Addis Ababa, Ethiopia 30 April - 4 May 1999

C. Account of Proceedings

Opening Addresses

Discussion on Conference Theme: The Challenge of Financing Development in Africa (agenda item 4)

Discussion on the Current Economic and Social Situation in Africa (agenda item 5)

Report on the Work of the Commission 1996-1998 (agenda item 6)

Coordination and Collaboration among United Nations Agencies at the Regional and Subregional Levels in Africa (agenda item 7)

Rationalization and Harmonization of ECA-sponsored Institutions: A Progress Report (agenda item 8)

Proposed Programme of Work and Priorities of ECA for the Biennium 2000-2001 (agenda item 9)

Statutory Issues: Reports from Intergovernmental Committee of experts of SRDCs and Reports from other subsidiary organs of the Commission (agenda item 10(a) and (b))

Any other business (agenda item 11)

Adoption of the Report (agenda item 12)

Closure of the Meeting (agenda item 13)

C. Account of Proceedings

Opening Addresses

1. In his opening statement, H.E. Mr. Mekonnen Manyazewal, Vice-Minister of Economic Development and Cooperation of the Federal Democratic Republic of Ethiopia welcomed participants to the meeting. He said that the theme of this year’s biennial session "The Challenges of Financing Development in Africa" was one of the critical issues that needed to be continuously reviewed and addressed if African countries had to sustain the implementation of their respective development programmes. Noting that Africa’s development indicators had steadily improved since 1995, he said that this was made possible by African governments’ resolve to create a stable macroeconomic environment and structural adjustment for growth and development. However, he cautioned against too much optimism, for weaknesses had been observed in a number of countries in 1998. He said that many challenges laid ahead of African countries in their quest of ensuring food security, health, education, infrastructural transformation and enhancing private sector development. In this context, financing development had a critically important role to play. Unfortunately, the low level of domestic savings was hampering sustained economic recovery.
2. The Vice-Minister pointed out that it was not the first time finance issues were being discussed by the Committee. In the meantime, the situation had worsened and the challenges had become more complex. He invited the meeting to come up with adequate and profound answers to the continued lack of improving capacity for financing development of African countries. In this regard, he invited African Governments to promote a political environment, free of conflicts to foster democratization and good governance and to respect the democratic rights of the people as well as enhance accountability. Each national government should also pursue economic policies in line with longer-term development needs so as to release the entrepreneurial energies of the people. Giving special support to domestic capital would eventually ensure the internalization of the economic development process.
3. Turning to the external factors which brought about economic hardship, the Vice-Minister noted that while some of Africa’s development partners had substantially raised their assistance, overall resource inflows, in real terms, had declined because of the end of the cold war and changing donor priorities. Other factors contributing to this shift were weak national coordination and management of aid and disbursement modalities reinforced by donor-driven aid management. Emphasizing the need to draw lessons from both the East Asian crisis and the globalization phenomenon, he said that while Africa needed much stronger international support, African Governments should resolve to move forward and squarely face the challenges of mobilizing domestic resources. This should be Africa’s long-term guiding principle in its development endeavour.
4. The Vice-Minister informed the meeting of the political and economic measures adopted by his country to promote growth and development. In 1991, Ethiopia issued a New Economic Policy which was subsequently elaborated into a series of stabilization and adjustment programmes. The results of the programme have been quite encouraging. The prevalence of peace and stability for the first time in nearly two decades, together with liberalization policies have enabled a quick economic upturn. In order to prepare the ground for future growth of the economy, his country had prepared a long-term development strategy oriented towards "agricultural development-led industrialization" (ADLI). The current economic policy envisages that the private sector would play the leading role in economic activity. The role of the government would be essentially to ensure macroeconomic stability, to put in place appropriate regulatory framework, and to provide social services and economic infrastructure. New political measures had been taken for creating a conducive framework for participatory development through devolution of power.
5. The Vice-Minister concluded his statement by inviting the meeting to give particular attention to domestic resource mobilization and rationalization of government expenditure in order to effectively enhance Africa’s economic development and eradicate poverty on the continent. He called for a strengthened policy environment to harness private savings, ensure good governance and put in place an effective system for the coordination and management of aid to Africa. To this end, he urged the Committee to critically examine the various impediments to sustained implementation of the various plans of action and agenda for Africa’s development and draw up concrete proposals for the consideration of the Commission.
6. In his statement, Mr. K.Y. Amoako, Executive Secretary of ECA, welcomed participants to this year’s meeting of the Technical Preparatory Committee of the Whole (TEPCOW) and the Intergovernmental Group of Experts. He expressed ECA’s gratitude to the Government of the Federal Democratic Republic of Ethiopia for its continued support of the work of the Commission. He also thanked TEPCOW for its pragmatic guidance on salient policy issues and major challenges of Africa’s development, as a key step in shaping a responsive work programme for the Commission. Recalling that the 1997 sessions of the Commission and of the Conference of Ministers of Finance focused on issues of trade, investment and financial sector reforms and debt management in Africa, he said that this year’s Conference theme "The Challenges of Financing Development in Africa" was intended to build on the outcomes of these 1997 meetings. He observed that this year’s session of the Commission was organized as a Joint Conference of African Ministers Responsible for Economic Development and Planning, and the Ministers of Finance, to emphasize the convergence of the development, finance and planning functions, and to enable the Ministers and Central Bank Governors to reflect on this important theme, together with Africa’s development partners.
7. He noted that on the eve of a new millennium, Africa was faced with several challenges, key among which were poverty reduction and sustainable development. African Heads of State and Government had endorsed the United Nations target of reducing poverty by half by the year 2015. He said that this would imply a reduction of poverty by 4 per cent per annum. However, in order to meet these targets Africa would need to raise its GDP growth rates to an average of 7 per cent per annum for the region as a whole, compared to an average of 4.5 per cent annually during 1995-1998. He said that the magnitude of external resources required to attain these poverty reduction targets were so massive that they were not likely to be attained. This was also made difficult by the relatively small inflows of private capital and the continued shrinkage in official development assistance (ODA).
8. The Executive Secretary invited African countries to step up their efforts to mobilize domestic resources for sustainable development and poverty reduction. He also recommended the holistic and integrated framework for financing the continent’s development advocated by the United Nations Secretary-General, in his Africa report to the Security Council last year. He said that Africa’s partners could play a crucial role in supporting Africa’s development by maintaining adequate flows of ODA, increasing resources for financing the Highly Indebted Poor Country (HIPC) Initiative, further debt cancellation, and enhancing market access for Africa’s exports.
9. Referring to the other agenda items of the meeting, the Executive Secretary informed participants that the Economic Report on Africa 1999 would provide a useful backdrop for discussion of the Conference theme by examining the African economy and reviewing the social and economic situation in the past year. The report had a new feature. Countries were ranked according to annual performance, economic sustainability and economic policy stance indices. There was also an analysis of the policy implications of these indices from the perspective of achieving the developmental objective of reducing poverty by half over the next 15 years. ECA was committed to identifying the best cases within Africa’s development to facilitate peer exchanges of information between policy leaders. He hoped that these indices would help in that regard.
10. He noted that the major mistake of the past two decades had been the focus on macroeconomic stabilization to the neglect of "capacity, structural and institutional" elements. While stabilization was necessary, it had entailed sacrificing resources needed to build the requisite institutions and infrastructure, and to invest in human capital development and retention, to the peril of Africa. The urgent task before African leaders and policy makers was, therefore, to formulate policies with the twin goals of macroeconomic stability and growth sustainability.
11. To help its stakeholders address those challenges, ECA had spent the past three years strengthening its capacity to focus on the changing development agenda of African countries. Its outreach and service to member States was increasing as the Commission strove to realize its potential as a regional policy centre, a networking hub, and a clearing-house for best practices and development information. As shown in the report on the Work of the Commission (1996-1998), the reform process had crystallized policies to expand partnership with other international and regional organizations; use ECA’s convening power to foster dialogue and consensus on Africa’s development and focus on the key policy issues. He said that an International Conference on Women and Development was held as part of the fortieth anniversary of ECA. Participants to that Conference had evolved strategies for removing the constraints imposed on women, as a means of achieving poverty reduction and sustainable growth in the long term.
12. The Executive Secretary noted that the Proposed Programme of Work and Priorities for the biennium 2000-2001 of the Commission aimed at assisting member States to meet many of their key challenges. Having enhanced its operational capacities, ECA would become more results-oriented in the coming biennium. For enhanced programme delivery and impact, the proposed work programme had built-in mechanisms in the form of stronger links between desired results and resource – for member States and programme managers, to monitor and determine its implementation, effectiveness, and relevance. He said that the need for enhanced collaboration and coordination was particularly compelling in Africa, where the activities of United Nations agencies had witnessed significant expansion at the national and regional levels. He added that the need to streamline existing coordination mechanisms was widely recognized by the agencies as well as member States. There was also need for the Committee to examine the report on the harmonization and rationalization of the 30 ECA-sponsored institutions.

