Canada moves forward with $100 million
African Investment Fund
The
Government of Canada today announced the first steps in creating an
African Investment Fund that will contribute to greater economic
development by encouraging and fostering investment into Africa.
International Trade Minister Pierre Pettigrew and International
Cooperation Minister Susan Whelan made the announcement from Lagos,
Nigeria.
"Foreign
investment is a key element for Africa's social and economic
development," said Minister Pettigrew. "Through this fund,
Canadians are helping Africans attract investors and build momentum for
increased trade and investment with Africa."
The
African Investment Fund will generate significant direct and indirect
benefits for Canada and Africa through new market opportunities for
Canadian firms and investors, and enhanced strategic linkages between
Canadian and African organizations.
"This
fund is part of a series of initiatives that demonstrates Canada's
commitment to bringing together governments, the private sector and civil
society to promote African innovation, human development and critical
infrastructure services," Minister Whelan said. "The fund builds
on more than 30 years of Canadian development work in Africa that is
helping Africans improve their lives. It is another way for Canada to make
a difference in this part of the world."
The
Department of Foreign Affairs and International Trade has appointed the
Canadian Commercial Corporation to select a qualified fund manager, who
will be responsible for establishing the fund, for engaging the private
sector and for directing the fund's activities. It is expected that the
fund will be operational and financing projects in Africa within the next
year and will provide a commercially viable investment vehicle to leverage
Canadian
private sector participation in African-based projects.
This
fund also responds to a consensus among international organizations about
the critical role private sector investment can play in helping developing
countries participate in the global economy. Canada has already announced
that it will open its markets to African imports by eliminating tariffs
and quotas on goods from least developed countries.
Today's
$100-million contribution is part of CIDA's $500-million Canada Fund for
Africa announced by Prime Minister Jean Chrétien at the G8 Summit
last June in Kananaskis. The new fund responds to the needs expressed by
Africans to reduce poverty through investment and economic growth.
African Investment Fund
In the December
2001 budget, the Government of Canada announced the creation of a
$500-million fund to support the G8 Africa Action Plan and the New
Partnership for Africa's Development (NEPAD). At Kananaskis, Prime
Minister Jean Chrétien made a number of announcements on behalf of
Canada in support of NEPAD and the G8 Africa Action Plan. Canada's
contribution of $100 million to the African Investment Fund was included
in this announcement.
The Department
of Foreign Affairs and International Trade (DFAIT) will take the lead in
developing the African Investment Fund within the Canada Fund for Africa,
which falls under the responsibility of the Canadian International
Development Agency (CIDA).
The Government
of Canada has three main objectives for the fund:
·
to channel at least $200
million in additional investment into
Africa, of which, $100 million would be contributed by the government of
Canada and the balance by other investors;
·
to confer a beneficial
development impact on Africa by way of
increased foreign direct investment; and
·
to maximize the beneficial
impact of the fund's activities on
Canadian interests.
The Canadian
Commercial Corporation (CCC) will chair a process to select a fund manager
and fund structure. It will run an open, transparent and independent
process to provide the government with the most qualified candidate.
Bidders will be invited to indicate how they intend to take account of
international standards for social responsibility such as those
recommended by the World Bank and the Organization for Economic
Cooperation
and Development, which will be a prerequisite for receiving the government
contribution. The selection committee will include representatives from
both CIDA and DFAIT, as well as private sector representatives.
The selection
process will be launched in late November. Full details will be available
on CCC's Web site.
A fund manager
is scheduled to be chosen by May 2003 with the African Investment Fund
operational by the fall of 2003.