The Thirty Second Session of The Commission/Twenty Third Meeting of the Conference of Ministers Responsible for Economic and Social Development and Planning

Opening Statement By K.Y. Amoako,
UN Under-Secretary-General and Executive Secretary,
Economic Commission for Africa

Addis Ababa 5 May 1997

 
Mr. Chairman,

Your Excellency, Dr. Kasu Ilala

Deputy Prime Minister of the Federal

Democratic Republic of Ethiopia

Your Excellencies,

Honourable Ministers and Heads of Delegations,

Mr. Vijay Makhan, Assistant Secretary-General of the

Organisation of African Unity,

Mr. Ferhat Lounès, Vice-President, African Development Bank

Distinguished Delegates,

Ladies and Gentlemen,

Welcome to this year's annual session of the Commission. About a month ago, I had the honour and privilege to welcome many of your colleagues in government to the 6th Session of the Conference of African Ministers of Finance in this very room. That member States have responded to our invitation to this meeting with great interest, so soon after that Conference of Ministers of Finance is indicative of your commitment to and interest in the Commission's work. We appreciate your gesture of support.

Then, as now, we have been honoured with the esteemed presence of the Deputy Prime Minister of the Federal Democratic Republic of Ethiopia, Dr. Kasu Ilala. On behalf of you, Honourable Ministers and heads of delegations, distinguished delegates, and on my behalf, I would like to thank the Deputy Prime Minister for his inspiring address this afternoon. Once again, I would also like to seize this opportunity to express my deep appreciation to the Government and people of Ethiopia for their hospitality to the participants of ECA's Conferences and for their strong support for the Economic Commission for Africa.

Last week, the Technical Preparatory Casommittee of the Whole (TEPCOW) -- your intergovernmental group of experts -- undertook an in-depth examination of all the issues on your agenda. Their recommendations on the various issues are contained in a report which you will consider tomorrow.

Mr. Chairman,

Distinguished delegates,

At your last session in May 1996, the Conference approved the new strategic directions for the Commission and authorized me to undertake its implementation. I would like to report to you on the progress that has been made in the implementation of new programme orientation and, more generally, in the renewal process.

As you know, the three principles that have guided the reform and renewal of the Commission are strategic focus, cost effectiveness and strategic partnerships. The first two considerations have been fully reflected in the managerial and organizational reforms undertaken in the past one year.

Today, I can confirm that the organizational restructuring of the secretariat has been completed. The 1997 Work Programme of the Commission has been revised, in line with the new strategic directions and in consultation with members of the Bureau, as the Conference had directed me to do.

We have revamped our senior management team and have recruited high calibre individuals who were selected for their intellectual, technical, and managerial excellence. The new biennial work programme for 1998-1999 for the Commission has been prepared also in conformity with the new strategic directions. And it is submitted for your consideration and endorsement. The revised work programme for 1997 and the 1998-1999 work programme embodies fully several of the new modalities for programme implementation.

For example, there will be fewer reports, fewer but more productive meetings, improved quality for documents, periodic surveys to measure client satisfaction, enhanced media and communications strategy for ECA's work, and more use of policy forums -- roundtables and expert meetings -- to share experiences and best practices.

I will, once again, be seeking your endorsement and approval of recommendations on three other major reform issues: streamlining of the Commission's inter-governmental machinery; the rationalization of the 30 ECA-sponsored institutions that have been established over the years by the member States; and the institutional strengthening and rationalization of the Multinational Programming and Operational Centres (MULPOCs).

The restructuring of the Commission's work programme calls for a similar institutional re-organisation of the Intergovernmental machinery and the specialised technical institutions. These kinds of changes will complement the work that we started last year and strengthen our service capacity to our Member States.

Mr. Chairman,

Honourable Ministers,

Distinguished Guests,

The prospects for development in Africa are much brighter now than they have been in the past several years. Economic recovery and growth are taking hold in more countries. And in nearly half of the countries of the region economic growth has outpaced population for two years in a row.

