Africa Commission had to work out what was wrong and how to fix it

Six months ago Paul Vallely was seconded from The Independent to join Tony Blair's Commission for Africa. Today it issues its report, of which he is the principal author. This is his account of the mission for change

In January last year Bob Geldof was in Ethiopia to visit friends when someone told him about the situation in the northern highlands, where feeding camps had been set up again, just as 20 years ago during the great famine of 1984 and 1985. He drove north to see.

In January last year Bob Geldof was in Ethiopia to visit friends when someone told him about the situation in the northern highlands, where feeding camps had been set up again, just as 20 years ago during the great famine of 1984 and 1985. He drove north to see.

What filled him with something bordering on despair, however, was the news from the south of the country. Among the lush green fields of Kafe - the region from which coffee takes its name - people were starving.

In the past the farmers there would use the money they made from selling coffee to buy food, but the world price had fallen by almost 70 per cent after countries in Asia dramatically increased coffee production. The farmers in the birthplace of the crop could not afford to buy food.

"We call it globalisation," Geldof said bitterly. "They call it hunger."

The Live Aid founder rang Tony Blair's office, which patched the call through to Evian in France, where the Prime Minister was attending a summit of the world's eight most powerful nations, the G8.

"It's happening again," he exploded.

"Calm down," said the Prime Minister, "and tell me what the problem is."

"I can't calm down," said Geldof. "Twenty years after Live Aid and things are no better; in some ways they're getting worse. What happened to all the early warning systems we put in? What happened to the improvements in EU aid: they're double-counting again. None of it is working. And there are all these new forces at play which nobody properly understands."

"Come and see me when you get back," Blair said.

Geldof did. A month later the Prime Minister announced a Commission for Africa made up of 17 commissioners, a majority of them African, gathered from the worlds of government, business and the development sector. They included two prime ministers, a president and two finance ministers.

To ensure the independence of the enterprise they invited Geldof to join too. They did not quite know what they were letting themselves in for.

The launch of the commission was greeted with a fair degree of scepticism. "Why do we need a commission? Everyone knows what Africa needs." was a common response.

So we asked people to tell us. We held consultations in 49 individual countries across Africa, in every G8 country, throughout Europe, in India and in China. We received nearly 500 formal submissions and examined the vast wealth of analysis on aid and development over the past 50 years.

At the end of it we were in a much better position to say what works and what does not. Our report reflects that. Revealingly it comes to a rather different conclusion from many of those offered to us as self- evident at the outset by the riders of hobby-horses who had assured us Africa's real problem was aid/trade/debt/Aids/lack of clean water and that if we just started there then everything else would follow.

What we concluded was that one factor underlies all sub-Saharan Africa's difficulties over the past 40 years: the weakness of governance and the absence of an effective state.

The term "poor governance" is often used to mean unsound policies and widespread corruption. Both these are certainly problems for Africa - and the Commission offers recommendations to deal with them - but the core problem is less dramatic yet even more serious.

Good governance is about much more than sound policies. Governments must be able to put those policies into effect. Africa lacks the roads, power grids, technology and telecoms to do that.

It has poor quality systems for the collection of data, without which government policies can neither be properly formulated nor accurately monitored. Its civil servants, in national and local government, often do not have the training to analyse complex information or plan and budget effectively. The quality of management is poor. Public servants are also being hit by Aids. In Zambia teachers are dying faster than they can be trained.

What that means is that all the administrative machinery which is taken for granted by the citizens of developed nations - "capacity" in development jargon - is lacking . That is why one of the commission's main recommendations was that donors make a major investment to improve Africa's capacity, starting with its system of higher education (particularly in science and technology) and working through the building of systems and staff in local and national governments, and also in trans-national bodies such as the African Union and the 10 regional economic communities that are developing in west, east, central and southern Africa.

Outside commentators tend to live in the past on the subject of Africa. They talk about economic stagnation and a continent dominated by corrupt dictators. There is, sadly, still some of that about.

But those characteristics were set in the era of the Cold War, during which both super-power blocs gave aid not to those who were poorest but to countries they saw as strategic allies. The result propped up dictators who stuffed personal Swiss bank accounts with money stolen from their people. "He may be a son-of-a-bitch," as a US president said of one tyrant, "but he's our son-of-a-bitch."

But the Cold War is over. Apartheid has crumbled. A new self-assurance is sweeping the African continent. Change is starting everywhere. Twenty years ago it was commonplace for African countries to be run as dictatorships; today such governments are a minority.

There were only three democracies in 1973; in the past five years more than two-thirds of the countries in Africa have had multi-party elections - some freer and fairer than others. War has given way to peace in many places. Growth exceeded 5 per cent in 24 countries in 2003. And aid is much more effective than in the bad old days. Studies by the World Bank suggests that average rates of return on its aid projects in Africa exceed 20 per cent. Everywhere there are the first signs of what could be a real momentum for change.

The commission's conclusion is that if change is to continue, two things need to happen. Reform must continue, and accelerate, in Africa. And Western countries must support that change and stop doing things that hinder Africa's development.

The top requirement for African governments is to ensure that their systems are open to the scrutiny of their citizens. That means strengthening parliaments, the media, trade unions and the judiciary. It means making budgetary processes more open so voters can see where money is being allocated and see that it is spent as promised.

