31 August 2002
Ladies and Gentlemen,
Honoured guests
Force of circumstance, gives me the honour today to share some thoughts about NEPAD and specifically the role of partnership between government and the business community with this distinguished group of leaders and business professionals, or practitioners of reconstruction and development, if you will.
The English expression, "the proof of the pudding is in the eating" suggests that one only gets a result through specific action, or slightly differently, one can only really assess a course of action if one engages with it. Besides the assumption that there is a pudding to eat in the first place – something that escapes the experience for most of our continent – I suggest this applies to NEPAD as well in an important way. Basically, we should accept right up front that the shape and course of NEPAD, its effect and impact on Africa’s people as a whole, will be determined by the extent of our active and forceful participation and engagement. It is only through that communion with every single element of its plans of action that we will be able to ensure that the Plan for Africa’s development does not become hijacked and turned into a nice plan for some others’ further enrichment and continued development. Thus, we cannot, as Africans, take for granted the profound statements, beliefs and commitments contained in the founding declarations of NEPAD or indeed of the African Union.
NEPAD as we know requires a three-pronged strategy for success. It needs to establish conditions for sustainable development (inclusive of peace and security, improved governance, sound human rights respect, and so on) and to strengthen regional integration. Secondly, NEPAD identifies priority sectors that can reverse our continent’s continued marginalisation and which lay the foundation for the sustained development I have referred to; and thirdly, NEPAD’s success requires the mobilization of resources within and outside the continent for the effective implementation of programmes.i On the face of it, these sound quite straight forward. However, the reality is different. Not only is Africa’s massive vastness matched by its myriad cultural, religious, economic, social and historical diversity; the depth of the challenges facing individual countries varies considerably; the experience of each sometimes teaches different lessons; and whilst some commonalities exist between colonial experiences, variations on the themes of decolonisation and liberation wars have produced various outcomes as well. As a NEPAD document states: "No African country is a replica of another and no African society is a mirror image of another. However, we believe that the variety within our oneness can be enriching."(i)
Tracking a course through this complexity requires commitment and political will, cooperation and participation of all sectors of our societies, and the building of essential partnerships that cross boundaries of class and culture, and transcend the frontiers of both nations and tradition.
For today’s engagement I wish to restrict my remarks to the business community’s partnership with government in the critical area of the third prong of NEPAD’s strategy, namely the mobilization of resources both within and outside our continent for the effective implementation of programmes.
A number of important engagements with the private business sector have already taken place around the world and have ended in strong support from the international business community for NEPAD’s objectives and its programme. The World Economic Forum in New York in January 2002 was followed by the WEF Africa Regional Summit in Durban in June. The Commonwealth Business Council and the USA Corporate Council for Africa provided valuable insights. A number of key business conferences in Abuja, Berlin, Johannesburg, and especially in Dakar in April and Durban in June have made progress in bringing business into the NEPAD picture. The UN Finance for Development Conference in Monterrey, Mexico and of course the current WSSD in Sandton also provide critical arenas for engagement in support of NEPAD.
At a practical level, the declaration by more than 130 South African-based companies in Durban at the African Union Business Summit to work together with other companies and to make contact with African business leaders on the continent is a good step in the right direction. It remains a fact of life that the majority of linkages between businesses in our various African countries are with corporations or enterprises in Europe, the America’s or Asia and the Far East. Just as it remains difficult to make flight connections within Africa, so our business networks stretch overseas more often than they link across our own borders. This is a situation that must change; and it is a very welcome fact that our presence here today is evidence of a growing and hopefully accelerating trend to bring about greater cooperation between African business enterprises from Africa itself.
The State, as an entity, has played and must continue to play, an important role in economic development in Africa. The reasons for Africa’s economic problems are much larger than the tired arguments that place the blame solely on the question of state intervention. The reality shows that where the state has failed ion a number of instances to address these problems, the private sector or "the market" has also not been the panacea it is frequently made out to be. The participation of the public and the private sectors in African countries will remain a dynamic and evolving process. One African scholar has summarized the situation by saying that, because of historical and economic distortions, "in Africa social need [defined by poverty, generally undiversified economies, rural or peasant marginalisation, export orientation of the modern sectors of the economy, and so on] and market allocation of resources [dependent on purchasing power, diversity, etc] … often fail to correspond with each other."(ii) In essence, we do not have the time available to allow the trickle (of traditional trickle down theories) to provide our people with the development they need.
Nonetheless, there are constraints within the state and private sectors of African countries that need to be addressed if NEPAD is to succeed. Some of these relate to excessive bureaucracy, inefficient systems, ineffective management, lack of capacity and so on. Africa’s leaders have, however, gone a long way to identify these problems from within the state sector and to suggest corrective action.
