§ 3.6 p.m.
§ Baroness Chalker of Wallasey
rose to call attention to the opportunities and challenges in Africa and the ways in which the United Kingdom can enhance economic growth both in that continent and at home; and to move for Papers.
The noble Baroness said: My Lords, I am most grateful that we are holding this debate today on the opportunities and challenges of Africa. I am particularly grateful to all noble Lords who have put down their names to speak.
Five weeks ago, over 100 businessmen and women heard the FCO Minister for Africa, Peter Hain MP, directors from Standard Chartered Bank and representatives from Macmillan's the publishers and Unilever's Africa Business Group speak positively about the future of Africa. The Minister herself was a guest at the lunch to hear the discussion. All three companies have constructive business in and sound plans for Africa. The growing markets of Africa are a challenge and an opportunity, not only for those in Africa but for all at home who can assist them.
First, perhaps I may declare my interests. In addition to my current Africa-related non-executive directorships of Unilever plc, the Freeplay Energy Group and Landell Mills Ltd, at the end of 1998 I formed a small advisory company, Africa Matters Ltd., to advance the sharing of knowledge, transparent governance and business development in Africa.
When, three months ago, I first asked for this debate, I thought of the remarkable successes of Mozambique over the past eight years. Despite the tragic effects of the recent floods, with more than 10,000 hectares of productive land destroyed in the past four weeks, Mozambique remains one of the best examples of how a country can progress to sustained growth after years of civil war. That is because it has open accountable government and it is committed to business partnerships.
In Mozambique we have witnessed eight years of real achievement, especially in the south, since the end of the civil war. Now the country's friends must help it to achieve new growth, probably faster than the first time round. The opportunity to rebuild the infrastructure, re-establish agricultural production 276 and re-develop the power and telecommunications networks in the most modern ways now known is one of the greatest opportunities open to business. That means business in this country as well as in Mozambique. If development assistance donors will partner the business and financial communities to build up the human capacity there, the country will be a positive lesson not only for her neighbours but also for development everywhere.
Not only did Mozambique achieve 4.7 per cent growth on average between 1988 and 1998, but Botswana averaged also 4.8 per cent over that period with some highs in double figures in the past 25 years. Uganda averaged 6.9 per cent, Ghana 4.3 per cent and Burkina Faso 3.1 per cent. All those countries had governments which began to focus on building up the capacity of essential sectors to train key workers, start essential privatisation and allow the private sector to grow and work alongside government.
If business sees unequivocal determination of a government to tackle its future, challenge by challenge, business is usually willing and able to partner that government in overcoming the daunting impediments to growth. Aid will still be needed and Kofi Annan, the UN Secretary-General, last week summed it up neatly in the third Commonwealth lecture when he said:yet for all that we have done to help Africa overcome its conflicts and false starts and lost decades, I am afraid to say it has not been enough. Africa needs more: more assistance, more technology, more investment, more access to world markets, more cooperation and partnership".How right he was.
No one agrees more with that than the retiring Commonwealth Secretary-General, Chief Anyaoku. He has helped to return so many of the Commonwealth nations to a fuller understanding of the need for democracy, good governance, sound finance and business development. He has stimulated some important initiatives, such as the establishment of the Commonwealth Association for Corporate Governance, to convince leaders of the essential requirement to carry out their business and government tasks without corruption and within constitutional rules. We wish the Chief and his wife great good fortune in their new life, and a little more time in their village.
We are fortunate in his successor, Don McKinnon, who, like me, was a member of the Commonwealth Ministerial Action Team to restore democracy in Africa. He will carry on the essential Commonwealth work into the new millennium. He will be a firm supporter of the growing Commonwealth Business Council, led by Lord Cairns, Cyril Ramaphosa and Dr Mohan Kaul, which promotes the very essence of the partnering concept that business and government are developing across 54 nations.
The business examples of Unilever, Standard Chartered and Macmillans are instructive. I am grateful to them for the information that I shall now share with your Lordships. Besides the oil and minerals industries, Unilever is the number one investor in Africa. Unilever produces in 12 countries 277 and sells consumer goods for personal care, for the household and for food across nearly all other African countries. Its turnover in Africa is above the Unilever average, and it employs over 50,000 people. It also owns plantations in five nations. In Kenya its 19,000 employees benefit from medical care and schooling, which also embraces some 100,000 family members, with a hospital, four clinics, 34 nursery schools, 22 primary schools, two doctors, 65 nurses and many teachers.
In Ghana and South Africa, on-going training is supplemented by the Unilever Foundation for Education and Development for postgraduate training through the Nelson Mandela Scholarship scheme which carries with it job guarantees afterwards.
The service of Macmillans, the publishers, on educational books in Africa is a particularly constructive story. It generates over £25 million of profitable turnover with bases in 14 countries. Macmillans have invested 25 years building those companies, which operate just as publishing companies do in the developed world.
Christopher Paterson of Macmillans is fond of saying, that for business success in Africa one needs nerves of steel with a long-term perspective, a "go anywhere, do anything" attitude and good personal relationships. My judgment is that every task takes rather longer to complete in Africa than in Europe, because often planning is not well thought through and systems are less reliable. However, the issues faced are very similar and with good personal relationships, well-trained and loyal staff, the rewards are there for the efforts invested.
Standard Chartered Bank, although active in much of the developing world, has made a special contribution to Africa for over 100 years. It operates in 12 sub-Saharan African countries, including Sierra Leone. It employs 5,500 people, spends over £100 million a year there, has assets over £1.5 billion, remits all profits, and makes a pre-tax profit of £100 million. As Standard Chartered is the first to say, it is doing well because its customers are doing well. Along with Guinness, BAT, BP, Shell and so many more, Britain's corporates play a huge role in developing Africa, but there are just not enough corporates yet involved. It is amazing to find that the banks remain underlent and we need to remember that there is plenty of debt capacity to support the much needed capital for business.
Although I have always been a fervent, committed advocate of the cancellation of government-to-government debt, debt has a role to play in business. Borrowing has a role to play provided it is done within well-known and well-calculated limits and the risks are clear for all to see.
Turning to the positive side—a factor that is often forgotten—investment brings far more to Africa than just capital. It brings urgently needed technology and management, too. At present Africa gets just 1 per cent of the world's foreign direct investment (FDI), and half of that goes to South Africa, Nigeria and north 278 Africa. Yet investment in Africa brings one of the best rates of return. Standard Chartered Bank reports that for the African region collectively, the return on equity is in excess of 30 per cent. That means that there is real scope for greater investment, and true benefit for the investor. I shall turn to South Africa a little later.
Although it is true that there are always inherent risks, we can begin to minimise those risks through the greater involvement of businesses in addressing the key issues of good governance and tackling corruption. Alone governments cannot, and nowadays should not even try to, provide the infrastructure, but they should gain much from partnerships in planning, delivery, maintenance, upgrading of power, water supply, rail, telecommunications and roads, all of which are essential for education and business.
New initiatives such as African Lakes' e-touch Internet booths are an imaginative development for a few countries. If those and similar schemes are developed, there will be a much-needed communications improvement across Africa, from which millions may begin to benefit.
I repeat that no company should be under any illusion about the extent of the task involved in building up business in Africa. There are severe skill shortages, but there are enormous opportunities for building business through skill sharing, as well as developing equipment and technology. Active investment in a factory or agricultural production produces real multipliers. For one person employed, an extended family of 10 or more is supported, creating new economic activity.
The benefits of training spread fast, particularly where elementary education is a priority. Training helps to stimulate local industries to become suppliers to the main investment. Those suppliers need suppliers themselves. More and more governments are being persuaded to focus on and to introduce best practice action, especially at local levels.
Nearly every development donor is involved in some way in building management and technical capacity in all sectors in the developing world. However, it is crucial that newly trained people get hands-on advice in the application of that capacity. Mentoring by firms is common, particularly by smaller supplying firms.
BESO (the British Executive Service Overseas), of which I am president, is one of over 30 international mature volunteer organisers sending help to small and medium enterprises and to areas of skills shortage across the developing world. For over 25 years that practical skill transfer has brought new insights and applications to thousands of organisations and businesses in the developing world. Business people with real experience can make all the difference to a small start-up, a local hospital or even agricultural development.
However, for capacity building in business to be truly successful, a nation's education has to be soundly based, with the proper commitment of a government's own resources. Much is done to assist this by corporate support, but it cannot succeed unless education is a 279 financial and organisational priority of government on a much wider basis. The use of the Internet and satellite broadcasting will become more useful to education, as will our wind-up radios. But it is e-commerce ingenuity that may help us to overcome some of the education deficits, provided the country's infrastructure is upgraded. At present that is just not so. It must be able to provide the power and improved communication facilities that are needed for far greater numbers.
South Africa's great infrastructure advantages do not exclude it from any of the challenges of education, healthcare or the need for greater investment for the mass of the people. In its recent research, A.T. Kearney found that informed current investors are far more positive about their futures than those who, alas, build up negative perceptions of South Africa from the outside. In South Africa, unlike other countries, it is not so much the market size which attracts investment, rather its stable and business-friendly environment, developed infrastructure and abundant natural resources. Those factors are given as the principal drivers of investment.
The proper development of natural resources, particularly that of minerals, will remain one of Africa's best hopes for investment, growth and employment for years to come. However, companies and governments must have predictable, regulated, orderly and transparent mining regimes with proper regard for health and safety and for the environment, as well as sound corporate social policies. I hope that UN Ambassador Fowler's work to stop the very small proportion of diamonds that come from conflict areas will be seen in proportion. Some 96 per cent of diamond production comes from non-conflict areas. Noble Lords will not need me to explain how many jobs are at stake in that 96 per cent of production.
Service industries, finance, marketing and tourism are all new key areas for investment in Africa. However, healthcare remains a great mountain for most African countries to climb, including South Africa. Tackling HIV and AIDS is still a very major task, which is being much helped by the activities of various business concerns.
Good governance is an absolute must for these countries and will be one of the greatest challenges across the world. But corruption will only diminish when good government and corporate codes of business become the norm. Those will come only when bribers from the north—in the main from the developed countries—stop bribing. That is why it is essential that the UK fully implements the OECD rules against corruption, a matter on which we are being very slow at the present time. By having strong rules, with instant dismissal for offenders, companies can show the way, but governments must help to police the whole system of governance. That requires each and every one of them to put their own houses in order as well.
Perhaps I may end by saying this. Many in Africa are trying hard to improve their performance and to change the world's mistaken perceptions. There are 280 some terrible exceptions to this in the political management of Zimbabwe, the Democratic Republic of Congo, Angola and others. But the builders of Africa—whether President Mbeki in South Africa or President Obasanjo fighting corruption and years of mismanagement in Nigeria, or, indeed, Zambia, which is at last beginning to privatise its mining industry —are making greater efforts to modernise and develop than I have seen over the past 20 years. Those efforts will create employment, prosperity and growth. However, until peace and stability are restored to the war-torn nations, business cannot play the effective role that it wishes to do. Good management can bring positive change, but it requires more leaders, more business and more investors. It also requires them all to pull in the same, positive direction. Then the opportunities will be realised. I beg to move for Papers.
§ 3.23 p.m.
§ Baroness Dean of Thornton-le-Fylde
My Lords, I am pleased to be able to speak in this debate and I should like to congratulate the noble Baroness, Lady Chalker, on putting down this Motion which gives us an opportunity to have a wide-ranging debate about Africa.
I should like to concentrate on South Africa, although I am conscious that we shall deal with the entire continent in this debate. However, South Africa is the area I know best. Anyone who has visited that country cannot fail to be impressed by the strong sense of nationhood felt by her people. It is amazing to see, given the brutal background of that nation. The vitality and optimism for the future shown by South African people leaves a lasting impression on any visitor. However, equally strong is the realisation that South Africa faces major challenges as well as opportunities.
Perhaps I may concentrate on two specific areas in my contribution. The noble Baroness rightly spoke of skills shortages throughout the continent. I should like to talk about education initiatives in South Africa which will help to provide solutions to those shortfalls. The noble Baroness mentioned several household name companies in her contribution. Many are helping in the work on education that needs to be done, not in a patronising fashion but working as partners where both the companies concerned and South Africa can benefit from such efforts. Indeed, those benefits are also felt by the United Kingdom as a whole.
I should like to talk about an education effort that has not received much publicity but is contributing in a helpful manner. Since 1997, the Warwick Manufacturing Group, attached to the University of Warwick, has been working, at their invitation, with the South African Government. Together, they have set up a partnership that has links in both the private and the public sectors. South Africa's electricity generating and distribution company, Eskom, has set up a technology leadership programme that works with Warwick to secure University of Warwick accreditation for both degree and master's courses. This is not a form of distance learning or a franchise. 281 Training is given on the ground by tutors from Warwick working in South Africa. Students also come here to study at the university. The first awards were made in 1998. Tutors in South Africa are now working on the next stage of the master's degree courses.
Eskom is also working to secure its own interest in providing effective management for the future, because it will be a major challenge to provide electricity to every home in South Africa. The company has sent 30 women on its chief executive officers' course being run at Warwick. Those women have been earmarked as potential senior managers in engineering and will provide the leadership of tomorrow.
In 1997, the then Deputy President, now President of South Africa, limbo Mbeki, launched the Project 2000 Campaign, a project that aims, over a four-year period, to train 2000 senior managers to advanced and degree-level on courses designed in co-operation with the University of Warwick. It was a matter of great credit to the United Kingdom when the president said that Professor Bhattchayya of the Warwick Manufacturing Group had provided them with an effective affirmative action programme that would empower future managers and would also extend their capabilities in using competitive management practices in the developing private sector.
