Make or break for NEPAD

AGENDA

There has been no shortage of ambitious pan-African development plans in the past but most of them have failed. Now a new plan, Nepad has been launched with much fanfare. Will this one succeed where so many others have failed? Tom Nevin ponders the question.

Africa's latest and much vaunted blueprint for its economic future, the New Partnership for Africa's Development, Nepad, has entered a critical phase that will, for all intents and purposes, decide whether the ambitious successor to the New African Initiative (NAI) will succeed or fail.

Together with the G8 nations, Nepad's sponsors-in-waiting, the 15 African nation executive committee of planners and strategists have begun the task of drafting an action plan that lays out how Africa will implement its side of the Nepad contract.

It is a plan of daring and challenge, and unlike anything Africa has attempted before. It commits the continent to put its money where its mouth is.

Development by equals

For the first time, Africa is offering to move away from a relationship of dependency with the developed world and replace it with one of development by equals through co-operation, mutual understanding and partnership in the global economy. Part of the Nepad commitment says: "Africans are appealing neither for the further entrenchment of dependency through aid, nor for marginal concessions."

One goal speaks for the enormity of the job ahead: to halve the nearly 350m Africans living in dire poverty on less than a single US dollar a day in under 15 years.

Nepad is an African solution to an African problem; it is also a challenge to the developed world. By embracing the programme's aims, the countries of Africa are committed to putting their houses in order, both politically and economically, by cooperating with each other to end conflict and to practice democracy and free market policies.

The challenge Nepad lays down to the developed world is for them to provide Africa with the tools to do the job. These include debt relief, development aid and increased and easier access for African produce into the markets of developed countries.

In simple terms, Nepad stipulates that Africa must first establish peace, security, democracy, human rights and good political and economic governance on free market principles. In return the G8 countries will set aside 0.7% of gross domestic product a year for official development assistance.

The international community has already welcomed Africa's gesture, albeit symbolically, by making the next sitting of the World Trade Organisation's negotiations a development round. These include a first-time consideration by the WTO of phasing out agricultural subsidies.

The Nepad document notes that developed countries provide around $1 bn a day in subsidies to their farmers - from five to seven times what they pay in development aid. These subsidies allow farmers in developed countries to undercut African farmers unfairly in developing and developed markets.

Nepad estimates that to meet its basic development goals African economies as a whole must grow at 7% a year, requiring an annual injection of new capital of 12% of its GDP - some $64bn.

Address investor perception

Nepad insists that to attract private capital, "the first priority is to address investor perception of Africa as a high-risk continent, especially with regard to security of property rights, regulatory framework and markets. Several key elements of Nepad will help to lower these risks gradually."

The strongest undertaking by developed countries in their part of the bargain is to give African producers greater access to their markets, especially for agricultural products.

The real goal is to get industrial muscle-- building foreign investment rolling in, and that will only happen when the writers of FDI (foreign direct investment) cheques are convinced Africans have the means and the will to end conflicts, to play by good governance rules and secure democracies.

Many critics have asked the question: Why should this grand development plan for Africa succeed where so many others have failed? The answer, according to commentator Peter Fabricius, is that its chances of success rest largely on its implicit contract with its partners in the developed world.

"Previous plans failed because they simply comprised wish-lists that the African countries presented to the rich world," says Fabricius. "The world was not prepared to give out large amounts of assistance, largely to dubious governments, with no assurance that it would be put to good use, because so many of these governments were simply not accountable.

Nepad's commitment by African leaders to programmes of good political and economic governance makes it unique, and potentially successful.

"We are at a significant juncture in history," notes Professor Wiseman Nkuhlu, chairman of Nepad's steering committee. "A critical mass of leadership has developed both on the continent and abroad and that are genuinely committed to the regeneration of the continent."