World Economic Forum on Africa 2006

WO

RL

D

EC

ON

OM

IC

FO

RU

M

INS

IGH

TS

World Economic Forum on Africa

Going for Growth

Cape Town, 31 May – 2 June 2006

The views expressed in this publication do notnecessarily reflect those of the World EconomicForum.

World Economic Forum91-93 route de la CapiteCH-1223 Cologny/GenevaSwitzerlandTel.: +41 (0)22 869 1212Fax: +41 (0)22 786 2744E-mail: [email protected]

© 2006 World Economic ForumAll rights reserved.No part of this publication may be reproduced or transmitted inany form or by any means, including photocopying and recording,or by any information storage and retrieval system.

REF: 270606

This publication is also available in electronic form on the World Economic Forum’swebsite at the following address:

World Economic Forum on Africa Web report:http://www.weforum.org/summitreports/africa2006 (HTML)

The electronic version of this report allows access to a richer level of content from themeeting including photographs and session summaries.

The report is also available as a PDF:http://www.weforum.org/pdf/SummitReports/africa2006.pdf

Other specific information on the World Economic Forum on Africa, Cape Town,31 May – 2 June 2006 can be found at the following links:

http://www.weforum.org/africa

http://www.weforum.org/africa/programme

http://www.weforum.org/africa/outcomes

http://www.weforum.org/africa/indepth

http://www.weforum.org/africa/partners

http://www.weforum.org/africa/competitiveness

Preface 3

Summary – Going for Growth 4

The Year of Africa in Review 8

Boosting African Growth 10

The Impact of China and India 12

Foundations for Progress in Physical and Social Infrastructure 15

Tackling Risks to Prosperity 18

Strengthening Branding and Changing Perceptions 20

Achievements, Commitments and Aspirations 23

The Creative Imperative in Africa 26

Acknowledgements 28

1

Contents


!

3World Economic Forum on Africa

Preface

At a time of unprecedented African growth, the World Economic Forum onAfrica, our 16th on the continent, provided a platform for leaders to discussthe opportunities and challenges facing Africa in the years to come.

Celebrating African successes and improving perceptions of the continent,the mood at the meeting was buoyant and optimistic – and optimism is oftencontagious and self-fulfilling. Of course, much remains to be done: insightson global competitiveness, risk and scenarios, most notably on the risingimpact of China and India, focused on the risks and challenges that remainto be tackled.

We were well pleased that the meeting moved from the identification ofproblems to the identification of solutions, and culminated in an emphatic callto learn from, and do more to sustain, success. The event generated strongcommitments to move forward in specific areas. We commend leaders thathave made commitments to champion issues and drive initiatives, and whohave agreed to build on the consensus that emerged on the steps requiredto catalyse action and delivery.

We would like to thank the Co-Chairs of the World Economic Forum onAfrica in Cape Town for providing valuable guidance and oversight. Theywere: Syamal Gupta, Chairman, Tata International, India; Jim Goodnight,Chief Executive Officer, SAS, USA; Maria Ramos, Chief Executive Officer,Transnet, South Africa; Charles Soludo, Governor of the Central Bank ofNigeria.

The resolve of participants was palpable. We trust this overview of thedeliberations captures the dynamism and energy of the meeting. More than asynopsis of interactive and plenary sessions (these are accessible on ourwebsite at www.weforum.org/africa), this report provides an overview of theaspirations, achievements and commitments of the broad cross-section ofleaders who took part in the meeting in Cape Town.

We look forward to welcoming you to the 2007 World Economic Forum onAfrica and invite you to contribute to the hard work that lies ahead to turncommitments and aspirations into action.

Haiko AlfeldDirector, Africa


Participants at the World Economic Forum on Africa in2006 sought to build on Africa’s recent success inachieving its best growth performance in decades.While they were eager to spread the good news, thefresh confidence among the more than 700 business,government and civil society leaders gathered in CapeTown was balanced by sober realism. Growth has tobe even faster if Africa is to make a significant dent inpoverty and attack major problems such as hunger,the lack of infrastructure and healthcare deficiencies,particularly in addressing the HIV/AIDS pandemic.Time is not on Africa’s side: the emergence of Chinaand India, while boosting African trade and investment,underscores the tougher competition in the globaleconomy.

While Africa is “going for growth”, it must find solutionswith long-term, sustainable impact. The meetingproduced a number of these solutions, including thelaunch of the Investment Climate Facility (ICF) for Africawith initial funding of US$ 100 million, and the NEPAD(The New Partnership for Africa’s Development) e-Schools Initiative to fund Internet access in 120schools in 16 African countries by mid-2007, with theultimate goal of connecting all African schools withinten years.

Participants in Cape Town focused on six sub-themes:The Year of Africa in Review, Boosting African Growth,The Impact of China and India, Foundations forProgress in Physical and Social Infrastructure, TacklingRisks to Prosperity and Strengthening Branding andChanging Perceptions.

These are the key messages that emerged from thethree days of interactive discussions:

The Year of Africa in Review

The world focused unprecedented attention on Africain 2005, which was dubbed the “Year of Africa”.

• Unprecedented economic growth on the continentsuggests that the concerted efforts of theinternational community to boost Africa’sdevelopment are paying off.

• Initiatives such as the African Peer ReviewMechanism and the Millennium Challenge Accounthave yielded some initial positive results.

• The general investment climate in Africa hasimproved, as indicated by the rapid increase in tradewith and investment from China and India.

• Significant development challenges remain. Africaneeds a development decade — a year is notenough.

Summary – Going for Growth

“Is growth the new gospelof the continent? We doneed to address thechallenge of poverty andunderdevelopment. Wehave to make advances.”

Thabo MbekiPresident of South Africa

“Action is what counts.This is Africa’s moment, notof greatest need, but ofgreatest opportunity.”

Niall FitzGeraldChairman, Reuters, UnitedKingdom; Member of theFoundation Board of the WorldEconomic Forum

“We have brought peace to Africa; now we can look atour development. Our development will come from ourown investment, and that investment will come witheconomic growth. The development of Africa depends onAfricans.”

Firmino MucaveleChief Executive, NEPAD Secretariat, South Africa


Boosting African Growth

While many countries in Africa are enjoying recordgrowth, the challenge is to sustain the expansionand reduce poverty.

• Growth in sub-Saharan Africa climbed to 5% in2005, with inflation dropping to its lowest point inmore than two decades.

• Capital flows are now outpacing aid.• This offers Africa the opportunity to address

persistent impediments to sustainability such asthe skills shortage and the lack of infrastructure.

• But 300 million Africans continue to live in direpoverty.

The Impact of China and India

China and India’s deeper engagement with Africaoffers both opportunity and cause for caution.

• The need for China and India to fuel their surginggrowth has boosted trade between resource-richAfrica and the two Asian economic giants.

• Africa needs to develop a coherent strategy withwhich to approach relations with China and India.NEPAD could offer a useful platform for themanagement of those ties.

• Because of their development experiences, Chinaand India offer valuable models for Africa as thecontinent seeks to achieve sustainable growth.

“We can’t have sustainedpoverty reduction andemployment withoutgrowth.”

Charles SoludoGovernor of the Central Bankof Nigeria; Co-Chair,World Economic Forum onAfrica

“China is diversifying the monopoly of investors inAfrica.”

