Fund to spur African investment

Businesses say investment would help Africa reduce poverty

Business and political leaders in Africa have launched a $550m (£294m) fund to promote investment in Africa.

The fund - the Investment Climate Facility (ICF) - aims to breakdown barriers to business in Africa.

Aims of the fund include accelerating business registration, improving customs regulation and securing property rights.

The fund was launched at the World Economic Forum in Cape Town, which is being attended by over 700 people.

"We will be able to show that Africa is ready to prepare a climate that is favourable for investment," said Benjamin Mkapa, Tanzania's former president and the fund's co-chair.

Barriers to business

Barriers to trade include bottlenecks at ports and when registering businesses.

"It currently costs about the same to clear a container through Dakar port without moving it at all as it does to ship the container from Dakar to the UK," said Hilary Benn, Britain's International Development Minister.

Mr Mkapa also said that improving the investment climate was crucial to combating poverty and helping Africa meet its Millennium Development Goal of cutting by half the number of those living on under $1 a day.

Organisations at the event initially pledged $100m towards the fund.

The aim long term is for $550m to be provided over the fund's seven-year lifetime with multilateral and country donors giving $500m and the remainder coming from private firms.

Firms that are backing the fund include Anglo American, Royal Dutch/Shell, Unilever and SAB Miller.

Projects will be for the business community in its entirety, not for the benefit of any particular company.

While attendees at the G8 summit in Gleneagles in 2005 supported the fund in theory, Britain was the only G8 country to commit financially, said Mr Mkapa.