Aid inflows won`t help - AfDB chief

African Development Bank (AfDB) President Donald Kaberuka has said that the private sector and improved trade are significant components that could help African countries eradicate poverty and attain Millennium Development Goals. Speaking at a press conference in Dar es Salaam yesterday, Kaberuka said the notion held by many Africans that the continent could be developed with aid inflows was wrong. He was speaking during the Aid-for-Trade meeting, which ended yesterday in Dar es Salaam. `Mobilizing Aid for Trade: Focus on Africa`, was the central theme of the high?level conference which took place under the auspices of the African Development Bank (AfDB), the UN Economic Commission for Africa (UNECA), and the World Trade Organization (WTO) in cooperation with the World Bank. Mozambique?s former President, Joaquim Chissano and former UN Secretary-General, Kofi Annan, had been invited to the conference, which brought together finance and trade ministers, senior donor representatives, regional institutions and key private sector actors to discuss trade-related challenges in the region, and set out priorities for future action. The AfDB President held the joint press conference with WTO secretary general Pascal Lamy. Kaberuka said private sector development and trade could be an engine for growth that would lift millions of people out of poverty and enable developing countries attain the Millennium Development Goals. `A key objective should be expanding Africa`s capacity to manage and deploy scaled-up development resources as well as the ability to negotiate international trade and business deals,` he said. `It takes only one link to paralyze trade and therefore aid for trade must also be provided for building capable governance structures that are critical in running a country?s economy.` The AfDB President`s remarks were in tune with the agenda of the conference, which highlighted the African dimension of Aid for Trade and encouraged governments, donors and the private sector to address specific challenges for Africa, prioritize Aid for Trade needs, and move towards shared solutions to trade-related challenges. The conference was expected to help raise awareness of the importance of trade for growth in developing countries, encourage information exchange about best practices and facilitate collective action to maximize the benefits of Aid for Trade. Wrapping up the meeting, World Trade Organization Director General Pascal Lamy said in order to attain the Millennium Development Goals, building capabilities in nations should be at the heart of aid for trade. He said that aid for trade should be used to empower African business people, improve the investment climate and promote entrepreneurship. Lamy said Kenyan horticulture was a striking example of how targeted investments by lenders could boost market access and earnings. `(African nations) are improving their capacity to benefit, look at flowers. It`s rocketing,` he told reporters. `This region is becoming so competitive in the global market because you have good natural conditions, labour costs are lower than in the Netherlands or Florida, and there are no subsidies on flowers in the Western world.` Kenyan flower exporters had been barred from EU and US markets due to pesticide residues on their blooms. But, Lamy said, the growers changed their processes with technical help. WTO officials estimate that for EU aid of only about 5 million euros to phase out the pesticides some five years ago, farmers were now accessing a lucrative and growing market. Horticulture earned Kenya more than $700 million last year as the sector overtook tea to become the East African country?s second highest forex earner after tourism. Kenya is now the biggest exporter of cut flowers to the European Union, with a market share of some 32 percent, up from 11 percent in 2005. The sector employs some two million Kenyans directly, 80 percent of them small-scale farmers. The trade forum in Dar es Salaam, which was organised by the WTO, African Development Bank and United Nations, was the third in a series of regional meetings that will report to a WTO ?Global Review? in Geneva on Nov. 20-21. Africa`s share of world trade is less than 3 percent, experts say, and often crumbling infrastructure make the cost of doing business there far higher than elsewhere. The cost per mile of operating a two-axle truck in Tanzania, for instance, is more than twice as much as in Indonesia or Pakistan. `We have heard the problem is not a lack of competitive firms, but the lack of competitive economic systems,` Lamy said in his closing speech to delegates. `If we can address this problem, Africa can compete with the world.` Earlier, former Mozambique President Joachim Chisano said African countries experienced a formidable range of barriers that constrained their efforts to reap benefits from the global trading system. `It is our hope that the barriers will either be eliminated altogether or significantly reduced so that Africans can have access to world markets,` he said. He said Africans must deal with their own domestic shortcomings that prevented them from effectively integrating into the global market.