Foreign investments in Africa face the most inhospitable climate in the world,” International Finance Corporation (IFC) chief economist Peter Klein said at a conference on developing business and infrastructure in Africa.

“The costs of doing business are horrendous, compared to the other parts of the world,” he said.

“As a result, we see very little business and very low wages, so improving the infrastructure is the solution,” said Klein.

“Africa should strive to achieve macroeconomic stability, notably by revising bad laws, tackling systematic graft and eliminating unnecessary business barriers.”

IFC executive vice-president Peter Woicke said in a recorded address that the task of improving Africa’s infrastructure was massive. He called for better governance and reforms as a way of attracting investors.

“Too many times the reform efforts get stuck,” Klein said, referring to most states in Africa, which receive about 2% of total global FDI inflows.

Kenyan President Mwai Kibaki pointed out that Africa, which accounts for less than 1,5% of world trade, would continue to be marginalised in global economics unless it embarked on reforms.

“We are inspired by the examples of the newly industrialised countries in Asia as proof that per capita incomes can be doubled and even tripled over a short period of time, if the right policies are followed,” Kibaki said.

“We in Africa cannot ignore the fact that FDI inflows to the developing world have overtaken official development assistance as the engine of economic growth,” he said.

Three years ago, African leaders drew up the New Economic Plan for Africa’s Development (Nepad), aimed at pulling the continent out of its cycle of poverty and misery. Nepad promises clean government and strong economic policies in exchange for greater aid and investment in the continent.

The leadership of another initiative, the brainchild of UK Prime Minister Tony Blair to find solutions for Africa’s economic woes, met on Tuesday in Downing Street, London.

At the Commission for Africa meeting were SA Finance Minister Trevor Manuel, Ethiopian Prime Minister Meles Zenawi and Tanzanian President Benjamin Mkapa.

The commission aims at publishing a report next year on Africa’s economy, poverty, agriculture, education, conflict resolution, health, conservation of the environment, cultural development and good governance. Sapa-AFP, Business Day Reporter

Source: Business Day
URL: http://www.bday.co.za/bday/content/direct/1,3…/p>