flows and funding, providing an african - owned framework for development as the foundation for partnership at both the international and regional level. 2. 3 nepad priority action areas include operationalising the african peer review mechanism, infrastructure, agriculture and food security, the preparation of a coordinated african position on market access, debt relief and official development assistance, and human resource development in the areas of health and education ( nepad 2006 ). 2. 4 and the current conjuncture is essentially promising. an important indication of the overall soundness of macroeconomic policies can be obtained from the inflation rate. in this connection africa has made considerable progress. few policymakers nowadays believe that higher inflation can buy lasting growth and prosperity. in a range of african countries measures have been or are being put in place to legally entrench disciplined financial policies, for instance by providing the central bank with an appropriate mandate and the degree of independence necessary to pursue that mandate successfully. 2. 5 a further key indicator of the state of the economy is the real growth rate. growth in aggregate real gross domestic product in africa has become more consistent in recent years and has also become stronger, as shown in the slide. partly this is due to the more sustainable monetary and fiscal policies being pursued in most parts of the continent, replacing earlier stop - go policies. partly it is also a result of benign global economic conditions and international prices which favour african commodity producers. 2. 6 with greater stability and an improved economic performance, africa has also been able to attract more foreign direct investment in recent years, as shown in the accompanying slide. and this is likely to feed back into stronger growth, helping to create a virtuous circle. 2. 7 the benefits of a fair degree of robustness in the face of adverse economic developments are substantial. accordingly, many developing countries have in recent years strengthened their foreign exchange reserves. africa is no exception in this regard, as shown in the slide. 2. 8 avoiding excessive levels of foreign debt can be as important as building up foreign exchange reserves in ensuring the ongoing health and robustness of the economy : and africa has, over the past few years, succeeded in reducing its foreign debt rather dramatically. part of this reduction is due to the debt write - offs under the heavily indebted poor countries ( hipc ) initiative. 2. 9 these developments at the aggregate level for all of africa are promising. however, further analysis at the regional and country level must clearly be done in coming to terms with any

x p guma : investing in africa address by dr x p guma, deputy governor of the south african reserve bank, at the arab - african investment, banking and business conference, cape town, 28 november 2006. * 1. * * introduction chairperson, excellencies, distinguished guests, participants, ladies and gentlemen, it is a great honour for me to address you this morning, here in cape town. permit me to add my voice to those which have already welcomed our visitors to south africa. 1. 1. the victoria and alfred waterfront, where we are meeting, is perhaps a uniquely appropriate venue for this meeting of minds, given that this waterfront was recently acquired by the dubai world and london & regional properties consortium. the consortium has in addition, also announced its plans to invest a further us $ 1 billion plus in the further bricks - and - mortar development of the v & a waterfront over the next four years. this is, some would say, concrete representation of the nature of the benefits which flow from increased interaction between our respective regions. 1. 2. in this address, i intend to outline some salient characteristics of the current conjuncture in africa – from the perspective of investment. i will then say something about south africa, again from the perspective of its attributes relative to investment. no claim is made, here, to originality. the object is, by contrast, to re - state those positive aspects of the current conjuncture which bear repetition : for no arab or african economy is currently included in the list of “ advanced economies ”. all are typically classified as “ emerging - market and developing countries ”, equally capable of either retrogression or progression. 2. african emerging 2. 1. as is well - known by now, the integrated socio - economic development framework for africa was adopted in july 2001 in lusaka by the 37th summit of the oau, and was named nepad – the new partnership for africa ’ s development. the four primary objectives of the nepad programme are the eradication of poverty, the promotion of sustainable growth and development, the integration of africa in the world economy, and the accelerated empowerment of women. 2. 2 nepad has a commitment to good governance, democracy, human rights and conflict resolution as underlying principles. the programme recognises that maintaining these standards is fundamental to the creation of an environment which is conducive to strong investment and long - term economic growth. nepad seeks to attract increased investment, capital