Conference of African Ministers of Finance, Planning and Economic Development
Opening Remarks by the Outgoing Chair, His Excellency Mr. Trevor Manuel, Minister of Finance of South Africa (delivered by Honourable Yaw Osafo-Maafo, Minister of Finance and Economic Planning of Ghana)
Kampala, Uganda
21 May 2004
His Excellency Mr. Yoweri Museveni, President of the Republic
of Uganda
Honourable Ministers,
Executive Secretary of ECA,
The African Union Commissioner for Trade and Industry,
Distinguished Ladies and Gentlemen,
It is a great pleasure to address the 2004 Conference of African Ministers of Finance, Planning and Economic Development on behalf of His Excellency Mr. Trevor Manuel, Minister of Finance of South Africa.
Our meeting today is significant and timely. The meeting has come few months after the fiasco of the Cancun trade negotiations and more importantly the enlargement of the EU, which is our major trade partner at the beginning of this month. We have also taken important steps to put the Doha Development Round back on track. From Geneva and Paris, we are now seeing signs of renewed momentum in the Doha Development Round of multilateral trade negotiations. At the same time, African countries are making serious efforts in enhancing the status of governance on the Continent with the first country review of the African Peer Review Mechanism commencing next week in Ghana.
These renewed efforts are critically important for accelerating progress towards poverty reduction and meeting the Millennium Development Goals in Africa. It is our responsibility to ensure that they become mutually reinforcing. The theme of this conference, "Mainstreaming Trade in National Development Strategies", is therefore particularly timely and relevant. It will assist us in exploring the dual challenges facing African countries as we seek to level the playing field in the global trading system, while simultaneously addressing national supply-side constraints that would prohibit us from taking advantage of improved trade opportunities.
Putting the Doha Development Round back on track is a critical priority. Most estimates indicate that the benefits to developing countries would be substantial. In fact, they could amount to as much as 500 billion US dollars annually, or 10 times the additional resource requirements for meeting the MDGs. Trade distorting agricultural subsidies and the disproportional tariff protection on agricultural products are particularly detrimental to economic development in Africa. OECD countries spend as much as 315 billion US dollars annually, or 47 percent of the value of their agricultural production, on instruments to support their farmers.
In manufacturing, tariff peaks and tariff escalation apply a disproportionate burden on developing countries and do particular harm to our efforts to diversify our economies. Let me provide you with an example: Last year, Mongolia and Norway both paid 23 million US dollars in tariffs on exports to the United States. Yet, the total value of exported goods from Norway amounted to 5 billion US dollars compared to a mere 143 million US dollars for exports from Mongolia, or 40 times as much. In effect, Mongolians pay 16 cents to sell the United States a dollar worth of sweaters and suits, while the Norwegians paid half a cent to sell the United States a dollar worth of gourmet smoked salmon and North Sea crude oil. In the case of cocoa, raw cocoa attracts 0% tariffs in Europe, 9% for semi processed cocoa products and 21% for finished products. These statistics are staggering. To me, they are a clear indication that we cannot talk about productive global partnerships for development without seeing significant and rapid progress in market access for products from developing countries to the OECD countries i.e. the need for a fair global trading system. With regard to SPS currently, the EU is considering the levels of ochratoxin and aflatoxin in our various commodities. We, as Africans, are not members of these international standard setting organizations. I will, therefore urge ECA, as a research institution to study this issue carefully and help African countries address this fairly and transparently.
Though the economic outlook for Africa is increasingly positive, substantially faster growth will be needed to reduce poverty and to meet the Millennium Development Goals in Africa. Over the past twenty-five years, our continent has grown poorer - not richer and only 4 countries are on track to meet the Millennium Development Goals in 2015. In fact, if substantial progress is not made, Africa as a whole will only achieve the universal education targets in 2029, i.e. 25 years from now halving poverty will require another 100 years, and meeting the child mortality rates will only happen in 2169; i.e. 165 years from now (8 generations from now).
These figures are a blank reminder of the challenges in front of us. National supply-side constraints can effectively undermine our capacity to take advantage of new trade opportunities. To maximize the economic benefits of multilateral trade concessions, we must consolidate and accelerate our domestic reform processes and build a conducive economic climate on the continent. Further efforts are needed to avoid policy reversals, to open up our economies to intra-African trade, to establish sound regulatory and institutional environment for private sector activity - that facilitates rather than impedes entrepreneurship and competition - and to deepen our financial sector to efficiently and sustainably mobilize resources and channel them to their productive uses.
We all have a responsibility to be part of the titanic struggle for the renewal and rebirth of our Continent. Our experience, albeit short, with NEPAD and the African Union has been an enriching one. We have come together, as a continent, recognized our common development challenges, defined the broad tenets of good governance and sound economic management and are building the institutions to carry forward and implement our common objectives.
Global Partnerships for Development are not just rhetorics. To most of us, they hold the promise of a qualitative leap in the global endeavour to fight poverty, raising living standards, and claiming back the dignity of our people. Real progress will however be limited if we do not ensure a successful, pro-development and timely outcome of the Doha Development Round. In the same vein, we need to redouble our national efforts in creating a conducive economic climate on the continent to enable us achieve our ultimate goal of integrating our economies into global economy.
With these few remarks, I anticipate a very fruitful deliberations over the next two days.
THANK YOU