing sensitive issues and promoting consensus is a valuable goal in and of itself, participants proposed that follow-up mechanisms should be considered to increase the effectiveness of the GCA. In particular, it was suggested that attention be give to monitoring how far the consensus reached in GCA meetings was acted upon by different parties, and with what results. This should be periodically reported in GCA meetings. It was suggested that peer review of selected topics would help move from consensus to action. The fact that other organizations take up issues originally addressed by the GCA was not necessarily considered to be a sign of duplication, but rather underlines the success of the GCA in putting issues on the development agenda and acting as a catalyst. However, participants considered that this should be done in a coherent manner, with greater clarity surrounding the GCAs role and its focus on specific issues. It was also suggested that more formal collaboration with other organizations could be pursued to ensure follow-up in selected areas.
Participants underlined that the GCA needs to continuously keep abreast of the realities faced by African countries and to reflect these realities in its debates. However, they cautioned that addressing too wide a range of issues could lead to a loss of focus. The GCA should therefore consider its strategic niche, both in terms of subject matter and approach. Its comparative advantage lies in its policy and political focus, and it should not lose the attributes that give it added value. Participants indicated that while the GCA should address a limited number of issues at any one time, it could be useful to revisit issues to assess progress. They also suggested that some topics be explored in greater detail than others. Participants considered that wider dissemination of the outcomes of GCA meetings within African countries would be helpful, and would facilitate the assimilation of decisions and recommendations into the mainstream of activities in individual countries. It was suggested that reports of GCA meetings could be sent to national parliaments, but that other efforts should also be made to reach a wider audience.
It was recognized that the GCA, like all organizations, needs to continually assess its relevance and mode of operation. Participants considered the openness of the review afforded by the Ottawa meeting to be characteristic of the approach of the GCA, and welcomed the opportunity to participate. They indicated that critical review, evaluation and assessment of impact would help the GCA to maintain its comparative advantage. In concluding, participants proposed a wide range of issues that the GCA could focus attention on in the future. These included the promotion of democracy and good governance; anti-corruption; conflict management; regional integration; HIV/AIDS; debt and HIPC; WTO negotiations and the development of an African common position; and the modernization of African economies. In addition, the GCA was urged to help change the image of Africa by highlighting positive changes and success stories, and to use the Plenary to develop an action plan for the promotion of the private sector in Africa. It was also suggested that a private sector representative be invited to join the GCA Co-Chairpersons.
Dr. Frene Ginwala, Speaker of Parliament of South Africa and GCA Co-Chairperson, closed the meeting by highlighting several issues that had been raised during the discussions. In her comments, she emphasized the pivotal role that the private sector can play in Africas development, and urged private sector actors to seize the opportunities offered by both MAP and the formation of the African Union. She stressed the importance of large businesses, as well as small and medium enterprises, in African countries. She also encouraged the private sector to take advantage of privatization, and to invest in new technologies and infrastructure, and to explore high tech opportunities. While recognizing the constraints imposed by the public sector, Dr. Ginwala underlined that the private sector has a responsibility to promote good governance, to adopt codes of conduct and take other measures to counter corruption, and to enter into dialogue with governments to ensure that its views are taken into account. She also emphasized the need for the private sector to be informed of WTO negotiations, and to engage in discussions with governments. She stressed the importance of Africas active involvement in the WTO, and the need for preparation and the adoption of a common position. Recognizing that African governments are often disadvantaged by lack of technical expertise, Dr. Ginwala suggested that the GCA could compile panels of experts from within the continent that countries could draw upon for advice on specific issues.
The meeting will be hosted by President Festus Mogae of Botswana. A number of African Heads of State current and former are expected to attend, along with other eminent persons and ministers from both African and partner countries. Ministers from donor countries, heads of development cooperation agencies and international organizations, parliamentarians, business leaders, and representatives of civil society and the media will also participate.