That kind of partnership in education will be increasingly useful, as will extending such opportunities info the more disadvantaged areas, such as the University of Zululand in Kwazulu/Natal and Transkei in the Eastern Cape. Today, 800 managers are attending training courses, which is not only good for South Africa, but also good for the work being done here in education. Partnerships of this kind benefit everyone involved.
An area in which I have a particular interest and on which the noble Baroness, Lady Chalker, did not touch in her contribution is that of housing. I am glad to have the opportunity to mention this subject in today's debate. Housing is a big challenge for any nation, but from my own observations, it will be an enormous challenge for South Africa. In that country there is a developing sector of social landlords who need professional management skills. The noble Baroness mentioned good governance as part of the strategy required to avoid corruption. That applies as much to social housing as it does in business. The social housing sector in this country is working in a low-key fashion with the South Africa Housing Foundation, which has set up around 50 initiatives.
Regrettably, Britain is not providing the level of resources for projects of this kind as are Holland and one or two of the Scandinavian countries. Nevertheless, we are working on the ground in South Africa, sending over professional managers to work with the local managers in this sector.
I am pleased to be launching later today, under a charity that is already registered, an appeal asking the lending sector—the banks and social housing—to extend bursaries. We are not asking them to give money that we hand on, but to create bursaries 282 whereby we can work with and train in social housing skills, in the United Kingdom, the future young professionals from South Africa. They can then take those skills back and utilise them. That is a positive way forward. It will not change the world overnight. But the need is great for those who are not used to paying rent; who do not have electricity or water. There is a great deal that needs to be done, and quickly.
We are delighted to be working in this sphere. It is an enormous challenge and it is not the kind of stuff that hits the headlines. It is positive rather than negative in the sense that we often tend to read negative stories in the UK. So I welcome this debate. I am sure that all those taking part in it will learn a great deal from it. I look forward to listening to the other contributions so that I, too, can learn and have an input into education and in the development of a housing partnership in which we will be working with, rather than patronising, the people of South Africa. They desperately need to gain from what we have learnt, and then be able to apply it in their own country.
§ 3.31 p.m.
§ Lord Holme of Cheltenham
My Lords, I too thank the noble Baroness, Lady Chalker, for introducing this debate and for persisting in her demands to ensure that it takes place. Also, I congratulate her on her eloquent and comprehensive review of the opportunities now available in Africa. Like the noble Baroness, Lady Dean, I want to concentrate on two issues. However, before I do that I apologise to the noble Baroness, Lady Chalker, and the noble Baroness, Lady Amos, who will be replying for the Government, in that, if the debate runs for the full three hours, I may have to leave before the end. I apologise for that. It is a longstanding engagement which was difficult to escape from. But were I and other noble Lords to be swift, I should not be faced with that dilemma.
The two issues I should like to address are, first, the question of the macro-conditions which will promote economic development in Africa; and, secondly, the need for a thriving base in society in terms of a free, prosperous, secure people who represent markets and economic potential for companies which might invest.
In relation to the macro-conditions for investment and enterprise, yes, open markets and liberalisation help. But when I attended the Afro-American Summit in Ghana last year as one of a small number of representatives of international business in a meeting with 16 heads of state, it was clear from the businessmen there that the greatest single obstacle to inward investment is something to which the noble Baroness, Lady Chalker, referred; that is, corruption. It inhibits responsible, good, long-term players from investing in Africa.
Conversely—we should recognise this; it may be true also for Angola—corrupt regimes have an almost magnetic attraction for pirate companies; for cowboy companies (to mix my metaphors); for people who want to operate on short-term horizons in a thoroughly opportunistic way and who are not 283 prepared to make long-term commitments. Those types of people are often attracted by corrupt regimes which facilitate their swift entry. So there is a double hazard in corruption: it deters the best investors and attracts the worst.
When the noble Baroness, Lady Chalker, was a Minister, she addressed the issue of linking British assistance of all sorts to good governance. That remains of crucial importance in Africa. Perhaps when the noble Baroness, Lady Amos, replies she can say whether the Department for International Development is persisting in the policies initiated by the noble Baroness, Lady Chalker, in terms of that linkage, and if so, how. It is of crucial importance in Africa.
At the micro-level, it is clear that Africa contains a large proportion of the world's most disadvantaged, most poor and least educated people. Business certainly has a role to play as a partner for social development of one sort or another. Indeed, the company of which I was until recently a director and which I still advise, Rio Tinto, which has long-term investments in southern Africa, believes it is the role of companies in Africa to get involved in the development, both social and economic, of the communities where they invest. So business can help in creating capacity, in training and in some of the ways already outlined by the noble Baronesses, Lady Dean and Lady Chalker.
But something further is needed; that is, an opportunity for ordinary people to participate in the informal economy on a scale which is not possible at present. The noble Baroness, Lady Chalker, said that borrowing has a role to play. It does, but at the micro-level also. We have seen promising experiments in South Africa, Tanzania and other parts of east and southern Africa in the use of micro-credit and micro-finance. One with which I have a close acquaintance is the venture in Kwazulu-Natal of Richards Bay Minerals, which is a subsidiary of Rio Tinto, in pavement banks. They started initially in converted containers. That has been extremely successful cumulatively. It is now part of a larger economic development experiment.
Those banks have been lending small amounts, from £7.50 up to £150, often on quite a short-term basis of a month or two; in fact, the average repayment period in those early experiments, which started in 1994, was 10 days. The money was being overwhelmingly used by hawkers, vendors and traders who would buy their essential stock and obligatory cart and be able to take craft and agricultural products to market. In that way they were brought into the informal economy as small enterprises.
Most striking of all is how much micro-finance such as that benefits women in particular. I believe that women are the great unharnessed opportunity of Africa. The vitality and energy of African women have to be seen to be believed. There is a lot of energy and potential for leadership in the emerging countries of Africa. Micro-credit is one way to allow small business people to realise opportunities which they would 284 otherwise not be able to do. In fact, the experiment I talked of has succeeded, over six years, in creating 3,500 jobs and 830 new micro and small businesses—one can visualise how small the businesses must be.
So I recommend maximum support by the Department for International Development and for companies operating in South Africa to act as bankers and enablers of micro-credit. First, it helps to give people a taste for economic life, for self-management, for money management, for how to meet obligations that are a prerequisite of commercial life. Secondly, it definitely helps sustainability. We had in your Lordships' House a few weeks ago an interesting debate on sustainable livelihoods. Micro-credit is often the means by which people can define for themselves sustainable livelihoods. It is particularly important as a means of enabling women with the confidence to play a full role in that informal economy. Micro-credit has been successful in India, the Far East and in other parts of Africa.
Most striking of all is the fact that the apartheid regime in South Africa really discouraged two forms of activity by the black population. It discouraged people being artisans—that takes us back to the issue of trading capacity—and discouraged black people from knowing how to mend motor cars and windows and learning how to do plumbing. It thought that such jobs ought to be reserved for the white workers of South Africa. The regime also discouraged entrepreneurs—and thus the very possibilities that micro-finance and micro-credit can open up.
Therefore, in creating capacity and recycling credit at the base of the economy—not just simply at the top with the grand investors and the major banks—I hope that Her Majesty' Government will continue to pursue at that rather humbler level all the opportunities that micro-finance and micro-credit make available. In my opinion, the future of Africa economically lies on the whole with more micro activity and rather less grandiose schemes.
§ 3.40 p.m.
§ Lord St John of Bletso
My Lords, we are grateful to the noble Baroness, Lady Chalker, for having given us this opportunity to debate the current challenges and opportunities facing the African continent. During her long period as Minister of State responsible for overseas development, the noble Baroness played a key role not just in promoting democracy in many parts of Africa, but also in the implementation of the many economic reform programmes on that continent. Sadly, however, the African continent has been written off as a lost cause by many commentators. I was therefore pleased that the wording of the noble Baroness's Motion addresses the positive opportunities and challenges in Africa.
For obvious reasons of my background, having spent most of my life living in South Africa, I wish to focus my remarks on the political and economic challenges and opportunities affecting not just South Africa but also the entire region of southern Africa. I say "political" because the economic success of any 285 country in Africa is obviously inextricably connected to the political stability of that country. Although there are certainly many positive aspects to speak about in southern Africa, it would be naive of me to paint a purely Dullish, upbeat picture of the region, especially in the, light of the regional conflicts as a result of the civil war in the Democratic Republic of the Congo, the devastating recent floods in Mozambique, the seemingly endless civil war in Angola, and the recent collapse of the Zimbabwean economy.
Under the leadership of Nelson Mandela, South Africa achieved the political miracle through his policy of promoting reconciliation. South Africa now needs to achieve a similar economic miracle by enhancing economic growth and creating more jobs. Since the political transformation in 1994 there has been a strong emergence of a black middle class. The central difficulty for President Thabo Mbeki is how he can preserve the position of the newly empowered middle classes while generating a huge increase in jobs for those outside the charmed circle. As has already been mentioned, the poor overall education and skills level—a legacy of the apartheid years—has not helped his cause. Unemployment, excluding the informal sector, is estimated at around 40 per cent of the labour force, with the obvious result that crime has become endemic and a major concern for foreign investors and for locals living in South Africa. Labour economists are increasingly worried about the breakdown in the relationship between growth and jobs. But I believe that President Thabo Mbeki is firmly committed to speeding up the economic reforms and boosting economic growth.
South Africa has implemented prudent macroeconomic policies keeping inflation firmly under control and reducing the budget deficit. It has achieved a fairly stable currency as a result of these measures. In addition to the stable economic environment, the country has an excellent transport, communications and financial services infrastructure. Britain has certainly played a key role as one of South Africa's main trading partners and recently assisted South Africa in the delicate European negotiations on the Free Trade Agreement, giving it wider access to sell its goods in these markets. Sadly, these negotiations have been long protracted and, I believe, have left many South Africans feeling very disenchanted with the process of encouraging South Africa into such markets.
For South Africa to succeed—certainly if the country is to benefit from and contribute to a regional revival—peace needs to be restored in southern and central Africa. Further, the country needs to attract a lot more foreign direct investment. When I say "foreign direct investment", I see this as long-term investment rather than short-term capital flows into the bond or equity markets. South Africans have become increasingly aware of how inefficient much of their industry is, especially formerly heavily protected sectors such as the motor car industry. In the area of infrastructure, more public/private partnerships are needed in southern Africa. The World Bank is trying to facilitate this.
286 I turn now from South Africa to Zimbabwe. Zimbabwe's military intervention in the civil war in the Democratic Republic of the Congo has cost the country dear and plunged the economy into one of the worst financial crises in its history. This has resulted in an escalation of social unrest. The lack of transparency and democracy over the past two decades has led to rampant corruption in the country. I just hope that the forthcoming general elections will he free and fair. Many commentators are concerned by vote-rigging tactics and the lack of checks and balances. Although I have tabled a Question on the subject for next week, I would appreciate it if the Minister could elaborate on what measures Her Majesty's Government are taking to ensure that these elections will be free and fair.
It is important for Africa that Zimbabwe recovers from this crisis. It has had an obvious knock-on effect for several British companies, such as Standard Chartered, Barclays Bank and BAT, which have billions of dollars invested in the country. Many countries have halted new aid to Zimbabwe because of its human rights violations, government corruption, economic mismanagement and its military involvement in the Congo. Much of this aid was targeted at rural development, education, health and sanitation programmes, which are essential for those living in poverty. On the positive side, the country—and the economy—has huge scope for growth in agricultural exports, notably tobacco, the mining sector and tourism, combined with the highest literacy rate in Africa, as well as a well-trained workforce. The potential for economic recovery, should there be political stability, is huge for Zimbabwe.
The noble Baroness, Lady Chalker, spoke of the tremendous achievements in Mozambique after so many years of civil war. After all the encouraging economic reforms over the past few years enhanced by foreign investment and privatisation, Mozambique has suffered a calamitous setback as a result of the recent devastating floods that will particularly affect many parts of the rural economy in the south of the country. Roads and bridges close to the Limpopo and Incomati rivers have been washed away and maize fields submerged. The floods have also destroyed a lot of the crops in the eastern part of South Africa, which supplies much of the food for Maputo and the surrounding area. For Mozambique to revive the economic recovery at the same pace as before the floods, the transport infrastructure will need quickly to be repaired and peasant farmers supplied with food until the next harvest.
There are reasons to be optimistic about the future of Mozambique, despite the fact that 11 million of its 16 million people are living below the poverty line. The northern provinces, which have more fertile land, were not affected by the recent floods. Many Mozambicans have not yet moved beyond subsistence farming lo take part in the modern industries of aluminium smelting, tourism and the financial services sector that are driving the current economic growth. I hope that as a result of the recent crisis there will not just be an increase in aid flows, but also much more debt relief for the country.
287 Finally, President Thabo Mbeki's vision of an "African renaissance" is based on the uncontroversial idea that hard work, economic growth, democracy and the fight against corruption will help the continent to realise its undoubted potential. It is patently clear that Africa's economic development is inextricably linked to political developments and peace. I support Her Majesty's Government's endeavours, and particularly those of DfID, to promote this ideal.
§ 3.50 p.m.
§ Lord Howell of Guildford
My Lords, I warmly congratulate my noble friend Lady Chalker of Wallasey on promoting this debate. I applaud not only her past record in government but also the work she now does in the field of African development. When I travel south of the Sahara her name is a byword for sympathy, understanding, empathy and creative optimism in helping the African nations to develop in extremely adverse circumstances.
I add a few words of praise in a completely nonpartisan spirit for the present holder of the office of Secretary of State for International Development. Clare Short brings great vigour and optimism to her job and seeks to call to our attention the vast importance of development in the poorest parts of Africa and elsewhere and the vast difficulties that exist. As is always the task of holders of that office in any government, she tries to mobilise serious, dedicated and widespread support for the development cause.
