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| TWENTY-SECOND SESSION OF THE ASSEMBLY OF HEADS OF STATE
AND GOVERNMENT OF THE CONOMIC COMMUNITYOF WEST AFRICAN STATES (ECOWAS)
Address Your Excellency, Chairman of the
Assembly of Heads of State and Government of ECOWAS, It is an honour for me personally, and for the Economic Commission for Africa, to be given this opportunity to address this Twenty-second Session of the Assembly of Heads of State and Government of ECOWAS. Permit me first, Mr. Chairman, to express my most sincere thanks to His Excellency, President Gnassingbe Eyadema, the Government and the people of Togo, for the warmest and uniquely African hospitality, which we have enjoyed since our arrival in this beautiful city of Lome. I am also grateful to Mr. Lansana Kouyate, the Executive Secretary of ECOWAS, for extending to me an invitation to be part of this Assembly, the last one this Century, and the last one this Millennium. In my brief remarks today, I will focus on the challenge of poverty reduction and sustainable development in Africa, highlighting the link between conflict, poverty and sustainable development. I will then show how regional economic integration and co-operation can be a powerful tool— indeed a precondition— for breaking the nexus of poverty- conflict- and non- sustainable development. In 1998, Africa on the whole enjoyed its fourth consecutive year of positive GDP growth rates, despite global, financial and currency turmoil. But growth was uneven, and while some sub- regions experienced a decline, West African countries grew on average at 3.6 percent. But this favorable outcome cannot be assumed to mean that the aggregate African economy has crossed the critical threshold to a self-sustainable, poverty-reducing growth path. Such a transformation would be contingent on two important conditions: First, the continent would have to be permanently insulated against current global environment and exogenous shocks. Unfortunately, the global environment and exogenous shocks are not changing in Africa’s favour—putting prospects for financing Africa’s development in jeopardy. ODA is stagnant or declining. While the prospects for debt relief are encouraging, little concrete progress has been made in reducing the debt burden. And from the point of view of the physical environment, there is no guarantee that the weather, which has been relatively good in the last couple of years, will remain so. Second, to ensure that recent growth continues and accelerates, our countries would need to put in place domestic foundations for sustainable development. At ECA we recently developed a set of new indices on the basis of which the quality of Africa’s development can be measured. We looked at the issue of sustainability of policy and economic performance of several African national economies from three perspectives: the consistency of short-term performance with stated long-term goals; the capacity for continuous replication of past good performance; and the foundations for accelerated take-off along a sustained growth path. For us, the long- term development objective and, therefore the sustainability challenge, is the goal agreed to in Copenhagen by the international community, of reducing poverty by 50 percent by the year 2015. To reach this goal, Africa as a whole requires an annual growth rate of 7 per cent, compared to the average of 4 percent recorded by the continent over the past 4 years. The West Africa sub- region needs to grow on average at 7.6 percent. Better income distribution is also required. How does the West Africa sub- region fare on sustainability, compared with the other four sub- regions of Africa? For West Africa, the challenge of attaining sustainability conditions is greater than in other sub- regions-- although East Africa is not much better off. The critical factor keeping the West Africa sub- region at the bottom of the sustainability ladder is the prevalence of conflict. About 20 percent of Africa’s people now live in countries formally at war or severely disrupted by conflict, and low-intensity conflict is endemic in many others. Various manifestations of conflict and insecurity affect 20 of 47 countries, half of which are members of ECOWAS. It is not surprising, therefore, that of the six countries at the bottom of the sustainability rankings, half are ECOWAS member countries with a history of civil conflict. It is equally not surprising that of the 15 countries that rank the highest on ECA’s sustainability scale, 8 are from the SADC region. This is clearly because the sub- region and the countries involved, have not suffered from widespread conflict, have a strong natural resource base and have been prudent in their economic management. The lessons to be learnt from this outcome are powerful. Countries in conflict lose growth opportunities. They are estimated to lose more than two percentage points of growth for each year the conflict continues. Conflict and wars wreak havoc on social, education and health services, leading to the loss of human resources. Lack of human capital means that young men have no stake in staying where they are. To these youths, rebellion is an employment choice motivated by the zero opportunity cost of this form of employment and the prospective gains from capturing the state and its resources. Joining a rebel army becomes a viable employment opportunity where job markets do not incorporate youth. On the other hand, rapid growth and job creation can ease political and