Discussion on Conference Theme: The Challenge of Financing Development in Africa (agenda item 4)

23. The Committee had before it the document entitled "The Challenges of Financing Development in Africa", (E/ECA/CM.24/2). In its discussion, the Committee examined the overall challenges of financing development in Africa, with particular focus on prospects and outlook of official development assistance to Africa; other sources of non-ODA external financing; the magnitude of capital flight and its implications on Africa’s development; African debt problem in the light of the various debt relief initiatives and the need to find a durable solution and take into its "political dimensions" importance of domestic resource mobilization in raising savings in Africa; and impact of the recent global financial crisis, triggered by the East Asian crisis, on African economies.

24. Overall challenges of financing development in Africa: The Committee acknowledged that formidable challenges face Africa in mobilizing development finance to support long-term sustainable development and poverty reduction. In this respect, the Committee emphasized the importance of mobilizing development finance in Africa, by:

1. Adopting policies and implementing measures that promote capital formation;
2. Modifying financial structures to improve mobilization of development finance;
3. Creating a conducive environment to attract foreign direct investment; and

Enhancing measures for domestic resources mobilization in order to reduce Africa’s aid dependency.

25. The Committee emphasized the need for African countries to focus on improving the overall performance of national economies and building capacities in important sectors of their economies. A holistic approach to a country’s development process is needed, which should include enhancing productive institutional and human capacities; fiscal and banking reforms; liberalization of the trade sector; legal and regulatory reforms; and rationalization and coordination of external assistance.

26. Noting that Africa would continue to depend on ODA to finance the resource gap in the short to medium term, the committee, nonetheless, urged Africa to strive to become self-reliant and mobilize non-ODA development finance.

27. The Committee noted that in spite of major reforms and deep restructuring efforts, many African countries continued to face serious difficulties in securing finance for their development. They stressed that there was no lack of "development visions or strategies in Africa". However, the most difficult problem was that of translating such visions and strategies into action. It was observed that mobilization of development finance would be much easier if Africa's economic development track record was good and internal conflicts were resolved.

28. Official development assistance: While observing that large increases in ODA were unlikely to materialize in future, even as the prospects for aid effectiveness in Africa were improving, the Committee noted the importance of ODA in terms of strengthening governments’ ability to make long-term investments, which were vital for private-sector-led economic growth. The Committee, however, observed the fact that aid had not been as effective as desired and might have nurtured a culture of aid dependency. To enhance aid effectiveness in the continent, it was suggested that the following corrective measures should be adopted: (a) maintaining a stable macroeconomic environment; (b) improving the efficiency and impact of public expenditures financed with aid resources and "optimizing" aid’s share in development expenditures, so as to reduce aid dependency in the long run; (c) emphasizing a "holistic and comprehensive approach" for new aid modalities; and, (d) initiating a new donor-beneficiary relationship in which multi-donor programmes focus on supporting an African-driven agenda.

29. The Committee underscored the vital importance of ODA to financing development in Africa, given the low rates of national savings, the decline of export commodity prices and deterioration of the terms of trade. African countries were reminded that by definition, ODA should only be a complement to their own efforts. It was necessary, therefore, to plan for long-term scenarios of decreasing Africa’s dependency on ODA. The Committee observed that given the prevailing environment in the donor countries and increased competing demands for ODA, flows of ODA to Africa are unlikely to increase significantly.

30. The Committee noted that at the end of the cold war adoption of market-oriented economic structures by formerly centrally planned economies and globalization of the world economy had increased demand for ODA. Furthermore, it was noted that the crisis in the Balkan region could result in further cuts in aid to Africa. The Committee suggested that aid to individual countries should be complemented by targeted aid to regional or subregional integration groupings.

31. Other sources of finance: In considering other sources of external finance, the Committee noted that Africa had not been a major beneficiary of the huge movements of private sector capital flows to developing countries that had taken place during the last two decades. A number of key conditions to attracting foreign investment included: (a) supportive macroeconomic environment, legal and regulatory framework; (b) the rule of law and the enforcement of contracts; (c) functioning social and economic infrastructure, financial sector reforms and support for capital markets development; (d) deliberate and explicit attention to the concerns of investor-risk-rating agencies; (e) privatization of public enterprises; and, (f) liberalization of trade and payment regimes.
32. The Committee recognized the importance of non-ODA external finance in supporting development in developing countries. In this respect, the Committee emphasized the importance of creating a conducive environment and implementing appropriate policies needed to attract foreign direct investment (FDI). The importance of developing properly functioning capital markets in mobilizing development finance was acknowledged. However, the Committee cautioned against the rapid liberalization of the capital account. The recent East Asian financial crisis has confirmed the dangers associated with volatility of international capital flows. It was important that African countries not only open their financial markets gradually to minimize speculative attacks but also that liberalization of financial markets should be matched with development of appropriate macroeconomic indicators and significantly improved capacity for surveillance and regulations.
33. Capital flight: In examining the magnitude of capital flight out of Africa and its implications on financing development, the Committee noted that Africa had a larger proportion of wealth held overseas by residents than any other continent (39 per cent of GDP, compared with 6 per cent for Asia before the crisis). It was observed that adverse investor-risk -ratings, unsustainably high external debt and macroeconomic policy errors were root causes of capital flight. Instead, corruption, lack of accountability and transparency and the absence or weakness of capital markets were the main triggers for capital flight in Africa. The Committee acknowledged the problem of capital flight in many African countries. It was observed that although unstable macroeconomic and financial environments had contributed to capital flight out of Africa, a large proportion of the source was from illicit funds obtained illegally by officials or the business community. The fact that some exports income was not brought back to the country was another manifestation of capital flight. The Committee identified measures for stemming the flow of resources out of the continent, as including: (a) policies for creating and sustaining a consistent and stable macroeconomic environment; (b) simplification of the administrative procedures in key areas, such as taxation, export and import licensing; (c) elimination of market distortions and of the discretionary powers of government officials; (d) elimination of corruption; and (e) introduction of changes in the banking regulations of developed countries, where resources obtained illegally were invested.
