African Nations Woo Foreign Investment

By Stephen Mbogo | July 7, 2008 | 8:14 PM EDT

Nairobi, Kenya ( - African nations have launched a plan to evaluate how well individual countries on the continent are being governed, in a bid to improve their ability to attract foreign investment.

The program hopes to lead to enhanced democracy, improved human rights and healthier investment levels in Africa.

It comes two years after President Bush announced a new approach to foreign aid - the Millennium Challenge Account - tying future U.S. aid to good governance. The fund that will run the new, multibillion dollar program held its first board meeting last week.

The African program is being carried out under the New Partnership for Africa Development (NEPAD), a development initiative launched by African leaders in 2002, with the aim of using "African solutions" to counter underdevelopment.

Seventeen nations have so far signed up to NEPAD's "peer review mechanism," which will begin in April to evaluate the situation in Ghana.

Significantly, Rwanda, the tiny central African nation that emerged from bitter civil war and genocide a decade ago, will be second to be evaluated.

Another of the 17 to volunteer for evaluation is Angola, an oil-rich country in Africa's southwest, which was devastated by more than two decades of civil war until 2002.

The peer reviews are designed to assure international investors of political and economic stability before they commit financial resources to a particular country.

Nations will be evaluated, by teams of visiting experts and officials, on issues such as democracy, human rights, corruption, corporate responsibility, social services and economic development.

The teams will then compile a report for the host government, and make recommendations for improvement.

Volunteer nations do face a risk: if they do not follow recommendations in their report, they could face NEPAD sanctions, hurting their ability to attract investment and foreign aid.

Speaking at the weekend launch of the program, senior NEPAD official Wiseman Nkuhlu said in Rwanda the process would significantly improve Africa's image.

African heads of state have selected seven eminent Africans to serve as evaluators, to be assisted by 20 experts.

Each evaluation will take up to nine months, and will be financed by the African Union, international donors and the countries themselves under review.

A perceived weakness in the program is the fact only those nations that volunteer will be evaluated.

Observers say this means that "usual suspect" nations, such as those with poor human rights records, high level corruption and poor government, will shy away.

"Only the best will be evaluated," said Wycliff Omollo, a Nairobi-based political science scholar.

"There is a need to involve those suspect nations in the evaluation. This will be one way of influencing change from within Africa," he said.

Countries that have so far signed up for evaluation are Algeria, Angola, Burkina Faso, Cameroon, Ethiopia, Gabon, Ghana, Kenya, Mali, Mauritius, Mozambique, Nigeria, the Republic of Congo, Rwanda, Senegal, South Africa and Uganda.

Africa presently attracts only two percent of foreign direct investments, the lowest in the world. Some 800 million people, making up more than half of the continent's population, live on less than a dollar a day.

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