Statement by

by K. Y. Amoako,
Executive Secretary,
Economic Commission for Africa

Your Excellency, John Agyekum Kufuor, President of the Republic of Ghana and Chairman of the Assembly of Heads of State and Government of ECOWAS,
Your Excellencies, the Heads of State and Government of ECOWAS, Honourable Ministers,
Your Excellency, The Chairman of the African Union Commission,
Your Excellency, the Executive Secretary of ECOWAS,
Distinguished Guests, Ladies and Gentlemen,

Mr. Chairman, let me first express my most sincere thanks to you and the other esteemed leaders of ECOWAS for giving me an opportunity to address this Twenty-seventh Ordinary Summit of the organization.

In my brief remarks today:

• I will first, present a snapshot of where ECOWAS stands in its development efforts and describe how West Africa’s performance compares to other African sub-regions.

• Next I will explain some of the causes of the relatively poor economic progress in the ECOWAS region.

• I will then outline how regional integration can help in promoting economic development in West Africa, and present an assessment of ECOWAS progress to date in this regard.

• Finally, I will highlight a few of the key challenges that must be urgently addressed in order to move the integration process forward in the sub-region.

Mr. Chairman,

As the United Nations Secretary-General’s recent progress report made clear, Africa is making little or no progress towards the Millennium Development Goals (MDGs).

We, at the ECA, have estimated that an average growth rate of 7 percent per year is required to lift half of the population out of poverty by 2015.

However, in 2002, only 5 countries in the whole of Africa achieved the 7 percent growth rate required.

And the record in this sub region is particularly sobering.

During the last half of the 1990s, the average growth rate of ECOWAS was only 3.5 percent. In comparison, GDP growth was 4.1 percent in East African Community member states over the same period, and incomes in COMESA member states grew at 4.5 percent.

We now estimate that this year’s growth rate in most West African countries will only be about 3 percent.

As a result of low economic growth, the sub-region’s progress towards the attainment of many key MDGs is poor. Let me highlight four of them.

First, the goal of reducing absolute poverty by half by 2015: the number one MDG.

Only four countries in the ECOWAS region have made progress towards this goal, with poverty declining by about a quarter in Ghana and by approximately 10 percent in Mali, Nigeria and Senegal during the 1990s.

Second, it also seems likely that no ECOWAS member state will achieve the MDG of reducing child mortality by two-thirds.

Although some countries have made progress in this area during the last decade, ECOWAS child mortality rates are currently higher than the African average.

In fact, progress is so slow in some countries that it could take well over a hundred years to reach the goal if current trends are maintained.

Mr. Chairman,

There is some good news concerning progress towards the attainment of universal primary education in the sub-region as all eight ECOWAS countries, for which information is available (Mali, Niger, Burkina Faso, Cote d'Ivoire, Senegal, Benin, Gambia and Togo), have managed to increase their enrolment rates in primary school.

However, ECOWAS member States have not been quite as successful in providing education to their children as SADC or the East African Community, which all boast higher enrolment rates.

Additionally, several member states of ECOWAS do not look likely to meet this MDG in time.

Finally, MDGs have set the target of reducing the proportion of people without access to safe and adequate water supply by 50 per cent by 2015. But although trends show that safe drinking water is becoming increasingly available to larger numbers of people in West Africa, the sub-region is still lagging behind the African average.

Indeed, only one ECOWAS member State (Ghana) is presently on course to meet this MDG.

Your Excellencies,

I would like to also emphasize that rolling back the HIV/AIDS is central to all our aspirations of sustainable development. At present the pandemic is looming so large that it is making it impossible for many countries to make any progress towards the MDGs.

The HIV/AIDS epidemic is a unique and unprecedented crisis, unlike the many other development problems facing Africa in its scale, nature and implications. The epidemic is killing tens of millions of Africans in their prime, undermining governance capacity, tearing apart the social fabric and throwing development into reverse.

Ten years ago, no one could have imagined that HIV prevalence would have reached the shocking levels that it has in Southern Africa.

South Africa counts 1,600 new infections a day, the highest rate by volume in the world, while in Lesotho, Namibia, Botswana, Zimbabwe, and Swaziland at least one in four adults carries the HIV virus.

