$100m boost for business in Africa
2 June 2006
The Investment Climate Facility, a unique fund conceived to help Africa create a more attractive business environment and realise its potential as a global player and trading partner, was formally launched at the World Economic Forum on Africa in Cape Town on Thursday.
A centre-piece of the WEF meeting, the Investment Climate Facility (ICF) received the full backing of the continent's premier gathering of leaders in business and politics, and announced that it had successfully secured its first $US100-million of funding through a combination of sovereign donor and corporate funding.
"With a defined seven-year life span, the ICF has set out clear objectives to drive investment in Africa, removing real and perceived obstacles to domestic and foreign investment, and preparing and promoting the continent as an investment destination," the ICF said in a statement.
These objectives include streamlining business registration, improving customs regulation, securing property rights and making financial markets more inclusive.
'Clear mandate to make a difference'
"We are confident the ICF can have an immediate and sustained impact on Africa's future growth and development," said Reuters chairman and ICF co-chair Niall Fitzgerald. "It is a unique fund, highly accountable and focused, with a clear mandate to make a difference."
Initial sponsors of the ICF include Anglo American, Royal Dutch Shell and Shell Foundation, Unilever, SAB Miller, the UK Department for International Development, Ireland, the Netherlands, the European Commission and the International Finance Corporation.
The ICF is structured on private sector principles and governed by an independent board responsible to the ICF's investors as well as to African and other high-level stakeholders. It has the support of the African Union, the New Partnership for Africa's Development (Nepad), the Commission for Africa, the G8 and Business Action for Africa.
"Africa must achieve a sustained annual growth rate of 7% if it is to meet the Millennium Development Goal of halving the number of people living on less than US$1 a day by 2015," said former Tanzanian president and ICF co-chair Benjamin Mkapa. "Improving the investment climate is a central catalyst in fulfilling this objective."
Reforming Africa’s investment climate
The ICF said it was "designed to complement rather than compete with other programmes. It is focused exclusively on reforming the investment climate across Africa - through practical action and measurable change.
"The ICF's level of resources, and its ability to draw upon skills and experience of African business, governments and regional bodies, enables it to work at regional and national level."
The ICF's ambitious list of to-dos over the next few years include:
- Reducing red tape;
- Helping to secure property rights and make contract enforcement more efficient;
- Speeding up and simplifying business registration processes;
- Making financial markets more inclusive;
- Making labour markets more conducive to job creation;
- Ensuring that customs regulations are reformed to facilitate trade;
- Making tax systems easier to comply with;
- Making information and communication technology regulations more investment friendly;
- Promoting competition;
- Pursuing initiatives to reduce corruption and crime; and
- Promoting Africa's image as an attractive investment destination.