It is important for the private sector to take note of these and to duplicate similar actions in their own community. President Thabo Mbeki has pointed out that, for example, "proper adherence to good economic governance, aimed at the emancipation of our people from poverty, is as important as ensuring political democracy."(iii) NEPAD has defined good economic governance in a holistic way through the adoption of 8 prioritized codes and standards that "have the potential to promote market efficiency, to control wasteful spending, to consolidate democracy, and to encourage private financial flows – all of which are critical aspects of the quest to reduce poverty and enhance sustainable development." These codes and standards cover good practice and transparency in monetary and financial policies, fiscal transparency, best practice in budget transparency, guidelines for public debt management, principles of corporate governance, the adoption of international accounting and auditing standards and core principles for effective banking supervision. These codes and standards are accompanied by three related sets of guidelines for transparency and financial management to include principles for payment systems; recommendations on anti-money laundering; and core principles for securities and insurance supervision and regulation.(iv) At the same time, the NEPAD Task Force from Ministries of Finance and Central Banks has begun its mandated review of economic and corporate governance practice by NEPAD countries in pursuit of the need to promote "concrete and timebound programmes to enhance the quality of economic and public financial management, as well as corporate governance."(v) The efforts are all part of targeted capacity building exercises to ensure that governments will be able to implement the programmes and partnerships that are NEPAD’s lifeblood.
I have taken some time to describe some of the practical steps that are being taken within the NEPAD initiative to emphasise that NEPAD cannot be dismissed as eyewash, nor derided as just some more "pie in the sky". Critical to its success is the concept of partnership, partnership between a wide variety of constituencies and groupings. So, in President Mbeki’s words, "the business people, the women, the intelligentsia, the youth, the workers, the politicians, media workers – all of us – have crucial and specific roles that we can and must play" as "conscious agents of change".
At the same time, and this has been emphasized by many, "we should find ways to use our natural riches to improve the living conditions of all our people, instead of those riches benefiting outsiders and a small elite."(vi)
Too frequently, the history of business interaction with Africa – and much of the developing world, it must be said – has been one of asset stripping, of ruthless extraction, of shallow investment for immediate gain, with little regard to the environment or indeed of the transfer of skills, technology or training to local populations. NEPAD aims to build on the progressive experience of the few and extend the benefits of global relationships to the many.
Businesses must approach their relationship with NEPAD as partners, not in the old way of clients, customers, brutish investors and so on. We are more than aware, as I have outlined, that the practical and real concerns of entrepreneurs must be and are being addressed. We must consider that we are in this together, prepared for the long haul where the vast majority of us will remain in Africa forever and to those who follow us we must bequeath a sustainable environment that provides for all. Thus, when we consider minerals and the mining of gemstones, let’s think local beneficiation; when we invest in oil and energy resources, let us consider environmental replenishment, health, and local needs; when we consider timber exploitation, let us treat the rain forests of the Congo basin and Central Africa as natural assets that must survive; when we think infrastructure projects, let us remember that water is the source of life in many ways and is the scarcest of resources. The common denominator to justify public and private partnerships is often understood as the inability of either sector to provide all the means for development on their own. Perhaps it is better to consider that public-private partnerships are a natural way of cooperating these days because the problems that confront us collectively have become so enormous that unless we unite our efforts and appreciate our specific roles we will all be losers in the long run.
A final comment on a common topic: corruption! Once again, Transparency International has produced its selected list of nation miscreants around the globe.
African countries score poorly by their criteria. African governments have acknowledged and accepted that corruption must be rooted out. At the same time it remains true that insufficient attention is placed on an important source of corruption in the modern world – those who provide the inducements in the first place. Good economic governance, and the promotion of sounds ethics and probity is not only the responsibility of states, important as that is. Multinationals, corporations, even some states and business generally, must desist from offering bribes, from promoting bribery and employing economic coercion in attempts to improve their chances of winning tenders or contracts. They should resist the temptation as well to foist policies and programmes on others in an apparent desire to promote development when in fact they boost the interests of their own better-off constituencies. For in such situations it is not relationships that are built and encouraged, but rather contempt and ridicule for both parties at the end of the day.
One of NEPAD’s documents states quite baldly that "Nepad is founded on a hard-headed assessment of the political and socio-economic realities in Africa today."viii Let me conclude by supporting the view that Nepad’s success and Africa’s regeneration depend likewise on a hard-headed approach to country-to-country relations, to the adoption of solid business plans and partnerships, and to the continuation of dedicated work towards greater cooperation and understanding that exists between the people of Africa.
I thank you.
(i) Towards the Implementation of NEPAD: Progress Report and Initial Action Plan, June 2002. para 27
(ii) Kidane Mengisteab, "A Partnership of the State and the Market in African Development: What is an Appropriate Mix?" in Mengisteab, K and Logan, B Beyond Economic Liberalisation in Africa: Structural Adjustment and its Alternatives [London: Zed, 1995]
(iii) Thabo Mbeki "New Partnership for Africa’s Development and African Union", Address to a Joint Sitting of Parliament, Cape Town, South Africa, 31 October 2001
(iv) NEPAD Declaration on Democracy, Political, Economic and Corporate Governance, para 18
(v) NEPAD document on the Economic and Corporate Governance Initiative, para 86
(vi) NEPAD Declaration on Democracy, Political, Economic and Corporate Governance, para 26