Address by K.Y. Amoako, Executive Secretary of the Economic Commission for Africa
Abuja, Nigeria
27 January 2005

Mr. Chairman,
Your Excellency, Alpha Oumar Konare, Chairperson of the African Union Commission,
Honourable Ministers,
Distinguished Commissioners of the African Union,
Ladies and Gentlemen,

Let me first say what a great honour it is to be invited once again to address this august gathering, and renew the already strong bond that exists between the Economic Commission for Africa and the region’s political leadership.

When we met in Addis Ababa in March last year, I highlighted the vital contribution that the African Union was already making in our quest to meet the continent’s development challenges.

In particular, I stressed the important role of the AU in working to ensure peace and security on the continent, accelerating the regional integration agenda, as well as the implementation of key aspects of the New Partnership for Africa’s Development (NEPAD).

At the same time, you may recall that I looked forward to this year as a time to focus on the challenges before us regarding the achievement of the Millennium Development Goals.

I also pointed to the opportunities that 2005 would present to Africa to make its case and galvanize further international support for the continent’s development.

Above all, I called for a united and clear African voice in 2005 on what we have achieved so far and what more needs to be done by us and by the international community to help us meet the Goals.

Well, Excellencies, Ladies and Gentlemen,

2005 has arrived, with a major international humanitarian disaster that seriously affected Asia and also, to a lesser degree, the east coast of Africa.

As a result of this devastating act of nature, the attention of the world is now understandably focused on issues of aid and relief for South East Asia.

We, in Africa, share the pain of those affected by the tsunami.
The AU was swift to make a significant donation on behalf of the continent to the international aid appeal and many individual African countries have been giving support in whatever way possible.

Contrary to some views, however, I do not believe that the Asian humanitarian relief effort necessarily detracts significant attention from Africa’s aid needs.

Nonetheless, I also believe it is now more critical than ever that we speak loudly and clearly about our own situation here in Africa and emphasize our particular challenges.

Fortunately, we have support from several important quarters to make this case in the international arena this year.

First, Investing in Development, the recently launched report from the UN Millennium Project Task Force cogently argues that Africa is caught in a poverty trap that is making it impossible to make any significant progress towards the Millennium Development Goals.

It focuses on many of the major structural impediments that we still face, including small market size, adverse trade relations with the rest of the world, low agricultural productivity and a heavy disease burden.
The Millennium Project estimates that, in order to reach the MDGs, aid to sub-Saharan Africa in real terms would have to increase from last year’s level, of just under 25 billion US dollars, to 37 billion this year and then climb steadily to 73 billion by 2015.
In response, the Task Force is calling for a big, aid–financed investment push by the international community focused on Africa, to build a significant momentum for change and progress towards the Goals.

This is clearly a position that we in Africa must support, especially by keeping up our side of the donor-recipient relationship: delivering peace and security, good political governance, and stable economic management.

Second, there is the work of the Commission for Africa, established by Prime Minister Blair, in order to galvanize an up scaling in international support for Africa starting this year.

I am pleased to inform you that the thinking of the Commission, on which I am honoured to serve, alongside President Mkapa of Tanzania, Prime Minister Meles of Ethiopia, South Africa’s Finance Minister Trevor Manuel and several other Africans, is consistent with the Millennium Task Force as well as regional initiatives such as NEPAD.

Earlier this month, the Commission held a consultation in Cape Town with 14 African Ministers of Finance, representatives of African institutions as well as business leaders and members of civil society in order to discuss some of the key economic proposals being considered by the Commission for Africa.

At the end of the consultation, your ministerial colleagues issued a communiqué that supported the Commission’s work overall.

More specifically, they backed its call for a strong programme of action from rich countries to support African-owned development initiatives that will encompass:

1. A major increase in international aid to Africa based on the technically feasible formula put forward in the International Finance Facility;
2. Innovative and bold action on debt;
3. Swift progress towards a pro-development outcome in the Doha round and;
4. Concrete, financed measures to build up regional infrastructure.

At the same time, the communiqué of the African Finance Ministers presented convincing evidence to counter the view that the conditions are not right for a big push in aid for Africa.

First, to those who doubt that we are able to manage the financial resources in our economies responsibly, they point to the marked improvement in economic governance in the region in recent years.

Transparency and accountability has increased and economic management has improved. There is unprecedented macro-economic stability, which is contributing to stronger economic growth rates than we have achieved in decades.

However, the need for Africa to do better was also acknowledged, particularly regarding steps to improve public financial management and budget reform; reversing capital flight; customs reforms; and actions to address corruption.

