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Africa's $550m investment boost
01/06/2006 19:05 - (SA)
Cape Town - Corporate and political leaders in Africa launched a $550m fund on Thursday to boost investment and growth by removing obstacles to doing business in the world's poorest continent.
The Investment Climate Facility (ICF), which has received support from the G8 rich nations and the European Union, was launched at the World Economic Forum's Africa summit in Cape Town, with initial funding pledges set to exceed a projected $100m, organisers said.
"For now we are open for business," said Niall FitzGerald, co-chair of the ICF and chairperson of Reuters.
Critical to success of plan
He said execution of the ICF's objectives, such as speeding up business registration, improving customs regulation, securing property rights and making financial markets more inclusive were critical to the success of the plan.
"Too many excellent initiatives in Africa lose drive, focus and ownership once the report is written," he told the forum's packed plenary session.
"The ICF will bring together the right people from government and business and provide them with the necessary support to address specific challenges," FitzGerald said.
Multinationals hoping to tap the continent's potential market of over 800 million people have backed the plan to help Africa become a global player and trading partner.
Tackle obstacles
Business leaders have emphasised the need for Africa to tackle obstacles to trade, such as bottlenecks at ports and in the registration of new companies.
Benjamin Mkapa, former Tanzanian president and co-chair of the fund, told Reuters the ICF was ground-breaking and could make a tangible impact on investment.
Investors wanted political and economic stability, including transparent, predictable tax regimes and financial systems, and protection for their intellectual and physical property rights.
"If you harmonise these (across the region) then it becomes a veritable investment destination," Mkapa said.
The ICF was launched with funding from multinationals Anglo American Corp, Royal Dutch/Shell, Unilever and SABMiller, while the African Development Bank and European Commission have strongly endorsed it.
Already creating interest
Britain confirmed on Thursday it was investing $30m in the ICF, which was part of the British-backed Africa Commission report.
Organisers say the programme is already creating interest in some sectors of African economies seeking help in attracting investment. ICF special adviser Ken Kwaku said 28 requests for assistance had been received before the fund was launched.
Only the 26 African countries that have agreed to open themselves up for scrutiny under the five-year-old New
Partnership for Africa's Development's (Nepad) Peer Review Mechanism qualify for funding through the ICF.
Under the Nepad initiative, African leaders have pledged to promote democracy and good governance in return for increased Western investment, trade and debt relief.
FitzGerald said the fund would swing quickly into action, with its next board meeting on Friday looking at concrete actions to implement its plans.
The ICF is targeting funding of $550m over its seven-year lifespan, with $500m expected from country and multilateral donors and $50m from the private sector.
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