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  World Economic Forum on Africa
    Cape Town, 31 May – 2 June 2006
World Economic Forum on Africa Home   

The Year of Africa in ReviewPrinter friendly versionSend to a friend
"Action is what counts. This is Africa's moment, not of greatest need, but of greatest opportunity." Niall FitzGerald Chairman, Reuters, United Kingdom; Member of the Foundation Board of the World Economic Forum
The world focused unprecedented attention on Africa in 2005, which was dubbed the "Year of Africa".
•  Unprecedented economic growth on the continent suggests that the concerted efforts of the international community to boost Africa's development are paying off.
•  Initiatives such as the African Peer Review Mechanism and the Millennium Challenge Account have yielded some initial positive results.
•  The general investment climate in Africa has improved, as indicated by the rapid increase in trade with and investment from China and India.
•  Significant development challenges remain. Africa needs a development decade — a year is not enough.

Declared the Year of Africa by the international community, 2005 was a year of unprecedented global focus on the continent, with significant promises and undertakings made in development and poverty alleviation. Positive economic growth seems to have been the payoff, although many challenges remain.

In 2005, the Blair Commission for Africa declared that this would be the Year of Africa. It asserted that at no previous time had there been such focus on the continent by the global community or as much goodwill towards it.

"There is the problem of tariff escalation. If Ghana exports cocoa beans to the US, the tariff is 0.5%. If it tries to export chocolate, the tariff is 30%." Gobind Nankani Vice-President for Africa, World Bank, Washington DC

In addition, an unprecedented growth rate for the continent of 4.5% in 2005 reflects that efforts by the international community, complemented by internal reforms by Africans themselves, appear to be paying off. Haiko Alfeld, Director, Africa, World Economic Forum, noted that the African continent has "emphatically and irreversibly turned the corner."

As the United Kingdom took over the chair of the G-8 group of industrialized countries in 2005, Prime Minister Tony Blair made reducing poverty in Africa through development the central pillar of his leadership of the high-level group. In doing so, he pushed the continent to the forefront of the agenda.

The Commission for Africa proposed an immediate doubling of aid to Africa to push development, with the amount rising to US$ 50 billion of additional aid by 2015, in addition to other wide-ranging proposals to improve living conditions on the continent.

There were other noteworthy developments. For example, the G-8 countries endorsed debt relief for 18 countries (14 of them African) of US$ 40 billion, in addition to agreeing to 100% debt relief for 38 countries that had successfully developed under the Heavily Indebted Poor Countries (HIPC) Initiative.

The Doha Development Round, while unsuccessful so far in providing better access for African products in developed markets, managed to put important issues on the agenda for discussion, and in so doing, increased pressure on the countries controlling these markets. The challenge is to meet agreed-to timetables for discussion to ensure that the process does not lose momentum as developed countries get diverted by their own issues.

The African Peer Review Mechanism, viewed as a significant force for positive change, kicked off in 2005 with the first peer review processes undertaken on countries drawn from the 26 countries that have signed up to the initiative.

The Millennium Challenge Account, launched in 2004 to provide development assistance to developing countries that meet specific criteria relating to issues such as governance and economic freedom, signed its first funding compacts with two African countries in 2005 – Madagascar and Cape Verde. A third country, Benin, signed in early 2006.

"Business believes African countries should paddle their own canoes – they need to develop the kinds of structures that allow would-be investors to invest." Reuel Khoza Chairman, Nedbank Group, South Africa

The US government pledged more support to Africa and, among other things, committed additional funding to the HIV/AIDS pandemic.

In addition to specific interventions, Africa also saw the benefits of a better governance climate in many member states and a deepening of democracy, including the successful conclusion of a number of elections. African leaders also joined the international community in tackling ongoing disputes in countries such as the Democratic Republic of Congo, Cτte d'Ivoire and Sudan.

There was also a new resolve to promote the African business and investment climate, with many countries extending economic reforms and putting in place structures to fight corruption. Discussions about establishing the African Investment Climate Facility started in 2005 and the facility was launched at the World Economic Forum on Africa in 2006, with initial funding of more than US$ 100 million, including strong corporate and donor government support.

In addition, a change in leadership at the African Development Bank precipitated a greater focus on infrastructure development.

A key development on the business front has been the rapid increase in Chinese, and to some extent Indian, investment in African countries. In just a few years, trade and investment between China and Africa has tripled, with the pace of such engagement becoming particularly vigorous during 2005. The trend has continued into 2006, as has the phenomenon of South African business expansion into the continent.

Many African countries have also seen a windfall from record oil and commodity prices over the past two years.

These positive trends seem set to continue beyond 2006, given their long-term nature. But what is in question is the delivery by the G-8 on the significant promises made in 2005. Africa is not on the agenda for the 2006 meeting and member states appear far from ready to make concessions on trade issues. The donor community remains fragmented and is not being held accountable for its lack of results in Africa.

African countries are also moving too slowly in taking advantage of the programmes and commitments made by the developed world, and many of their central problems – disease, skills shortages, education, unemployment and others – remain major challenges. The private sector remains weak, particularly in the area of small and medium enterprises and the key sector for poverty eradication – agriculture – is still underdeveloped.

In addition to concerns about global trade, African governments must focus on increasing intra-African trade. "We meet as African trade ministers to discuss what we can take to Hong Kong. But we never meet to ask how we can deepen intra-African trade and break down tariffs among ourselves," remarked Mandisi Mpahlwa, Minister of Trade and Industry of South Africa.

What Africa needs is a development decade – a year is not enough. Africans need to be more proactive about solving their own problems. As Charles Soludo, Governor of the Central Bank of Nigeria affirmed, "Ultimately, Africans will develop Africa."

"We have brought peace to Africa; now we can look at our development. Our development will come from our own investment, and that investment will come with economic growth. The development of Africa depends on Africans." Firmino Mucavele Chief Executive, NEPAD Secretariat, South Africa