We are witnessing an Africa which is emerging as a more dynamic continent, replete with trade and investment possibilities. A new generation of reform-minded leaders is in charge in many capitals. Governments are creating environments which allow investors and entrepreneurs to flourish. There has been a distinct attitude change which embraces rather than shuns business and private sector development.

These promising trends are the reasons for much hope and optimism about Africa. To foster and nurture these positive trends require perseverance and commitment. Nowhere is such perseverance and commitment needed more than in accelerating trade and investment -- the theme of this Conference.

Any credible strategy to accelerate the development of Africa must include the promotion of trade and investment among its key elements. Sustained high rates of capital investments are needed to channel scarce resources to the most productive sectors. It is not possible to sustain a high investment rate, however, without a corresponding high rate of domestic savings supplemented and complemented by foreign savings brought in largely by foreign direct and portfolio investors. And, sustained trade expansion associated with increasing diversification of the production and export base, can be an engine of growth.

A policy framework to promote increased investment in Africa must address issues relating to the political climate; a conducive economic policy framework; increased public savings and investment; increased private savings; attracting foreign investment; and enhanced regional cooperation and integration.

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. To do this, African countries would need to enhance their international competitiveness in the world markets.

Over the last two decades, Africa has steadily lost world export market shares for its principal exports which, in turn, have seen their relative importance in world trade steadily decline. Both factors have contributed to Africa's increasing marginalization in world trade.

At the same time, Africa's traditional sources of development support are declining. Net aid to development countries have stagnated or declined over the past decade. Nonetheless, in sub-Saharan Africa, official development assistance accounts for a higher proportion of external financial flows to this region than to any other developing region.

As has been often stated, while official development assistance is declining, record levels of private capital are flowing to developing countries. But the flows to Africa at 3 per cent of GDP, are lower than all other developing regions.

In view of the weakening of traditional sources 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. The Conference of Finance Ministers covered three issues -- financial sector reform, the development of capital markets, and Africa's debt problem -- matters of great importance in expanding our ability to take better advantage of the global financial investment and trade markets.

On the other hand, over the next two days, this Conference of Ministers responsible for Economic and Social Development and Planning, will focus on other related issues, including investment promotion policies, trade and regulatory policies, and the role of information and communication.

Last week, your Committee of experts (TEPCOW) addressed questions such as: Why international private investment capital by-passes Africa?, and are there useful lessons that we can learn from the countries attracting it? How can we make Africa a more attractive place for private capital flows? In particular, why are countries which have taken concrete and far-reaching steps in the direction of liberalising their trade and investment policies still being by-passed by investors? How can we participate more fully in the trade expansion in the post-Uruguay Round era?

TEPCOW concluded that all the policies that promote domestic savings and the growth of local enterprise also tend to enhance African countries' attraction for increased foreign investment flows. The general consensus was that a business-oriented development policy framework was essential to attracting foreign investors.

Mr. Chairman,

Ladies and Gentlemen,

While the private sector needs to take the lead in production for exports and domestic consumption, our governments must play a supportive role particularly in promotion of exports. Export promotion institutions can help identify foreign market opportunities, organize sales missions and trade fair participation, arrange promotional events, and assist with market research and training.

In certain circumstances, the establishment of export processing zones can boost production for export by overcoming infrastructural and transport constraints and by eliminating bureaucratic red tape and other regulatory barriers to production. Government-private sector consultations and collaboration can also serve to maximize successful marketing of a country's export production.

Because of the many trade-related negotiations and multilateral activities that are currently either underway or are in the planning stages in the World Trade Organization, with the European Union and elsewhere, African governments need to be well-prepared to articulate and defend their interests. African countries therefore need to build capacity for these highly technical negotiations, and do a much better job than in the past of articulating their individuals, as well as joint positions.

Mr. Chairman,

The good news is that the new and dynamic Africa which is committed to becoming competitive in the world market is being recognized by the international community as potential emerging markets rather than aid dependent disasters.

Some African countries have opened up their stock markets to foreigners. The enthusiasm in stock market development in Africa is evidenced by the surge of Wall Street interest in Africa, the increase in investment funds being traded in New York and Europe -- from zero in 1992 to over US$1 billion currently -- and, by the increased number of stock exchanges, now at 16.

