March 26, 2003

Nepad has little to offer us, says Namibian think-tank

The Namibia Economic Policy Research Unit has become the latest economic think-tank to criticise the New Partnership for Africa's Development (Nepad). In a report, the unit said the recovery plan had "little to offer Namibia": "Namibia is already a major receiver of official development assistance and foreign direct investment. So it is unlikely that Nepad will generate more of these for Namibia, at least in the short to medium term," the report said.

The Nepad plan was cautiously accepted by the African Union last year. It envisages African countries opening up their economies to private enterprise and enforcing good governance standards in return for debt cancellation and investment from the west.

The unit said Namibia was not classified as a heavily indebted poor country or a least developed country and was not in line for debt cancellation or low-interest loans, even though it scored well on most of Nepad's political and economic policy tests. Namibia could benefit, however, from a "neighbourhood effect". If most countries in Africa were stable, peaceful places, trade within Africa would increase and more investment would be attracted.

But the think-tank said it was unlikely that Nepad alone could do this. It had been "sold" to a select group of African leaders and to the Group of Eight industrialised nations, but had yet to get a mandate from Africans at the grass roots level. It was up to western companies, not governments, to invest in Africa. These companies often took decisions based on stability, rather than good political governance or sound economic policies. Much more action was needed to address the outflow of capital from Africa. The report estimated that Africa faced a "resource gap" money that is needed but not available of about $40bn. However, the researchers said, Nepad would create growth in countries with well-developed industries, such as SA if they were willing to comply with the business world's demands. (Business Day, Johannesburg)

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