social stress. Civil conflicts, Mr. Chairman, devastate the lives of civilians and damage the environment. They traumatise whole generations of youth; and force people to abandon homes and farming land, engulfing once stable family units in a flood of refugees. The annual cost of caring for refugees in Central Africa alone adds to $500 million. Armed conflict destroys capital and causes the loss of investments deterred by risks and a general deterioration in economic management and institutions, leaving shattered infrastructure in its wake. · Armed conflict, being as it is a negative shock on economic systems, reduces savings and diverts portfolios away from domestic investment, and triggers massive capital flight - which, by the way, relative to GDP, is higher in Africa than in any other region of the world. · Armed conflict also distorts foreign aid budgets, which now increasingly are devoted to emergencies. And most fundamentally, armed conflict massively diverts government expenditures away from the provision of economic services and other poverty reduction programs, towards military expenditure. Estimates put the increased military spending associated with conflict in West Africa and Central Africa at about $1.8 billion annually. Conflict has inflicted enormous costs to Africa’s development. Mr. Chairman, There are common misperceptions as to what are the fundamental causes of conflicts in Africa. Many people say it is ethnicity. The ethnic diversity of Africa’s states does not inevitably mean that conflict will prevail over peace. On the contrary—research has shown that diversity can be a source of stability. But it is important that appropriate constitutional structures and mechanisms of mediation between groups, be developed. While most African societies are highly pluralistic, political parties often coincide with geographic region of origin or ethnic background. And elections have largely been conducted on a winner-takes-all basis. The net result is to shut some groups out of power. This often includes the most economically developed and best-educated minorities. There is a high development price to be paid for marginalising communities in national political processes. Ways must therefore be found to make electoral systems more inclusive, through diverse power-sharing arrangements at national or local level- as a key step to improving governance in Africa. Mr. Chairman, Poor governance, poverty and conflict feed each other and are the root causes of poor economic regress, and must be simultaneously managed in the process of economic reconstruction, recovery and development for the progress of Africa. Permit me now, Mr. Chairman, to turn to the critical role that regional cooperation and integration can play, indeed should play, in moving our countries along the path of recovery, sustainable development and poverty reduction. Africa is the most subdivided continent, with 165 borders demarcating the region into 51 countries – 22 of which have a population of 5 million or less, and 11 of which have a population of under 1 million. With the continent’s GDP equal to that of Belgium—a small European country, the limitations of size, from the demand and supply points of view, are very real. Through cooperation and integration, regional planning frameworks and trading blocks, Africa can ensure the efficient use of the collective capital, labor, and natural resources of its component states. As individual entities, our countries are not in a position to benefit from such efficiency gains. And even the well- managed ones will remain at risk from the "bad neighborhood effects" from others. The economies of scale that Africa can reap in productive investments – particularly for large infrastructure and utilities projects – stand to significantly reduce the cost of private- and public-sector operations, including the cost to donors of aid administration. As national macroeconomic policy reforms become harmonized, efficient producers will move to expand their market share and prices will become more competitive on the world market. Investment in Africa will accelerate, attracted by the larger market and technological innovations. Additionally, regional frameworks will reduce transaction costs on intra-regional trade as a result of the removal of tariff and non-tariff barriers—including excruciating pain at customs border posts. These outcomes, Mr. Chairman, will create opportunities for a stronger bargaining position for Africa vis-à-vis the rest of the world. I said earlier that even to day ECOWAS should negotiate in the WTO framework as a block on behalf of its members. With the outcomes I just highlighted, ECOWAS’s negotiating clout would be greatly enhanced. With such a vision, it is clear why regional cooperation is a sine qua non for competitive entry by any individual African country into world markets. It is the only way to survive the trend to globalization, with its attendant array of big issues. All big issues confronting Africa, and certainly the trade and investment issues, require stronger and more financially viable sub-regional and regional organizations. They require building strong interstate institutions. Here in Africa, as we strengthen sub-regional institutions, we will also need to take politically difficult steps, which only the brave leadership of national governments can assure. But those steps are necessary to give explicit recognition to the fact that genuine and rational regional integration-- and the inevitable process