Phumzile Mlambo-NgcukaDeputy President of South Africa

“There are a lot of newideas on the continent, inthe private sector. There’s alot of creativity. We arebeginning to see a hugenumber of Africanentrepreneurs who arestarting new businessesand growing them.”

Patrice T. MotsepeExecutive Chairman, AfricanRainbow Minerals (ARM), SouthAfrica

5


Foundations for Progress in Physical andSocial Infrastructure

To achieve sustainable growth, Africa must put in placenecessary infrastructure – both bricks-and-mortarfacilities such as roads, ports and airports and thebasic “software” of development such as educationand healthcare services.

• Africans will not be able to enjoy the benefits of highgrowth if they are not provided adequate healthcareand education, as well as the physical infrastructureto provide access to clinics, hospitals and schools.

• Access to water and energy, as well as informationand communications technology, is essential tosustaining economic growth.

• School attendance has risen dramatically but moremust be done if the continent is to remedy its severelack of skills.

• Countries must invest more in health services,including education to promote proper hygiene andcontrol the spread of disease.

Tackling Risks to Prosperity

Because global risks are interconnected, confrontingthem requires a concerted, multifaceted approach.

• It is important to appreciate how risks are linked tounderstand how solutions are connected.

• Adequate infrastructure, for example, will ensuretimely delivery of health services and access toschools, which are essential to boostingperformance in healthcare and education.

• Business must play a greater role in pushing forwardinitiatives to mitigate the risks affecting Africa. TheInvestment Climate Facility (ICF) for Africa is anexample of an innovative public-private partnershipdesigned for that purpose.

“An enabling environmentis Africa’s biggest landminein the process of developingthe continent. Regionalcooperation will make ahuge difference. It startswith Forums like this. This isa big forum in which wecan create home-grownsolutions for home-grownproblems – Africanproblems.”

J. Adewale TinubuGroup Chief Executive Officer,Oando, Nigeria

"In Africa, you needalternative modes offinancing [such asmicrofinance] which havebeen very successful inIndia. It is the bottom of thepyramid that pays back allthe money."

Syamal GuptaChairman, Tata International,India; Co-Chair, WorldEconomic Forum on Africa

"Governments throughoutAfrica are beginning torealize that the privatesector is where jobs arecreated. Let companies runso that in turn they createmore revenues for thegovernment that can beused for things likehealthcare."

Jim GoodnightChief Executive Officer, SAS,USA; Co-Chair, WorldEconomic Forum on Africa

“We have to be realistic; wehave to compete in theglobal economy. When wetalk about growth, we mustaccept that we are going tolose jobs in some sectors.That’s also part of beingpart of the globaleconomy.”

Maria RamosGroup Chief Executive, Transnet,South Africa; Co-Chair,World Economic Forum on Africa


Strengthening Brandingand Changing Perceptions

Africa lacks the international image that correctlyreflects the new dynamism and confidence that ispalpable on the continent.

• Africans must aim for proper branding. Thepositive Africa story needs to be told.

• A public relations campaign may be required tochange perceptions. In 2010, South Africa standsto capitalize on its hosting of the World Cupfootball finals.

• To sustain the rebranding effort, Africa mustpursue leadership reform to underpin itsinstitutions and the democratic values its peoplehave fostered, particularly the rule of law andfreedom of expression.

• Although a problem everywhere, corruption is ascourge that has long contributed to Africa’s poorimage. Africans must squarely address thischallenge.

“We can only win the fightagainst corruption if eachand every one of us haszero-tolerance for it. Each ofus is a potential taker or agiver, and we need thecourage to say no.”

Arunma OtehVice-President, AfricanDevelopment Bank, Tunis

World Economic Forum on Africa co-chair Charles Soludo, Governor of the Central Bank of Nigeria, leads the growth discussion with ArmandoEmilio Guebuza, President of Mozambique; Lars Thunell, Executive Vice-President, International Finance Corporation (IFC), Washington DC;Thabo Mbeki, President of South Africa, on his left and Jakaya M. Kikwete, President of Tanzania, on his right

“African brands cantravel, but it is hard workand we have to be moreinnovative about how wedo it.”

Susan M. ClarkMember of the ExecutiveCommittee and Director,Corporate Affairs, SABMiller,United Kingdom


Declared the Year of Africa by the internationalcommunity, 2005 was a year of unprecedented globalfocus on the continent, with significant promises andundertakings made in development and povertyalleviation. Positive economic growth seems to havebeen the payoff, although many challenges remain.

In 2005, the Blair Commission for Africa declared thatthis would be the Year of Africa. It asserted that at noprevious time had there been such focus on thecontinent by the global community or as muchgoodwill towards it.

In addition, an unprecedented growth rate for thecontinent of 4.5% in 2005 reflects that efforts by theinternational community, complemented by internalreforms by Africans themselves, appear to be payingoff. Haiko Alfeld, Director, Africa, World EconomicForum, noted that the African continent has“emphatically and irreversibly turned the corner.”

As the United Kingdom took over the chair of the G-8group of industrialized countries in 2005, PrimeMinister Tony Blair made reducing poverty in Africathrough development the central pillar of his leadershipof the high-level group. In doing so, he pushed thecontinent to the forefront of the agenda.

The Commission for Africa proposed an immediatedoubling of aid to Africa to push development, with theamount rising to US$ 50 billion of additional aid by2015, in addition to other wide-ranging proposals toimprove living conditions on the continent.

There were other noteworthy developments. Forexample, the G-8 countries endorsed debt relief for 18countries (14 of them African) of US$ 40 billion, inaddition to agreeing to 100% debt relief for 38countries that had successfully developed under theHeavily Indebted Poor Countries (HIPC) Initiative.

The Doha Development Round, while unsuccessful sofar in providing better access for African products indeveloped markets, managed to put important issueson the agenda for discussion, and in so doing,increased pressure on the countries controlling thesemarkets. The challenge is to meet agreed-to timetablesfor discussion to ensure that the process does not losemomentum as developed countries get diverted bytheir own issues.

The African Peer Review Mechanism, viewed as asignificant force for positive change, kicked off in 2005with the first peer review processes undertaken oncountries drawn from the 26 countries that havesigned up to the initiative.

The Millennium Challenge Account, launched in 2004to provide development assistance to developingcountries that meet specific criteria relating to issuessuch as governance and economic freedom, signed itsfirst funding compacts with two African countries in2005 – Madagascar and Cape Verde. A third country,Benin, signed in early 2006.

The US government pledged more support to Africaand, among other things, committed additional fundingto the HIV/AIDS pandemic.

The Year of Africa in Review

“There is the problem oftariff escalation. If Ghanaexports cocoa beans tothe US, the tariff is 0.5%.If it tries to exportchocolate, the tariff is30%.”

Gobind NankaniVice-President for Africa,World Bank, Washington DC

“Business believes Africancountries should paddletheir own canoes – theyneed to develop the kindsof structures that allowwould-be investors toinvest.”

Reuel KhozaChairman, Nedbank Group,South Africa


In addition to specific interventions, Africa also sawthe benefits of a better governance climate in manymember states and a deepening of democracy,including the successful conclusion of a number ofelections. African leaders also joined theinternational community in tackling ongoingdisputes in countries such as the DemocraticRepublic of Congo, Côte d’Ivoire and Sudan.

There was also a new resolve to promote theAfrican business and investment climate, with manycountries extending economic reforms and puttingin place structures to fight corruption. Discussionsabout establishing the African Investment ClimateFacility started in 2005 and the facility waslaunched at the World Economic Forum on Africa in2006, with initial funding of more thanUS$ 100 million, including strong corporate anddonor government support.

