Development opportunities, hot topic at WEF on Africa

Marilou Jane (L2), sector director of the Africa Finance and Private Sector Development of World Bank, talks about the Africa Competitiveness Report 2009 in Cape Town, South Africa, June 10, 2009. The Africa Competitiveness Report 2009 released on Wednesday highlighted that financial development and trade were crucial to making Africa more competitive and riding out current crisis. (Xinhua/Xu Suhui)
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By Song Ying and Li Jianmin

CAPE TOWN, South Africa, June 10 (Xinhua) -- Co-chairs of the World Economic Forum (WEF) on Africa stressed on Wednesday the development opportunities of the continent on the opening plenary of the platform.

The meeting came as the global economic meltdown has sucked the growth strength of many African nations, making flagging the traditional economic drivers like foreign investment, demand for raw material and oversea remittance.

A journalist reads the Africa Competitiveness Report 2009 in Cape Town, South Africa, June 10, 2009. The Africa Competitiveness Report 2009 released on Wednesday highlighted that financial development and trade were crucial to making Africa more competitive and riding out current crisis. (Xinhua/Xu Suhui)
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At the plenary under the theme "Africa and the New Global Economy", the five co-chairs believed that African countries should use the crisis which has devastating effects on the world's major economies, as an opportunity to bring about new development in the continent.

Newly-elected South African President Jacob Zuma, also the host of the forum, said the continuation of the current crisis will mean increased starvation, poverty and child mortality."

However, he expressed belief that Africa can have its own way to deal with the crisis just like other parts of the world.

"We view the economic downturn as providing both challenges and opportunities for the continent and the developing world in general," said Zuma.

World Bank Managing Director Ngozi Okonjo-Iweala said the impacts of the crisis on Africa are not abstract.

She argued that the key issue is how to focus on the opportunity brought by the crisis to position Africa for long-term development.

Okonjo-Iweala also stressed the importance of having the voice of African countries on the table.

Jiang Jianqing, chairman of the board of the Industrial and Commercial Bank of China, told the participants at the opening plenary that the global crisis poses a challenge to African economy as the price of raw material, outside demand and foreign investment all drop.

"Africa will have more opportunities in the long run as the global economy will be in a more balanced pattern after the crisis. The relations between development and fairness will be better," said Jiang.

Another co-chair, Soud Ba'alawy, executive chairman of Dubai Group of the United Arab Emirates, said that there is a misconception that the investment to Africa will have high risks. People will begin to wonder which one has greater risk after the crisis started in the West.

The World Economic Forum on Africa has attracted over 800 participants from 50 countries. Five African leaders have taken part in the meetings. They are Kenyan Prime Minister Raila Amolo Odinga, Lesotho's Prime Minister Pakalitha Mosislili, Rwandan President Paul Kagame, South African President Zuma and Zambian President Rupiah Bwezani Banda.

Participants of the forum will try to seek practical solutions to foster better business practices and greater investment across the continent.

The closing plenary session of the platform scheduled for Friday afternoon will highlight the outcomes of the meeting and map out the future engagement of main stakeholders.

World business leaders meet on Africa strategy against crisis

by Song Ying and Li Jianmin

CAPE TOWN, June 10 (Xinhua) -- The 19th World Economic Forum on Africa started on Wednesday in the coastal city of Cape Town, South Africa, under the theme of "Implications of the Global Economic Crisis for Africa".

The meeting comes as the global economic meltdown has mounted pressure on major economies in Africa, sucking the strength of traditional economic drivers like foreign investment, demand for raw material and oversea remittance.

Jiang Jianqing, co-chair of the World Economic Forum on Africa and chairman of the board of the Industrial and Commercial Bank of China, said at the press conference that the Davos meetings of the World Economic Forum he attended have inspired him a lot.

"It was my first time to take part in the Africa meeting of the forum, " Jiang said, "I desire to learn the opinions and suggestions of all sides on how to cope with the challenges brought by the global crisis."

