From Rhetoric to Action: The African Investment Climate Facility

01.06.2006 World Economic Forum on Africa 2006 The Investment Climate Facility (ICF) for Africa, an innovative public private partnership aimed at making Africa a better place in which to do business, was launched. The Commission for Africa, convened by the United Kingdom government, had proposed the initiative, which was endorsed at last year's World Economic Forum Africa Economic Summit and by the leaders of the G 8 industrialized nations at their summit in Scotland. According to ICF Co Chair and session Chair Niall FitzGerald, Chairman, Reuters, United Kingdom; Member of the Foundation Board of the World Economic Forum, the facility had already received US$ 90 million in commitments. Additional unspecified pledges made by the European Union and the African Development Bank during the session were likely to push the total above US$ 100 million.

Britain is so far the only G 8 member to make good on its pledge of support. The ICF is different from other funds for Africa because "it is Africa owned", said Baroness Valerie Ann Amos, Leader of the House of Lords of the United Kingdom. In addition, "it is a unique partnership between African business and government, between multilateral and bilateral donors and other key stakeholders like NEPAD. The ICF, Amos explained, "is really about delivering economic growth with investment." She believed that as the ICF produces results, more donors would come forward. "It will complement what donors are doing."

African ownership will be a key factor for the success of the ICF, Benjamin William Mkapa, Co Chair, Investment Climate Facility for Africa, Dar Es Salaam; President of Tanzania (1995 2005), agreed. He urged African enterprises to contribute even a token amount. He also pledged that the facility would serve the purpose for which it was created and would do so "accountably, transparently, demonstrably." Indeed, Firmino Mucavele, Chief Executive, NEPAD Secretariat, South Africa, maintained that the ICF framework, with a reputable board of trustees, would work. It will quickly identify bottlenecks in investing in Africa and then aim to address them, he said.

The goal of the ICF is to remove obstacles both real and perceived to doing business in Africa. It is focusing on property rights and contract enforcement, reducing red tape, taxation and customs reform, making financial markets more inclusive, infrastructure facilitation, increasing the flexibility of labour markets, the promotion of competition, and the control of corruption and crime. This facility puts the private sector at the centre of Africa's development agenda, said Lars Thunell, Executive Vice President, International Finance Corporation (IFC), Washington DC.

Indeed, corporate donors expressed confidence in the ICF. "The time is right," Harish Manwani, President, Asia, Africa, Unilever, United Kingdom, reckoned. He was impressed by the confidence of Africa's leaders in "going for growth," the theme of this year's meeting. "Africa is growing and people can see the benefits." He also noted that the ICF is based on collaboration, accountability and benchmarking. Sir Mark Moody Stuart, Chairman, Anglo American, United Kingdom, agreed. The design of the ICF is right. "This is not studying things; it moves directly to implementation." He called for the involvement of civil society in the process.

From the floor, Trevor Manuel, Minister of Finance of South Africa, said that the ICF would promote the dissemination of best practices. Asked whether the political will existed to make the ICF a success, Jakaya M. Kikwete, President of Tanzania, sought to reassure participants: "Don't worry about political will. We are going for growth. The political will will be there." Mkapa pointed out that Britain was the only G 8 member to "put their money where there mouth was." He called on the other governments, as well as the private sector and donor organizations, to contribute.

"Words are cheap; action is what counts," FitzGerald declared. "This is Africa's moment not of greatest need but of greatest opportunity." At least 300 million Africans are still very poor, FitzGerald noted. To remedy this poverty, "Africa will need to grow faster and sustain that faster growth for as far as we can see." The ICF, he added, aimed to deliver pan continental and national programmes. It is closely engaged with the donor community. Its finite lifespan proves that "the ICF is not about institutional empire building." He concluded: "This is a proud and hopeful moment for Africa. There is a great deal to be done."

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