Speech at the Africa investment & Finance Conference

How many times do you hear people begin a statement with the words, “The trouble with Africa…”?

Not only does that give a starting point to any conversation that is negative, but it is based on assumptions that are factually wrong, as I intend to explain. And it also implies that all Africa is the same, which is another assumption I intend to tackle.

Those who make sweeping generalisations don’t talk of Africa’s rich cultures – indeed its status as the cradle of humankind – or the successful examples of democracy and governance, or the dynamic economies.

Yes, there is disease, lack of education, injustices to women and other human rights concerns, and increasing climatic insecurity. But these are not unique to the countries in Africa. I can find some poverty and injustice and sickness within this Square Mile and within walking distance of it.

And there is no more reason to lump all Africans into one category than there is to do so about the people in any other continent or country or even city. Would you say that the people of Birmingham, Berlin, Zagreb or Barcelona are all the same?

Whilst I am sure that none of you here today are caught in that negative mindset, it is the public perception out there. And that is harder to change. Ignorance breeds ignorance and loss of opportunity. It is the political reality that I grapple with, and my success and that of others like me, in turning public perceptions is the foundation for business and investment success – your success.

The end of 2007 regretfully did not help with the events after the Kenyan elections. A number of African political heavyweights contributed to resolving the impasse there.

I’m very encouraged that former UN Secretary-General Kofi Annan is making headway. It underlines the value in situations like this of trust, respect, and quiet diplomacy. Kenya could and should have had a better election than it did.

In part, it did not look good for Africa because many expected it or were not surprised. And that is sad because, for a number of years, there have been good elections where a President, Prime Minister or political party has changed through the ballot box without a shot being fired, without bloodshed, tanks, or police. Changes have occurred and life goes on in countries like Ghana, Zambia, Mozambique, Sierra Leone, Tanzania, and Namibia.

I recall a speech I made to the Kenyan business community in Nairobi a year ago which laid down all the challenges we felt it was facing.

I spoke then of the problem of corruption in light of the Githongo Report, and of our Commonwealth support for the Kenyan Anti-Corruption Commission. I encouraged Parliamentary reform, and I mentioned the improvements we felt were needed in the Electoral Commission of Kenya.

Some of those changes have happened, like better voter registration and training for Electoral Commission staff. Some haven’t.

The quality also dipped in Nigeria but – again to flip the coin to the positive side – six of the State-level outcomes have already been overturned by the judiciary, and there are other cases being considered. My point is that bad news will always overshadow good news.

Wherever I look in Africa, I see many of these same contrasts, and the same sense of more advance and less retreat, even if it is played differently in the media. The negatives perpetuate their own myths.

People look at Africa and see tensions – or blurred distinctions – between the executive, the judiciary, and the legislature, and indeed the army and the police force. They see money disappearing into Swiss bank accounts (and incidentally, corruption has both a demand and supply side – money wouldn’t disappear in the way it does offshore unless there were those at the other end willing to take it), rather than staying on the continent. Nearly 40% of the money generated in Africa leaves it which compares with something like 90% of earnings in East Asia which stay there.

The fact that Africa still attracts less than 2% of world trade is scandalous – but I again point out that there is a demand and supply factor in this: Africa can supply but its options are limited if the demand conditions are distorted by trade barriers.

I prefer and can easily argue in favour of an Africa on the move, and going ever upwards. 25 years or so ago, there were around three African democracies: Botswana, Senegal, Mauritius. Now more than 40 countries hold regular multi-party elections. I used to make a point of saying that Commonwealth Africa is in pretty good shape, and – even with a major lapse like Kenya – I will hold to that.

The journey that is ‘democracy’ goes on, and the Commonwealth walks alongside – mediating tensions, building electoral commissions, helping to introduce new voting systems, even drafting new Constitutions in places like Swaziland. It might be two or three or four steps forward and one back – but overall it’s forward.

The economic situation looks good, too, even if much of it is driven by the resource needs of China and India:

• Much of Africa’s wealth lies in the ground – and now, they are starting to benefit this continent. Look at places like Nigeria, Botswana, Ghana.
• Look at China, and Russia, and India, and Brazil, wanting to invest in Africa.
• Post-apartheid South Africa has led the way, with a five-fold increase in its trade since 1994.
• Remittances now come back to Africa to the tune of $8 billion a year. In the last five years, sub-Saharan economies have routinely grown at nearly 7% per annum.
• Well over $50 billion-worth of debt has been cleared.
• There has been exponential growth in the numbers of listed companies.

My analysis of Africa’s economic situation is simply this: many good things have happened in the last decade – but that they are not, yet, noticed. For Africans and non-Africans alike, those that have noticed them are doing well, while others are held back by a combination of bad news and received wisdom.

The positive lies in what former IMF Head Michel Camdessus called the ‘silent revolution’ – the macroeconomic stabilization which has taken place in Africa, alongside a rise in commodity prices. Budget deficits and inflation rates have been cut; debt has been better managed, and in many cases canceled. Countries like Tanzania, Uganda, Mozambique and Ghana have massively improved their investment climate. It is satisfying for me that they are all Commonwealth members.

