Sixty Third Meeting of The Council of Ministers of The Organization of African Unity

Statement by
K.Y. Amoako, UN Under-Secretary General, Executive Secretary, ECA
26-28 February 1996
Addis Ababa, Ethiopia

Your Excellency, Ato Tamirat Layne, Deputy Prime Minister of the Federal Democratic Republic of Ethiopia;

Your Excellencies, the Council of Ministers of the Organization of African Unity;

Excellency and dear colleague, Dr. Salim Ahmed Salim, Secretary-General of the Organization of African Unity;

My Colleague, Mr Lansana Kouyate, Assistant Secretary-General for Political Affairs, here representing the Secretary-General of the United Nations,

Your Excellency, Mr. Jacques Diouf, Director-General of the Food and Agricultural Organization;

Your Excellencies, Ambassadors and Plenipotentiaries;

Distinguished Guests,

Ladies and Gentlemen;

I am honoured to welcome you all to Africa Hall. This is the historic place where the founding fathers signed the Charter of the OAU in May 1963. Thirty-three years later, the spirit of African Unity, pride in Africa's heritage, and confidence in its bright future still resides in this place, more than anywhere else.

The primary business of this session of the Council, as in past years, is to take decisions on administrative, budgetary and financial matters. For all our multilateral organizations these are critical matters, and they will remain a concern of member States as long as they continue to attach value to the objectives and goals for which these organizations were created. Contributions to meet their running expenses should therefore be among the priority expenditures in national fiscal budgets. African regional institutions should be secure enough to galvanize this continent's participation in the emerging pattern of international relations, assist African States to overcome the challenges that they face, and ensure that issues of concern to Africa have a prominent place on the world's crowded agenda.

Excellencies,

Although the primary focus of the session is on administrative and financial matters of the OAU, the Council has always taken keen interest and provided guidance on the important development issues and challenges facing the continent. In this regard, allow me, as is customary, to share with you the Economic Commission for Africa's latest perspective on Africa's economic and social situation. From our preliminary assessment, the situation is a mixed picture -- the proverbial glass being half empty and at the same time half full.

Our provisional estimates indicate that Africa's gross domestic product (GDP) at constant 1990 prices, grew by 2.2 percent in 1995, compared to 1.6 percent in 1994. Although the average income per head in the 53 member States remained negative during the first half of the 1990s, per capita growth has improved since 1992. Indeed, a turnaround in per capita growth was achieved in the sub-Saharan countries as a whole in 1995.

Only 3 African countries experienced negative growth rates in 1995. Furthermore, no less than half the countries of Africa have been enjoying real GDP growth in excess of their population growth rates through 1995. Actually, more than a third of these countries recorded growth rates of 6 per cent and above in 1995. All this is a source of hope. It is a vindication of the economic reforms and sound policies which our countries have struggled to implement at considerable social cost in the last decade or so.

For the second year running, Africa has enjoyed a modest improvement in its terms of trade. In addition to the earlier successes of arresting inflation by adjusting countries, there have been recent successes by other countries. In spite of the fear that the 1994 devaluation of the CFA Franc would trigger an inflationary spiral, these countries have retained remarkable price stability with the exception of the jump in prices following the devaluation. This has been achieved by their continued fiscal discipline, tight monetary policies and wage restraint. Significantly, under consistent monetary policies, the Republic of South Africa has also brought down the rate of inflation to its lowest level in 23 years. In contrast, there have been strong inflationary pressures in 1995 in countries which experienced difficulties in cutting budgetary deficits.

The key lessons from these examples is that more needs to be done. Countries that have not yet embarked upon the process of reforms, could learn from the experiences of the countries who successfully implemented reforms. And countries implementing reforms must build on successful policies, or deepen them in order to sustain growth and to prepare for the challenges and opportunities of the 21st century.

Excellencies,

By and large, at the dawn of the 21st century, these challenges are the same ones which our countries have been grappling with for two decades. If anything, they will be made more demanding by the far-reaching changes that are taking place in the global economy. Success in meeting these challenges will depend greatly on the commitment, determination, and innovation with we transform and develop our economic and social structures.