Opening Statement by His Excellency, The President of Botswana,
Mr. Festus G. Mogae
You Excellencies Heads of State and Government
Your Excellencies Former Heads of State and Government
Honorable GCA Co-Chairpersons
Members of the Diplomatic Corps
Honorable Members of Parliament
Representatives of bilateral and multilateral organizations
Representatives of the Private Sector, Non Governmental Organizations and the Media
Ladies and Gentlemen:
1. It is an honor and pleasure to welcome you all to Gaborone. Botswana is privileged to host this Plenary of the Global Coalition for Africa, which is being held in Africa for the first time. We would like to express our appreciation to all participants, particularly those who have traveled long distances to share with us their experiences on private sector development.
More importantly, we should make concrete proposals about how we can optimize private sector contribution in the development of our continent and its people.
2. The New African Initiative states that In Africa 340 million people, or half the population, live on less than US$1 per day. The mortality rate of children under 5 years of age is 140 per 1000, and life expectancy at birth is only 54 years. Only 58 per cent of the population have access to safe water. The rate of illiteracy for people over 15 is 41 per cent. There are only 18 mainline telephones per 1000 people in Africa, compared with 146 for the world as a whole and 567 for high income countries.
3. Moreover, Africa accounts for less than 2 per cent of global private capital flows and world trade. And to compound this, 70-80 per cent of the estimated 36 million people infected with HIV in the world are found in Africa which also accounts for disproportionately more new infections. We Africans can extricate ourselves from the grim specter of economic gloom only under conditions of durable political stability, inclusive political processes, tolerance for opposing views, peace, security, good governance as well as respect for human rights and the rule of law, in addition to appropriate economic and social policies.
4. The New African Initiative, recognizes the critical role of increased private capital flows from outside Africa as well as domestic resource mobilization, in the economic transformation of the continent. In the years to come, trade and investment should replace Official Development Assistance (ODA) as Africas main sources of finance although this is not to underplay the paramount importance of sufficient ODA flows in the initial years.
It is now generally accepted that the private sector plays an indispensable role in economic growth, job-creation, business innovation and technological advancement.
5. It is one thing to make policy pronouncements about private sector development, and quite another, to effectively implement the policies and institutional arrangements that provide a conducive environment for the private sector. Moreover, the implementation of appropriate reforms and a business-friendly environment may not immediately translate into an upsurge in new private investment. As we have all the relevant actors here among us, including a large cross-section of the business community, we look forward to frank discussions on the constraints that need to be addressed, as well as the additional proactive measures and incentives that need to be provided to bring about vibrant private sector-led growth.
6. Private sector activity and investment are influenced not only by what individual countries do but also by developments within a particular region. Conflict or political instability in a neighboring country has implications for investment, tourism and other business activities in the immediate vicinity and even beyond.
7. Similarly, macroeconomic policies including fiscal, monetary and exchange rate and interest rate policies pursued in countries with economic and trade relations with each other, impact significantly on one another. Hence, while individual country action is necessary, it is also important to address constraints in close coordination with relevant neighboring countries. Regional organizations such as the Southern African Development Community (SADC) have an important role to play in the convergence of macroeconomic policies and harmonizing regulations and procedures.
8. As many of you may be aware, when we attained Independence in 1966, Botswana was a very poor country, with most of its people subsisting on rural arable and pastoral farming activities. A significant number of the adult male population was employed in South African mines. A large part of our national budget was financed by donors, principally the United Kingdom in the initial years. With the discovery and commercial exploitation of diamonds starting in 1969, the prospects for Botswana improved considerably. Real per capita income grew at an average annual rate of about 7% in the first 30 years of our independence. As a result, in 1991 we graduated from the category of least developed countries to a middle income economy. All this would not have been possible without the active partnership between Government and the private sector, both domestic and foreign.
9. Over the years, we have implemented fiscal and monetary policies aimed at both stability and growth promotion. As a small, land-locked country, Botswana had little choice other than to be an open economy. We have consistently maintained a market-based exchange rate system and a liberal trade regime. Remaining Exchange Controls were abolished in 1999. Our tax rates are quite low and compare favorably with rates in other developing countries. Although there is considerable room for improvement, our administrative and regulatory systems are relatively simple and investor-friendly.
