Address by Prof. Alpha Oumar Konare, Chairperson of the African
Union Commission, at the University of South Africa (UNISA), Pretoria, 24 June
Your Excellency, President Mbeki,
Honorable Members of the Cabinet,
Representatives of the Diplomatic Corps,
Governor of the Reserve Bank,
Ladies and Gentlemen
1. I would like to begin by thanking
the Department of Foreign Affairs of the Republic of South Africa (DFA)
and the University of South Africa (UNISA) for inviting me to make this
address. Indeed, it is a real pleasure for me to have the opportunity to share
my views with this select audience on the topic of my address, which is "Confronting
the Challenges Facing Africa". This topic is timely because African
leaders have important strategic choices to make in the short- and medium-term,
which will determine the future role of Africa, if any, in world economic, monetary
and political affairs. The strategic choices that our leaders make at this juncture
are critical for the creation of an environment in Africa characterised by the
respect of human rights and where the vast majority of the people will be able
to meet their basic needs in food, clothing, shelter, education and health services.
Before I comment on the issues that must be addressed in the process of creating
that environment, let me first recognise the laudable initiatives taken by
UNISA to contribute to Africa's development. I was encouraged to note that
UNISA is implementing a number of projects that are in the line with the objectives
of NEPAD, a programme of the African Union (AU). This co-operation between the
UNISA and the AU is a welcome arrangement that can be extended to other programmes
of the African Union. I particularly welcome UNISA's recent decision to establish
a "Regional Learning Center" in Addis Ababa, which will provide
support to the AU and the Economic Commission for Africa (UNECA) in the further
training of their staffs, research, policy development and publication. There
is no doubt that the expansion of UNISA's training activities throughout Africa
will help us to reduce the need for foreign technical assistance, which has remained
ineffective and costly for the majority of the African countries. For these projects
and other initiatives that may be in the pipeline, the leadership and the faculty
of UNISA deserve a special recognition.
3. Let us now move to the aforementioned
topic of this address. As a good point of departure, I would like to clarity the
meaning of "Africa" in the process of identifying the main challenges
that African countries are presently facing. Following that clarification, I will
talk about some of the main factors that contributed to Africa's present economic,
social and political situation. After that, I will identify the main challenges
facing Africa. The last part of this address will be about the role that the African
Union Commission can play in the co-ordination and harmonisation of policies to
be implemented by Member States in the transformation of our Continent into a
place characterised by peace and security, and where the populations will enjoy
freedom and have the prospects of claiming the 21st Century.
4. This brings
me to the following question: What is "Africa"? Before I propose
my definition of "Africa", I would like to draw your attention to the
fact that the answer to this question is not simple. This is because there is
no unanimous agreement on a definition. Some people refer to "Africa"
as the "Black Continent", probably alluding to the color of the
skin of the majority of its inhabitants. Other people maintain that it is important
to recognise that "Africa" is not a coherent entity because of the racial
and cultural differences that exist between "sub-Saharan Africa"
and "North Africa".
5. Still, there are people who insist
that differences between "English-speaking", "French-speaking",
"Arabic-speaking", "Portuguese-speaking" and "Spanish-speaking""
Africa must be acknowledged. It is even more interesting to note that before the
end of Apartheid in this country, The Republic of South Africa was classified
as being part of Europe by international organisations. Webster's NEW World Dictionary
defines "Africa" as follows: "Africa is the second largest continent
in the world, situated in the Eastern Hemisphere, south of Europe¹".
This definition is interesting at the same unsatisfactory. It is interesting because
it recognises "Africa" as a geographic entity. But, it is unsatisfactory
for all Africans because it defines "Africa" in relation to Europe.
In my view, Africa is best defined as a landmass of over 30 million square kms
situated between the Atlantic Ocean in the west, the Indian Ocean in the East
and bordered by the Mediterranean and the Red Sea in the North. With this definition,
needless to say that al 850 million people who live in countries located between
the Mediterranean Sea and South Africa and between Senegal and Egypt, including
all the islands adjacent to the main landmass are all Africans. According to many
scientific findings "Africa is the cradle of human civilisation". Therefore,
one can only wonder why it is necessary to define our continent in relation to
Europe? In fact, the argument should go the other way around. All other continents
in the world must be defined with reference to the "cradle of human civilisation",
which is Africa.
