Africa: Help is good but investment is better

?To go for small and medium companies, favour the creation of regional markets, support sustainable investments and arrive at an economic growth rate of 8%?. These are the solutions proposed by Louis Kasekende, chief economist for the African Development Bank (ADB).

Vita Europe: Africa has begun to fly. Is it a sign of economic revival or is the boom caused by the increase in the price of resources and the super-demand of the Asian market?
Louis Kasekende: China is certainly a contributing factor. But the phenomenon goes beyond it. There is an ever increasing number of countries exporting petrol and these are experiencing increasing growth, such as Mozambique. The climate favours private investments.

Vita Europe: In the last several years a number of books and films have criticised aid to development in Africa, especially by part of the International Monetary Fund (IMF) and the World Bank. The common theme seems to be the definition of ?aid? that would seem to have failed in the past years. What is your position on this?
Kasekende: The first question to ask is whether aid is really not doing any good. It must be proved that this is so. There are examples, such as Mozambique, Tanzania and Uganda where aid has worked. However, there are some basic preconditions that are needed if aid is to be effective. As far as we are concerned, we want standards to be respected, therefore at any suspect that corruption is taking place we block the procedures.

Vita Europe: In some important countries, such as Algeria and Nigeria, corruption remains high ?
Kasekende: Nigeria has taken great steps forward in the last 4 or 5 years. The new government has also continued the fight against corruption. Banc reforms have not been among the top priorities for many African countries that are now recovering ground. And there is a growing realization that earning trust in the private sector is crucial.

Vita Europe: The majority of companies you work with (80%) are small and medium ones. In a global world do you think that African development must necessarily occur through these companies.
Kasekende: There are cases where the ADB supports large projects. Recently we have financed SCom and MedBank. But small and medium companies remain the most important in terms of giving employment to people, especially in rural areas.

Vita Europe: Chinese companies are very active in Africa. What are the opportunities and the risks involved?
Kasekende: At first Chinese investment was concentrated upon natural resources. These investments are certainly a good opportunity for Africa. It is however important to make sure that investments from China are sustainable and that our people receive the benefits, such as increased employment.

Vita Europe: What do you expect from the Doha Round?
Kasekende: The recent events at Doha were a great disappointment to us. We hoped that an agreement would be reached, but this did not happen. Now we are concentrating on ?aid for trade? and are organising a meeting between the ministers of Finance and Commerce that will take place in Dar Es Salaam between the 3rd and 4th October. We want to talk about this and about the role that the private sector can play.

Vita Europe: This year the UN has published a report on the Millennium Objectives. The paper says that your continent will not reach them ?
Kasekende: What most disappointed us was knowing that we would not reach the poverty-objective. We know that in the last years much progress has been made, as is shown by the growth rate that has been registered. But we know that these growth rates will not help single countries. That is why we must aim for an 8% growth rate.