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Walking the Talk: Business Challenges for the NEPAD

Written by: World Economic Forum

Article Overview: Business and government leaders in South Africa say the formation of the New Partnership for Africa's Development (NEPAD) has led to cooperation to implement programmes in the country and across Africa which embrace the spirit of the NEPAD.

Walking the Talk: Business Challenges for the NEPAD

12.06.2003

Africa Economic Summit 2003

Business and government leaders in South Africa say the formation of the New Partnership for Africa's Development (NEPAD) has led to cooperation to implement programmes in the country and across Africa which embrace the spirit of the NEPAD.

"Our view is that the structures are succeeding and that they can make a very big difference," said Alec Erwin, South African Minister of Trade and Industry. "We are working together to forge this partnership which is the making of our future."

Erwin was addressing a plenary session during a discussion on "Walking the Talk: the business challenges for NEPAD".

He was supported by Reuel Khoza, Chairman of Eskom, the South African electricity utility. "A working partnership is developing between governments and business," he said. "NEPAD is working already."

Erwin outlined for Summit participants how government and business in South Africa had grappled with the concept of a successful partnership.

Business has adopted covenants on corporate governance and the elimination of corruption, and codes on good accounting and auditing practices and on corporate social responsibility. Governments have set in motion the peer review mechanism, which Erwin said allows them to commission best governance practices to see how they comply with the best in the world.

"We hope soon to have the first countries going through that peer review," he said

Because Africa is a priority for South Africa, the South African government set up a group, led by the trade and industry department, to work with businesses involved in Africa in pursuit of common objectives. Erwin said there were no quick fixes or instant solutions it is teamwork where all pull together.

Khoza referred to an AT Kearney study which showed that business cynical, sceptical and contemptuous of the NEPAD a year ago was now 80% supportive of the programme. "We have identified NEPAD as a catalyst for coordinating economic growth in Africa."

He said the NEPAD had also been explained successfully to leading governments and to world business leaders. "Apart from the war psychosis at the World Economic Forum in Davos in February 2003, NEPAD and the African programme to save itself was the only show in town."

Business had put the business case for the NEPAD to ambassadors from the G 8 countries to ensure that governments did not see the NEPAD as an idea peddled only by politicians.

Khoza concluded with the hope that NEPAD would be the instrument that would transform Africa.

"May the contributions of this generation of African leadership be worthy of continental and global adulation, and worthy of respect by posterity," he said.

Adan Mohamed, Managing Director of Barclays Bank of Kenya Limited, said there was still a great deal of ignorance and scepticism about the NEPAD in East African countries. "NEPAD is the future of Africa. Unfortunately the future of Africa is clouded by the sins of the past. People ask what will be different about this vision."

Kenya has a NEPAD secretariat and a steering committee comprising private sector and government members which is advancing NEPAD issues in the region.

A regional meeting has been proposed for July this year, which Mohamed hoped would be attended by the three East African heads of state, for a major launch of NEPAD and its activities in East Africa.

Klaus D�g, Chief Executive of Siemens in South Africa, offered some advice from the friendly perspective of a multinational corporation that supports the NEPAD and believes it can put Africa back on its feet. "When the continent prospers, each and every business will prosper and be in a position to create jobs," he said.

However, companies wishing to undertake major infrastructure projects in Africa came up against the problem of securing project finance. The financiers looked at the project risk, and the country risk, and finance became difficult to obtain.

"Botswana has an A credit rating, but many countries in dire need of infrastructure projects have a C minus rating or no rating at all," he said.

"NEPAD must ensure that the risk profile of countries will be lower in the years to come. Better project finance will make capital costs cheaper, which will make project costs cheaper and allow everyone to implement more infrastructure projects on the continent."

Marc Ravalomanana, President of Madagascar, said supporters of the NEPAD are committed to building the African continent. However, African governments must ensure that their business partners are comfortable with government policies.

"Our partners must be assured that we are committed to true democracy. And our business partners must cooperate with us to eradicate corruption. Those who offer bribes are just as corrupt as those who accept them," he said.

Nallie Bosman, Group Chief Executive, Absa Group, South Africa, outlined Absa s corporate social responsibility programmes and how they tie into the NEPAD objectives in South Africa and the African countries where the banking group operates.

The social responsibility programmes aim at social development by investing in resources, including human resources. The Absa Foundation invests in the development of disadvantaged communities, while staff is encouraged to do volunteer community work and to contribute financially to selected charities. In addition, Absa contributes to development through its normal commercial activities electronic pension payment schemes bring state of the art technology to remote rural areas in South Africa, while Absa s expansion into Mozambique and East Africa has led to infrastructure investment and the upgrading of technology in those countries.

Robert Mallett, Senior Vice President, Corporate Affairs, Pfizer, USA, offered a multinational perspective of the ways to promote the NEPAD ideals. These included helping to ensure market acceptance for African goods and products, and lower trade barriers for these products; leveraging market presence by helping African countries meet international standards; and learning from other countries where small business has developed terrific skills in social marketing, such as health literacy.

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Article Tags: alec, business challenges, catalyst, corporate governance, corporate social responsibility, covenants, economic summit, electricity utility, elimination of corruption, erwin, governance practices, government leaders, nepad, partnership business, peer review, plenary session, quick fixes, south african government, south african minister, summit participants



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