PREPORT ON THE WORK OF THE ECONOMIC COMMISIONFOR AFRICA (ECA)1998 - 2000

Ref: E/ECA/CM.25/CRP.1
9 April 2001

Table of Contents

Executive summary

Abbreviations and Acronyms

Chapters

I. Overview of Economic and Social Developments In Africa

II. Major Policy and Programme Developments

A. Major Policy Initiatives

1. African Development Forum
2. The "Big Table" of OECD - African Countries
3. Consultation on ECA's Partnership Programme
4. Post Conflict Reconstruction and Development Programme

B. Major Programme Events

1. High Level Regional Consultation on Financing for Development and the LDCs
2. Africa Regional Hearing for the Millennium Assembly

III. Implementation of the Work Programme

1. Facilitating economic and social policy analysis
2. Ensuring food security and sustainable development
3. Strengthening development management
4. Harnessing information for development
5. Promoting regional cooperation and integration
6. Promoting the advancement of women
7. Subregional activities for development
8. Other programmes

1. United Nations New Agenda for the Development of Africa
2. The United Nations System-wide Special Initiative on Africa

IV. Programme Support Activities

1. Policy planning and programme development
2. Financial resources management and mobilization
3. Human resources management
4. Programme monitoring and evaluation
5. Conference and general services

V. The 2002-2003 Work Programme In Perspective

ANNEXES

1. Meetings, conferences, seminars and workshops organized by ECA during the period, 1998 - 2000 (listed by subprogramme)
2. Rgional Advisory Services provided to member States, intergovernmental and non-governmental Organizations (listed by subprogramme)

EXECUTIVE SUMMARY

The report on the work of the Commission has become a vehicle for reporting on the activities of the Commission as carried out by its main policy organs, its subsidiary bodies and the secretariat in assisting member States to tackle the socio-economic development problems they confront. The present report, which covers the period from 1998 to 2000 is being submitted to the thirty-fourth session of the Commission, organized as a Joint Conference of Ministers responsible for Economic and Social Development and Planning, and Ministers of Finance.

The report provides an overview of the major activities carried out by the Commission and its secretariat under the programme structure approved in 1996 and revised in 1998, which consists of seven mutually complementary subprogrammes which encompass the key programme in Africa's development. These are facilitating economic and social policy analysis; ensuring food security and sustainable development; strengthening development management; harnessing information technology for development; promoting regional cooperation and integration; promoting the advancement of women; and promoting subregional activities for development. The strategy for carrying out the work programme, which is reflected in each of the subprogrammes, involves policy analysis and advocacy; convening stakeholders and building consensus on development policy issues; providing technical assistance and training to support the capacity-building efforts of member States; networking with African researchers to enhance information and experience sharing including best practices; and promoting closer collaboration with other UN agencies and international donors in support of Africa's development. The report is divided into five chapters with two annexes.

Chapter I reviews economic and social developments in Africa in the period 1998-2000 against the backdrop of developments in the global environment. The review shows that economic performance in Africa during the 1998-2000 period remained stable at a rate exceeding 3 per cent per annum. The review also estimates an average growth rate for the African economies of 4.5 per cent in 2001 provided the major determinants of growth in Africa - weather, international commodity prices, social and political stability, official development assistance (ODA) flows, debt and a stable macroeconomic framework - remain favourable. The review concludes that the social situation continues to deteriorate despite the modest improvement in overall regional economic performance. This is because the growth rate is not high enough and not sufficiently broad-based to achieve poverty-reduction. This is further worsened by the devastating impact of HIV/AIDS and the raging wars and armed conflicts across the continent.

Chapter II provides a description of the new policy and programme initiatives undertaken by the Economic Commission for Africa (ECA) during the period. These include the establishment of the African Development Forum (ADF); the covening of the "Big Table" of the Organization for Economic Cooperation and Development (OECD) - African Countries; Consultation on ECA's partnership programme; Post-conflict reconstruction and development programme; the African Regional Hearing for the Millennium Assembly; the High-level regional consultation on financing for development and the preparatory meeting for the third UN Conference on Least Developed Countries (LDCs).

Chapter III provides an account of the main activities undertaken in each subprogramme.

In the area of facilitating economic and social policy analysis, the work programme addressed broad macroeconomic issues of concern to member States. Emphasis was placed on research and analysis related to national mechanisms for the review and appraisal of socio-economic conditions; the development of methodologies and techniques for enhanced national development planning. Several activities were also undertaken within the context of supporting African countries to adjust to the post-Uruguay Round trading environment. Particular attention was also given to the peculiar problems of LDCs in Africa, the African debt problem and the problems of the Highly Indebted Poor Countries (HIPCs). The subprogramme also addressed social development issues, particularly the strategies and reforms needed to alleviate poverty.

The nexus of food security, population and environmental sustainability were addressed under the subprogramme on ensuring food security and sustainable development. The thrust of the Commission's work in this area was to help promote the understanding and management of the interrelationships among the issues of this nexus which is at the heart of the poverty syndrome in Africa; help in building national and local capacities; and foster interaction among sector experts and specialists at ECA and in the member States to undertake an integrated analysis of the interrelated issues of food security, population dynamics and environmental sustainability.

Activities in strengthening development management continued to focus on the articulation of policies and strategies aimed at fostering effective public sector management, promoting private sector development and enhancing popular participation in the socio-economic development process of African countries. In this regard, the African Centre for Civil Society (ACCS) which was established in 1997 with its secretariat at ECA, continued to serve as a repository of relevant and timely information in issues related to the role of civil society in development and governance, as well as facilitating effective and programme-based linkages between African Civil Society Organizations (CSOs) and the international development community.

During the period under review, ECA continued to play a catalytic role in promoting Africa's connectivity to the Information Superhighway through its activities under the subprogramme on harnessing information for development. These activities were aimed at strengthening national, subregional and regional capacities for the adoption and utilization of communication and information technologies, strengthening capacity for the development and use of statistical, bibliographic, referral and spatial databases as decision-making tools in support of information and communication technologies for development. ECA devoted its first ADF in October 1999 to the theme, "The Challenge to Africa of Globalization and the Information Age."