34. Africa’s external debt: The Committee also examined the African debt problem in the light of the various debt relief mechanisms. It was observed that Africa's debt had become difficult to service and certainly unsustainable in many African countries, under any sensible growth-oriented macroeconomic scenario. The Committee recognized that the external debt problem continued to be a major constraint to Africa’s development. Furthermore, the debt overhang remained a major disincentive to foreign direct investment. The Committee noted that despite recent debt relief initiatives, servicing of debt continued to absorb a large proportion of Africa’s resources.
35. Any credible solution to Africa's debt problems must entail substantial debt cancellation. The Committee noted that during the first two years of the implementation of the HIPC Initiative, 10 countries were reviewed for eligibility, and a number of other countries were in the pipeline. However, so far only one African country had received actual debt relief through the Initiative, thereby justifying calls for improvements to be made to the Initiative to allow more countries to benefit from it. The Committee welcomed new initiatives by the key Group of Seven (G-7) creditors, which could entail substantial debt cancellation. The Committee noted that five variants of enhanced debt relief proposals will be put forward for consideration at the next G-7 Summit in Cologne, Germany in June 1999. The proposals were aimed at strengthening and accelerating the implementation of the HIPC Initiative, with a view to enabling as many countries as possible to make the necessary adjustments and receive debt relief quickly and comprehensively. Donors should be encouraged to provide additional resources for funding existing debt initiatives. The proposals if adopted could significantly reduce the waiting period before debt relief was granted and enlarge the number of eligible countries. The Asian crisis had demonstrated, through the sharp fall in demand of commodity prices, the vulnerability of some highly indebted middle-income countries to external shocks in the increasingly globalized world economy. Also demonstrated was the precarious nature of their role in impelling subregional or regional growth. This might well enlarge the number of HIPCs and further intensify their need for resources to implement the various mechanisms of the Initiative. The specific situation of these highly indebted middle-income countries will have to be addressed through debt reduction and investment promotion measures.
36. The Committee stressed the need to: (a) consider the various proposals that will be put forward in the next G-7 Summit in Cologne, Germany, as well as those of other stakeholders that are geared towards finding a lasting solution to the debt problem; (b) consider the applicability of the UNCTAD proposal of applying established national insolvency procedures, with independent assessment to determine a country's sustainability and calling for a write-off of all non-collectable debts; and (c) share experiences of the application of non-HIPC debt relief instruments, such as debt conversions and debt swaps.
37. African countries were called upon to draw lessons from past mistakes made in contracting external debt and to take appropriate actions and also adopt better methods of debt management.
38. Domestic resource mobilization: The Committee also examined the importance of domestic resource mobilization in raising savings rates in Africa, and more specifically on the need to ensure macroeconomic stability, implement financial sector and capital market reforms, adopt appropriate interest and exchange rate policies as well as fiscal reforms and expenditure rationalization.
39. The Committee underlined the importance of African countries intensifying their efforts to mobilize domestic resources in order to raise domestic saving rates, which are currently at very low levels in many African countries. Given the goal of reducing poverty in Africa by half by the year 2015, the magnitude of domestic resources to be mobilized would be significant and require greater effort by African countries.
40. The Committee urged African countries to implement appropriate strategies and policies needed to raise domestic savings rates. Such policies would invariably have to include: maintaining macroeconomic stability; promoting sustainable growth; reducing rates of inflation; expanding financial structures and financial instruments in order to mobilize both urban and rural savings; utilizing informal financial institutions and arrangements to mobilize such savings; and promoting both national and subregional capital markets. Furthermore, the Committee called for an examination of the factors which contribute to the shift by some economic operators from, the "formal sector" to the "informal sector" with dire consequences on government revenues and savings. The Committee also called on African countries to examine modalities for providing micro finance to urban and rural people. Furthermore, it was observed that in view of the role played by the "informal sector" in many African countries, due attention should be paid to this sector and to how surpluses generated by this sector could be mobilized to support the development process. In the course of encouraging investments environmental aspects should be given due consideration.
41. Recent global financial crisis and Africa: The Committee discussed the global financial crisis, triggered by the Asian financial crisis, and its effects on the world economy, in particular on African countries. It was observed that most African economies were relatively less integrated in the world economy and accordingly the impact of the crisis on these economies in terms of financial flows had been rather minimal. Nonetheless, some of the negative effects on African economies had shown up: (a) the weakening of commodity prices, with serious consequences on prices of primary products on which most African countries depend; (b) the decrease in Asian investments in Africa; and (c) a reduction on demand for Africa's commodity exports due to currency realignment. At the international level, the global financial crisis had raised serious questions as to whether the current international financial system was capable of effectively dealing with systemic imbalances and more importantly promoting long-term sustainable development.
42. The Committee noted the calls being made to reform and restructure the "international financial system", in the aftermath of the Asian financial crisis. The Committee stressed the need for Africa to be involved not only in the debate on the "new financial architecture" but also in the implementation of the restructuring of the institutional framework to ensure that the new international financial structure that will emerge will have to contribute to improved "development finance" as one of its core elements and functions.
43. In this respect, the Committee welcomed calls by the Group of Seventy-Seven (G-77) and the Group of Twenty-Four (G-24) for a working group to be established to review the "international financial architecture" and submit recommendations for its reform and restructuring. The Committee noted that a Group of Twenty-Two (G-22) which had been established to undertake this work has limited African representation. It was, therefore, necessary to deal with this imbalance by expanding the G-22 to allow more African countries to participate in the review.
44. The Committee raised the need to: (a) share experiences of the direct and indirect impact of the recent East Asian crisis on African economies, especially trade and investment; (b) consider strategies for forestalling an East-Asian-type crisis in Africa; and (c) propose measures to prevent loss of markets due to currency realignment in Asia. Furthermore, the need for the "new financial architecture" to accommodate the legitimate needs of poor developing countries for development finance, in a situation of volatile trade, finance and capital markets was raised. The Committee stressed the need for Africa to examine carefully the options currently under debate in the international community on how best to restructure, reform and strengthen the international financial architecture.
45. The Committee took note of the report in the light of the above observations.

