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The Guardian - UK
The Guardian - UK
World
Mark Tran

Enriching Africa

Muammar Gadafy, the Libyan president, was in typically defiant mood when he opened an African Union summit in Sirte on the Libyan coast.

"We are not going to beg at the doorsteps to reduce debt .... We are insulted constantly and we deserve it. We don't need assistance and charity," Mr Gadafy told some 50 African leaders.

The eccentric Libyan leader received only tepid applause from the audience for he was hardly on message. Unlike Gadafy, other African leaders have welcomed the efforts of Tony Blair and Gordon Brown to boost aid and provide debt relief for the continent at this year's G8 summit.

"The message is simple. The message is that the G8 should cancel the debts of all African countries," Charles Murigande, Rwanda's foreign minister, told Reuters.

Yet in a sense, Mr Gadafy is right to preach self-reliance.

While Africa needs aid and debt relief, it also needs foreign investment. In order for this to happen, African governments have to make their countries attractive to foreign investors.

As the Africa commission report pointed out in March, the continent suffers from low domestic and foreign investment. At 18%, Africa's investment-to-GDP ratio is below the average of 24% for all developing countries, and the lowest of any developing region.

Moreover, only 6-7% of foreign direct investment and around 5% of remittances flowing to developing countries go to sub-Saharan Africa. The barriers to investment range from policy unpredictability and economic and political instability to governance issues such as transparency, accountability and corruption.

The UN secretary-general, Kofi Annan, touched on this when he told the AU that outside nations had a "responsibility to protect" people from genocide, war crimes and ethnic cleansing if their own governments failed to do so.

But African leaders remain loath to criticise each other. Zimbabwe remained notably absent from the AU summit agenda, in keeping with the AU's kid gloves policy towards Robert Mugabe. AU officials last week rejected calls from NGOs to intervene in Zimbabwe, saying the shantytown clearances that have provoked allegations of widespread human rights abuses are an internal affair.

The reluctance of African leaders to criticise publicly Mr Mugabe, however, should not obscure encouraging signs elsewhere. The UK banking giant Barclays decided in May to invest £2.9bn in a 60% stake of Absa, South Africa's largest retail bank. Analysts say this could be the start of a big foreign investment drive in South Africa that could have beneficial effects for the rest of the continent.

South Africa is not the only country on the continent where things are looking up. Jonathan Power, in a fascinating article on Tanzania, which he first visited 40 years ago, notes signs of economic progress in the east African state after years of failed policies under Julius Nyerere.

He believes the country has a reasonably bright future if the next president can be as dynamic as the current one, Ben Mkapa; if aid donors hold steady; if rich countries open up their agricultural markets and if the world economy continues to grow.

Tomorrow, Mr Blair is scheduled to open a business summit in London, an event designed to foster foreign investment in Africa. While debt relief and aid are rightly at centre stage at Gleneagles, it is also important that wealth creation is not overlooked as a way of improving Africa's economies.

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