Various activities aimed at facilitating and enhancing the process of regional integration were undertaken, with the Abuja Treaty establishing the African Economic Community (AEC), providing the major impetus. The issues addressed in this regard were the strengthening of the regional economic communities through institutional development and elaboration of programmes; promoting intra-Africa trade; and strengthening institutional capacity for monetary and financial integration. Attention was also paid to Africa's position in world trade through analysis of the implications of the post-Uruguay Round arrangements on the region's development. Other activities carried out under this subprogramme were aimed at facilitating the rationalization, harmonization and coordination of pertinent programmes, with the aim of creating an enabling environment for integration through the development of infrastructure, harmonization of policies, and collaboration in mineral and energy resources development.

During the period under review, ECA began the process of preparing an annual report, entitled, "Annual Report on Integration in Africa" to monitor and report on the state of integration in Africa. The report will provide qualitative and quantitative information on the state of integration in Africa for policy makers, the regional economic communities and Intergovernmental Organizations (IGOs). Beginning in 2001, the Annual Report on Integration in Africa will be one of ECA's annual flagship publications and will provide the core and organizing framework for ECA's work in the area of regional cooperation and integration and its findings will guide the Commission's sectoral interventions.

ECA's work in the area of women in development focused on monitoring and assessing the progress made on the situation of women in the critical areas of the global and African platforms for action. In pursuance of these objectives, ECA put emphasis on the economic and social empowerment of women in Africa.

To signify its commitment to promoting gender equality in Africa, ECA commemorated its fortieth anniversary in April 1998, by organizing an international conference on the theme, "African Women and Economic Development: Investing in our Future." The conference, which brought together about 1,500 women and men representing African governments, civil society, non-governmental and private sector organizations, international agencies as well as Heads of State of some African countries, examined progress made on critical areas of concern to women within the context of the commitments made at Beijing.

In November 1999, the ECA secretariat organized the sixth Africa Regional Conference on Women in Addis Ababa to review progress in the implementation of the global and regional Platforms for Action. Progress reports covering the 12 critical areas of concern were submitted to the Conference by most African Governments, the Organization of African Unity (OAU), the African Development Bank (ADB) and several international and non-governmental organizations. The 12 critical areas of concern to women, which were ranked in order of priority included poverty reduction, education for women, health care, human rights, women in decision-making, violence against women, institutions, women in economic activity, media, environment, the girl-child, and conflicts. A major outcome of the Conference was the adoption of the African Plan of Action for accelerating the implementation of the global and regional Platforms of Action over the period 2000-2004 at national, subregional and regional levels. The Plan proposed strategies and mechanisms for dealing with problems which had been identified as impediments in the implementation of the platforms. The African Plan of Action was adopted by the OAU Council of Ministers at its meeting in March 2000.

Under the newly established subprogramme on promoting subregional activities for development, the subregional development centres of ECA, located in the five subregions of the continent, intensified efforts in providing technical support to and cooperating with the regional economic communities; facilitating networking and information exchange among governments, civil society and private sector, and strengthening ECA's outreach in the various subregions.

Chapter IV describes the main support activities carried out by the new Office of Policy Planning and Resource Management (OPRM) and the Conference and General Services Division (CGSD). Programme support encompasses the functions and structures relating to administration; management and development of human resources; programme planning, finance and evaluation; management of technical cooperation and conference and general services.

The Office of Policy Planning and Resource Management provided policy guidelines, coordination, programme planning, budgeting, monitoring and evaluation. Other activities included provision of administrative and financial management services and responsibilities for human resources management of technical cooperation activities and internal oversight services.

The Conference and General Services Division provided support for the secretariat in the area of conference and general services, including the management and maintenance of the Conference Centre in Addis Ababa, as well as the responsibility for information and communication services and facilities management.

The final chapter of the report puts the work programme for the 2002-2003 biennium in perspective, by highlighting key priorities of the work programme as articulated in the Medium-Term Plan for the period 2002-2005.

ABBREVIATIONS AND ACRONYMS

CHAPTER I

OVERVIEW OF ECONOMIC AND SOCIAL DEVELOPMENTS IN AFRICA 1998-2000.

Africa's economic performance during the 1998-2000 period remained steady at a rate exceeding 3 per cent per annum. Real GDP growth was 3.1 per cent in 1998 and 3.2 per cent in 1999. Preliminary estimates show that real GDP increased by 3.6 per cent in 2000. The major determinants of economic performance in Africa were the weather conditions, especially in the agriculture-dependant countries; international commodity prices; social and political stability; and the soundness of the economic policy framework in individual countries.

A. Africa's Economic Performance in 1998

In 1998 Africa's economy grew by 3.1 per cent relative to the 2.9 per cent of 1997 thus registering an improved overall performance during a difficult year. With an average population growth rate of 2.8 per cent per annum the continent's per capita income increased by 0.3 per cent during the year. This rate of growth was salutary for a number of reasons. Firstly, this marked the fourth year in a row during which per capita income increased. Secondly, this rate of growth was the highest in the world, endowing the continent with the distinction of being the fastest growing region. Thirdly this performance was achieved under conditions of declining global growth momentum. World economic growth declined from the robust 4 per cent of 1997 to 2 per cent in 1998.

The decline in the global growth momentum was due to the financial crisis in the emerging markets and its spread to the rest of the world. Although African economies were, by and large, spared the agony of financial market instability, they were nevertheless not immune to the generally depressive impact of the crisis. The effect of the instability and the consequential downward pressure on economic activity was transmitted to Africa mainly through global commodity prices and resource flows. The dollar denominated export price index of African commodities declined by more than 16 per cent. While the price of all the region's exportable declined, none was affected as much as oil prices which fell by more than 42 per cent.