Second, to the critics who say that that Africa simply will not be able to absorb the major increases in foreign aid that are needed to strengthen our efforts to reduce poverty, African Ministers of Finance stress that the issue of lack of absorptive capacity is no longer the obstacle it once was.

Why? Because the capacity of African economies to absorb aid has increased, and will improve further as the quality of aid improves.

On this front, as Africa takes steps to improve its management of aid resources, the onus is on our international partners to do all they can to make their aid more effective by improving predictability, and through greater harmonization.

There is need for urgent action in this area as evidence from last year shows that the amount of ODA actually disbursed was significantly less than what was pledged.

Additionally, it is crucial that donors deliver more aid through budget support, mainly in form of grants better co-coordinated to support recipient governments’ plans.

That is not to deny the need to further develop Africa’s human and institutional capacity in order to further improve management of resources, and we are seeking our partners’ help in this.

We need to train civil servants more effectively so that they can command the latest techniques in data gathering and management so as to overcome serious constraints in economic analysis and policymaking.

The issue of whether or not extra aid will simply increase Africa’s aid dependency is a valid concern.

However, there is really no alternative source of significant financing for Africa’s poverty reduction and growth needs in the near term.

Current flows of foreign direct investment are inadequate to kick-start growth.
Remittances from Africans living outside the continent are also not large enough to fill the financing gap.

And, our economies are still not developed enough for domestic private savings and tax revenues to play a prominent role in stimulating increased investment rates and financing higher levels of public spending.

To out it differently, we need more aid for the big push to generate growth, which will be self-sustaining in the long run. Evidence from other parts of the world indicates that where the growth process succeeds, aid tapers off.

Third, in response to critics of existing debt relief mechanisms, your colleagues in Cape Town agreed that debt relief as it currently functions is not really working to the benefit of Africa.

They therefore stressed the importance of 100% multilateral debt service relief for HIPC and other countries, which is shaped by development needs and levels of poverty rather than more narrow considerations.

Additionally, an appeal was made for due consideration to be given to tackling the debt management constraints of non-HIPC, middle-income indebted countries, such as Nigeria, which is mainly owed to bilateral creditors.

Despite the size of their economies, these African countries also need significant debt relief so they can increase spending on MDG related activities from now until 2015.

Finally, emphasis was also placed on the essential need for the international community to give Africa the opportunity to trade in a fair trading environment, through better access to the markets of rich countries.

In particular, a call was made for the Commission to make specific and time related proposals for action by rich countries to break down their barriers and end their subsidies, particularly in agriculture.

At the same time, the group also recognized the need to reduce domestic and regional barriers to trade and the importance of tapping the potential for regional integration in Africa.

Mr. Chairman,

So, as you have heard, Africa’s Finance Ministers have started the year united and with a clear voice on the key steps needed to advance the development agenda in the continent this year.

As we move forward, the AU clearly has an essential role to play, as it is the embodiment of African ownership and leadership of the development process in the region.

This vital importance of the AU and its regional partners is very much recognized by my fellow Commissioners and I, on the Commission for Africa.

We therefore plan to do all we can to bolster your activities in various areas through the recommendations we will make when our report is launched in March.

For example, we will highlight the comprehensive steps that donors need to take to effectively support African efforts to develop a regional capacity to prevent and resolve conflicts.

Additionally, we will also be making recommendations regarding how regional post-conflict peace building efforts can be improved and also better financed.

The regional fight against the HIV/AIDS pandemic is another critical area.

Here too the Commission will be calling on the international community to do more to support AU initiatives such as AIDS Watch Africa and the NEPAD strategies for combating HIV and AIDS, TB and malaria.

Other areas include regional infrastructure development, where we plan to push for a major fund to finance regional investment priorities, and regional capacity building.

In particular, the urgent need to support the capacity-building efforts of the AU and the regional economic communities will be stressed.

Furthermore, we will stress the critical importance of up scaling support for African efforts to promote good governance and improve accountability and transparency, for example through the implementation of the African Peer Review Mechanism (APRM).
Honourable Ministers,

These are just some of the key areas that must now be addressed in order to make a big push for Africa.

Recent measures such as the creation of the AU, NEPAD and the APRM, have shown to the world that Africa’s leaders are up to the task of leading the development effort in the region.

We now need to keep up the momentum and do all we can, both at the political and technical level, to make our new initiatives work.

Additionally, as we go forward, we will also require stronger and more effective outside support for our efforts.

In that regard, the September General Assembly meeting on the Millennium Development Goals provides a major high-level opportunity for you to make Africa’s case and to get significant political backing from the international community behind the need for a “big push” for Africa.

We, at ECA, pledge to work with the AU Commission to do all we can to help you make that case as coherently and as convincingly as possible in the months leading up to the General Assembly and beyond.

Thank you.