Opening Speech
On behalf of Mr. Hany Dimian, Deputy Minister of Finance of Egypt
Delivered by Yasser Sobhi, Economist at the Office of Minister of Finance
Your Excellency Mr. Ken Kandodo, Minister of Development planning and cooperation, Minister of Finance of the republic of Malawi, Your Excellency Mr. Abbie Shawa, Mr. Abdoulie Janneh, United Nations Under-Secretary-General and Executive Secretary for the Economic Commission for Africa, Mr. Maxwell Mkwezalamba, Commissioner for Economic Affairs of the African Union, distinguished delegates, Ladies and Gentlemen,
First, I would like to express our gratitude to the government of Malawi for its generous hospitality in hosting this important conference. We hope that this event will be an excellent opportunity for sharing our experiences, challenges, and to explore new ideas and directions to guide us in our path to prosperity.
I also thank Mr. Jean Ping, Chairperson of the African Union Comission, and Mr. Abdoulie Janneh, Executive Secretary of ECA fr their exceptional leadership and commitment as evidenced by the strong synergies that has been built in these meetings over the past three years.
Last June in Cairo, participants at the conference were highly engaged in fruitful discussions and proposed important recommendations in a time where the global crisis and its impact on our economies and societies were highly felt and recognized.
The theme of the conference was enhancing the effectiveness of fiscal policy for domestic resources mobilization. As the Minister Youssef Boutros-Ghali has said during the conference that we can not rely anymore on the others, we’re on our own.
Indeed, economic growth can’t depend on the long run on external aids and other assistance for development programs. Growth should be based on stable, solid and sustainable institutional and economic fundamentals.
In this regard, the role of fiscal policy should target promoting growth rather than closing fiscal gap. The mindset of fiscal policy should change towards this end. This switch doesn’t happen in the short term but should gradually develop in the medium and long run.
There are prerequisites to achieve this target:
Enabling tax policy
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Enabling productive expenditure programs
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Enabling business environment
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Enabling trade environment
Nearly one year on from the Cairo meeting, it is particularly pleasing to note that Africa’s senior political leaders and policymakers have wasted no time in strategizing on how best to respond to the adverse impact of the global crisis on growth and development in Africa.
We have also been greatly enriched by the various meetings that have been held on this issue since our Cairo meeting- the UN General Assembly high-level meeting on the impact of the global crisis on development; the Pittsburg Summit of the G20; and the meetings of Committee of Ten of African Finance Ministers and Central Bank governors.
The theme of the conference this year is to promote high-level sustainable growth to reduce unemployment in Africa. It’s an urgent call.
With high rate of unemployment in most of African countries, the 4.5% real GDP growth achieved in the continent in 2008 and 1.6% in 2009 and the expected 4.3% in 2010 are insufficient to create jobs for new entrants to the job market annually , yet reducing unemployment.
Fiscal policy has a major role to play in helping the diversification of the economy and its sources of growth. This diversification will ensure that private sector led-growth would create real and sustainable job opportunities.
There are some concerns about jobless growth. However, we should realize that those desired job opportunities could take more time when it comes from the private sector. The latter is very prudent to ensure that their business is stable and that their growth is sustainable before offering durable employment opportunities.
However, Growth should also be complemented with other important reforms namely education and training. We face the reality that many of the unemployed people are hard to be hired. We need employable people. Education and training for adopting newly and highly developed technology are essential to match the job market needs and requirements.
Let me stress on the high potential for growth that our continent possesses. The future of the continent is promising. With a market of 1 billion consumers and rich natural resources, Africa has become more and more attractive to world investors. This interest has been showed recently not only from the traditional developed world but also from other countries that have already emerged like China, India among others. They need new partners and new markets for growth. We have to seize the opportunity by being ready and attractive.
It’s true that reforms are sometimes risky, sometimes painful and most of the time face resistance. But, implementing bold reforms are rewarding. And experience shows that tackling the major bindings for growth encourage domestic as well as foreign investments to increase. Capital flows are searching, not anymore for tax incentives, but for the most committed countries and governments for reforms.
Before I conclude my remarks, let me also thank the bureau of the Committee for their vital contribution to the success of last year’s Conference. I have no doubt that this Conference and the new Bureau will enjoy the same level of support on many of the issues and challenges that they will be addressing over the next one year.
I wish you a successful conference.
Thank you for your kind attention.