These developments had important repercussions on the African economies. For the first time, in recent years, the trade balance turned negative dragging the current account deficit to $US16.5 billion, the highest for the decade. Foreign resource inflows to the region were also negatively affected as donor countries and institutions directed their attention to the distressed countries and to containing the global contagion. There was considerable outflow of foreign resources from the region, especially from the Republic of South Africa and some of the North African countries, estimated at $US5 billion. On the other hand official flows increased to $US5.3 billion.

The lacklustre performance of the external sector was more than made up for on the domestic front. There was a strong rebound in agriculture, where output increased by 3.5 per cent relative to 1.7 per cent in 1997. The recovery was most dramatic in North Africa where output increased by 7 per cent. There was substantial improvement in West and the Eastern African subregions. The turn around in agriculture is credited to improvements in weather conditions. Despite this significant improvement, the region continued to be very far from food self-sufficiency and had to import large quantities commercially and in food aid. The food deficit is estimated at 18 per cent of which 80 per cent was covered through commercial imports.

The performance of the industrial sector remained sluggish with its output increasing at 3.2 per cent relative to the 3.5 per cent of 1997, mainly on account of depressed external demand for oil and minerals and the lacklustre performance of the manufacturing industries. Growth in the manufacturing subsector was 2 per cent compared to 2.5 per cent of the previous year. The sluggish performance of the manufacturing industries was due to a host of factors including low volume of investment to increase productive capacity and the inability of existing enterprises to take advantage of opportunities in the emerging global economic environment. While the export-oriented natural resource-based industries succeeded to adapt to global competition, manufacturing industries producing for the home market continued to be hampered by the liberalization measures and the generally high cost environment. The services sector, on the other hand, registered a vibrant performance with its growth rate increasing from 2.5 per cent in 1997 to 3 per cent in 1998.

While the overall regional performance was satisfactory, the growth momentum had not been shared equally among the subregions. In fact the resurgence was limited to the two subregions of North and Central Africa. In North Africa the rate of growth increased from 3.6 per cent in 1997 to 4.5 per cent in 1998; while in Central Africa it increased by nearly one percentage point to 4.9 per cent. A slowdown was in evidence for the rest of the subregions. In Southern Africa growth decelerated by as much as 30 per cent declining from 2.5 per cent in 1997 to 1.7 per cent mainly on account of the slowdown in South Africa and Angola. West Africa's growth declined from 4.1 per cent to 3.6 per cent because of the relatively poor performances in Côte d'Ivoire, Ghana and Nigeria. In Eastern Africa growth was more or less maintained at the previous year's level of 2.5 per cent.

The diversity in performance was also evident at the country level. While the number of countries with negative growth rate continued to diminish, only two countries attained or surpassed the required growth rate of 7 per cent. As in the past, a large number of countries clustered in the 3 to 6 per cent range.

B. Economic Performance in 1999

Africa's economy grew by 3.2 per cent in 1999 barely improving the previous year's modest performance of 3.1 per cent. Africa's annual average economic growth of 2.1 per cent during the last decade of the twentieth Century did not keep pace with the yearly increase in population of 2.8 per cent, and was considerably lower than the 7 per cent annual growth required to reduce poverty by half by the year 2015.

Still in sharp contrast to previous experience, no African country posted negative GDP growth in 1999. Furthermore, only one economy grew at a rate of less than 1 per cent compared to four in the previous year. In 19 countries the growth rates ranged between 1 and 2.9 per cent, while other 17 countries managed to grow in the 3 to 4.9 per cent range; 12 countries had growth rates between 5 and 6.9 per cent. Five, as compared to only two countries in the previous year, grew at a rate higher than 7 per cent in 1999. Growing at an estimated 10 per cent each, Mozambique and Equatorial Guinea showed the strongest economic performance.

At the subregional level, Eastern and Southern Africa, which account for 45 per cent of the population and 37 per cent of the region's GDP, enjoyed higher growth in 1999 relative to 1998. The other three subregions, which account for 55 and 63 per cent of the population and GDP respectively, experienced lower rates of growth. East Africa pushed up the aggregate growth rate from the 2.6 per cent of 1998 to 4.1 per cent in 1999, while Southern Africa improved its performance from 1.7 to 2.2 per cent. In North Africa the average growth declined from 4.4 per cent to 3.6 per cent. Performance declined from 3.6 to 3.3 per cent and from 5 to 4.5 per cent in West and Central Africa, respectively.

The five largest economies in Africa, i.e. the African G-5: Algeria, Egypt, Morocco, Nigeria and South Africa, which account for 59 per cent of GDP and 37 per cent of the population of the region, posted a growth rate of 2.8 per cent in 1999. The 11 oil-exporting African economies, which account for 49 per cent of the region's GDP and 41 per cent of the population, marginally improved their 1998 growth rate by 0.1 percentage points to reach 3.7 per cent in 1999. The six island-economies, making up about 2 per cent of the region's GDP and population, posted a decline in their rate of growth from 4.6 per cent in 1998 to 4.0 per cent in 1999. The Least Developed Countries (LDCs) of Africa, representing 16.5 per cent of the GDP and 47 per cent of the population, have shown dynamic GDP growth rates in excess of the continental average in recent years. They again succeeded to increase the previous year's growth rate by 0.2 percentage points to reach 4.5 per cent in 1999. The 15 land-locked countries (10 per cent of the regional GDP and 23 per cent of the population) managed to increase their growth rate from 4.2 per cent in 1998 to 4.9 per cent in 1999.

At the sectoral level, growth rates declined in agriculture from 3.5 per cent in 1998 to 2.1 per cent in 1999, as well as in the industrial sector from 3.2 to 2.8 per cent. On the other hand, the growth rate in the services sector increased by one percentage point to reach 4 per cent in 1999.