In addition, a change in leadership at the AfricanDevelopment Bank precipitated a greater focus oninfrastructure development.

A key development on the business front has beenthe rapid increase in Chinese, and to some extentIndian, investment in African countries. In just a fewyears, trade and investment between China andAfrica has tripled, with the pace of suchengagement becoming particularly vigorous during2005. The trend has continued into 2006, as hasthe phenomenon of South African businessexpansion into the continent.

Many African countries have also seen a windfallfrom record oil and commodity prices over the pasttwo years.

These positive trends seem set to continue beyond2006, given their long-term nature. But what is inquestion is the delivery by the G-8 on thesignificant promises made in 2005. Africa is not onthe agenda for the 2006 meeting and member

states appear far from ready to makeconcessions on trade issues. The donorcommunity remains fragmented and isnot being held accountable for its lack ofresults in Africa.

African countries are also moving tooslowly in taking advantage of theprogrammes and commitments madeby the developed world, and many oftheir central problems – disease, skillsshortages, education, unemploymentand others – remain major challenges.The private sector remains weak,particularly in the area of small andmedium enterprises and the key sector

for poverty eradication – agriculture – is stillunderdeveloped.

In addition to concerns about global trade, Africangovernments must focus on increasing intra-Africantrade. “We meet as African trade ministers todiscuss what we can take to Hong Kong. But wenever meet to ask how we can deepen intra-African trade and break down tariffs amongourselves,” remarked Mandisi Mpahlwa, Minister ofTrade and Industry of South Africa.

What Africa needs is a development decade – ayear is not enough. Africans need to be moreproactive about solving their own problems. AsCharles Soludo, Governor of the Central Bank ofNigeria affirmed, “Ultimately, Africans will developAfrica.”

A Rosier Picture – Africa’s Outlook

Source: OECD Africa Economic Outlook, 2005/06


Africa is experiencing record growth rates in manycountries in a new era of peace, political stability andmacroeconomic reform. But the challenge is to ensurethat this growth is sustainable and reduces poverty,and is not only driven by high oil and commodityprices and windfall investments from China. Increasedrevenues must be used to address problems in thebusiness environment, build infrastructure, increaseaccess to finance for entrepreneurs and improve healthand education. These measures will help to unlockgrowth right down to the bottom of the pyramid – therural poor.

Growth in sub-Saharan Africa reached an eight-yearhigh of 5% in 2005, while average inflation fell to itslowest rate in 25 years. About 20 countries achievedgrowth of more than 5%. Coupled with surgingcommodity prices, improved governance and reducedconflict, Africa’s fortunes seem to have changed for thebetter, with experts noting that the outlook is the bestit has been for decades.

Growth has become Africa’s new developmentstrategy, which can be sustained through politicalstability and sound macroeconomic policies.

Yet, with an estimated 300 million Africans still living indire poverty, Africa is by no means out of the woodsyet and many questions remain. What is driving thisgrowth and who is benefiting? Is it sustainable? Is itcreating jobs? Is it reducing poverty? What is holdingback even greater growth?

South African President Thabo Mbeki said, “Withoutgrowth we simply cannot deal sustainably with theissues of poverty and underdevelopment.”

While the Commission for Africa has called for massiveincreases in aid, some believe Africa is receiving toomuch, propping up otherwise unviable states andreducing governments’ willingness to deal withproblems. There is little evidence to suggest that aid islinked to growth. “The current foreign aid systemworks very well for everyone – except poor people,”declared William Easterly, Professor, Economics

Department, New York University, USA. But PresidentJakaya M. Kikwete of Tanzania, said that, in reality,many countries simply do not have the resources tosurvive without aid, even when they have goodpolicies.

Nonetheless, capital flows to Africa have increased tothe point where they now outpace the US$ 25 billion inaid. Remittances flowing into Africa dramaticallyincrease such flows by more than US$ 10 billion andare seen as an important catalyst for increasedeconomic activity.

However, many challenges remain. There arepredictions that Africa will be the only region that isunable to meet the Millennium Development Goals(MDGs) – despite claims that the goals areoverambitious for Africa and were developed withoutinput from Africans – because the growth Africa isexperiencing is not necessarily reducing poverty.

Skills shortages are a major constraint to sustainablegrowth. Greater investment in quality education andskills training is required to address the problem.

Addressing the business and investment climate iscrucial for increased growth. Areas needing to beaddressed include removing excessive bureaucracyand regulation, improving customs and taxadministration, providing viable microfinanceinstitutions, addressing crime and corruption,deepening financial markets and addressing propertyrights and contract enforcement, among others.

Boosting African Growth

“In the past it was just state, state, state. Now we saywe have the state, the private sector and civil society – itis a partnership.”

Joaquim Alberto ChissanoDirector, African Rainbow Minerals (ARM), South Africa; President of

Mozambique (1986-2004)


Countries can sustain growth in their revenue baseonly by increasing private sector activity andbringing more businesses into the tax net.

The Investment Climate Facility, launched at theWorld Economic Forum on Africa in 2006, aims totackle many of the problems that keep investors atbay and that compromise the private sector’s abilityto stimulate economic activity and revenuegeneration. Removing the obstacles to doing

business would also have the effect of reducinginvestor risk.The issue of competitiveness of African products,as well as increasing the levels of intra-African tradeneed to be tackled with the same vigour given tothe problems in the international trade agenda.Companies must be competitive in their ownregions before they can effectively compete in theglobal arena. Business should become moreengaged in trade issues, since it is companies thattrade, not governments.

Africans believe the continent needs to develop astrategy to deal with the overwhelming wave oftrade and investment from China, notably inextractive industries. The continent should not beleft worse off once the boom ends; deals must bemade more sustainable through, for example,downstream linkages and local partnerships.

Infrastructure is crucial to development and Africaneeds to develop stronger public-privatepartnerships to address the backlogs, as well asreducing the risk to investors in large projects.Rural infrastructure has been identified as a prioritybecause of the potential to unlock growth in poorerand marginalized areas. Technology should beused to promote health, education and trade inrural areas.

Africa’s current growth rates are being driven in partby record oil and commodity prices. Africancountries need to find ways to allow the positiveeconomic growth they are experiencing to trickledown to the people who need to benefit the most –the poor.

This is not only the responsibility of government,but must also involve business and civil society.Former President of Mozambique JoaquimChissano summarized, “In the past it was juststate, state, state. Now we say we have the state,the private sector and civil society – it is apartnership.”

“Us, buoyant and bullish?” Meeting co-chairs sharing a light moment during a press conference on African growth prospects

“Growth in Africa is not going to come about as a resultof actors outside Africa.”

William EasterlyProfessor, Economics Department, New York University

USA


China and India have become major trading partnersof Africa and are increasing investment on thecontinent. Africa has the raw materials andcommodities that China and India need to fuel theirsurging growth. Africa must develop a coherentapproach to the two Asian economic giants, withcommercial relations based on sustainability andmutual profit. China and India serve as models forAfrica because their experiences hold useful lessonsfor developing countries on how to manage gradualeconomic and political transformation.