Prevalence continues to rise in most countries even beyond levels of infection that few predicted as probable a few years ago. When HIV prevalence reaches 35% of adults, it implies that a teenager has a lifetime chance of contracting HIV of about 75%. This is a catastrophic reduction in life expectancy.

In Southern Africa, less than half of today's 15-year olds-in some countries less than a third-can expect to live out a normal adult lifespan, reaching age 60. Twenty years ago, the figure was over two thirds. Infection is concentrated in the working age population (ages 15-45); with women infected at earlier ages then men, and rather more women infected overall than men.

In contrast, the general rates of infection within the ECOWAS region have been consistently lower, with countries registering between 0.5 and 5 percent prevalence rates among adults.

Nevertheless, there is little reason to be complacent. With some of the countries in West Africa approaching the tipping point of 5 percent prevalence rate amongst the general adult population, there is every reason to worry that what is unfolding in southern and eastern Africa could repeat itself here.

In response to this challenge the United Nations Secretary-General, has convened the Commission for HIV/AIDS and Governance in Africa, a new high-level initiative that I am chairing, and which is headquartered at ECA.

The Commission aims to equip African policymakers with the tools for addressing the profound structural impact HIV/AIDS is having on our capacity to meet our development challenges.

Mr. Chairman,
Excellencies,

We, at ECA, have made great strides recently in our efforts to analyze and measure the robustness of policy environments across the continent.

In that context, we have developed two key tools - the expanded policy stance index, and the economic sustainability index - that are very useful in comparing performance of African countries.

Additionally, they help in pinpointing the reasons why some are doing better than others.

The Expanded Policy Stance Index covers three broad areas of policy performance: macroeconomic policies, poverty reduction policies, and institution-building policies.

Last year’s Expanded Policy Stance Index covers 35 countries in Africa. No ECOWAS member State featured in the top five and only one featured in the top ten. In contrast, two West African countries scored at the bottom of the index.

Our Economic Sustainability Index, meanwhile, has 21 indicators measuring an economy’s capacity to maintain long-term growth.

These indicators help measure human capital development, structural diversification, external dependency, transaction costs and macroeconomic aspects of sustainability.

Of the 38 countries ranked in terms of economic sustainability for the period 1995- 2000, no West African country was ranked among the top ten. Five ECOWAS countries are however ranked among the bottom ten.

From our analysis of these indices it is clear that good governance, peace and security, as well as strong economic and institutional conditions are vital to economic development. Indeed, the ten worst performers last year according to our indices were either in conflict, or recovering from recent conflict.

Mr. Chairman,

Whilst it is clear that each conflict brings about massive economic destruction in the affected country, I would especially like to draw your attention today to the adverse consequences of conflicts on neighboring countries and the sub-region as a whole.

Take for example Mali’s recent experience. Mali’s economy has been severely affected by the outbreak of fighting in Cote d’Ivoire. The Abidjan-Bamako road, one of the main lifelines of the Malian economy, was closed in the third quarter of 2002.

Since then, the Malian Government has had to take measures to divert trade to other ports in the region and find new sources of supply for key products. This has significantly increased the cost of production in Mali. The crisis is now estimated to reduce real GDP growth by ½ to 1 percent in Mali.

Mr. Chairman,
Excellencies,

Many of the facts and indices are very sobering, but important. They show the reality, but at the same time, indicate the imperative for regional integration in West Africa. The quest is particularly strong due to the size, structure and low level of development of the economies of the sub-region. Let me explain this in more details.

Most are small, open, non-diversified economies, which maintain little trading relations with each other.

Only Nigeria has a population greater than 20 million people. Five other countries have a population greater than 10 million. Six countries meanwhile have a population smaller than 5 million.

Fourteen of the fifteen countries of the sub-region are classified among low-income countries. Compounding that, half of the countries of the sub-region are in the Sahel Zone and threatened by desertification, which continues to gain ground and is pushing its way southward.

Additionally, many of our countries, which are among the poorest in the world, are landlocked. These land-locked countries represent close to half of the total areas of West Africa, compared to one-third for the whole Sub-Saharan Africa, and only eight per cent of Latin America. Most of their difficulties can only be resolved through improved regional cooperation or integration.