Agricultural performance in 1999 was mixed across the region. In North Africa, growth in agriculture decelerated, while in West Africa it increased. Performance in Central Africa was restrained due to civil unrest, political instability, and pest infestation; while output in Eastern and Southern Africa declined as a result of erratic rainfall, war, and uncontrolled crop pests. The poor performance of agriculture, aggravated by population displacement due to political instability, has exposed nearly 20 million people to critical food shortage requiring emergency food assistance.

The service sector continues to be dynamic showing a 4.0 per cent growth rate in 1999 relative to only 3 per cent in 1998. Although all services subsectors experienced growth, the financial and communications services were the lead performers.

The terms of trade declined by nearly 6 per cent as a result of a fall in the unit value of exports by more than 3 per cent and an increase in the unit price of imports by more than 2 per cent. The increase in the value of African exports (in US dollar terms) by 2.4 per cent was due to a 6 per cent increase in the volume of goods exported, which more than offset the decrease in the unit price of exports. Imports also increased in value and volume. While the increase in value was in the order of 4 per cent, the volume of imports increased by 1.4 per cent.

The balance of trade registered export earnings of $US101 billion in 1999, an increase of 2.4 per cent from 1998. The current account balance deteriorated further increasing to $US21 billion in 1999, a 13 per cent increase from 1998.

External resource flows rose from $US16 billion in 1998 to $US22 billion in 1999. Foreign direct investment (FDI) amounted to about $US6 billion while $US7 billion came in as transfers. Borrowing amounted to $US8.4 billion, an increase of nearly 45 per cent over 1998. The volume of debt rose from $US351 billion in 1998 to $US359 billion in 1999. Debt servicing increased from $US35.7 billion in 1998 to $US39.4 in 1999.

C. Economic Performance in 2000

Preliminary estimates show that real GDP increased by 3.7 per cent in 2000, as a result of which per capita GDP increased at close to 1.0 per cent during the year. While this rate of growth is salutary, it nevertheless masks wide variation among the subregions and economic groupings.

At subregional level, North and Southern Africa subregions had higher rates of GDP growth in 2000 compared to 1999 while in the other subregions there was marked deceleration. North Africa's GDP increased by 4.7 per cent compared to 2.6 per cent in 1999. The recovery in Morocco and higher growth rates in the oil-driven economies of Algeria, Egypt, and the Libyan Arab Jamahiriya as well as the Sudan and the ever robust Tunisian economy contributed to the higher national and subregional performances.

In Southern Africa, the significantly higher performance of South Africa, the largest economy in the subregion, increased the overall growth rate. Performance in West Africa was reduced to 2.9 per cent compared to 4.1 per cent in 1999 despite the strong recovery in Nigeria, the largest economy in the subregion. In Eastern Africa growth decelerated from 4.1 per cent in 1999 to 3.4 per cent in 2000.

Performance was buoyant in the Central African subregion, increasing from 4 per cent in 1999 to 5.2 per cent in 2000. The oil exporting countries such as Cameroon, Gabon and Equatorial Guinea continued to enjoy higher rates of growth while the recovery in the Congo remained strong.

As in the previous years, economic performance in Africa in 2000 was the result of the weather condition, international commodity prices, political stability and economic policy reform. The climatic condition in the agriculture-dependant economies turned for the better in 2000 compared to 1999. International commodity prices were mixed, with oil prices increasing to a record high while prices of primary commodities were on the decline. Political stability was on positive trend, following cessation or reduction in the intensity of conflicts. However in a few countries social instability depressed economic activity.

On the basis of economic grouping, the African G-5 countries and the oil exporting ones experienced higher rates of growth, at 4.5 per cent in 2000 compared to the 3.8 per cent of 1999.

Performance in the least developed, island and land-locked economies declined in 2000 compared to 1999. The hardest hit were the land-locked countries where growth declined from 4.9 per cent in 1999 to 3.4 per cent in 2000. In the LDCs, GDP growth fell by one percentage point in 2000, averaging 3.5 per cent.

At the sectoral level, all the major sectors of the economy were on positive trend. Due to the auspicious weather conditions value-added in agriculture increased by 2.8 per cent in 2000 compared to 2.1 per cent in 1999. The industrial sector's growth of 4 per cent in 2000 was among the highest in recent years. The service sector continued its dynamic pace, increasing at 5.8 per cent in 2000.

There were positive developments on the external front. The current account deficit declined significantly to $US2.5 billion owing to the higher export earnings of the oil exporting countries, although it increased sharply for the oil importing countries. The trade balance of the oil exporting countries amounted to $US43 billion while the non-oil exporting countries ran a deficit of $US40 billion.

Exports increased to $US143 billion in 2000 from the $US101 billion of the previous year, while imports increased from $US107 billion in 1999 to $US140 billion in 2000, resulting in $US3 billion surplus in the trade balance. The service account continued to deteriorate, the deficit increasing to $US13.5 billion from $US11 billion. Net current transfers amounted to $US8 billion.

D. Prospects for 2001

In the medium term the factors that were responsible for the economic performance of the region in the past would continue to have major influence. In particular, the following assumptions are made in projecting the most likely performance scenario for the African economies in 2001:

1. The consolidation of the democratization process and the corresponding commitment to reducing instability and conflict within and among African countries would increase the degree of stability and create a more conducive environment;

2. The currently high prices of oil are expected to fall to the $US25 per barrel benchmark with prices of primary commodities maintaining their 2000 level;

3. External resource transfers would maintain their current volume of $US10 billion;

4. The weather conditions do not become adverse in the agriculture-dependant economies.

On the basis of these assumptions, ECA estimates the growth of the African economies at 4.5 per cent per annum in 2001.

CHAPTER II

MAJOR POLICY AND PROGRAMME DEVELOPMENTS

A. Major Policy Initiatives

1. African Development Forum (ADF)

The African Development Forum is an initiative led by ECA to establish an African-driven development agenda that leads to specific programmes for country implementation.