7. Having clarified the meaning of Africa in this address,
I shall try to identify the main challenges that our continent is facing today.
In that context, it is my view that it would be ludicrous to avoid talking candidly
about historical factors that explain, to a large extent, the current situation
in Africa. Particularly important here are factors that led to the division of
Africa into numerous countries, thereby weakening its ability to compete with
the rest of the world.
8. There is no doubt that, slave trade and colonial
adventures of European powers are among the main factors that adversely influenced
Africa's development during the last 500 years. As a direct consequence of these
factors, Africa was deprived of millions of its young daughters and sons, possibly
some of its best brains and certainly its labor force. The colonisation of Africa
also resulted in the arbitrary division of our continent following the Berlin
Conference of 1884. Unfortunately, that division has been at the origin of some
armed conflicts within and between Africa countries during the post-colonial period.
It is even more troublesome to note that, after becoming politically independent
beginning in the late 1950s, Africa countries continue to be divided by languages
that simply reflect our colonial heritage. There is nothing wrong for Africans
to become proficient in English, French, Portuguese or Spanish in the process
of acquiring knowledge. In that regard, I would like to strongly encourage all
young Africans to learn every foreign language that they can, including Chinese
10. The widespread knowledge of foreign language will be a
powerful instrument for Africa's opening to the outside world through increased
cultural, commercial technical and scientific exchanges. It will also bring future
generations of Africans closer and strengthen the prospects for our future political
union, which is our ultimate goal. Therefore, we should not use foreign languages
as a pretext for the division of our continent.
11. Also, we should not
use the existing ethic and linguistic differences among ourselves for political
advantages. In the contrary, we should consider ethnic and cultural diversity
as one of our strengths. Africans should not forget that our former colonial masters
used such artificial differences to divide better control and us.
strengthen Africa's social and political stability in a lasting manner, our leaders
must take the necessary steps to protect the rights of majority groups in each
African country. We cannot envisage a meaningful political union in Africa as
long as tensions persist between different ethnic or religious groups within individual
countries. If we want to succeed in our efforts to achieve our common economic
and political destiny in a reasonable time frame, it is important for us to build
on things that unite us and to tolerate differences that may exist between us.
The division of our continent into many small countries is a key factor that keeps
Africa economically and politically weak in the world. Even if one prefers to
make a distinction between the former "settler colonies" and the rest
of European colonies in Africa, the main challenges facing them during the post-colonial
period are almost the same today. It is true that the modernisation of agricultural
production and the process of industrialisation began earlier in " settler
colonies", particular in South Africa, than in the rest of the continent.
Nonetheless widespread poverty, which is on the rise, hopeless unemployed young
people whose future prospects are uncertain; and endemic diseases characterise
the current situation in the vast majority of African countries.
countries have the weakest social indicators in the world. Let us take the example
of the Republic of South Africa, which has the largest economy in the continent.
According to some sources, South Africa has the 13th largest economy in the world
based on its economic and financial indicators. Because of that, South Africa's
quota at the Board of the International Monetary Fund is the highest among the
54 African countries. Nonetheless, in the Human Development Report of the United
Nations Development Programme (UNDP) of 2004, South Africa ranked 119 out 176
countries classified in the world on the basis of their human development indices.
Except Libyan Arab Jamahiriya and Tunisia, which ranked 58 and 92, respectively,
no other African country was classified among the first 100 countries, including
South Africa, have a serious income distribution problem, which is reflected in
widespread rural and urban poverty.
15. Various institutions began to predict
Africa's poverty problem more than twenty years ago. In 1983 the Economic Commission
for Africa (ECA) warned that the perspective of the African Region by 2008 under
the historical trend scenario was almost a 'nightmare'. In 2000, a study by the
World Bank Group with contributions from the African Development Bank, the African
Economic Research Consortium, the Global Coalition for Africa in Washington and
the ECA, concluded that " despite gains in the second half of the 1990s,
Sub-Saharan Africa enters the 21st century with many of the world's poorest countries".
The "Commission for Africa Report", published by Prime Minister Blair
in early 2005, confirmed the above analysis on the extent of poverty in our continent.
