The past few weeks have seen an increase in the trade (or business) vs. aid in Africa discussion. Framed by Andrew Mwenda’s presentation at the TEDGlobal conference in Tanzania, and Bono’s subsequent rebuttal, the issue of what path should lead African development is certainly a hot topic. Here are a few articles which add to the ongoing discussion:
Please Bono, Stop Heckling and Just Listen (Financial Times)
Pro-aid campaigners argue that providing aid to accountable governments is a means of stimulating their economies. This is nonsense. Giving aid to poor countries and working exclusively through their government agencies makes accountability worse rather than better. It makes the governments more accountable to foreign donors than to their own people.
Africaâ€™s only viable and sustainable strategy for economic growth is one based on trade and not aid. For this to happen, African countries need to aggressively support their private sectors to create environments for enterprise, wealth creation and elimination of poverty.
Investors In Africa Seeking Undervalued Names, Diversification (CNN Money)
“We’re convinced that the perceived risk in Africa is greater than the actual risk for disciplined and focused investment,” – Thomas Gibian, chief executive of Emerging Capital Partners, (which manages more than $1 billion in five private-equity funds focused on African companies)
“If you read the newspaper, you’re very worried because a lot of news is bad news,. If you take a step back and you take a look at the patterns that are in place in the world, you’ll see that there’s a long-term movement of the world toward democracy and peaceful settlement of disputes.” – Lawrence Speidell, co-manager of the Frontier Market Select Fund, L.P
Africa market size hinder private equity (The Namibian)
“…funds into Africa would have jumped in 2007, but private equity players’ enthusiasm was dampened by worries about the size of markets and companies, illiquidity and regulations in certain countries that slow down the process of buying out local firms” – Martin Kingston, Executive Deputy Chairman of Rothschild & Sons, South Africa