10. The Privatization Policy Paper adopted by Parliament in June, 2000 sets out the broad parameters of privatization in Botswana. In addition, we have established institutional mechanisms for the promotion of entrepreneurial development and for the improvement of productivity.
In particular, we have programs that are specifically targeted at encouraging and promoting small and medium-scale businesses as well as micro enterprises. This is because we believe that medium, small and micro enterprises are relatively easier to start and operate, and also offer significant opportunities for employment.
11. While formal sector employment has grown significantly over the years, we are the first to acknowledge, that our current level of unemployment is unacceptable and untenable. Hence job-creation and the associated goal of skills enhancement are important preoccupations for the government. At the same time, the Botswana economy must be diversified to establish new non-traditional sources of growth. We have no doubt that the private sector, both foreign and domestic, holds the key to achieving these priority objectives of sustainable diversification and job-creation. The choice of the theme The Private Sector: Key to African Development for the GCA Plenary is thus most welcome for us in Botswana.
12. For the African continent to realize the full potential of the private sector, we need to confront all the constraints that it presently faces. If a selective approach is adopted, we shall get sub-optimal results. Therefore stable macroeconomic policies and regulatory environment; well developed and regulated financial and banking system; transparency; development of human resources; infrastructure provision as well as its efficient operation and maintenance; adequate legal framework, including enforcement of laws; as well as efficient delivery of public services, are among the issues, that should remain at the top of the development agenda.
13. I trust that our discussions will include a consideration of the regional and global economic environment, given its implications for our economies, particularly private sector development. Private sector led growth is not an easy, all gain and no pain option.
Neither is it a panacea for all of the continents development problems, but the private sector can make a meaningful contribution to economic development under conducive domestic and international conditions. Indeed, market changes in the international economy, such as the economic crisis of 1997-98 that started in Asia and spread elsewhere, or the current economic slowdown in the major industrial countries, have a direct impact on the exports of many African countries. WTO-initiated or bilaterally agreed tariff reductions and trade liberalizations by trading partners also impact on our revenue receipts as well as on the competitiveness of our products.
14. The volatility of international commodity prices as well as the risks of depressed demand are issues of major concern to the African continent. Diversification is the long-term means for addressing the challenges we face as well as for taking advantage of the opportunities available in the international market place.
And diversification can be achieved through partnership between domestic and foreign investors. Foreign direct investment provides benefits beyond access to capital, as it is also usually a channel for acquisition of technology, marketing and management know-how, as well as skills development. African Governments need to intensify their efforts to further improve the environment for business and prepare their citizens with the skills and knowledge, such as Information and Communications Technology, that are crucial for international competitiveness.
15. I cannot conclude without reiterating the immense threat Africa faces from HIV/AIDS. My own country Botswana has one of the highest HIV/AIDS prevalence rates in the world. It is true that we woke up to the enormity of the pandemic too late in the day.
However , we are on a virtual war footing in waging campaigns aimed at both prevention and care until we reverse the trend. The experience of countries such as Uganda gives us hope that with determined and well coordinated campaigns we may see the beginnings of a decline in the HIV/AIDS prevalence rate. Increased support by the international community in the war against HIV/AIDS is absolutely imperative given that Africa requires between US$ 3 and 4 billion annually to effectively fight the scourge.
16. The United Nations Millennium Declaration adopted in September, 2000 included a commitment by the international community to enhance resource flows to Africa by improving aid, trade and debt relationships with the rest of the world as well as increasing private capital flows.
The GCA and other friends of Africa should lend their support to the New African Initiative as a concrete manifestation of realizing the objectives of the Declaration. This will provide the impetus to the economic growth that is necessary for sustainable poverty reduction and the achievement of other International Development Goals. In this regard, the question of access of African products in the markets of developed countries is paramount. Lowering and reducing tariffs and non-tariff barriers should be complemented by drastic reductions in some of the heavy subsidies extended to developed country products. A part from the fact that these subsidies distort free trade, some of the products subsidized are also the ones in which African producers are internationally competitive, for example agricultural products.
