Twenty-Fifth Meeting of Ministers of Finance, Planning and Economic Development

Opening Speech for Hon. Minister of Finance, Government of the Federal Republic of Nigeria, Dr. Ngozi Okonjo-Iweala and the Opening of the 39 th Session of the ECA and Conference of Ministers of Finance, Planning and Economic Development, Ouagadougou, Burkina Faso, May 13-14, 2006

Protocols:

It gives me great pleasure, as the Outgoing Chair of the Commission of the United Nations Economic Commission, to welcome you all the 40 th Session of the Commission of ECA and the annual ECA Conference of African Ministers of Finance, Planning, and Economic Development. The past year has been momentous in terms of the degree of attention that our continent received from the international community and this Conference of African Finance Ministers, until recently the only formal forum for us to meet to discuss, review, and articulate new economic directions for our continent.

There is a familiar face sitting next to me that I am sure you have all noticed. In case you do not know him; that is H.E. Mr. Abdoulie Janneh, Under-Secretary General of the United Nations and the new Executive Secretary of ECA. I would think I am on safe grounds if I say that Mr. Janneh needs no introduction to most of us. We know him from his days at the UNDP in charge of UNDP's Regional Bureau for Africa as a fervent and committed son for our continent. At the UNDP, his actions spoke louder than words. Under his leadership, UNDP scaled up its country support programmes and its support to the Africa Union, the New Partnership for Africa's Development (NEPAD) and the African Peer Review Mechanism (APRM). Permit me therefore, dear colleagues, to congratulate Abdoulie, on behalf of the Government and people of Nigeria, on my own behalf, and on behalf of all of you, on his elevation to head our continent's premier economic policy research institution.

Abdoulie, we applaud your success and elevation and do know for sure that with you in the saddle, we have a true believer in the prospects and possibilities of our continent. We are in no doubt that under your leadership, our countries' relationship with ECA will be further strengthened and deepened.

Mr. Executive Secretary, you have shared with me some elements of your vision for ECA, about the work of the Task Force that you set up to assist in this effort, and the broad outlines of the reforms that you have initiated to refocus ECA and make it much more speedily responsive to the needs of Africa. I agree with two areas - "Regional Integration" and Addressing Africa's Special Needs" - that you have identified. These are areas where ECA does have comparative and competitive advantage and can add considerable value to our work. We need new thinking, for example in the area of regional integration. We need new approaches to planning, financing and implementation of regional public goods; not just the infrastructure programs but also disease and pest control (the avian influenza threatening the poultry industry of many African countries is an example). We also need new thinking on economic diversification. The promise of regional integration will remain unfulfilled and economic growth's impact on poverty will remain shallow until and unless we diversify our economies. So, the strengthened emphasis on regional integration is very welcome. However, reform is not easy. I would like to assure you, Mr. Executive Secretary, of my unflinching support. We will walk the walk with you.

I would also like to congratulate the incoming Chair of the Commission, the Minister of Finance of the Republic of Burkina Faso. M. Minister, your country has been a leader in urging our countries to pay greater attention to employment creation as an important outcome of our reforms. It was here about a year ago that the African Union held its Extra-Ordinary Summit of Heads of State on Employment. It is therefore very fitting that this Conference of African Ministers of Finance on the theme "The Challenge of Employment and poverty in Africa" should be held here.

Your Excellencies:

Since our meeting in Abuja, there have been significant developments in the international community that bear directly on our continent's interest: The G-8 commitment at the Gleneagles Summit to cancel the debt of 18 of the world's most resource constrained countries, 14 of those countries are African; the UK Commission for Africa in its report, "Our Common Interest" advocated a large increase in aid to Africa; the re-affirmation by world leaders at their 2005 UN Special Summit of their commitment to pay attention to Africa's special needs; the new proposals for scaling up aid to Africa. Although the Hong Kong Ministerial meeting of the World Trade Organization fell short of our expectations, there were nonetheless outcomes that are encouraging to us such as the decisions on cotton and the gradual phasing out of agriculture subsidies.

This renewed attention to our continent must not be narrowly seen as a response by the international community to our poverty. Rather, it must, in my view, be interpreted as recognition by our development partners that we are, once again, doing many things right. The world is beginning to invest in our success. On the political front, we continue to make progress. In Liberia, for example, peaceful elections resulted in the election into office of our continent's first woman President, Mrs. Ellen Sirleaf-Johnson, a former Finance Minister. (May I suggest that this Conference send her a congratulatory message.) Elections are soon to be held in the DRC. The Dafur conflict is nearing resolution with the signing by all parties of a peace agreement in Abuja.

