Strengthening the OECD-Africa Investment Initiative
- Japan's proposal -

1. Background

At the OECD-Africa Investment Roundtable on 19 November 2003 in Johannesburg, participants from African and OECD countries strongly reaffirmed their commitment to the investment agenda of the Monterrey Consensus. In particular, the Roundtable concluded that "without higher levels of private investment, both domestic and foreign, and effective development aid, the United Nations Millennium Development Goals (MDGs) cannot be achieved, particularly in the least developed countries of Africa". There was also common agreement that "significant efforts by African countries and considerable assistance from their development partners in OECD countries" are required in this endeavour.

Considering that only ten years remain if the MDGs are to be achieved by 2015, there is a need for urgent, focused and results-oriented action. With this in mind, in addition to bilateral and regional efforts that should follow the OECD Statement to the follow-up of the UN Millennium Declaration and Monterrey Consensus (to be) agreed at the Ministerial Council Meeting (MCM) on the 3-4 May 2005, it would be desirable for the OECD to build on its efforts in the ongoing OECD-Africa Investment Initiative.

Working in close partnership with the World Bank and other international organisations present in Africa, the OECD-Africa Investment Initiative would be strengthened by taking advantage of an OECD multidisciplinary approach, making use of work by the Organisation's other relevant committees and, as appropriate, seeking their co-operation.

Since the OECD Initiative on Investment for Development* was launched in 2003, the OECD has strengthened investment-related co-operation with non-member countries including those in Africa, in particular with the African Union/NEPAD, through the OECD-Africa Investment Initiative. This year, the NEPAD-OECD Conference on Alliances for Integrity was held in Addis Ababa, Ethiopia in early March, and the Roundtable on Investment for African Development will take place in Entebbe, Uganda in late May. By making use of the accomplishment of the OECD Initiative on Investment for Development -- including its Policy Framework for Investment project, and its Policy Lessons on the role of ODA - the OECD could help African countries' efforts toward development and poverty alleviation.

2. Proposed Activities

Building on the outputs from the OECD Initiative on Investment for Development while taking into account the needs and the different situations in Africa, the project would:

1. Identify regulatory, legislative and administrative impediments to private investment;
2. Identify priority areas that governments will want to address to create a better investment climate by customising the Policy Framework for Investment (PFI) for specific use in Africa through country/regional case studies;
3. Utilise the PFI as a reference point to identify priority areas for ODA, such as regulatory reforms, human/institutional capacity development, and improved access to/affordability of infrastructure to address impediments to private investment and encourage more strategic, focused and co-ordinated donor actions in support of the mobilisation of private investment for development;
4. Undertake results-oriented case studies with volunteer African countries/regions to identify impediments to investment and measures to address them. These case studies will be intended at action plan implementation and review of progress, based on the principle of countries' ownership of their reform agenda; they will also be used as a platform for advancing policy dialogue among African and OECD member participants in the OECD-Africa Investment Initiative;
5. Monitor and evaluate the results of the above exercises. This monitoring/evaluation phase would feed into the mutual review process of the OECD-NEPAD.

* The Initiative on Investment for Development consists of three closely inter-related projects: the i) development of a Policy Framework for Investment, ii) building policy capacity based on OECD peer learning methods and iii) using ODA more effectively to support partner countries' efforts to mobilize private investment.