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Doubt of Africa

Thabo Mbeki had high hopes for summer 2002's Group of Eight summit. But like other far-reaching African initiatives made over the years, this one promptly rolled off the track and into the ditch.

Thabo Mbeki had high hopes -- and not altogether unreasonable expectations -- for last summer's Group of Eight summit. The South African president has long wanted to usher in an "African renaissance" that would reverse decades of economic, social and political decline. To that ambitious end, he and other so-called New Generation African leaders developed a sweeping economic recovery plan -- the New Partnership for Africa's Development, or Nepad -- that is intended to galvanize rich-country financial support for African states by having them undertake significant economic and political reforms.

Having led a high-powered delegation of African leaders to the remote Canadian Rockies resort of Kananaskis for the developed-country powwow, Mbeki was hoping to obtain vastly increased foreign aid for African infrastructure projects and debt relief as well as greater access to Western markets for African goods, all to advance Nepad's goals.

The occasion seemed both propitious and momentous. U.N. Secretary General Kofi Annan, himself a native of Ghana, declared at the meeting, "If Africans really stick to the commitments they have made in Nepad to themselves and to each other, and if the G-8 really carry out the action plan they are announcing today, this summit might come to be seen as a turning point in the history of Africa and, indeed, of the world."

One G-8 leader, British Prime Minister Tony Blair, who has called African poverty a "scar on the world's conscience," had already boosted the U.K.'s aid to Africa substantially, from $632 million in 2002 to $1 billion by 2006. And he had been actively campaigning for Nepad among his fellow heads of state. During a visit to West Africa in February 2002, Blair described the African leaders' proposal as a "down payment on a decent future for us all." Nepad's aim, he explained, was a "strengthened partnership between reforming African governments and the world's richest countries."

But like other far-reaching African initiatives made over the years, this one promptly rolled off the track and into the ditch. The G-8 ended up giving only grudging support to Nepad. In a misleadingly named Africa Action Plan, the developed countries endorsed Nepad's principles of better governance and economic management, but they coughed up only an additional $1 billion for debt relief, failed altogether to reduce their domestic agricultural subsidies (which hurt African farm exports) and -- most disappointing of all to the Africans -- neglected to provide any further aid to the continent. Instead, the G-8 merely resolved to try to distribute $6 billion of previously pledged aid.

"The G-8 failed to build on earlier summits, choosing instead to serve up a dish of reheated promises," says Oliver Buston, Washington coordinator for aid group Oxfam International.

To put the G-8's $6 billion in perspective, David Malcomson, an economic adviser to Mbeki and also Nepad's international liaison officer in Johannesburg, estimates that Africa will need $64 billion a year in foreign aid to meet the development plan's goals -- which include cutting the continent's poverty rate in half -- by 2015. Thus skeptics saw Annan's proclamation that the Kananaskis action plan was a "turning point" as the secretary general's putting a brave face on things.

Now rebuilding Iraq threatens to push Africa down the agenda of the U.S. and other developed countries. As Mbeki lamented to his National Assembly on March 12, "It is generally the fear around the African continent that the situation in Iraq, that war and its consequences, might very well lead to the African continent being put further back on the back burner." Adds Mark Malloch Brown, who administers the U.N.'s top aid operation, the U.N. Development Programme, "Africans are generally concerned about U.S. commitment to Nepad."

U.S. officials say that such fears are unwarranted. Washington remains committed to Africa, they insist, citing as evidence the Bush administration's own aid initiatives, including the proposed Millennium Challenge Account. MCA would ultimately provide $5 billion a year in fresh assistance to countries embracing democracy and free markets. In addition, Washington has announced a $15 billion plan to combat AIDS in Africa and the Caribbean.

"A lot of non­Middle East regimes are concerned because there has been so much attention on the Mideast," acknowledges Walter Kansteiner, U.S. assistant secretary of State for African affairs. "But our budget is growing because of the Millennium Challenge Account and the HIV-AIDS initiative, so our commitment to Africa is growing."

Still, keeping Africa high on the rich-country foreign policy agenda in this age of Mideast tumult and global terrorism won't be easy. At last month's meeting of G-7 finance ministers in Washington, for instance, the debate about postwar Iraqi reconstruction so dominated the proceedings that World Bank president James Wolfensohn protested that the finance ministers should not forget "the other war" -- fighting poverty.

But African politicians who feel victimized by what they see as developed countries' indifference to the continent's plight deserve a fair share of the blame for that neglect. To its severest critics, Nepad is little more than a public relations ploy to extract more money from Western donors.

"Nepad is merely the current grant proposal: We'll impose conditions on ourselves if you'll come up with increased resources," says Salih Booker, executive director of Africa Action, a Washington-based advocacy group.

The doubters point, for example, to African leaders' reluctance to condemn last year's elections in Zimbabwe or to apply sanctions against that country's increasingly dictatorial president, Robert Mugabe. One of the most contentious aspects of Nepad, in fact, is its so-called peer review mechanism, under which African countries are supposed to periodically assess their neighbors' adherence to governance, economic and human rights standards. The voluntary mechanism -- to be formally unveiled this month -- has enrolled only a dozen countries so far.

Many investors and aid donors regard peer review as the heart of Nepad and wonder how Africans can be trusted with additional aid if they can't even agree on chastising a Mugabe. Indeed, on March 31 Valerie Amos, the junior minister for Africa in the U.K. Foreign Office, warned during a visit to South Africa that the Zimbabwe situation was making it difficult to promote Nepad.