Like any other region, Africa is dealing with theimplications of the emergence of China and India. Inone session, moderator Millard W. Arnold, Director,

Murray & Roberts, South Africa, asked if China is agreat opportunity or whether it should be approachedwith a great deal of caution. His question – one thateven China’s immediate neighbours are posing –captured the ambivalence Africans have about theirgrowing relationship with Asia’s two economic giants.Arnold’s fellow panellists delivered the answer inunison: “Both!”

The numbers support the case for China and India asan opportunity. China, the second largest consumer ofenergy, is importing nearly 30% of its oil and gas fromsub-Saharan Africa. Chinese trade with Africa willexceed US$ 36 billion this year (nearly three timeswhat it was in 2002), but this is still less than theUS$ 50 billion in trade that the US conducts with thecontinent. China is now Africa’s third largest tradingpartner, ahead of the United Kingdom. According to anOrganisation for Economic Cooperation andDevelopment (OECD) study, Chinese enterprises areinvesting about US$ 1 billion a year in Africa, mainlyinto the energy and commodities sectors.

Indian companies are following. The Tata Group, forexample, has invested about US$ 100 million andplans to triple that over the next three years. LikeChina, India has invested in energy exploration in the

The Impact of China and India

“I see in India and Chinaan opportunity to convertour comparativeadvantage intocompetitiveness.”

Firmino MucaveleChief Executive, NEPADSecretariat, South Africa

“For the first time, thereare centres of power thatunderstand ourdevelopment challenges.”

Mandisi MpahlwaMinister of Trade and Industryof South Africa

0

1

2

3

4

5

6

7

1990 1995 2000 2004

Exports to China Imports from China

Exports to India Imports from India

Africa’s Rising Trade with China and India ...

Source: IMF Direction of Trade Statistics

%

“We need to change from a defensive mindset aboutChina and India to one that is more embracing, and onein which we can help determine the terms ofengagement.”

Ebrahim RassoolPremier of the Western Cape Province, South Africa


Sudan and elsewhere. It has also extended creditsto West African nations to boost sales of Indian ITservices, mimicking China’s offers of financing towin infrastructure-building contracts. China hasparlayed its purchases of commodities, fromcopper to cassava, into sales deals for itscompanies to provide anything from constructionservices to arms.

“India and China need Africa,” said FirminoMucavele, Chief Executive, NEPAD Secretariat,South Africa. “If you look at the resources we have,we have a comparative economic advantage inmining, agriculture and tourism. I see in India andChina an opportunity to convert our comparativeadvantage into competitiveness.” As Nigerianentrepreneur Omwan’ Busty Okundaye, President,International Operations, USTY Global Company,People’s Republic of China, advised potentialinvestors in China, Africa will have difficultycompeting with the Chinese in low-endmanufacturing. While labour costs may becomparable, poor infrastructure and other factorsmake transaction costs much higher.

The seemingly perfect match of wants and needscould turn sour if not properly managed. The lastthing Africa needs is another round of despoiling byplundering juggernauts hungry for the riches underits soil. Tanzanian President Jakaya M. Kikwete

Sir Mark Moody-Stuart, Chairman, Anglo American, United Kingdom, makes a point on the impact of Chinese resource hunger on Africa asNEPAD Secretariat Chief Executive Firmino Mucavele looks on

Sub-Saharan Exports to India, China andLatin America

Source: UNCTAD Handbook of Statistics, online

“China and India will not transform Africa; Africans willtransform Africa.”

Jakaya M. KikwetePresident of Tanzania


made that crucial point when he underscored Africa’snew confidence and asserted that “China and India willnot transform Africa; Africans will transform Africa.” Hedeclared, “There is no scramble for Africa.”

China and India are still feeling their way in Africa – andAfricans have yet to forge a coherent strategy inrelations with their new Asian partners. “The successof relationships with India and China depends on howwe [Africans] work together,” reckoned Mucavele. “Weneed to increase domestic investment and productivecapacity. If we do that, we don’t need to be afraid ofChina, India or whomever.” Africans, he explained, hadworked hard to end conflicts on the continent. Theincrease in commerce with China and India is part ofthe peace dividend. But, he argued, China and Indiaare not saviours. “Our development will come from ourown investment. The development of Africa dependson Africans.”

For this reason, he and other participants, includingMandisi Mpahlwa, Minister of Trade and Industry ofSouth Africa, called for NEPAD, the African Union’sframework for improving governance and promotingsustainable development across the continent, to bethe platform for managing a sound and sustainablepan-continental policy towards China and India. “Thisrelationship should assist Africa with capacitychallenges and should create the basis forsustainability into the future,” Mpahlwa said. “We needto clarify the nature of our relationship. NEPAD mustbe the centrepiece of our engagement.”

Good governance is the key, concluded Sir MarkMoody-Stuart, Chairman, Anglo American, UnitedKingdom. Whether it is China, India or any othertrading partner, he said, “…we should maintain thegrowing standards of transparency, particularly inresources. I would encourage subscription of allcountries and companies to the Extractive IndustriesTransparency Initiative.”

To be sure, as developing countries, China and Indiapursue economic diplomacy in styles different from theUS and Europe. In particular, China’s value-neutralapproach has made it welcome – even hotly courted –in certain markets where Western interests arereluctant to enter or do so with attached strings. ForAfrica, the attraction of China and India may be asmuch the sympathetic means as the mutuallyprofitable commercial ends. “For the first time, thereare centres of power that understand our developmentchallenges,” Mpahlwa observed. “We see China andIndia as models giving Africa the hope that sometime,someday, with the right policies, we will get there,”added Kikwete.

In the long run, that hope may be the most valuableproduct that China and India can trade to an aspiringAfrica.

“We no longer need to go through a boom and bustcycle, at the end of which people say ‘Money was made,but what happened to it?’”

Obiageli Katryn EzekwesiliMinister of Solid Minerals of Nigeria


In order for current growth trends to be sustainable,the physical and social infrastructure of Africancountries must be upgraded. Trends towardurbanization have exacerbated existing deficienciesin rural areas and placed new strains on cities.Participants discussed new strategies for upgradingsystems of water distribution, energy access, andinformation and communication technologies. Theyalso tackled challenges (old and new) in the areasof education and healthcare.

While expanding economies hold promise forAfrica’s future, many of the continent’s 900 millionpeople will be cut off from their benefits withoutadequate healthcare, education and physicalinfrastructure. Strong leadership and regionalinitiatives are required if lagging infrastructureprojects are to keep pace with market-led growth.Grand plans are not enough, and public and privatesectors must work together at every step.

“We need to take ideas and turn them into bricksand mortar,” said Jay Naidoo, Chairman of theBoard, Development Bank of Southern Africa,South Africa. “That is the challenge facing Africatoday.”

Foundations for Progress in Physicaland Social Infrastructure

“We must come up with an optimal combination ofenergy sources to allow the continent to develop.”

Salomon Banamuhere BalieneMinister of Energy of the Democratic Republic of Congo

Thulani Gcabashe, Chief Executive of Eskom, leads participants in a brainstorming breakout group on African infrastructure development

Brian Bruce, Group Chief Executive of Murray & Roberts,prioritizes action items for a business contribution to moveAfrican infrastructure projects beyond grand designs


Physical Infrastructure

Among the most pressing, but least adequatelyaddressed, issues is access to safe water. Waterscarcity and inefficient distribution pose majorobstacles to development projects on all levels. Watershould be priced according to its value, saidparticipants, but it should always be within reach of thepoorest in any society. “Affordability of water foreveryone is a human right,” said Alexandre J.Cantacuzène, Senior Vice-President, Nestlé,Switzerland.