Our resource picture is also improving. Increasingly, oil and other internationally tradeable minerals have been discovered in commercial quantities in many countries. These resources, if well managed, will reduce our dependence on foreign savings in the not too distant future. The improved growth performance of many African countries shows that we are increasingly managing our economies better. This development provides our continent with some internal strength. Further development of our large economies such as South Africa, Nigeria and Egypt to better serve as regional drivers of growth will provide some additional degrees of freedom against the vagaries of the international market. In most of our countries, the fight against corruption and mismanagement is methodical, assiduous and unrelenting. Believe me the fight is rough both on the economic and political front.

As I pointed out in my address to the Meeting of the Committee of ECA Experts last year, the combination of the positive political changes and improvements in the economic management has resulted in sustained positive economic growth in many of our countries. For the first time in a long while, we have more than 20 countries growing persistently at mort than 5% p.a. for more than 6 consecutive years. Granted this rate of growth is less than 7% annual rate of growth that the ECA determined in 1999 as the rate of growth sufficient for Africa to cut poverty in half, this achievement nonetheless represents a significant break from the past and is a good foundation upon which we can and should build.

But there is a blemish, very serious blemish, on our recent growth performance. That blemish is the poor employment creation record of our recent growth. In most of our countries, economic growth is not resulting in significant job creation and therefore in poverty reduction. The evidence stares us in the face on the streets of our major cities: young men and women, trained at substantial expenses by their families and governments, roaming the streets with little to do, operating motor-cycle taxis in the absence of something to do, and in some cases engaging in criminal activities. The constituency for reforms will be small if the benefits of our reforms are not broadly shared. It will be extremely difficult to secure these improvements in growth performance - and indeed in political stability - under these circumstances. Employment creation, meaningful and decent jobs, is thus a big economic as well as social and political problem that our continent must address.

It is in this light that we applaud ECA's choice of "Meeting the Challenge of Employment in Africa" as the theme of this year's Conference. We, Ministers responsible for Finance, Economic Development and Planning, are directly concerned about the employment situation for a number of reasons. The objective of the policies we enact and the decisions we make each day is to improve social welfare. Our projections of revenues depend on the number of people working as does our expenditure on social safety nets. A preponderant outlay for social safety nets as a consequence of low employment limits the extent to which we can scale up investment in infrastructure, agriculture, trade promotion, and industrial diversification.

It is important that we enact innovative policies to deal with the employment problem. However, to succeed in this, we also need additional financing. This is why the commitment by the G-8 countries at Gleneagles to provide additional financing for Africa is important. We need to find an effective mechanism to encourage our G-8 partners not to renege on their commitment. It is for this reason that the Government of Nigeria and the ADB with the Finance Ministers of Financing for Development, the purpose of which is to explore a) how we are meeting our commitments to our people and to the international community and b) how commitments can be encouraged and monitored.

Ladies and Gentlemen:

Last year, at my address to the meeting of experts, I urged that we Africans should be much more innovative in our thinking about our problems. I also challenged us to take the lead in thinking about our problems. For too long our continent has been used as a place for experimentation of ideas that have never been tried any where else. This has happened because we have ceded thinking about our problems to others. We cannot afford to continue in this manner because we are late-comers to development. Unnecessary experimentation will delay us further and accentuate our lateness. And lateness can be costly. Former Soviet President Mikhail Gorbachev put the cost of lateness most succinctly: "History punishes the late comer" he had said when asked to justify his "perestroika." I might add that history punishes even more the late comer who spends too much time experimenting with untested ideas. So, today, as we try to scale up our national development strategies in order to improve employment creation, there are voices advising us not to be bold because of absorptive capacity. But bold we must be, if we are to make a significant headway in meeting the targets of the Millennium Development Goals and advancing the NEPAD agenda.

Let us therefore not be timid in the decisions that we shall take at this conference for as a philosopher once said: "Our fears are like traitors that make us lose the good we oft might win by attempting." Let us not lose the good because of our fears.

Thank you,

Dr. Ngozi Okonjo-Iweala
Minister of Finance
Federal Republic of Nigeria