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11.  Promoting growth and jobs

What we agreed at Gleneagles

• The G8 will build an international infrastructure consortium involving the African Union (AU), New Partnership for Africa’s Development (NEPAD), World Bank and African Development Bank (ADB) to facilitate infrastructure investment in Africa.
• The G8 will support investment and enterprise development through support to the AU/NEPAD Investment Climate Facility and increase access to financial services.
• The G8 will support a comprehensive set of actions to raise agricultural productivity.

How is the UK doing?

The UK spearheaded the development of the Investment Climate Facility (ICF), in order to promote investment, growth and job creation in Africa. Launched in June 2006 with the UK contributing $30 million for its first phase, it will help governments and businesses to lower the costs of doing business in Africa, and support projects to bring about more business-friendly policies, laws and regulations. The ICF is now fully operational and funding is being considered for a series of projects focusing on commercial justice, business and land registration, telecoms regulation and legislation, legal reform, taxation and customs.

We have also provided £133 million over five years to the Comprehensive African Agriculture Development Programme, an AU/NEPAD-led initiative that will enhance the productivity of agriculture, ensuring that there is sufficient food – as well as improving livelihoods and reducing poverty.

The UK is contributing funding and staff to support the establishment of a secretariat for the Infrastructure Consortium for Africa, which was launched in 2005. We are also providing funding for infrastructure projects to meet Africa’s energy and transport needs.

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How the International Community is doing

$120 million has been raised for the Investment Climate Facility (ICF), including commitments from the UK, the Netherlands, Ireland, Norway, the IFC, the African Development Bank and seven private sector companies. Significant additional commitments are expected to be made by other agencies during 2007.

Alongside UK support for the work of the Infrastructure Consortium for Africa, funding and staffing have been contributed by Japan, the African Development Bank and Public Private Infrastructure Facility. The Consortium brokers donor financing for infrastructure, and in 2006 Consortium members contributed $7.7 billion to the development of infrastructure in Africa.

The Financial Sector Reform and Strengthening (FIRST) Initiative – currently supported by the UK, Canada and several other donors – is helping to improve financial market access in areas such as banking, pensions, insurance and capital markets in developing countries.

What should happen next?

The UK has committed $20 million towards the establishment of an Africa Enterprise Challenge Fund (AECF). The AECF is one of the UK’s responses to calls at Gleneagles for improving access to financial services for poor people and small entrepreneurs - and boosting agricultural productivity.

The G8 should support the second phase of the successful FIRST Initiative, which is playing an important role in strengthening financial markets.

The UK has launched the multi-donor Better Regulation for Growth Programme, which promotes best practice in regulatory reform and complements the ICF. The G8 should support this initiative as its central focus is on improving governance and could help African countries implement African Peer Review Mechanism recommendations.

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Where it is making a difference:

• The Kenya Tea Development Agency (KTDA), representing small holder tea farmers in Kenya, and Lipton, part of the Unilever Group, are promoting the adoption of improved farming practices. They are working at farmer level through field schools, and improved systems in the tea factories. DFID’s Business Linkages Challenge Fund is supporting this initiative, which will expand to cover 30,000 farmers in the pilot stage. As KTDA has 58 tea factories in Kenya, scaling up the initiative will reach 400,000 smallholder KTDA tea farmers, helping them to maintain market access and increase incomes through improved yields and marketing.
  

Last updated: 12 March 2008