Opening Statement

by K. Y. Amoako,
Executive Secretary of the Economic Commission for Africa
at the Conference of African Ministers of Finance, Planning and Economic Development

Johannesburg, South Africa
19 October 2002

Your Excellency, Trevor Manuel, Minister of Finance, Republic of South Africa,
Your Excellency, Amara Essy, Interim Chairperson, Commission of the African Union,
Honourable Ministers and Governors,
Excellencies,
Distinguished Delegates,
Ladies and Gentlemen,

Thank you, Mr. Chairman. And thank you Honourable Trevor Manuel for delivering such an important and inspiring statement. President Mbeki's leadership and that of his founding brothers in NEPAD have already made a huge difference in Africa's ability to influence the international agenda. Now, our challenge is to assure that together we can also influence the course of Africa's future. South Africa is certainly doing that now. It is now the largest single source of cross-border investment in Africa. Its development course and policies ripple outwards in influence.

Mr. Chairman,

I would also like to recognize three special guests, among many great friends of Africa, who are with us for this Conference: UN Under-Secretary-General Anwarul Chowdury, the High Representative for Least Developed Countries (LDCs), Landlocked Developing Countries (LLDCs) and Small Island Developing States (SIDS) whose portfolio has such critical relevance to many of our countries; Ambassador Robert Fowler, Canada's G-8 Representative for Africa whose outstanding work assured a highly significant outcome for Africa at the last G-8 Summit; and Ms. Eveline Herfkens, former Development Cooperation Minister of the Netherlands and currently Special Advisor to the Secretary-General on the Millennium Development Goals, whose collaboration with Africa and whose creativity is well reflected in many of the concepts now on our agenda.

Honourable Ministers and Governors,

When this Conference last convened 18 months ago in Algiers, you gave ECA specific directions to help unite two approaches to collective unity for Africa's Development: the Millennium Partnership for the Africa Recovery Programme (MAP) and the Omega Plan. At the same time, you asked us to provide technical backstopping to the combined effort based on ECA's Compact for African Recovery. No one could have then predicted that we were about to enter into such a dynamic period of activism on development issues - and the most intensive period of creating African unity since the early 1960s.

You and your cabinet colleagues, Honourable Ministers, have traveled the course from Doha to discuss trade, to Monterrey to discuss finance, to Rome to discuss food security, to Lusaka and Durban to create the African Union and to this city to discuss the merger of poverty reduction and sustainable environments. ECA has been with you every step of the way in preparatory meetings, backstopping negotiations, presenting informed analyses on our progress on these issues, presenting proposals for your positions, and helping create understanding of Africa's positions. It has been an intense and productive period. Together, we have spurred and help shape:

· The launch of a development round of trade negotiations; · A reversal of the slide in development aid; · A focus on the quality of development through a stronger implementation of the Millennium Development Goals; · A successful focus on Africa at the G-8 with a detailed action plan for Africa; and · The launching of the African Union under the direction of our esteemed brother Amara Essy.

I believe that we would never have come so far had it not been for the political unity and leadership demonstrated here in Africa. Starting with Mr. Mbeki, the President of our host country, we owe tremendous thanks for the activism of our political leaders in promoting Africa's unity here on the continent and throughout the world. Political leadership has gone well beyond shaping NEPAD. It has been applied to influence the resolution of long-standing issues of peace in the region; to face with determination our need to effectively organize to prevent conflict; to convince our development partners that Africa must be the major focus of international development cooperation; and to make our case for greater market access and for more debt relief.

All this provides this Conference, Honourable Ministers, with a time of high receptivity for proposals to move Africa ahead. And all this has created an Africa on the move - with a more united vision of its future.

NEPAD now embodies that united vision. NEPAD is new and it still needs explaining. But before I discuss some of the issues in implementing NEPAD, I want to provide you with a short list of myths about NEPAD. There are four main myths about NEPAD, which your colleagues back home will need to understand.

Myth 1: NEPAD is an intrusion on national sovereignty. This is a myth because NEPAD will have no power to usurp national decisions. Nor will it force any country to cooperate. NEPAD provides a robust framework, not a straight jacket, for our development.

Myth 2: NEPAD will be an elite club in which there will be insiders and outsiders. This is a myth because NEPAD is open to every African country. NEPAD recognizes diversity among our countries. Some are emerging out of war and require special policies of cooperation. Some are highly effective and should be offered longer-term partnerships. Others need to build capacities and improve operational performance. But all are invited to be part of NEPAD. And all will be embraced by NEPAD.

Myth 3: NEPAD can be successful only if donors foot the bill. This is a myth because most of the resources required for the priorities identified in NEPAD's plans are targeted for domestic resource mobilization. NEPAD has urged more aid, but it relies most on greater mobilization of medium- and small-scale enterprises, more effective public sector services delivery and greatly scaling up of foreign direct investment.

Myth 4: NEPAD's Peer Review will result in unwanted intrusions in how countries are managed. This is a myth because the peer review process envisioned under NEPAD can take place only when a country volunteers to be peer reviewed. It can be expected that a great many leaders will encourage peer reviews as part of national efforts to improve governance and performance.

Well, you get the point. NEPAD, because it is new is not fully understood. The NEPAD secretariat has made great efforts to brief key groups, such as the meeting a few weeks ago in Cotonou with African parliamentarians. But we all will need to help create wider understanding of NEPAD.

