Monday, July 13, 1998 Published at 22:53 GMT 23:53 UK
US urges investment in Africa
Robert Rubin - first trip to Africa
The United States Treasury Secretary, Robert Rubin, has labelled capital flight one of the key constraints to economic growth in Africa.
Speaking in Ivory Coast at the start of a five-nation tour of Africa, Mr Rubin said about 40% of the private wealth of Africans was held outside Africa, and this discouraged investment on the continent.
He was speaking at the headquarters of Africa's largest home-grown financial institution, the African Development Bank, in the country's economic capital, Abidjan.
'Countries must help themselves'
Most of Mr Rubin's message was familiar.
If African governments privatise state industries and encourage private investment, he said, they will be rewarded with cheap loans from the international development banks.
But he stressed that Africa also has to help itself with political, economic and social reforms.
"Some argue that putting conditions on assistance is harmful," he said.
"But recent research at the World Bank and elsewhere demonstrates that foreign assistance is of little benefit - and is sometimes harmful - where the policy environment is not sound."
Signs of hope
The treasury secretary said there were already signs of hope in Africa.
He noted that 10 years ago, when he was working as an investment manager, nobody on Wall Street took Africa seriously, whereas now foreign businessmen are keen to have a look.
Since private sector reforms were introduced in the mid-1990s, Africa's average economic growth rates have doubled, and 16 African nations have rates of 5% a year or more, according to Mr Rubin.
Most African economists agree that economic reform is necessary, but they warn that it is not sufficient in itself to generate growth.
Many of them say that African countries have been so badly exploited in the past that cheap subsidised loans are still vital.
Although Mr Rubin conceded that cheap loans remain critical for the poor countries of Africa, the United States is in serious arrears in its own contributions to the loan arm of the African Development Bank.
Mr Rubin later goes on from Ivory Coast to South Africa - where sharp falls in the rand have given the visit extra significance - before heading for Namibia, Mozambique and Kenya.
His week-long tour comes on the heels of President Clinton's tour of Africa in March, which was the longest tour of the continent ever made by an American leader.