Forget about security delays at the airport, anarchists and terrorism. The most substantive issue at the upcoming G-8 Summit is Africa. And this marks a great opportunity for Western Canada to showcase itself as a leading partner with Africa in the 21st century.
Western Canadians have much experience to share with Africans, who face some of the same challenges of geography and geology.
We have constructed an increasingly diversified, outward-looking economy, using natural resources -- agriculture, oil, minerals and forests -- as a foundation. Outside of our main urban centres, we've had to deal with vast, sparsely populated territory and deliver government services, health care and education, and build infrastructure such as roads, power and telecommunications.
We've also developed a frontier entrepreneurial culture that can recognize and tackle opportunities others might not touch. We've worked out creative partnerships between government and the private sector along the way. We have provincial political systems that work and voters get their say every few years.
Like Western Canada, Africa is vast and resource- rich. But, too many Africans are poor and too many African states and economies are too weak to help.
Given our history and capabilities, Western Canada's private sector is perfectly suited to play a significant role in Africa's development.
Now is our chance. Key African leaders will be in Alberta to meet with their G-8 counterparts. They'll be discussing the G-8 Africa Action Plan response to Africa's own vision, the New Partnership for Africa's Development (or NEPAD). New resources, approaches and mutual commitments are on the table.
Ambitious objectives include boosting annual economic growth in Africa to a sustainable seven per cent, part of the plan to reduce by half the number of people living in extreme poverty by 2015, one of many difficult but achievable UN Millennium Development Goals.
For the first time, African leaders are offering to impose conditions and responsibilities on themselves, via an Africa Peer Review Process with input from the Economic Commission for Africa. Those leaders and countries that fail to make the grade in areas like human rights, democracy or economic policy will see their access to international resources curtailed, which won't make their domestic (in most cases, voting) constituencies very happy.
So, what does this mean for Western Canada?
First, Western Canada's business and investment communities and provincial governments have to recognize Africa's opportunities. What they'll find are African partners anxious to work with Canadian firms and organizations.
Some Alberta firms are already there. Wi-LAN's exports to Nigeria have doubled annually since 2000, helping Africa bridge the digital divide (a NEPAD priority). Major oil firms like Canadian Natural Resources, EnCana and Nexen are either already involved in African investment projects or evaluating opportunities, with the Canadian Petroleum Institute offering staff and regulatory development services in Africa.Y´
Davnor Water Treatment Technologies is tackling one of the most pressing needs -- potable water -- while contributing to entrepreneurship and economic development.
Yes, you say, but what about the wars, the poverty and AIDS? How can there be a more risky part of the globe for business or investment? And yet, a realistic assessment of risk in Africa highlights more than 50 diverse countries with vastly different economies, opportunities and risk profiles.
Compare perceived risk in Africa to cases like Enron, Nortel, Teleglobe, 360Networks or Global Crossing. Could investors or pension funds have grown or preserved their capital better by putting some of their money in Africa? Probably, if the right mechanisms were in place.
Second, Ottawa needs to follow through on its rhetoric toward a new partnership with Africa. Debt relief needs to be enhanced. Trade barriers have to be lowered.
Governance assistance should be expanded. Examples such as Alberta's twinning relationship with the South African province of Mpumalanga illustrate what is possible if Canada's administrative experience is shared with African jurisdictions.Y´
A completely new province formed under the then-new South African constitution, Mpumalanga in 1994 paralleled Alberta in 1905: an administrative shell. Since then, government of Alberta officials, via a twinning program funded partially by the Canadian International Development Agency, have worked closely with counterparts in Mpumalanga to build capacity in fiscal management, introduce economic development models at the local level and develop institutional strength to ensure vibrant provincial-federal relationships within the New South Africa. And these government ties are beginning to stimulate private-sector interest and opportunities.Y´
But most importantly, from a private sector viewpoint, Canada has to create new financial mechanisms to kick-start Canadian foreign direct investment in Africa, especially for our small and medium-size enterprises that have identified commercially viable projects and partnerships there.
Without access to risk capital or lending, potential business opportunities in Africa remain unrealized. While aid remains necessary, it is investment that will shift Africa out of its doldrums. Y´
Of course, the largest firms can always go anywhere and get financing, but Africa needs less "enclave capitalism" and more small- and medium-sized joint ventures and creative partnerships.
Private investment is also Africa's only real hope to start tackling its tremendous infrastructure shortfalls. But you cannot expect venture capital-type returns on infrastructure like roads and utilities. So how do you attract private money to Africa?
There are a number of options, but the quickest is to set aside a small part of Canada's $500 million Africa Fund to seed fund a Canada-Africa Enterprise Fund.Y´Mandated to attract matching private sector money, such a fund would combine the functions of a merchant bank and a development finance institution.Y´
Nearly all industrialized countries, plus South Africa and others, have either or both development finance institutions and investment funds dedicated to Africa. Canada has neither.Y´
A Canada-Africa Enterprise Fund would invest in, or lend to, commercially viable projects in Africa, leveraging its resources with other lenders, spreading and reducing risk, and developing an expert source within Canada for assessing African investment opportunities.
It would be run by the private sector and designed to be profitable within a framework established by its stakeholders, including government.
The fund would pay out its investors when necessary, but recycle most of its returns into projects in Africa.
It would be a sustainable investment of public money already committed to Africa.
Third, the impediments to strengthening relationships, like getting business visas for African partners or reducing red tape in African bureaucracies and at ports, have to be addressed.
The Canadian diplomatic and trade footprint across the continent has to be strengthened. That means more trade officers, more immigration officials and more trade missions.
Is NEPAD perfect? No, but if Africans were forced to wait for the perfect plan, they would be waiting forever. Action is needed now. The G-8 is listening. Let's take up the challenge and see where it goes.
Chris Roberts is executive director of Africa Direct West, a business association for Western Canadian firms and organizations in Africa. He's also president of African Access Consulting. E-mail: executive director@ africadirectwest.com
FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. NoNonsense English offers this material non-commercially for research and educational purposes. I believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner, i.e. the media service or newspaper which first published the article online and which is indicated at the top of the article unless otherwise specified.