Market fragmentation is thus one of the key obstacles to industrial development in the Sub region.

By combining markets, regional integration arrangements can help countries overcome constraints arising from their small domestic markets-allowing them to reap the benefits of scale economies, stronger competition and increased domestic and foreign investment.

Regional integration is also vital for West Africa as the countries of the sub region face numerous common problems that can best be dealt with collectively.

These problems include the marginalization of the region in the global economy and issues relating to regional commons such as the environment, and natural resources utilization.

Resources of important rivers such as Niger, Senegal and the Gambia are common resources to many countries and should be managed in a collective and concerted manner. Likewise, common maritime resources need to be managed in a coordinated manner.

Mr. Chairman,
Excellencies,

The ECA’s in-depth Assessment of Regional Integration in Africa (ARIA), to be published early next year, candidly highlights where we are with intra-African trade and the work that is needed to improve our regional integration efforts.

By and large, the ARIA findings reveal that the implementation of Africa’s integration agenda to date has been one with mixed results.

There is certainly some good news from ECOWAS. Indeed, the Community has notched up some remarkable successes in its regional integration project. Highlights include the measures taken regarding the free movement of ECOWAS citizens; the construction of regional transport and other infrastructure; and in efforts to maintain peace and security.

This compares favourably with other RECs who, like ECOWAS have free movement protocols but are not applying them as effectively.

For example, COMESA has not ratified its protocol on free movement because of strong reservations of some members, and SADC has not signed any protocols in this area.

ECOWAS has also made considerable progress regarding the development of national and inter-State networks and is, therefore, clearly among the RECS that show increasing connectivity. SADC and COMESA are also in this advanced group while CEMAC and ECCAS lag far behind.

ECOWAS also ranks second among all RECs for its share of intra-community trade between 1994 and 2000, where 19.8 percent of all imports and 20.9 percent of all exports were within the region.

SADC ranked highest in this category, with 31.1 percent of imports and 30.2 percent of exports coming from within the region, while CEN-SAD came third with 12.8 percent and 13.3 percent respectively.

Additionally, ECOWAS is in the vanguard of RECs in the bid to achieve transport integration. However, its progress in this regard has not been as fast as that of SADC and COMESA.

Mr. Chairman,

Although commendable progress has been made in ECOWAS in the sectors I have just mentioned, there remain several challenges that must be urgently addressed in order to advance the integration project in Africa as a whole, and most specifically, this sub-region.

The first challenge concerns the rationalization of the present integration arrangements.

In ECA’s assessment, the current system of integration in Africa is too complex, too duplicative, and requires too much political energy and money for what is being produced.

Currently almost all of our countries belong to more than one of these RECs. Twenty-seven countries belong to two, 18 belong to three and one country belongs to four. At the same time they may often belong to other regional institutions as well.

In the West African sub-region, it is clear that the co-existence of ECOWAS with the parallel UEMOA integration initiative, and the failure to harmonize the two initiatives, has resulted in unnecessary duplication of effort.

There is, therefore, an urgent need to align these RECs to ensure coherence. This calls for the harmonization of ECOWAS and UEMOA protocols and an alignment of the institutional settings.

The next issue concerns the current slow progress regarding the ratification of regional integration protocols. All the RECs have protocols laying out the practical steps for implementing their treaties, which merely set out broad areas of agreement and general objectives, principles, and commitments.

However, many African countries have been late in signing, ratifying, or implementing REC protocols.

Consider the case of SADC. The SADC summit has signed and approved 15 protocols. Yet none of these has been signed and/or ratified by all member countries.

Within ECOWAS, only the protocol on the abolishing of visa and entry permits has been implemented by all member states. The remaining key protocols have only been ratified by at most 50% of member states.

Meanwhile the protocol on the harmonization of immigration and emigration forms has not been implemented by a single ECOWAS member State.

Mr. Chairman,

Third, it is generally recognized that the lack of or inadequate financing is one of the main factors contributing to the lack of significant progress of Africa’s integration.

