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African Summit to Focus on Economic Growth

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African heads of state are gathering in Ethiopia days from now to discuss the continent's long-standing inability to attract investment. From African Union headquarters in Addis Ababa, VOA's Peter Heinlein reports at least 40 African heads of state and government are expected to attend, along with some top dignitaries from outside Africa.

The theme of this AU summit is 'Industrial Development in Africa.' But to some extent, the topic of industrialization has been overshadowed by the conflict in Somalia and Darfur and the political turmoil in Kenya. At a pre-summit conference however, the buzz was about making the continent more attractive to investors to create the economic base needed to sustain growth rates high enough to reduce poverty.

It is not going to be easy in a region where many leaders still cling to outdated theories of central planning and tight government controls. At the conference on attracting private sector investment, delegates repeatedly heard that the key to growth is unleashing the continent's multitude of entrepreneurs, many of whom are held back by high taxes and rampant corruption.

African Union Trade and Industry Commissioner Elisabeth Tankeu of Cameroon says the idea that development aid would pull Africa out of poverty has been proven false.

"If some country can be developed with aid, Africa would be developed. You understand," said Tankeu. "You don't develop your country with aid. For decades we relied on aid, but we now realize that we still remain poor."

In a speech to the Private Sector Forum, the deputy executive secretary of the United Nations Economic Commission for Africa, Lalla Aicha Ben Barka noted the irony of the continent's economic statistics. For example, she said while the percentage of Africans living on less than $1 a day fell from 48 percent to 41 percent during a recent eight year period, the number of people living in extreme poverty had risen over the past quarter century from 168 million to about 300 million.

Ben Barka warned African leaders that they must reverse anti-business policies and encourage entrepreneurship if they hope to attract the investment necessary to create jobs and grow their economies.

"Indeed, as a result of poor business environment, Africa attracts only one percent of foreign private capital, and this is mostly in the capital-intensive natural resources sector with minimal job creation," said Barka.

George Kell is the executive director of the United Nations Global Compact, which co-sponsored the private sector forum along with the African Union. He says Africa's leaders must halt corruption and provide a law-based society, then stand back and allow the private sector to create the wealth necessary for prosperity.

"The political leadership still has not embraced the importance of business and what it takes for business to grow," said Kell. "There's enormous entrepreneurship here. So many success stories, but these success stories can't grow because the framework within which they operate is not conducive. There's just too much corruption, too much instability, and public policy makers are not appreciative of the role of business. The whole incentive structure is not geared to reward entrepreneurship."

With the emphasis on economic issues, special guests will include World Bank President Robert Zoellick. He will be the first World Bank chief ever to address the gathering. Others likely to attend include U.N. Secretary-General Ban Ki-moon, who is due in the region for discussions on Darfur, and former Secretary General Kofi Annan, who is trying to mediate the post-election dispute between Kenya's rival leaders.

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