| Thirty-fourth session of the Commission/ Twenty-fifth meeting of
the Conference of Ministers/Ninth Meeting of the Conference of African Ministers of
Finance
Opening Statement by K. Y. Amoako Mr. Chairman, I am very delighted that we are here today to consider an especially important agenda. I am well aware of the competing demands on your time and I am therefore more appreciative of the presence here of so many of you – Honourable Ministers – and of your willingness to work with us on this agenda. Mr. Chairman, I would like to take this opportunity to thank you for the remarkable leadership you showed in your chairing of last November’s Conference, and for your commitment, encouragement and leadership which helped to bring us to this meeting. I am likewise very grateful to your whole Bureau for exceptional work on behalf of this entire Conference and for setting such a sterling example for the incoming Bureau. Mr. Chairman, I should now like to turn to a brief overview of the state of Africa’s development. Africa made impressive economic progress in the 1990s. In the last half of the decade, African economies averaged growth rates of 4 percent per year - well above the growth rate of 0.5 percent in the first half of the decade. For the first time in many years, several countries sustained double-digit growth. Botswana, Mauritius, Morocco, South Africa and Tunisia - are well on the way to transforming their economies into robust engines for growth and poverty reduction. Fourteen other countries - ranging from Benin and Burkina Faso to Uganda and Ghana - have established the prerequisites for sustainable growth and have good prospects for take-off in the coming years. Export growth nearly doubled over the decade, with the demand for African manufactured goods increasing in Europe and the United States. The business climate became more conducive to domestic and foreign investment. Private entrepreneurs in many countries responded strongly to the improvement in the business climate. For example, liberalization and privatization in the telecommunications sector, has resulted in explosive growth in wireless telephony across the continent. However, the good news masks several disturbing trends. Perhaps most fundamentally, despite the impressive growth figures, poverty is increasing on the continent. The number of people living on less than $1 a day increased from 217 million in 1987 to 310 million in 1999. It is clear that if these trends continue, Africa will not meet the International Development Goals of reducing by half the absolute number of poor people by 2015, reducing infant and maternal mortality and ensuring universal primary education. Furthermore, Africa is the continent with the greatest disparity in incomes between rich and poor. Our recent economic recovery is fragile. Domestic savings rates remain well below the levels required to grow at the target rate of 7 percent. Natural disasters such as the floods in Mozambique, external shocks, such as the recent increase in oil prices, and cross border spillovers of civil conflicts, such as in Sierra Leone, have undermined the recent recovery. Africa needs a pro-poor development agenda, that transforms the fruits of economic growth into tangible improvements in the quality of life of its people. Such an agenda would entail a renewed emphasis on modern agriculture, as a basis for resource based industrialization; improving the quality of human capital, through investments in education; harnessing the benefits of ICT and narrowing the digital divide; and tackling diseases that deepen poverty, such as HIV/AIDS, tuberculosis and malaria. Because of widely shared concerns on these issues, I proposed a Compact for African Renewal, at the November 2000 Conference of Ministers of Finance. In a sense, the Compact codified a growing consensus within Africa of what we must do to accelerate our development. Uppermost, is the need to move more rapidly towards an effective and capable state. Such states are characterized by their adopting and implementing sound economic and political policies; they empower all their people to participate fully in the economy; and their actions work to sharply reduce poverty. Serious and concerted actions on these issues, should yield a positive response from our partners. The response we seek from Africa’s development partners is reformed aid, debt relief, and trade access. In essence: a reformed African development should evoke a reformed partnership. It was gratifying that the Ministers of Finance received my proposal for a Compact with enthusiasm. They requested ECA to develop this proposal, for presentation at this joint Conference. The document on the Compact before you, is the result of our work since the November Conference. How would the Compact work? This is an African-centered Compact. So, naturally, the first step is to get our house in order. The key concept in doing so is improved governance. An effective and capable state organized to achieve sustainable development; poverty reduction; economic diversification; integration; and, social development to provide essential endowments of health and education. No one can do these things for us. The onus is on us to do so. This is a national task, but regional cooperation can help this process through joint actions and by peer review, peer lessons and peer pressure. ECA is in the midst of institutionalizing such regional capabilities for our continent. Our approach is to help measure how we are doing in key public policy actions and areas of governance. A significant amount of work has already taken place to devise indicators of good governance. These indicators are now being launched in a number of countries. We plan to regularly measure Africa’s development performance and to publish the results. We also plan to organize a system of peer review of economic performance, drawing upon the OECD peer country review experience, adapted to Africa’s needs and circumstances. These peer reviews will be aimed at learning lessons from each other, and to providing constructive critiques. All this is a form of taking ownership of our development, and not being dependent upon others to tell us how we are doing, and what we need to do in order to do better. As we get our house in order, as we change, we can expect our partners to be in a better position to consider and undertake a parallel reform, particularly focused at arriving at an aid relationship