African countries have experienced modest economic recovery during the 1990s. But these countries are caught in a vicious circle in which the existing economic structure cannot generate enough savings and export earnings needed to finance their development and mount a sustained assault on widespread poverty. Yet foreign aid has been cut back sharply and the continent receives only a trickle of foreign investment flows. New policy regimes are now in place, creating the right environment for external financing to make a major difference. Development finance is one of the foremost challenges facing African countries and the international community in the new century.

Ambassador VIJAY S. MAKHAN is a career diplomat of Mauritius. He was Secretary for Foreign Affairs of his country up to 1995 when he was elected Assistant Secretary General of the OAU. He was re-elected in July 1999. Besides a number of papers, he has authored Policy Consensus Strategy Vacuum, A Pan-African Vision for the Twenty-first Century.