OPENING STATEMENT BYHON. KEN EDWARD KANDODO MINISTER OF FINANCE OF THE REPUBLIC OF MALAWI

25 – 28 March 2010
LILONGWE, MALAWI

Good morning.

It is my pleasure to welcome you all to Malawi, the “Warm Heart of Africa” and to Lilongwe our capital city in particular. I wish to thank you for honoring us with your presence and for participating in this very important Conference, whose theme is ‘Promoting High-Level Sustainable Growth to Reduce Unemployment in Africa’.

I would like to extend my appreciation to the Chairperson of the AU Commission, Mr. Jean Ping and the Executive Secretary of ECA, Mr. AbdoulieJanneh for making this meeting possible.  I would like also to thank the outgoing Chairman of the Bureau of Experts and members of the Bureau for their leadership in preparing us for this Conference.
The choice of the theme of our Conference, Promoting high-level sustainable growth to reduce unemployment in Africa is a timely one especially against the backdrop of recent global financial and economic crisis. It is timely because it conveys the hope that we know what needs to be done to achieve the high, sustained and inclusive growth for poverty reduction in Africa. I recognize that this choice must have been made because of the adverse impact of the global financial and economic crisis on growth and development in Africa.  I have no doubt that today's discussions will contribute in many ways to accelerating Africa’s growth recovery.
The link between economic growth, employment creation and poverty reduction has come under a microscope because of the paradox we have witnessed in our economies where recent impressive economy growth does not seem to have created many new jobs.  While these growth experiences do not invalidate the importance of economic growth for poverty reduction, they, however, bring into focus the importance of job creation. The consensus that emerges from these experiences is that economic growth can result in increased countries’ wealth, but the poor may not necessarily contribute to, nor benefit from, if the growth is not all inclusive.

Furthermore, employment is not only important for poverty reduction but also for sustaining economic growth. This is to say that the relationship between economic growth and employment creation runs in the opposite direction as well. Rising employment provides incentives for additional investment in human development, which is essential for increasing and sustaining long-term growth.
Distinguished Delegates,
Without Government intervention, the world economy would have been in a much deeper recession. Governments will need to strengthen their capacities in order to provide the necessary enabling conditions for the private sector.  In addition, markets on their own would not lead to Africa’s development.  Governments will need to take a leading  role in ensuring better regulation and functioning of the markets. What’s more, there is no substitute to pursuing good macro-economic policies and Governments must remain vigilant in exercising fiscal prudence, in the pursuit of better economic governance, and in the promotion of transparency in public finance management.

More specifically, the following should be at the core of our deliberations during this conference because of their importance and linkage high-level sustainable growth for Africa:-

Ladies and Gentlemen, a stable macro-economic environment, at national level, is important in the process of promoting regional economic integration and it is also a prerequisite forthe developmentof robust regional financial and capital markets. Maintaining macro-economic stability will require strengthened policy coordination and macroeconomic convergence, which over time and with varying speed, can become building blocks toward deeper integration and monetary unification.

The importance of regional economic cooperation and integration as a means for accelerating and consolidating economic and social development has long been recognized by African decision-makers. Regional integration and the creation of a pan-African common market has been a central vision of African leaders since the early years of independence. However, progress towards the vision has been challenging, with significant disconnects between stated regional priorities and national policies. It is therefore important to strengthen the connection between regional policy commitments and national planning.

Regional Economic Communities (RECs) have a uniquely important role in the process towards stronger integration in Africa. Important aspects of this role include facilitating provision of regional public goods and brokering credible mechanisms to compensate losers in specific integration initiatives. However, the overlapping membership raises some challenges for policy and program coordination, a matter which needs to be effectively addressed.

Ladies and Gentlemen, in many African countries there has been a lack of adequate investment in the agriculture sector,which is crucial for increasing productivity and to the effectively deal with issues of Food Security and Nutrition. Sufficient attention and resources need to be invested in irrigation farming, and in appropriate technology for increased agricultural production. This should be coupled with the strengthening of institutions to promote better functioning of both producer and credit markets.  With such a large proportion of Africa’s population being dependent on agriculture, this seems to be the best way of addressing issues of poverty and making progress towards meeting the MDGs.

Ladies and Gentlemen, our countries must strive to build stronger and better-connected infrastructure platforms which can help unlock economies of scale and sharpen competitiveness in Africa, particularly for the Africa’s 15 landlocked countries. Regional infrastructure will also facilitate more intraregional trade as well as exports from the continent, thus strongly supporting Africa’s growth agenda.

Distinguished delegates,
Growth experienced by African economies has been insufficiently low relative to Africa’s development goals. Our growth has also been highly vulnerable to external shocks. For decades, African production and exports have depended excessively on primary commodities with extremely limited value addition. In addition, many other developing countries are emerging as newly industrialized economies with highly diversified production.  Africa is however, left behind because it has continued to serve as the provider of raw materials.

To achieve an integrated approach between growth, employment and the policies for poverty reduction would require a sustainable development strategy that transforms the fruits of economic growth into tangible improvements in the quality of life of our people.The way forward for Africa hinges on commitments by all stakeholders to design and implement effective long-term strategies and policies that promote economic transformation through high-level sustainable growth and at the same time generate employment to reduce poverty. Country-specific growth and employment strategies should be inclusive and particularly sensitive to the needs of the vulnerable groups – women, the youth, the elderly, people with disability and the rural poor.

Ladies and Gentlemen, for employment-focused growth strategies to be effective, they must be based on measurable targets mainstreamed in national development plans and these must receive sufficient budget allocations. These targets must be regularly monitored and assessed by all stakeholders – the central and local governments, the private sector, labour organizations and the civil societies.

Distinguished Delegates,
Africa will not be able to fully realize its potential if African countries are unable to significantly increase intra-Africa trade, which is critical for promoting agro-industries, manufacturing and increased competitiveness in global markets. In this regard, we should encourage our regional economic communities (RECs) to speed up the elimination of all barriers to intra-Africa trade and promote regional integration as well as regional value chains. In addition, there is a need for concerted action to address the very pronounced gender dimension of poverty in Africa, enhance our international competitiveness and accelerate our integration into the world economy.

We have a substantial agenda before us and it is not possible within the limited time available to address adequately all the issues on the agenda of your meeting. However, I trust that our deliberations over the next few days will be fruitful and provide new impetus for action and renewed commitment in addressing the challenges of growth and employment.
With thesebrief remarks, I now declare the Meeting of the Committee of Experts of the 3rd Joint Annual Meetings of the AU Conference of Ministers of Economy and Finance and ECA Conference of African Ministers of Finance, Planning and Economic Development officially opened.

I wish you success in your deliberations and,along with my other Minister colleagues,look forward to receiving your report.

Thank you for your kind attention.