which learns from the experience of recent decades. We ask our partners to move towards programmatic support, mutual accountability and longer term, larger support. Already this kind of support is being instituted in a few of our countries. Fortunately, the donor community is increasingly entering into a period of introspection, as many of you found last November, when we brought together a number of African Ministers of Finance and their counterparts from OECD Development Cooperation Ministries in our informal forum, now known as the "Big Table". As development of the Compact has progressed, I have kept in touch with leaders of partner agencies, to ensure the support of Africa’s initiatives. In this respect, I am so pleased that the distinguished Chairman of the OECD Development Assistance Committee, Jean Claude Faure, is here with us to share his uniquely positioned perspectives. An Africa with accelerating development, matched by a reformed aid process is desirable, but we cannot expect aid partnerships to last forever. Indeed, in so many countries, we have learned that aid dependence is unhealthy. We must not only foresee, but act to move from aid dependence. This means a shift from aid, to African and foreign private sector finance and investment. Some of our countries are already showing the way forward, by achieving much more diversified finance for their development. They have established the appropriate conditions of governance, property rights, contract enforcement and market mechanisms. The Compact should be implemented to help more of us move in that direction. It is most fortunate that the development of the Compact has been carried out at the same time that Presidents Bouteflika, Mbeki and Obasanjo have shown bold leadership with their Millennium Partnership for African Recovery Programme, known by the acronym, MAP. The MAP has several virtues. It provides a needed political framework for our progress together. It provides a needed political momentum, as only Africa’s top political leadership can make the kinds of changes in governance, necessary to create a lasting foundation for our development. It provides a high level visibility with our partners. I think it will give us a far better chance of obtaining the changes in development partnership which we seek. In meetings with Presidents Mbeki and Obasanjo and with leaders of our host Government, we quickly agreed that the Compact should serve to help operationalize the MAP. I have also met with President Wade who has developed a parallel initiative known as the Omega Plan. I see very high potential for the merger of the MAP and the Omega Plan so that at the political level, Africa can speak with a united voice. In fact, I think we are well on the way to this point. The Compact was discussed by your experts over the last few days. You will be receiving from them a full report of their discussions. I am delighted that they generously praised the work we have done in developing the Compact, and that their recommendations give additional direction and impetus to this work. Mr. Chairman, While discussion of the Compact and MAP will clearly be the heart of this meeting, I want to briefly touch on the state of ECA, since you are, in effect, our Board of Directors. The state is good. With your guidance, over the past five years we have streamlined our work to increase our effectiveness and efficiency. We have deepened our policy analysis by engaging leading thinkers across Africa and beyond. We have upgraded our staff skills through a significant infusion of new talent. We have created intellectual networks and a variety of alliances with leading institutions. All of this has greatly strengthened our capacities and relevance. As a result, I think it fair to say that our audience and impact has commensurately increased. ECA has also created a continental meeting place, the African Development Forum, which I believe over time will be regarded as Africa’s Davos. The most recent African Development Forum, this past December, was on meeting the leadership challenge of HIV/AIDS. I want to touch upon that meeting as there are important implications for Ministers. Our Forum was preceded by 23 national meetings and resulted in a Consensus and Plan of Action. We are grateful that the Consensus and Plan of Action was endorsed at the OAU Summit on HIV/AIDS held a few weeks ago. The key finding of our Forum was that a multi-sectoral response is required, akin to defending a country from military attack. Participants at the Forum strongly urged that Ministers of Planning and Finance must be actively engaged in the fight to prevent the spread of HIV/AIDS. In other words, you are a key part of the leadership needed in this fight. As a member of the WHO Commission on Macroeconomics and Health, I have come to have a better understanding of the enormous cost to our economies of the poor health of our peoples. The recent Abuja Summit recommended a substantial increase in the proportion of national budgets devoted to health issues. Even if large domestic budget allocations are instituted, in most countries there still will be serious finance shortfalls to cope with HIV/AIDS. For that reason, the UN Secretary-General has just launched a Global Fund for HIV/AIDS aiming at mobilizing US$7-10 billion dollars. I am pleased that the HIV/AIDS challenge is on your agenda to continue the discussions you commenced in 1999, with the added information which the ADF 2000 Forum and the Abuja Summit have provided. I invite you, Honourable Ministers, to share your lessons of your experience of your country’s work on this life and death issue. Mr. Chairman, In these remarks, I have reviewed the Compact and how it complements the MAP. The development of these twinned approaches represents an historic assertion that Africa must take ownership and leadership of our development. It is fitting that we begin a new century and a new Millennium by searching for agreement on how we can better grab hold of our destiny for the betterment of all our peoples. The improved state of ECA, which I have reviewed only in part, comes at a time when the desire of Africa’s leaders to take charge of the fate of the continent has come. This is a fortunate confluence of events and one where the political desire of leaders, and the technical abilities of the Commission, seem destined to combine. We are ready and we welcome your guidance on how this should be done. Thank you. |