Africa: Resource rich, trade poor

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Africa is on the brink of an era of unprecedented growth, but it is still hampered by "woeful" progress on trade reform and broken promises by the world's wealthiest countries, an international commission has concluded.

While many African countries are attracting much more foreign investment with new business-friendly policies, they are still failing to spend enough on health and education, and they are encumbered by wealthy nations that have failed to reduce their farm subsidies or negotiate trade deals with Africa, the commission says.

The Commission for Africa, created by Tony Blair when he was British prime minister, issued an influential report in 2005 that became the blueprint for the G8 summit at Gleneagles, where the Group of Eight industrialized nations pledged a massive increase in aid to Africa.

Five years later, in a report to be released on Monday, the commission says it is disappointed by the lack of progress on many fronts, even though Africa has quadrupled its level of foreign investment and trade in recent years.

The commission's most famous recommendation in 2005 was a call for the doubling of foreign aid to Africa. It persuaded the G8 and other donors to commit themselves to debt relief for Africa and a doubling of their aid flows by 2010. Under their pledge, Africa would receive an additional $25-billion (U.S.) in aid annually by 2010 in a concerted push to reduce poverty.

But in reality, the wealthy nations fell far short of their promise. Their aid for Africa increased by just 60 per cent of the promised amount, and much of this went to high-income and middle-income countries, rather than the poorest African countries, the commission says.

It criticized some donors - including Canada and France - for "re-clarifying" their commitments and establishing "lower targets" for their aid to Africa. Another rich country, Italy, actually reduced its aid to below its 2004 level, despite its promise to double its aid.

On debt relief, the G8 has done better, providing $100-billion (U.S.) in cancelled debts, allowing Africa to spend an extra $1.5-billion annually on other needs. The report also points to dramatic progress in AIDS treatment, malaria prevention, primary-school education, child immunizations, and investment in infrastructure.

But on other issues, much less has been achieved, the commission said. There has been no improvement in higher-education funding, so Africa continues to face a shortage of doctors, teachers and other professionals. The commission had called for a 50 per cent increase in irrigated farmland by 2010, but instead it increased by just 0.9 per cent.

On trade issues, the results have been "dismal," the commission said. "Trade is perhaps the area in which the least progress has been made in the past five years," it said.

Despite an increase in African exports in recent years, Africa still accounts for only 3.3 per cent of global trade - "a very modest share and the smallest of any region in the world," the commission said.

It said progress has been "glacial" on trade issues of crucial importance to Africa - especially agriculture, where the wealthy nations continue to give heavy subsidies to their farmers, making it difficult for Africa to compete. Trade negotiations between Africa and Europe, meanwhile, have been "tortuous" so far, with no agreements reached between the European Union and any African region.

Although the African economy grew by an average of 6 per cent annually from 2003 to 2008, much of this was due to resource exports, and most impoverished Africans have not benefited from the growth, the report says.

And today, it warns, there are new threats to Africa, including the lingering effects of the global economic crisis, which has jeopardized aid to the continent. An even bigger threat, it says, is climate change, which poses a "massive challenge" to Africa's future growth. Donors should provide $10-billion to $20-billion (U.S.) annually to help Africa cope with climate change, the report said.

The commission's members include Mr. Blair, former British prime minister Gordon Brown, former Tanzanian president Benjamin Mkapa, South African Planning Minister Trevor Manuel, Ethiopian Prime Minister Meles Zenawi, Botswana central bank governor Linah Mohohlo, Canadian MP Ralph Goodale, and musician and activist Bob Geldof.