Discussion on the Current Economic and Social Situation in Africa (agenda item 5)

46. Under this agenda item, the Committee considered document E/ECA/CM.24/3 entitled "Economic Report on Africa 1999: The Challenge of Poverty Reduction and Sustainability". The Committee noted that Africa’s economy in 1998 showed a significant turn around, with regional GDP growing by 3.3 per cent, compared to 2.7 per cent in 1997. The growth rate was obtained under difficult external environment marked by the financial crisis in the Asian emerging markets. The Committee noted with satisfaction that this was the highest rate of growth recorded in the world for the year and that the performance showed an increase in per capita income for the fourth year in a row.
47. However, the Committee noted that despite the satisfactory regional growth, there was marked diversity in performance at the subregional and country levels. Of the five subregions, three experienced marked deceleration and only two increased the growth rate of their GDP, namely: the North Africa subregion where GDP growth doubled from 2.1 per cent in 1997 to 4.4 per cent in 1998, and the Central African subregion where it increased from 4 per cent in 1997 to 4.9 per cent in 1998.
48. On the basis of economic groupings, growth in the 11 oil-exporting countries declined from 3.6 to 2.4 per cent, while the 42 non-oil-exporting countries increased their rate of growth from 2.3 to 2.9 per cent. Performance in the 33 Least Developed Countries increased from 2.4 to 4.1 per cent. Growth in the G-5 countries of South Africa, Nigeria, Morocco, Algeria and Egypt (which together account for 59 per cent of the regional GDP and 37 per cent of the population), increased from 2.2 to 3.1 per cent.
49. The Committee observed that the economic recovery in 1998 relative to 1997 was spearheaded by the revival of agriculture, whose rate of growth increased from 1.7 to 3.5 per cent. On the other hand growth of the industrial sector declined from 3.8 per cent in 1997 to 3.2 per cent in 1998. The service sector continued on its positive trend, growing by 3 per cent in 1998 relative to the 2.5 per cent in 1997.
50. The Committee noted the significant structural transformation in the African economy during the last decade and half. While the share of agriculture in GDP declined from 22 per cent in 1980 to 19 per cent in 1997, it observed that this fall was not compensated by an increase in the industrial sector, whose share declined from 39 per cent in 1980 to 36 per cent in 1997. The decline in the share of agriculture and industry was offset by the service sector whose share in GDP increased from 38 per cent to 45 per cent respectively. The Committee also observed that, if this trend continued, the African economy may be transforming itself into a service-oriented economy rather than expanding its commodity producing sectors.
51. The Committee noted that the major factor behind the burgeoning deficit in the balance- of-payments position of the region in 1998 was the decline in world commodity prices. The decline in external resource inflows, especially from private sources, forced countries to draw down their reserves to fill the payments gap. The Committee also noted the continued increase in the debt burden of the region, which increased from $US344 billion in 1997 to $US350 billion in1998. At the same time debt service increased from $US33 billion in 1997 to $US36 billion in 1998. The debt stock amounted to 66 per cent of GDP and a staggering 303 per cent of exports of goods and services. The Committee further noted that of the 40 HIPCs in the world, 32 were African and called for the significant revision of the HIPC initiative.
52. The Committee noted with satisfaction that the objective of reducing poverty of African governments was shared by their development partners. In this regard the Committee welcomed the commitment of Africa's development partners expressed in various international fora, the latest of which was at the second Tokyo International Conference on African Development (TICAD II) held in October 1998. The Committee, however, underlined the enormity of the challenge of reducing poverty by underscoring the fact that 44 per cent of Africans, and 51 per cent of those in sub-Saharan Africa lived in absolute poverty.
53. The Committee was informed that Africa needed to increase its growth rate to 7 per cent and maintain this level for the duration of the target period in order to reduce poverty by half by 2015. The required rates of growth per subregion were 5.6 per cent for North Africa; 7.6 per cent for West Africa; 6.7 per cent for Central Africa; 8.1 per cent for Eastern Africa; and 6.2 per cent for Southern Africa. These growth targets called for an investment of 33 per cent of GDP in Africa as a whole. At the subregional levels the corresponding figures for investment were 21 per cent for North Africa; 37 per cent for West Africa; 49 per cent for Central Africa; 46 per cent for Eastern Africa; and 38 per cent for Southern Africa.
54. Considering the financial implications, the Committee noted that there was a large gap between resources that are available from domestic sources and the required volume of investment to make an impact on poverty reduction. Examining the possible avenues for closing the gap, the Committee reviewed past ODA flows into the region. It noted with concern that ODA flows were most likely to decline in the years ahead. It further noted that, even if ODA flows were maintained at their current levels, it would still leave a large gap between available resources from domestic savings and ODA and the required volume of investment. Further exploring ways of filling the gap, the Committee observed that Africa's share of FDI was not only very small but was declining as a proportion of global FDI. The Committee also noted that the distribution of FDI in Africa was uneven, favouring the mineral - and more so the oil-rich countries.
55. In view of these realities, the Committee underlined the need to increase the mobilization of domestic resources, including the stemming and reversal of human and financial capital flight; increasing domestic savings, (although this was deemed to be difficult in light of the large proportion of people living in or close to absolute poverty); improving the productivity of existing resources; and devising an intelligent and targeted use of the resources that are to be mobilized. The Committee invited member States to formulate and implement policies conducive to the building of institutions that would assist and support national efforts to meet the objective of reducing poverty in their respective countries.
56. The Committee was appraised of the four new indices that were developed by ECA for evaluating the performance and sustainability of African economies. These were the Borda Index, the Annual Economic Performance Index (AEPI), the Economic Sustainability Index (ESI), and the Economic Policy Stance Index (EPSI). The Borda Index was constructed to measure the state of well-being of the African people. Scores for countries were obtained by summing the rank of each of these countries relative to other African countries. On the basis of the Borda index so obtained, Seychelles, Mauritius, South Africa, the Libyan Arab Jamahiriyan Arab Jamahiriya and Tunisia were the countries with the highest scores and ranked first to fifth respectively.
57. The Annual Economic Performance Index (AEPI) was designed to measure improvements that countries made or failed to make on a year-to-year basis. The index is based on current account a percentage of GDP, changes in the rate of inflation, and change in per capita income. On the basis of the AEPI, Equatorial Guinea, Mauritius and the Congo were rated the countries with the highest turn around in 1998.
58. The Economic Sustainability index (ESI) was designed to measure the long-term prospect of African economies. The index is derived from the five indices of human capital development; structural diversification; dependency; transaction cost and macroeconomic indicators of sustainability. On the basis of the ESI index so obtained, the countries with the highest score and therefore the highest probability to attain and sustain a high rate of growth were Equatorial Guinea, South Africa, Botswana, Mauritius, Tunisia and Egypt respectively.
59. The Economic Policy Stance Index (EPSI) was designed to measure the policies pursued by countries. The index was derived from the indices of fiscal index and monetary policies. The fiscal policy index was derived from government deficit as a percentage of GDP; taxes on income and profit as a percentage of government revenue; taxes on international trade as a percentage of government revenue and indirect taxes as a percentage of government revenue. Monetary policy indices were based on the growth rate of money (M2) supply; commercial banks interest rate on deposit and the spread between lending and deposit rates. On the basis of the indices Seychelles, South Africa, Ethiopia and Egypt were the highest ranked.
60. The Committee noted with satisfaction that the intention of developing these sets of indices was to generate an African measure and to provide a more realistic appraisal of where each country stood relative to other African countries. However, the Committee observed that the current indices were developed on the basis of a limited number of variables and that the indices so obtained may not have correctly assessed the well-being of the people, or has not properly reflected the potential and therefore the sustainability of the countries.
61. The Committee also observed that the approach itself raises questions on the appropriateness of some of the indicators. In particular the "annual performance indices" did not reflect the very good performance of those countries that already maintained an excellent track record. For example, a country that has succeeded in controlling its inflation at a low or constant rate would have either very small or zero value for changes in inflation. This would tend to adversely affect its overall ranking among the countries. Such an approach tends to penalize those countries that have taken the trouble to maintain low inflation and low deficits in the current account. The Committee recommended the inclusion of a composite index in the report, using relevant weights based on their economic and social importance. The Committee called on ECA to undertake appropriate revision of the methodology such that countries with good track records are also reflected in the ranking.
62. The Committee felt, therefore, that further work was required and expressed the need for deepening the analysis on different sectors, in particular the informal and services sectors, which were included in GDP calculations. Analysis at household levels was needed to help design policies for poverty alleviation. In this regard, the Committee observed the need to examine the accessibility to water, basic services in health and education, as well as food security by the poor. Poverty gaps revealed in the report required focusing on productivity and efficiency enhancement of human resources, on the one hand, and the development of macro, small and medium size projects, on the other, targeting the maximization of value added derived from national resources. The role of development banks in such activities is to be encouraged.
63. Furthermore, the Committee requested that other indicators be included to reflect progress in important development fields such as infrastructure, and economic integration and also broaden the variables that make up the policy indices by including exchange rates. There is also a need to develop different indices for LDCs by looking at the quality of life, per capita GDP and vulnerability. Consideration should also be given to the construction of other indices that would incorporate such factors as demography, good governance and political issues. However, it was observed that the goal of constructing indices for the purpose of intercountry comparison required the adoption of a standardized and an integrated information system in Africa. The Committee noted that in the computation of the various indices, due consideration should be given to balance of payments.
64. In designing appropriate methods that would help to improve the quality of these indicators, the Committee recommended that ECA should work with other United Nations bodies using evaluation methods considered pro-active and reliable such as the UNDP evaluation method based on sustainable human development. Such cooperation could be considered at three different levels: regional, subregional and national. In this regard, the Committee welcomed the proposal to: (a) develop and maintain subregional database; (b) develop and maintain a bank of analytical tools to help monitor progress as well as guide development in the subregions; (c) develop at subregional levels common country assessments on the theme of globalization; and (d) establish a network of experts within and among SRDCs.
65. The Committee encouraged ECA to hold a series of workshops, seminars and conferences both to popularize the indices and to acquaint and get advice from professionals on these new indices. The Committee reiterated its appreciation for the excellent report, which brought the new indices relating to well-being performance, sustainability and policy. In this regard, the Committee commended ECA for having fulfilled its previous request to prepare an analytical rather than a descriptive report. The use of official data in the report including for the development of the new indices was appreciated. In this regard, the Committee recommended that the ECA secretariat should involve the SRDCs more in statistical data and information collection and pursue the improvement of the report and eventually come up with a study that presents practical recommendations to member States.
66. However, the Committee regretted the fact that the report was not sent to member States well in advance to give them ample time to study it and participate actively in the discussions.
67. On the subject of conflicts affecting more than 20 African countries, the Committee noted the adverse impact of large-scale population displacement on the economic development and on the efforts aiming at alleviating poverty on the continent. Special attention was also given to the specific development and financing needs of countries emerging from conflict, and the challenge to create a link between humanitarian assistance and sustainable development. The Committee noted, further, that lack of stability resulting from conflicts makes it unlikely for these countries to attract investment. Given the gravity of these issues, the Committee requested ECA to undertake an in-depth study on the impact of conflicts and displacements of populations on economic development.
68. The committee noted the destructive effects of HIV/AIDS on life expectancy, GDP, labour productivity and all other aspects of human life, and urged African countries to pay particular attention to contain it. The Committee urged ECA in collaboration with relevant and interested United Nations agencies and other organizations to undertake a study on the economic consequences of HIV/AIDS on Africa’s economic recovery and development prospects, and requested member States, Civil Society Organizations and the international organizations to raise public awareness by and through education to elicit behavioural change. Efforts to reduce spread of the endemic have proven to be cost effective.
69. The committee took note of the report in the light of the above observations.

Report on the Work of the Commission 1996-1998 (agenda item 6)

