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EU-Africa Business Forum Declaration

Publish date: 
29/11/2010

Preamble

  • As private sector members of the EU-Africa Business Forum, we re-affirm our commitment to bring together entrepreneurs and public and private investors from Africa and Europe with the shared agenda of improving the investment and business climate,incorporating good governance and creating the conditions for sustainable social and economic development in Africa.
  • Paradoxically, Africa has been hindered by one of its primary assets — the scale and diversity of this extraordinary continent - and efforts to unlock opportunities have achieved only limited success. The growth of Africa and its development have not been hampered by a lack of enterprise; rather a lack of integration.
  • Development has been disjointed; regulation, trade and business policies, skills resources, infrastructure and investment have all moved at a different pace between countries. It often results in an Africa of isolated countries rather than an integrated powerhouse.
  • For this reason, progress on our objectives, agreed in Nairobi in September 2009, of regional integration, increased investment and improved infrastructure, has been frustratingly slow; the desired policy shift, from poverty reduction to wealth creation, has not yet occurred.
  • Yet we firmly believe that partnership between the European Union, the African Union and business can deliver the policies, infrastructure and access to finance that the continents need to harness its considerable economic and human resources to truly deliver on its long-standing potential.
  • The following recommendations set out the joint vision of the African and European private sectors, agreed at the 4th EU-Africa Business Forum in Tripoli on 26-28 November 2010, for an integrated, prosperous Africa,and suggest the practical means of achieving the tangible results that Africa urgently needs.

Legal Security

  • To attract investment, private investors need the security of a good legal system.  An investor needs the assurance and reassurance that in the event of a dispute, they will benefit from an impartial justice system within a framework of clear legislation. 

Transparency

For the sake of transparency business leaders recommend that  :

Extractive companies (oil, minerals and gas) publish public accounts and contracts

Trade& Regional Integration: Unlocking Africa’s Trading Potential through Partnership

Business leaders call on Heads of State and Government to:

  • Put the promotion of inter-African trade at the forefront of the political agenda. Advance the regional integration process and strengthen Regional Economic Communities. Effectively ensure, through both regional cooperation and national action, the dismantling of tariff and non-tariff barriers.
  • Implement trade facilitation mechanisms and facilitate cooperation among customs, finance and regulatory authorities to foster the freedom of movement of goods and people within regional markets.
  • Develop joint strategies with the private sector to effectively tackle the issues of counterfeiting and illicit trade, which severely jeopardise legitimate trade, seriously erode government revenues, and put consumers confidence and public health and safety at risk.
  • Support the strengthening of private sector intermediaries to make the voice of business, includingSmall and Medium-sized Enterprises, heardin Africa and set up formal platforms for dialogue with business on trade and regulatory policy, including trade negotiations, taxation and enforcement of intellectual Property Rights.
  • Exchange best practices on national policy frameworks in order to further improve the business climate. More attention should be paid to Public Private Partnerships as a vehicle for delivering development goals.
  • Conclude the WTO Doha Round and insert a new momentum into the negotiations of the economic partnership agreements. Theseshould include rules to set the right economic, business and industrial policy framework for more investment in Africa.Trade liberalization should be gradual and backed up with accompanying measures.
  • Implement Aid for trade projects and support African exporters in implementing technical standards in order to facilitate their exports.

Effective tools for Private Sector decisions

Business leaders call on Heads of State and Government to:

  • Support the establishment of a new information culture based on regular investor surveys that feed into a central and web-based information platform, such as the UNIDO Monitoring Platform and request to expand the ongoing UNIDO Investor Surveys to all African countries and to intensify capacity building of investment promotion stakeholder institutions in the public and private sector.
  • Support specialized programmes that promote upgrading, subcontracting and facilitate linkages between local suppliers with domestic and foreign buyers, such as the UNIDO Subcontracting and Partnership Exchange Programme (SPX).

Infrastructure: How to deepen involvement of local private sector in infrastructure delivery

Under the above the forum recommends to:

  • Develop human capacity training program and include in tender document the know-how transfer to local contractor
  • Develop sound investment policies and create Infrastructure Investment Fund that boosts local private sector participation in infrastructure delivery;
  • Promote long-term construction contracts partnerships between African and European companies with high level of local content (Joint Ventures, subcontractors and workforce);
  • Enhance EIB’s role to act as lenders and investors for infrastructure projects in Africa;
  • Priority should be given to infrastructure projects that include an ICT dimension

Infrastructure: Making Private Investment in Africa’s Transport Infrastructure work

In the area of infrastructure PPPs, the EU-Africa Business Forum recommends:

  • Provide Technical Assistance and financial support to African Governments to prepare the legal framework for PPPs and to select bankable projects;
  • Participate in risk sharing with local banks to enable financing denominated in local currency and provide foreign exchange coverage;
  • European Union and EIB to provide separate Political Risk Guarantees (which should not be necessarily linked to a loan or grant) for infrastructure projects.

Raw materials: create a win-win for Africa and the EU

Business leaders call on Heads of State and Government, based on the African mining vision and the EU raw material initiative, to:

  • Strengthen EU-Africa relations in the area of raw materials through partnerships with a particular focus on improving governance (fighting corruption and promoting transparency notably through EITI), exchange of best practices, setting up raw materials databases and enabling industrialization in Africa.
  • Work together with international partners to increase transparency in setting up of contracts and government-payments principles and practices to enable a level-playing field for industry worldwide.
  • Set up the right investment climate in African countries to enable industrialisation, up-stream value-creation and transparency.  Exchange of best practices between the EU and AU on extractive industry policies is encouraged.
  • Leverage private sector investments with EU aid, for example to improve infrastructure, including roads and ports.
  • Launch a partnership that is pragmatic, focused on deliverables and encourages participation from European and African companies, including reliable NGOs where appropriate.