17. Furthermore, Africa should also be relieved of the long standing yoke of external debt. And even more important, the often talked about globalization should not be a whale that swallows economically weaker states, but rather a vehicle for broad based improvements in living standards in the interest of global peace, security and human dignity.
18. I also wish to deplore the vicious and tragic attacks on New York and Washington DC on 11th September and the human death toll and suffering inflicted. The reverberations of the attacks are being felt by economies across the world and it is the poorer economies which will bear the brunt of global economic slow down.
Resources that are being deployed in security improvements have a high opportunity cost and could exacerbate the already low levels of Official Development Assistance and Foreign Direct Investment flows to Africa. It is my earnest wish and hope that the current tensions do not escalate into a global conflagration. That having been said, let it be known that the Botswana Governments supports the steps that are currently being taken by the US and the UK to bring the perpetrators of the crimes to justice.
19. I would like to encourage participants to take full advantage of the GCAs well established practice of frank and open dialogue to thoroughly discuss what African governments, the private sector itself and our external partners need to do to promote and develop he private sector in each of our countries.
20. Once again I welcome you to Botswana, and encourage you to take advantage of your presence here to get to know our country. Your knowledge of Botswana is incomplete without exposure to the culture and traditions of Botswana, the countrys natural beauty and pristine environment. You must visit our internationally-renowned tourist attractions such as the Okavango Delta and the Chobe Game Reserve. I wish you a pleasant and rewarding stay in Botswana as well as successful and productive deliberations that will guide the GCA in its future work.
21. Excellencies, Madam Chairperson, GCA co-chairpersons, Honorable Ministers, Distinguished Participants, Ladies and Gentlemen, I thank you.
Opening Remarks by Her Excellency Eveline Herfkens
Minister of Development Cooperation, The Netherlands
Your Excellency Festus Mogae, President of Botswana
Your Excellencies Heads of State and Government
Your Excellencies Former Heads of State
Honorable GCA Co-Chairpersons
Honorable Ministers and Distinguished Participants
Ladies and Gentlemen
On behalf of GCA Co-Chairpersons, it is a pleasure for me to welcome all participants and invited guests to the Gaborone Plenary of the GCA. I speak for all participants in expressing sincere thanks and appreciation to you, Mr. President, and through you to the Government and people of Botswana, for the warm welcome and gracious hospitality extended to us all.
We are all aware that this meeting is being held only a little over a month since the horrific events in the United States on September 11. In the aftermath, there has obviously been much concern with security. But those events also underscore the need for development, to deny terrorists the opportunity to manipulate the poor and oppressed for their own ends. Now more than ever, it is important to reaffirm our commitment to development, and ensure that the resources we bring to it are maintained.
In speaking of development, Botswanas political and economic performance is a success story of which both Africans and friends of Africa should be very proud. For a period of more than thirty years, it has recorded annual real per capita growth rates of well over 7% -- growth rates approximated by only two or three East Asian countries. Some may attribute this to the good luck associated with the discovery and exploitation of significant diamond deposits. But I am convinced that the wise and prudent policies consistently pursued by its leaders are the real good luck Botswana was blessed with.
Regular consultation and institutionalized popular participation have long characterized Botswanan politics, and the government is kept accountable and always on its toes by a vigilant parliament. It is within this framework of democratic participation and accountability that economic policy-making and management are conducted. Botswana has not only achieved exceptionally high and sustained levels of growth, but has also continued to promote social justice.
Among the more notable features of Botswanas development is that no investment projects or programs were implemented unless they were first incorporated into the national development plan. This meant, among other things, that donor-funded projects had first to conform to the priorities established by the government. In other words, the Government of Botswana has for many years exercised the prioritization and donor coordination that have only recently gained broad acceptance. Many consider Botswana to be an outstanding example of what can be achieved in Africa, and urge development partners to provide the assistance that will enable it to build on its success and make further progress.