Clare Short has made a number of excellent speeches. Indeed, many others have made speeches. If speeches were the currency of development, Africa would become rich, so many speeches and words have been generated. Unfortunately, Africa is not becoming rich, but poor. Many parts of Africa are poorer now than they were in 1960 and are still going backwards. It is also a very violent place. Some noble Lords may have read the chilling and devastating book by the leading American journalist, Robert Kaplan, The Coming Anarchy, in which he describes in detail what is happening in many African countries. That description is remote from the kind of glossy picture sometimes portrayed by elite groups at the UN and other international agencies.
Sierra Leone, although it is temporarily stabilised, is the poorest country on earth. The Ivory Coast used to be rich from cocoa exports but has taken a dive as its forests have been stripped. Somalia has no government at all. Kenya, where I went with starry eyes in the 1960s to help with the Federation of East Africa, was an efficient and prosperous state but has sunk down and down into greater difficulties, corruption and chaos. AIDS is gripping poor Zambia; Zimbabwe has AIDS and bad politics, as we have just heard in the telling and informed speech of the noble Lord, Lord St John of Bletso. There is war in Congo Brazzaville and in Angola. Even South Africa, which I greatly admire and love, is a violent country with a murder rate six times that of the United States and five times that of Russia. Central Johannesburg is 288 becoming almost uninhabitable. These are steps backwards, not forwards. We must contrast the positive side, which my noble friend Lady Chalker stressed so strongly, with the reality of some dreadful developments.
What are the problems? There is no doubt that the whole globalisation process produces good and bad, tensions and opportunities, and is doing so in some of the poorer societies and nations of Africa. The old idea that pouring billions of pounds worth of aid into Africa would achieve something has proved totally wrong. The billions have gone in; development, in general, with marvellous exceptions, has not occurred. The whole school of development economics is fundamentally wrong in terms of what drives development. The model of people such as W W Rostow and the generation of economists who looked at economic factors but failed to look at the constitutional and legal factors and the underlying questions of good governance, which have been rightly mentioned, was simply wrong.
Much nearer the mark was the noble Lord, Lord Bauer, a Member of this House who was much derided at the time for saying that the key to economic growth lay in the historical dimension of what had happened previously and in the customs and the constitution of the country concerned. By taking account of that, one would understand what made growth happen; if one simply poured in money, one would not. He argued that,understanding of antecedents was critical to the understanding of the current social phenomena and how development would proceed".He was right. Those who derided him were wrong. It is not more and more aid that will move these African countries forwards rather than backwards; it is far greater concentration on basic things wrapped up in the phrase "good governance". I refer to respect for property and property rights so that you can invest without having that investment removed from you. I refer to law and order and the confidence of knowing that some roaming, illegal gang will not come along at night to slaughter your family and take your possessions. I refer to political stability—government that is soundly advised and with the legal system entrenched. I refer to reasonable freedom from corruption. One cannot be too strict about that as there will always be a degree of corruption. One cannot eliminate it entirely. That is one important starting point which I think we have to accept if we are to see progress in Africa. We must be careful with the word "democracy". The word flows easily from the lips of many lecturers and elite groups, but there is democracy, pseudo-democracy and the trappings of democracy. We may find better prospects for the future in the model of Uganda today. President Museveni attended the Select Committee in the other place which I had the honour to chair. When eager young MPs asked him why his country did not have democracy, he replied, "How long did it take you to achieve a proper democratic system—300, 400, 500 years? What do you expect in Uganda?" If it is only pseudo-multi-party democracy, with soldiers chucking grenades into the middle of it, that does not 289 lead to development but to more chaos and more difficulty. We need to be careful as regards preaching about democracy being the answer and the model for Africa to follow tomorrow morning.
My noble friend Lady Chalker is totally right to say that Africa needs private investment, the return of flight capital and debt relief. Somehow, capital has to be injected back into Africa. There is much private investment in emerging countries—244 billion dollars last year. However, as my noble friend rightly reminded us, the vast proportion of it does not go to Africa. How do we get that flowing again? I believe that the roots of the development must be humble and focused on the smaller owner, the smaller processor, the smaller factory and the smaller farmer. I always admired the model of what was once known as the Colonial Development Corporation and which later became the Commonwealth Development Corporation. I admired that model over the years from the days when Evelyn Baring was chairman. It adopted the right approach to small-scale, private enterprise development. We should forget the big, glamorous schemes and the giant aid flows and get on with small-scale development in the form of agriculture, processing and distribution. My noble friend is absolutely right to say that that is what is needed.
Access to markets is extremely important. I am shocked by the way in which the American trade unions at present are blocking African textile exports to the United States. I am shocked to see how many other people who generally preach virtue and development when their own specific interests are threatened put obstacles in the way of exports from the poorest parts of Africa into the great markets of Europe and the United States.
Perhaps I may quickly run through my list of world institutions. Can they do more? The World Bank seems still not to have its tasks properly focused. Much too much effort is going into concessionary lending to Argentina, Mexico, Brazil and China—all countries with huge access to private capital. If we need this institution, why is it not concentrating much more on the poorest countries?
Why is the IMF playing around in this area so unsuccessfully when it should be limiting its activities, as the Melzer report rightly recommends, to liquidity crises and short-term situations? It is getting into a muddle about its role and stepping onto ground which should be covered by the World Bank.
As to the United Nations, splendid and excellent work is done by its agencies hut, again, it seems to be losing its focus. The UN should be defining and upholding the rules of international order and continuing with its works of mercy. Yet it appears ready to invade the sovereignty of nation states and to try to umpire between good and evil in ways which usually end up with the poorest suffering. We need to see change in all those areas if the African development pattern is to take off.
I conclude with one brutal and awkward question: does Africa really matter at all to our electorate? We have to ask that question because development policy 290 must win support in our country at large. No amount of wishful thinking and idealism can get round that fact. I believe that in the end Africa is strategically extremely important in terms of our precise national interest. Disease, war, migration and environmental destruction all threaten our cosy societies, threaten Europe and threaten global stability.
We will be saved, not by the world government or even more aid, but by what Kofi Annan called, in his Commonwealth lecture last week, "solid frameworks of law". If we can work out how to get from here to solid frameworks of law in the small and medium-sized states of Africa, we will have secured a better path to development than anything a thousand economic remedies or theories can offer. It is the realists, the investors and the hard-headed businessmen rather than the idealists and the foreign aid enthusiasts who can and will bring this about.
§ 4.2 p.m.
§ Lord Desai
My Lords, it is a pleasure and a privilege to take part in this debate which was introduced so ably by the noble Baroness, Lady Chalker. I appreciate following the noble Lord, Lord Howell because he mentioned my former colleague, the noble Lord, Lord Bauer. I want to link the remarks attributed to the noble Lord, Lord Bauer, with some of the points made by the noble Lord, Lord Howell. They are pertinent.
Let me begin with the question asked by the noble Lord: does Africa matter to us? I think I do not care; Africa matters to Africans. We should worry about Africa not because it is in our interests or to our profit—or even because it is to our detriment that Africa may spread disease—but because many people live there. Their well-being should matter to us regardless of whether or not we do business with them. We shall do business with them, but we should take an interest in Africa because many Africans live there.
For far too long and throughout the Cold War, we have tolerated misgovernance in Africa. We aided and abetted bad governance—we gave lots of money to people like Mobutu—and we should not now suddenly shake our heads and say, "The mess you have made is nothing to do with us. When are you going to behave yourselves?"
I remember that in the 50s, when I began to study development economics, Africa was not a poor country; Asia was. People in Asia looked with envy at Africa—at Ghana, Nigeria and Kenya—and thought, "Aren't the Africans lucky? They have lots of land, lots of natural resources and not much population". We thought that they had all the institutions that had been given to them by western countries. Asia was the big worry. I remember people saying in the mid-60s, "If only India and China could feed themselves, there would be very few problems left".
It is interesting to think of how Asia has taken care of its own problems, and Africa has not. I think that, fundamentally, the key lies in the way that Asia has looked after agriculture and rural development, and Africa has not. I support what the noble Lord, Lord Holme, said in that respect. Many years ago, 291 Peter Baher reminded us that agriculture in Africa, especially in west Africa, is women's business. Trade is women's business. Many development agencies when they first went to Africa forgot this—they did not know—and so men were given agricultural grants. But men did not know much about agriculture; they had never had experience of it before.
One way of reviving African economies is to go back to the rural development issue, where again micro-credit helps. There we will find that African people have natural habits of entrepreneurship, especially African women. It would be a great opportunity for Africa to revive those trading practices and exports. After all, west Africa used to be a major exporter of agricultural products. But those economies have been smashed up by people who thought them unfashionable. We now know that those people were wrong. They followed the wrong ideology of starting industrialisation and transferring the surplus from rural to urban areas; and they indulged in certain fashions, as newly independent countries do.
However, we have to admit that at that time we were part of the problem but not part of the solution. We now have to examine our own role and say to ourselves, "Should we do too much? Should we not allow Africa the opportunity to look after itself? Helping, yes, perhaps; but not again laying down the law as to what it should do this time. We did it last time and we got it wrong".
I should like to concentrate on the theme which, to me, is the most important key to development in Africa. I refer to export-oriented rural development and micro-credit. In that context, one of the major concerns is not only democracy but decentralisation. It was because of a concentration of power in the urban areas and capital cities that a massive misallocation of resources took place. Once again, we should take the message of devolution of power and decentralisation to Africa—I am sure that DfID is doing so—and of giving women their proper role in local politics.
There are good examples of that. In India, seats are reserved for women at the panchayat level. It has been a long time coming. It has not been easy because men do not readily give up power. It is important that we push the idea of a combination of decentralisation, devolution of power, micro-credit, and rural development to revive Africa's fortune. It is obvious to the people concerned that that is the way out; it affects their livelihoods and they hardly need telling. We need basically to get out of their way and to help them to achieve what they can.
Many noble Lords have said that from the mid-50s onwards—almost 50 years ago now—the big failure in Africa was a failure of governance. A few years ago, Basil Davidson, a long-standing student of Africa, wrote a book entitled Black Man's. Burden—I recommend it to noble Lords—in which he pointed out that nationalism cost Africa dearly through the setting up of small nation states. Those nation states, indulging in their own fancies—as they were wont to do—cost Africa a lot of valuable surplus which was not reinvested. That was combined with the wrong 292 theory; namely, that all business, especially private business, was somehow "anti-people", and that did not help either.
I agree with the noble Lord, Lord Howell, that issues of governance are again prominent. I should not go so far as to say that Africa does not need democracy; I still believe that democracy is a good thing. We do not insist, for example, that, because the railroad happened in Western countries, Africa should go through all the stages that those countries went through before having railroads. We encourage everyone to have the latest technology. Why, when it comes to politics, Africa needs 500 years to develop democracy, I do not understand.
Centralised democracy at national level is not enough. What are necessary are vibrant connections at local as well as national level. To use another clich00E9;, the quality of civil society is very powerful. One African country I have visited more than any other is Sierra Leone. I used to go there as an external examiner in the days when the Fourah Bay college was a great university and external examiners were honoured and the red carpet was rolled out for them.
Since then, I have seen Sierra Leone falling apart in the most amazing way. In the late 1970s, it was not the poorest country in Africa. It was a properly governed, good country; it had a good infrastructure and so on. The most surprising thing I found on revisiting the country was that there was no newspaper. In Freetown, it was not possible to get hold of a tabloid or a broadsheet which was readable. All that was occasionally available was some grubby thing with four pages. That should have triggered some idea as to where the problem lay. There was no civil society, no standard channels by which people could operate outside the political system. The political system monopolised all social life.
Africa is much more in need of the forces of civil society, which would act as a counterbalance to politics. Politics of itself, and the monopoly of power in Africa, have done a great deal of harm. However, I am sure that enough things are happening in Africa for Africa to take care of itself.
§ 4.12 p.m.
§ Baroness Park of Monmouth
My Lords, I, too, thank the noble Baroness, Lady Chalker, whom I still regard as probably our best secret weapon in Africa.
Africa has come a long way. My father walked from South Africa, where he arrived at the age of 20, to what was then Nyasaland, now Malawi, in 1896—over a century ago. I arrived in 1922, at the age of eight months, by sea at Beira in Mozambique and travelled up the newly built railway to the Zambezi, then, as now, in flood. My journey from southern Tanganyika to the coast at the age of 11 to go to school in England took 10 days, first walking, then by lorry through a plague of locusts, then by train. We had to stop to collect the wood to fuel the train. We lived in a house built of mud and wattle. We had no electric light, running water, telephone, radio or car, and I spoke the local African language almost before I spoke English. 293 Law and order was kept by one district officer and one or two Askaris (native policemen), and justice was given in the courts. Years later, I heard Robert Gardiner tell an audience of young Zambian diplomats that although they should now grasp and enjoy their independence, they must never forget that it was to the British that they owed the rule of law which had replaced tribute to the witch doctor and the chief.
I believe that the British tried, as did the French in a different way, to leave an infrastructure to govern each country as they withdrew. I believe also that, under pressure from both political correctness and financial stringency, and perhaps a degree of disgraceful indifference, we left too soon. But the real disaster which has destabilised the centre of Africa was the disgraceful vacuum left by the Belgians when they gave independence to the Congo, where I served for a year before independence and for over a year afterwards. There were at independence 12 graduates in a country the size of India. No civil servants and no members of the professional class (doctors, teachers, lawyers, accountants) were available to administer a vast and rich country in the modern world. Unilever and Shell alone produced people with experience, some of whom became Ministers. One from Shell, alas, was eaten in a tribal war at the very outset of independence.
