What is NEPAD?

What is a NEPAD?

What is NEPAD?

Josh Startup

1. Origins of New Partnership for Africa’s Development (NEPAD)

NEPAD is a plan to redevelop the African continent developed by and for Africans. To understand NEPAD it is necessary to gain a sense of how the plan came into existence and what the ideas behind it are. NEPAD is the culmination of the merger of the Millennium Partnership for the African Recovery Program (MAP) and the OMEGA Plan, which was finalized on July 3, 2001. The idea began in 1999 when Presidents Mbeki (South Africa), Obasanjo (Nigeria) and Bouteflika (Algeria), agreed that Africa had been reacting for too long to ideas and offers of support from the rest of the world, without developing its own plan. Africa, they felt, had programs of action in the past, but for a variety of reasons—including timing, a lack of capacity and resources, a lack of political will and the interference of outside interests in the Cold War era—the plans failed.

MAP was a pledge, devised by President Wade of Senegal, for African leaders to both independently and jointly pursue a path of sustainable development, with the goal of eradicating poverty and actively participating in the world economy. MAP sought to achieve this lofty goal by changing the traditional relationship between Africa and developed nations. Hence, MAP did not call for further foreign aid for African countries nor for marginal concessions. Instead it called for the mobilization of technology, human skills and capital—all of which it stated were already within its grasp—combined with creative new African leadership, and a new global partnership based on joint responsibility and mutual interest.

The overarching theme of MAP was for African—and more specifically African leaders—to take more leadership and responsibility for the development of the continent, instead of relying on, or blaming others. MAP invited the developed world into a partnership with Africa, based on a more even footed relationship between the parties, with mutual self-interest as the driving force behind it.

The OMEGA plan took a slightly different approach from MAP. First, it sought to assess Africa’s need as compared to developed countries in order to see areas where it needs to bridge the gap in order to be competitive. The plan initially focused on education, health, agriculture and infrastructure. It called for a massive infusion of investment in Africa until it was at a point where it could harness its large human and natural resources, along with modern technology. This would allow Africa to focus on direct production, thereby truly entering the world of international trade and the global economy.

OMEGA parted ways with MAP most distinctly in the area of funding. OMEGA called on African countries with large financial reserves invested in Western markets to lend those resources instead to Africa. The Plan also asked developed countries to use their treasury bills to invest in African resources. It also called for “special drawing rights” designed especially for Africa, as well as interest rate reductions, which eventually would fall to zero for Africa.

African leaders recognized the overlap between the two plans, and the fact that debt relief was but one critical aspect to Africa’s development the plans, so they merged them in July 2001 at the Organization for African Union (OAU) Summit of Heads of State and Government in Lusaka, Zambia. (Initially NEPAD was called the New African Initiative or NAI). NEPAD was adopted as Africa’s principle plan for development, providing an integrated, comprehensive framework for Africa’s socio-economic development.

The African Union’s (AU) institutional framework is the implementation vehicle for the plan, while the NEPAD heads of state are required to report to the AU annually. The Plan is designed to work along side other African development initiatives and is not an attempt to replace them. NEPAD is also envisioned as being integrated into international conferences such as the Conference on Financing for Development, and the World Trade Organization, to ensure the integration of NEPAD into the multilateral system. The G8 endorsed the plan on July 20, 2001.

2. NEPAD’s Plan

NEPAD combined the goals of MAP and OMEGA into four main objectives:

promote accelerated and sustainable development
eradicate widespread and severe poverty
stop the marginalisation of Africa in globalization
accelerate the empowerment of women

NEPAD continues MAP’s commitment to using a people-centered, sustainable development plan based on democratic values. Underpinning NEPAD is the idea that Africans themselves and the resources of their continent hold the key to their development. Therefore, the plan calls for partnerships between the peoples of Africa, and the acceleration of continental integration. Additionally, the plan provides a single platform for Africa to engage the rest of the world. To that end, it links itself to the Millennium Development Goals and other agreed to development targets.

NEPAD’s expected outcomes are:

growth in development and increased employment
reduction in poverty and inequalities
the diversification of productive activities
enhanced competitiveness in international market and increased exports
increased African integration

The personal representative former Canadian Prime Minister Jean Chretien, stated more broadly that NEPAD seeks to bring about an environment that will induce private investment to flow into Africa, because it is believed that it is private investment, not global financial assistance, which will ultimately increase Africa’s level of development and standard of living.

NEPAD contains three main priorities, which are broken down into sub-priorities.

1. NEPAD’s first priority is to establish the conditions for sustainable development by ensuring:

peace/security
democracy
good governance
capacity building
regional cooperation and integration.