Your Excellencies Heads of State, Distinguished Participants
My colleague Co-Chairpersons and I believe that the principal theme of the Plenary, namely the key role the private sector plays in development, is of fundamental importance. In many ways, the private sector is the missing link in Africa. But to maximize its contribution to pro-poor growth and poverty reduction, it is important that we consider what African governments, the private sector itself, and Africas external partners all need to do. That in fact is how the agenda for this meeting and the supporting background document are organized.
We would thus propose that, after a brief review of Africas economic potential, discussions first focus on the role of African governments. In particular, what conditions need to be met and what measures need to be taken by governments to create and sustain an attractive environment for private sector activity? Peace and security are fundamental, and so we need to consider how existing conflicts can be resolved and new ones prevented. The credibility of economic policies, the strength of institutions, the efficiency of infrastructure and the depth of financial intermediation all have direct bearing on the environment, as well as on the cost of doing business. Our discussions will surely go into these and other related issues. We look forward to getting practical and pragmatic proposals for what needs to be done, as well as suggestions on where the priorities should lie.
But it is not only governments that we need to focus on. We trust that participants will be equally forthcoming concerning the measures and initiatives to be taken by the private sector itself. One aspect for consideration would be the ethical standards to be observed, and the social responsibility and corporate citizenship to be practiced by the business community. Responsible behavior includes timely payment of taxes, support for competitive practices, and refusal to engage in corruption. More positively, our exchange of views should also suggest proactive measures that the private sector can take to address constraints, take advantage of opportunities, and increase productivity and competitiveness. When we talk of the private sector, we are talking about a wide range of activities. Given their potential to generate employment and reduce poverty on the continent, I would urge that time and attention be given to considering how micro, small and medium enterprises, including those owned and operated by women, can best be encouraged and supported.
Your Excellencies and Fellow Participants,
Africas external partners can and must contribute to the development of the private sector in Africa. Our goal of reducing poverty on the continent cannot be achieved without it. We hope the representatives of bilateral and multilateral partners can help us explore some practical and additional steps that can be taken to stimulate pro-poor growth. The provision of ODA funds for investment and other programs that support private enterprise are important. Even more important is that we, the external partners, help create an international enabling environment. We should ensure the complete removal of barriers that African exports face in accessing our markets. In this regard, I hope we will also take up the important issue of strengthening African capacity to negotiate and effectively defend their interests within the multilateral trading framework. Our discussions also need to include external partnership in the form of business-to-business relations and foreign private investment.
Excellencies, Ladies and Gentlemen,
While the role of the private sector is the main agenda item of this meeting, the Co-Chairpersons would also like to make some recommendations regarding the future orientation and focus of the GCA. We intend to make a brief presentation on this tomorrow. We are proud of the GCAs past record, and are confident that it can continue to make a significant contribution. We look forward to forging an even stronger north-south partnership dedicated to sustained growth and poverty reduction in Africa in the coming years.
Mr. President, Your Excellencies, and Fellow Participants,
One of the more important recent developments in Africa is the adoption by its leaders of the New African Initiative. This was a clear demonstration of the determination of Africans to take leadership of their own development. I am pleased to report that I hosted a Ministerial Meeting just ten days ago devoted, among other things, to the consolidation of the international communitys support to the Initiative. While African countries and their development partners will have a number of opportunities for collaborating in this regard, the GCA forum can make its own contribution to the realization of the Initiatives goals.
Before concluding, let me briefly refer to a key issue that figures among the immediate priorities of the African Initiative, namely the HIV/AIDS pandemic that is ravaging Africa. As is well known, Southern Africa bears the brunt of the scourge, and Botswana is among the most affected countries. The campaign against HIV/AIDS is now a global priority and I am sure all of us here are committed to taking an active part in the battle against this modern plague. Without concerted action by us all, hard-won gains will be undermined. But with dedicated and joint effort, we will be able to make progress.