The leaders who emerged, many of them, at the beginning, men of quality and principle, Mobutu included, struggled, but anarchy and chaos ensued, and the UN presence, when it came, was a disaster too—wrongly conceived. Three days after independence and after meeting Ministers from Nigeria and Uganda, two of Lumumba's Ministers came to me to ask whether they could after all change their minds and whether the country could become a British colony. I had to say no. Six months earlier, a delegation of former Eoka men from Cyprus, who had settled in what was then Stanleyville, now Kisangani, demanded that the British should take over the Congo. I expressed some surprise that that should come from men with their background, but they said firmly that the British could be relied upon to run an independence in a tidy way.
I later served in Zambia for four years. That country too, sadly, although it had a number of good civil servants and professional men, including barristers, and one very profitable industry, copper, which later failed, did not have the infrastructure to run an effective economy in the modern world. President Kaunda told me as late as 1992 that he had always had to reshuffle the same five or six able people in the key jobs of chairman of the bank, secretary to the Cabinet, and so on, and that in the end they had usually defected to the much more lucrative private sector. I knew many of those men. They were my friends. And, alas, it is true: it was very tempting for them. That, quite apart from party pressures, had made it almost impossible to administer the complex and sophisticated regimes required by the IMF and the World Bank.
294 It becomes all the more tragic that another country which, after a long and debilitating war, entered independence with an excellent infrastructure, a well-educated population and the capacity to flourish economically, Zimbabwe, should now he in such dire straits. The noble Lord, Lord St John of Bletso, has spoken about this, but I should like to say a little more. I have family connections there, third-generation Zimbabwean citizens, tobacco farmers, who bought their land well after independence and who are committed to the country for good or ill. When I was serving in Zambia at the time of UDI, I also made many friends in both the ZANU and ZAPU groups in exile, and was several times denounced on Salisbury radio as a friend of terrorists.
At the Lancaster House settlement it was recognised that land reform was essential and proper, but also that there should be compensation from the government for land acquired for resettlement by African farmers. The Land Acquisition Act 1992 laid down the right to compensation and for appeals against arbitrary acquisition. It was in any case intended originally to apply only to derelict farms or farms held by foreigners or absentee landlords. Some land was acquired subsequently by the government, but without proper schemes to train and fund the Africans whom they wished to settle there and grow tobacco or raise stock. Thus they failed to be viable and the land either lay unused or had in any case been given to politicians and others to whom the government owed favours. Over the years, the farmers union has trained many Africans in its farm development colleges as farm managers and has worked with small farmers so that a corpus of people with the necessary skills to run a modern enterprise is gradually being created. The union believes in a programme of land reform which would contribute to job creation and stability and which would develop the rural areas. It believes also that the government should enable Africans trained in this way to acquire title to their land.
However, in 1997 the government moved to serve acquisition orders on over 800 individual farms. Since they announced that there would be no compensation, since the economy depends for some 44 per cent of its foreign currency on the revenue from agriculture, and since, not least, agriculture employs a very large proportion of the people (over 250,000 farm workers would be thrown out of work), that proposal seriously destabilised the country. Donors such as the IMF, the World Bank, the EU and indeed HMG subsequently sought and received many reassurances that there would be proper compensation, even if it had to be phased. Since then, as we all know, those promises have been broken several times and international aid and loans have been frozen. Zimbabwe's funds are daily depleted to pay for the war in the Congo and, indeed, for President Mugabe's own excesses, and with no money to pay for the import of fuel the country is fast running down. Perhaps the saddest thing is that Zimbabwe has more in its favour than almost any other country in the region: a well educated population; plenty of entrepreneurs, white and black; 295 until now a relatively flourishing economy; good race relations, and a white population who are citizens, not settlers in an alien land; a courageous press and effective trade unions; a respected judiciary, which is not afraid to challenge the state; and a population both sensible and sophisticated enough, despite much tribal hype, to vote in a referendum against the party line and for the interests of the country. They have recognised that the so-called "veterans", very few of whom are old enough to justify the title, are the president's bully-boys. On the farms that they have invaded, under party instructions, the African workers themselves are rejecting them. The Europeans are behaving calmly and with good sense under pressure. It would be a tragedy if a country with so much to offer both its people and Africa in general should go down.
It is a country in which all the conditions for economic prosperity exist. I respect the firm way in which the Foreign and Commonwealth Office has been dealing with Mr Mugabe, but I hope to welcome action, stimulated internationally, both to end the wickedly wasteful war in the Congo and to enable a good, effective multi-racial economy in Zimbabwe to thrive as it deserves to do. No country is an island: disaster in Zimbabwe in terms of unemployment and turbulence will mean serious destabilisation in the neighbouring countries, not least Botswana, South Africa and Zambia. I cannot believe that we and the Commonwealth do not have both the power and the interest to exert real pressure on the man responsible, and to provide an international presence at the election, as the noble Lord, Lord St John of Bletso, suggested. The people could not have made it clearer that they wish to reject the policies of the man responsible.
We ought not to forget either that if it is not made possible for the natural leaders of Zimbabwe, such as the African trade union leaders, to have an effective voice in the affairs of their country, the president could well bring back the army and install yet another pernicious African military regime which could repeat the atrocities perpetrated in Matabeleland some years ago. That would be a terrible end for a good country which deserves better.
I conclude by endorsing what was said by the noble Lord, Lord Holme of Cheltenham, about the power of the women of Africa. They are indeed remarkable. I can remember being in despair in Accra on one occasion because I needed to get to Togo and the High Commission had assured me that it was totally impossible—no aeroplanes, roads under water, no way of getting there. I went to the market and asked a mammy, one of the large African market women, "Do you have a mammy wagon going to Togo?" "Yes", she said. I said, "Can I come?" She looked at me and said, "Fine", so I climbed on the lorry. I was put in the front, of course, as the guest of honour, and my suitcase was banished under the goats, the cheeses and the people in the back. I recall that the wagon had written on it some slogan such as, "God is with us". We needed it; the wagon had no brakes$ However, we got to Togo and 296 the ambassador was probably as surprised as the High Commission, but I was not at all surprised. African women can do anything.
§ 4.22 p.m.
§ Lord Tomlinson
My Lords, I welcome the opportunity given to us by the noble Baroness, Lady Chalker, to debate this important matter this afternoon. I also particularly welcome the remarks of my noble friend Lady Dean concerning the valuable work of the Warwick Manufacturing Centre, particularly in postgraduate training, in South Africa. The work of that centre and Professor Kumar Battacharia is a very good example of what can be achieved in terms of the practical promotion of excellence in that continent.
I found myself somewhat surprised to be so fully in agreement with the points made by my noble friend Lord Desai about the relative confidence that he has in the continents of Africa and south Asia. Twenty years ago, when I was a junior Minister in the Ministry of Overseas Development, I was very optimistic about Africa and very pessimistic about South-East Asia. Twenty-five years later, the relativity of my thinking has changed somewhat, despite the threats of nuclear proliferation in South-East Asia and despite the beacons of hope which exist in Africa. The beacons of hope are clearly there, but they are very much offset by some of the often preventable and self-inflicted tragedies, some of which we have heard about this afternoon, such as the tragedies of the Democratic Republic of the Congo, Sudan, Zimbabwe, Sierra Leone and Angola. There are, of course, other areas which we have not discussed. I refer particularly to the bitter disappointment of certain areas such as the Magreb and parts of the Mashraq, where the European Union early in its development had devoted so much energy to the negotiation of agreements.
I believe that parts of Africa have clearly been successful. However, other parts of Africa give cause for deep, continuing and perhaps even deepening concern. They are riddled with conflict—ethnic and religious clashes, tribal conflicts, conflicts over post-colonial borders—and those conflicts are frequently compounded by the existence of corruption. In addition, I believe that there is cause for concern which has recently been highlighted in the very important but equally depressing report of the International Committee of the Red Cross, entitled War, Money and Survival. It suggests that,Prolonged internal violence in countries with rich natural resources but corrupt or weak governments may best be understood as battles for money or resources".The flavour of that report is to be found in an excellent article which was published in the Economist of 4th March, which states:Wars in such countries serve some participants well. Violence provides a cover for the extraction and smuggling of resources, and armies, either private or national, give the means to control workers, transport and territory. War itself can be the means of getting rich (for example, in trading arms or by fighting as a mercenary) or of survival (bands of ill-educated young men 297 recruited into arrives in Sierra Leone … make guerrilla warfare a way of life). Such participants may continue to exploit a war rather than win it and end it".I believe that that somewhat depressing scenario is evident across much of the continent of Africa.
However, the world must not and cannot give up the commitment and the objective of concerning itself with the economic growth of Africa. In my opinion, the trade opportunities for that continent and with that continent must be developed and fostered. We have some responsibility in that respect. For example, the Uruguay Round was not a round which showed any concern fix the continent of Africa. To suggest that everybody benefits from trade liberalisation is, in my opinion, the worst sort of cop-out. In relative terms, Africa did extraordinarily badly by comparison with us, with the European Union, with the United States, with Japan. If poverty is a relative concept, that means that the fate of Africa was worsened by the Uruguay Round, and all the signs for the current WTO negotiations are that Africa is not placed to fare any better. We there fore have to accept responsibilities in addition to standing back and criticising the appalling tragedies as they unfurl before us.
However, Africa is well placed to benefit from two current changes. There are obvious benefits to be gained from the increasing commitment to debt relief. There is also a benefit to be gained from the new European Union/ African, Caribbean and Pacific agreement, the successor agreement to Lomé0 IV, which has just been negotiated, facilitating market access for the least developed countries.
On the subject of debt relief, I merely mention that debt relief should not be seen by anyone, as I am sure it is not in your Lordships' House, as an end in itself. If debt relief is to serve a useful purpose, the financial benefits that accrue from it must be properly deployed and used to the right ends. Poverty reduction and elimination, the development of education and literacy, and the capacity to compete in trading terms with the world must be the beneficiaries of the financial resources that flow from debt relief.
As to market access, it is perhaps appropriate that in this debate we should regret both the delay in and the dilution of the European Union/Republic of South Africa trade agreement. Agreement should have been reached at the Cardiff Summit. It is to the shame of the EU that, for petty advantage on marginal products, that agreement was so long delayed. It shames us all that for those marginal benefits the Republic of South Africa was left without a trade agreement, despite the fact that EU heads of state and government had invited Nelson Mandela to Cardiff in the expectation of such an agreement.
That is now behind us and we have the new European Union/ACP agreements, which are substantially better than those that they replaced. The EU has given a unilateral commitment that essentially all products will be both duty free and quota free. I draw particular attention to the words "essentially all" and hope that when my noble friend replies to the debate she will give some inkling of current Whitehall thinking on what they mean. I hope that they mean 298 precisely that, and that the Government will seek to ensure that the minimum number of exemptions are inserted into those agreements.
Goods exported by LDCs can now come here. The clause which discriminated between least developed and non-least developed LDCs has been removed from the agreement. There is also an extremely important proposal relating to simplified goods of origin in the agreement. Although the EU has traditionally been the most generous in the supply of preferential terms, those terms apply only to the LDCs within the framework of the Lomé Agreement. For all other LDCs in Africa which are dependent on the generalised scheme of preferences for access to the European Union, that scheme does not give as good access to markets. We must ensure that they have the capacity to compete and have access to our markets on the same terms as those now available to countries which are the beneficiaries of EU/ACP agreements.
In this very useful debate we have focused on a number of points. The final test is how we help Africa to promote its own economic growth, which must be achieved. One thing that we can provide is tariff-free and quota-free market access to all LDCs. The "essentially all" means exactly that: the minimum number of exceptions that are humanly possible—and even those must be worked out of the system.
I again welcome the debate and congratulate the noble Baroness, Lady Chalker of Wallasey, on giving us the opportunity to debate the matter this afternoon.
§ 4.34 p.m.
§ Baroness Cox
My Lords, I join all other noble Lords in warmly congratulating my noble friend Lady Chalker on initiating this debate and inspiring us with her wealth of knowledge and experience. I focus on two areas: one a place of hope, albeit very precarious; the other a place of increasing despair. I refer to Nigeria and Sudan.
I begin with Nigeria from which I returned yesterday. I had the privilege of meeting the president and several ministers of state and of visiting Kaduna, the scene of recent horrific riots. The elections last year saw a welcome return to democracy and the reinstatement of Nigeria as a member of the Commonwealth. President Obansanjo subsequently set out his government's priorities, which include fundamental economic reform, an anti-corruption drive, and poverty eradication. The president needs and deserves strong support of every kind to achieve those objectives.
The ministers to whom I spoke emphasised the need for debt relief. Sadly, they also expressed concern about Britain's apparent lack of commitment to investment in economic development. They feel very disappointed by the lack of investment by British companies compared with other countries, including many in the European Union. Particular concerns were expressed about the need for investment in the construction, telecommunications, energy and oil industries. British companies have not only failed to invest relative to other countries but in many cases have pulled out.
299 These are difficult days of transition for Nigeria which has suffered so much under undemocratic and brutal rulers. As the president and his government strive to maintain democracy and curtail corruption, they need help with economic development. It is hard to sustain democracy when people have empty stomachs. I was, therefore, saddened to hear Ministers express disappointment over Britain's record. I ask the Minister what steps are being taken by the DTI actively to encourage investment. Will more active measures be taken to help Nigeria in these critical days?
I follow my noble friend Lady Park with a brief personal anecdote which may make a point more strongly than generalities. Just two days ago I travelled by car from Kaduna to Abuja. When we were in the bush about 100 miles from either city, and away from any village or settlement, our car broke down, the bearings of both back wheels having disintegrated. There we were in the middle of the bush with absolutely nothing. Suddenly, three young men who appeared from nowhere proved themselves extremely competent mechanics. They removed the rear wheels from the car and suddenly produced from nowhere replacement wheel bearings for our Honda. One would be hard put to find such brilliant service if one's car broke down in Britain. In the bush we found an example of local Nigerian skill, competence and enterprise.
