[A-List] UK sub-imperialism: scramble for Africa

["Keaney Michael" <Michael.Keaney@xxxxxx>]

Africa fund calls private sector into public service
Financial Times; Jan 30, 2002
By ALAN BEATTIE

A group of financial institutions backed by the UK government will drive
forward an international move today to bring private-sector investors
into developing countries by launching a Dollars 300m (Pounds 207m)
infrastructure fund for Africa.

Government support for the Emerging Africa Infrastructure Fund , to be
launched today in London, reflects a growing feeling among development
ministries and official agencies that private investment must take a
greater role in helping the world's poorest countries to develop.

The World Bank is mulling a private-sector development strategy designed
to refocus its work on improving the climate for new investment, and the
International Finance Corporation, the Bank's private-sector arm, is
expected to participate in the Africafund.

But the move has proved controversial with some non-governmental
organisations, who regard it as a fig-leaf for privatisation and
deregulation of the public sector.

The EAIF, backed with Dollars 100m of equity capital underwritten by the
UK department for international development (DfID), Dollars 85m from
Dutch, South African and German development finance institutions and
Dollars 120m of commercial debt from Standard Bank Group and Barclays,
aims to provide long-term debt finance for private companies investing
in infrastructure.

Appropriate sectors for investment - which the banks involved say could
involve new developments, upgrades or privatisations - include power
generation, telecommunications and transport.

Clare Short, the UK's development secretary, said: "Public-sector
resources and even enhanced levels of aid will never be able to provide
sufficient funding to generate the investment in transport, water and
sanitation, electricity and telecommunications necessary to ensure that
Africa meets the target of halving the proportion of people in poverty
by 2015."

Projects to be approved by the fund will have to pass DfID
environmental, social and poverty-reducing guidelines. But any move to
encourage private companies to fulfil public services is likely to be
regarded with suspicion by some NGOs. The Bretton Woods Project, a
watchdog NGO that monitors the World Bank and International Monetary
Fund , says private companies are often reluctant to take on the risk of
supplying public services without implicit or explicit government
guarantees.

Robert Wade, a professor of political economy at the London School of
Economics, said that the bank had made no attempt to evaluate its
earlier efforts to support private participation.

One DfID official estimated that of the investment in new infrastructure
in developing countries, 5 to 10 per cent came from overseas aid, 20 per
cent from the private sector and the rest from the national government.

Full article at:
http://globalarchive.ft.com/globalarchive/article.html?id=020130001186&q
uery=Africa+fund

Michael Keaney
Mercuria Business School
Martinlaaksontie 36
01620 Vantaa
Finland

michael.keaney@xxxxxx