Concretely, the African Development Bank, whichpledged to facilitate pan-African infrastructure projects,committed to working towards the MillenniumDevelopment Goal of bringing access to safe water to80% of rural Africa by 2015.

Also essential to development and sustained growthare clean, affordable and accessible sources of energy.Much of rural Africa still lacks electricity, andparticipants suggested various distribution andgeneration methods including scaling up existingtransmission infrastructures and harnessinghydropower. While external inputs may be needed inthe start-up phase, ultimately all systems should be

self-funding. As an initial step, the Energy Poverty TaskForce committed to electrify 11,000 households in theDemocratic Republic of Congo and Lesotho.

“We must come up with an optimal combination ofenergy sources to allow the continent to develop,” saidSalomon Banamuhere Baliene, Minister of Energy ofthe Democratic Republic of Congo.

Improved information and communication technologyis also a glaring need. “Connectivity is a problem onthe continent,” said Jakaya M. Kikwete, President ofTanzania. Much work remains to construct physical

“Learning by Doing”: Oliver Suinat, Managing Director, Africa, HP, Germany, leads a discussion of IT companies on scaling up success of theNEPAD e-schools initiative

“We need to take ideasand turn them into bricksand mortar. That is thechallenge facing Africatoday.”

Jay NaidooChairman of the Board,Development Bank ofSouthern Africa, South Africa


highways, but, increasingly, information highwaysdemand attention as well. Certainly, electrificationmust come first, as what one participant termed“the refrigeration divide” trumps the digital divide asa priority. But connectivity is essential, as it can alsohelp meet a series of social infrastructure goals.

The issue calls for public-private partnerships. “ICTis the enabler,” said Olivier T. Suinat, ManagingDirector, Africa, HP, Germany. “We believe youshould provide the tools, and entrepreneurship willtake care of the rest.”

Education

While school attendance in Africa has increaseddramatically since 1990, too many children acrossthe continent still lack access to basic education,and those that have access to primary, secondaryand tertiary education are often unprepared for thespecific requirements of the private sector.

The NEPAD e-Schools Initiative will fund e-accessin 120 schools across 16 African countries by mid-2007 and will scale up to all 600,000 Africanschools in ten years. Innovative energy sources willbe required to overcome the “refrigerator divide”and the NEPAD programme will need acollaborative effort from government, business andcivil society to move forward. But the potential gainfor students in even the most remote areas hasalready been realized in pilot projects in 20countries.

Another educational imperative concerns the lackof skilled workers for Africa’s growing privatesector. “Trouble is there are too many matriculantsin skills that, frankly, are of no use for industry,” saidIan Cockerill, Chief Executive Officer, Gold Fields,South Africa. Moreover, the skilled workers thatexist often pursue higher paying jobs overseas.Participants agreed that businesses need to maketheir needs known to universities, so that thoseneeds can be met through the curricula.

Healthcare

Twenty-five per cent of the global disease burden isin sub-Saharan Africa, while only 1.3% of theworld’s healthcare workers are found in the region.Part of the problem is the limitations of marketdriven delivery systems. “When you are providinghealth services to the poor,” said Co-Chair MariaRamos, Group Chief Executive, Transnet, SouthAfrica, “there isn’t money to be made”. NGOs andgovernments need to partner with businesses tocreate innovative solutions to vital health dilemmas.

Participants suggested promoting hygiene,spreading accurate information about HIV/AIDSprevention and treatment, integrating traditionalhealthcare workers into standardized healthcaresystems and easing restrictions on new healthcareproducts.

Concretely, the World Economic Forum’s GlobalHealth Initiative has launched guidelines for largecompanies to support HIV/AIDS and malariaprogrammes within their supply chains. Moreover,the Forum committed to beginning a public-privatepartnership to strengthen public healthcare systemsin Africa. Focusing on epidemic and pandemicdiseases, the programme will be launched at theWorld Economic Forum Annual Meeting 2007.

“Without infrastructure, how do you get products tomarket, people to clinics, students to schools?”

Maria RamosGroup Chief Executive, Transnet, South Africa;

Co-Chair, World Economic Forum on Africa


Risks are interconnected, requiring a multifacetedapproach to confronting them. Infrastructure andeducation, for example, are keys to solving persistentproblems such as hunger and impediments to thedelivery of health services. As Africa goes for growth, itmust move on a wide number of fronts, focusing onthe basics of sustainability, including education, theempowerment of women, infrastructure, the rule of lawand healthcare. Above all, business, in partnership withgovernment, must play a more active role in pursuingsolutions. The new Investment Climate Facility forAfrica is an example of an innovative public-privatepartnership aimed at promoting sustainable growth.

At a workshop on managing risks, participantsexamined the linkages between threats such asterrorism, pandemics, oil price shocks and climatechange. Worries of a terrorist strike may drivepetroleum prices up, while the rise of energy costscould spur development of alternative fuels, a long-term response to climate change. “It is almostimpossible to separate one risk and think of it inisolation,” Sean M. Cleary, Managing Director, StrategicConcepts, South Africa, counselled. “In a highlyinterconnected world, these risks manifest themselvesin highly systemic ways.” But, he warned, “If we getparalyzed by the prospect of risk, we will cease toachieve anything in terms of economic developmentand growth.”

Globalization means that the world is fraught withrisks, both on and off the radar screen. Even at a timeof unprecedented growth, Africa has its full share,some threats in greater proportion than in otherregions. It was a poignant coincidence that whileparticipants gathered in Cape Town, the UnitedNations in New York was assessing the progress (orlack of it) in the fight against HIV/AIDS. UN projectionsforecast that the death toll from the pandemic in Africa,which accounts for almost half of HIV/AIDS fatalities,could reach 100 million by 2025. The disease is theleading cause of death among Africans.

As Africa goes for growth, Africans must go forsolutions. On a range of challenges from health tohunger, reputation to regional trade, the continent hasto counter the daunting array of problems with a varied

arsenal of traditional and innovative remedies. Thegoal: to sustain the region’s 5% growth and push iteven higher.

At the meeting, participants identified key solutions,including infrastructure, delivery of healthcare services,education, empowerment of women, improvement ofthe investment climate, the promotion of regional andglobal trade, and the reshaping of Africa’s image,among others.

“We sometimes get lost in a one-dimensional growthdebate,” said meeting Co-Chair Maria Ramos, GroupChief Executive, Transnet, South Africa. “But forsustainable growth, you need to have other things inplace. We have to spend money on health, oneducation. Without infrastructure, how do you getproducts to market, people to clinics, students toschools?”

Take hunger as an example. In one workshop,participants discussed solutions for eliminating thisscourge in Africa, including the education of womenand girls; microfinancing for small-scale farmers;assistance in the provision of water, seed and fertilizer;the promotion of small enterprise; the application ofeffective business models; and the development andsupport of top-class agricultural colleges. In thesession on HIV/AIDS, there was widespreadrecognition that education is a crucial tool incombating the pandemic. In the plenary session onovercoming the challenges to growth, ThomasFuentes, Special Agent in Charge of InternationalOperations, Federal Bureau of Investigation, USA,underscored how crime and corruption can ruin acountry’s competitiveness.

Tackling Risks to Prosperity

“If we get paralyzed by the prospect of risk, we willcease to achieve anything in terms of economicdevelopment and growth.”

