First Ministerial Session of The Economic and Social Commission of The African Economic Community

Statement by
Dr. K.Y. Amoako, UN Under-Secretary General and Executive Secretary, ECA
20 November 1996
Abidjan, Cote D'Ivoire

Your Excellency, Prime Minister Daniel Kablan Duncan,

Your Excellency, Minister of State Ahoua N'guetta,

Honourable Ministers,

Your Excellency, Dr. Salim Ahmed Salim, Secretary-General of the Organization of African Unity,

Your Excellency, Mr. Omar Kabbaj, President of the African Development Bank,

Your Excellencies, Members of the Diplomatic Corps,

Distinguished Guests,

Ladies and Gentlemen,

It is both an honour and privilege for me to address this very First Ministerial Session of the Economic and Social Commission (ECOSOC) of the African Economic Community (AEC). This Commission embodies the ideals and the serious commitment we share for a more prosperous Africa. Through ECOSOC, we can guide Africa through the challenges and opportunities posed by globalization and guarantee its role as a contributing and competitive partner in the world economy.

Mr. Chairman,

As we complete the sixth year of this decade, Africa's record shows hopeful signs of economic and social change. However, not all countries in this dynamic continent are progressing equally.

In some countries, we have witnessed the amicable resolution of conflicts followed by free and fair elections. Peace has invariably translated into a surge of economic activity. But, unfortunately, we have also painfully watched countries where the complete breakdown of law and order has virtually stalled and even reversed development.

Today, about half of the countries in Africa, are enjoying real economic growth in excess of their population growth rate. A small, but significant band of countries has embraced reforms with commitment and innovative pragmatism. These countries have in fact sustained significant real per-capita economic growth.

These trends are a clear confirmation of a determined Africa, an Africa where a younger generation is asserting its commitment to growth and progress, an Africa of expanding ties, an Africa with an awareness of its need to stake its place in the global economy.

It is this Africa which, for the first time in many years, affords us the luxury of well-grounded optimism about our future. A future where, with diligence, in a generation we can sharply reduce absolute poverty on this continent.

Mr. Chairman,

Reducing the deep-rooted poverty - which now afflicts two out of five Africans - is clearly the major challenge we face. To end poverty, it is necessary to have growth... but growth alone is not sufficient. The highest payoffs to poverty reduction will only be attained through the provision of basic social services and creation of broad-based labour-intensive growth.

However, the recent positive record of reform and growth in Africa leaves us no room for complacency. In those countries where growth has been registered, the patterns are clearly not sufficiently broad-based, nor the levels yet adequate to attain any meaningful reduction in poverty.

If ending poverty is the first challenge we face in Africa, then the second challenge is identifying and supporting environmentally sustainable programmes. Currently, the nexus dynamics of high population growth rates, an extensive agriculture system, and a fragile ecology is creating havoc with the prospects for an environmentally sustainable development agenda for Africa.

Many factors undermine this agenda in Africa. Soon, as many as twenty countries will lack the water they need. Food shortages might well take on the magnitude of Africa's debt and adjustment crises of the 1980s and early 1990s if left uncorrected. On other parts of the continent, erosion, deforestation, and pollution continue unabatedly.

Deepening our commitment to an agenda which includes poverty-reduction through environmentally sustainable and broad-based growth will guarantee Africa's ability to address its long-term challenges. However, this will first require consolidating the recent achievements in macroeconomic stabilization pursued by a large number of countries.

Second, strengthening the capacity of the state to foster and manage the transition from stabilization to long-term development will be crucial. The immediate focus of this exercise should be on enhancing the policy making capacities of a small number of core state institutions that are most central to macroeconomic stability and growth.

Third, human resource development will need to be advanced vigorously. Increasing human capital is one of the keys to long-term growth and poverty reduction.

A fourth and important prerequisite is the promotion of the development role of the private sector and civil society organizations. The experience of the past three decades has clearly demonstrated the limits to government-led development strategies. This decade ahead calls for governments to be ready to perform as catalyst and facilitator -- governments ready to stimulate and complement the private sector.

Mr. Chairman,

Clearly, Africa's transition from stabilization to long-term growth cannot be divorced from the realities implied by the increasingly integrated global economic system. Africa will not be able to attain lasting gains from its reform and growth agenda without giving careful attention to these realities.

However, African governments, acting individually, are incapable of addressing the challenges and difficulties posed on their national economies by increased integration and globalization. Our small and vulnerable economies are marginalized by the increasingly competitive global trading system. Further problems hamper growth. These include weak macroeconomic policies, undiversified production base of goods and services, and the high cost of trading in an environment with poor transport and communications networks. A regional integration framework can help overcome these difficulties. That is why the regional integration, the subject matter of this Conference, is fundamental to Africa.

Ten days ago, at the Third Middle-East and North Africa Economic Conference in Cairo, President Hosni Mubarak stated [and I quote]:

"Our place in the global economy lies in our cohesion, the harmony of our policies, of our economies, but most of all in our shared hopes for prosperity."

He added:

"Regional infrastructure projects, -- in power, energy, transport, communication and environment -- await our integration. Greater regional trade should be within reach. Better coordination among our policies should magnify their positive impact on our peoples."

[end of quotation]

President Mubarak's words have much relevance to our deliberations over the next few days.

Mr. Chairman,

Africa's integration agenda, if approached with pragmatism in the context of this globalization, offers the continent a real opportunity to attain productivity gains, to avert marginalization, and to carve its niche in the rapidly integrating global economy.