Many of you are also involved in Africa’s biggest economic successes. You have chosen countries, sectors and businesses in which to get involved. The successes of Actis and Aureos in Africa (both managing the money of the Commonwealth Development Corporation) show that. We will hear their stories today, alongside those of companies like Renaissance Partners. Through the Commonwealth Private Investment Initiative, we have successfully injected some £200 million into African investment.

That’s fine for the few, but not for the rest. How can we, non-Africans and African alike, help consolidate the gains, and turn around some of those persistent negative perceptions?

Let me give a very brief answer – in terms of politics and economics.

2005 was supposed to be the year of Africa: the Gleneagles G8 Summit, the Commission for Africa, and more. It seems a long time ago now. In essence, it revolved around a deal: non-African countries – especially the G8 – would re-commit: with more and ‘better’ aid, more debt relief, and a trade deal that allowed African countries to trade as equals, and indeed gave them the time and technical support actually to become ‘equals’.

For its part, Africa committed itself to charting its own way forward, committing itself to levels of governance, accountability and efficiency that would deliver economic and other development.

Almost three years on, the G8 has met some but not all of its promises. Its aid money is pledged but not totally forthcoming. The Doha Round still has its wheels spinning with little traction, to the eternal shame of those who have had it good for so long: the US and the EU especially. The EU is still seen to be imposing a raw deal on its African, Caribbean and Pacific partners in the Economic Partnership Agreements. They are supposed to open up new opportunities for all and give ACP countries a lift, not just new markets for Europeans.

Meanwhile Africa has shown how serious it is about its own future in its own hands. The strengthened AU, a lively NEPAD, and the painstaking and sometimes painful work of the African Peer Review Mechanism are indicators. I’m pleased, by the way, that 27 African countries have now signed up to that self-monitoring APRM – with its focus on political governance, economic governance, corporate governance, and socio-economic development. Half of those committed to the APRM are Commonwealth countries.

Africa is rich with natural resources. It’s in the middle of a technological revolution. Its future can be rosy, if it continues to take ownership of its future.

It begs the question which President Museveni of Uganda asked his fellow Commonwealth Heads of Government, when they met in Kampala last year. How, he asked, can we breed African, not just Asian, tigers?

The Commonwealth argument is that Africa’s path to transformation and development requires greater inclusiveness and fundamental democratic principles.

‘Africa is not ready for democracy’ – what bunkum! Identify for me one person, just one person who does not want to have a say in influencing their own future. One person who doesn’t have aspirations for themselves or their children, be it a home, job or education.

This is where democracy begins: people having a direct say in who represents their aspirations and day-to-day interests. The creation of a Parliament or Assembly that can change laws, grant monies to the Executive or Government, or just debate the issues of the day.

So far so good. But those democratic ideals are not attained where an Executive or Government usurps the power of the Assembly; diminishes the role of the peoples’ representatives; ignores the rulings of judges; or does not provide the people with total financial transparency of a country’s finances.

None of this suggests that democracy is the wrong concept. What is important is the creation of the right democratic institutions. It is recognizing the separation of powers, which all Commonwealth countries have signed up to. And it is the people supporting and defending those institutions. But, yes, it can be improved in African countries and everywhere else.

A market analyst might look at Democracy in 2008, weigh up its potential returns, management and business risk, and conclude that it is volatile stock. Others might even conclude that it is overvalued for the return on the investment. Yet it remains our greatest aspiration. It remains the blue-chip magnet which draws people – just look at levels of migration towards the most established democracies.

It means far more than free and fair elections; and far more than effective democratic institutions. It has to develop a deep-rooted culture, which brings with it a free yet responsible media, a lively civil society, and nations which value and include both genders and all ages, their human rights, and their religious, linguistic and ethnic communities.

Economic development, too, is best when it’s democratic and inclusive. Hence the need to promote all business activity – small and large, and that accommodates women and youth entrepreneurs. Hence, too, the need for responsible business – accountable socially and environmentally as well as financially. The clearest indication of a society’s commitment to itself is that its citizens invest their hard-earned cash in the country itself, and don’t take their money beyond its borders to keep it ‘safe’. People should have the confidence to live, work, save and invest in their own countries.

I point to Mo Ibrahim, whose life’s work and money is now dedicated to promoting governance in Africa. Many of you will know that the first Mo Ibrahim Award went to Joaquim Chissano, former President of Mozambique. He was to have been on this podium today, but felt that the situation in Kenya did not allow him to be here. Mozambique is a Commonwealth country which faces many challenges, but it is meeting them. In 15 years, levels of poverty have been cut by a third, and the numbers of children in school have been doubled.

That’s what I mean by Africa’s upward trajectory of progress and hope. It is you who can contribute, by investing and further inspiring economic growth. And it is good governance and a deeply felt culture of democracy which will underpin that development sustainably.

So, ladies and gentlemen, my message today is quite simple: don’t judge the whole continent by the negative few; look at the parts one by one; think about their history and the challenges others have created for those who live there before criticising the situation today; and develop meaningful long term partnerships.

I’m reminded, as I conclude, of the Yoruba proverb I read in the Commission for Africa report, that says, “With shoes one can walk on thorns”.

I wish African countries, in all their rich diversity and opportunity, the very best on their continued path with you to peace and prosperity.