AICC Newsletter

NEPAD Business Group (Nigeria), International Business Forum, 27 – 29 January 2005, Presidential Banquet Hall, Aso Rock Villa, Abuja, Nigeria.

President Olusegun Obasanjo of Nigeria on 28 January in Abuja opened the International Business Forum organised by the Nigerian Chapter of the NEPAD Business Group, with the theme “Wealth Creation for Poverty Eradication in Africa”

In his keynote address, President Olusegun Obasanjo stated: "The desire for self expression and self actualisation embodied in NEPAD can only be achieved when Africans become the architects of their own economic destiny through self reliance and less dependence on official development assistance. This can best be done by looking inwards and developing our private sector to create wealth for alleviation of extreme poverty and the enhancement of the standard of living of our peoples.

"The antidote to the prevalent mass poverty in our region today is wealth creation and accumulation, combined with a progressive social policy of more equitable distribution of national income. Businessmen know very well how to generate capital and create and accumulate wealth. It therefore, behoves African governments to fashion a coherent and viable private sector development strategy to solve the problems of capital formation, job creation and poverty eradication in this decade and beyond".

President Obasanjo said that African leaders are not unaware of the problems of the private sector. He stated "Reflective of the new thinking and new commitment, political leaders have taken the position that it is desirable to adopt the public-private partnership strategy. Nonetheless, it is important to define the role of government and the responsibility of the private sector in that partnership. Government remains the catalyst and the facilitator, setting the rules, guaranteeing the welfare of the people, ensuring public order and safety and providing the over all conducive environment for business. "For the public Private partnership to be effective, it is incumbent on government as well to promote a liberal environment and encourage private initiatives, establish a positive investment climate, develop infrastructural facilities, establish appropriate regulatory, legislative and policy environment and ensure a fair, equitable and efficient tax regime.

"Although it is recognised that the role of the private sector as a strategic partner in NEPAD is quite significant, it should be appreciated that the indigenous private sector in Africa is not yet well positioned to meet the expectations of the society. The operators of the organised private sector at present confront serious constraints of capacity and capital. They are a nascent group with limited exposure and not yet competitive on the international scene. Even then, they remain vital to the NEPAD process. The challenge is for government to support and strengthen the private sector to actualise its huge potential and fulfill its obligations to the society and the continent. On their part the operators in the organised private sector should cultivate a more positive investment psychology. They ought to demonstrate more confidence to invest in Africa and build more lasting partnerships with foreign investors. They must be more proactive and daring in their investment decisions. It is imperative that the private sector, with the support from the NEPAD Business Group, initiate and implement a strategy for enhanced advocacy to recast and present the realities and opportunities in African economies to the global communities".

Stressing the importance of the private sector in poverty eradication, the Secretary General of the United Nations Kofi Annan (in a good will message through Professor Ibrahim Gambari, Under-Secretary-General of the United Nations and special adviser to the UN Secretary General on NEPAD) said "Three and half years have elapsed since the adoption of NEPAD, an initiative that has won a great deal of commitment from Africa governments, and support from donors and the international community. NEPAD’s implementation has begun in earnest.

In this implementation process, one cannot over emphasise the pivotal role that effective participation of the private sector in NEPAD’s programmes and projects can play to realise NEPAD’s objectives. In particular, the private sector as the engine of production and job creation can contribute to creating wealth and hence help to eradicate poverty in Africa. Yet the potential of the private sector business in contributing to NEPAD is far from being fully explored in Africa. Private sector investment opportunities across Africa are yet to be fully taken advantage of."

In his welcoming delegates to the event, Goodie Ibru (Chairman, NEPAD Business Group Nigeria) stressed that this is now the time for the private sector in Africa to rise up to the challenge of ensuring wealth creation for poverty eradication on the continent. According to him “Only when there is a congruency between the dynamics of our domestic economy and the external dimensions of business yearnings can we make much needed impact on the continental and global scene as directed by NEPAD.”

Mr. Ibru also reiterated the need for more multi-sectoral partnerships involving business, government and the civil society sector, as a means of achieving the tenets of NEPAD.

Stressing the importance of multi-stakeholder partnerships, Professor Wiseman Nkhulu (CEO, NEPAD Secretariat, South Africa) in his speech challenged African Businesses to be ready to forge alliances and partnerships across all sectors, towards becoming major players and ensuring that the continent secures a prosperous future.

In his presentation on Corporate Social Responsibility (CSR), Tagbo Agbazue (Programme Manager of the Africa Corporate Sustainability Forum, a programme of the African Institute of Corporate Citizenship –AICC –) congratulated the Nigerian Chapter of the NEPAD Business Group for making CSR part of its core agenda, as business can and must play a crucial role in reversing the trend of Africa’s weak economic performance.

According to Mr. Agbazue, “CSR implies an approach for business towards creating long term economic growth and competitiveness, through embracing opportunities and managing economic, social and environmental risks.

