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Business Day, Johannesburg, 02 June 2006
=Investment in Africa to get boost from fund=


 * Ayanda Shezi, Economics Correspondent**

CAPE TOWN — The African Investment Climate Facility (ICF) — a fund set up to help create a more attractive investment environment on the continent — was launched yesterday at the World Economic Forum (WEF) meeting on Africa.

The fund, which has secured nearly $100m in donor funding, has a lifespan of seven years, during which it aims to improve investment, boost economic growth on the continent, and create more jobs to address Africa’s challenge of poverty and underdevelopment.

Niall FitzGerald, chairman of Reuters and co-chairman of the ICF, said the success of the fund would be measured against the extent of new economic activity, which will be seen through increases in productive investment, firm start-ups, jobs created and increased levels of trade and production.

“The ultimate measure of the ICF’s success will be higher, more sustainable growth on the continent,” he said. This, FitzGerald said, was the only way to get the continent out of the poverty trap.

“Execution is critical. We need more investment, higher growth and more jobs, and we need drive and focus in order to be able to achieve this,” FitzGerald said.

The ICF aims to remove real and perceived obstacles to domestic and foreign investment in Africa, and prepare and promote the continent as an investment destination.

Its objectives include streamlining business registration, improving customs regulation, securing property rights and making financial markets more inclusive.

Benjamin Mkapa, co-chairman of ICF, said countries which would receive priority were those that had signed up for the African peer review mechanism. “These countries have already shown they are committed to change and good governance,” Mkapa said.

Initial sponsors of the ICF include Anglo American, Royal Dutch Shell and SABMiller.

“Of the Group of Eight countries which pledged financial help at the Gleneagles summit last year, only the UK has made a financial contribution to date,” Mkapa said.

The British government has pledged $30m to the ICF. “Some people have not put their money where their mouths are, so to speak,” he said.

This was disappointing, Mkapa said, but the ICF was confident that once it was up and running, more donors would come to the party. At the launch, Mkapa, who is also former Tanzanian president, said Africa needs to achieve a sustained annual growth rate of 7% in order to meet the United Nations Millennium Development Goal of halving the number of people living on less than $1 a day by 2015.

“Improving the investment climate is a central catalyst in fulfilling this objective,” he said.

While sub-Saharan Africa is rated as the poorest region in the world, it is also seen as the most profitable investment destination.

A 2003 World Bank global development finance report described Africa as offering “the highest returns on foreign direct investment of any region in the world”.

The ICF will get together to review its success, and any obstacles impeding progress, in two years’ time. The ICF is accountable to its investors, as well as to African and other stakeholders.

The WEF summit ends today.


 * From: http://www.businessday.co.za/articles/economy.aspx?ID=BD4A209837**

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