Policy Dialogue : Africa Needs to Attract More Private Capital to Achieve Integration into the Global Economy

• Author: Elliott C. Harris
• Position: IMF African Department
• Pages: 15-16

Page 15

The Development Policy Forum of the German Foundation for International Development hosted an international policy dialogue entitled "Opening and Liberalizing Markets in Africa-A Response to Globalization?" at Villa Borsig, Berlin, on December 1-3, 1998. The discussion brought together a small circle of key decision makers from Africa (including the finance ministers of Nigeria and South Africa, the minister of justice of Zambia, and the governor of the Central Bank of Kenya), from international organizations (including the IMF, the World Bank, and the African Development Bank), and from Germany's public and private sectors. The purpose of the dialogue was to reflect on how Africa should respond to the challenges of globalization, to exchange experiences, and to draw up concrete recom-mendations that would feed into the formulation of national and regional economic policies in Africa. IMF Deputy Managing Director Alassane D. Ouattara delivered a keynote address. (The full text of the address is available on the IMF's website: www.imf.org.)

Several overarching themes emerged during the course of the dialogue. There was general agreement that Africa had no alternative to full integration into the global economy, given its pressing need for accelerated growth and poverty reduction and that it would have to attract a substan-tially greater share of the world's private capital in order to catch up with other regions. Regional integration was considered a use-ful intermediate step toward, though not a substitute for, global integration. It can also contribute to the requisite stabil-ity and predictability of macro-economic policy. Promoting private sector investment also required an adequate economic infrastructure and the development of national human resources, as well as a conducive regulatory framework. This argues for a carefully redefined role of the state and a constructive partnership between public and private sectors. PolicyPage 16 reforms should be framed within a comprehensive policy approach, and policies should be well explained to the population to foster understanding and acceptance. Transparency and accountability of the government, open and participatory democratic institutions, and an efficient civil service are the key building blocks of a national consensus in favor of the reform effort.

Responding to the Challenges of Globalization

The dialogue was organized...