Tony Blair: “Africa must promote investment to develop”

Reuters Africa. Former British prime minister Tony Blair, on Thursday 1st of April 2010, added his voice to calls for African development strategies to go beyond aid, saying a predictable and transparent business environment was critical to sustainable development. Blair whose African Governance Initiative advises three African governments, said developing countries needed to do more to promote government accountability, battle graft and create a “one-stop shop” for frontier investors.

Blair’s comments echo proposals by Zambian economist Dambisa Moyo, who has called for a financial market-led approach to development.

“The problem with African countries is not just a matter of aid,” Blair told Reuters in an interview.

“The two absolutely critical things for any African country that wants to develop sustainably are that you put together the right business environment and that (investors) can come in on a transparent and open basis.”

Blair’s initiative operates in Rwanda and Sierra Leone and recently began work in Liberia, all of which are recovering from conflicts and present good opportunities for intrepid financiers, Blair said.

“You’ve got to put all the caveats in, but the natural potential of these three countries is enormous and the political leadership and determination is there,” he said.

“There are very few frontier markets that you go into where there isn’t a risk-reward balance, but if the investment pays off, it’s going to pay off in a very big way.”

Moyo, who wrote the book “Dead Aid”, has criticised aid flows, arguing instead for increased trade, foreign direct investment, and use of capital markets through bond issues.

African economies weathered the global economic slowdown relatively well.

The IMF recently forecast the continent’s growth for 2010 at 4.5 percent, although this presents a significant drop from the six percent growth rates enjoyed over the past decade.

This article was written by Hereward Holland.

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