Internationally, Africa continues to play a very marginal role in world trade
and investment flows. The same is true for world political issues where decisions
made by many African governments are greatly influenced by the interests of foreign
powers. The vast majority of African countries remain small open economies, which
depend on one or a few primary commodities (agricultural, mining and forestry)
for the foreign exchange receipts. If one excludes petroleum products and minerals,
the volume of their exports and the amount of their foreign exchange earnings
fluctuate widely with domestic weather conditions and the demand for their products
in developed countries. The amount of private capitals flow coming to Africa,
with the exception of South Africa, is still very small in comparison with other
developing regions of the world.
17. Given the above situation, one can
broadly identify two main challenges that are facing Africa today. First, there
is a need to put in place, on an urgent basis, an environment that will promote
public-private sector partnership in investment (domestic and foreign) activity
in order to achieve high quality economic growth and create employment opportunities
for poverty reduction. This challenge is in line with the requirements of the
'United Nations Millennium Declaration" of September 2000. Second, Africa
must become a full and competitive participant in world affairs, including trade
and investment. To that end, it must create conditions to increase its power in
international decision-making bodies. It must also become more competitive in
world markets for goods and services and attract an increased amount of foreign
capital in the form of portfolio and foreign direct investment.
18. In the
search for a lasting solution to the problems that Africa is facing, we should
keep in mind that our objective is not to copy blindly the model of development
used by present-day industrial countries. I believe that the main objective should
be the improvement of the social indicators of our countries. We should not simply
be trying to narrow the output gap between the developed countries and the African
countries. The emphasis should be put on policy areas that will enable us to meet
the basic needs of our populations.
19. As indicated at the beginning of
this address, African leaders have strategic choices to make in confronting these
challenges. In that context, they must decide whether they believe that Africa
has the best probability of success if African countries confront these challenges
separately or collectively. Since the majority view is that collective action
is the preferred option, what should be the model and the pace of Africa's integration?
The answers to these questions must be found on an urgent basis, because time
is running against us. We must accelerate the pace of the integration of the continent
in order to be able to catch up with trends towards the building of regional blocs
around the world. Africa cannot become a full-fledged member of the global economy
without having achieved its own monetary and economic integration.
of the importance that Africa's economic, monetary and political integration will
play for our ultimate success in confronting the challenges that our countries
are facing, the African Union considers regional integration as essential for
the transformation and modernisation of the African economies in its Strategic
Plan adopted in 2004. In that context, it is important to indicate that the OAU
Summit of 1991, in line with the recommendations of the Abuja Treaty, adopted
21. Unfortunately, the process of regional integration is
not moving fast. This is because of the difficulties to co-ordinate and harmonise
the requisite policies. These difficulties are exacerbated by the fact that some
countries continue to be members of different regional economic communities (RECs).
We must therefore address the issue of overlapping memberships and to try to rationalise
the eight communities presently recognised by the African Union.
leaders must take actions that aim at improving the co-ordination and harmonisation
of sector policies in Africa and support the creation of networks that would facilitate
the free movements of goods, services, and persons. In the process of economic
integration, the African Union also high priority to the development of regional
and continental infrastructure projects. It therefore welcomes the various actions
envisaged or already taken by African countries, including the recent building
of "an international consortium" with the participation of the AU and
its NEPAD programme, the World Bank and the African Development Bank.
As we continue to pursue the objective of establishing the United States of African
the long run, it is important to find an arrangement that will enable us to improve
the co-ordination and harmonisation of Africa's position in some key areas of
policy making. In this regard, I advocate for a model of integration that is based
on the principle of subsidiary. The main idea here would be to identify some policy
areas, which can be better co-ordinated and supervised by a continental Executive
Body. This requires, in the short to medium term, the transformation of the current
African Union Commission into such an Executive Body. At the same time, it would
be necessary for Member States to agree to surrender or delegate some of their
sovereignty in policy formulation and implementation to the African Union Commission.
The exact form that such an arrangement will take can be debated at some point.
If African leaders accept to transform the Commission into a Continental, Executive
Body, that body will have the authority to issue regulations and directives for
Member States in a number policy areas.