Financial resources made available to support the RECs mainly come from assessed contributions, but external assistance has been the prime source of financing their operational activities. Our studies show that for many RECS, extra-budgetary resources far outweigh member contributions. In some cases the rate for external funding is as high as 50 percent.

However, actual paid contributions have declined over time and external support, in some cases, is no longer as forthcoming and sufficient to meet RECs’ needs.

This disturbing trend needs to be considered very seriously as the gap between the RECs’ needs and member contributions is already large, and projections suggest that it will grow. Without finance they do not have the capacity to deliver.

In that context, it is also critical for priorities to be streamlined. The regional integration project in Africa simply needs to have much greater focus on deliverables. ECOWAS and other RECs clearly need to align their policies and programmes with reference to continental objectives. To this end, they are required to form their positions in close collaboration with the leadership of the African Union.

Among the critical steps towards achieving ECOWAS integration objectives are the intertwined processes of monetary integration and trade liberalization. The Monetary Cooperation programme was launched in 1987 and was due for completion as far back as in 1994, and the trade liberalization scheme was due for full implementation by 1999.

In respect to the monetary cooperation that would lead to a single currency zone by 2005, we have to admit that, in spite of the complexity of the process, the results achieved so far are well below expectation. Despite encouraging efforts by nearly all countries to meet some or most of the primary convergence criteria, it is also a fact that the majority of these countries failed to comply with the set secondary criteria, translating that efforts in improving public resources management were not sustained. It is obvious that this state of affairs has caused a shift of the date of completion of the programme. This would send bad signals on the credibility of the ECO, the common currency that is to be emitted.

ECOWAS did not record better results in the implementation of its trade liberalization scheme as many tariff and non-tariff barriers continue to prevail.

It took 25 years for Intra-ECOWAS trade to growth from 4 per cent to about 11 per cent today.

In spite of the decision of the Authority of Heads of State and Government to expand the UEMOA scheme including external common tariff to all ECOWAS members, most countries continue with protectionist trade policies and do not demonstrate, in the practice, commitment to remove non-tariff barriers.

This situation leads me to point out that, more than setting dates of completion, what matters most is for ECOWAS countries to translate the expressed political commitment into effective sound economic policies.

They must also exercise individual and collective ownership of the collective vision and acceptance of the region’s common faith.

ECOWAS re-launched its trade liberalization scheme in January 1990 with the ultimate goal of establishing a free trade area by December 1999. But that deadline has now long passed without result.

Mr. Chairman,
Excellencies,
Ladies and Gentlemen,

As you know the New Partnership for Africa’s Development (NEPAD) endorses good governance as the cornerstone for sustainable equitable development for the continent.

Therefore, I would like to conclude by stressing the overall importance of good governance to our development efforts including our quest for regional integration.

It is encouraging that a number of West African countries are among those that have committed themselves to peer review under NEPAD.

For the past couple of years, the ECA project on Measuring and Monitoring Progress towards Good Governance has developed 82 core indicators that assess three broad areas of governance: institutional and political, as well economic and corporate governance practices. The emerging lessons from the initial 28 country studies will be featured in the inaugural African Governance Report, the first edition of which will be published in early 2004.

7 West African countries are among the ones we have studied so far. The overall findings show that general progress being made in the sub-region, as well as in the other regions. We have grouped these countries in three categories:

• Countries that are making sustained progress in governance;

• Countries showing reasonably good progress in governance; and

• Countries making fair progress in governance.

Only one ECOWAS country ranked among the top third of countries that are making sustained progress in governance.

Five countries meanwhile, are in the second tier of countries showing signs of reasonable good governance, and one is in the lowest tier of countries that show signs of fair governance.

Our research also shows that major challenges remain in the dealing with the rising incidence of armed rebellion in West Africa, which is closely linked to the governance issue. It also underscores the increasing relevance of collective ECOWAS security arrangements.

I tried to give a frank and objective assessment of the economic situation in this sub-region, as well as the progress made and challenges faced.

In carrying out the regional integration agenda your strong and continued leadership will be essential.

ECA will continue to work closely with the ECOWAS secretariat and member States of the sub-region to support your efforts.

I thank you for your attention.