Sean M. ClearyManaging Director, Strategic Concepts, South Africa

“The current foreign aidsystem works very wellfor everyone – exceptpoor people.”

William EasterlyProfessor, EconomicsDepartment, New YorkUniversity, USA


Initiatives such as The New Partnership for Africa’sDevelopment (NEPAD) and the MillenniumDevelopment Goals (MDG) are predicated on theprinciple that Africa must take a multifacetedapproach to the risks it faces. But many countrieslack the capacity to pursue a full-court press.“There are trade-offs in the MDGs; if you do moreof one thing, you will do less of another,” reckonedWilliam Easterly, Professor, Economics Department,New York University, USA. The likelihood that Africawill meet its MDG commitments is diminishing.Less than 30 nations on the continent havesubscribed to NEPAD and the African Peer ReviewMechanism (APRM), which has uncovereddeficiencies in some economies.

The lack of capacity is perhaps the strongestargument for greater participation of the privatesector. In practically every session, that was theclear refrain. “HIV/AIDS workplace programmes area business imperative,” said Brian Smith, Director,Human Resources, Volkswagen of South Africa,South Africa. “While many large organizations areinvolved, smaller firms often don’t have the time orresources to do the same. It makes sense for bigfirms to extend programmes through to suppliersand SMEs.”

In securing Africa’s energy future too, businessmust play its part. “Africa will not develop withoutclean, affordable sources of energy being readilyavailable,” said Salomon Banamuhere Baliene,Minister of Energy of the Democratic Republic ofCongo. “The private sector must play a major role.

We must liberalize. We must allow public-privatepartnerships to develop all kinds of energysources.”

This spirit of cooperation and comprehensive actionis what lies behind the Investment Climate Facility(ICF) for Africa, an Africa-owned public-privatepartnership to make the continent a better place inwhich to do business. Endorsed by the WorldEconomic Forum’s Africa Economic Summit 2005and the G-8, the ICF was launched in Cape Townwith US$ 100 million in funding. Its objective: toremove obstacles – both real and perceived – todoing business in Africa by focusing on propertyrights and contract enforcement, reducing red tape,reforming taxation and customs, making financialmarkets more inclusive, facilitating infrastructure,increasing the flexibility of labour markets,promoting competition and controlling corruptionand crime.

While previous initiatives may have gone awry, thistime Africa may be in a perfect “sweet spot” ofpeace, stability and growth that will make adifference. “The political will is there,” Jakaya M.Kikwete, President of Tanzania, assuredparticipants. Africa may not get a better chancethan now to blunt for good some of the sharpthreats it faces. “Action is what counts,” declaredNiall FitzGerald, Chairman, Reuters, UnitedKingdom; Member of the Foundation Board of theWorld Economic Forum. “This is Africa’s moment,not of greatest need, but of greatest opportunity.”

Tackling risks to African prosperity: Steve Booysen, Group Chief Executive, Absa Group, South Africa; Thomas Fuentes, Special Agent inCharge of International Operations, Federal Bureau of Investigation, USA; Obiageli Katryn Ezekwesili, Minister of Solid Minerals of Nigeria; JimGoodnight, Chief Executive Officer, SAS, USA; Trevor Manuel, Minister of Finance of South Africa; Gobind Nankani, Vice-President for Africa,World Bank, Washington DC


For the moment, Africa lacks an international image tomatch the real growth of its economies, and thevibrant aspirations of its peoples. News headlineshighlight only war, famine, criminally mismanaged aidor epidemic disease. Participants committedthemselves to rebranding Africa, building on recentachievements, such as South Africa’s winning bid forthe 2010 World Cup, to spread the word that Africa isa promising place to visit and in which to do business.

From Cape Town to Cairo, Africans have been feelinggood about the direction of their countries and theircontinent as a whole. A recent Voice of the People pollshowed that a majority (52%) of Africans are optimisticabout the future. With the most encouraging economicindicators in 30 years, and unprecedented peace andprosperity, Africa should be courted by Westerninvestors and visited by foreign tourists. Instead,Westerners still view Africa as “the hopelesscontinent”.

“It’s the CNN effect,” said Charles Soludo, Governor ofthe Central Bank of Nigeria. While civil war in Sudanand Uganda dominate headlines, stories of conflictresolution and unprecedented growth fall off backpages. “We should do the branding properly,” saidThabo Mbeki, President of South Africa, “to tell thisvery, very positive story.”

Several recommendations and commitments toenhancing the international perception of Africaemerged from the discussions.

Rehabilitate Africa’s Image

Participants called for an outright public relationscampaign to overhaul the image of the continentinternationally. Some recommended branding Africa“the next big thing” or the “must-have” trading partnerwith “must-have” products.

Strengthening Branding andChanging Perceptions

“There is a strange arrogance among some businessleaders that they would be better at running the countrythan the politicians.”

Mark J. LambertiDeputy Chairman and Chief Executive, Massmart Holdings

South Africa

“The perception of Africa must change – from being ablack hole into which money disappears to being a fertilefield for growth.”

Simon AnholtIndependent Consultant on Branding, United Kingdom

Emulating and sustaining success: Joaquim Alberto Chissano, Director, African Rainbow Minerals (ARM), South Africa and President ofMozambique (1986-2004); Reuel J. Khoza, Chairman, Nedbank Group, South Africa; Jakaya M. Kikwete, President of Tanzania, during thediscussion on “Changing the Tone of African Leadership”


Others suggested involving celebrities in an “I aman African” campaign. A homecoming-themedcampaign should target the African diaspora. Filmcompanies should be encouraged to shoot moviesin African locations. The Forum of YoungGlobal Leaders committed tosponsoring a film serieshighlighting African successstories.

Africa achieved a goodfirst step towardschanging perceptionslast year when SouthAfrica won its bid tohost the 2010 WorldCup. To capitalize onthe opportunity for allof Africa, the gamesmust highlight acontinent that is notonly safe but warm andwelcoming. “The WorldCup is 43 days that cancompletely change theperceptions about our countryand our continent,” said YvonneJohnston, Chief Executive Officer, TheInternational Marketing Council of SouthAfrica (IMC), South Africa.

Strengthen Brands

Part of overhauling the perception of Africa isincreasing the awareness of, and desire for, itsproducts. African brands should be strengthenedand strategies should be adopted to increase theirvalue and availability in markets overseas. Whilemuch national pride existed for particular products– beer from Kenya, diamonds from South Africa –several participants agreed with Simon Anholt,Independent Consultant on Branding, UnitedKingdom, that Africa’s brand image was “anongoing catastrophe”.

“Brand Africa has to be deleted,” he said, “so wecan develop 54 individual brands with their ownbrand values.” Others encouraged advertisingstrategies rooted in the myriad cultures, rather than

in national iconographies. “African brandscan travel,” said Susan M. Clark,

“but it is hard work and wehave to be more innovative

about how we do it.”

Reform Leadership

Perhaps the mostdirect way ofenhancing theimage of Africa isby changing thenature of itsleaders. “We mustbecome the change

we want to see,”said one participant,

citing MahatmaGandhi. To do this,

Africa must develop thenext generation of leaders

that will bring Africa forward intoa peaceful and prosperous new

century.

African history has several examples of strongleadership, including Julius Nyerere of Tanzania andNelson Mandela of South Africa. Today, democraticsystems have replaced dictatorships in manycountries, term limits have replaced life terms anddirect elections have replaced military coups.