Thank you for your attention.
Statement by His Excellency, The President of Botswana, Mr. Festus G. Mogae at a dinner in Honour of GCA Plenary Participants
25 October 2001
Your Excellencies Heads of State and Government;
Honourable GCA Co-Chairpersons;
Members of the Diplomatic Corps;
Ladies and Gentlemen;
1. Allow me , once again, to extend a warm welcome to you all. Especially those of you who are attending the Plenary of the Global Coalition for Africa from outside Botswana. The broad participation at this Plenary is clear indication that there is a strong commitment to pull Africa out of its current doldrums.
2. I would also like to take this opportunity to express the deep appreciation of the Government and people of Botswana to the GCA for giving our country the privilege and honour of hosting this important event.
3. Since its establishment, the GCA has, without doubt, played an effective role in putting the concerns of our continent on the global screen. We in Botswana take particular pride in the success of GCA because our Former President is one of the founding Chairpersons of the organization. It is therefore apposite that the first Plenary of the GCA to be held in Africa is being held in Botswana, homeland of Former President Masire. I am confident that this meeting will assist the Coalition refine its objectives and further deepen its resolve to foster the development of Africa.
Your Excellencies, Participants and Distinguished Guests,
4. Before the GCA was established in 1990, Botswana like most African countries went through trying periods of social change, political transformation and economic management. Being surrounded by neighbours who did not share the same political ideals placed a strain on our democratic and social institutions as well as the economy. Luckily, at no time has our commitment to democracy, peace, stability and prudent economic management wavered. The advent of the GCA, which promoted many of the ideals Botswana stood for, was thus a very welcome development. Good governance and democracy, which were long accepted in the developed world were hard to swallow, let alone discuss openly in Africa. The involvement of civil society and Non-Governmental Organisations, and even the Private Sector, in the development process was viewed as imposition by the North on the South. State control was pursued as a rigid ideology.
5. It was also during this period that the Bretton Woods Institutions were supporting structural adjustment programmes in many African countries which were often the subject of major policy and implementation disagreements. The problems of rampant corruption, lack of transparency, economic mismanagement and political instability were defined as African in form, if not in origin. Africas slow pace of development and failure to attract significant Foreign Direct Investment were simply explained in terms of these ills. For Africa, the future seemed very bleak.
6. Your Excellencies, Participants and Distinguished Guests, the emergence of the GCA with the main mandate of placing Africa at the pinnacle of solutions to her problems offered a glimmer of hope. But given the mutual suspicions that reigned at the time, there were serious doubts that it would survive, let alone thrive.
7. I am happy that the GCA has confounded the prophets of doom and that it has grown to become a thriving and well respected international organization by African countries, Developed countries and major international organizations. Addressing the issues of democracy, governance, economic and political reform as well as regional integration have been the principal focus of the GCA from its formation. Through perseverance and steadfastness, the GCA has seen its ideals become a reality. We now all accept that good governance and democracy are pre-requisites for sustainable economic and social development.
8. We have witnessed with pride issues about democracy and good governance taking centre stage in many international organizations, including our very own Organisation of African Unity. Support for economic and social reform programmes by donors and lending agencies now takes more account of their effects on societies and social groups within recipient countries. And most important, these programmes are now more responsive to the peculiar needs and circumstances of recipient countries, although there is still a lot of room for improvement. Issues of corruption and transparency are now viewed in a holistic manner instead of being treated as isolated occurrences. The remedies to corruption must not only treat the symptoms, but also the root causes.
