Addis Ababa, 6 May 1999

I take special pleasure in conveying my greetings to the Ministers and delegates attending the Joint Conference of African Ministers of Economic Development and Planning and Ministers of Finance.

At the threshold of a new millennium, Africa is witnessing many positive changes. Economic reforms are creating a favorable environment for growth and development. Transitions to a democratic system of governance are enabling Africans to participate in decisions that affect their lives. The growing dynamism of the private sector is reinforcing the emergence of private sector-led development, and the activism of civil society organizations is buttressing the consolidation of democratic rule in many countries. These changes have generated a renewed sense of hope about Africa.

However, our optimism is tempered by the recurrence of old conflicts, the emergence of new ones, tearing apart the social fabric of many countries but also resulting in massive displacement of populations -- as refugees and internally displaced persons. Conflicts continue to destroy social and economic infrastructures. Lack of economic diversification continues to impede Africa's prospects for active participation in the global economy. Population and ecological pressures, in combination with poor agricultural productivity, are exacerbating poverty.

Peace and development are inextricably linked and this is particularly evident in Africa. Since taking office I have placed peace and development in Africa high among my priorities. Indeed, in my report submitted to the Security Council in April 1998, on the causes of conflict and the promotion of durable peace and sustainable development in Africa, I underlined the fact that Africa confronts complex economic, social and political challenges which require a comprehensive response. In particular, the report recognized that financing of Africa's development was a major challenge.

Thus, the theme of this year's joint conference -- The challenges of Financing Development in Africa -- is topical and timely. Mobilizing and managing financial resources for development are enormous tasks.

Africa's efforts in doing both are hampered by a combination of an adverse external economic environment and by domestic policies and institutional weaknesses. Tackling these issues is the key to progress in financing development in Africa. Hence, in my report to the Security Council, I recommended several measures to improve the external economic environment in support of Africa's development efforts.

First is official development assistance. I noted that new sources of funding were required from donors, and urged donors to strive to ensure that 50 per cent of their aid to Africa is spent in Africa. Moreover, aid should be restructured to focus on high impact areas (rural water supply, basic education, and primary health).

Second is Africa's external debt. The current burden is unsustainable. I stressed that significant movement on lifting Africa's crippling debt burden will require concerted political action at the highest levels. I urged that the scope of the Highly-indebted Poor Countries (HIPC) should be greatly expanded to enable more African countries to qualify. All creditors should convert into grants all remaining official bilateral debt of the poorest countries, and creditors should consider clearing the entire debt stock of the poorest African countries, as requested by the Organization for African Unity.

Third, I recommended that special efforts be made by the developed economies to ensure access for competitive African goods.

Fourth, I emphasized that coordination among donors, both bilateral and multilateral, was essential and should be continually re-evaluated until the assistance offered to Africa proves more successful in reducing poverty and promoting economic growth than in the past.

Since that report was issued, a number of developed countries, in particular, the Group of Seven industrialized countries have announced initiatives to reduce the debt burden of Africa. But much more remains to be done. I hope that your deliberations at this conference will provide new impetus for action by Africa's development partners and renewed commitment by African governments on several issues.

As African governments demand improved access to foreign markets, seek to attract foreign direct investment, and urge debt cancellation, they must take those crucial policy measures and actions that will result in efficient utilization of the financial resources. A combination of measures will be needed.

It would require that African countries strengthen their institutions for upholding accountability. It would require increased transparency and better information dissemination on key aspects of economic policy-making. It would also require more rigorous monitoring and enforcement of compliance with rules and regulations for the disbursement of public resources.

And, above all, it would entail imposing severe penalties on public sector officials and private sector agents who engage in corrupt practices. A major lesson of the Asian financial crisis is that poor corporate governance can lead to severe economic difficulties, as does poor civil governance. Africa would do well to heed that lesson.

But there is another consideration that Africa's economic managers ? the Ministers of Finance and Planning as well Governors of Central Banks ? should take into account. Decisions on financial expenditures are not always socially or politically neutral.

Just as they can distort economic incentives, they can also have destabilizing political and social effects. Targeting expenditure to empower the poor and other disadvantaged groups can contribute as much to achieving the objective of economic growth as to enhancing social equity and fostering political cohesion. Efficient and equitable financing of development is an investment in peace.

With the support of the international community and skillful management on the part of African governments, peace and development will gain new momentum in Africa. The United Nations will be an essential and reliable partner in contributing to that effort. Economic Commission for Africa -- as the regional arm of the UN in Africa -- will play a crucial role in that process. Your meeting under the aegis of ECA is a vital and vivid testimony to that commitment.

I am confident that your deliberations will make a significant and enduring contribution to realizing the dream of a peaceful and prosperous Africa.

I wish you all success in your deliberations.

Thank you.