Secondly, there are also encouraging signs of growing interest in portfolio investment. Since 1994, more than 12 Africa-oriented funds have been set up. Initially focused on the South African markets, the base has been broadened to include a number of other African countries, such as Botswana, Côte d'Ivoire, Ghana, Kenya, Mauritius, Zambia, and Zimbabwe.

Thirdly, the rates of return on foreign direct investments have generally been much higher in this region. As I mentioned at the Finance Ministers meeting, during 1990-1994, rates of return on FDI in Sub-Saharan average 24-30 percent, compared to 16-18 percent for all developing countries.

Fourthly, US trade with 11 countries of Southern Africa is roughly equal to US trade with all 15 republics of the former Soviet Union. Significantly, US exports to Africa have been growing at over 20 per cent per year.

And fifthly, Malaysia and other countries in East Asia are strengthening economic and trade links with South Africa, Botswana and Malawi. Already, South Africa is Malaysia's chief trading partner in Africa, with bilateral trade reaching 544 million dollars in 1996, up from 353 million dollars a year earlier.

Such promising developments led Honourable Kasu Ilala to say at the Attracting Capital to Africa Summit in Washington just a few days ago, that the US business community should not view the continent "on the basis of images that are no longer an accurate reflection of the reality now prevailing in most parts of Africa, including his own country, Ethiopia".

This is not meant in any way to gloss over the suffering of the millions of our brothers and sisters living in strife or in the war-torn areas. Since the early sixties, an estimated ten million people, the vast majority of whom are civilian, have lost their lives as a result of armed conflict. Nearly as many people have been handicapped for life. Presently, over half of the world's refugees are found in Africa. The untold human suffering we are witnessing every day must not be forgotten. To our citizens still mired in war and conflict, we say, "It is no longer good enough to cry peace, we must act peace, live peace, and live in peace."

Mr. Chairman,

Honourable Ministers,

Tomorrow, you will have the occasion to reflect on the opportunities and the challenges we face in promoting trade and investment to accelerate Africa's development. To facilitate your discussion, we have assembled a distinguished group of experts to introduce the issues and discuss with you best practices. I look forward to a participatory discussion, a candid exchange of views, and a real dialogue on these important matters.

Mr. Chairman,

Distinguished Delegates,

Participation in the information age is inextricably linked with extending trade and investment in Africa. Just as in the past, local or foreign investors were hesitant to invest in countries without roads. Today investors are hesitant to invest in countries without adequate information and communications services. When polled about the factors that shape their international investment decisions, multinational corporations (MNCs) no longer only say cheap labour and raw materials -- now they include a good communication system, without which they do not want to invest.

For African nations to be part of the global economy, we must make full use of information technology, of which telecommunications are the base. But some may think that the information revolution is not important to Africa or even regard it as elitist. There may also be concerns about retaining national telecommunications monopolies, that privatization of telecom companies may not serve national interest, and that allowing private investors into the telecommunications sector may unleash forces that small and poor nations cannot control.

Many of these concerns are legitimate, yet they can be overcome. Rural or disadvantaged communities can be served by putting in place licensing agreements which guarantee services to rural areas. Many countries have developed rural telecentres which aggregate use and make service to rural areas profitable.

If a government believes that its national carrier can withstand competition, it should consider corporatizing the institution, and gradually lowering entry barriers to its services. If a government believes that its national carrier will not be able to withstand competition, privatization may be a good alternative.

Privatisation brings in much-needed capital, not to mention skills and new technology. Competition brings better service and lower prices to users.

Mr. Chairman,

African rates of teledensity are the lowest in the world, and in many African countries, customers can wait up to ten years for telephone service. We need to change this.

For these reasons, we have incorporated a special event on Wednesday, Meeting the challenges of national information and communication infrastructure development in Africa. This event, planned in conjunction with the Global Information Infrastructures Commission (GIIC), will use a panel format to explore two key issues:

First, what is the most effective process for National Information and Communication Infrastructure (NICI) planning and policy framework development? The panelists will present models of what has worked in National Information and Communication Infrastructure planning and policy development, what has not, and why. Also included is a focus on the implementation of the African Information Society Initiative (AISI), which you approved last year, and its proposed pilot projects.