70. Under this agenda item, the Committee considered document E/ECA/CM.24/4 entitled "Report on the Work of the Economic Commission for Africa 1996-1998", which provided an overview of the activities undertaken by the Commission in implementing its programme of work and priorities during the period under review and of the availability and utilization of resources within ECA.
71. The Committee noted that the report covered a three-year period because of the decision taken in 1997 to hold the Conference of Ministers on a biennial, rather than an annual basis. In particular, the Committee noted that the reform and renewal of the Commission, which began in 1996 was almost completed, and the current report was a product of these efforts. These reforms coincided with and fulfilled the General Assembly instructions in resolutions 50/227 of 24 May 1996 and 52/12B of 1997 to the regional commissions to rationalize their operations.
72. The renewal process encompassed four types of institutional reforms, namely: (a) programmes and priority setting, which led to a streamlined programme structure of five subprogrammes, reflecting the key issues on Africa's development agenda; (b) organizational restructuring, focusing on the realignment of the secretarial structure to the new programme orientation, managerial improvement, and strengthening of ECA's subregional presence; (c) reform of the intergovernmental machinery, which led to a reduction in the number of Ministerial level conferences, and the other subsidiary organs with the aim of promoting greater coherence and coordination; and (d) improving programme impact, by developing guidelines for monitoring programme implementation and measuring results and impact.
73. These reforms also entailed streamlining and strengthening programme planning functions, budgeting, financial control, monitoring and evaluation, the building of a team-based approach to task management; improved management of physical facilities, procurement and general services; as well as an effective internal and external communications strategy which includes greater use of electronic networks, computers, e-mail, Internet, improved publications programme and dissemination strategy.
74. The Committee also noted that the reform of the Commission had began to yield tangible results, as there was now evidence of significant improvement in the impact of its services to member States. The Economic Report which was presented at this year's TEPCOW meeting, was another tangible evidence of this improvement. ECA had used its comparative advantage effectively through such modalities as conferences, seminars and workshops to disseminate information on best practices and promote advocacy as well as build consensus on key issues in Africa’s development.
75. The Committee further noted that the activities of the Commission during the period under review spanned the entire gamut of development concerns, and was implemented by six substantive divisions and supported by three service divisions. These activities included such essential issues as poverty reduction, fostering regional cooperation and integration, promoting good governance, building Africa's information and technology infrastructure through the implementation of the African Information Society Initiative which was endorsed by the Conference of Ministers in 1996, promoting human-centreed development, better management of the interlinked issues of food security, population and environmental sustainability, as well as promoting women in development and building capacity of member States on the various issues through the provision of advisory services and group training.
76. The Committee was informed that all these activities were carried out under severe resource constraints owing to the reduction in both regular and extrabudgetary resources, occasioned by the financial crisis in the United Nations and the strategic shift by some partners in their funding arrangements, which emphasized financing projects executed at the national level instead of projects at the regional level. In this regard, the Committee also took note of the clarifications provided by the representative of UNDP with regard to their financial assistance, which had declined over the years, and pointed out the availability of other resources and suggested that ECA and UNDP work together on modalities for accessing these resources in order to generate greater synergies.
77. The Committee was further informed that following the lifting of the freeze on recruitment, the Commission was speeding up the process of filling the vacant posts which resulted from the freeze and assured that in doing so, gender parity and geographical balance would be taken into account.
78. It was observed that, in spite of ECA's efforts at strengthening its subregional presence, the SRDC-SA presently lacks sufficient expertise in the mineral and energy, as well as trade and investment sectors. He noted that this was a serious deficiency, given that trade and investments in the minerals sector constituted the major economic activity of the subregion. In addition, it was pointed out that the position of Director of the SRDC-SA was vacant and some of the participants wished to know what the Commission was doing to fill it.
79. In response to the concerns raised regarding staff deployment to the SRDCs, the secretariat informed the Committee that steps had already been taken to appoint Directors for ECA's five SRDCs and assured that it was looking into the issue of deploying relevant expertise to the SRDC-SA. The Committee was also informed that gender focal points had been deployed to all ECA substantive divisions, as well as the SRDCs.
80. Above all, the committee noted that one of the guiding principles of the reform--effective partnership would remain crucial in the Commission's work, as there was wider recognition that Africa's development objectives can only be achieved through effective partnership with other development actors. In this regard, ECA had done a lot of work in coordinating and harmonizing the activities of other United Nations agencies, bilateral, multilateral and private partners.
81. The Committee raised questions on such issues as globalization, measures to improve Africa's position in the post-Uruguay trading and economic environment, debt reduction, poverty alleviation, and good governance. The Committee emphasized the need for ECA to undertake studies on the modalities for establishing an African Monetary Fund to serve as a financial buffer for financially distressed African countries, and the need for ECA to organize seminars and workshops to create a better understanding among member States of the mechanisms of WTO and provide assistance to member States in understanding the phenomenon of globalization and coping with it.
82. In response, the secretariat reminded the participants that the proposal for setting up an African Monetary Fund had been on the agenda of the Conference of Ministers in the past, but the idea had to be shelved due to lack of consensus on the issue. However, the secretariat promised to undertake the necessary studies in view of the strong support from member States.
83. The secretariat also informed the Committee of the extensive work it had done in the past three years to assist member States benefit from the new global economic environment through its seminars, workshops and technical advisory services. Specifically, the secretariat pointed out that its assistance on the WTO arrangements to Africa's Least Developed Countries (LDCs) will continue. In addition, ECA has organized several symposia, seminars and workshops, aimed at examining the implications of various international trading arrangements, such as the Marrakech Agreement.
84. The Executive Secretary pointed out that ECA's activities in the past three years had focused extensively on various aspects of globalization and promised that the Commission would do more in future to promote a better understanding on key issues in Africa's development. He said that future ECA publications and reports will focus on various aspects of globalization and informed the Committee that the first meeting of the African Development Forum, would have as its theme Globalization and Information Age. He said that ECA's activities in the area of governance were increasing and a State of Governance Report would be published by ECA beginning in the year 2000. He also informed the Committee that ECA in collaboration with UNDP had successfully organized the African Governance Forum. Two have already been held, and a third one is planned for June/July 1999 in Mali.
85. The Committee noted with appreciation the comprehensiveness of the report and the clear and concise manner in which it was presented, adding that it provided useful information for policy makers in Africa. The Committee however emphasized that future reports should pay attention to issues and proposals for improving the competitiveness of African economies and better distribution of the benefits of growth.
86. The Committee took note of the report in the light of the above observations.

Coordination and Collaboration among United Nations Agencies at the Regional and Subregional Levels in Africa (agenda item 7)

87. The Committee considered document E/ECA/CM.24/5 entitled "Coordination and Collaboration Among United Nations Agencies at the Regional and Subregional Levels in Africa". The Committee noted that three patterns of coordination and collaboration among United Nations agencies were discernible at the regional level in Africa. These included the system-wide programmes and initiatives adopted by the United Nations to address Africa’s economic and social development problems, the United Nations New Agenda for the Development of Africa in the 1990s (UN-NADAF) and the United Nations System-wide Initiative for Africa (UN-SIA); the regionally agreed programmes adopted by the African member States and endorsed by the United Nations (AISI, UNTACDA, IDDA, and the Addis Ababa Plan of Action for Statistical Development); and collaboration/partnership arrangements among agencies developed as pragmatic response to the specific needs of African countries (SPA, NLTPS, IGWA, UNAIDS and WMO).
88. At the subregional level the Committee observed that four patterns of cooperation arrangements existed: those relating to instances where United Nations agencies organized subregional programmes around specific issues of concern to selected or affected countries; those involving programmatic collaboration between various United Nations agencies and the subregional intergovernmental organizations; Subregional Development Centres of ECA whose work encompassed the full gamut of development spectrum including fostering subregional cooperation and integration; and those relating to situations where United Nations agencies are engaged in cooperation with a regional or subregional technical organization specializing in a particular field.
89. The Committee noted the key findings of the report. The first finding was that the United Nations Inter-Agency Task Force established for UN-NADAF had been helpful in facilitating and mobilizing inter-agency team effort for implementing various programmes and initiatives. The second finding was that there is a plethora of coordinating mechanisms developed around specific regional programmes. The need to streamline these mechanisms is widely recognized by the agencies as well as the member States. The third finding was that the thematic programmes represented an important framework for collaboration among the United Nations agencies, on the one hand, and between the United Nations agencies and other stakeholders, including the private sector organizations, on the other. The fourth finding was that there is a virtual absence of mechanism for coordination at the subregional level in Africa. The fifth finding was that many agencies are developing closer links with the subregional intergovernmental organizations. The sixth was that the decentralization of activities by various agencies to the subregional level in Africa is yet to induce the much hoped for improved coordination among the agencies.
90. The Committee welcomed the effort being made by United Nations agencies to work closer together and for more effective collaboration in all their activities. The recent regional coordinating meeting held at the United Nations Office in Nairobi (UNON), Kenya on 5 March 1999 offered an important opportunity for renewed and effective coordination and collaboration among United Nations agencies in Africa. That meeting concluded that the vision for the United Nations’ work in Africa must be shaped and determined by Africa’s development agenda and that UN-SIA would provisionally constitute an appropriate mechanism for the coordination of the United Nations system’s work in Africa.
91. The Committee took note of the activities, constraints and accomplishments UN-SIA. Launched in March 1996, UN-SIA singled out Africa’s key advancement challenges, defined in 13 development clusters and enlisted the international community’s assistance in meeting them through a coordinated development commitment. UN-SIA underscored the importance of consolidating support for positive continental, political and economic trends initiated during the 1990s. Since the launching of UN-SIA, the separate lead agencies, each of which had accepted commitments in specific target areas, have made significant headway in their respective sectors which they were assigned lead role. United Nations Country Team Retreats have facilitated in-country consultation on UN-SIA’s benefits. The outstanding challenges include deepening and widening country coverage and rallying additional partners in support for UN-SIA.
92. Questions were raised regarding the adequacy of the financial resources allocated for implementing the UN-SIA programme, the United Nations agencies awareness of the severity of such problems as high illiteracy, lack of water and social amenities confronting African countries; and how ECA could support country level operations especially through its network of subregional development centres. It was explained that although UN-SIA had envisaged mobilizing some additional resources, the main strength of the Special Initiative was in improving coordination and collaboration among United Nations agencies. This reflected the recognition that coordination among the agencies could produce results that exceeded the sum total of each individual agency’s contribution and magnify the overall impact of the United Nations system at the country level in each of the 13 clusters of the Initiative. In this regard, it was emphasized that various programmes developed by the agencies were continuously being reviewed to respond to the development challenges of the region.
93. The committee stressed the importance of ECA’s active involvement in supporting member States in national programme formulation and implementation. In this regard it was noted that SRDCs were increasingly involved in national level activities as part of the United Nations country team, as evidenced in the growing collaboration between some of the SRDCs and other United Nations agencies in their respective subregions. It was emphasized that this enhanced participation of SRDCs in country team work reflected the spirit of the consensus reached at the Turin Staff College Seminar on improved harmonization of programmes of United Nations agencies.
94. Some participants noted that ECA was well placed to play a lead role in regional coordination both because it is part of the landscape of regional institutions and because it is the regional arm of the United Nations in Africa. Other participants emphasized that the assistance provided by United Nations agencies to member States at the national level should adhere strictly to the principles of national ownership and national execution of programmes. It was a matter of concern that all agencies had not fully adhered to these principles in the implementation of their programmes. Moreover it was observed that different agencies imposed different procedures for programme implementation, thus imposing high transaction costs on governments. The committee urged United Nations agencies to simplify their rules relating to programme implementation.
95. The Committee took note of the report in the light of the above observations.

