There is cause for optimism about Africa

Much of sub-Saharan Africa has lower living standards than Europe had under the Roman Empire
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Economic summits come round every summer but the tally of achievement is pretty meagre. Some 820 million people in Africa will hope that this one will be different. The rest of us should hope so too.

Economic summits come round every summer but the tally of achievement is pretty meagre. Some 820 million people in Africa will hope that this one will be different. The rest of us should hope so too.

The Group of Eight developed countries summit starting today in Kananaskis, in the Rockies 50 miles from Calgary, has as its prime focus an effort to try to lift the economic performance of Africa, the world's poorest continent. The sad statistics about African economic performance have become so familiar as almost to lose their ability to shock: that, for example, more than half the population lives on less than $1 a day, 250 million people have no drinking water, and two-thirds of the world's cases of Aids are in southern Africa.

Personally the statistic I find the most disturbing is that much of sub-Saharan Africa has lower living standards than Europe had at the time of the Roman Empire. It is as though 2,000 years of progress have entirely passed this continent by. It is disturbing because anyone looking at any plan to try to lift Africa's performance has to see it in the context of this failure. We've got to believe that 2,000 years of experience are wrong.

I think we can, for reasons I'll come to in a moment. First, the initiative before the G8. It comes from five African leaders, headed by Thabo Mbeki of South Africa and Abdoulaye Wade of Senegal, and is called the New Partnership for Africa's Development, or Nepad. The other three countries are Nigeria, Egypt and Algeria.

The idea is that African countries will make a commitment to good governance and human rights. This will be policed by the African Union, the successor to the Organisation for African Unity. By coincidence, the African Union will be launched next month. In return, the developed world will increase debt relief, encourage commercial investment in Africa (helped of course by the reforms underwritten by Nepad) and will open their own markets to African goods.

It is an elegantly simple idea – political reform for commercial help – and one that will be welcomed by the G8. But as we know, translating fine words and supposedly ground-breaking initiatives into practical progress is extremely difficult. Why should we have any hope here? I can think of at least five good reasons to do so.

The first is that this is an idea whose time has come. The apparently long period of failure is actually a rather short one. Given the continent's history, we are really talking of a post-colonial failure: why did the newly-independent African countries fail to take off economically in the way that others did, particularly in East Asia? And that can be explained substantially in terms of an unfortunate coincidence. Independence occurred at the same time with the post-war fashion for government economic intervention.

In terms of economic history, the experiment of government economic planning and nationalisation of major industries was a 30-year blip from about 1950 to 1980. But the idea was seductive, Western European advisers urged it on them, and the newly-independent countries bought it in industrial quantities. (We also urged loans on these countries without sufficient attention as to whether the loans could be repaid and whether the items or projects being bought were appropriate.)

Of course post-colonial Africa faced huge difficulties, but having fashionable but damaging economic policies thrust upon it was perhaps the greatest one. So the failure has really been one of the last 20 years, or even the last 10 – since the new leadership took over in sub- Saharan Africa's largest economy, South Africa, and since the failure of planned economies became evident to all, in the wake of the collapse of the Soviet Union. But now there is a clear run for good governance.

That leads to the second reason for optimism. This is an African plan, not one imposed by outsiders. It is conceived by African leaders and will be administered by the African Union. No one can know how this new body will develop – an idea is that it might eventually be built into something like the European Union – but clearly it will have to gain credibility by its own actions.

The way it subjects African countries' performance on human rights to peer review will be a crucial factor in establishing that credibility. So there is a lot riding on this for Africa. It is hugely in the continent's interests that the African Union should be seen as effective and, for that to happen, this initiative has to succeed.

The third reason for optimism is that it is also in the interests of the developed world that Africa should become an economic success story. That is not because of any drag on the world economy for, sadly, Africa, with less than 4 per cent of world output, does not pull enough weight to matter. Nor, in terms of Western finance, do the debts matter much either: the numbers are huge in local terms, but in terms of the output of the developed world or the debts of the developed world, they are tiny.

It is also in the interests of the developed world to see Africa succeed not in economic terms but in human terms. It is an affront to our sense of fairness and decency that the gap between one part of the world and another should now be larger than at any time in the history of humankind. That gap is not just on the narrow measure of GDP per head, but in terms of health, life expectancy and so on. And it is not just our sense of fairness that is affronted, our security is threatened by differentials that grow ever wider.

That leads to the fourth reason for optimism. It is quite easy for the developed world to help on trade. Too much of the criticism of the West from both inside and outside Africa has focussed on debt relief and too little on access to markets.

Western protection of agriculture has been one of the most serious barriers to African exports, and such protection will continue for a while yet. But there has been a change of mood, if not yet of practice, towards agricultural subsidies. In addition, there is great scope for making detailed amendments to our trade barriers that increase access without damaging our own interests – in fact, quite the reverse. If the G8 meeting leads, as it may well do, to a series of specific, detailed, measures to open markets to African exports, then it will have done something useful. The step may not be huge, but it will be a start.

And fifth, the plan shows a new awareness within Africa of the need to counter the image it projects to the world. You cannot solve a problem until you acknowledge that one exists.

Now you may say that countries like Algeria and Nigeria are hardly world class in the human rights league. You could point to South Africa's failure to engage successfully in Zimbabwe. But at least there is an acute awareness that the behaviour of some – indeed, too many – African states is deeply damaging to the interests of the rest. Private investment is the key to growth, but investors are shy animals and a fright on one side of the continent will scatter the creatures on another.

Investors, like the rest of us, need to differentiate – not to bundle the whole continent together and label it a basket case. There are success stories in Africa. I have just been looking at a league table of economic, as opposed to political, freedom. One country, Botswana, is well up the table, tying with France. It also happens to be one of the fastest-growing countries in the world. It can be done.