“We must nourish the institutional reforms that underpindemocracy.”

Reuel J. KhozaChairman, Nedbank Group, South Africa


“We must nourish the institutional reforms thatunderpin democracy,” said Reuel J. Khoza, Chairman,Nedbank Group, South Africa. “The rule of law,an independent judiciary and basicfreedoms such as freedom ofexpression and freedom of the pressmust be entrenched and becomepart of the DNA of ourdemocracy.” Other goalsinclude fostering trust andcooperation between businessand government leaders andencouraging responsibleopinion-shaping from themedia.

Africa must also train the nextgeneration of Mandelas andNyereres to ensure that democracylasts across the continent. Once again,The Forum of Young Global Leaders hascommitted to helping NEPAD in its leadershipprogramme with a pledge to establish leadershipdevelopment institutes across Africa.

Corruption, which costs African economies US$ 150billion every year, remains a significant obstacle to

trustworthy leadership, and thus toinvestment-worthy countries. A World

Economic Forum initiative is tacklingthe problem. The 103 signatories

to the Forum’s PartneringAgainst Corruption Initiativehave pledged to engage theAfrican business community.

Ultimately, however,corruption, like Africa’s poorimage, can only beovercome if each African

takes into their heart theideals of a new continent.

“Each of us is a potential takeror giver [of bribes],” said Arunma

Oteh, Vice-President, AfricanDevelopment Bank, Tunis, “and we need

the courage to say no.”

“Poverty need not be hereditary”: Deputy President Phumzile Mlambo-Ngcuka extols the potential of social entrepreneurship as a driver ofgrowth


Achievements

Promoting Investment – The Investment ClimateFacility for Africa – endorsed by our AfricaEconomic Summit 2005, and an outcome of the G-8/ UK Commission for Africa’s ‘Year of Africa’-deliberations – was launched in Cape Town withsecured seed funding of US$ 100 million and astrong, business-led mandate to improve Africa’sinvestment climate.

Ensuring Access to Education – The NEPAD e-Schools Initiative demonstration project operates in16 African countries and will fund e-access in 120schools by completion in mid 2007. The ultimategoal is to have all 600,000 African schools involvedwithin ten years.

Building Social Infrastructure• Fighting Hunger – A National Council was

launched in Kenya, under the auspices of theForum’s Business Alliance Against ChronicHunger, with eight multinational and domesticcompanies providing time and resources.

• Promoting Global Health – Guidelines werelaunched for large companies to support theHIV/AIDS programmes of smaller companies intheir supply chains.

Promoting Social Entrepreneurship• Sunette Pienaar was named the South African

Social Entrepreneur 2006 in Cape Town. • Across Africa, the Schwab Foundation has

engaged and celebrated the most promisingsocial entrepreneurs.

Fighting Corruption – The Forum’s PartneringAgainst Corruption Initiative (PACI) now counts 103signatories representing more than US$ 500 billionin annual turnover. PACI signatories havecommitted to doing business in Africa in support ofanti-corruption efforts on the continent.

Business Takes Action against HIV/AIDS –selected examples of corporate engagement:• Eskom has supported 42 suppliers in South

Africa to establish HIV/AIDS workplaceprogrammes, reaching 20,000 people .

• Unilever has supported 70 small tea farms inKenya to establish HIV/AIDS workplaceprogrammes, reaching 12,000 people.

• SAB Miller has supported 400 owner drivers and160 bars to establish HIV/AIDS workplaceprogrammes.

Addressing the Resource Curse – Globaldeliberations of the mining industry on responses toresource endowment challenges and opportunitieshave now fully incorporated insights from leaders ofAfrica’s mining industry.

Sharing Best Practices – In a session on‘Technologies for Growth’, experts sharedexperiences on how to ensure that technologiesrelevant to African markets are adopted moreeffectively.

Achievements, Commitments and Aspirations

“Action is what counts. This is Africa’s moment, not ofgreatest need, but of greatest opportunity.”

Niall FitzGeraldChairman, Reuters, United Kingdom; Member of the Foundation

Board of the World Economic Forum

We have selected a few achievements,commitments and aspirations from the threedays of the World Economic Forum on Africa in2006.

The commitments vary: Some are championedby individuals, others by a group of members,while in some cases the Forum community hasmerely played a facilitating role, assistingprogress and galvanizing action on African-ledinitiatives.

The Forum is proud to be associated withleaders in business, government, civil societyand academia who are committed, through theiractions, to improving the state of the world.

It is our hope that achievements of the past canbe emulated and scaled up, that aspirationsoutlined this year will inspire future commitmentsand, most importantly, that commitments willtranslate into tangible, measurable action andachievement.


Selected Commitments

The African Development Bank has committed tobe the lead facilitator of pan-African infrastructureprojects, and participants agreed to better leveragepublic-private partnerships and better integrate theviews and contribution of business as a partner ininfrastructure development projects.

The World Economic Forum has committed tolaunch a public-private partnership to strengthen publichealthcare systems in sub-Saharan Africa. This willaddress epidemic and pandemic diseases and will belaunched at the Annual Meeting 2007 in Davos.

The Forum’s Energy Poverty Task Force, a group ofForum member companies active in the search for,and implementation of, innovative solutions to ruralelectrification has committed to two pilot schemes,electrifying 11,000 households (with a significantpotential to scale up) in the Democratic Republic ofCongo and Lesotho by 2008.

Improving Energy Access – The Development Bankof South Africa, the African Development Bank, Arevaand Shell committed to facilitate the creation of aproject database for small-scale energy projects tofacilitate the sharing of knowledge.

African members of our community of Young GlobalLeaders have, inter alia, committed to:• Sponsor a film series on African Success Stories• Launch a financial literacy programme in Rwanda• Establish leadership development institutes

throughout Africa

A core group of leaders has committed to establish theSouth African Foundation for SocialEntrepreneurship.

To leverage the power of sport – The South African2010 Local Organizing Committee pledged to make2010 an African World Cup, inter alia, by maximizingAfrican business involvement in all events surroundingthe Cup.

Commitments on Health:• A food and beverage company committed to

working with the Forum’s Global Health Initiative toimplement world-class malaria control programmesin at least three countries of operations.

• Companies committed to providing and analysingtheir data to help show the cost benefit of providingeffective AIDS treatment to workers andcommunities.

“Building an International Business Alliance to Scale Up Success”: Jim Goodnight, Chief Executive Officer, SAS, USA; Patrice T. Motsepe,Executive Chairman, African Rainbow Minerals (ARM), South Africa; and Syamal Gupta, Chairman, Tata International, India, at the closingsession of the World Economic Forum on Africa


• Action on HIV/AIDS – Volkswagen committedto supporting at least nine of their small-scalesuppliers to establish strong health and safetyprogrammes, including HIV/AIDS workplaceprogrammes.

To promote the African brand, Bata shoesmanufactured in Kenya will in future carry thestamp “Made in Africa” – a pledge made byThomas J. Bata, Chairman, Bata Shoe Foundation.

Changing Perceptions – Forum companies in theadvertising, media and entertainment industriescommitted to support recent successes in businessand government in Africa by establishing a“Rebranding Africa Campaign” to be launched atthe Annual Meeting 2007 in Davos.