Such transparency will help expose the rot of corruption, systemic in many African societies. It is there at the bottom; in the Ivory Coast to get a single lorry from one side of the country to the other typically adds $400 (£200) to the journey in bribes and payments. It is there at the top, adding at least 25 per cent to government costs, frequently resulting in low-quality construction and unnecessary purchases.

African governments must show the political will to root out corruption. Rich nations can help in this too. They should track down money looted from Africa, now sitting in foreign bank accounts, and send that money back to those from whom it was stolen. Western banks must be obliged by law to inform on suspicious accounts.

Those who give bribes must be tackled as well as those who take them. Foreign companies, especially those in the oil and mining industries, must be pressed to publish what they pay to governments. And firms who bribe should be refused export credits.

It is within this framework of good governance that the commission's specific proposals - it makes more than 90 - must be seen. They cover a wide range of areas.

On peace and security, it recommends that Africa and the international community shift their emphasis away from military intervention and humanitarian relief towards preventative measures.

On health and education there is a raft of proposals - which will cost more than $12bn a year. This is more than a matter of basic human decency. It is also sound economics: a healthy and skilled workforce is a more productive one.

Africa is poor, ultimately, because its economy has not grown. This is not because its people lack entrepreneurial talent, but because the right climate has not existed to allow that talent to be unleashed. To promote it African governments must create the right economic, social and legal framework which will encourage firms and individuals to invest.

They must also improve infrastructure. Africa's transport costs are today twice as high as Asia's and as much as 50 per cent of the harvest is lost because farmers are unable to get their goods to market over poor roads. Donors should double their spending on infrastructure. Improving the investment climate and infrastructure takes over a third of the extra $25 billion a year in aid the commission is calling for.

Trade is what has allowed developing countries in Asia to transform their economies. Africa faces two major constraints here.

The first is well-known. Africa is confronted by shameful trade barriers that tax its goods as they enter the markets of the rich world. These must be dismantled. Rich countries must also scrap the $350bn a year they spend subsidising agri-business to undercut the wages of poor African farmers. Subsidies on cotton and sugar should end immediately and all others by 2010. And in the current Doha Round world trade talks concessions must be made to Africa without demanding reciprocation.

The second constraint on trade highlighted by the commission, however, will surprise many campaigners. Contrary to what is often supposed, trade barriers are not the prime cause of Africa's trading problems. Other developing countries have faced even higher barriers yet have still broken into world markets. The problem is that Africa does not produce enough goods, of the right quality or price, to enable it to break into world markets. Nor do Africa nations trade enough between themselves. A mere 12 per cent of all African goods go to other African countries.

To improve its capacity to trade, Africa needs to make changes internally. It must reduce and simplify the tariff systems between one African country and another. It must reform excessive bureaucracy, cumbersome customs procedures, and corruption by public servants. It must make it easier to set up businesses. It must improve the way African nations work with one another in the continent's regional economic communities. Reforms here are easy, cheap, quick and in the hands of Africa itself.

The cost of the commission's whole package of proposals would be an extra $75bn a year. The commission estimates that Africa itself will be able to pay for about a third of this. The rest should be financed by increases in aid. Aid should be doubled now, from $25bn a year to $50bn.

If governance improves as the commission predicts (and if donors improve the efficacy of the way aid is given as the commission recommends in some detail) it reckons Africa will in three to five years be able to effectively used another $25bn. That is a trebling of aid from current levels.

Alongside that the commission calls for an end to the negative aid, which is what debt repayments constitute. That means 100 per cent cancellation of Africa's debts to institutions such as the IMF and World Bank.

The amounts involved are large, the equivalent of a Marshall Plan for Africa, but the costs to the rich world are relatively small. The first $25bn increase represents just 10p out of every £100 that the rich world earns.

The problems Africa faces are interlocking. They must therefore be tackled together. The commission's proposals are not a shopping list from which donor nations can pick and choose. They constitute a coherent package for Africa that must be implemented simultaneously if they are not to lose that mutually reinforcing effect. That means a lot of money now.

The commission recommends that G8 and EU countries take the aid to be pledged for the next decade and spend a critical mass of it up-front. It suggests this should be done by backing the British Government's plan for an International Finance Facility to raise the money immediately from international capital markets, with bonds backed by donor governments' pledges as security.

Reaching agreement on such a package of recommendations was not easy. The members of the commission ranged from Geldof, with his passionate activism, to Michel Camdessus, who was managing director of the IMF during the time of some of its most controversial activities in Africa.

At least six people threatened to walk out at various points. Negotiations went to the wire. There were stand-offs over details on debt, the impact of economic growth on poor people and the pace of trade liberalisation to the eleventh hour, and beyond. (The report missed the printers' deadline by 10 hours), which is why it was unhelpful that a draft of the report was leaked in a version that did not contain the last five days of negotiated changes.

But for all the endless redrafting and compromises the end result is, I believe, a package that is both bold and radical and yet which has a realistic chance of being endorsed by G8 leaders when they meet at Gleneagles in July. There will be a massive international campaign now to ensure that they do.

Paul Vallely is a former chairman of the leading development think-tank the Catholic Institute for International Relations and of the fair trade organisation Traidcraft.