But the 21st century world does not confront Africa only with challenges; it provides us with increased oportunities from an ever increased global trade. In order to make the most of these opportunities, however, our Governments must sustain the enabling environment by continuing sound micro- and macro-economic policies; by building economic infrastructures and strengthening essential institutions; and by sustaining good governance, peace, stability and security. Working together in the spirit of regional cooperation and integration, African countries can jointly overcome the major challenges on the road to self-sustaining development. Let me single out four such challenges for your attention.

Clearly, the foremost challenge we face is the persistence of poverty. Today, more than half of all Africans live in absolute poverty and Africa is the only region in the world where poverty is projected to increase. It is not possible to develop a part of African society while leaving a substantial part behind in misery and backwardness. That is why we must renew the liberation struggle -- this time against poverty and its tentacles. The guidelines for this struggle should be built upon sound social and economic policies. Every African man and woman must be empowered to liberate themselves from want and create wealth for their families. I am convinced that a concerted economic struggle can rid African society of abject poverty between now and the year 2025.

The second related challenge arises from the nexus of population, the environment, and agriculture. Food security and self-sufficiency have continued to elude us, as agricultural productivity has stagnated across the continent and per capita food production has been on a declining trend for the last three decades. The way to cope with the nexus challenge of high population growth, low agricultural productivity and environmental degradation is to accelerate human resource development and to build critical capacities for development.

The third challenge I wish to bring to your attention is managing the transition to democracy and good governance and, in the countries long torn apart by war and factionalism, the transition to peace, stability and security.

All of our development efforts will come to naught in the absence of security, peace and stability throughout the continent, within and between our countries. The bitter lesson from the countries long embroiled in war -- not only in Africa, but in other continents as well -- is that sustained development is inconceivable without peace and stability; security of persons, communities and nations; and reasonable degrees of individual and collective freedoms and human rights. Creating and maintaining the conditions under which all these ingredients can be preserved in equilibrium is the function of good governance.

The restoration of security, peace and stability, and good governance in war-torn countries is not an easy task, however. There are wounds to be healed; mistrust is rife between former combatants; almost entire populations have become displaced and impoverished; and there is never enough resources, let alone efficient institutional structures and distributional channels, to set in motion the rehabilitation and reconstruction process beyond relief supplies. Managing the transition from war to peace is therefore a challenge. The transition to democratic governance and multi-party rule while introducing painful but necessary social and economic reforms is also a challenge. But if our countries have to move forward to the vision of a dynamic Africa by 2025, we have to overcome these challenges.

It is in this regard that the OAU's increasing focus on issues in Africa's economic and social development, linking them to the issues of peace, security and stability must be applauded. The OAU Mechanism for Conflict Prevention, Management and Resolution deserves material as well as moral support from all those interested in this continent's development.

The fourth challenge that I wish to share with you is the mobilization of the financial resources that are needed to accelerate the development process. Related closely to this is Africa's external debt crisis which remains unresolved -- in the graphic image conjured by UN Secretary-General Boutros Boutros-Ghali, "a millstone around the neck of Africa". I know that this challenge is never far from your minds, in view of the frequent resolutions and declarations which this Council and the OAU Heads of State and Government have adopted -- calling for sustained development assistance from Africa's external partners; pleading for a lasting solution to the debt burden; or advocating a self-reliant development approach. To successfully prosecute the economic liberation struggle that I have talked about will require an enormous amount of resources to be invested in Africa's human, institutional, infrastructural and productive capital stock.

Sustained structural transformation, robust growth and poverty reduction will not be achieved until the rate of gross investment in our economies reaches no less than 30-35 per cent of GDP on an annual basis. This is the lesson from the dynamic economies of South-East Asia that only thirty years ago were on a par with our own. These resources have to come from domestic sources, primarily. Africa, therefore, must boost its domestic savings rate substantially, and financial intermediation must be greatly improved. Africa, too, will need to draw considerable resources from the rest of the world to supplement and complement its own.