The biggest world players are rapidly creating regional economic and trading agreements and arrangements which optimize their gains from globalization. Drawing on lessons from the experiences of these players, Africa will also need to accelerate its own integration process -- to improve production and productivity, to encourage greater intra-regional trade, and to prepare its national economies to become competitive in the global economy.

A strong regional economy can facilitate the pooling of risks between otherwise vulnerable economies and enable the continent to exploit complementarities and to attract the levels of investment required for the development of modern manufacturing. In the long run, liberalizing and intensifying regional cross-border flows in investments and trade will enhance economic growth and development in Africa. Greater trade within the region would also permit African states to enjoy more specialization and economies of scale, and better access to technology.

Finally, economic cooperation and integration may also offer Africa a mechanism to collectively foster national policy credibility in the continent and reduce the risk of policy reversal... a major reason why businesses today do not invest in Africa.

Mr. Chairman,

This First Session of ECOSOC offers us a unique opportunity to evaluate Africa's past performance with regional integration. I think we can all agree that we have some achievements to date, but they fall short of our expectations. Some fault our integration structures. Others perceive the integration as merely a "top-down" governmental exercise. Still others say that the approach lacks private sector involvement.

We can, however, point to some achievements. The West African Economic Community (CEAO), now replaced by West African Economic and Monetary Union (UEMOA), has made a difference in facilitating trade among its member States. The share of trade within CEAO members as a percentage of their total export increased from 6.6 percent in 1970 to 10.5 percent in 1992. Rail links now exist between many of the member States. Hence, non-tariff barriers to trade among these States, such as prohibitive transport costs, have been significantly eased in the subregion. CEAO's relative success is also based on currency convertability and capital mobility.

Similarly, the Economic Community of West African States (ECOWAS) has facilitated trade among its member States. The share of trade within ECOWAS members as a percentage of their total exports increased from 2.9 percent in 1970 to 7.8 percent in 1992.

ECOWAS has made a real difference in facilitating the free mobility of nationals across borders. It has also established the basic structures for the effective harmonisation and coordination of some transport modes in the subregion. Harmonisation of highways legislations in the subregion has gone a long way. 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.

The Southern African Developing Coordination Conference (SADCC), now Southern African Development Community (SADC), has made considerable progress in harmonisation of programmes in the transport and other priority sectors in the subregion. During its ten years of existence, the Coordination Conference also successfully secured funds for its subregional projects. Recently, the Southern African Development Community adopted a trade liberalization protocol encouraging countries to take tariff reduction measures.

The Preferential Trade Area for Eastern and Southern African States (PTA), now Common Market for Eastern and Southern Africa (COMESA), has also made progress in implementing activities in sub-sectors of metallurgy, engineering, chemicals, agro-based and building materials industries. Programmes on transport facilitation have been drawn up.

The revised COMESA Treaty accommodates deeper integration instruments. Through the institution of the PTA Travellers' Cheques, the Automated System for Customs Declarations (ASYCUDA), and the Trade Information Network (TINET), COMESA has made some progress in trade facilitation and promotion.

Mr. Chairman,

Such achievements and the challenges ahead force us to rethink our approach and develop one which restores the vitality and dynamism to the integration process. Using the Abuja Treaty as the framework, we can proceed with a flexible and adaptable plan for Africa.

In our view, the process of integration in Africa should build on two sets of fundamental policies:-

* market integration through trade liberalization, monetary harmonization, and private sector promotion; and

* expansion and interconnection of Africa's physical infrastructure.

The first step in this direction, will be deepening trade reforms in countries currently undertaking these reforms and initiating urgent action in the remaining countries. Sound policies must be put in place to improve competitiveness.

On the whole, we need to aggressively pursue policies which not only increase intra-African trade .. which is only about 8 percent of the total African trade, but also its share of global trade. Solutions must link markets at all levels - country to country, country to region, region to region, and the African continent to the global market.

There is also need to explore the economies of scale and other critical factors which bear on the development process. We are a continent rich in natural and human resources. We have a physical space envied by other nations. We must harness out yet untapped resources.

Mr. Chairman,

We, at the Economic Commission for Africa, are committed to assist Africa in its integration agenda within the framework of the Abuja Treaty. We will work to expedite the Abuja process; strengthen sub-regional organizations' integration efforts; assist the integration of transport and communications systems; and encourage cooperation on energy and mineral resources development.

The tasks ahead of the Economic and Social Commission are daunting. ECOSOC should very seriously consider the institutional changes required for the launching of a solid, lean, and dynamic African Economic Community Secretariat that will spearhead the work of a rationally-articulated Joint OAU/ADB/ECA Secretariat and the Secretariats of the various African Economic Communities.

We will need to give particular attention to institutional harmonization and rationalization to avoid unnecessary duplication and overlapping between the policy and the technical organs dealing with economic and social issues on our continent. Complementarity, rather than competition, should be the guiding principle for ensuring synergy and maximum impact of our efforts. I am confident that by putting our collective efforts behind a well-articulated work programme we can attain this synergy.

In closing, Mr. Chairman, I wish to express my most sincere thanks to His Excellency, President Henri Konan Bedie, the Government, and the People of Cote d'Ivoire for the warm and uniquely African hospitality we have enjoyed since our arrival in this beautiful city. Let us reward this hospitality with a new milestone in African development. We are right to proceed with an African Economic Community agenda which uses integration arrangements to strengthen our collective commitments. I believe firmly that, our collaborative efforts and concerted actions in this regard will optimize Africa's economic reform.

Thank you for your kind attention.