Press Release No. 13/1997

ECA Chief Calls on Africa to Pursue "More Purposeful Engagement" in World Trade, UN Secretary General Praises ECA for Initiative on Information and Communication Technologies

Addis Ababa, 6 May 1997 -- There has been a distinct change of attitude in Africa, an embrace rather than an avoidance of business and private sector development as well as the willingness of governments to create environment that allow investors and entrepreneurs to flourish, a senior UN official has said.

These promising trends -- including the emergence of a new generation of reform-minded leaders in many African countries -- "are the reasons for much hope and optimism about Africa", said UN Under-Secretary General and ECA Executive Secretary K.Y. Amoako.

Addressing the opening ceremony of an ECA conference of African ministers responsible for economic and social development here Monday, Amoako added: "To foster and nurture these positive trends requires perseverance and commitment. Nowhere is such perseverance and commitment needed more than in accelerating trade and investment".

'Accelerating Trade and Investment in Africa' is the theme of the three-day conference, which brings together senior African experts and policymakers, including a number of ministers.

Amoako's point was bolstered by Kasu Ilala, Deputy Prime Minister of Ethiopia, who in his statement to the conference said that with the exception of a few countries "the general economic situation in Africa in terms of growth domestic products (GDP) has, by and large, been improving since 1995".

His optimism notwithstanding, the ECA Executive Secretary stressed that Africa has steadily lost world export market shares for its principal exports which, in turn, have seen their relative importance in world trade decline -- from 6 per cent in 1980 to 2 per cent in 1995.

"In regard to trade expansion, we must embark on a more dynamic course marked by increased participation in world trade and a more purposeful engagement in international exchange of resources", Amoako said.

He added: "In view of the weakening of traditional resources of development support, financing additional investment to spur vigorous growth and to reduce poverty in Africa is likely to emerge as one conspicuous challenge facing our continent".

A few hours before Amoako spoke, the United Nations Conference on Trade and Development (UNCTAD) in a statement preceding the Addis Ababa world launch of its 'World Investment Directory in Africa' revealed that foreign direct investment (FDI) flows in Africa were moving into service industries, particularly into the finance and insurance sectors and manufacturing, leaving behind Africa's traditional concentration on primary commodities.

Meanwhile, reported UNCTAD spokesman Jagdish Saigal, the liberalization of investment and trade regimes were spawning a new phenomenon: the emergence of African Transnational Corporations (TNCs) in countries such as South Africa, Morocco and Zambia.

African TNCs include: Anglo-American Industrial Corps (South Africa) the largest in the region; Barlow Rand Ltd., a conglomerate in South Africa; Conserverie Cherifinnes, a food TNC in Morocco ; and Zambia's Consolidated Copper Mines.

However, compared with other parts of the world, overall volumes of FDI flows for Africa remain low. Between 1991 and 1995 Africa attracted only 5 per cent of total FDI flows to developing countries and 2 per cent of world's FDI. Moreover, FDI in Africa is concentrated only in a handful of countries.

Nigeria and Egypt accounted for over 50 per cent during the first half of the 1990s. Morocco was the largest recipient during the same period with average annual flows of US$0.5 billion.

In his address, Assistant Secretary General of the Organization of African Unity, Vijay S. Makhan, argued that due attention should be given to such parameters as sound policy and institutional frameworks particularly to regulatory environments, efficiency of the banking system, monetary regimes, incentive packages and infrastructure.

In terms of commodities, said African Development Bank (ADB) vice-president Ferhat Lounes, Africa has lost market shares in cocoa beans, coffee and timber (mainly to Asia) and in iron-ore and cotton (to Eastern Europe).

"The loss in market share is attributable to lack of competitiveness at both price and non-price levels", he added, warning that it was the income-dimension attribute of global competition that worried him most: as global income grows, so does the demand for more sophisticated goods. The majority of African countries produce primary commodities which were progressively becoming unattractive in international markets.

In a message read to the conference by Amoako, UN Secretary General Kofi Annan applauded the Economic Commission for Africa (ECA) for prioritising the issue of information and communications technologies on the conference agenda.

The conference sub-theme, relating to the African Information Society Initiative (AISI), is reflected in a collaborative effort between ECA and the Global Information Infrastructure Commission (GIIC) -- an international non-governmental organization of leaders from 40 of the world's foremost information and communications technology companies.

The GIIC provides a framework for filling the gaps between the public and private sectors, between developing and developed countries and between diverse industry sectors from around the world.

ECA and GIIC are holding a high-level symposium on private and public sector partnership in building the African Information Society, the basis of which is AISI, a framework for developing Africa's information and communications infrastructure signed by African ministers in 1996.

The Symposium will be broadcast live in Africa in an M-NET production on Multichoice digital satellite television (DStv). The GIIC will release its "Statement of Addis Ababa" on 7 May, which its Africa regional director Dr. Derrick Cogburn says will strongly support private and public partnerships in building the African information society. It will also propose a set of principles intended to guide the implementation of AISI plans for National Information and Communications Infrastructure (NICI) within each African country.

This and other press releases and background documents relating to the conference are available either by e-mail or post, or at the UN ECA Web site: www.un.org/depts/eca

UN ECA's African Information Society Initiative (AISI) home page is at: www.bellanet.org/partners/aisi