ECA Survey Finds Limited Progress in Implementation of Monterrey Consensus in Africa

Addis Ababa, 22 October 2007 (ECA): The results of a recent survey by the Economic Commission for Africa suggest that, in general, very limited progress has been made in realizing the objectives of the Monterrey Consensus on Financing for Development.

The release of the survey results coincides with the 23-24 October high-level biennial review of the United Nations General Assembly Plenary on the implementation of the Monterrey Consensus.

The ECA survey of African policymakers was conducted in March and April 2007 to gauge their views on the degree of progress in meeting the goals of the Monterrey Consensus.

Overall, the survey found that while significant progress has been made in the area of external debt relief, performance in other areas has been either fair or disappointing.

The results also indicate that considerable efforts are required by both African governments and development partners to mobilize the level of resources needed for development in the region.

Key findings:

• Governments are making efforts to mobilize domestic resources, but savings rates in African countries remain inadequate relative to their investment requirements.

• FDI inflow has increased, but it is still insufficient, and too concentrated in the natural resources sector, to help accelerate economic growth and development.

• Most countries have policies in place to attract private capital flows, but response from foreign investors has so far been muted.

• Though exports have increased in recent years, respondents believe that donors have not made much progress in supporting African countries in the area of trade.

• ODA flows to Africa are on the increase, however, donors are still not on track to meet their commitments. Recent aid flows also tend to be concentrated in a few countries and social sectors (emergency aid and debt relief).

• There has been a significant reduction in the external debt burden of African countries as a result of recent debt relief initiatives. However, more debt relief needs to be provided. Governments also need to exercise caution in borrowing to ensure that debts in African countries remain sustainable.

The Monterrey Consensus adopted at the International Conference on Financing for Development in 2002 was the first global attempt to comprehensively address the challenges of financing development, especially in the context of meeting the Millennium Development Goals (MDGs). The Consensus calls for a new partnership between developed and developing countries covering six main areas of action:

•  Mobilizing domestic financial resources;

•  Attracting international financial resources (private capital flows);

•  Promoting international trade as an engine for development;

•  Increasing international financial and technical cooperation for development;

•  Sustainable debt financing and external debt relief; and

•  Addressing systemic issues.

In recent years, there has been concern that very limited progress has been made in honouring the Consensus commitments in all six areas. G-8 leaders acknowledged these concerns in their 2006 Summit in St Petersburg as well as in the Heiligendamn Summit held in 2007.

It was also the main reason for their decision to launch the Africa Progress Panel (APP) in April 2007 with the objective of working with African countries and their development partners to ensure the delivery of promises made to the region.

The concern about low delivery on promises has also led African governments to take the lead in monitoring the implementation of commitments by donors through an annual African Ministerial Conference on Financing for Development. The first Conference was held in Abuja, Nigeria, from 20-22 May 2006 and the second was held in Accra, Ghana, 30-31 May 2007.

The United Nations General Assembly is organizing a “Follow-up International Conference on Financing for Development” in Doha, Qatar, in the second half of 2008 in order to take stock of progress made in the implementation of the Monterrey Consensus and explore options for moving the development finance agenda forward.

For full survey results and a detailed analysis of the implementation of the Monterrey Consensus in Africa go to:

:: The Monterrey Consensus and Development in Africa: Progress, Challenges and Way Forward
:: Perspectives of African Countries on the Monterrey Consensus Results of a Survey