The aim of ADF is to present the key stakeholders in African development (governments, civil society, the private sector, researchers and academics, intergovernmental organizations and donors) with the results of current research and opinion on key development issues, in order to formulate shared goals and priorities, draft action programmes and define the environment that will enable African countries to implement these programmes. The Forum will meet annually on a different development issue.

The 1999 Forum was the first, and was held in Addis Ababa, Ethiopia from 24 to 28 October 1999 on the theme "The Challenge to Africa of Globalization and the Information Age." The issue of globalization and the information age was chosen for the inaugural ADF because of the importance of defining African-owned and African-led strategies to join the global information economy. A major goal of ADF'99 was, therefore, to develop and support African initiatives that are fundamental to shaping the African Information Age.

ADF'99 brought together 950 participants from government, the private sector, civil society, and bilateral and multilateral organizations, to assess the opportunities, confront the challenges and develop a plan of action for Africa's entry into the Information Agenda. It was the culmination of more than three years of activities to build an African Information Society and the occasion to set future directions for the African Information Society Initiative (AISI). In this regard, ADF'99 identified specific, feasible, phased and agreed on monitorable action to accelerate the implementation of AISI.

In line with the Forum's mission of addressing the continent's most pressing development issues, the chosen theme for 2000 was "AIDS: The Greatest Leadership Challenge." ADF 2000 took place from 3 to 7 December 2000 in Addis Ababa, convened and hosted by ECA, with UNAIDS, the International Labour Organisation (ILO) and the Organization of African Unity (OAU) as co-sponsors, and with the technical and financial support of various UN agencies and bilateral and multilateral institutions. ADF 2000 was designed to serve as a major launching pad for a renewed commitment to more concerted action against HIV/AIDS in Africa by highlighting positive local, national and regional experiences and by generating the highest level of scientific, technological, traditional and intellectual leadership possible, at all levels of society and the development community towards addressing and mitigating the impact of the pandemic in Africa.

ADF 2000 brought together 1,500 participants including six Heads of State and Government, and the Secretary-General of the United Nations, policy makers, civil society organizations (including people living with HIV/AIDS and the academia), the private sector, and representatives of youth and women organizations, as well as Africa's development partners, to address concrete roles and responsibilities for leaders at all levels so as to galvanise an Africa - led response to the pandemic. The Forum highlighted the crucial elements missing in the fight against HIV/AIDS in Africa, namely political will and leadership to make HIV/AIDS a top priority on the development agenda; comprehensive multi-sectoral plans to expand and deepen country-level programmes to combat the pandemic, and create the enabling environment with conditions for successful prevention, care and mitigation programmes in order to protect Africa's future development prospects.

The Forum ended with the adoption of the Africa Consensus and Plan of Action which calls for leadership at all levels - in the family, in the community, the workplace, schools, civil society, government and at the international level to overcome the continent-wide threat of HIV/AIDS. In addition, the Forum resulted in a commitment by African leaders to make HIV/AIDS a top priority on their development agenda and to invest the necessary resources to fight the disease. The Forum also led to the adoption of concrete actions by African governments and their development partners to scale-up interventions and develop multisectoral programmes and plans with country-level impact.

2. The "Big Table" of OECD - African Countries

ECA hosted an African/OECD Ministerial Consultation tagged, the "Big table" in November 2000 - on the occasion of the eighth session of its Conference of Ministers of Finance. The consultation brought together 11 African Ministers and their development partners from OECD countries, joined by five high level representatives from international organizations and institutions, for a frank and honest exchange on the international development goals and the related poverty reduction strategies. ECA was commended for organizing the consultation and encouraged to institutionalize it.

The Consultation sought two broad objectives, namely a mutuality in strengthened commitment to the international development goals and the new development framework, which encompasses issues of the Poverty Reduction Strategy papers and its enabling debt relief instrument, the HIPC Initiative.

The consultation examined a number of issues under the theme, pro-poor growth policies and the international development goals, and noted that: policies which emphasize robust growth of not less than 7 per cent are essential and compatible with efforts to reduce poverty; international development goals and the Poverty Reduction Strategy papers are long-term initiatives requiring long-term initiatives and long-term commitment, flexibility in resource use and variety of solutions which recognize country specificity; and the longer-term objective of international development goals and the Poverty Reduction Strategy papers is to enable Africa to regain its competitiveness and achieve integration into the global economy.

The Consultation also noted the need to mobilize capacity from the society as a whole for the design, implementation and monitoring of the Poverty Reduction Strategy papers; build capacity within government structures; and introduce incentives to enhance capacity retention as well as attract African talent and skills in the Diaspora.

The overarching view derived from the consultation is that the Poverty Reduction Strategy papers approach is unique and revolutionary in its focus on "ownership". For participation to be meaningful, those involved need to feel they "own" the process to a significant extent. Ownership also requires a strong partnership response - the commitment to sustained support, the determination to give space to African partners in their pursuit of realistic growth and poverty reduction goals.

3. Consultation on ECA's Partnership Programme

ECA convened a series of consultative meetings with its partners from 30 November to 1 December 2000 as a follow-up to the first partners' meeting held in April 1996. While the 1996 meeting discussed ECA's new strategic directions and the planned reforms of the Commission, the November 2000 meeting was aimed at providing ECA's partners with a better understanding of ECA's role in Africa's development. The meeting discussed concrete proposals around which partnerships and collaborative arrangements could be agreed, and sought firm commitments for implementing partnership activities in 2001, the first year of the three - year partnership work programme that was presented for discussion.

The meeting noted that the reforms at ECA had effectively positioned the Commission as a leading development actor in Africa and a fulcrum for international partnership in support of an African-driven and African-owned development agenda. The partners welcomed the wide range of concrete partnership proposals that had been developed over the past two years to complement the Commission's core work programme in the priority areas of Africa's development. In this regard, they pledged to deepen their collaboration with ECA through programme-type support to ensure predictability of external support to ECA's medium-term agenda, rather than the project-type, stop-and-go support that had characterized partnerships in the past. Accordingly, the partners supported the idea of establishing a "Friends of ECA" to provide a forum for dialogue on ECA's work programme and a framework for deepening and monitoring partners support and commitment.