24. Some of these areas, the list
of which is not exhaustive here, could cover policies regarding: (a) peace
and security; (b) the introduction of good governance practices; (c)
the development of social sectors of education and health; (d) agriculture
and food security; (e) infrastructure and energy; (f) the role of
the government in the process of promoting public-private sector partnership;
and (g) international relations, including trade and investment, as well as the
adoption of measures to open Africa to the ongoing globalisation process.
Africa must also put in place an institutional framework, including the establishment
of pan-African financial institutions that will be needed for the implementation
of policies in these areas.
25. Our efforts must aim primarily at creating
conditions for lasting peace and security in Africa. An environment, which is
characterised by peace and security, is absolutely necessary for domestic and
foreign business confidence. It also facilitates the economic and political integration
of our continent. In this respect, I would like to commend the political leadership
of South Africa, beginning with former President Mandela and President Mbeki,
for their relentless efforts to bring peace to a number of African countries.
I have no doubt that the whole continent appreciates your commitment in the peace
processes of Burundi, Cote d'Ivoire, the Democratic Republic of Congo, Comoros
Islands, the Darfur region of Sudan, etc. The African Union will continue to support
your efforts and those of other leaders elsewhere in Africa.
countries must work together in confronting the problem of refugees in our continent.
It is estimated that there are presently about 5 million people in Africa who
have been forced to live outside their countries of citizenship or are displaced
within their own countries because of armed conflicts. As the whole world observes
the "refugees day" on June 20th, African countries should try to find
a lasting solution to the refugee problem in the continent. One important step
in that regard would be to facilitate the free movement of people across our continent.
We should remember that the process of integration would be meaningful only if
it results in the total mobility of labour and capital within an African common
27. As should be recalled, the OAU Convention governing the special
aspects of the refugee problem in Africa was adopted in 1969. It is important
for all African to adhere to that convention. In emergency situations, African
countries should automatically grant refugee status to those who come from other
African countries and protect them. We cannot blame the European countries that
are refusing to accept potential refugees from African countries when we are restricting
the free movement of own people within Africa.
28. As regards good governance
practices, the AU has taken a number of steps since its creation to encourage
Member States to adopt them. Noteworthy in that regard are (i) the African
Peer Review Mechanism (APRM), in which the performances of participating governments
are evaluated on the basis of a set of criteria; and (ii) the Monitoring and Evaluation
Mechanism of the "Conference on Security, Stability and Co-operation in
Africa" (CSSDCA), in which Member States' implementation of the agreements
they have voluntarily entered into, is reviewed. The African Union is also actively
encouraging Member States to adopt good democratic governance practices in line
with the provisions of the 2000 Lome Declaration and the AU Constitutive Act.
The AU believes that it is imperative for African Countries to reinforce their
adherence to constitutional order and to ensure that the rule of law and democratic
governance prevail at all times. This will promote good governance, transparency
and accountability in the management of public resources. The strengthening of
the institutions, which will facilitate the creation of such an environment, is
29. In the area of Social Development the African
Union Commission has begun to record significant progress in the harmonisation
and co-ordination of Member States' policies. For example, considerable work is
being done to promote the objective of "health for all" in the
development programmes of Member States. Since Africa faces the highest disease
burden, in the world, the Commission is encouraging Member States to prioritise
the strengthening of national health systems. In addition, the Commission is supporting
efforts made by Member States to promote traditional medicine as a means of
ensuring universal access in order to mitigate the manifold health challenges
that Africa is facing.
30. HIV/AIDS, Tuberculosis and malaria continue to
be the three main causes of morbidity and mortality in Africa. The Commission
is involved in the collective efforts of African countries to try to meet the
MDGs objectives in this area. The Commission is also supporting various actions
taken by Member States to eradicate polio.
31. Regarding manpower development,
the issue of "brain drain" is a matter of concern for Member
States of the African Union. In my view, it is a tragedy that African Countries
should be the source of professionals and skilled workers for the economies of
the developed countries. It is very difficult for an African citizen to gain permanent
residency, let alone citizenship of a developed country without skills that are
useful for its labour market. At the same time, the same developed countries,
which take away our trained citizens, claim that we need technical assistance
because of the lack of skilled manpower. It would probably be more beneficial
for us to receive the financial support that is needed to reduce the number of
our intellectuals who leave our continent in search of better living conditions
available in the developed world, than receiving "experts" from the
32. On labour and employment issues, the Commission will
convene five regional workshops this year on integrated policies at the level
of the five regional economic communities. The objective of the workshops is to
create a decentralised employment promotion system in Africa.