Jiang and Liu Guijin, special representative of African affairs of the Chinese Foreign Ministry, would attend parts of the sessions of the forum.

Prior to the meeting, Head of Africa of the World Economic Forum Katherine Tweedie highlighted the urgency of exploring how macroeconomic shifts are shaping the global agenda and how these trends are affecting Africa's diverse economies.

"Most importantly, the meeting will facilitate interaction and dialogue that will allow our key leaders to address the immediate challenges posed by the crisis and fully explore the unique opportunities that Africa has at its doorstep in this new global arena," Tweedie said.

The talks attract over 800 participants from 50 countries. Five African leaders have confirmed their attendance, including Kenyan Prime Minister Raila Amolo Odinga, Lesotho's Prime Minister Pakalitha Mosislili, Rwandan President Paul Kagame, newly-elected South African President Jacob Zuma and his Zambian counterpart Rupiah Bwezani Banda.

Participants of the forum will try to seek practical solutions to foster better business practices and greater investment across the continent.

The first event of the meeting would be a highly interactive session to engage over 350 leaders in a brainstorming exercise. Leaders will examine the changing global landscape and determine the major challenges for which African countries need to be most prepared in the coming year.

The discussions will be based on five general themes in the fields of politics, business and economics, namely, Global Shifts; Regional Effects; Drivers of the Economy; Change Leadership; Collaboration across Borders; and Growth through Innovation.

Among high-profile topics to be discussed are Macroeconomic Shifts in the Global Agenda, Economic Crisis and Impact on Africa.

Economic deliberations will be closely linked to important social and environmental issues including food security, climate change, health care and education.

The 2010 FIFA World Cup in South Africa also draws the attention of business leaders in the world. They will try to explore the economic and social impacts of the international football event in the forum.

The closing plenary session of the platform scheduled for Friday afternoon will highlight the outcomes of the meeting and map out the future engagement of main stakeholders.

The Africa meeting followed the international talks in Jordan sponsored by the World Economic Forum to map out the Middle East response to the world economic crisis.

Special Report:
Global Financial
Crisis

African largest trading bloc COMESA kicks off summit in Zimbabwe

by Li Nuer, Song Ying and Tichaona Chifamba

VICTORIA FALLS, Zimbabwe, June 7 (Xinhua) -- The 13th summit of Africa's largest trading group COMESA started in the Zimbabwean resort town of Victoria Falls on Sunday, with the long-anticipated official launch of a regional customs union topping the agenda.

It will be the second crucial step taken by the Common Market for Eastern and Southern Africa (COMESA) in its process of economic integration after the 19-member bloc established the first free trading area in Africa in 2000

The important move had been confirmed again by COMESA secretary general Sindiso Ngwenya before the summit. The COMESA chief announced that the customs union will be launched next Monday when the summit came to an end.

"The Common Tariff Nomenclature and the Common Customs Documentation (CCD) are in place and what remains is the COMESA Regional Policy still under negotiation," he had said.

At the opening ceremony of the summit, outgoing chairman of COMESA Authority, Kenyan President Mwai Kibaki gave a report on progress made since the last summit in Nairobi in 2007, including the movement towards harmonization of policies between COMESA and the other economic blocs of the Southern African Development Community and the East African Community towards an African Economic Community.

He said he was encouraged by the fact that intra-COMESA trade had 52 billion U.S. dollars in 2008, up from three billion dollars the previous year.

"As we collectively position ourselves to ushering the next milestone on our regional agenda, let us also remain fully aware of the broader agenda on the integration of the African continent. It is necessary that we focus on the bigger picture by strengthening our relations with other regional blocs," Kibaki said.

Ugandan President Yoweri Museveni thanked the Zimbabwean political leadership and people for coming up with an inclusive government and averting a potentially serious conflict. He also said COMESA should push for first world status and look at how it can take advantage of the current global economic crisis.

"We need to find how best we can survive and even how best we can take advantage of it," he said.