 

Rationalization and Harmonization of ECA-sponsored Institutions: A Progress Report (agenda item 8)

96. Under this agenda item, the Committee considered document E/ECA/CM.24/6 on the rationalization and harmonization of ECA-sponsored institutions. It recalled resolution 827(XXXII) of the twenty-third meeting of the Conference of African Ministers Responsible for Economic and Social Development and Planning held in Addis Ababa, Ethiopia in May 1997, which had called for a merger, conversion and/or closure of such institutions, and for ECA to redefine its relationship with the institutions which would henceforth be called "regional development institutions".
97. The Committee noted that a study had been carried out which clustered these institutions into five groupings: (a) Cartography, Mapping and Remote Sensing; (b) Engineering and Industrial Technology; (c) Economic and Social Development; (d) Finance and Trade; and (e) Minerals and Transport. Under the first category, it had been recommended to merge the regional Centre for Training in Aerospace Surveys (RECTAS) and the Regional Remote Sensing Centre (CRTO) and the Committee was informed that a joint meeting of the Governing Councils of the two Centres was expected to be held in September 1999 after the meeting of plenipotentiaries to be held in Ouagadougou.
98. Under the second category, the Committee noted that the Governing Councils of the African Regional Centre for Technology (ARCT) and the African Regional Centre for Engineering Design and Manufacturing (ARCEDEM) had agreed to merge subject to certain conditions and a Memorandum of Understanding had been signed. The African Regional Organization for Standardization (ARSO) and the African Regional Industrial Organization (ARIPO) had decided to maintain their separate identities. As for the African Institute for Higher Technical Training and Research (AIHTTR) and the African Regional Centre for Solar Energy Research (ARCSE), their Governing Councils had not met to consider their fate because the institutions had virtually closed down.
99. Under the third category, the Committee observed that the Institute for Economic Development and Planning (IDEP) and the African Centre for Applied Research and Training in Social Development (ACARTSOD) had been urged to take a collective decision on the merger. Meanwhile, the Committee expressed appreciation to the Government of the Libyan Arab Jamahiriyan Arab Jamahiriya which had been strengthening ACARTSOD through financial contributions and was informed that a Director had recently been appointed. With regard to the Eastern and Southern African Management Institute (ESAMI), the Committee noted that its Governing Council met in July 1997 and had accepted the recommendation that it be transformed into a regional institution to cover the whole of Africa.
100. Under the fourth category the Committee took note of the report that the Governing Boards of the Association of African Trade Promotion Organization (AATPO) and the Federation of African Chambers of Commerce (FACC) had agreed to merge and the instruments of a merger would be finalized at the end of May 2000.
101. Finally, under the last category of minerals and transport, it was reported that the Central African Mineral Resources Development Centre (CAMRDC) was virtually non-functional. However, SRDC-CA in Yaounde was ready to assist in its reactivation. With respect to the Southern and Eastern Africa Mineral Resources Development Centre (SEAMIC), the Committee observed that it had been agreed that its relationship with SADC and COMESA be addressed through a Memorandum of Understanding.
102. The Committee was informed that the new relationship between ECA and the institutions would be based on three key principles, namely: relevance of programmes of the institutions to ECA’s new strategic directions and programme focus; relevance in terms of present operational capacity or potential for effectiveness; and the extent to which the institution was provided regular support by member States. In this connection, the Committee noted the classification of the institutions into three different categories, namely: those with which ECA would develop strong cooperation provided the proposed rationalization measures were implemented by member States; the second category of institutions which also meet the criterion of relevance to ECA’s strategic directions but with comparatively limited support from member States or not adequately self supporting; and the third category of institutions consisting of those that were paralyzed and practically non-operational. The possibility of institutions graduating from third to second and first categories was also pointed out.
103. Finally, the Committee noted the new modalities for a new relationship between ECA and the institutions, and urged member States to pay their assessed contribution to these institutions. The Committee also recognized the crucial role that viable institutions could play in strengthening the capacities of member States while serving as centres of excellence and promoting south-south cooperation.
104. The Committee was appraised of current developments in some of the institutions and particularly took note of the difficulties they were facing in spite of the initiatives and efforts being undertaken by these institutions to remain operational. These included new approaches and policies aimed at meeting their staffing requirements, consolidating functions and operations, restructuring and re-engineering these institutions. In this regard, the Committee took note of the case of UNAFRI as a regional body which benefits from a United Nations grant in light of its mandate and efforts to promote and coordinate regional technical cooperation activities related to crime prevention and criminal justice systems in Africa. However, the support provided by the United Nations grant and donor grants in relation to specific projects need to be supplemented by demonstrated payment of the assessed contribution of its member States in order for the Institute to have the necessary resources for its effective functioning.
105. The Committee also examined the question of settling financial obligations as a prerequisite of any merger between institutions. It recognized that the problems encountered by the institutions still persisted in spite of the efforts made by some member States and by development partners to put these institutions at least on a sound financial footing. ECA was commended for having implemented the mandate given it by the ECA Conference of Ministers in May 1997.
106. Some participants indicated their readiness to strengthen the institutional capacities of these institutions which should play an important role to speed up economic and social development. The Committee recognized that the institutions affected by the rationalization were not given all the attention they deserved in accordance with the objectives established for them at their inception.
107. The Committee, indeed, pointed out that the lack of financial support by member States had prevented the institutions from implementing their respective work programmes and, in some cases, led to their complete paralysis. While not overlooking the efforts made by some countries to give financial support to the institutions based in their countries (for example staff deployment, provision of office buildings), the Committee urged member States to find lasting solutions to the financing problems, especially for those institutions recognized by both the report of ECA and the member States themselves as relevant and important for Africa’s development.
108. The Committee took note of the concerns expressed by the Deputy Executive Secretary of ECA about the seriousness of the financial situation of the institutions whose Governing Councils ECA has been a member. Concerning the rationalization proposals made by the secretariat, the Committee noted that the proposals were quite objective since they were based on scrupulously selected criteria. The Committee also noted the appeal made by ECA to maintain some of these institutions in view of their importance for the economic and social development of Africa.
109. The Committee invited member States to meet their commitments by taking practical steps to provide the institutions with the resources required for their optimal operation.
110. The Committee took note of the report in the light of the above observations.

 

Proposed Programme of Work and Priorities of ECA for the Biennium 2000-2001 (agenda item 9)

111. Under this agenda item, the Committee considered document E/ECA/CM.24/7 entitled

"Proposed Programme of Work and Priorities for the Biennium 2000-2001."

