STATEMENT DELIVERED BY AMBASSADOR ALUKO-OLOKUN, MEMBER OF NEPAD STEERING COMMITTEE AND PERSONAL REPRESENTATIVE OF PRESIDENT OBASANJO ON NEPAD, ON BEHALF OF THE NEPAD STEERING COMMITTEE AND SECRETARIAT AT THE OPENING CEREMONY OF THE MEETING OF EXPERTS ON DEBT SUSTAINABLITY HELD IN
DAKAR, SENEGAL ON
17 NOVEMBER 2003

His Excellency Mr Abdoulaye WADE, President of the Republic of Senegal;
Mr KY AMOAKO, the Executive Secretary and the Under-Secretary of the UNECA;
Honourable Mr Abdoulaye DIOP, Minister of Finance, Republic of Senegal;
Honourable Ministers here present;
Distinguished Delegates;
Ladies and Gentleman:

Let me begin by apologizing on behalf of Professor Wiseman Nkuhlu who would have wished to be here but because of other pressing matters, could not be with us at this very important meeting on debt. He has asked me to represent the NEPAD Steering Committee and the NEPAD Secretariat.

It affords me pleasure to be here today to participate in this important Debt Sustainability Conference as part of the build-up to the International Conference on Africa’s debt next year.

I wish to recognise first that the moving spirit behind this effort to find lasting solutions to our continent’s debt problem is none other than President WADE of this great country, Senegal. We at the Steering Committee and Secretariat of NEPAD have watched with admiration President’s WADE’s tenacity in finding solutions to the problem of capital flows in to Africa, of which the debt sustainability issue is a subset.

May I seize this opportunity to express our heartfelt appreciation to President WADE as we hope he will continue his dogged struggle for the economic liberation of Africa.

May I also thank and congratulate Mr Amoako and the UNECA for having organised this expert meeting on Africa’s external debt jointly with the Government of the Republic of Senegal.

Permit me to go down the memory lane to underline that debt relief has always been a critical aspect of the overall development agenda for Africa. At the Extra-Ordinary Summit of the Organisation of African Unity (OAU) held in Sirte, Libya during September 1999 which, in fact, was the genesis of the New Partnership for Africa’s Development (NEPAD), Presidents Mbeki and Bouteflika were mandated to engage Africa’s creditors on the total of Africa’s external debt.

Following this, the South Summit of the Non-Aligned Movement and the G77 which was held in Havana, Cuba in April 2000, mandated Presidents Mbeki and Obasanjo to convey the same concerns of the South to the G8 and the Bretton Woods Institutions.

The OAU Summit held in Lome, Togo in July 2000 further mandated the three Presidents - Mbeki, Bouteflika and Obasanjo - to engage the developed North with a view to developing a constructive partnership for the regeneration of Africa.

Subsequently, the three leaders met with the G8 for the first time at their Summit in Okinawa, Japan in July 2000 and the Okinawa Declaration pledged support for partnership sought by Africa with the G8. In the meantime President WADE has been working on the OMEGA Plan, which he released in early year 2001. MAP, inspired by Presidents Mbeki, Bouteflika and Obasanjo, the OMEGA Plan, inspired by President WADE, and the ECA New Global Compact, which was unveiled in Algiers in 2001, were successfully merged into NEPAD and the rest is history.

I have recalled the events above, to build our institutional memory, which has always been deficient in Africa and more importantly, to remind participants that the theme of this conference has always remained on the agenda of NEPAD, right from its genesis.

I am also delighted to say that from Okinawa, through Monterrey in March 2002 to Kananaskis in July 2002, the Champions of NEPAD and the development partners have addressed the issue of unsustainable Africa’s debt as an impediment to growth and development in the region.

May I also add that at the formal launch of the G8/NEPAD enlarged dialogue, called Africa Partnership Forum, in Paris, France on 10 November 2003 - barely a week ago, the debt burden as a constraint to capital flows into Africa was also discussed extensively. The first meeting of the Africa Partnership Forum at the level of Personal Representatives of Heads of State and Government and organisations, was addressed by both President Chirac and Mr Alpha Oumar Konare, the Chairperson of the African Union Commission. All this goes to show that try as we might in Africa, the unsustainability of Africa’s external debt remains a cog in the wheel of progress and a matter for concern at the highest levels of authorities.

Herein lies the significance and value added of this two-day conference. Participants should, therefore, realise that African countires, development partners and partner institutions are all looking forward to the outcome of the experts here present to brainstorm on this enduring problem.

There are two groups of sovereign debtors in Africa. The first group comprises 39 or so countries whose low per capital income is below US$885 per annum - which qualify them for the International Development Association (IDA) process. These are countries largely engaged in the HIPC process. To be HIPC compliant they must prepare Poverty Reduction Strategy Paper (PRSP).

Quite often, discussion on Africa’s external debt refers to this first group to the benign neglect of the second group. The second group can be described as “middle income” countries which are not eligible for HIPC but are engaged in the Paris Club through the IMF for debt relief. The point to stress here is that for both groups, current initiatives - HIPC and Paris Club - are not getting us closer to solutions to the fiscally unsustainable debt of African countries. And this is the challenge now.

There is a close relationship between the large external debt burden, low economic growth rates and development of many African countries. Empirical studies have indicated clearly that much of the slow=down in growth of many African countries in the past couple of decades can be attributed to the debt crisis. This is part of why our region has been isolated and missed out of the stupendous expansion in global wealth and prosperity in recent times.

More recently, concern is being expressed about the prospects of African countries to meet the Millennium Development Goals (MDGs), especially in the sub-Saharan region. This is a cause of serious worry to the African leaders, especially the champions of NEPAD. I want participants in this conference to note this much.

Estimates by Jubilee, for instance, suggest that only five of the poor countries in Africa - Angola, Benin, Mauritania, Sao Tome and Principe, and Zambia - have sustainable levels of debt in the assessment of the financing gaps to meet the MDGs.

Five other poor countries - Guinea-Bissau, Malawi, Mozambique, Senegal and Sierra Leone - are expected to achieve sustainability before 2006 without further debt relief. Therefore the rest of 32 or so poor countries in the region would need substantial additional resource transfers to achieve the MDGs

From the above, new initiatives, a rethink and enhanced efforts are required to put an end to the detrimental effects caused by external debt overhang to the progress towards the MDGs in Africa. My charge to participants in the next two days is to situate the debt problem properly within the context of the MDGs and to generate the new thinking as experts in this area. I am, however, cognisant that debt relief alone cannot assure meeting the MDGs.

Finally, it is expected that this conference will generate viable options on debt remissions in our region. NEPAD in particular, expects this conference to make significant progress towards defining a common African position on debt relief.

I wish participants fruitful deliberations in the next two days.

I thank you for your attention.