Vice Chairman of African Union Commission Erastus Mwencha decried the fact that although Africa was represented at the last G20 summit, it was still to remove a stimulus package as pledged there.

He stressed the need for Africa to consolidate its strategies with climate change, whose effects he said could affect the lives of its citizens.

The customs union aims to lift tariffs among member states while harmonizing barriers with third parties through the Common External Tariff, which the community's heads of state and government adopted in May 2007.

With the theme of "Consolidating Regional Integration through Value Addition, Trade and Food Security", the summit followed a meeting of the Council of Ministers from Tuesday to Thursday and talks of COMESA foreign ministers on Friday and Saturday.

The summit, which had originally been set for last year, has been postponed twice. The COMESA made a put-off decision first to allow the host country Zimbabwe to complete its electoral process which finally gave birth to the formation of an all inclusive government.

The meeting was later postponed again as organizers took into account the need to begin the process of implementing the decisions of the summit of three trading blocs held in Uganda last year regarding the harmonization of Free Trade Areas and common external tariffs.

COMESA, headquartered in the Zambian capital of Lusaka, was formed in 1994 to replace its forerunner, the Preferential Trade Area. It enjoys an aggregate population of about 400 million and combined GDP of over 360 billion U.S. dollars.

Backgrounder: Basic facts about
COMESA

Backgrounder: Brief introduction about
COMESA authority and chief

Backgrounder: Brief introduction about
Zimbabwe

Tanzania ranked within top five African investment destinations

DAR ES SALAAM, Feb.19 (Xinhua) -- Tanzania has joined Nigeria, Ethiopia, South Africa and Mauritius as the top five potential investment destinations in Africa, according to a recent African Rainbow survey.

"Africa is going to overtake the Middle East to become the second fastest growing region in the world after emerging Asia," said African Rainbow chief executive Katharine Pulvermacher, "It will be affected by the global financial crisis but it is much less exposed than many places."

The London-based business consultancy firm ranks the 53 countries in Africa in its Star of Africa index in terms of their investment potentials in various aspects.

IFC, AGRA sign new deal to boost agricultural growth in Africa

NAIROBI, Feb. 13 (Xinhua) -- The International Finance Corporation (IFC) on
Friday signed a partnership deal with the Alliance for a Green Revolution in
Africa (AGRA) in Nairobi to unlock credit and financing for small-scale farmers
and agribusinesses across sub-Saharan Africa.

The organizations said the collaboration will help expand or scale up
AGRA's existing innovative financing projects to reach more countries and key
stakeholders in the African agricultural value chain. AGRA and IFC both pursue
practical solutions to help alleviate poverty.

"AGRA's partnership with IFC will harness the strengths of both
organizations to scale up AGRA's innovative programs across the agricultural
value chain. We will improve the livelihoods of many more small-scale farmers
and be able to do it sooner," Namanga Ngongi, AGRA's President told journalists
in Nairobi.

"The growth of the agricultural sector will strengthen the continent's food
security as well as create employment and raise living standards for millions of
smallholder African farmers."

Ngongi said the amount of agricultural lending in Africa is very low, one
of the reasons hindering farmers' ability to achieve their full potential, and
escaping hunger and poverty.

The partnership between IFC and AGRA specifically focuses on developing
market-based incentives and tools to increase agricultural productivity.

For example, IFC and AGRA said they will work together in various ways to
scale up AGRA's partnerships with investors and national commercial banks to
make loans available to farmers and agribusinesses like smaller seed companies,
expand and finance agro-dealer networks to increase availability of farm inputs
and expertise in rural areas, and support 'fertilizer value chain' financing,
including regional procurement of fertilizer.

"The challenges to growing Africa's agribusiness are great. But so are the
opportunities," said Lars Thunell, Executive VP and CEO of IFC.

"IFC is committed to helping Africa capitalize on these opportunities by
playing a catalytic role of bringing a wide range of partners together to
deliver practical market based solutions. Our alliance with AGRA is a very
important step in this direction," Thunell said.