With regard to follow-up activities, another meeting was scheduled for February 2001 to review the outcome of the November 2000 meeting and provide an update on activities undertaken since that time. The meeting would discuss the partnership proposals in the context of the core work programme of ECA and explore opportunities for collaboration and networking with relevant institutions and organizations.

4. Post-conflict reconstruction and development programme

In July 1999, the UN Secretary-General requested the Executive Secretary of ECA to lead the effort of the UN System and other partners in developing a subregional programme of post-conflict reconstruction and development for the Mano River Basin countries of Guinea, Liberia and Sierra Leone. Subsequently, ECA launched an initiative to address the subregional dimension of post-conflict reconstruction and development in the three countries. Each of these three countries is either emerging from the ravages of war or has been adversely affected by conflicts in the neighbouring countries.

Known as the Mano River Basin Initiative, its aim is to assist the process of post-conflict peace-building within and among the three countries by focusing on development activities that are subregional in nature. The partners collaborating with ECA in implementing the initiative include United Nations agencies and African regional and subregional organizations, namely, ADB, the Economic community of West African States (ECOWAS), OAU, the United Nations Development Programme (UNDP), the Department of Political Affairs of the United Nations Secretariat, the Office of the United Nations High Commissioner for Refugees (UNHCR) and the World Bank.

The first consultative meeting of the partners of the Mano River Basin Initiative was held in Addis Ababa, Ethiopia, in October 1999, and the second consultative meeting was held on 23 and 24 March 2000, in Conakry, Guinea. The organizations collaborating on this initiative have identified projects of a subregional nature that would contribute to post-conflict peace-building in the three countries.

These include the revitalization of the subregional integration organization; capacity-building for economic policy-making and management; and re-establishing the framework for good governance in the three countries. Progress in the implementation of these projects will depend crucially on the mobilization of adequate resources, agreement of all the three countries to participate in the programme, the existence of an enabling environment in the three countries, and a security and political framework that creates and reinforces confidence and trust among the three countries.

Given ECA's comparative advantage in institutional capacity-building, it has been designated the lead agency in mobilizing assistance to strengthen and revitalize the Mano River Union Secretariat. Several missions have been fielded to the Secretariat in support of these efforts, and a project document to seed donor support is currently being finalized by the ECA secretariat. Implementation of these projects is expected to begin in early 2001.

B. Major Programme Events

1. High-Level Regional Consultation on Financing for Development and LDCs.

The High-level Regional Consultative meeting on financing for development and the preparatory meeting for the third United Nations Conference on LDCs was held in Addis Ababa, Ethiopia from 15 to 17 November 2000, to prepare African countries for the two major events that have been mandated by the UN General Assembly to be convened during 2001. Both events are of critical importance to Africa, because they focus on some of the major development challenges facing Africa as well as the need to accelerate Africa's growth and development through better integration into the global economy, particularly in relation to LDCs.

The main issues addressed by the meeting included debt, ODA and their link to poverty reduction; trade and investment; and proposals for reform of the international monetary, financial and trading systems. The meeting undertook comprehensive analysis of the various sources of development finance-domestic sources, international private financial flows, concessional flows, external debt and trade.

In addressing the development challenges faced by African LDCs, the meeting focused on several thematic issues around which discussions at the forthcoming LDCs conference will be based, namely financing growth and development; international trade; commodities and services; enhancing productive capacities of LDCs, food security and sustainable natural resource management; human resource management and employment; social service delivery; and governance, peace and stability.

African policy makers and their development partners have addressed these issues in previous ECA conferences, and their conclusions and decisions have helped to influence international policy and opinion. This is particularly the case with regard to debt, trade and ODA. At their eighth session of the ECA Conference of Ministers of Finance, held in Addis Ababa, Ethiopia on 21 and 22 November 2000, the Ministers considered the recommendations of the High-Level Regional Consultation and reviewed recent developments in the context of their previous positions and recommendations, and of the forthcoming global conferences. The conference issued two Ministerial Statements - on financing for development, and on LDCs articulating Africa's position on the issues on the agenda of the two forthcoming global conferences.

Recognizing the importance of domestic resource mobilization in ensuring sustainable development, the Ministers reaffirmed their commitment to raising private savings, including strengthening and improving reliability of thrift institutions and incentives to save, as well as broadening the range of financial instruments. The Ministers agreed to reinforce macroeconomic stability and deepen reforms of financial markets and institutions, as well as ensure sound interest and exchange rates policy management to enhance private and public savings. Ministers stressed the critical role of capital markets in raising the level of domestic savings, attracting foreign private investment, and stemming and reversing capital flight. In this regard, the Conference prepared the development of regional or subregional approach to capital markets development.

On the external side, the Ministers welcomed the initiatives taken by the global community to reduce the debt burden. However, the need to deepen the HIPC Initiative and deliver faster debt relief was underscored. In this regard, the Ministers endorsed the need for dialogue on two proposals put forward by the United Nations Conference on Trade and Development (UNCTAD) on the debt issue, namely the establishment of an independent panel of experts of eminent persons to look into the problem, as well as the freezing of debt service of the HIPC countries with no interest obligation until acceptable arrangements are reached.

Against the backdrop of a reduction in the level of ODA flows, the Ministers noted that while there is a need to reduce dependence on aid in the long-term, an increase in the volume of aid is necessary to achieve this transition. The Ministers also noted that the policy environment for aid effectiveness was improving across the continent. To further enhance the effectiveness of aid and thus ensure sustained aid flows, the Ministers emphasized the need for African countries to engage donors and other development partners in a new partnership, focusing on an African-driven development agenda; set realistic goals; target ODA to fund poverty reduction programmes; strengthen institutional and delivery mechanisms as well as coordination and specialization among donors and multilateral sources of funds; and ensure participation of target groups to enhance a sense of "ownership" of development assistance programmes.

