By Frederick Philander Windhoek Although Africa is presently experiencing its highest economic growth in 30 years, the continent will require an estimated US$18 billion in infrastructure financing alone this decade. This revelation was made by the managing director of Old Mutual, d at a three-day conference of the Southern African Organization of Public Accounts Committees which is sitting currently in the capital. The Old Mutual director was addressing participants on prudent investment policies for public funds. "Inadequate public investment is blamed for Africa's poor stock of infrastructure, which clearly limits the growth potential of economies. The challenge now is to propel the national economies of our continent to ensure that essential infrastructure and social projects such as schools, water, energy, clinics, hospitals and roads move from the drawing board into the community," said. According to him, the framework for the investment of public funds can be reviewed against nationally raised funds that are awaiting disbursement to appropriate national priorities and the investment of trust money such as public retirement funds, road accident and social security funds. "The management of such funds require that proper legislative and regulatory frameworks be put in place. This is to ensure that assets and liabilities associated with public funds are effectively and efficiently managed. It is also important that the people entrusted with public funds understand their responsibilities and obligations. A framework to guide how these funds should be invested and spent should be put in place," he advised. Such a framework could be informed by national agendas such as Vision 2030 or the National Development Plans and not by expediency, convenience, and the promotion of self-interests of a few individuals or to buy votes. "Conditions required for successful public sector spending include clear rules, objectives consistent with macro-economic goals, transparency, respect for the rule of law and the elimination of corruption. It should be borne in mind that the quality of government has always been an important element in the complex equation determining a nation's economic prosperity," he said. !Gawaxab further said investing in a way that is consistent with macro-economic stability and debt sustainability undoubtedly constitutes prudent spending of public sector funds. "The dominant traditional model of parliamentary oversight emphasizes the separation of powers and checks and balances. While not entirely displaying the paradigm, oversight could also be thought of as ensuring that public sector spending remains prudent, and that scarce resources are directed towards productive parts of the economy, as well as the eradication of poverty and underdevelopment," he said. "Investing in people by and large has to do with the creation of a pool of individuals with the right combination of management, technical and leadership skills that a country requires to propel its growth. Furthermore, it means developing the capacity of the people to implement and deliver on plans. Where capacity is poor, it is profoundly difficult to implement plans and to fight corruption. Where corruption sets in, prudent investing is first to fly out of the window, a potential threat to democracies," he said. He said in countries with poor governance, the economy generally does not fire on all cylinders and the quality of life of the ordinary man on the street does not improve. "Public sector spending on industries where we have a competitive advantage as well as a niche, is bound to enhance the productivity of the economy. Prudent spending constitutes spending is consistent with macro-economic stability, debt is sustainable, a better life for all is indeed possible and that people who are entrusted to ensure this happens have the courage of their convictions to speak up. We should not be silent or unable to act if public sector spending fails the nation because we run the risk of condemnation," !Gawaxab warned.
2006-08-16 00:00:00 12 years ago