AGRA has responded to the lack of access to credit for farmers and smaller
agribusinesses in sub-Saharan Africa by working with financial institutions and
investors to make low-interest loans available to key operators along the
agricultural value chain -- agro-dealers, fertilizer wholesalers, and seed
companies -- and to make financing available for warehouse receipt systems,
farmer groups and agro-processing facilities.

AGRA's work to increase farm productivity and incomes complements IFC's
support for private sector development through mobilizing private capital and
providing advisory and risk mitigation services to businesses and governments.

According to deal, the two will provide credit guarantees to Africa-based
financial institutions in order to leverage significant private sector financing
for agriculture.

They will also expand AGRAs Agro-dealer Development Program to recruit and
train significantly more agro-dealers.

Tnunnel said the two organizations will also provide financing to the
African Seed Investment Fund (ASIF), which provides reimbursable loans to small
to medium African seed companies. AGRA has already made 12 million U.S. dollars
investment in the ASIF.

They will also develop and fund a financing mechanism for fertilizer
wholesale companies and explore the feasibility of establishing the West African
Agribusiness Investment Fund (WAAIF) to provide long-term commercial risk
capital to small and medium agribusinesses.

World Bank official warns on human crisis in Africa

Special Report:Global Financial Crisis

LAGOS, Feb. 2 (Xinhua) -- The World Bank's Chief Economist on Africa Shanta Devarajan has warned that the global financial crisis would pose a greater danger of human crisis for Africa.

Devarajan gave the warning on Sunday in a statement posted on the World Bank's website, saying that since Africa has already caught the flu of the global financial crisis, it will likely experience a deceleration.

"Africa was spared the first-round effects of banking failures, it is already facing the second-round impacts of declining capital flows, remittances, stagnating foreign aid, falling commodity prices and export revenues," he was quoted saying by the News Agency of Nigeria on Sunday.

He said his colleague at the World Bank, Justin Lin, had earlier warned against allowing the global financial crisis to become a human crisis.

"Child mortality, for instance, rises during decelerations, but hardly falls during acceleration and primary school completion rates are substantially lower in countries experiencing growth decelerations, as is life expectancy," he added.

Devarajan said the official development assistance either per capita or as a share of GDP is lower during decelerations, noting that it is pro-cyclical.

The Governor of the Central Bank of Nigeria, Chukwuma Soludo, admitted last week that Nigeria is vulnerable to the financial crisis.

Economic experts in the country have listed the meltdown in the capital market, gradual depletion of the foreign reserve and the falling crude oil prices as effects of the global financial crisis.

Economist says South Africa needs more competition in economy

Special Report:Global Financial Crisis

JOHANNESBURG, Jan. 15 (Xinhua) -- More competition is needed in South Africa's economy, chief economist at Investment Solutions Chris Hart said on Thursday.

He was addressing the Democratic Alliance's economic summit held in Johannesburg.

"In the apartheid years we had the same problem -- the economy was over concentrated and there was not enough competition to fight unemployment and inflation," Hart said.

He added that the country should not be in a position where a single entity such as Eskom held it to ransom.

"This is why we need a number of electricity producers," Hart said.

He added that South Africa's protected monopolies have led to problems such as the recent complaint of bread price fixing.

Hart suggested that the government should be involved in regulation and not business.

"You're not allowed to compete with the post office. The government won't allow competition when it comes to its own business," Hart said.

"And with our telephone network, only three players can compete, and that doesn't make sense when you have an unemployment rate of 23 percent." he added.

Democratic Alliance's (DA) leader Helen Zille opened the economic summit.

According to Zille, the party's major concern during the present economic crisis is job loss.

"In the third quarter of last year, 74,000 jobs were lost in South Africa, and every wage earner provides for up to ten dependants - so this is very significant," Zille said.

The DA leader noted that some trade union analysts have predicted that 310, 000 jobs will be lost in 2009.