of globalisation-- are political processes. They entail ceding some elements of sovereignty. As such, nations must prepare to understand and be able to reconcile national objectives with the broader regional benefits. In this context, it is clear that while regional integration is a useful tool for growth, it cannot paper over inadequate national preparation. Nor for that matter, can economic integration paper over political issues between states. But it can enhance mutual interests, which can put troubling political issues in a broader perspective. Let me illustrate this point with the situation in Mano River basin, which we are all familiar with. Permit me first, Mr. Chairman, to add my voice to the well- deserved praises for the wisdom of the West African leaders who showed their resolve, under the umbrella of ECOWAS, to stop the terribly devastating wars in this river basin and beyond. But I need not remind you that the situation is far from stable, and that steps must be taken urgently to prevent a relapse. Development projects, to reduce poverty in the region are an important element of the solution—and we must move quickly on that front— if we can. But we in Africa and the international community at large would compound errors if we treated the area just as a series of national situations. Obviously, with huge population shifts across borders, with challenges to the viability of states in the area, and with a plethora of cross-border issues, a new security and development architecture is needed in the area. Perhaps the time may well have come to engineer porous borders, creating larger and more open economic and political space within the sub-region, through greater flexibility in citizenship status and the free movement of peoples, goods, services, ideas, technology and capital. Less than fully viable mini-states, understandably, may not wish to give up core sovereignty, but might well be ready for more creative solutions amongst themselves-- if the alternative is continued national crises and conflict. Seen from this point of view, the need for integration of our economies has a much stronger rationale than that of boosting inter-continental trade. And the time- table must show more urgency than that of meeting the WTO requirements. I do firmly believe that we cannot continue business as usual. Against this menu of what needs to be done, let us give credit to ECOWAS in terms of some of the things it has already done, or is in the process of doing. Trade within ECOWAS members, as a share of their total exports has not dramatically increased—having risen from 2.9 percent in 1970 to 7.8 percent twenty- two years later, in 1992. But ECOWAS has made a real difference in keeping the Community together despite the sharp divisions along linguistic lines. It has facilitated the free movement of goods and nationals across borders. Most recently, in July 1990, the ECOWAS travellers’ check was introduced. It is an important step towards the West African Monetary Union. ECOWAS has established the basic structures for the effective harmonisation and co-ordination of some transport modes in the sub- region. Harmonisation of highways- legislation in the sub- region has advanced far. The Trans- West African highway network linking all state capitals by road is almost complete. ECOWAS has also facilitated telecommunications links among all capital cities of its member states. And of fundamental significance-- worth of special mention-- is the restoration of peace to Liberia and Sierra Leone. Despite these achievements, the challenges ahead for ECOWAS are formidable. Member countries need to mainstream regionalism in a way not done before, by using the "open regionalism concept" to enlarge the economic space and seek to integrate with the rest of the world, but with a sufficiently enlarged internal dynamism to reap the benefits of globalization. ECOWAS needs to further facilitate the locking- in of trade reforms and the negotiation of regional convergence criteria on macroeconomic and regulatory reforms. And while it may be desirable for ECOWAS member countries to harmonize policies and eventually adopt a common currency or limited currency zones, it is not clear how fast these measures should be, or could be implemented. Further, in line with what I said earlier about the WTO, ECOWAS needs to create an effective platform for substantive participation in multilateral negotiations and enforcement of global standards. In light of Africa's marginalisation in multilateral negotiations, ECOWAS may need to co-ordinate with other RECs and present joint strategies and teams in multilateral negotiations at the WTO. Although ECOWAS has made notable progress with infrastructure development, weakness of national and regional infrastructure are still an important constraint to trade integration. Mobilizing resources from private and public sector sources and harmonizing policies for effective regional infrastructure development are critical to enhanced future integration. And as regional integration advances, there will be increasing pressures on the administrative capacity of the national and sub-regional agencies to implement agreed programs and policies. Administrative capacity of ECOWAS and its institutions, as well as national institutions charged with the mainstreaming of regionalism, will need to be strengthened considerably We must also not forget, Mr. Speaker, that overall, a special challenge to ECOWAS is to build bridges across the linguistic divide to