Second, what are the concrete requirements for the private sector to invest in information and communication infrastructure in African countries? The panel will focus on presentations by several senior-level representatives of the global and African private sector outlining the enabling environment needed to stimulate private sector investment in National Information and Communication Infrastructure in Africa.

I would like to extend a warm welcome to the Global Information Infrastructures Commissioners and to their colleagues who represent some of the largest information and communications conglomerates in the world for agreeing to host and sponsor what promises to be a very exciting and rewarding event.

Mr. Chairman,

Honourable Ministers,

Ladies and Gentlemen,

Institutional reform and renewal, be it in the private or public sector or in a regional or international organization, has significance and impact when it delivers tangible results to the clients. Our main clients and constituency are our member States. Thus, we can ask, what can ECA do to help Africa promote trade and investment in order to boost development and alleviate poverty? In collaboration with partners, ECA will:

First, assist African governments to formulate and implement policies for investment promotion, organize investment fora, and support privatization efforts through the dissemination of best practices;

Second, support the African Capital Markets Forum. The objective of the African Capital Markets Forum which was launched at the ECA-sponsored Reviving Private Investment Conference held in Accra in 1996 is to promote cooperation among African capital market institutions, and serve as a forum where African capital market institutions can exchange ideas;

Third, assist African countries to develop and use their institutions and to expand and diversify exports and facilitate enterprise development;

Fourth, help countries identify opportunities arising from the Uruguay Round Agreement, facilitate understanding of the multilateral system and analyze new and emerging issues on the international trade agenda from an African perspective;

Fifth, promote and strengthen subregional trading and payments arrangement, essential to the growth of larger markets and economic spaces in the region; and

Sixth, advise and encourage African governments to adopt policies that promote an information and communications infrastructure by coordinating the African Information Society Initiative, making development information available through new information technologies.

Mr. Chairman,

Honourable Ministers,

ECA will undertake these tasks with determination and humility. Determination, because Africa has a distinct opportunity to meet basic human needs and sharply reduced poverty in an environment of economic growth. ECA can help make a difference. And humility, because in many areas, other organizations and institutions have greater expertise and more resources than we do.

We are, therefore, seeking synergies with African intergovernmental organizations, UN bodies and specialized agencies, donor countries, African universities, research centres, and civil society groups. The partnerships will vary, depending on organizational resources. Most of the collaborations will involve research, advisory services, sponsorship of seminars and workshops, data exchange, and advocacy.

In these times of declining resources for development assistance, pooling efforts and coordinating diverse activities is a cost-effective approach and ultimately will be better for Africa. Where there is a duplication of effort, there are missed opportunities. Shared aims and commitment can only enhance the quality, importance, and excitement of the projects and programmes for the continent.

For us here today and for Africa, this is not the time to rest satisfied. The lost years behind us are too fresh in our memory for us to be complacent. We must redouble our efforts.

Next year, ECA will be 40 years old. It will be a time of reflection and re-dedication of our efforts for Africa's growth. We plan to host a special event in honour of our African women for the role they play in the social and economic development of Africa, and to evaluate strategies for removing the constraints imposed on them. The theme of the event will be African Women and Development. I hope that you, other African leaders and opinion makers, and civil society representatives will be able to join us.

When ECA moves ahead in the next year, we will do so in the spirit and the reality of partnership -- partnership with those of consequence, accomplishment, position, and worth for Africa's future. And as we work in partnership, our first priority will be to work with you -- both because your are our Commission, and you represent the entry point of so much of the reflective policy analysis and action which can now move the future of Africa's development.

May we proceed in the year ahead with fruitful partnerships, may anything ECA accomplishes of merit be the occasion for you to be satisfied because of your work with us, and may our continent continue to move boldly to seize the opportunities.

Mr. Chairman,

Thank you very much for the opportunity of again addressing this Commission. I am grateful to each of you for being with us, for guiding us, and for helping make ECA a worthy partner in our continent's development.

Thank you.