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Last Updated: Tuesday, 5 July, 2005, 23:59 GMT 00:59 UK
African business in push for trade
By Jorn Madslien
BBC News business reporter at the G8 business summit on Africa

Sir Mark Moody-Stuart, chief executive of Anglo American
Summit chairman Sir Mark says regulation should be simple
Ahead of the Gleneagles G8 summit, the message from business leaders to world leaders is clear.

"The key to eradicate poverty is wealth creation, and you can only create wealth through the private sector through investment and job creation," says Pascal Dozie, chief executive of Nigeria's Diamond Bank.

But to thrive, Africa's private sector needs help to grow, Mr Dozie told leading business executives from both G8 and African countries.

Mr Dozie's colleagues at the G8 Business Action for Africa summit in the City of London passionately agree, cheering loudly as high-profile speakers churn out the mantras of global business.

Property rights must be protected. The rule of law must be respected. Stable and democratic governments should focus on creating predictable environments for business to operate in. Infrastructure must be improved or created.

Beyond that, the state should adopt a hands-off regulatory approach.

"It needs to be transparent, but it needs to be simple," sums up Sir Mark Moody-Stuart, chairman of the South African mining giant Anglo American and the chair of the summit, in a BBC interview.

Trade not aid

Business people are keen to tell the G8 leaders that the way to help Africa is to allow it to help itself.

Delegates at the G8 Business Action for Africa summit
The G8 Business Action for Africa summit says trade is the answer

"It is very important that business keeps reminding (them) that aid is not a long-term solution," Sir Mark insists.

For Andrew Rugasira, chief executive of Rwenzori Coffee, a Ugandan coffee company about to start shipping its produce to the Waitrose supermarket chain in the UK, it is obvious that there is a better way.

Mr Rugasira is scathing about the way aid creates a chronic dependence which he believes stifles creativity.

Although aid and debt forgiveness is necessary in the short term, the only way to secure economic prosperity in Africa is to open up western markets to African companies eager to compete, he insists.

"Trade is the engine for growth," he declares.

Rwenzori coffee farmer
Africa's income could grow quickly if trade barriers were lifted

"If Africa increased its proportion of world trade by 2%, it would bring in $150bn in extra revenue.

"That's four times the debt relief offered by the G8."

Key to this would be the removal of tariffs and agricultural subsidies in the West, which make it difficult for African exporters to compete, observes Sir Mark.

And he believes there is a chance the G8 leaders will listen.

"They will reflect and react to the will of their people," says Sir Mark.

"The subsidies are there because the governments at the time perceived that it was what their people wanted."

African efforts

But providing access to the West's cash rich markets is not enough to ensure prosperity in Africa, where there is a pronounced shortage of entrepreneurs, says Mr Dozie.

WHAT IS THE G8?
Name
Group of eight major industrialised states, inc Russia
Members
Canada, France, Germany, Italy, Japan, Russia, UK, US
Aims
Originally set up to discuss trade and economic issues
Now leaders discuss global issues of the day
2005 Summit agenda
Africa
Climate change

"African governments must develop their private sector," he says. "Foreign investment is necessary, but it is not sufficient to do the magic."

And the international community should also play a part, he says.

"It is necessary for the G8 to help Africa create a critical mass of entrepreneurs."

Getting to that point has proved difficult, Mr Rugasira argues, not least because small and medium-sized enterprises find it hard to get off the ground.

"You've got to recognise the need for some government intervention" similar to that received by companies in many industries in the West, he says.

Returns

The message from many at the conference is simple.

Helping Africa to help itself is not an act of generosity or altruism, they argue, but a pragmatic strategy which offers attractive returns.

They argue that if Africa prospers, the world will prosper too - in part since poverty reduction is a powerful fillip to reduce resentment and hence the risk of terrorism.

For foreign investors, the rewards could be even more obvious.

"The returns in Africa are among the highest in the world," observes Mr Rugasira. "We need to say that."


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