112. To ensure that the present proposals were seen in their proper context in the programming cycle in the United Nations, it was explained that the cycle started with the establishment of the Medium-Term Plan. The Plan was an expression of the broad objectives of the Organization, the modalities by which these objectives were pursued and the expected results at the end of the plan period. The present Medium-Term Plan was for the period 1998-2001. The Plan is organized around programmes and subprogrammes with each department in general responsible for one programme. ECA's programme consisted of five subprogrammes until the Plan was revised in 1998 when two new subprogrammes were added. The Medium-Term Plan was translated into a programme budget with concrete activities and detailed cost implications on a biennial basis. The present programme proposals were, therefore, for the second biennium of the current Medium-Term Plan. Departmental legislative organs are requested to review only the programme aspects of the programme budget. This was why the document before the Committee did not contain information on the budgetary implications of the programme proposals.
113. It was further explained that because of the tight schedule reserved for the preparation and review of the programme budget, the present proposals were being submitted for the consideration of the Committee at the same time as they were being reviewed by the Programme Budget Division at United Nations Headquarters along with the proposals from all other Departments for submission to the relevant review bodies of the General Assembly namely, the Committee for Programme Coordination (CPC) and the Advisory Committee for Administrative and Budgetary Questions (ACABQ). The comments and observations of the Conference on the ECA proposals would be brought to the attention of these review bodies.
114. In considering the proposals, the Committee noted that they were being made at the threshold of the twenty-first century in the context of many positive signs in Africa's development prospects but at the same time with many daunting challenges still facing member States. Among those challenges was that the incidence of poverty was showing no sign of receding. Conflicts in some countries of the region were undercutting the promise of accelerated growth and development. The process of globalization was progressing apace with the Africa region not yet properly positioned to reap maximum benefits from the process. Social and economic, including information and technology, infrastructures remained inadequate and inefficient in the face of daunting population dynamics and ecological degradation. External debt continued to exercise a major constraint on the region's development. And the challenge of expanding and consolidating good governance was as critical as ever. All these have to be seen against the immense natural resources with which the region was endowed.
115. The Committee welcomed the proposals and considered them relevant and consistent with member States' needs and priorities. It was suggested that consideration should be given to prioritizing the activities in the programme to ensure that the limited resources available for the implementation of the programme were effectively used. The need to forge effective partnerships in the implementation of the programme was also emphasized.
116. Several participants underscored the importance of the impact of HIV/AIDS and armed conflicts on the economies of the region. In doing so, they acknowledged that there were other organizations directly responsible for the prevention and control of these phenomena. It was, however, underlined that ECA had a special role to play in analyzing the socio-economic dimensions of both HIV/AIDS and conflicts, as well as the issue of refugees and displaced people. It was emphasized that this role should be more specifically reflected in the work programme. ECA should also strengthen its intervention in the reconstruction and development of countries in post-conflict situations through the programmes of technical cooperation it was already developing with some of these countries.
117. Some participants felt that debt and domestic resource mobilization should have been more explicitly treated in the programme. Others also felt that there was a lot of work the Commission could do to sensitize member States to the implications of globalization and to support them in terms of building capacity in economic diplomacy and market analysis. Yet others felt that issues pertaining to higher education including enhancing cooperation between African universities, the development of inter-African trade and the informal sector, as well as, promoting networking among entrepreneurs should have been more adequately reflected in the programme.
118. One participant cautioned that it was important to ensure focus and impact. While many issues were important and urgent priorities, not everything could be included in the work programme. There was need to prioritize.
119. A number of participants made specific suggestions in respect of the timing and scope of some activities in the programme. These were well noted by the secretariat.
120. The Executive Secretary expressed appreciation for all the comments and observations. He pointed out that the programme had been established on the basis of wide consultations with member States and ECA's development partners. Through the intergovernmental machinery of the Commission, the secretariat sought advice and guidance during the meetings held by the subsidiary organs of the Commission such as the Committee on Sustainable Development, the Committee on Women and Development, the Committee on Regional Cooperation and Integration, and the Intergovernmental Committees of Experts of the SRDCs. He said that the Committees which had not yet met would do so shortly. He also said that those consultations had enabled the secretariat to define its priority activities and allocated resources for their implementation. He recalled the guiding principles underlining the programme, namely strategic focus, cost-effectiveness and effective partnerships. In this regard, he agreed with the call for prioritization. He informed the Committee that ECA was also seeking synergies with African intergovernmental organizations, the United Nations bodies and specialized agencies, donor countries, African Universities, research centres, and civil society organizations. The secretariat had also enhanced its media and communication outreach and was increasingly using policy fora to share experiences and best practices.
121. He assured the Committee that issues such as HIV/AIDS and post-conflict reconstruction and development were high on the agenda of the secretariat. It was because of this that an invitation was extended to the Executive Director of UNAIDS to make a special presentation at the ministerial session of the present meeting.
122. He also invited member States to ensure that ECA’s role and action are well known by their citizens and partners.
123. The Representative of Zambia informed the meeting that his country would host an international conference on HIV/AIDS and sexually transmitted diseases in Lusaka in September 1999. He invited ECA to substantively contribute to the organization and deliberations of the Conference.
124. The Committee took note of the proposed programme of work for the biennium 2000-2001 in the light of the above observations and comments.

 

Statutory Issues: Reports from Intergovernmental Committee of experts of SRDCs and Reports from other subsidiary organs of the Commission (agenda item 10(a) and (b))

125. Under this agenda item, the Committee was informed of the deliberations, conclusions and outcomes of the meetings of the following subsidiary organs which were held since the last session of the Commission: Intergovernmental Committee of Experts (ICE) of SRDCs; Committee on Sustainable Development; Committee on Women and Development; Committee on Regional Cooperation and Integration; the Conference of Ministers of Transport and Communications; and the Conference of Ministers of Mineral Resources and Energy. The Committee was also appraised of the recommendations and conclusions of the two follow-up meetings to the World Social Summit. The reports of all these meetings were made available to the Committee in documents E/ECA/CM.24/8, Add.1 and Add.2.
126. The Committee noted with appreciation the report of the fourteenth meeting of ICE of the SRDC-NA, and endorsed the recommendations regarding the implementation of several activities including:

1. A perspective study of priority areas in the subregion;
2. A seminar on the irrigation to be held in Egypt;
3. An analytical study on the economic and social conditions of the subregion,

with emphasis on the issues of agriculture and debt; and

(d) A study and seminar on the debt issue in North Africa. In that regard the Committee welcomed the technical support to be provided by UNCTAD and the World Bank on debt management in the subregion. The Committee also took note of the readiness of the Islamic Development Bank to provide support for the organization of a seminar on debt management. The Committee further took note of the Egyptian Government’s acceptance to host a seminar in Cairo on irrigation schemes and water management. The Committee noted with satisfaction the scientific contribution extended by the Spanish Agency for International Cooperation and the Spanish Supreme Council for scientific research in the organization of the seminar on the irrigation schemes.