fashion a viable sub-regional grouping. The fact that 10 of the 16 ECOWAS member countries are francophone, belong to the CFA zone, and to a parallel sub-grouping-- the Union Economique et Monetaire de l'Afrique de l'Ouest (UEMOA)—raises long- term sensitive issues of potential conflict and rationalisation. We have all been clear on the ends and the needs. Now we must be serious about the means and work them to the ends. Ultimately, the right frameworks will facilitate the entrenchment of peace and stability, as opportunities and viable options increase for nationals of each country and the environment becomes more conducive to non-violent forms of conflict resolution. These benefits of regional co-operation and integration contribute directly towards the components that constitute the core elements of sustainability as we at ECA have defined it. Given the challenges for ECOWAS that I have highlighted, how can ECA help ECOWAS? Building on our previous experience, and capitalising on the country- level presence of strategic partners, such as UNDP, ECA can strengthen the institutional and human skills- capacity of ECOWAS and the national- level institutional focal points responsible for regional integration. Further, ECA can support technical studies that investigate the costs and benefits of economic integration, assess the viability of present inter- country benefit redistribution instruments and appraise the financing of regional integration institutions and schemes. A special focus for ECA would be studies aimed at mainstreaming a regional approach in national programs by defining benchmarks and indicators for monitoring and assessing progress by member countries towards agreed ECOWAS integration goals. ECA and its country- level partners, can also support follow- on activities to implement the recommendations of such studies, including the establishment of structures and capacities to mainstream regional policies and programs in national plans, and monitor the implementation and consistency of national policies with sub- regional goals and priorities. ECA would also ensure the consistency of sub- regional programs with regional aspirations. ECA is could also help in improving transport planning and co-ordination in ECOWAS. And the recent meeting in Yamousokro on civil aviation, confirmed that we would have effective partners in our effort on transport and communication. Also, the October 1999 African Development Forum, the first of its type, which was a partnership of private and public sector interests in information communication technologies and programs, confirmed support for us in programs to help Africa countries with their information communication needs. ECA would promote harmonized and coordinated activities to develop the capacities of ECOWAS and national institutions in the transport sector, through training workshops, seminars and advisory services. The substantive focus would be transport technology and transport planning and management. ECA would support thematic networking of African experts and institutions in transport in the sub- region to facilitate knowledge and experience- sharing, as well as generate new knowledge about the sector. Further, we would support transport studies on Transport and Trade Facilitation Network, with a view to establishing national, sub- regional Trade and Transport Facilitation Network as part of regional system linked up through a Backbone Information Mechanism (BIM). We would also establish a sub- regional Transport Data System, including a Road Data Bank, among other things. – Other areas where ECA could help ECOWAS is in facilitating international trade and Investment through activities to support regional capital markets development and to build capacity of ECOWAS and its member States to identify opportunities and challenges created by the WTO. The idea is to help African leaders and institutions to be better prepared for future WTO participation. We would provide technical support to ECOWAS and its member States to monitor and to promote the compatibility of the integration agenda with the obligations of the countries under international agreements, and to assist the countries in addressing issues of direct concern to them in international negotiations. We could support training and other instruments for developing expertise to effectively participate in international negotiations, as well as studies for improving the competitiveness of regional economies. We would also continue to support workshops for African trade ambassadors. There are other areas where we can help but I will just mention only one more. We are well positioned to facilitate your sharing of experiences of the Latin American and Asian countries and sub- regional integration groupings through technical cooperation and other capacity building measures, in a South-South Cooperation framework, which we are developing at ECA. Mr. Chairman, Let me conclude these brief remarks today by emphasising that we must have ambitious goals as we enter the 21st century—recognising the convergence of good economic and political governance in determining the social advancement and wellbeing of our people. An important part of leadership is the ability to inspire people, by setting goals for worthy ends and by working towards these goals in ways where progress can be demonstrated, and can be asked of the leadership. I thank you for your kind attention and wish your meeting every success. |
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