ULLA TOERNAES, MO IBRAHIM and GREG MILLS
Below is an op-ed by Ulla Toernaes, Mo Ibrahim and Greg Mills on the release of the Africa Commission’s report in Copenhagen yesterday, published in Business Day, 7 May 2009.
GOVERNANCE is improving in Africa: last year, more than half the continent’s countries improved their performance. The bad news is that Africa’s competitiveness is lagging. According to the Global Competitiveness Report, eight of the world’s 10 least competitive countries are from sub-Saharan Africa.
Africa is filled with hard-working, innovative entrepreneurs. The success or failure of their businesses will determine whether Africa prospers or falters. But they face an uphill battle . Few businesses have adequate skills or access to sufficient credit and good advice. Many are forced to cope with weak infrastructure, predatory governments and unforgiving geography. No wonder Africa’s prosperity largely depends on commodity prices — it is uncompetitive anywhere else.
As investor risk aversion grows in the current economic slowdown, such weaknesses are exaggerated . Yet business growth is vital if African countries are to tap into globalisation.
Last year the Danish government established an Africa Commission. The aim was to come up with innovative recommendations for economic growth in Africa. Yesterday, in Copenhagen, the commission delivered its recommendations on how African entrepreneurs can move from surviving against the odds to becoming the drivers of positive change.
The commission proposes a fresh approach to international development co-operation with Africa. The continent’s dependency on development aid is not sustainable, and aid is no panacea. The time has come to focus on improving Africa’s competitiveness, in so doing setting the stage for private-sector-led growth. After all, if growth through business has proven the principal means of development elsewhere, why should Africa be any different?
But entrepreneurs need to be nurtured by governments, not strangled by cumbersome and unnecessary procedures and corruption.
One of the commission’s five international initiatives aims to increase the quantity and quality of artisans through apprenticeships. And it will link tertiary research and business practices especially to expanding agricultural output, moving away from subsistence to promoting commercial agriculture.
Africa’s small and medium-size enterprises (SMEs) provide 80% of output and jobs. While their growth is stunted by lack of access to finance and basic business services, the commission has also proposed the creation of an Africa Guarantee Fund in partnership with the African Development Bank aimed at leveraging $1,5bn to reduce the cost of finance for SMEs. A related initiative aims to unleash the power of African entrepreneurship specifically in start-up enterprises by creating advisory innovation centres in which business-people can translate good ideas into practical plans.
Africa needs much better access to energy. More than three-quarters of Africans lack access to electricity — a major constraint to economic development, doing business and diversification. Africa would benefit from the deregulation of small-scale energy producers. The fifth initiative proposes a combination of policy advice, technical assistance and finance to realise this brighter future.
The commission realises that development assistance to Africa has failed to meet expectations because, in large part, the principle of local ownership has been neglected, so all initiatives will be African-owned, just as their identification has been African-led.
The current global crisis is a wake-up call for all. Those countries that respond best will lead the process of global economic recovery and growth. Now is the opportunity for Africa to cast away old aid stereotypes and show the way. To assist, the commission proposes a hand-up, not another handout.
Toernaes is Danish minister of development co-operation . Ibrahim is founder of Celtel and the Mo Ibrahim Foundation. Mills heads the Johannesburg-based Brenthurst Foundation. All are members of the Africa Commission.
 

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