2. NEPAD calls for policy reforms and increased investment in the following key sectors:

agriculture
human development
infrastructure
diversifying export products
accelerating access to inter-African markets and markets of developed economies
the environment

3. NEPAD’s final priority is the mobilization of resources. This encompasses:

improving domestic savings and the management of public resources
gaining a larger share of global trade
attracting foreign direct investment (FDI)
increasing capital flows through debt reduction

One of the Plan’s key features is the African Peer Review Mechanism (APRM) which all AU members are expected to participate in, though the program is voluntary. The APRM requires each country to perform a self-evaluation in the areas of democracy, governance, and socio-economic development. The APRM is designed to increase a country’s attractiveness to foreign investors, with each country’s rating acting as an indicator of that country’s potential. The G8, African Development Bank (ADB), and bilateral donors have indicated their aid may be tied to a country’s APRM score.

3. How is NEPAD’s implementation progressing?

One of NEPAD’s top priorities is the creation of short-term regional infrastructure programs to work on transport energy, water and sanitation, and information and communication technology. However, actual implementation of projects has been slow. For example, the African Development Bank, which is financing some of NEPAD’s Short Term Action Plans, is implementing less than half of them at any stage. Capacity building projects and investment projects are lagging even further behind.

The Plan also calls for the implementation of sub-regional food security and development programs. NEPAD is also supposed to come up with a coordinated strategy for debt relief, market access and official development assistance reforms.

Similarly, countries have been slow to implement the APRM, with only four showing much enthusiasm towards completing one. The program has received a cool reception in many northern African countries that do not practice western style democracy, and civil strife has hindered it in a number of other countries. Additionally, a shortage of workers in the NEPAD secretariat has been cited as slowing APRM’s progress. On the upside, membership in the program has grown from an initial 16 up to 23.

4. What are people saying about NEPAD?

Foreign investors see NEPAD largely as a beacon of promise for Africa to transform into a viable place for investment. For example, executives of Siemen’s in South Africa have lauded NEPAD’s concept and expressed optimism for its success. However, they were also quick to warn that Africa’s leaders must be able to create a stable environment for investment, and a failure to do so could not only cause a mortal blow to the future of NEPAD, but for the continent as a whole.

Some African’s however, have a more skeptical view of NEPAD. Many feel that NEPAD simply offers nothing “new,” and is just another plan destined to be mired in Africa’s old problems of corruption and self-interest. At a multi-stakeholder dialogue held in South Africa in October of 2004 the consensus of participants—which included the architects of NEPAD—was that NEPAD was primarily another “talk shop.” When questioned about what NEPAD had accomplished Senegal's President Wade said, “Nothing. Whenever I am asked what we have done, it is meetings, meetings. We need action.” President Osabanjo of Nigeria, and current chairman of the AU, went on record that he too was unsatisfied with the pace of development, but more recently he has commented that NEPAD is making steady progress. The sense at the conference was that the secretariat was too concerned with holding conferences and workshops rather than implementing any changes. There was a feeling that Africa’s leaders are not really committed to the change called for in the plan, especially the commitments to improve things like good governance and accountability.

The chairman of the NEPAD Steering Committee contends that the plan should not be judged one the financial capital it has mobilized, but rather the political will and encouragement it has provided to African countries. He concedes though, that the majority of Africans are not aware of the Plan’s details, and raising awareness about NEPAD should be a priority for the stakeholders.

Civil society organizations, such as the Africa-Canada Forum, have asked if the plan will really do anything to promote social or economic justice in Africa. Some commentators, like Richard Pithhouse of the University of Natal, have gone further arguing that NEPAD just opens Africa up for further exploitation from outsiders.

Despite such criticism, foreign governments continue to reaffirm their support for NEPAD. The Canadian government, for one, while conceding that NEPAD has yet to have an impact on conditions on the ground in individual countries, maintains that NEPAD has accomplished important goals. Canada established the $500 million for the Canada Fund for Africa to support NEPAD’s efforts. It claims that NEPAD has: 1) provided an organizational framework for the United Nations and other international community to work from; 2) stopped the erosion in support of Africa from its development partners, and; 3) incorporated peer-review and mutual accountability as important elements in the decision making of African governments. The other members of the G8, however, have been slower to make financial commitments to support the plan.

The International Monetary Fund (IMF) has been supportive of NEPAD’s efforts. In 2003, Horst Kohler, the Managing Director of the IMF, expressed his congratulations to African leaders for NEPAD. He also emphasized that the partnership and peer review mechanism would be a critical element to NEPAD’s success. NEPAD has also received praise from the internationally renowned economist Jeffrey Sachs, who also serves as Special Advisor to U.N. Secretary-General Kofi Annan. Sachs praised NEPAD for its leadership and contributions towards helping Africa meet the Millennium Development Goals.