With that illustration, I return to more general points. The Nigerian ministers identified other priorities, including poverty alleviation and healthcare. The former can be assisted by economic development; priorities for the latter include assistance with immunisation, malaria and communicable diseases. I ask the Minister whether DfID will assist in satisfying those very urgent needs.
I turn to the recent tragic events in Kaduna and elsewhere in which hundreds of people, both Christians and Muslims, were killed and many homes and properties were burnt. Tension remains extremely high. One member of our group was involved in a very frightening incident which nearly developed into a lynching. The tensions and riots are associated with moves to implement Sharia law in the northern states. I met leaders of both Christian and Muslim communities, all of whom agreed on the need for dialogue to promote understanding and peaceful co-existence; but deep divisions still remain. One imam, the national co-ordinator of the Muslim-Christian Dialogue Forum, confirmed the continuing commitment of Muslims to introduce Sharia law in the north. One Anglican bishop who was deeply committed to working for peaceful co-existence spoke of his fear that Nigeria would disintegrate under these pressures.
Although the Nigerian leadership has commendably averted the present crisis, there are indications that it may well recur. As we were told, Muslims still want to implement Sharia law and there may be strong international support from other Islamic countries for them to do so. For example, when Sharia law was 300 introduced into Zamfara State, envoys from countries such as Sudan, Saudi Arabia, Iran, Egypt and Libya were reportedly present at the ceremony and offered financial support. Although Muslim leaders give assurances that its implementation will not affect non-Muslims, experience in countries such as Pakistan shows that its penal code has wide-ranging repercussions; for example, in that country countless citizens have suffered from misuse of the blasphemy code.
We were also told by many Nigerians, rather disturbingly, that they believed the motives for implementing Sharia law were not only religious but also political. By exacerbating unrest, they may create political instability which is intended to unseat the president. Therefore, the president and his democratically elected government need strong support as they address the challenges that confront them in this difficult, sensitive and complex situation.
I turn briefly to Sudan. Following the reply given by the noble Baroness, Lady Scotland, to my Starred Question on 13th March, I am concerned that the Government's policy of critical dialogue may be long on dialogue and short on effective criticism. For example, in the response to that Starred Question the Minister apportioned blame equally to the National Islamic Front Government and to the Opposition. That perception could not be further from the truth.
I do not claim that the opposition forces, including the SPLA, are angels. War is war. But the opposition forces do not have an agenda of ethnic cleansing of civilians from their homelands; they do not callously and deliberately bomb civilian targets such as schools and hospitals; and they do represent the previous democratically elected government. Moreover, in our experience, whenever the opposition regained control of an area, they worked hard and fast to establish a civilian authority and civil society. Many Arabs and Muslims from the north whom we meet when they come south to trade and graze cattle in the dry season tell us that they prefer being in SPLA areas because human rights are respected and they feel safe there.
By contrast, the NIF regime, now called the "government of Sudan", was not democratically elected. It represents no more than 5 per cent of the Sudanese people. It took power by military coup and retains it by terror and subjugation. Countless Muslims in the north have been unlawfully arrested, detained, tortured and executed in prisons, and ghost houses. When I visited the NIF leaders in Khartoum in 1993 to hear their viewpoint, there was overt commitment to Jihad against the peoples of the south and the Nuba mountains. The word "Jihad" has many meanings, but the NIF's interpretation is full-scale war with massive military offensives against innocent civilians, with massacres, scorched earth policies, and the abduction of thousands of women and children into slavery.
These policies have been documented not only by us in Christian Solidarity Worldwide but by many other people and organisations, including UN rapporteurs. Recently in the oil-rich lands the government 301 attempted ethnic cleansing of tens of thousands of Africans from their traditional homelands. This has been documented in the Harker report to the Canadian Government. There have been many independent witnesses to recent bombings of hospitals and of a school in the Nuba mountains. A government spokesman even confirmed that the school was their intended target. Right now, while we talk today, government forces are undertaking a massive offensive in Hamesh Khoreb in the Kassala region in eastern Sudan where the Beja Muslim people live.
Economic investment in areas controlled by the government of Sudan only encourages that brutal regime and enhances its capability to carry on killing its own people. This is particularly the case with investment in the exploitation of the massive oil reserves. The government are siphoning off 450 million dollars a year to fuel that war and to purchase weapons to kill their own people. Will the Government please press for a total oil audit?
The situations in Nigeria and Sudan are totally different. Nigeria desperately needs economic investment to accelerate development and to underpin its still fragile democracy. I hope that Britain will improve its record there. By contrast, Sudan is looking for economic investment to improve its pariah image and to help to finance its war against its own people.
I conclude by asking whether the Minister will give assurances that the Government will not encourage the government of Sudan, directly or indirectly, economically or politically. Last Monday the Minister, the noble Baroness, Lady Scotland, quoted a figure of 1.5 million people who have suffered in that war. That is a huge under-statement. Up to 2 million have died; and 5 million have been displaced in recent years. Please will this Government—they have expressed an honourable commitment to human rights and an ethically-based foreign policy—look again at the evidence and not be guilty of doing business with a regime which has the blood of millions on its hands?
§ 4.44 p.m.
§ The Earl of Sandwich
My Lords, the noble Baroness, Lady Chalker, does Africa a great service in tabling this debate. Her enthusiasm is infectious. I am grateful to her, and delighted to support the case for improving opportunities for that great continent which still receives only a fraction of the attention it deserves from our politicians and business sector.
My particular concern is for the poorest, and how they can benefit. I know that the economic strength of a nation should ultimately improve the life of everyone, but that trickle-down argument is now discredited. It is equally important that measures must be pro-poor; that is, directed towards the needs of vulnerable sections of society. Those inevitably include a range of political as well as economic objectives, as spelled out in DfID's latest enormous consultation document entitled, Economic Well-being. If policy statements could feed people, 1999 was a bumper year and we shall certainly have enough to go round.
302 People see aid policies as humanitarian and often ask how they can make a difference to the economy. Alongside IMF-inspired reforms there have to be targeted human development programmes. Many of these can directly address small businesses especially in the informal sector, bringing income into the poorest purses. As the noble Lord, Lord Holme, and others have said, there are a number of practical ways in which small injections of aid can stimulate local economies such as the use of micro-credit, loan schemes on the Grameen model, new marketing techniques, education and training, and the strengthening of local institutions. Many of these programmes are run by NGOs in partnership with the local community and government. The noble Baroness, Lady Dean, mentioned housing. I can think of many examples of rural African entrepreneurs starting up with this kind of funding. The CDC was mentioned. Some multilateral agencies like the International Fund for Agricultural Development (IFAD) have an excellent record in bringing skills arid finance into the poorest regions—not as outsiders, but by involving people directly in their own development.
Despite their new commitment to private enterprise, I do not believe that this Labour Government are enamoured of the IMF's adjustment policies in Africa which, although they have moderated, seem to have increased rather than alleviated poverty in the short term. But however bullish our own aid department, Africa has a very low priority in Downing Street. The Government will have technical answers to this debate; and I know there are a host of diplomats and aid workers who are committed to helping Africa, but we also have to ask whether the will is there to improve our trade and investment in Africa.
After all, our trade with sub-Saharan Africa has changed very little, despite some improvement in our imports from South Africa which accounts for nearly half of all our trade. Investment figures are only a guide: they hide the hideous inequalities and injustice of trade which can benefit unelected authoritarian regimes like Sudan, or play one side of a nation against another, such as in Angola. Yet there are British companies which have continued a long tradition of working in Africa, and they should be encouraged.
As a wealthy nation able to give away £3 billion in an afternoon, there can be no doubt about our ability to respond to a country in crisis. We are one of the foremost countries in humanitarian aid. Even with a limited aid budget, we have been faithful to post-conflict countries like Uganda, Sierra Leone and Mozambique, especially where the political conditions are right. But taking a harsher, City view, Africa north of the Limpopo hardly even figures in our economic vision. We regard sub-Saharan Africa as a bloc more like Soviet Central Asia or some far away war-torn region than the vast continent of nations and cultures which has influenced the entire western world.
From our island we have been in the habit of seeing the Anglo-Saxon culture as dominant for at least two centuries. But from another perspective, it has been Africa and the Caribbean which have supported our wealth, our lifestyle and our trade, let alone influenced 303 our culture, cuisine and music for at least that period of time. Many of us in Britain come from Africa, or have lived there. Indeed, we increasingly acknowledge that it was from Africa that our civilisation emerged in the first place.
So how can we repay our debt to Africa in an economic as well as historical sense? The cancellation of unpayable, unsustainable and immoral debt is crucial, but it is a very slow process, especially when linked with poverty alleviation, as we are seeing even in Mozambique. The HIPC initiative, however welcome when it is announced, regularly, by the Chancellor never seems to be adequate. Hopes now lie with the Japanese as they take the chair at the next G8 summit. But can the Minister say something about the Paris Club decision last week? Did Her Majesty's Government, following their new-found entente cordiale in Abidjan, make a formal protest that the decision on Mozambique has been deferred yet again despite the pleas of that stricken country?
Education is critical to the expansion of opportunities, as will be apparent at the World Education Forum in Dakar in April. There can be little hope of increasing family income or limiting the scourge of AIDS if girls are not given more access to secondary education and more status in the local economy. As the noble Baroness, Lady Whitaker, said so tellingly last week, higher literacy must lead to lower infant mortality, and hence to better health and economic potential.
I saw for myself a year ago in Uganda that education was receiving higher priority and had already made an impact on the incidence of AIDS. In Mozambique, in 1996–98, the primary school enrolment rate went up from 62 per cent to 71 per cent even while hundreds more classrooms were being built. Let us hope that those classrooms are still standing and that classes are continuing today.
I was unable to attend last week's debate, but I read the encouraging statement of the noble Baroness, Lady Amos, that,achievement of those [education] targets … is feasible if the political will is there".—[Official Report, 15/3/2000; col. 1590.]I only wish that the same could be said of the 2015 poverty targets which on present trends seem unlikely to be met.
I also hope that we listen more to Africans talking about Africa. I had the pleasure of knowing Chief Anyaoku for a brief period. I am sure that many in the House have appreciated the ability, determination and good humour with which he has led the Commonwealth over many years. The United Nations Secretary-General paid tribute to him at the Commonwealth Day lecture last week. As we have heard, he said that Africa needs more assistance and more technology. One thing he pointed out from an UNCTAD study is that investment in Africa brings a higher return than does any other region, while more than 25 countries have undertaken far-reaching structural economic reforms. Yet Africa received only 5 per cent of all FDI to developing countries. 304 The Central African Republic, Guinea-Bissau, Niger, Botswana, Namibia and of course Nigeria are just a few examples of countries where the internal situation has improved. South Africa still has a strong economy, with all the obvious reservations and legacies of apartheid.
Seen over a longer time-scale, there are many differences in the rates of growth in sub-Saharan Africa. Real per capita income in the region as a whole barely grew between 1970 and 1998. But out of the 48 countries, nine achieved an annual average growth of 3.1 per cent over that period. The noble Baroness mentioned even better examples.
This good news about Africa—and there are many examples of success—is drowned in a continual story of conflict, corruption and misappropriation. I suggest that it is up to our Government to liberalise trade and encourage the private sector, rather on the lines mentioned by the noble Lord, Lord Tomlinson. I am sure that the Minister will say that the United Kingdom is doing a lot in many directions; and it is. But she must admit that we have no real lasting commitment to Africa or even a political initiative to compare with the United States' recent initiative, although we must have at least as many historical reasons and connections for doing so.
§ 4.53 p.m.
§ Baroness Sharples
My Lords, I thank my noble friend for initiating today's debate. I have known her for very many years and she is very much admired and loved on all sides in South Africa. My contribution today is due entirely to the fact that I have had the good fortune to spend annual holidays of a few weeks in South Africa over the past 15 years. I hope that I do not present a too negative picture of the situation there as I see it.
Since 1994, when Nelson Mandela was released—and I do not think that President de Klerk received enough praise for his courage in making that decision—the country has indeed progressed very slowly towards its aim of a rainbow society. Education, however, in some areas is virtually nonexistent because of the difficulty in recruiting teachers for schools in the townships. The police are under severe pressure because of very low salaries and instances of corruption in the force have greatly increased, as one has seen over recent months. The health service is under a great strain, again because of low wages and because many nurses and doctors are leaving the country in search of better rewards. Groote Schuur, the renowned hospital, is a shadow of its former glory, but I suppose that applies to many other hospitals built many years ago.
There appears to be quite a divide in opinions among young people as to whether they should seek their fortunes overseas or remain in their beloved homeland. Much, I feel, depends on how far affirmative action is taken. There are numerous stories of successful university graduates who are white not even getting an interview, while a less qualified black person is employed, sometimes resulting in, for 305 instance, through no fault of their own, the black student having to drop out of medical school half way through the course. That must be a terrible waste of resources.
As noble Lords will be aware, the Cape coloureds—mixed race—feel discriminated against more now by Mbeki's government than they were under apartheid, and frustrated so that they understandably often resort to violence. Violence has been mentioned by previous speakers. The gun culture among the young gives rise to great concern on all sides. That is a priority for the government to tackle and they are doing so. It is the main obstacle to the country achieving more inward investment. People read about it and they hesitate before they invest.
I do not entirely agree with my noble friend Lord St John of Bletso on one point. The roads are generally well maintained, but public transport around the Cape is sadly neglected and those trying to get to and from work find it more and more frustrating, especially over weekends. Illegal immigrants—there are thousands flocking to the Cape in search of employment—add to the problem of the lack of low-cost housing. This year I did notice a considerable advance in building since a few years ago. Four years ago, the electricity, water and the roads were laid on, but nothing happened. This year I have seen a number of houses at those sites.
