Treasury's Paulson Says African Leadership Vital
Treasury's Paulson Says African Leadership Vital in Four Areas
Treasury Secretary Henry M. Paulson has identified four areas where African leadership is vital to accelerate and sustain economic development -- natural resource protection, financial markets, business climates and free trade.
In a speech to the U.S.-Africa Business Summit in Cape Town, South Africa, November 16, Paulson said that competition for natural resources often has been the cause of conflict in Africa. He added that protection of those resources is "key to Africa's long-term, sustainable and inclusive economic advancement."
Regarding the need for properly regulated and well-functioning financial markets, Paulson said: "Lack of access to finance ... is one of the biggest constraints for private sector growth in Africa. Less than 20 percent of Africans have bank accounts -- the lowest level in the world."
The secretary said that improving the business climates by enhancing transparency, shortening the business startup process, and strengthening the rule of law and property rights will allow more businesses to be formed, thereby nurturing competition. "Greater competition is vital for improving productivity, fostering innovation and generating jobs," he said.
As for free trade, Paulson appealed to the participants in the U.S.-Africa Business Summit to embrace it.
"It is a development strategy that has worked for countries as diverse as Singapore, Chile, Ireland and Mauritius. And it is a strategy that can work for other countries in Africa," he said.
While the international community can support Africa's reforms, it is the continent's leaders and people who "must maintain a firm commitment to reform, combat corruption, respect human rights, adhere to the rule of law and spread the benefits of economic growth to more of Africa's population," Paulson said.
The secretary is on a three-nation trip to Africa, November 14-19, undertaken to attend a meeting of G20 Finance Ministers and Central Bank Governors and discuss the positive economic changes taking place on the continent with government and business leaders. Africa is experiencing its highest rates of growth and lowest levels of inflation in 30 years, prompting increasing investor interest in the continent. (See related article.)
Paulson said that U.S. economic assistance to Africa increasingly is directed toward supporting countries that are fostering free markets, sound fiscal and monetary policies, transparency and the rule of law.
Before arriving in Cape Town, Paulson visited Tanzania, where he and Tanzanian Finance Minister Zakia Meghji co-hosted a discussion on regional financial integration with the other finance ministers of the East African Community. While in Tanzania, he also visited an innovative land trust and toured a mosquito net factory.
On November 19, Paulson will be in Ghana to meet with President John Kufuor and co-host with Ghanaian Finance Minister Kwadwo Baah-Wiredu a meeting with private-sector financial leaders on financial sector development in West Africa, following a tour of the Ghana Stock Exchange. Later that day, he will be joined by U.K. Chancellor of the Exchequer Alistair Darling and African Development Bank President Donald Kaberuka during a tour of Akosombo Dam to discuss infrastructure investment.