'Africa needs strong regional institutions'

Interview with ECA Executive Secretary K.Y. Amoako

From Africa Recovery, Vol.15 #4, December 2001, page 12 -
http://www.un.org/ecosocdev/geninfo/afrec/vol15no4/154pers.htm

Mr. K.Y. Amoako is executive secretary of the UN Economic Commission for Africa (ECA), headquartered in Addis Ababa, Ethiopia. The ECA was in close consultation with African leaders as they formulated a variety of development initiatives that eventually culminated in the New Partnership for Africa's Development (see article "Momentum builds for African plan"). In April 2001, the ECA issued its own "Compact for African Development," which seeks to provide technical and analytical support to the NEPAD. Africa Recovery interviewed Mr. Amoako during a visit to UN headquarters in New York, during which he briefed senior UN officials about the NEPAD's goals and implications.

AR: Why does the New Partnership for Africa's Development place such a heavy emphasis on regional integration within Africa?

K.Y. Amoako: Africans have always, since independence, had this idea of unity, of pan-Africanism. Those are the political aspects of regional integration. But increasingly we are realizing that the economic aspects are also very important, given the small size of African economies. The combined GDP of sub-Saharan Africa is less than that of Belgium. That shows you the constraints.

Look, for example, at the biggest impediment to Africa's competitiveness, transport. In Africa now, it is so very difficult to travel around the continent. For many African countries, especially the landlocked countries, unless you develop transport infrastructure, it's going to be a major constraint to integrating Africa into the global economy. In the case of civil aviation, with so many airlines cut, it's almost impossible to travel from east to west -- or anywhere. There is no way we can deal with civil aviation issues until we look at their regional and sub-regional dimensions, by pooling resources, rationalizing air space, and so on.

There's a lot of trade going on within Africa, if you take into account all the illegal trade that moves across borders. But by the official records intra-regional trade is very low, in most cases 4 per cent or so. It can take a long time to transport goods from Nigeria all the way to Côte d'Ivoire, given the number of roadblocks, the number of customs posts, the number of delays that one encounters. So rationalizing transport routes, removing these barriers, would be a good way for the average person, the average trader, to see the benefits of integration. Businessmen are facing the same difficulties in trade and investment across African countries. So rationalizing our tariffs, harmonizing policies across countries, can really make a difference for the average trader.

HIV/AIDS also is a regional problem, the way it travels down transportation routes, by truckers. There are regional dimensions even to peace and security. The problems of conflict in the Great Lakes and the Mano River countries, for example. You cannot talk about resolving conflicts in Liberia, Sierra Leone or Guinea in isolation from each other.

So for all these political, security and economic reasons, regional integration and regional solutions are important. That's why there's a strong emphasis in the NEPAD on taking a regional approach toward some of Africa's problems.

AR: Africa already has numerous regional and sub-regional institutions, with limited results. What needs to change to make regional integration more of a reality?

Amoako: We've been talking about all these things for years now. You ask, "So, what's new?" We have to look at Africa's own experiences so far -- and the experiences in Latin America, Europe and elsewhere -- and draw the lessons of what has worked well, and what hasn't worked in the past.

We seem to have a multiplicity of sub-regional organizations. We need to rationalize them. Some countries belong to two, three sometimes. There are conflicts. Countries sign protocols, and never implement them. So we need to look at rationalization of the existing regional institutions and their memberships.

We need to create strong institutions that can deliver on their political and economic mandates. Some of the existing institutions, for example ECCAS [the Economic Community of Central African States], have never really managed to take off. So establishing such institutions, showing that they are efficient, ensuring that their member states pay their dues and building their capacities to deliver is a key dimension.

There also are benefits and losses in the integration process. One of the lessons that we've learned is that you need to put in mechanisms to compensate for the losses. For example, a lot of these countries rely heavily on tariffs for their revenue base. If you suddenly remove all these tariffs, some of these countries are really going to hurt. So we need to look at compensatory mechanisms so that the stronger countries can compensate the smaller ones.

