African governments and business are not in conflict over the need for inward investment and growth in Africa - but their conceptions of how to proceed are poles apart.
Against the background of Africa's declining role in the global economy (see page 45), the two sectors have met under the auspices of the World Economic Forum (WEF) in Maputo this week to discuss the role of business in the continent's development.
The clearest evidence of business's reluctance to invest is that Africa's share of global foreign direct investment accounts for only 1,7% of world FDI flows.
WEF chief economist Augusto Lopez-Claros says: "While the political landscape in most of sub-Saharan Africa has significantly improved in recent years, a renaissance of Africa's economy has yet to take place.
"African countries have not succeeded in laying a foundation of macroeconomic stability and a variety of structural and institutional rigidities have hampered growth performance."
The annual meeting of the WEF, the foremost gathering of Africa's business and political leaders , will struggle to bridge the present abyss of thought and perspective between these potential partners in Africa's development.
Their relationship moved forward two years ago when SA business strongly backed the New Partnership for Africa's Development initiative.
At the WEF meeting in Durban that year, more than 100 businesses and parastatals, most of them South African, got together to pledge their support for Nepad. Headed by Eskom chairman Reuel Khoza, the Nepad Business Group comprised many of the companies that have over the years expanded their businesses north of the Limpopo, including MTN, SA Breweries, Sasol, Anglo American and Transnet.
Business's involvement took a further step forward when a number of international and regional business bodies, including the US Corporate Council on Africa, the Commonwealth Business Council and the African Business Roundtable, joined the Nepad Business Group at a UN conference in Mexico. A working group was chosen to liaise between the business group and the heads of state group leading Nepad.
At the WEF's global meeting in Davos this year, business leaders of African companies and multinationals operating on the continent said they would share the responsibility for the success of Nepad; they would encourage superior governance practices and good accounting and auditing standards, and take on corporate social responsibility.
That has been the easy part. What Africa's political leaders were really hoping for was greater investment. They have not got it.
It was expected that the money or financial relief would come from FDI, trade revenues and debt relief. It was also thought that business would participate in Nepad's 20 headline infrastructure development projects. So far, business has been reluctant and the little progress that Nepad has achieved has been in the area of debt relief.
Numerous Nepad documents outline how the public and private sectors can work in partnership to get projects off the ground. The sectors that enjoy priority are telecommunications, IT, infrastructure and financial services.
But lately, the relationship between the Nepad Business Group and governments has cooled.
Nepad's 20 large infrastructure projects have received partial backing from various multilateral organisations, but the private sector has stayed on the sidelines. (See page 47.)
These projects had two broad aims: improving electricity and transport infrastructure (rail, road and ports); and providing basic services such as water to communities. They are seen as crucial to development and growth and Nepad foresaw that the private sector would play a crucial role in funding, building and managing these projects.
Business has raised a number of concerns, including risk considerations, lack of business collaboration, hostile business conditions and access to capital.
But topping the list is the failure of Nepad to ensure the political stability that is vital to attract investment.
Speaking in Johannesburg last month, Khoza not only expressed disappointment with the strength and vehemence of Nepad's peer review, he also hinted at business frustration with the effectiveness of the Nepad secretariat.
Nepad's most important project to date, the African peer review mechanism (APRM), began last month with governance reviews of Ghana, Mauritius and Rwanda.
It seems a fair start. But peer review is a "misnomer", argues Ross Herbert, research fellow at the SA Institute of International Affairs, in the latest SA Journal of International Affairs .
As Herbert observes, "the review envisioned is by technical experts, governed by an independent panel of seven eminent persons and the APR secretariat" and is based on a country's self-assessment. Further, he says, "the questionnaire had to be softened to make it acceptable to all African states, not merely those which had volunteered to be reviewed."
Khoza announced this week that the business group was instituting its own review, in tandem with the voluntary APRM. "We would be much happier with the mechanism being a little more robust," Khoza said .
However, it would be a mistake to see the APRM as a disciplinary mechanism . Instead, peer review is designed to assist countries to conform to agreed standards of political, economic and corporate governance, aimed ultimately at achieving sustained economic growth and eradicating poverty.
Of course, rogue states such as Zimbabwe underline the difficulty of the entire Nepad project - that is, being constrained by the lowest common denominator. Yet the hope appears to be that the reforming, prosperous nations will lead by example.
Until then, the business sector is unlikely to be interested.
But the failure of the private sector to get involved also suggests that outside SA it is fairly weak and lacks the resources to participate in large-scale infrastructure projects.
Experts argue that the business scene in Africa is dominated by informal small traders and a formal sector is emerging only gradually.
This emerging corporate sector is crucial to business leadership and co-ordination, says the African Business Roundtable. Only when this sector has built up momentum, says the ABR, will businesses be able to contribute to the development of infrastructure , trade and job creation.
The rise of African conglomerates through indigenisation policies, such as the black economic empowerment policy in SA, is thus a topic of exploration at the Maputo meeting.
Another constraint to business is the difficulty of repatriating African skills. A recent Nepad seminar heard that 40% of the continent's professionals were based abroad, with significant negative consequences for inward investment.
There has been some progress, however. African economies achieved an average growth rate of 3% last year, not enough to achieve longer-term sustainable development but an improvement on previous figures.
And a number of infrastructure projects are starting to get off the ground in transport, telecommunications and electricity (see page 50). In energy, in particular, regional utilities are working together to tackle the electricity shortages that are a serious obstacle to the growth of business.
And slowly and reluctantly, large companies are starting to make an impact, particularly in the extractive industries of oil, gas and mining.
Two large projects in Mozambique - the Mozal aluminium smelter and Sasol's gas project (see story below) - showcase the success of carefully considered business investments backed by a government that is willing to provide a sound regulatory framework.
Unfortunately these projects are still the exception rather than the rule in Africa.