33. As President
Mbeki has stated on many occasions, Africans need to claim the 21st Century so
that it becomes the " African Century". To this end, the Charter for
the Cultural Renaissance of Africa, adopted by African leaders in Khartoum, is
expected to play an important role. The Charter will provide the appropriate framework
for the promotion of the African cultural agenda. The African Union is prepared
to support Member States in their efforts to enable Africa to take its rightful
place in the world.
34. In November 1996, the World Food Summit held in
Rome estimated that 840 million people were then chronically hungry. That summit
issued a Declaration on Food Security and Plan of Action to combat hunger and
cut by half the number of hungry people in the world by 2015. African countries
must try to make food security a human right, as water should be. In order to
reduce the number of hungry people in our continent, we need a co-ordinated approach.
To this end, we must modernise agricultural production through the provision of
modern inputs to farmers. At the same time we should put in place measures to
fight against desertification, land degradation and deforestation. The Commission
will continue to encourage the implementation of appropriate policies by Member
States in all these areas.
35. In the area of infrastructure, Africa's economic
integration is presently hampered by the lack of transport, communications and
energy facilities. African countries continue to implement development projects
in these sectors individually. This situation is not in line with the recommendations
included in the Abuja Treaty. To change that situation, the African Union intends
to harmonise policies and facilitate the implementation of integrative programmes
in the infrastructure sector. The African Union supports efforts to invest in
the construction of continental roads and railways in order to speed-up the process
of Africa's physical integration. Air transport is another area where the African
Union believes that Member States must strengthen their co-operation.
Regarding the Energy sector, it is estimated that only 15% of Africa's population
of over 850 million people have access to electrical energy. At the same time,
Africa has diverse potential sources of energy, including crude oil reserves,
gas and coal. Of the world totals, these sources of energy account for 9.5% of,
8.0% and 5.5% respectively. One can add to these sources, the hydropower potential
of the continent that amounts to 13% of the world. This implies that the development
of the hydropower potential would be sufficient to cover the various demands for
energy of Africa's population, which is estimated to represent 13% of the world
population. With the sharp increase in petroleum prices during the last two years,
it has become necessary to develop new and renewable sources of energy in Africa.
This requires investment resources that are not available in the majority of African
countries. Nonetheless, the African Union would like to encourage African countries
to act collectively, at least at the regional level, in the promotion of investment
in rural electrification through the construction of hydropower plants or the
use of solar, as well as, Aeolian and geothermal sources of energy.
During the last two years, high prices of petroleum products have created balance
of payments for the large majority of African countries that are net-importers
of these products. This situation was discussed at the Assembly of the Heads of
State and Government of the African Union, held in Sirte/Libya during July 4-5,
2005. One important conclusion of this Assembly was to request net-exporters of
petroleum products in Africa to provide some form of financial assistance to net-importers
as a demonstration of "intra-African solidarity". It was then proposed
to set-up a Petroleum Fund through which such financial assistance can
be provided. While we are waiting for the establishment of that mechanism, I would
like to encourage African countries to increase their petroleum imports from African
producers and make arrangements to pay these imports with the commodities they
produce. The African Union could pay an active role in the drafting of these arrangements.
The future role of the government and public enterprises is an issue that must
be addressed by African leaders. In that context it is important to recall that,
in recent years, African countries have been strongly advised by international
partners to privatise their public enterprises indiscriminately. The main argument
behind that policy advice was that all public enterprises in African countries
suffer from chronic inefficiencies and had to be "subsidised" constantly.
Because of that, they represented a heavy burden on government finances.
However, as the experience shows in Africa, the transfer of ownership between
the government and the private sector has often meant that public enterprises
were simply sold to private bidders representing, in many cases, foreign interests.
The privatisation of public enterprises is certainly an area where private
(domestic and foreign) investment could be encouraged. But, it is also useful
to note that, until recently, may economies in the developed world have had large
public enterprise sectors, which played a key role in their industrial development.
