UK backs Africa Enterprise fund
The United Kingdom has became one of the first donors to get behind a new fund which will help businesses to encourage entrepreneurship in Africa.
Speaking at the World Economic Forum on Africa in Cape Town on Wednesday, Leader of the House of Lords, Baroness Amos, announced that the UK would provide US$20-million over three years to the Africa Enterprise Challenge Fund (AECF).
The AECF said in a statement on Wednesday that, from early 2008, it would provide grants of up to $1.5-million to businesses that provide "innovative proposals for improving people's chances to take part in economic activity, particularly in the areas of finance and agriculture."
According to the AECF, 70% of Africa's people work in agriculture.
An example of the type of project that might receive funding from the AECF is a mobile phone system that is helping Kenyans without bank accounts to transfer money.
"The M-Pesa system run by Safaricom, and partly funded by the UK's Department for International Development, allows users to borrow, transfer and make payments using text messages," the AECF said.
"Customers visit one of a network of shops, pay a cash deposit, and then 'text' the sum to the recipient - who uses a secure pin number to pick up the funds at another shop.
"The number of mobile phone users in Kenya - more than 6.5 million - is far greater than the number of people with bank accounts, so the system provides an affordable financial service to many who have no other way to access such services."
Speaking in Cape Town on Wednesday, Baroness Amos said that business development was essential in the fight against poverty. "Last week the G8 reaffirmed the importance of this in stimulating economic growth in developing countries and encouraged businesses to improve the level of sustainable investment in those countries.
"The Africa Enterprise Challenge Fund will help to deliver this," Amos said. "It encourages innovation in trade and commerce to help those who are most excluded enter the world of business."
Other donors who have already committed to support the fund include the African Development Bank, the Consultative Group to Assist the Poor, and the International Fund for Agricultural Development.
SouthAfrica.info reporter
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