AR: Within the framework of structural adjustment, economic policies in Africa have been negotiated on a national level between individual African governments and the donors. Some critics argue that these national programmes sometimes undercut regional goals. How valid were those criticisms?

Amoako: Those criticisms were very valid. If you look at the trade liberalization that has gone on in Africa, it has been one of unilateral trade liberalization in a context of structural adjustment programmes. Industrial policies were in the context of national programmes and they did not take into account a sub-regional dimension.

That's why NEPAD at least could offer a different basis. It gives a common framework, policies and programmes for African countries to buy into, with both national and sub-regional dimensions. That should aid our relationship with our donor partners and the international institutions, in terms of formulating policies that are consistent within and across countries. We should see more effort in that direction. But the lead has to come from Africa.

AR: The Omega Plan of Senegalese President Abdoulaye Wade saw foreign direct investment as a major new source of financing for Africa. But the NEPAD seems to regard significant foreign investment mainly as a long-term possibility, and emphasizes getting more development assistance, debt relief and other traditional sources of financing in the short- to medium-term. Realistically, what kinds of financing can Africa expect to attract?

Amoako: It's not an either/or question. Maybe you can look at it as short-term, medium-term, and long-term. I think that appears valid. But you need to have a holistic approach toward financing Africa's development. Taking off from the broad objectives of development -- the need to reduce poverty, what the financing requirements are and the level of domestic resource mobilization that's feasible now -- you come up with a huge financing gap, clearly. The question is, how do you fill that gap?

Obviously, there's diversity in Africa. Countries are at different phases. But by and large, for most countries, you need more ODA [official development assistance], you need to attract more foreign investment, you need to work on debt relief. It's how you frame the financing issues.

The NEPAD, which brings together the Omega Plan and the MAP [Millennium Partnership for the African Recovery Programme], clearly takes a more holistic view of financing development in Africa. So it's calling for not just more ODA flows, but also improving the terms of the debate and shifting the paradigm between Africa and its partners. We need more effective ODA flows; the quality becomes important. The NEPAD calls for a transformation of the relationship between Africa and its development partners, in which Africa is taking more of the ownership. We are calling for more mutual accountability, on the side of both Africa and its development partners.

That's why the whole question of governance issues are fundamental to the New Partnership. Good economic, corporate and political governance are essential prerequisites for getting both the ODA flows to come in, and the foreign and domestic private investment to come in. Various forms of financing are going to be important. But certain basic principles need to be put in place in order to attract financing of whatever kind.

AR: What needs to change to make such partnership possible?

Amoako: First, a compact between Africa's leaders and her people, where certain fundamental things are gotten right -- good governance, economic and corporate governance. You put in sound public finance management systems, more transparency in the way you do your budgeting, better planning, and all that. That's fundamental in order to be able to use resources more effectively. So it starts within Africa. It starts with us first.

Once you get the right policies, then a transformed relationship with the donors calls for less conditionality and more resources -- predictable and long-term resources -- coming in to support the country programmes.

A lot of the ineffectiveness in aid so far has been due to the proliferation of projects -- too many projects, too much donor conditionality, a lack of harmonization of donor policies. There are African finance ministers who have to be accountable to 15, 20, 30 different types of accounts for the same type of project. In fact, there are some countries where so many donor resources are going in, but the government does not even fully know the amount and the types of aid.

We cannot afford that kind of relationship any more. We need to get the donors to harmonize their policies and their programmes within African countries. And they need to provide the resources on a more sustainable, long-term basis, moving money more toward sector lending and budget support.

And then there is the issue of mutual accountability. How do you measure the results of aid? Who holds whom accountable? In countries like Tanzania, there are some very interesting experiments now, where many of the donors have collectively agreed that we will also be evaluating donor policies, to see how they are meeting their part of the bargain. It's not just one-sided conditionality.

But the fundamental thing is that Africa needs to get its act together. And once it does, you can expect the donors to be more forthcoming.