9. Your Excellencies, Participants and Distinguished Guests, Botswana takes keen interest and plays and active part in international peace keeping efforts, observing elections as well as building a stable regional economic and social environment. Botswana has not hesitated to make its limited resources available for the advancement of peace and security in the continent. Former President Masires involvement in the Democratic Republic of Congo as a Facilitator in the Inter-Congolese Dialogue is one of our attempts at contributing to peace and stability on the continent. The secondment of our Permanent Representative at the UN to the Secretary-Generals office for service in Ethiopia and Eritrea is in the same spirit. It is our ardent hope that the International Community will ensure that this process is carried to its logical conclusion by availing the requisite resources and support to the Facilitators office.
10. The ongoing dialogue in Addis Ababa, which has brought together, for the first time since the war broke out three years ago, all the internal parties to the conflict, must be supported by all those who are concerned about the future of our continent. As you all know, at Independence in 1966 Botswana was faced with serious challenges, including apartheid and racism in the region, nascent democracy and an underdeveloped economy. Our ability to interact with the international community on an equal footing was limited. But, thanks to the assistance of friends and organizations like the GCA, we are now active players on the international scene with a stature that perhaps defies our size.
11. Our views on a number of international issues are often sought and contribute to solutions to various problems. Institutions that we have set up to nurture our democracy and economic development are sometimes useful for other countries to model and develop their own. In recent years, our establishment of the Directorate on Corruption and Economic Crime is being emulated in several countries as a mechanism to fight corruption. The mainstreaming of gender issues into national programmes has gone a long way in ensuring that gender bias is reversed so that all citizens can contribute and benefit from national development. It is pleasing to observe that most of Africa, and indeed the rest of the world, are now pursuing policies that empower men and women in economic development.
12. Botswana is cognizant of the fact that the road ahead is still a long and arduous one. We are alive to the fact that in the competitive world in which we live, there is no comfort zone. We will continue to cherish these interactions with other countries because they help us better understand the global environment, the challenges it poses as well as the opportunities it offers. More importantly, we believe that our future as a small landlocked economy will depend on our ability to closely interrelate and cooperate with other countries.
13. As we plan for the way forward, we should take note of the complexity of issues at hand. A number of organisations have come up to help address these challenges. There is even concern in some quarters that there could be duplication in certain instances.
14. Happily, GCA has been focused on the right issues from inception. Its informal, open and frank deliberation has enabled key stakeholders to engage one another in a constructive manner and mutually beneficial way. It is one of the few, if not the only forum, where former African Heads of State make their contribution side by side with the incumbent leaders. This ensures that we continue to benefit from the wise counsel and rich experience of our leaders even after their retirement from active politics. GCA deliberations and declarations have proven useful in preparing the ground for better understanding at other international fora. The GCA has a good track record of advancing certain causes on behalf of Africa. That role is important and we need to nurture and promote it.
15. New and equally pressing issues are emerging on the international scene, requiring strategic focus, mutual respect and understanding. African leaders and their friends and partners in the North must remain engaged if Africa is to avoid marginalisation. Africa needs to be fully integrated into the global financial architecture and governance at the earliest possible opportunity. The manner in which issues are discussed in GCA meetings is unprecedented. As I said earlier, we need the GCA to strengthen our efforts to tackle even problems among ourselves in a frank and concerted manner.
16. Your Excellencies, Participants and Distinguished Guests, before concluding my remarks, I wish to once more express my appreciation for the large attendance of this Plenary at very high level. This attests to the value we Africans place on the GCA as well as the desire to see the GCA grow from strength to strength. Organisations do not flourish on their own. Their strengths and successes are a function of the vision and dedication of those who lead and service them. I urge you to continue to nurture the GCA so that it can continue to be Africas think tank on issues that are central to Africas prosperity, stability and, indeed, its future.
17. Your Excellencies, Participants and Distinguished Guests, regarding the terrorist attacks on the and in the United States on 11th September 2001, we join the International Community in condemning it. We also support steps currently being undertaken by the U. S. and the U. K. to bring those responsible to book. The indiscriminate international terrorism that took place in Kenya and Tanzania and other places, and now in New York and Washington knows no boundaries, no race, no ideology and no religion. It is an attack on humanity. We therefore condemn it, and support measurers to fight it. I thank you.