US Treasury Secretary Paul O'Neill has said Africa's prospects are looking up, but maintained US opposition to extending African debt relief programmes.

I'm continuing to ask the question why clean water was such a low priority that it didn't get funding

Paul O'Neill US Treasury Secretary

"I am optimistic that... this can be the century for the African continent, and it can be early in this century, not late on," he told the BBC's World Business Report.

Mr O'Neill said many African countries are benefiting from stronger governments determined to "get real value" out of economic development programmes.

But the Treasury Secretary, speaking from Uganda, also questioned how money was allocated by the World Bank.

Mr O'Neill said it would investigate the issue of clean water

"Forty-five percent of the people don't have clean water (and) if you look at the amount of money that's come into Uganda since 1986, I'm continuing to ask the question why clean water was such a low priority that it didn't get funding," he said.

"The amount of money that's required to give everyone here clean water is maybe $25m (but) according to the local people, the World Bank gave them $300m and still getting them clean water was not a high priority."

He added he did not have enough time to find out why this had occurred but would pursue the issue in the coming months.

Fact-finding

Mr O'Neill, currently on a 10-day tour of sub-Saharan Africa with U2 singer and debt relief campaigner Bono, said Uganda would remain heavily dependent on foreign aid even if the country's debts were cancelled.

"President Bush has made the point that for low income countries like Uganda, we should give them the money in the form of grants," he said.

The tour, designed to inform US government thinking on how to promote growth in Africa, traces its origins back to a meeting between Mr O'Neill and Bono in Washington last year.

The US Treasury Secretary defended subsidies to US farmers, widely condemned as a form of unfair price competition against agricultural exporters in the third world.

But he added: "Would the world be a better off if there were no trade or tariff barriers? Absolutely."

He reiterated US opposition to cancelling Africa's foreign debt.

Rock star tribute

Mr O'Neill also paid tribute to Bono, despite differences of opinion between the two men over debt relief.

"He is a rock star in the places that we live, but in a lot of places in Africa they don't know who he is."

"I have thoroughly enjoyed spending this time with him. I think he's a great asset," he said.

Mr O'Neill and Bono's fact-finding tour, which has already passed through South Africa and Ghana, is due to make its next and final stop in Ethiopia.