Three concerns were specifically addressed to me during my last visit: first, there was the insistence by the Europeans on the removal of grappa and ouzo labels; secondly, the sale by the UK of gold; and, thirdly, what they considered to be the very slow reaction of Her Majesty's Government to disaster in Mozambique. South Africa has made great strides in helping her very patient people—they are very patient—to lead better lives.
I hope that on my next visit in 2001 the improvement in the lot of all South Africa's citizens will be more apparent. We all realise the enormous challenges which face that nation and they will undoubtedly look to us for help and advice. I trust that we will not fail them.
§ 4.58 p.m.
§ Lord Cocks of Hartcliffe
My Lords, I thank the noble Baroness for this opportunity to speak about Africa. The noble Lord, Lord Howell, drew attention to the slow growth of democracy and said that we were expecting too much of Uganda. The noble Lord, Lord Desai, asked why people should bother about Africa. Apart from the answers that he gave, we should concern ourselves because western Europe bears a very heavy responsibility for the conditions which exist in Africa.
I have lived in the Bristol area since 1941 and am conscious of the appalling depredations of the slave trade over many years. For a long time, Africa was known as "the Dark Continent". In the 1960s, I heard a lecture by Professor Thomas Hodgkin which he called "The Pre-colonial Stereotype". I hesitate to use the word "intellectual" in terms of myself, but his 306 demonstration of the western European idea that Africa was behind the times and subject to all kinds of absurd notions was a revelation to me. It was built up by the need to justify the colonisation of Africa which was carved up for the use of the European nations.
The British, to their credit, tried to prepare countries for eventual independence. However, the noble Baroness, Lady Park, mentioned Belgium disgracefully totting up the balance sheet, discovering that it was moving into the red and pulling out of Africa. I am grateful to her for her correction, because I had noted that there were 13 graduates in the indigenous population. However, I am more than happy to accept the fact that I exaggerated and to take her figure of 12. The record is not good because we also left those countries with arbitrary frontiers, often drawn with a ruler on a map in the Colonial Office in London. We did not provide the best possible start for development.
There are large Muslim populations in the north, and large Christian populations in sub-Saharan Africa. In that connection, the Labour Party recently discovered the existence of the Memorial Hall in Farringdon Street because it loudly proclaimed that that was where the Labour Party was founded. You could have heard people expatiating on that if you lashed out several hundred quid for a posh feed, which no doubt my noble friend Lord Desai did. However, I resisted.
I have been familiar with the Memorial Hall since I was a small boy because it was the centre of the Congregational Church of which my father was a minister. It was also the site of the LMS. Elderly people in your Lordships' House will think of the LM S as the London Midland Scottish Railway, but it was not to us. To us, it was the London Missionary Society. I used to go around with my little box shaped like a hut—even that was patronising—collecting coins for the cause. We used to collect the ship halfpennies to go towards the cost of maintaining the supply ship, "John Williams", which used to ply between the Pacific islands where we had missionaries working.
As a result, we had Christians in Africa, many of them from the missionary works. I believe that, as a nation, we ought to play a bigger part in sustaining them. From time to time, I have mentioned the welcome contributions from the Bishops' Bench about persecuted Christians abroad. I believe that with such a substantial built-in block vote in your Lordships' House—it is about 26—that is one of their functions. I believe that more could be done by our friends on that Bench about the problems which such people face. In many cases, they are serious.
There are approximately 130 million Muslims in north Africa. In sub-Saharan Africa, 275 million people, or 48 per cent of the population of Africa, are supposed to be Christian. The interface between the two religions is the centre of much trouble, particularly in Nigeria and Sudan which were mentioned by the noble Baroness, Lady Cox.
307 I shall weary the House once more by quoting the 1997 US State Department report. Its author, Paul Marshall, stated that,in the last five years there has been persecutions of Christians in 40 countries. By persecution I mean there may be physical beatings, imprisonment, church burnings, maybe death, I don't just mean discrimination".We must realise that people of our faith are the most persecuted in the world and we must do what we can to help those African communities. The UN rapporteur, Gaspar Biro, said much the same about the conditions in the Sudan. We must try to reconcile the two great religions in order to remove the causes of difficulty.
From time to time, there are serious atrocities in some African countries, but, with our record of the German death camps and the more recent revelations about France which were made during the Papon trial, western Europe is hardly in a position to lecture them about it. Therefore, we must realise that we are in no position to cast the first stone.
When assisting development, we must be careful not to appear to be striking a fresh neo-colonial phase. The people are very proud and independently minded and they are conscious of past history. Therefore, it is most important to ensure that we do not give the wrong impression. Even when we are discussing fossil fuels and the need to restrain their consumption, they may say, "You have had several hundred years of establishing a good standard of living by burning things in the most polluting circumstances and now you are lecturing us". Therefore, we need a new approach that is free from any taint of neocolonialism.
I echo what was said by a previous speaker that in the Commonwealth we have a wonderful example of multi-racial co-operation among all kinds of different nations but with a common theme. Only this morning, there was a debate in another place about the importance and significance of the Commonwealth. That organisation should be one of the main spearheads in our encouragement of development in Africa, which we all want to see.
§ 5.7 p.m.
§ The Earl of Caithness
My Lords, my noble friend Lady Chalker in introducing the debate—for that I am grateful—said that good governance is a must. There are, and have been, exceptions and, sadly, it is an aspect for which Africa has not been well known. Indeed, even when the old guard has gone, some of those taking on the role of senior politicians are proving to be slightly worse than their predecessors. It is sad that politics is a career which the very best in Africa seem to shun.
I want to focus the first part of my remarks on Zimbabwe. That will not surprise your Lordships because I took part in an earlier debate on that country. I am very disappointed, as I am sure is the rest of the world, that President Mugabe is responsible for the systematic rape of a dying paradise. The current crisis in Zimbabwe, as in many African countries, has 308 three basic elements: the crisis with regard to the availability of foreign exchange; the crisis in government financing; and the debt crisis. The first is caused by poor export performance and the withdrawal of multilateral and bilateral support. The next is caused by excessive government expenditure and the high interest rates on domestic debt. The last is caused by the huge growth in debt during the past 20 years.
The total revenue of the government in Zimbabwe is estimated at 93 billion dollars. Their total expenditure is 142 billion dollars. That is a deficit of 49 billion dollars, or nearly 15 per cent of GDP and one-third of total expenditure. The interest on the domestic debt is now running at 5 billion dollars a month, which is a completely unsustainable level. The shortage of foreign exchange is estimated at 14 billion dollars, and that is before the funding of the Congo war is taken into account. That is estimated to cost the Zimbabwean economy 1.5 billion dollars a month in foreign exchange—not a happy situation.
The result of that was brought to our attention by the brave and thorough survey of urban and rural voters carried out between 14th January and 9th February for the Helen Suzman Foundation. That showed that 68 per cent of Zimbabweans believed that life for them and their families had got worse over the previous five years, and 63 per cent expected it to continue to worsen over the next five years. By far the most important issues for voters were rising prices and unemployment, followed by the fall in the value of the Zimbabwean dollar. Only 31 per cent of Zimbabweans said that they were confident that the government were telling them the truth, and 68 per cent said that they had not much, very little or no confidence in the government.
On top of that is the matter of the farming crisis. Nearly 700 farms have now been invaded by Mr Mugabe's young, paid thugs. They are not war veterans. Those farmers are Zimbabwean citizens and many bought their farms post-independence. Not only have they been threatened, abused and attacked, but so have their farm staff. The beatings and the brutalising have been and remain a terrifying experience, the like of which we cannot possibly imagine in our closeted life in this country. There has been no reference in the press to the huge damage to the natural habitat and wildlife that is also occasioned in the invasions of the farms. I have received a report that the situation for many is now worse than it was 20 years ago. We should congratulate the farmers and all the black staff who have been abused on the restraint that they have shown in the face of almost impossible circumstances and huge provocation. Long may their good sense prevail to take the heat out of the situation.
A ray of light in Zimbabwe comes from the strength and independence of the courts. I hope that the noble Baroness will update us on the current situation. I understand that the courts ruled in favour of the farmers and that all the squatters and those who invaded the farms had to be off the land within 72 hours. Those 72 hours are up. Can the noble 309 Baroness tell us the situation in the country, and whether it is true that the government are trying to return to the courts to reverse an unfavourable decision?
That is all gloomy, but I turn now to what I consider to be a chink of light. Some of your Lordships have said that for years Africa has been seen as a "black hole" with no great future. However, I believe that there are now good opportunities. It is remarkable to consider that Africa had a steady annual economic growth during the 1990s, in marked contrast to many other areas of the world where the economies perished during that period; for example, east Asia. I know that it came from a different base, but Africa had a steady growth. The IMF forecasts that the growth for sub-Saharan African countries will be 5.5 per cent—the highest in the world. That represents potential hope for Africa.
I should like to touch briefly on particular aspects where there has been a marked and radical difference from what has occurred in the West. I refer, for example, to the telephone system. In Zimbabwe, it takes approximately 14 years to obtain a land line. However, suddenly people have mobile telephones and access to communication, as happened during the recent referendum. People communicated by mobile telephone and, for once, they had a reliable means of communication.
In banking and account handling, they have leap-frogged past the cheque stage. Many never had cheques and have moved straight into smart-cards. That represents a great opportunity for them. E-mails have also leapt across boundaries and gone past the hopeless telephone systems. In every village in Kenya and throughout Africa one finds e-mail and fax centres springing up. There is a company called "e-touch" in Kenya which started in business at the end of last year. It already has 25,000 people on mobile communication and expects that number to reach 50,000 by the end of the year. That is a growth rate of 2 to 3 per cent per day—the fastest in the world. I know that it is a small company, but at least it is there and giving people the opportunity to conduct business and to communicate in a way that previously had been impossible. That will change the economy and the democracy of Africa. Just as television helped to break down the stubborn Eastern bloc countries in the 1980s, so this technological revolution will undermine the government's attempt to keep their electorate and their people in the dark.
Africa is not short of good, bright people. There are plenty of good businessmen out there. However, they need help from the West and the developed world, but not in the sense of governments interfering in and nannying the state. That has never worked and it will not work now. However, as many noble Lords have said, what the people really need is education, education, education. If we provided the opportunities for them to be educated, I believe that they would have a really great future.
I have time to say one thing more about Zimbabwe. Am I alone in this House in being ultra-cynical, or is it possible that if a white president tried ethnically to 310 cleanse half his farming population because it was a different colour, he would receive a different reaction throughout the world? Surely big debates would be held in the United Nations about that. Will the Government call a Commonwealth conference to suspend Zimbabwe from the Commonwealth for its anti-humanitarian behaviour and will they also raise the matter in the United Nations? It is so important. I do not believe that what is happening in Zimbabwe is so different from what happened in Kosovo. However, we are reacting in a totally different way.
§ 5.16 p.m.
§ Baroness Williams of Crosby
My Lords, I too add my thanks to the noble Baroness, Lady Chalker of Wallasey, for introducing this debate and for the huge contribution that she has made in Africa. I hope that she will forgive me if I say that she is the best Cabinet Minister we never had. I should like also to say what an extraordinarily knowledgeable and interesting debate this has been. I believe that that is because so many Members of this House have direct, first-hand experience of the continent of Africa.
The noble Lords, Lord Howell of Guildford and Lord St John of Bletso, both referred to the fact that a difficulty arises from the perception of Africa as what is often described in the United States as a "basket case"—a continent that has been written off. I believe that that is partly because over the years Africa has attracted bad publicity and little credit is given in the media to its real, if very painful and difficult, achievements. The one exception to that has been South Africa, where for many years the single example of Nelson Mandela attracted a sympathetic medium. That is why, even today, South Africa is often exempted from the overall perception of Africa as a continent of despair.
Noble Lords have referred to many good points, and I shall come to those. However, I shall add one or two more problems to the list and refer, first, to commodity prices. Even today, approximately 30 per cent of sub-Saharan Africa's GNP is in exports, most of it raw materials and other commodities. Historically, commodity prices today are at their lowest level in real terms for 150 years. The problem is that that is unlikely to bounce upwards because the manufacturing and other processes of modern advanced economies use far fewer raw materials and far less energy than they once did. Therefore, Africa cannot look for its salvation simply to the processes of global growth.
Secondly, one problem within Africa to which we have not referred in great detail today is the relatively ruinous effects of extensive deforestation and overgrazing, especially in sub-Saharan Africa, north of Zambia and Zimbabwe. The noble Lord, Lord Howell of Guildford, referred to the devastating reduction of the forests of the Ivory Coast. That is one example among many others which could be given. I must say that in my gloomier moments, when I read about that, when I hear from my daughter in Malaysia that even now she cannot put her children outside because of the level of haze from the burning of Sumatra, when I fly 311 over the Amazon and see fires reaching over a vast expanse of Latin America, I ask myself for how long we in the developed western world can continue to twiddle our thumbs and see the environment as a problem for our grandchildren and their grandchildren.
I shall not pursue that except to say that the fate and fortunes of Africa are necessarily bound up in our fate and fortunes. We shall be victims of a great illusion if we suppose that we can simply wash our hands of that great continent.
As regards the agricultural problems, I do not know how far the flooding in Mozambique is due—I suspect it is a good deal—to the churning out of the areas around the great rivers further north but I understand that one reason for the scale of the devastating floods was deforestation and the degradation of land further to the north of Mozambique. That is a thought which we should all bear in mind.
The noble Earl, Lord Caithness, cheered me up by speaking about the speed at which mobile communications are taking hold in countries like Kenya. I am sure he is right about that. My worry is that it is a relatively thin layer of the new African middle class, and in some countries an even smaller élite, which is benefiting from the advantages of information technology.