Aspirations

A selection of the broad range of aspirationsexpressed by participants in Cape Town:

Principles to projects – Operationalize NEPADprinciples on transnational private-publicpartnership into tangible costed projects like theWest Africa gas pipeline and the Inga Dam.

Breakthrough in trade – Improved market accessfor African goods.

Increase the input and engagement of Africanbusiness in global trade negotiations.

Improved governance – Build on Africa’s gains inimproved peace and security, improved governancestandards and entrenched rule of law to ensurethat the exception becomes the norm.

Healthcare:• Healthcare systems – Develop sustainable and

comprehensive approaches to the strengtheningof healthcare systems in sub-Saharan Africa.

• Increase access to HIV treatment – Unilever,Eskom, Volkswagen, Standard Chartered Bank,SAB Miller and Heineken aspire to support allthe small and medium size enterprises in theirsupply chain to establish HIV/AIDS workplaceprogrammes. Together, they could reach overone million people, but will need to partner withgovernment to make this happen.

There should be deeper, more symbioticpartnership between universities, business andgovernments in Africa to ensure universities asdrivers and incubators of growth.

Reduced constraints to intra-African trade toallow capacity, efficiencies and scale to beimproved regionally even as negotiations continuein the global arena.

China and Africa – Improve Africa’s role indetermining terms of engagement with China.Increasingly move from perceiving China as a threatto discussing holistic, win-win solutions tostrengthen the partnership and maximize theopportunity arising from trade and investment withAsian giants.

Rebranding Africa – To associate Africa withpositive images and to build stronger countrybrands within the continent.

“The challenge is how dowe get companies andentrepreneurs to flourishand develop.”

Lars ThunellExecutive Vice-President,International FinanceCorporation, (IFC),Washington DC

“Our belief has been that by bringing business togetherwith governments and civil society, those partnershipscould unlock Africa’s great potential and would allow thecontinent to assume its proper role in the globaleconomy.”

Peter TorreeleManaging Director, World Economic Forum


The World Economic Forum on Africa in 2006continued discussions that had taken place at lastyear’s meeting in Cape Town and at the WorldEconomic Forum Annual Meeting 2006 in Davos,Switzerland. The workshops, which were extremelywell attended, and other sessions were designed tosustain efforts to follow “the creative imperative” byshaping solutions to a range of global challenges –from hunger to healthcare, investment to infrastructure.More than 700 government, business and civil societyleaders pooled their knowledge and enthusiasm andshared their experience to find innovative ways to keepAfrica “going for growth”.

The following is a selection of creative conclusions thatcame out of the workshops:

Global Risks: The proliferation of interconnected risksin the globalized age requires a more sophisticatedapproach to confronting them. Participants devisedworst-case scenarios for risks salient to Africaincluding oil price shocks, terrorism, climate changeand a pandemic – and then considered ways tomitigate the threats or prevent them from becomingreality. One common conclusion was that businessmust play a role in confronting global risks inpartnership with government and civil society.

Infrastructure: Africa’s infrastructure deficit can onlybe solved with strong leadership and pan-continentalcooperation. Public-private partnerships are essential,given the limited resources and knowledge in thepublic sector. Other key elements for a successfulinfrastructure development programme include politicalwill and stability, strategic planning, efficient logisticsand bureaucracy, the capacity for dispute resolutionand the availability of skills and talent.

Investment Climate: A crucial outcome of the WorldEconomic Forum on Africa was the launch of theInvestment Climate Facility (ICF) for Africa with morethan US$ 100 million in initial commitments. Thispioneering public-private partnership will run for sevenyears and will target the impediments to investment

and aim to unblock them. Participants focused on thefollowing priorities: crime and corruption, enforcementof property rights, expansion and reform of financialmarkets, tax and customs reform, promotion ofefficient business registration and bureaucracy,encouragement of competition, the need for greaterflexibility in labour markets, and the development ofadequate “soft” and “hard” infrastructure. Progress inthese areas, which are priorities of the ICF, should bemeasured against targets or benchmarks.

Hunger: The fight against hunger is not a simplematter of putting food in people’s mouths. Acomprehensive approach is needed to ensure asustainable solution. This includes educating womenand girls; providing microfinancing for small-scalefarmers; assisting farmers with water, seed andfertilizer; help for small enterprises; promotion ofeffective business models; and the support of world-class agricultural colleges. In each area, businessesare among the many stakeholders that have a role toplay. The private sector, for example, can beinstrumental in encouraging entrepreneurship at thevillage level.

Rebranding Africa: Perceptions of Africa must matchthe new reality of a confident, growing continent wherepeace, stability and democracy have spread in recentyears. Africa has to promote itself as the world’s “nextbig thing” as China and India have done. Business canplay a role by highlighting corporate success storiesand the more favourable investment climate,particularly achievements in democratization andderegulation. Success will come through cooperativeefforts among Africans, not through the patronage ofthe Western media.

The Creative Imperative in Africa

“In reality, we have to implement programmes to whichwe have already agreed. Basically our challenge is ourcapacity to implement those. The capacity to implementstands at the centre of our challenges.”

Thabo MbekiPresident of South Africa

South African Finance MinisterTrevor Manuel ‘thinking on thebox’ in a WorkSpacebrainstorming session onimproving Africa’s investmentclimate


Participants in action at the Cape Town WorkSpace to explore and work through ideas,

envisoning new possibilities and prioritizing responses to complex, systemic problems on

perceptions of Africa, infrastructure, risk and the African investment climate

27


The World Economic Forum would like to thank its Partners for their valuable support of the WorldEconomic Forum on Africa, Cape Town, 31 May – 2 June 2006:

Strategic PartnersAMDAudiErnst & YoungGoldman SachsHPIntelMerck & Co.NestléVolkswagenWPPZurich Financial Services

Regional PartnersABSA GroupAfrican Rainbow Minerals (ARM)EskomMTN GroupMurray & RobertsNigerian National Petroleum Corporation (NNPC)SABMillerSasol

Service ProvidersTelkomTransnet

Acknowledgements

Peter Torreele is Managing Director of the World Economic Forum. Haiko Alfeld is Director, Africa. AdeyemiBabington-Ashaye is Global Leadership Fellow and Associate Director, Africa. Nadine Bonard is Senior EventManager. Yvonne Diallo is Member Relations Manager, Africa.

Report WritersDianna GamesAlejandro ReyesBenjamin Skinner

Editing and ProductionAlicia Bartlett, Icon DesignJanet Hill, EditorKamal Kimaoui, Associate Director, Production and DesignNancy Tranchet, Associate Director, Editing

PhotographersAndrea GuidaEric Miller

The World Economic Forum would like to express its appreciation to the summary writers for their work at theWorld Economic Forum on Africa in Cape Town. Session summaries are available on our website at: www.weforum.org/africa.

The World Economic Forum would like to recognize the support of PricewaterhouseCoopers in providingKnowledgeConcierge services and fast facts.

The cartoons in this publication have been graciously provided by Zapiro, Editorial Cartoonist, ZaprockProductions, South Africa, and Gado, Editorial Cartoonist, Nations Media Group, Kenya.

Contributors

The World Economic Forum is an independentinternational organization committed to improvingthe state of the world by engaging leaders inpartnerships to shape global, regional andindustry agendas.

Incorporated as a foundation in 1971, and basedin Geneva, Switzerland, the World EconomicForum is impartial and not-for-profit; it is tied tono political, partisan or national interests.(www.weforum.org)

Documents

World Economic Forum on Africa 2006