It's an honor to be addressing this distinguished gathering of bankers and I want to thank the organisers, for inviting me. They say there's no free lunch and I can see the same applies to dinner! It's becoming a cliche to say that Africa is now on the threshold of a new era, at the start of a century many feel will belong to Africa. But it feels good to say it nonetheless. This is something we must believe in and strive for if we want to make it a reality.

The topic for my speech is on Africa as an emerging investment destination. Historically, capital inflows to Africa have been largely confined to the natural resource sectors - oil, gas, mining and to Official Development Assistance, ODA, flows. But in 2006 Africa crossed a threshold. For the first time, according to the OECD's Development Assistance Committee, private- capital flows exceeded official flows. In addition, there is growing broader interest in Africa as an investment destination. Africa stands to receive badly needed foreign direct investment and, with it, new technology. It can potentially buildup labour intensive manufacturing and create jobs. It can refurbish and expand its power and road infrastructure, which we all know is a serious constraint on private investment. And together with ODA, it can make stronger progress towards the Millennium Development Goals.

The prospect of joining the emerging markets club is an exciting one. But before we start opening up the champagne, we need to confront some big challenges. The biggest of these and my main message for to night is: African countries need to take advantage of capital inflows to promote growth and development while minimising the downside risks. Later in my speech, I shall get into some do's and don'ts. Managing the process of financial integration well is vital, especially with the Multilateral Debt Relief Initiative (MDRI) having only recently wiped the slate clean for many African countries. Nigeria as you know saved 18 billion dollars as a result of Paris Club debt relief. If financial integration is poorly managed, it could lead us down a painful but familiar path of another unsustainable build up in debt and economic stagnation instead of faster growth. If I dare paraphrase William Shakespeare, "There is a tide in the affairs of Africa which taken at the flood leads on to fortune. Omitted, all their economies are bound in shallows and in debt. But let me counterbalance caution with an optimism I believe is justified: Africa is displaying a capacity to surprise, which in large part explains why it is fast becoming an attractive destination for private investment.

Why are private investors suddenly interested in Africa? Because they can make money at what they perceive to be acceptable levels of risk. Their interest has been stimulated by a combination of factors, such as abundant global liquidity, attractive yields compared to emerging markets in other regions; high commodity prices; and clean government balance sheets in many SSA countries due to debt relief.

This is not all. Many African countries are implementing major reforms in trade and industrial regulation, and easing barriers to business. According to the World Bank's Doing Business indicators for 2006/07, four African countries ranked in the top third: Mauritius 32, South Africa 35, Namibia 43, and Botswana 51. Kenya moved up to 72 and Ghana to 87 and both were among the top 10 reformers in the world in 2006/07, Eleven African countries took steps to reduce the time and cost needed to start a business. For example, Burkina Faso created one-stop shop for business entry, cutting required procedures from 12-8 and time from 45 days to 34.

The combination of improved governance, persistent reform and vastly improved macroeconomic management is showing up in the results. After three decades of stagnation, African economies are growing at the same pace as the global economy - 5.4 percent a year for the last three years with falling inflation. And foreign exchange reserves have been built up as a direct consequence of managing this commodity price boom far better than past booms. Some 18 non-mineral-exporting countries, home to a third of all Africans, have been growing at four percent a year for over a decade. Africa offers opportunities for portfolio diversification with higher risk-adjusted returns than in the past and that's why money is beginning to flow in.

Since this is an audience of bankers, you must be waiting for the numbers. Starting from a level of 11 billion dollars in 2000, private equity and debt flows have quickly climbed to 53 billion dollars in 2007, an almost 400 percent increase. Even though the 2007 number of 53 billion dollars is less than one percent of global capital inflows, it is significant at over six percent of sub-Saharan Africa's 2007 GDP.