The noble Earl was absolutely right to remind us that the foundation stone of an information revolution is always education. Perhaps the most disturbing point to make is that the United Nations Development Programme forecasts that there will be in Africa by 2015 not 45 million children who are not even in primary school but 75 million. It is the only part of our globe where the proportion of children out of primary school, let alone secondary school, is growing rapidly. In Asia, the figure is falling dramatically; in Africa, sadly, it is slowly rising.
One reason for that, to which a number of noble Lords have rightly referred, is the scale of the devastating internal wars in Africa. The noble Baroness, Lady Cox, told us about the Sudan. The noble Baroness, Lady Chalker of Wallasey, mentioned the Congo in that context. The terrifying aspect is that, throughout the centre of Africa, such wars are raging and are literally devouring the resources that are needed for education and health.
However, I agree, to some extent at least, with the noble Lord, Lord Cocks of Hartcliffe, who pointed out that the western world is not wholly without a share of responsibility. It is important to recognise that, throughout the Cold War, both sides used Africa as a surrogate in a war which they never conducted themselves. Wherever you look in Eritrea and Ethiopia, Angola or Mozambique or many other parts of Africa, you will see the devastating consequences of their having been used in that way and warlords having gained control over governments.
I now want to make two positive remarks in this short speech. The first concerns corporate social responsibility, of which the noble Baroness, Lady 312 Chalker of Wallasey, is one of the world's leading advocates, and she is absolutely right. I give three quick examples of what is meant by corporate responsibility.
In Angola, even today, the embers of war are still easily ready to flare. One reason for that is that UNITA has been used by certain companies as a way of retaining control of the diamond areas. Even today, UNITA hangs desperately on to those areas which are the best hope that Angola has of major steady development.
The major company in the diamond industry—and I do not accuse it in any way of financing UNITA—is De Beers. The great thing that De Beers could do, in a spirit of corporate responsibility, is to insist upon all diamonds carrying certificates of origin so that they can be inspected closely to ensure that they are not coming from those sources which are using the money only for buying arms and for destroying a generation of young Africans.
The noble Baroness, Lady Cox, spoke eloquently—and I could not agree with her more—of the desperate need to support that marvellous African, Dr Obasanjo, in Nigeria in his efforts again to try to build democracy against all the odds, and the odds are terribly high. Dr Obasanjo is attempting to deal with corruption, with religious and other differences and the power of the military. As the noble Baroness, Lady Cox, said, he needs all the help he can get. Part of that help must come from the oil companies, and this is my second example of corporate responsibility. Almost the only major presence today in Nigeria is the oil companies. Two things follow from that: the need to reject absolutely systems of bribery and corruption, making it plain that, in doing so, the oil companies are supporting Dr Obasanjo's appeal to his people; and, secondly, the need for a greater sense of environmental responsibility than has sometimes been shown in the past. Putting it bluntly, in some cases, the oil companies have a great deal to answer for in terms of allowing oil to run into the ground and destroy possible agricultural areas.
Thirdly, still on the subject of corporate responsibility, I believe that the companies in South Africa have a responsibility with regard to the training not only of a narrow middle class—and I agree completely with what the noble Baroness, Lady Dean, said about the importance of management education—but also with regard to the adoption of community education schemes within the townships to give those children some sort of help.
Last, on the subject of governance, I could not echo more strongly what was said by the noble Lords, Lord Tomlinson and Lord Desai, about the World Trade Organisation, the EU Mediterranean Project and the situation with regard to the Uruguay Round. They are absolutely right. The governments of the West have not pitched in to the extent needed in order to offset the weakness of African governments in dealing with major interests which are brought to bear on them.
313 Our responsibility is not to intervene, not to recolonise and not to tell African governments what to do. But in the great international fora of the world, whether that be the WTO, the UN or, above all, in the monitoring of the sale of arms, only powerful western governments can undertake responsibility. I believe that to be the price which we owe to Africa for the exploitation of many centuries past.
§ 5.27 p.m.
§ Lord Moynihan
My Lords, I add my congratulations to my noble friend Lady Chalker on securing this key debate at such an apposite time for the discussion of African politics and economics. I congratulate her also on her ongoing, effective work on behalf of so many African people. In the time available, it is impossible to do justice to that vast continent and to deal with all the challenges that it presents. We could easily spend this timed debate discussing any one country in Africa and still merely scratch the surface of the issues as regards a continent containing an estimated 12 per cent of the world's population —some 642 million people.
It has been most heartening to hear, not least from my noble friend Lady Park, of Africa's success stories, which are rarely trumpeted. I doubt that it is a well-known fact that democratic institutions, however fragile or flawed they may be, as noted by my noble friend Lord Howell, now form the basis of government in the majority of African nations, while 11 African countries are publicly committed to fighting corruption and working towards a binding anticorruption convention. Those countries, which are quietly working for peace, for economic reform, for human rights arid for constitutional and democratic rule offer us glimmers of hope and the promise of what Africa's future could hold.
Mozambique, the first country to be mentioned by my noble friend Lady Chalker, although the most recent African nation to be brought to its knees by disaster, is one such country. It lifted itself out of the chaos of civil war to achieve remarkable sustained levels of economic growth, combined with democratic government. Last year, it recorded double-digit growth. As the UN Secretary-General said, it is bitterly ironic that the EIU has singled out Mozambique as likely to have the highest growth rate in Africa this year. We know from Mozambique's example that it can be done and we must find the key to unlock similar progress in other African countries.
The debate has painted a tale of two Africas, but it is the story of deprivation, despair and disaster that we hear most often. Intensive efforts are needed to resolve the conflicts from the Red Sea to the Atlantic ocean; in the Democratic Republic of Congo; the diamond-fuelled conflicts in Sierra Leone and also in Angola—as the noble Baroness, Lady Williams, noted; the territorial war of Ethiopia and Eritrea; and conflicts in Sudan and Burundi. From north to south, east to west, the African continent regrettably is embroiled in civil and regional wars which take a horrifying toll on innocent civilians. The destruction visited on the continent cannot be overestimated.
314 As we have heard, even those African nations which we hope have put behind them a painful and difficult past, such as Nigeria and South Africa, have a long and difficult journey ahead. In the transition from apartheid to democracy, South Africa continues to provide an engine for African growth and stability, thanks to the vision of its leaders. But South Africa still has far to travel in building a just and stable society. Large, strategically located and a major oil producer, Nigeria now needs all the help it can obtain in its struggle to establish a viable democratic system, to jump start the economy, to fight corruption and to resolve regional unrest.
I listened carefully to the comments of the noble Lord, Lord Holme of Cheltenham, my noble friend Lady Park of Monmouth and my noble friend Lord Caithness. I too wish to devote some of my remarks to Zimbabwe and to the Government's policy on that country, which is economically devastated as a result of the moral bankruptcy of its leader. I do so with a heavy heart, more in a tone of deep disappointment than in anger. I ask the Minister to what extent she considers that the circumstances which prompted Pakistan's suspension from the Commonwealth—namely, violations of the Harare principles—apply also in the case of Zimbabwe. At the time of the Harare Declaration, Zimbabwe was not only a member of the Commonwealth Ministerial Action Group, set up to sit in judgment on the ways in which countries adhered to the principles; it was in the chair. It was replaced only last November.
Yet Robert Mugabe is not observing even the basic principles behind the Harare Declaration. This is a country which sends money and support to a war in the Democratic Republic of Congo rather than feed its own citizens. It is a country which prevented opposition parties gaining access to the media during the referendum. It is about to give consent to a Bill allowing interception of electronic mail and other communications. It is a country where journalists are arrested because they write the truth, not government propaganda, and where others are tortured. It is a country where the President threatens to kill his political opponents, condones the illegal seizure of farms and instructs the squatters to stay put; and it is a country which raids diplomatic bags and then claims that we are paranoid.
We have called for a suspension from CMAG. The Government have given no response. We have called for an audit of bilateral aid, in view of the suspension of EU aid, following the Court of Auditors' report that that aid was being misdirected. The Government have given no response. We believe that the innocent people of Zimbabwe should not suffer as a result of the crimes of their government. That is why properly audited bilateral aid and funding for NGOs should, and must, continue. But the international community needs a lever by which proper respect for democracy, human rights and the rule of law can be encouraged in Zimbabwe. The democratic world and the stability of southern African can no longer afford the policies 315 pursued by Robert Mugabe. It is for that reason that I now call upon the Government to request that Zimbabwe be suspended from the Commonwealth.
I hope that the Minister will support that call. Will she say how else the Government intend to convey to the Government of Zimbabwe the clear message that their behaviour during the referendum was wrong; that their behaviour now is wrong; that the land seizure programme is illegal; that the ambitions of the kleptocrats and cronies must be curbed; that the destruction wrought on Zimbabwe's economy must be reversed; and that Robert Mugabe's system of government is fundamentally corrupt?
Last week, in London, the UN Secretary-General told us what we already knew: that, in spite of all that we have done to help Africa to overcome her conflicts, it has not been enough. His words, that,Africa needs more: more assistance, more technology, more investment, more access to world markets, more co-operation and partnership",have been echoed in the debate today. I agree with the noble Baroness, Lady Williams, that we must ask what more the international community can do to sustain the focus on the challenges facing Africa and to support the efforts of African governments and peoples in meeting those challenges.
I am pleased that the noble Baroness touched on the importance of the middle class. We need policies to develop the middle class. Let us consider the effectiveness of such policies in relation to pensions in Chile, or indeed in Taiwan. Let us consider the effectiveness of capitalisation targeted at the middle class in Bolivia. The establishment of policies directed towards the growth of an effective middle class provides both economic and political stability, because it gives individuals a direct interest in the success of their country's political and economic policies.
The subject of today's debate—economic opportunities in Africa and at home—is key. The reforms that have been made and the steps taken by African governments to enhance the foreign direct investment climate deserve our attention. Many governments have improved their regulatory framework for foreign direct investment, with investment promotion agencies to assist would-be investors. But there is potential for far more. As Africa grows, our businesses cannot afford to ignore that market. They must be encouraged to follow the example of companies such as African Lakes, which last month became the first fully listed UK plc to obtain a listing on the Nairobi stock exchange.
From the Government's working partnership with the US State Department, will the Minister say what lessons the Government have learned from President Clinton's Partnership for Economic Growth and Opportunity and the African growth and opportunity pact in terms of encouraging two-way trade, private sector investment and making the most of the opportunities Africa has to offer? To seize those opportunities, we must calibrate effectively our 316 policies on debt, on trade, on war, on corruption and on development assistance. We cannot allow our failure to do so to contribute to the withering on the vine of Africa's productive sector.
For too long, Africa was viewed as a superpower battleground through the distorting prism of apartheid. Kofi Annan is right. We must not and cannot fail Africa now. Africa is doomed to political and economic failure only if we allow it. The direct involvement of the international community is critical if this, the poorest and most conflict-ridden continent in the world, is to make progress. If Africa fails, so do we. We cannot be secure if millions elsewhere are trapped by strife and scarcity. Africa should not fill us with despair. It should fill us with anger, determination and hope; anger that we are a witness to such waste; determination to do more to help the people of Africa to achieve and sustain peace and economic growth; and hope for Africa's potentially prosperous future.
§ 5.38 p.m.
§ Baroness Amos
My Lords, I begin by thanking the noble Baroness, Lady Chalker, for initiating today's important debate. I pay tribute to her work, which is well known in this House. She has worked tirelessly to facilitate development in Africa and to bring to the world's attention issues of concern to countries in Africa. This has been a good debate. It shows the concern in this House for what is happening in Africa.
The achievement of sustained and stable economic growth is a challenge facing all governments. It is an essential factor in reducing poverty and a prerequisite for integration into the world economy.
Two themes have emerged from the debate. The first is the importance of using the Commonwealth more positively in the way in which we work in Africa. The second is the need to influence international financial institutions and business to contribute to the development of Africa in a more positive, long-term and sustained way.
Three areas have dominated the debate. The first is the challenges that face the African continent. The noble Lord, Lord Howell of Guildford, mentioned many of them. It is also important to remember that those challenges can and are being addressed. The second key area is the opportunities that exist to take countries in Africa forward. The third area, mentioned by many noble Lords, is what the Government are doing in terms of impacting on some of those challenges.
The first major challenge is that of economic growth. Roughly 46 per cent of the African population lives on less than one dollar a day. Substantial improvements in material conditions will not be possible without a large acceleration in growth rates. Sub-Saharan Africa's growth performance has improved. Over the second half of the 1980s GDP growth was 2.5 per cent, which is not enough to keep up with population growth. In the early 1990s growth was even slower, but since 1994 it has quickened to around 4 per cent.
317 Those rates fall well below the 6 to 8 per cent growth per annum which is needed if Africa is to reach the international development targets in 2015. I say to the noble Earl, Lord Sandwich that we still believe that those targets are achievable. The countries that recently have achieved them, or have come close to achieving them include Mozambique, which was mentioned by the noble Baroness, Lady Chalker. I agree with her that Mozambique is one of the best examples of a country where many developments have taken place. We are committed to the rehabilitation and reconstruction effort to get Mozambique back on track. The future task is to ensure that high growth continues in countries like Mozambique and that we work to create the conditions to enable growth in more countries.
In Africa a consensus is emerging on the need to implement good economic policies, the importance of tackling high inflation, lowering fiscal deficits, introducing well-functioning foreign exchange markets, maintaining open external markets, reforming the civil service, improving efficiency levels in the public sector, reducing price control and getting rid of restrictive licensing arrangements.
A second major challenge that has been mentioned by a number of noble Lords is the importance of conflict reduction. My noble friend Lord Tomlinson talked of the importance of conflict and linked conflict with corruption. Having a set of good economic policies is not enough. We know that in Africa conflict and war slow down growth. More than half of all African states have been affected by conflict in the past two decades, arid ten have been affected by severe conflicts.