Regarding reform of the international financial system, the Ministers noted that one of the key lessons for Africa, from the Asian financial crisis, is the need to strengthen supervisory and regulatory mechanisms of financial institutions to ensure greater transparency in financial transactions and improved corporate governance, in consonance with the principles of financial liberalization. The Ministers, thus, endorsed proposals for the reform of the international financial and monetary systems, and called on the UN system to develop an appropriate reform package to this end.

With regard to African LDCs, the Ministers broadly acknowledged that past efforts to address the development problems facing these countries have failed to yield the expected results, with the result that African countries are becoming increasingly marginalized in a rapidly globalizing world.

A major outcome of the Ministerial Conference was the decision to develop a New Global Compact with Africa, in which the developed countries would invest the necessary resources, through aid, debt relief and market access, in order to give African economies the necessary jump-start. In turn, Africa world intensify its efforts at political and economic reforms.

The Compact will necessarily entail a new architecture of aid to be under-pinned by an African ownership of the development process; mutually agreed goals rooted in the international development targets; mutual accountability towards defined outcomes (in place of one-sided conditionality); long-term commitments, moving away from "stop and go" relations and restricted project finance; channelling resources through the budgetary process so that aid is fully integrated into overall public expenditures; allowing for greater flexibility in the use of resources by recipients, which will require a demonstrated recipient capacity to monitor and manage resource flows efficiently.

In this regard, ECA was called on to further develop the approach for operationalizing the "New Global Compact with Africa". In response to this call, ECA has commenced wide-ranging consultations on the Compact proposal within Africa and with Africa's development partners. The outcome of these consultations will be presented for discussions at the next session of the Joint conference of African Ministers responsible for Economic Development and Planning and Ministers of Finance in Algiers, Algeria in May 2001.

2. Africa Regional Hearing for the Millennium Assembly

The Africa Regional Hearing for the Millennium Assembly was held in Addis Ababa, Ethiopia on 24 and 25 June 1999 as part of a series of informal regional hearings organized by the United Nations to consult with a cross-section of society as an initial step towards the preparation of "The Millennium Assembly" which took place in New York in September 2000. The Hearing took place against a backdrop of significant developments in the global, political and economic environment.

The main objective of the Hearing was to initiate consultations at the regional level with a view to informing the thematic proposals and issues to define the orientation and role of the United Nations in the new millennium.

The Hearing was organized under the overarching theme, "United Nations in the twenty-first Century." Under this overall theme, the Hearing examined the role of the United Nations in Africa in the twenty-first century, focusing on the five core areas of the Organization's work identified as priority, namely: peace and security, economic and social affairs, development cooperation, humanitarian affairs and human rights.

The Hearing also presented an opportunity to review and assess the institutional weaknesses of the United Nations in order to identify the challenges which, from Africa's perspective, should form part of the vision of the United Nations in the next millennium. Some of the crucial challenges highlighted included how to make the United Nations truly representative of all peoples; how to ensure that the United Nations is the custodian and defender of the principles of the sovereignty of nations and a bastion of democracy, as enshrined in its Charter, so as to maintain the confidence and trust of Africans and reflect the views of Africans on matters affecting the continent; the kind of United Nations desired by member States and other stakeholders in the new millennium, how the United Nations should interact with its constituencies and how member States will contribute to achieving these.

The Hearing underscored the need for a strong United Nations, capable of addressing the development challenges of many of the world's people; promoting peace and security; and defending the rights of peoples all over the world.

Views from the debates served as inputs to the Secretary-General's report entitled, "We the Peoples: The role of the United Nations in the twenty-first Century", outlining a vision of the United Nations in the new century and its relevance in the context of a world that has changed since the Organization was established in 1945. The report was presented to the Millennium Assembly held in September 2000 under the context of the fifty-fifth session of the UN General Assembly.

CHAPTER III

IMPLEMENTATION OF THE WORK PROGRAMME

During the period 1998 - 2000, the work of the Commission was organized around seven mutually complementary subprogrammes. These are: facilitating economic and social policy analysis; ensuring food security and sustainable development; strengthening development management; harnessing information for development; promoting regional cooperation and integration; promoting the advancement of women and promoting subregional activities for development. In what follows, we present the activities implemented under each of these subprogrammes as well as other major initiatives, namely: the United Nations New Agenda for the Development of Africa in the 1990s (UN-NADAF); and the United Nations System-wide Special Initiative on Africa (UN-SIA).

A. Facilitating economic and social policy analysis

Activities undertaken under this subprogramme were aimed at enhancing understanding of the key issues in Africa's development and assisting member States to develop their own economic and social policies for sustained growth and macroeconomic stability, trade and investment promotion, debt sustainability, enhanced social development and poverty reduction.

In the area of economic policy analysis, the secretariat undertook several studies during the period under review. These included savings mobilization in Africa: Processes, institutions and cultural factors; growth strategies for Africa: lessons from Asia and Latin America; financial intermediation in Africa: Broadening local participation in the market for public securities and privatization of public assets; review of fiscal institutional framework; Instruments and processes in the implementation of fiscal policy in African countries; development finance requirements which focused on the challenges and indications of mobilizing financial resources to meet the internationally agreed objective of reducing poverty by half of the year 2015; broadened development agenda for Africa which focuses on Africa's broadened development agenda including issues of income growth, equity and poverty reduction, social development and environmental sustainability; and effectiveness of anti-poverty policies and programmes which evaluated the impact of various anti-poverty policies and programmes.

The studies noted, in general, that in spite of the rigorous policy reforms implemented by several African countries over the past decade, most countries continued to perform below their potential. The studies further noted that this disappointing performance largely reflected shortcomings in a number of policy areas, both macroeconomic and structural, and emphasized the importance of deepening reforms and strengthening institutional capacity in policy formulation and implementation.