87. The Committee observed that the 1999 ICE meeting should be held and future annual meetings of ICE of North Africa should be convened before the session of the Conference of Ministers and the Follow-up Committee. It was suggested that efforts be made to ensure that ICE meetings are held before the Conference sessions.
88. The Committee endorsed the recommendations made during the two ICE meetings of the SRDC-WA held in March 1998 and March 1999 respectively. The Committee expressed satisfaction with the emphasis placed on issues such as enhancing food security in West Africa; formulating technological policy and strategies for the subregion; developing databases for sustainable development management in West Africa; promoting gender perspective; trade policy management in the subregion; informal sector development; and water resources and Lake Basin development and management. It particularly welcomed the initiative to undertake a study on the social and economic impact of HIV/AIDS on the economies of the West Africa subregion.
89. A question was asked about whether an activity of the SRDC-WA on informal sector could not be brought forward from 2001 to 2000, given the growing importance of that sector in many West African countries. The Committee was informed that the activity would be brought forward.
90. The Committee observed that, although there were several intergovernmental organizations in West Africa, the coordination and harmonization of the work programmes, especially in the area of regional cooperation and integration was not very evident. It was explained that in the past the SRDC had played an important role in fostering coordination among the subregional intergovernmental organizations through the association of West African intergovernmental organizations. However, this mechanism had become dormant and effort will be made to revitalize the mechanism.
91. The Committee noted that the ICE for Central Africa, which had not been able to convene, will meet in June 1999 in Malabo, Equatorial Guinea. The Committee welcomed the planned relaunching of regional integration in the subregion as the main focus during this meeting, where a high-level forum on the diplomacy of regional integration will be organized. It further endorsed that the 1999 report on socio-economic conditions in the subregion will be a joint endeavour between United Nations coordination agencies, IGOs and member States. The main theme of the report would be globalization.
92. The Committee was informed that a study on external debt was launched by SRDC-CA, within the framework of the United Nations Resident Coordination System and with focus on the responsibility of Africa’s development partners in the cancellation of debt. The first case study has been completed. UNDP underlined the importance of the study and indicated its willingness to support the preparation and dissemination of the findings of the study.
93. The Committee welcomed the effective transfer of the offices of the SRDC-EA from Addis Ababa to Kigali in October 1998 with the assistance of the government authorities in Rwanda and the Resident Coordinator of the United Nations System. It was noted that, due to this recent relocation of the Centre, the ICE meeting for the SRDC-EA had been postponed to October 1999. The Committee observed that the Centre had been able to provide technical assistance not only to member States but also to regional economic groupings such as COMESA, EAC, CEPGL and IGAD in such areas as institutional reform for regional cooperation and integration, harmonization and monitoring of financial and trade policies, development of physical and social infrastructures, inclusion of gender issues into development policies and private sector promotion.
94. The Committee took note of the activities carried out by the SRDC-EA on the facilitation of trade and transport issues which are of paramount importance in a subregion with four land-locked countries, one semi land-locked country and three island states. It acknowledged support from UNDP, the World Bank, the Permanent Secretariat of Transit Transport Coordination Authority of the Northern Corridor (TTCA), EAC, CEPGL and COMESA. It further commended the Centre for the initiative taken to elaborate joint activities with bilateral and multilateral partners in the area of post-conflict reconstruction and development. In this regard, the Committee endorsed activities planned for the biennium 2000-2001 in promoting constructive dialogue between government authorities and civil society organizations for achieving good governance.
95. Questions were asked about what activity SRDC-EA was undertaking or planning to implement to curtail the destructive impact of water hyacinth on Lake Victoria and in what activities the SRDC-EA was collaborating with IGAD. It was explained that the SRDC’s strategy had switched from destroying water hyacinth using chemicals to harnessing its economic value. Additionally, ECA was examining ways to support the development of the ports infrastructure around Lake Victoria, to enhance its contribution to the economy of the countries bordering the Lake. The Committee was informed that the SRDC-EA and IGAD were collaborating closely on a range of issues, including gender, economic integration and environment. The Committee was informed that UNCTAD was planning to hold the fourth Meeting of Governmental Experts on land-locked and transit countries, from 22 to 26 August 1999 in New York and that the SRDC-EA should participate at the meeting, given the large number of land-locked countries among its members.
96. The Committee endorsed the recommendations of the fifth meeting of ICE of the SRDC-SA held in October 1998 which particularly called for the development of an improved mechanism for enhanced coordination between ECA and the regional economic communities, on the one hand, and amongst the regional economic communities themselves, on the other, to achieve better synergy in their respective programmes; the streamlining and harmonization of modalities for data collection between ECA, the regional economic communities and other interested parties. In this regard, the Committee noted the responsibility entrusted to ECA for establishing a subregional database on key economic and social indicators in the member countries for use by all United Nations agencies.
97. The Committee also endorsed the recommendations made to support the SADC mining unit for developing an institutional framework of cooperation in mineral development in Southern Africa; the termination of the Eastern and Southern African Development Information system (ESADIS) project and integration of the activities into the SRDC’s regular programme of work; and the streamlining of the SRDC’s work programme priority with those of the subregion.
98. The Committee took note of the activities carried out by SRDC-SA in the areas of gender and development, the management of the nexus issues of population, food security and environment, and the development of informal sector in the subregion.
99. The Committee took note of the fact that no member State had offered to host the sixth meeting of ICE scheduled for November/December 1999 and therefore appealed to those countries which had so far not hosted the meeting to give it further consideration.
100. In response to a question about whether there was a general framework for all SRDCs to promote coordination and harmonization of the work of the regional economic communities and intergovernmental organizations (IGOs) in the field of regional integration, the Committee was informed that the main mandate of SRDCs was to work closely with the regional economic communities and IGOs in fostering regional integration and to facilitate the coordination of the activities of other United Nations agencies in the subregions to better respond to the challenges in each subregion.
101. With regard to the conclusions emanating from the other subsidiary organs of the Commission, the Committee took note of the resolution and decision made by the eleventh Conference of African Ministers responsible for Transport and Communications held in Cairo, Egypt in November 1997. It endorsed the framework of action for accelerating the implementation of UNTACDA II programme during the period 1998-2000 and beyond. The Committee underscored the need to put greater emphasis on railways development in Africa as well as to strengthen railway reforms and interconnection and extend support to the Union of African Railways. The Committee further endorsed the creation of the African Initiative on road safety issues initiated by ADB and ECA within the framework of the Global Road Safety Partnership (GRSP) and UNTACDA in order to address the negative effects of road accidents in Africa which are estimated at 2 per cent of GNP ($10 billion).
102. The Committee was informed that the Conference of African Ministers of Mineral Resources and Energy at its meeting held in Durban, South Africa in November 1997 had adopted a declaration including a number of recommendations on the need to deepen economic reforms and reforms in the mineral and energy sectors, capacity-building in the area of mining and energy; the need to emphasize the construction of cross-border oil and gas pipelines; the establishment of relevant databases and information networks; a call on ADB to continue its support to the African Energy Programme; and for OAU to establish the African Energy Commission.
103. The Committee was informed that the Committee on regional cooperation and integration held its first session from 27 to 29 April 1999 in Addis Ababa and discussed important issues such as harmonization of regional economic groupings and policy convergence; compensation/equalization mechanisms; and self-financing mechanisms for the funding of the integration process in support of trade liberalization; regional programmes and projects; and the impact of the Uruguay Round Accord on regional integration.
104. The state of regional integration in Africa was reviewed through sectoral presentations made by the representative of ECOWAS on transport and communications infrastructure development; UDEAC/CEMAC on policy harmonization and policy convergence in Central Africa; SADC on its electrical power pool arrangements; UMA on the state of integration in the Maghreb countries and related programmes as well as the efforts being deployed by its leadership for the implementation of such programmes; and CEPGL on the need to assist in post-conflict reconstruction programmes in the launching of joint undertakings in such areas as electricity and banking.
105. The Committee noted the progress made in furthering the regional economic integration process in the various groupings.
106. The Committee urged the secretariat to continue its support to regional economic communities in furthering their trade, infrastructure development and macroeconomic policy harmonization and convergence. It further insisted on the need to define variables and indices for the measurement of progress in regional economic integration in Africa.
107. The Committee took note of the various recommendations made during the first meeting of the Committee on Women and Development particularly those related to modalities of renewal of membership and introduction of registration fees for participants. The Committee further endorsed the recommendation presented to the current OAU Chairman for the acceleration of the implementation of the Dakar and Beijing Platforms.
108. The Committee noted with satisfaction the success of the two subregional follow-up meetings to the World Summit for Social Development held in Marrakech (Morocco) and Nairobi (Kenya) in March 1999. It acknowledged the support extended by the host countries concerned as well as assistance from UNDP, GTZ, UNICEF and ILO in the organization of the meetings. The Committee fully endorsed the recommendations of these conferences. The Committee noted that a similar meeting was to be held for the West and Central Africa subregions in Burkina Faso. This meeting was scheduled to take place in March 1999, but had to be postponed at the last moment because of technical difficulties. The meeting will be held later in the year.
109. The Committee took note of the recommendation made by some participants to formulate a proposal on the establishment of an African Monetary Fund with the assistance of ECA.
110. The Committee endorsed all the resolutions and decisions emanating from the subsidiary organs and sectoral bodies as contained in document E/ECA/CM.24/8. Add.1 and Add.2.


Any other business (agenda item 11)

111. Under this agenda item, the Deputy Executive Secretary informed the Committee of the importance that the management of the secretariat of ECA attached to improving staff welfare, through training and enhanced motivation among others. This effort reflects the recognition that the staff were the main assets for implementing the activities of the Commission. To foster better management-staff relations, there were several committees through which management and staff consulted periodically to address various issues of concern to both management and staff. At present, there was one outstanding problem which required the support of member States for its resolution, namely the declining value of the pension and salaries of local staff, as a result of devaluation.
112. The Deputy Executive Secretary requested that the President of the Staff Union Committee (SUC) of ECA be given an opportunity to address the Committee on the issue. In his statement, the President of the SUC observed that in the recent past, in many developing countries, the phenomenon of currency devaluations had become prevalent. These devaluations had direct adverse effects on the salaries, pension and other benefits of the General Service and National Officer staff of the Organization in view of the fact that these benefits were denominated in local currencies. Because pension contributions are a percentage of the salary, every currency devaluation has the immediate and continuing effect of reducing all salaries that are denominated in local currencies including pension contributions. The problem is common in the United Nations system and therefore affects staff in Latin America, Africa, Middle East and Asia.
113. The devaluation in the host country has led to a salary decrease of 56 per cent, pension contribution decrease of 45 per cent and pension entitlement loss of 55 per cent for local staff. Member States could assist to alleviate the situation, by asking their representatives on the Board of Pension Fund to support the adoption of corrective or remedial measures; and by supporting, in the fifth Committee of the United Nations General Assembly, a review of existing rules and regulations governing pay and pension of local staff especially by agreeing to the denomination of salaries in $US while actual payments are effected in local currencies.
114. The Committee agreed to adopt a motion in support of the efforts of the staff Union Committee to alleviate the plight of the local staff of ECA.
115. On another issue, the Committee was reminded that as part of the reform of the intergovernmental machinery of ECA, it was decided that Least Developed Countries (LDCs) would be an item on the biennial session of the Commission. Since this session of the Commission would be the last before the third United Nations Conference on LDCs, the Committee needed to adopt a resolution regarding Africa’s preparation for the third United Nations Conference in 2001. The Committee agreed that a draft resolution on this issue be submitted to the Drafting Group for consideration.

Adoption of the Report (agenda item 12)

116. On 4 May 1999, the Committee adopted the present report and draft resolutions annexed to this report for consideration by the Conference.

Closure of the Meeting (agenda item 13)

117. The Chairman expressed appreciation to all the participants for their cooperation.
118. He then declared the meeting closed.