The first and most fundamental need is to improve the information available to prospective investors so that risk evaluation can be based

on sound data. The Feasibility Analysis Centres I have earlier proposed

should go a long way toward meeting this need provided that the knowledge

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gained is in fact dissoisixiated effectively to those who might act upon ite Information must also "be dispersed on the favourable climate for investment that exists tcday in Africa* In this case; however, factual information has proved to "be insuffioient, because many ■businessmen un acquainted with Africa attach to it p, low degroo of credibility* Several potential investors havs told me on thoir first visit tc Kanya that their earlier apprehensions wore misplaced* More and more industrialists and

financiers must be e:ior>ui'agf"i t-*> b«co;:i(? accy minted ?.' :~: '..:■-'id with

visits by private trade ^^^^ons, African governments and local business men's associations would welcome such programmes of visits-.

'. . '...■..

Guarantees 'oy govpvmien^s in Africa have sot at rest the fears of many investors witli rGf.?d to +ko repatriation of profits and capital*

Market guarantees have also "b-aen giv*3«? ecnw tines by several countriee;

for a given projeci, ;J?aty c'r^rbe.clis and tariff protection have also served to reduce the risks oi dnvestnent* Guarantees have also been used effec tively for the dopiestio invest02? but should, I thinkj be extended as a means of encouraging new entroprerjaurs* Freauently^ guarantees are a

costless device to government but oxtreacly1 valuable to the potential investoro

Participation in industrial projects by government parastatal organizations is aucthev -io.?.zis of reducing the exaggeration of risk and nancowing diffc-rencop in r:-.sk estimation. Ir;deeds wlien a project is so important as to warrant government participation, th« other partners have every possible assuranc3 that the project will be succeeeful.

While noE-suree '-uch as these have all proved useful in reducing the risk problem in Africa, other imaginative approaches are urgently neededo I hope that the talent and experience assembled here can help us to solve what is Ter-Jly a nutu-O. probleme

J^r purpose in cLiecueKi-ns these thi*<?o taBks has been to demonstrate that many of tbc otcp3 ji«3c?E?Gary id acce.1 erp.te industrial development in

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Africa are consistent with the aims of greater profits and faster develop ment. While there is much that potential investors can do, "both individu

ally and collectively, to identify opportunities, ensure realistic

appraisals, and promote development, a large share of the responsibility must continue to be borne "by the African governments.

Perhaps of greatest importance is the need to promote a favourable climate of investment. Much has already been done as I have noted, but more is necessary. Contradictory policies and attitudes must be abolished

or reconciled. Too often, the promotion of private foreign investment is coupled with open hostility and suspicion - the desire for foreign capital is coupled with a fear of exploitation and foreign domination.

History has demonstrated that this dilemma is vary real - the risk of the one often goes with the other, What is needed is a clear statement of the ground rules so that the potential investor can know precisely what is expected of him when he assesses the profitability of any project.

Definite ground rules would also reduce considerably what every business man dislikes in dealing with bureaucracy - red tape. It should also reduce what some businessmen are willing parties to, namely, graft, bribery and similar forms of corruption.

A second contribution African governments must make is one to which I have already referred, namely, the promotion of economic co-operation among countries so that multinational markets can be guaranteed for reasonable periods of time. Co-operation among nations on economic matters does not infringe national sovereignty and yet is an effective

step toward political federation if indeed that is considered to be a desirable objective.

Finally, African governments must take more positive and imaginative steps to promote and marshall domestic savings for constructive development purposes. But I should add that potential investors and financiers should study more carefully the African capital market* There has been a tendency to ignore, play down or even frustrate this source of capital for investment,

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Thus in addition to promoting domestic saving, however, governments must ensure that attractive opportunities are created for its domestic use, I have "been amazed to discover how much of Africa1s limited saving has in the past "been used to finance development in the advanced countries.

Africa cannot yet afford this kind of reverse foreign aid, particularly when so many profitable opportunities need to bo developed here*

I have been quite frank in this assessment of prerequisites for industrial development in Africa. The opportunities are here. We need to work constructively to find more effective means for accelerating Africa's industrial growth,, Industrialists and financiers from developed countries need to work with us in this most urgent task. We in Africa have inherited strong ties with particular countries in Europe. These ties have for the most part been served at the political level, but the strength of our economic ties has diminished more slowly. We do not j however, want colonialism to give way to spheres of influence in Africa.

We welcome industrialization from any source and are indeed emphasizing the need to diversify the sources of private as well as public foreign investment* Thus investors from Prance need not only consider the former French colonies, nor should British financiers only look at what they still call British Africa* African governments will welcome co-operation with all countries and no one need feel out of place.

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Annex V

v

STATEMENT BY HIS EXCELLENCY ATO AEEEE RETTA, MINISTER OF COMMERCE ABD INEQSTRY OF

THE IMPERIAL ETHIOPIAN GOVERNMENT

Mr. Chairman, distinguished delegates, ladies and gentlemen,

On behalf of His Imperial Majesty's Government and the people of