CSR is on the one hand, crucial in creating fertile grounds for internal and external investment flows and market access, and on the other hand a veritable instrument for ensuring that increasing competitiveness, market access and investment flows in Africa will have the necessary impacts on poverty.

According to Mr. Agbazue, CSR is imperative in the African context considering international trends in investment and the opportunities in Africa, including using CSR as a competitive driver for market access and new market creation.

Although Mr. Agbazue acknowledged that business acting responsibly have a clear role to play in driving sustainable economic growth and competitiveness in Africa, he pointed out that the solutions required to achieve this are often too complex and the resources too thinly spread across different sectors for business to it alone, hence, the need to develop the capacity of the NGO/civil society sector towards engaging both business and the public sector constructively.

In buttressing Professor Nkhulu’s call for partnerships, Mr. Agbazue stated: “The development of an African multi-stakeholder platform, which facilitates action learning and the sharing of relevant experiences relating to CSR is critical at this stage, to ensure that sustainable economic growth is achieved in a manner that not only makes good business sense but maximises benefit to governments and society as a whole. The Africa Corporate Sustainability Forum intends to use its collective ability to share leading practice and knowledge in a way that drives Africa’s competitiveness while at the same time promoting progress towards sustainable economic growth”.

Poverty according to Dr. Magnus Kpakol (National Coordinator of the Nigerian National Poverty Eradication Programme – NAPEP) has become a major challenge facing Africa. Many people he said continue to suffer pronounced deprivation even as reforms continue across the continent. "This condition if not addressed can create a divide that can engulf our countries" he stated. However, Mr. Kapkol believes that tackling poverty on the continent involves of a necessity a collective will through multi-stakeholder partnerships and collaborations.

In his paper, Bumi Oni (Managing Director of Cadbury Nigeria PLC) believes that the problem of African economies is centred on the fact that the continent is in what he called a commodity trap, in which African countries rely on the vagaries of the commodity market with little value added and heavily import dependent. The economies of Africa states he said have weak baselines, shallow markets that are unable to withstand shocks in the international markets thus making them venerable. Mr. Oni said that it is time that Africa begin to build industrial activity based on production induced processing and that African countries should begin to evolve economic zones rather than geo-political zones with priority and focus for resource allocation.

He stressed that most African economies have revenue-generating sectors that do not create jobs and that manufacturing in Africa is 25 per cent disadvantaged on cost. He said that in order for the private sector to create jobs there was the need to reduce the cost of doing business in Africa by lowering, simplifying and harmonising tariff structure, longer amortisation on capital investment, reduction in corporate taxes and encouraging inter-and intra-regional trade.

Stressing the point that Africa leaders have not shown enough commitment by not enforcing international agreements, conventions and decisions reached at continental levels and using the Aviation industry as a case study, Nick Fadugba (Publisher, African Aviation Magazine) said "Today in parts of Africa there is a tenacious unwillingness among certain countries, civil Aviation Authorities, Air Transport Licensing Bodies and Airlines to implement the Yamoussoukro Decisions -which as we have already seen, is legally binding on their countries". Mr. Fadugba appealed to African leaders to always remember the local businesses when extending business rights to foreign companies.

He declared "In extending air traffic rights and frequencies to foreign carriers, it is important that African governments do not do so at the expense of their own airline industry and national economy. The fact is, though, many African countries are currently frustrating the growth of their private airlines by reserving the plum air routes for foreign carriers. Of course, not all African airlines possess the technical, financial, and managerial capabilities to operate long haul services, but those that do should be encouraged."

Continuing, Mr. Fadugba said, "The Africa Aviation industry is currently grappling with twin challenges of transport modernisation and liberalisation. Concerted moves are now well under way across the continent to improve aviation facilities and services, enhance aviation safety and security, as well as to harness the full economic potential of air transport through liberalising domestic, regional, and international aviation policies.

This dovetails with the aims and objectives of NEPAD. But the truth is that Africa will not achieve the magnitude of progress desired in its aviation industry until its economy starts to thrive and the political instability and civil strife in several parts of the continent are significantly diminished".

Mr. Fadugba submitted that without a strong, viable and profitable African Aviation industry that facilitates business, trade, tourism, and social interaction on the African continent and beyond, it will be difficult to create wealth, eradicate poverty and promote sustainable economic development in Africa.

During the plenary session on HIV/AIDS and its challenge to poverty eradication in Africa, Babatunde Osotinmehin (Chairman, National Committee Against HIV/AIDS) raised the issue of the growing HIV/AIDS prevalence rate in Nigeria (which he placed at over 5%) and its ramifications on the country, including women and the eradication of poverty. He enjoined the private sector to take an active stance against HIV/AIDS noting, “HIV/AIDS is a disease that cuts across all sectors.”

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