During the period under review, the secretariat prepared and published the Economic Report on Africa, 1998; the Economic Report on Africa, 1999; and the Economic Report on Africa, 2000. These reports were aimed at providing an assessment of the current trends and short-to medium-term outlook of the African economies and indicating the factors that affected their performance, taking into account developments in the global economic environment.

The theme of the Economic Report on Africa, 1999 was poverty reduction and sustainability of economic growth and performance. The report introduced a new feature in reviewing the performance of African economies in which countries were ranked according to annual performance, economic sustainability and economic policy stances. The Annual Economic Performance Index (AEPI) measured improvement or decline in current account balance, inflation and per capita income on year to year basis; the Economic Sustainability Index (ESI) measured a country's capacity to maintain long-term economic growth; while the Economic Policy Stance Index (EPSI) measured the appropriateness of government monetary and fiscal policies.

The 1999 Report analyzed the policy implications of these indices from the perspective of achieving the developmental objective of reducing poverty by half by the year 2015, and concluded that the majority of African countries were yet to establish conditions for sustained growth and for most of the countries now on the verge of recovery, the capacity to sustain growth and development over time was fraught with uncertainty. The report noted that recent growth rates needed to be increased and sustained long enough in order to achieve the objective of reducing poverty by half by the year 2015.

The Economic Report on Africa, 2000 focused on the fundamental determinants of growth, namely income, poverty and inequality, economic structure, investment, governance and human capital, and identified peace and stability, political and economic reforms as necessary conditions for achieving poverty-reducing growth and development in the twenty-first century.

The secretariat prepared a number of background papers in the area of trade, debt and investment policy, which were published as Working Paper Series, to support African countries in their negotiations in the context of ongoing multilateral trade negotiations within the World Trade Organization (WTO) and other fora. The publications included strategies and policies for trade and investment promotion; strategies and policies for debt management; dynamic impact of external debt accumulation on private investment and growth in Africa; public and private partnership in trade and investment promotion in Africa; required institutional changes to adjust to globalisation; competitiveness of Africa's major exports: Textiles and clothing industry in Africa; the status of African debt: An analysis of the developmental impact of debt cancellation; and promotion of investment agencies in Africa. These papers discussed the challenges of promoting trade and investment in Africa through policies that increase private foreign investment, public savings and domestic investment; including addressing the structural and institutional constraints to enhancing the competitiveness of African economies. The study on Africa's debts examined the impact of debt cancellation on the economic performance of African countries, particularly Africa's LDCs, and concluded that there was need for deeper and faster debt relief if these countries were to escape the debt trap and achieve sustainable growth and development.

The secretariat's activities in the area of social policy and poverty analysis were designed to promote efficient macroeconomic and sectoral policies for sustained growth and poverty reduction; analyze the empirical evidence and policy implications of the linkage between poverty, gender and ethnicity; promote strategies to ensure that public expenditure in Africa is pro-poor; build capacity for poverty analysis and monitoring; and promote policies that support human capital development and capacity-building. The following studies were undertaken in the area of social policy and poverty analysis: Government subsidy programmes in Africa: Best practice paper; cross-country studies on trends in public expenditure allocation in selected African countries; the new face of poverty in Africa: Case studies of selected urban centres in Africa; integration of quantitative and qualitative data for poverty analysis: Pilot studies using household survey data from selected African countries; and higher education cost recovery: Potentials and constraints. These studies generally defined poverty reduction as the central objective in designing and implementing public policies and programmes in Africa.

Two papers, Finance for Development in Africa, and Africa's Trade and Development in the twenty-first Century were presented as issues notes to the eighth session of ECA's Conference of African Ministers of Finance. In addition to estimating the magnitude of resources that would be required to achieve Africa's development goal, the paper on Finance for Development in Africa also reviewed recent trends in resource flows to Africa, and concluded that African governments would need to adopt policies to enhance domestic resource mobilization, in addition to attracting higher levels of external finance - ODA, FDI, debt relief, trade including addressing Africa's trade and development in the twenty-first century; examined Africa's position in the world economy in the context of a globalizing world, and proposed that Africa would have to adopt policies to enable the continent take advantage of the opportunities offered by the globalization process, and improve its position in the multilateral trading system by accelerating its integration agenda. This is imperative if Africa is to avoid further marginalization in the global trading system.

During the period under review, the secretariat organized or participated in several conferences, meetings, seminars and workshops dealing with critical issues in Africa's development. These included the Joint Conference of African Ministers of Finance and Ministers of Economic Development and Planning in May 1999; the eighth session of the ECA Conference of African Ministers of Finance in November 2000 in Addis Ababa; a high-level symposium on trade and development organized by WTO in March 1999; the Technical Group meeting of the Committee for Development Policy in London in March 1999; the Forum on the future competitiveness of African economies in Dakar, Senegal in March 1999; African consultations on the World Development Report, 2001 in Johannesburg, South Africa in January 1999; the subregional follow-up conferences to the World Summit for Social Development for West and Central Africa in Ouagadougou in January 1999; for East and Southern Africa in Nairobi, Kenya in March 1999 and for North Africa in Marrakech, Morocco in March 1999; Geneva Social Summit 2000 held to review progress in the implementation of the 1995 Copenhagen Plan of Action; Conference of African Ministers of Education organized by OAU in Harare, Zimbabwe in March 1999; and a conference on the causes and solutions of poverty in Africa held at the Centre for the Study of African Economies of Oxford University, United Kingdom in April 1999. These meetings provided the fora for reviewing and sharing experiences on critical development issues, both at the international and regional levels, as well as for formulating and implementing policies and strategies in support of development in the member States.

Several ad hoc experts group meetings were also organized during the period under review covering the following issues: appropriate follow-up mechanisms to the first WTO Ministerial Conference and modalities to facilitate Africa's effective participation in the second WTO Ministerial Conference which was held in Geneva in May 1998; the analytical and conceptual tools for poverty measurement held in Addis Ababa, Ethiopia in October 1999; Afri