We in ECA have been privileged to provide technical support on NEPAD's creation and proposed operations. We have been particularly active on governance issues, including the African Peer Review process. We have contributed ideas on enhanced partnerships and mutual accountability. We believe that a flow of major products from ECA will continue to assist NEPAD's work. These major products include the first African-based system of assessing governance issues; new and comprehensive measures of the sustainability of Africa's development; a recent major analysis on harnessing technologies for Africa's development; and a new series assessing carefully the status of regional integration in Africa.

NEPAD has been conceptualized and in the next plenary of this Conference, we shall learn more on how it can most effectively be implemented. Our timing is right as in two weeks the NEPAD Steering Committee meets, followed by the Heads of State Implementation Committee.

It is our view that Ministers of Finance and Planning will be particularly important in understanding and participating in the key work of NEPAD. That is why our issues paper covers five important areas where the relationship with NEPAD will be particularly important. Let me highlight just three of them.

First is the issue of sound policy-making and public expenditure management. The framework for this is poverty reduction, which is of critical importance in Africa, and is now central in NEPAD with its endorsement of Poverty Reduction Strategies. Also, central to poverty reduction are the Millennium Development Goals. We know from organizing and running the African Learning Group on Poverty Reduction Strategies that efforts are growing to address poverty reduction in Africa. Poverty Reduction Strategies and comprehensive planning must be better meshed, more efficiently designed and more effectively integrated into budget priorities.

But progress in poverty reduction and the rest of the Millennium Development Goals requires more than PRSPs. It also means more effective management of expenditures and performance. Better planning and management of expenditures is exactly what NEPAD is promoting as a means to enjoy more advanced partnerships with donors. Progress on poverty reduction in concert with other development goals is also a very complex matter requiring skills and planning of some considerable sophistication. Mutual accountability and peer reviews will require more openness on expenditures and management than is often the norm. So the question is: what needs to be done to transit to more capable, accountable and transparent systems of planning and monitoring? Your experiences and advice will be valuable on this point.

A second issue is the welcome focus by NEPAD on market access issues as an important motor for growth. Unquestionably, the decisions taken by Ministries of Finance, Planning and Central Banks Governors very much affect the environment in which trade and investment for exports takes place. This is well illustrated in many ways in national experience in Africa. But let me reach to Costa Rica for an example of how trade, planning and finance have been well integrated. Several years ago, Costa Rica determined that the information economy offered it many advantages, so it emphasized computer literacy in its whole education system, created special incentives for investment in that sector, created industrial zones and other appropriate infrastructure suitable for the information industry, sought special market access for its planned products, and created a fiscal environment compatible with its aspirations. The results have become famous.

Africa's outcomes at Doha were mixed, but we achieved a lot more than in many previous trade rounds. We now need to formulate trade negotiation strategies for the Doha round which reflect our development aspirations, which anticipate adjustments in import policies, and which are developed and negotiated by truly talented people. Your experience and recommendations on integrating trade policies and general planning would be valuable. How can nations best prepare for the domestic adjustments, which will be required by more open access to our markets? And how can we assure that national needs and regional solidarity can be accommodated under one umbrella?

Third is the question of mutual accountability. Some of you have kindly participated in ECA's Big Table meetings, which brings together several African Finance and Planning Ministers with their OECD counterparts from development cooperation ministries, and agency heads and senior officials from key multilateral development agencies. The second Big Table, hosted by our good friend Ms. Eveline Herfkens in Amsterdam last year, recommended adoption of mutual accountability in which high performance on our side would be rewarded with long-term sector and budget support, all held to high standards of delivery and mutual accountability.

Suffice it to say, that as Africa gets its systems and peer review process in order, it now becomes time for the donors to keep pace with their own reforms. There have indeed been donor experiments at reform, but now it is timely for more systemic reforms, some of which are being considered by only a few donors. The issue before us is how can we help accelerate donor reforms of aid. Added to this question of quality, of course, is the question of quantity.

Finally, I want to highlight debt. Notwithstanding the need for debtor countries in many cases to better manage their resources, it is now generally recognized that HIPC is not working well enough. There are now a number of proposals on the table on how we can move beyond HIPC towards greater debt relief. For example, there is the proposal that debt relief should be linked to the Millennium Development Goals, determined by an independent review panel with representatives of both creditor and debtor nations. NEPAD, meanwhile, proposes that debt service be limited to a particular proportion of revenues, possibly with different limits set for different groups of countries. And the IMF is now exploring the idea of Sovereign Debt Restructuring. We need clarity on where Africa as a group stands on these ideas. It would be useful if you could reflect on them and in your ministerial statement help to shed light on what Africa's position should be in the search for debt resolutions to free up larger amounts of resources for development.

In thinking about these issues, I want to make a simple observation, but one which if printed I would present in large letters: The kind of processes that NEPAD will use are all ones that many of you are trying to inculcate to better manage your country's development.

What is different is that NEPAD attempts to make the whole greater than the sum of the parts. It tries to put wind in your sails for reform. It tries to create enhanced international support for Africa's development. And as I have briefly summarized for you, it has generated considerable enthusiasm and support so far.

Your experts have met on these and other issues over the last few days. I have reviewed with them in some detail ECA's plans; our latest round of quality reforms, and our new products. It has been a great pleasure working with them as they set about preparing a very solid set of recommendations for your consideration.

Honourable Ministers,

Over the last year, we have orchestrated ECA's meetings and flagship publications to backstop you and your colleagues as you entered into key negotiations in development conferences and summits. I am happy to note that this Conference is also timed to be as helpful as possible to the process of building NEPAD's implementation. I am glad that NEPAD has come so far and I am glad that you are here to help it go farther.

Thank you very much