allAfrica.com: Africa: 'Give Investors Confidence, or the African Union Will Fail' (Page 1 of 2)

The African Union is about more than political structures. It should open the way for substantial expenditure on Africa's infrastructure, to facilitate intra-African trade and investment. But who's going to put their money into long-term infrastructural development in Africa? History shows that the continent is a high-risk environment for investors - whether foreign or African - and unless that perception changes, the African Union may find it hard to fund its plans. Ellen Johnson Sirleaf has had a long career in business and development both as a leader in the public sector with UNDP and more recently in the private sector with her own business and on the board of a leading US-based African investment house. She ran for president in her country, Liberia, in 1997.

As someone who's been very active in Africa's economic affairs and works in the private sector, what do you want to see the African Union achieve in practical terms? What are the things that really have to happen first?

I'd like to see us focus on better infrastructure; roads, other types of transportation systems, communication technology - all improved, enhanced, rationalized, and harmonized across countries. You need to start in every sub-region - Mano River, Ecowas, Cedeao, on the West side, SADC, Comesa, in the southern region and on the East side, the East African Union. You need to take a couple of those and see how you can connect them.

I think sometimes we put the cart before the horse, because you're not going to get political commitment unless you can get people doing business with each other, trading. We need to encourage the trading blocks. We need to do more inter-Africa trade. Africa today claims less than 2% of global trade and inter-African trade is even less than that.

So those are the things that need to be addressed and I know much is being done policy-wise and at the sub-regional level but I think we need a much greater push, a more concerted effort and more importantly, tackling some of the obstacles at sub-regional level. I tell you, try driving from one country in West Africa to another; Look how many road blocks you face! Look at the shakedown and the extortion that market women face when trying to get their goods across borders, despite all the policies that say Ecowas is moving.

The reason for that is, many people - the security forces who man these road blocks, the traders who are moving across - don't really understand the issues. They need to be told through media, radio, dialogue, workshops, whatever, of the economic advantages to everybody of promoting this free movement. They need to be told of the consequences that follow from some these things that look like little trifling impediments, yet have major repercussions for trying to improve upon trade and regional cooperation. We need to get the African people involved and win their understanding, commitment and their contribution to the process.

I must say the CFA [franc zone] countries with the common currency have been able to make much more progress. They have gone beyond a common currency, and now have harmonization of business laws and institutions that are going to enforce those laws. We can build upon that.

So where's the money going to come from to build those roads, to put up the servers and get the Internet connections out there? Is it a matter of going back, cap in hand, to the World Bank or is there a role for the African private sector here?

That's the rub. You just touched upon the Achilles heel of the whole African Union objective. The funds to support the institutions, the many institutions that will be created are just not there. And to find them, will frankly mean, Africa itself will have to look at its own resources and allocate them more efficiently and effectively towards this goal.

That will mean that we need more accountability, we need more efficiency on a country level, on a sub-regional level, that enables Africa to first apply its own resources towards these goals and then, of course, to go out and try to mobilize supplementary resources from the friends of Africa in the industrialized world and the private sector.

You know, studies have shown that more capital leaves Africa then any of the other more developed regions of the world. Now, that capital flight; if we can find the means, if there's concerted commitment on the part of African leaders to seek the repatriation of that capital and to put it into building the private sector, if we can also improve upon governance so that people's freedoms are assured and people's rights are protected, then we can make Africa a more attractive place for private investment.

We're not only talking about Africans themselves but others who do not see the attractiveness of Africa today because of corruption, because of non-predictability regarding laws and procedures. We have the responsibility to get our environment right. The other regions of the world were not built by development assistance. In the beginning, yes, but after that, the bulk of funds today come from the private sector and from private capital.

But private capital is very shy. It only goes where it has confidence, where it knows it's safe, where returns can be assured, repatriation of profits is allowed and where predictability in the political and regulatory environment is there. We need to work on that.

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