Memorandum submitted by Business Action
for Africa[21]
1. BUSINESS ACTION
FOR AFRICA
Business Action for Africa (BAA) is a rapidly
growing network of businesses and business organisations, active
in Africa and from the continent, launched in July 2005 to build
on the momentum of the Commission for Africa (CFA) and G8. An
outline of BAA is included as Annex A (Ev 158). A selection of
participant case studies is included in Annex B (Ev 159). A selection
of useful resources is included in Annex C (Ev 160).
2. BUSINESS AND
DEVELOPMENT
Business has an important and direct contribution
to the delivery of positive change for Africa and its people.
It is through the responsible and profitable operation of core
business activities that business makes the most significant contribution
to development: generating growth, creating jobs and economic
opportunities that lift people out of poverty, and tax revenues
needed to fund public spending on a sustainable basis. Of course,
the way businesses do business has a powerful impact. It is important
to keep in mind that the vast majority of poor people derive their
livelihoods from the private sector—in small scale enterprises,
as employees or as customers of goods and services. The domestic
private sector accounts for the major share of investment in most
developing countries (some 80% in Africa). Business also has important
role in maintaining collective pressure on international and national
policy makers to pursue policies that promote growth and ensure
poor people are able to participate in and benefit from growth.
3. PRIVATE SECTOR
DEVELOPMENT, GROWTH
AND POVERTY
REDUCTION
The evidence shows that growth is necessary
(though not sufficient) for poverty reduction. In most African
countries, the central problem is that growth rates have not been
maintained at the levels needed for long enough. Yet, all too
often inadequate attention is paid to growth and to the policies
needed to ignite and sustain it. Effective policies for growth
must recognise the centrality of the private sector as its engine.
Unleashing the entrepreneurial energy (particularly for poor people
and small enterprises) in developing countries must be made a
priority, and the benchmark by which to test the effectiveness
of donor interventions.
4. PRIORITIES
FOR PRIVATE
SECTOR DEVELOPMENT
There are six priority areas that businesses
(in Africa and across the G8) have identified for catalysing private
sector-led growth, and for deepening opportunities for poor people
to escape poverty.
A. Governance and Transparency
Good governance is the foundation of economic
growth and poverty reduction. Business Action for Africa believes
that support should be given to the African Peer Review Mechanism
as an innovative framework by which to plan, measure and assess
reforms. In other regions, a similar drive must be given to initiatives
to increase transparency and improve governance. Corruption is
a global problem, but it hits the poorest hardest. Business must
play its full part in tackling corruption: companies must take
a stance of zero tolerance to bribe giving. Under the banner of
Business Action Against Corruption, work is being taken forward
in Africa to strengthen the capacity of the public and private
sectors to tackle corruption. A number of the participating companies
in Business Action for Africa are lead members of the Extractive
Industries Transparency Initiative (EITI). Business Action for
Africa welcomes the increasing adoption of EITI within Africa
and calls upon, and will aim to actively encourage, more countries
and companies to work together to increase transparency across
other sectors.
B. Climate for Business
African governments must continue to improve
the "investment climate": tackling the barriers to and
reducing the costs of doing business. This is particularly important
for the small-scale enterprises—who are hit hardest by a
weak operating environment. As part of this, efforts have to be
made to tackle Africa's infrastructure weaknesses. Business Action
for Africa welcomes the proposed AU/NEPAD "Investment Climate
Facility" (ICF) as an important private sector-led initiative
to address these issues. Three participating companies recently
announced their financial support for the ICF.
C. Trade
Trade has the potential to be a powerful engine
for Africa's development but only if action is taken on three
areas—an end to agricultural subsidies, increased access
to developed country markets and support for improving Africa's
capacity to trade. Given the disappointing progress made at Hong
Kong at the end of 2005, a concerted effort is needed over this
year. African governments, for their part, must work to enhance
intra-African trade. Recognising the need for business to join
the debate, Business Action for Africa will continue to campaign
for a more favourable trade regime for Africa. At the same time,
a number of members are driving forward work on a specific, critical
area—improving customs administration to facilitate international
and regional trade.
D. Enterprise and Employment
A vibrant and successful private sector is key
to sustainable growth. Encouraging Africa's entrepreneurial spirit—from
its family farms and small firms to its larger companies—is
important for growth and job creation. Business can do more to
help small enterprises access capital, skills and training, as
well as opportunities to trade. There is a growing body of good-practice
in supporting enterprises through company supply chains. Youth
unemployment is a particular issue in many African countries,
and must be tackled as a priority.
E. Human Development
Strengthening education and health systems is
central to enabling people to participate fully in the economy,
and is vital to long-term business growth. Specific attention
must be paid to tackling HIV and AIDS and its devastating impact
on people's lives, on business and on the economy. Business has
an important role to play to complement the efforts of African
governments and donors.
F. Perceptions of Africa
The language of intergovernmental debate—of
debt, aid, poverty and conflict—dominates the way Africa
is discussed externally, reinforcing perceptions of a continent
of problems. Africa often appears to be seen as one large risky
country, with little understanding of its diversity. But Africa
deserves increasingly to be seen as a continent of opportunity.
Africa's new business leaders, and most investors in Africa, feel
this growing sense of confidence.
5. CONCLUDING
REMARKS
There is now greater acceptance that the private
sector is the key to prosperity and poverty reduction—to
more jobs, wealth and income—with government's essential
role to secure public safety, to provide core public services
in education, health and infrastructure, and to regulate the economy
in a way that does not create obstacles to enterprise. Thus creating
a good working partnership between business and government is
fundamentally important—to create a good business environment,
to free up the energy and ideas of entrepreneurs, whether they
be farmers, traders or in companies. We know what works, what
matters most is to ensure that no time is lost in delivering results
to the hundreds of millions of citizens still marginalised from
the global economy.
21 This paper is submitted on behalf of the business
members of the BAA Oversight Group. Back
| 