Noteworthy among such developed countries are Austria, Finland, France, Italy
and Norway. Some of the most successful economies in emerging of East Asia also
had large public enterprise sectors.
40. Given these examples, there is
no empirical evidence that a large public enterprise sector alone is a cause of
the poor performance of African economies. It is also not evident that the privatisation
of public enterprises has improved significantly the supply of goods and services
in African countries. This notwithstanding, African governments should consider
encouraging private sector investment in the public enterprise sector if the expectation
is that it will make goods and services more affordable to the end users.
Concerning our international relations, African countries must become more active
in the decision-making processes of various international organisations. In the
regard, Africa should continue to claim a fair representation among the permanent
members of the Security Council of the United Nations in New York. Our representation
at the Board of the Bretton Woods institutions also needs to be strengthened.
In my view, it is almost a travesty to see that Germany, Japan and the United
States together have a combined voting power at the Executive Board of the International
Monetary Fund that represents five times that of all the 54 African countries
combined. In addition, there is no plausible reason why Africa should continue
to be a bystander in decisions that affect its people. We should work on a proposal
to strengthen Africa's representation at the Boards of the Bretton Woods institutions
without further delay.
42. As regards external trade, it is estimated that
commercial exchanges within regional groupings remain low. The direction of trade
is still largely oriented towards Western Europe or Asia. According to available
statistics, the average African country sent over 40 percent of its exports to
the European union and only 10 percent to other countries in the African region
in 2001. This situation is partly due to the lack of transport infrastructure
that constitutes an important obstacle to intra-African trade. The Commission
supports efforts to increase intra-African trade. In that context, the Commission
is playing a leading role in the ongoing efforts to establish a continental
Commodity Exchange, which could be headquartered in Botswana.
There is a need to increase the volume of Africa's trade transactions with other
regions of the world. There are, however, constraints that have accounted for
the inability of African countries to take advantage of market access opportunities
offered hitherto by the European Union under the Lome and Yaounde Conventions
as well as by the USA through the African Growth and Opportunity Act (AGOA). African
countries will not be able to derive many benefits from an enhancement of market
access in the developed countries unless the existing constraints are removed.
44. Two main constraints limit Africa's ability to increase its penetration
of international markets for goods. One is its heavy dependence on the exports
of primary commodities. The second constraint is the inability of most African
countries to be more competitive than other regions in the manufacturing of the
majority of industrial products. The African Union will support African countries
efforts to diversify their production base and adopt production technologies that
will make their production technologies that will make their products more competitive
in world markets.
45. Regarding trade relations with the rest of the world,
two issues are of serious concern. One is on the Doha Round of negotiations and
the other relates to the follow-up to the Cotonou Partnership Agreement (CPA).
Negotiations on these issues aim at addressing the existing imbalances against
Africa in the present global trading system. We hope that further progress will
be achieved on the outstanding issues of the Doha Round.
46. We welcome
the fact that the major platforms of Afro-European relationship, the CPA and Africa-Europe
Dialogue recognise the importance of Africa's integration aspirations. However,
it is somewhat confusing to see that, in the framework of the Phase II negotiations
at the regional level for individual Economic Partnership Agreements (EPAs) with
the European Union, the six African regions do not coincide with the regional
economic communities recognised by the African Union. There are other issues that
require careful examination n the context of the ongoing EPAs negotiations with
the European Union. Policy co-ordination by the African Union is strongly recommended
in this context and is actually being worked at.
47. On foreign direct
investment (FDI), it is true that because of the steady decline in Official Development
Assistance (ODA) African countries must now look for non-debt creating private
capital flows. However, even if African countries took appropriate measures to
attract such capital flows, it is not certain that foreign private investors would
be interested in projects intended to alleviate poverty. Their main interest will
remain in the exploitation of crude oil and minerals. Nonetheless, measures must
be taken in order to create environments that will enable Africa to receive an
increased amount of FDI.
48. It is obvious that in order to attract foreign
capital, Africa must offer an environment where that capital can achieve a higher
rate of return than elsewhere. There is also a need for (1) political stability;
(2) a reassuring legal and regulatory framework for the enforcement and respect
of contractual arrangements; (3) an exchange system that allows for the transfer
of at least part of benefits accruing from investment; and (4) the existence of
various infrastructure facilities. The African Union Commission must play a key
role in co-ordinating policies of African countries aimed at creating a favourable
environment for foreign direct investment.