"Foreign investors fear that Nepad won't work," she said. "They question whether an African peer review mechanism can really work if African pressure is so low-key and so little heeded, as appears to be the case with Zimbabwe." Or as Hilde Johnson, Norway's International Development minister, told Institutional Investor, "The fact that African governments have not acknowledged what happened in Zimbabwe has had an effect on Nepad's credibility."

Nepad's Malcomson disputes the notion that Africans can't or won't police themselves under the agreement. "Zimbabwe is the issue that keeps getting thrown at us," he says. "Nepad has only been in place for 18 months. To say that Nepad is responsible for a preexisting crisis is not feasible. We cannot on day one deliver all 53 members of Nepad in pristine condition." This sentiment is echoed by Madagascar's vice prime minister, Zaza Ramandimbiarison, who argues that "criticism of Nepad is not justified; it is only a few years old." Laments the U.N.D.P.'s Malloch Brown: "I wish people looked at it more from the perspective of Africans. Mugabe is one of the grand old independence leaders, and there is a degree of embarrassment in the use of sanctions."

THE TRAGEDY IS THAT WESTERN and, in many instances, African suspicion of Nepad comes at a time when the stakes are higher than ever for ordinary Africans. The global economic downturn has hurt the continent disproportionately. Africa's GDP grew 2.5 percent in 2002 -- meager by the standards of developing countries -- while foreign direct investment slumped from $15 billion in 2001 to $11 billion last year. By contrast, China attracted $52 billion in foreign investment. Low commodities prices have crippled Africa's exports. Meanwhile, foreign aid to Africa has declined by more than 40 percent since 1990. As many as 300 million Africans live in abject poverty, according to the World Bank. About 30 million suffer from HIV or full-blown AIDS. If Nepad fails, Africa may be consigned to another long decade of disappointment and decay.

Yet it wasn't so long ago that things seemed to be looking up for the continent. A new generation of leaders -- Mbeki, Algeria's Abdelaziz Bouteflika, Nigeria's Olusegun Obasanjo and Senegal's Abdoulaye Wade -- were promoting a vision of a peaceful, democratic, corruption-free and well-managed Africa. They had transformed the old talking shop, the Organization of African Unity, into the more robust, EU-like African Union. "The creation of the African Union reflected the African desire to speak with a unified voice in an era of globalization and turn [the old OAU] into something meaningful," says Africa Action's Booker.

Mbeki and other statesmen, recognizing that Africa had essentially missed out on the great global capital flows of the 1990s, created Nepad in July 2001 in large part to draw more investment to the continent. The proposal was designed to appeal to rich-country investors and donors by affirming Africa's support for a free-market development strategy based on liberalization of markets, privatization of state enterprises and further integration of Africa into the world economy. Among Nepad's stated goals: sustaining a GDP growth rate of more than 7 percent.

"Nepad is a political initiative to put development back on the center stage of the African political agenda," says Alan Gelb, the World Bank's chief economist for Africa.

Nepad sounded a new note of self-reliance. "We are not asking for handouts; we are coming to you as capitalists," said Nigerian Stock Exchange CEO Ndi Okereke-Onyiuke at a forum on African capital markets in New York last month. "We don't believe in poverty alleviation. We believe in wealth creation."

The aim is admirable, but if Western investors and donors are nevertheless suspicious of Nepad, so are many Africans. Grassroots organizations have staged mass protests against the initiative. "Nepad is accountable not to the African people but to aid donors that only provide 10 percent of Africa's total budget," asserts economist Charles Abugre, director of the Integrated Social Development Centre, a Ghanaian nongovernmental organization.

Virginia Setshedi, a Johannesburg antiprivatization activist, offers a harsh but not isolated opinion: "Nepad is a continuation of neoliberalism that doesn't look at issues of HIV-AIDS or women and doesn't benefit the poor," she charges. "It says it will attract foreign direct investment, but we haven't attracted much foreign investment despite liberalizing our economies."

Nepad's supporters acknowledge that selling the program to Africans, not to mention foreigners, will be a challenge. "Nepad has not been well sold to several constituencies yet," concedes the U.N.D.P.'s Malloch Brown. The World Bank's Gelb notes that "many people in Africa don't know about Nepad. It needs to institutionalize itself in Africa, and that will be a long process."

Almost two years after Nepad's launch, it has little to show in aid or investment. Only a handful of projects have fallen within the plan's framework: The African Development Bank has announced a $200 million financing for 17 infrastructure transportation projects. In March Nigeria's Obasanjo revealed that his country will receive $1 billion for transportation infrastructure from a Malaysian investor under Nepad auspices. And Nepad is working with the U.N. to reduce Africa's dependence on food aid. "At this June's G-8 summit, Africans will provide a concrete list of projects," insists Charles Banny, governor of the Central Bank of West African States. "We hope new money will come for Nepad."

Still, the money isn't likely to be private sector foreign investment. "Africa is interesting from the hydrocarbon and natural resources point of view, but if you look at the micro level, there's very little interest in investing there," says Bruce Wrobel, president and CEO of New York­based Guinea Aluminum Products Co., which was set up to build a $2 billion alumina refinery in Guinea. Shrugs John Niepold, an Africa-focused portfolio manager for Arlington, Virginia­based Emerging Markets Management: "I don't know if Nepad will make a difference. Talk is good, and the perception [of Africa] can create reality, but the perception now is not good."

Nepad has a lot more work to do, suggests the U.S. State Department's Kansteiner. "Nepad is philosophically spot-on," he says. "The U.S. will focus on those emerging markets doing the right thing in terms of private sector development, economic freedom and liberty. But now we are waiting for the implementation." So, even more urgently, are Africans.

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