Africa's capability to mobilize not only external, but even domestic resources as well, will be enhanced greatly if a comprehensive solution is finally found to its external debt burden which, on average, consumes in the order of 20 per cent of export earnings to service it. The debt overhang siphons away scarce resources which could have been invested in economic and social infrastructures; and it scares away potential investors from Africa.

A meaningful solution to this problem therefore must entail the principle of substantial write-offs for countries implementing credible socio-economic reforms, to enable them to take off with a clean slate, unencumbered by mistakes of the distant past. Within this principle, a more satisfactory solution must be found for the management of multilateral debt. It is my hope that the members of the Group of Seven leading economies will lend support to the initiative of the World Bank on this issue, which is of vital importance to many reforming African countries.

Africa's capability to attract sizeable quantities of investment resources would also be enhanced enormously if efforts towards regional economic integration led to the creation of a continental economic space that facilitated the free mobility of production factors and finished goods and services. It offers fabulous opportunities for Africa's accelerated development. In my view, it is a sine qua non for Africa's integration into the global economy of the Twenty-first Century.

If our countries can meet the challenges that I have identified, in the words of the Cairo Agenda for Action, Africa will be "in a position to fully participate, as a credible partner, in the world system. In this new spirit, Africa will be able to promote its fundamental interests and concerns."

Your Excellencies,

OAU, ECA and ADB -- your three continental organizations -- can and must work closely together to assist African countries to overcome these challenges and fully exploit the opportunities that are opening up. The scarcity of resources in the face of competing claims, and the prevailing mood across the world towards the multilateral system mean that these three organizations must develop strong and clear-cut complementarities. Collaboration rather than competition is a must if we are to serve our Member States better. After all, we share common goals -- regional integration; sustained economic growth and transformation; eradication of abject poverty from Africa; and, above all, peace, stability, and a broader concept of human security. To collaborate, we will need to develop improved channels of communication, not only at the executive level, but at the substantive programme and professional staff levels. With modern information technology, this is not difficult at all.

Complementarity and collaboration should not only need be reflected at the level our substantive programmes; but we also need to harmonise the institutional frameworks of sectoral and legislative councils and commissions. We may even find it fruitful to programme joint meetings of these decision-making organs. I am convinced that this is the direction in which our Member States want us to go.

Excellencies,

Strengthening the Economic Commission for Africa to play a more effective role in promoting Africa's development has been has been the pre-occupation of all of us at ECA in the six months since my arrival here. We have given deep thought to the problems and challenges that face our continent and her people. A vision of hope has begun to take shape in our minds: Africa can be integrated. Economic development and social transformation can be accelerated on a sustainable basis. Poverty in the absolute sense can be eradicated from Africa by the year 2025.

Our vision has been informed by the Cairo Agenda of Action for Relaunching Africa's Economic and Social Development, adopted by a Special Session of the OAU Council of Ministers in March, last year. We are inspired particularly by the Cairo Agenda's stress on the responsibility of the African people for their continent's development.

We have worked hard to sharpen our focus; and we will restructure our organization and substantive programmes. We have aimed at revitalizing your Commission to make it more efficient and effective in delivering services to our Member States to help them meet the development challenges as well as exploit the regional and global opportunities of the Twenty-first Century. We have reflected on how ECA can work better with the OAU and ADB, complimenting and reinforcing (rather than duplicating) each other -- all three organizations, to serve Africa better.

Your Excellencies,

Distinguished Ladies and Gentlemen,

Africa has the capacity to make our vision of a dynamic continent come true. She has natural resources in abundance. But most important of all are her young people -- our children : their energies and creativity. Those of us in a position to make policies and to re-direct economic and social structures must think of our children. What future do we wish to create for them? We must not disappoint their dreams by stunting their future opportunities. Africa must dare to move forward, waging a determined economic struggle on all fronts, aimed squarely at liberating society from poverty. I have no doubt that, if we persist, we will find that there is ample external goodwill and resources that can be tapped on the basis of mutual gain to accelerate Africa's development and its integration into the global economy. At ECA, we are committed to work in collaboration with OAU, to realise this vision.

Your Excellencies,

I am grateful, indeed, for your kind attention.