My noble friend Lord Cocks of Hartcliffe and the noble Baroness, Lady Cox, spoke of the destructive impact of religious conflict. Of course, in the past few years we have seen the devastation of ethnic conflict in various parts of Africa. Even in countries such as Rwanda and Uganda where substantial economic changes have occurred, effort is needed to bring down levels of military expenditure and reduce cross-border conflict. The noble Baroness, Lady Williams of Crosby, rightly drew our attention to the importance of understanding the way in which developed countries have sometimes profited from those conflicts.
The third major challenge is the impact of HIV/AIDS, which is now the biggest killer of adults in Africa. Some countries will lose a quarter of their adult population to the disease. Increasingly African countries and their governments recognise the scale of the challenge and the need to take action now. The UK Government are working in partnership with African governments, the private sector and other donors, to co-ordinate an effective response to the epidemic. In this House we have had a debate on that issue, but I shall not give the detail of that assistance now.
The fourth major challenge is corruption. Corruption not only stifles domestic and foreign investment, but it affects the poor by excluding them from access to services and the protection of the law. 318 However, prospects for progress on stamping out corruption have never been better. Governments everywhere are coming under pressure to bear down on corrupt practices. The noble Lord, Lord Holme of Cheltenham, who unfortunately has had to leave, asked about the link between good governance and British assistance. In the White Paper on international development there were some key themes on human rights, on good governance and on gender equality.
As a government we have been robust in our relationships with governments on those matters. We are working hard to ensure that we tackle the corruption issue with the countries with which we work on a bilateral basis. At an international level, our priorities for addressing corruption are to agree a co-ordinated donor approach and concrete action to tackle corruption. A donor meeting in Maastricht in April is designed to produce an agreed action plan. In the United Kingdom we support the development of legislation to help implement the OECD convention on the bribery of foreign public officials and to strengthen action against money laundering, a point raised by the noble Baroness, Lady Chalker.
We are encouraging the private sector to support anti-corruption efforts. In developing countries our aim is to work with other donors to facilitate a locally-led process to gain commitment from all sections of society to address corruption and to support the development and implementation of anti-corruption strategies. We are working hard to tackle what my noble friend Lord Desai called the failure of governance.
The fifth challenge is debt. There is no doubt that economic growth in Africa has been constrained by heavy debt burdens. Money spent in debt service, for example, cannot be spent on schools, on health or on building rural roads. Business people are also wary of investing in indebted countries, and that, of course, retards growth.
That is why this Government have taken the lead internationally in pressing for the debt burden to be lifted. We now have a debt relief package that should remove two-thirds of the debt of the heavily indebted poor countries. In December last year the Chancellor announced that the UK would unilaterally write off all the debt owed to ECGD by the heavily indebted poor countries. Most significantly, the general public in indebted African countries and indeed the British taxpayer expect that debt relief to be used by governments for comprehensive poverty reduction—an issue raised by my noble friend Lord Tomlinson. I want to assure the noble Earl, Lord Sandwich, that we are committed to that "pro-poor" development. The UK will contribute a total of around £165 million to the HIPC trust fund, in addition to our share of the 1 billion euro package agreed by the EU for HIPCs, of which 680 million euro will be for the trust fund.
Having set out the challenges I now turn to some of the key elements that will enable African countries to sustain economic growth and to focus on reducing poverty. A number of noble Lords have mentioned the importance of increasing investment, encouraging 319 enterprise development and increasing trade. There are, of course, mutual opportunities through trade and investment. A more prosperous Africa is likely to lead to a more prosperous UK. Wider and deeper trade and investment opportunities provide a two-way flow of benefits.
In terms of domestic and foreign direct investment, compared with other regions of the world, African investment rates are low. Not only do rates of investment need to increase, but the efficiency of investment also needs to be raised through improvements in the functioning of the public sector. The noble Baroness, Lady Chalker, mentioned that only 1 per cent of foreign direct investment goes to Africa. My figure is 3 per cent, while the noble Earl, Lord Sandwich, mentioned 5 per cent. Perhaps we have all used slightly different calculations to reach our figures.
Nevertheless, the reality is that most of that investment, however small, is mainly concentrated in only a few countries; namely, South Africa, Egypt and Nigeria. However, it is important to remember that the UK is the third largest source of foreign direct investment into Africa, investing 1.1 billion dollars in 1997. Foreign direct investment in Africa has been constrained by negative assessments of, for example, corruption, profitability, the legal and regulatory framework, the economic and political outlook of whichever country is in question, access to regional markets, trade policies and tax regimes.
Investment in Africa by African entrepreneurs is influenced by similar considerations. It is estimated that 40 per cent of African wealth is held overseas, whereas for south Asia the figure is more like 5 per cent. For a continent that is so starved of capital, this has staggering implications. However, the general perception that Africa is a poor destination for international investment is gradually changing. During the 1990s, foreign direct investment to Africa increased. To a large extent, this was in response to the adoption of better economic policies. Additional privatisation will also provide further incentives.
The second area seen as providing good opportunities is that of enterprise development. The development of small and medium-sized enterprises is crucial for the long-term development of the economy. In Kenya, for example, small enterprises account for 98 per cent of all enterprises, 80 per cent of which employ fewer than five workers. Medium-sized enterprises can be innovative and dynamic because they provide crucial links between micro-enterprises and large businesses.
The noble Lord, Lord Holme of Cheltenham, mentioned the important role of micro-credit and micro-finance. The DfID has committed over £20 million into funding micro-finance projects in Africa to support the efforts of micro-enterprises and other informal sector entrepreneurs. Perhaps I may say to my noble friend Lord Desai that the sustainable livelihoods approach, including rural development, is 320 a key element of our strategy. The noble Lord will recall last year's excellent debate in this House when this matter was looked at in detail.
The UK Government are actively encouraging and supporting enterprise development in Africa in a number of other ways: by improving the legal and regulatory enabling environment; by helping to establish financial instruments and institutions; and where possible, by removing management, technology and knowledge constraints faced by small and medium-sized businesses.
The third area of opportunity is trade development. Increased international trade is vital for accelerating growth in Africa. The Government are keen to promote a comprehensive round of trade talks. A more open, rules-based, multilateral trading system should benefit sub-Saharan Africa, although I have listened carefully to the concerns expressed by my noble friend Lord Tomlinson and by the noble Baroness, Lady Williams of Crosby. There is no doubt that, in the short term, globalisation will present Africa with serious challenges. Difficult transitions will have to be negotiated. We can expect the price of primary commodity exports to fall further. With deepening world trade reforms, preferential margins enjoyed by African countries in overseas markets, such as the EU, will inevitably be eroded.
However, I can assure my noble friend Lord Tomlinson that the UK fought very hard in the negotiations for a successor to the Lomé Convention and was successful in securing agreement to grant duty-free access for essentially all exports from less developed African countries until 2005. Discussions are continuing on what "essentially" will mean. A second important commitment of the EU is to review and simplify rules of origin that apply to LDC exports. As rules of origin can often act to limit the benefits of preferential market access, progress on this will be very important.
In most of Africa there is little technical capacity to analyse trade policy options, to negotiate new trade arrangements, to implement trade reforms, to monitor effects and mitigate adverse impacts. The Government are helping to build this capacity in a number of African countries and also to strengthen regional organisations. Furthermore, in response to a point raised by the noble Baroness, Lady Chalker, we remain committed to supporting education and capacity-building, which was the subject of a debate in the House last week.
Perhaps I may now turn to the specific countries that have been mentioned by a number of noble Lords. First, as regards South Africa, my noble friend Lady Dean of Thornton-le-Fylde spoke of the importance of working in partnership and gave the specific example of the Warwick Manufacturing Group. As a graduate of Warwick and also one with knowledge of and a great deal of affection for South Africa, I am pleased to see the important role that partnership efforts are playing in leadership development and in promoting equality and equal opportunity.
321 The noble Lord, Lord St John of Bletso, and the noble Baroness, Lady Sharples, mentioned other challenges facing the government of South Africa. President Mbeki's top priority is to improve the lives of the poor black majority, in line with election promises. South Africa remains a country with many living in poverty and with a high rate of unemployment—well above 30 per cent. Both of those factors exacerbate crime. We are helping to address these problems primarily through our development assistance programme, which will provide £90 million over three years. The priority areas include health, good governance, education and enterprise development. On the matter of the EU/South Africa trade agreement, the UK has been at the forefront in these negotiations, pushing South Africa's case for a liberal agreement. This is one of the best ways that Europe can aid South Africa's transformation from apartheid.
The noble Lord, Lord St John of Bletso, also spoke of Mozambique, as did other noble Lords. I should like to make one point concerning the reconstruction, which is continuing in Mozambique. The Government of Mozambique have asked UNDP to take the lead in planning for recovery. A meeting of donors organised by the UN is planned for the end of April. There is no doubt that the disaster is a severe setback in human terms for Mozambique. However, we hope that the longer term economic impact will not be too damaging. The Government of Mozambique still predict that a 9 per cent economic growth rate can be achieved this year, which would be a major factor in assisting that reconstruction, if it can be delivered.
Turning now to Nigeria, I share the views of the noble Baroness, Lady Cox, and of the noble Baroness, Lady Williams, as regards what President Obasanjo is trying to do. He and his government have made a good start. He has made economic reforms, the fight against corruption, reform of the military and poverty eradication the centrepieces of his policy. The DfID's bilateral programme provides assistance in health, water, education, rural livelihoods and good governance in a number of states. The bulk of that assistance is delivered through non-governmental channels. We are also co-ordinating with the Government of Nigeria an effort to introduce initiatives for widespread HIV screening. UK/Nigeria trading links are strong, but Nigeria needs serious reform if it is to benefit from globalisation. Privatisation and a crackdown on corruption will attract new investors, as will better security and the maintenance of the rule of law. We are looking at ways to help in relation to all of those.
A number of noble Lords have expressed concerns in the strongest possible terms about what is happening in Zimbabwe. The noble Baroness, Lady Park of Monmouth, and other noble Lords talked about the farm invasions and the importance of land reform. High-level representations have been made to the Government of Zimbabwe to address the illegal occupation of farms by members of the War Veterans Association and to ensure that the rights of farmers 322 and the rule of law are upheld. My honourable friend Peter Hain has spoken to the Vice-President on this issue.
We have conveyed to the Government of Zimbabwe our serious concerns. There is some confusion over the position of the court case and the appeal, which was mentioned by the noble Earl, Lord Caithness. Both the Attorney-General and Chief of Police are out of the country. The Commercial Farmers' Union has shown remarkable restraint and welcomed further discussions over the legal position. But I can tell the noble Lord no more right now about that issue.
I share with the noble Earl, Lord Caithness, anxieties in relation to the economic management in Zimbabwe. We urged the Government of Zimbabwe to work with the IMS and to implement the necessary budgetary restructuring to restore economic stability. Our programme in Zimbabwe gives priority to helping the 70 per cent of Zimbabwean households that fall below the poverty line.
The noble Lord, Lord St John of Bletso, raised the issue of elections. We and other countries are concerned that the government's timetable for elections will not allow the problems of the voters' roll to be addressed. We will not assist or mount international observer missions if that only serves to endorse a flawed process.
The noble Lord, Lord Moynihan, asked specifically about the Harare Declaration. The farm invasions are serious, but do not constitute the serious and continuous violation of the Harare Declaration which demands investigation by the Commonwealth Ministerial Action Group. We want to see good governance, respect for human rights and economic policies which will enrich and empower all in Zimbabwe.
I am afraid I have run out of time.
§ Lord Moynihan
My Lords, I am grateful to the Minister. There were clear calls this afternoon for the suspension of Zimbabwe from the Commonwealth. I would be grateful if the Minister could set out the Government's position on that specific point.
§ Baroness Amos
My Lords, I made the Government's position clear. We do not believe that the farm invasions, although they are serious, constitute the serious and continuous violation of the Harare Declaration which demands investigation by the Commonwealth Ministerial Action Group.
323 I conclude by saying that our commitment to Africa runs across all government departments. The noble Lord, Lord Moynihan, stressed the importance of this being a commitment that did not just involve DfID. Various government departments are involved in promoting growth and development in Africa. Reducing conflict is high on our agenda and we are currently undertaking a cross-cutting review of conflict prevention. We are active, too, on the issue of security sector reform because we know that in many poor countries repressive, untransparent and bloated security sectors are major obstacles to progress in development.
I have mentioned our work on anti-corruption efforts in Africa with other western governments and there are some good examples of that. We are launching challenge funds with the aim of supporting partnership initiatives. British Trade International, our newly-formed trade and investment promotion arm, is actively engaged in identifying commercial opportunities throughout the continent. On the investment front, it has worked with a number of African agencies to promote investment. And of course the Foreign and Commonwealth Office is constantly working to promote stability and security across the continent.
Now is a time for opportunity for Africa. Never before have global relationships been so important and global processes so influential to any one country's and continent's development. Those are the themes which will be explored in the new White Paper due for publication in the autumn. Africa matters, and it matters to our electorate. We have only to look at the response of the British public to recent events in Mozambique and to the debt campaign. And I agree with my noble friend Lord Desai: Africa matters to the Africans. We, as a key partner in trade, investment and development, must assist Africa in that development to ensure a sustainable future.
§ 6.5 p.m.
§ Baroness Chalker of Wallasey
My Lords, I thank all those who have spoken in this debate. We shall return for further debate, particularly on the tragic issue of Zimbabwe.
Over 96 per cent of Africa's diamonds do not come from conflict areas, and those firms employ large numbers of Africans. I hope that we can get some balance into this debate because I learned earlier today that De Beers, mentioned by the noble Baroness, Lady Williams, buys neither from Angola nor Sierra Leone. I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.