ICT:  Opportunities and Challenges

The EU-Africa Business Forum reaffirms its commitment to support ICT investment and uptake on the African continent and calls urgently to move forward the concrete implementation of the January 2010 African Union Summit Addis Ababa – ICT for Africa Summit agreement, where African leaders declared ICT as a key  priority in their development programs by: 

The private sector is ready for substantial investments in Africa in order to match business with social development objectives, provided the public sector invests in parallel in fostering market development and in the deployment of e-services. To-date the critical lack of public funds allocated for the mass diffusion of ICTs is missing the potential of sound PPPs in the field and related concrete opportunities to fast-track Africa's development path. 

Therefore business leaders call on Heads of State and Government to:

  • Effectively implement harmonized and transparent regulatory frameworks to promote fair competition and including appropriate fees (e.g. customs) to foster ICT private investment in Africa;
  • Prioritize broadband infrastructures deployment, ICT human capacity building, provision of local digital content and innovative e-Services (e-schools, e-health, agricultural services, transport services, Space based applications and e-Government Services) in national and regional development programmes; and allocate corresponding financial resources;
  • Most importantly we recommend  to use and fast track unallocated funds in AU/EU Partnership to be prioritized onto ICT initiatives as noted above in section a and b.

Bringing SMEs at the heart of the Joint EU-Africa Strategy

Business leaders call for:

  • African governments to adopt SME Charters based on common key principles framing sustainable SME development.
  • African and European Government to consider SMEs in the Second Action Plan as a cross-cuttingissue and to give due consideration to agricultural producers as businesses in their own right.
  • The establishment and funding of an African Cluster Collaboration platform for experience and knowledge sharing, and to enable collaboration with European clusters.
  • For the establishment of a Euro-African Business Associations Collaboration Facility, to support twinning arrangements between European and African SMEs and intermediary organizations.

Energy: Investment Opportunities in Energy

Business leaders call on Heads of State and Government to take the following recommendations into account:

  • Energy and renewable energy in particular,is critical for Africa's development, due to their potential for overcoming the negative consequences for the continent of the scarcity, price volatility and environmental impacts of fossil fuels. Renewables such as hydropower, solar, biomass, wind and geothermal need to be promoted to meet power demand. It is also urgent to develop optimised transmission networks at regional level.
  • There is a strong need to strengthen the regional dimension in order to overcome Africa's energy problems: efficient regional power markets and regional power pools must be developed on the basis of the renewable resources of the continent and of regional transmission networks.
  • Regulatory and policy frameworks are required to create enabling conditions for quality investment on renewable energy sources, including the domestic private sector and improved mechanisms for project preparation and implementation need to be developed in the different regions of Africa.
  • The mobilisation of the political will of countries and regions is essential to ensure the stability of investment frameworks and to guarantee the security of infrastructure and its continuous operation, even if conflict situations arise. Guaranteeing operation in conflict scenarios also means a focus on mini, off-grid renewable energy solutions.
  • Increase energy access as a necessary condition to reduce poverty and ensure the sustainable growth of Africa. Renewable energy provides a sustainable basis for productive uses, especially trade related activities, industry, agro industry, and for SMEs in Africa.

Agricultural growth in Africa:

Business leaders call on:

  • AU governments to implement the Maputo Declaration committing 10% of their annual budgets to agriculture development; to expand the scope of CAADP and use it as the foundation for future development strategies in the agriculture sector.
  • Develop holistic, integrated agricultural policies that:
    • Address the fundamental issue of publicland tenure
    • Direct investment to build the necessary infrastructure in a regional perspective
    • Implement replicable models of public-private partnerships in order to enable commercially viable smallholders farming.
  • Strengthen considerably extension servicesforthe creation of modern sustainable agribusinesses;
  • Support the development of innovative financing instruments,especially risk mitigation tools and measures
  • Remove trade constraints at international, regional and local level and create a level playing field to ensure competitive markets.

Access to finance: regional perspective

True partnerships between all actors able to enhance access to finance and support investments and economic growth are needed whereby the following can be achieved:

  • The business environment becomes sufficiently attractive - this is where governments have a clear role to play in the partnerships by putting in place legal and regulatory frameworks that are supportive of financial intermediation.  This includes effective and simple collateral and bankruptcy laws; improved coverage, scope and accessibility of credit information available through public credit registries and private credit bureaus.
  • Innovative financial instruments are developed by combining the resources of donors, IFIs/ DFIs, financial institutions and the private sector to enhance the absorptive capacity for risk. An example of this would be the provision of risk mitigant structures – which would allow the private sector to leverage funding from the public sector – achieving a leverage factor of between 10 and 20 to one. This far extends the deliverable of conventional donor/loan funding, and is a great example of these partnerships.

ADDENDUMBY THE LIBYAN BUSINESS COMMUNITY

  • The Libyan business community adopts the Leader’s call to undertake infrastructure and development projects in Africa.
  • The Libyan business community pledges to initiate a joint project that combinesthe economic interests of the African and European entrepreneurs.  It is a non-profit institution expecting finance from the EU, AU, UNIDO, EIB, AD and European groups.  The project is jointly initiated by ABC (a Libyan consultancy firm) and PRAGMATA.