49. The launch of NEPAD in 2001
was also intended to promote private sector investment in Africa. The priority
areas through which is expected to contribute to the economic integration of the
continent are: (a) Information and Communication Technologies; (b) energy; (c)
the construction of transport infrastructure to integrate Africa physically; (d)
the development of industrial production; and (e) the development of tourism.
The process of globalisation, it is claimed, has as its main objective making
African countries and those of other developing regions of the world to liberalise
their economies and open them to world-wide competition. The supposed idea behind
it is that, by opening to the outside world, African economies will be able to
secure areas where they would have a competitive advantage. It is further claimed
that compliance with the requirements of the process would benefit all countries
of the world. If this claim is true, one can only wonder why trade unions in the
developed countries are voicing their opposition to globalisation? They argue
that their labour force is now loosing employment opportunities through "outsourcing"
to low paid workers in developing countries. At the same time, non-governmental
organisations (NGOs) also oppose globalisation on the grounds that the dominant
role of multinational firms in this process prevents the growth of national economies.
Given this controversy, it may not be in the interest of African countries to
accelerate the pace of liberalisation of their economies, unless a careful analysis
concludes that the benefits of globalisation would outweigh by far its cost in
the medium- to long-term.
51. Africa's debt problem needs a quick and more
generous solution. In spite of the debt reduction granted to heavily indebted
poor African countries under the HPIC Initiative, Africa is still facing a debt
crisis that began in the mid- 1980s. Africa's debt must be cancelled in order
to enable African countries to invest more resources in regional and continental
infrastructure projects that are indispensable for the physical integration of
the continent. In this regard, it is important to note that even if Africa is
granted total debt cancellation, its social and economic development will continue
to depend on foreign capital flows to offset the shortfall in domestic savings,
at least in the medium-term. Ideally, therefore, these capital flows will have
to be non-debt creating.
52. In the majority of African countries, financial
sectors are unable to intermediate between the savers and investors. This is because
the commercial banks dominate the sector and often do not lend for long-term projects.
They tend to provide short-term credit mainly to finance activities related to
domestic trade and imports. In addition, banking system of many African countries
are small and dominated by foreign-owned banks. As a result, they do not compete
for the provision of services to the customers. Reflecting this environment, which
is characterised by the lack of competition, the commercial banks charge high
intermediation costs and make no effort to attract domestic savings.
Given the above-described situation in the financial sectors of African countries,
the Abuja Treaty already requests the establishment of an African Central Bank
and the introduction of a single currency in Africa. Also, Article 19 of the Constitutive
Act of the African Union, reiterates that request and provides for the establishment
of not only a continental Central Bank but also of an African Monetary Fund and
an African Investment Bank. It is expected that the creation of these financial
institutions will provide African countries with the credit and monetary instruments
they need to finance the development of their economies.
54. There are two
compelling reasons for accelerating monetary integration in Africa. First, given
the current world economic and financial order, characterised by the free movement
of capital, the conduct of independent monetary policy by small and open economies,
whose currencies are pegged to a convertible or a basket of convertible currencies
at fixed exchange rates, has became totally ineffective. Second, there are clear
indications that, in Africa, the transmission mechanism between monetary policy
decisions taken by the national or multinational central banks and the provision
of bank credit is almost inexistent. This implies that instruments of monetary
policy is used by national or multinational African central banks do not affect
the operations of the commercial banks or other lending institutions.
Considerable progress has already been achieved in the area of monetary integration
in some sub-regional and regional groupings. The AU now is encouraging other regional
groupings to accelerate their efforts that will facilitate monetary integration
at continental level. The AU organised a meeting of independent experts on the
establishment of the above-mentioned financial institutions in Addis Ababa in
September 2006. In the meantime, I am pleased to announce that the African Central
Bank will be located in Nigeria, the African Investment Bank in Libyan Arab Jamahiriya
and the African Monetary Fund in a country to be determined in Central Africa.
Further preparatory work for the establishment of these institutions will continue
during the coming months.
56. In line with the conclusions of the 2002 Monterrey
(Mexico) Conference, "a substantial increase" in the flows of external
resources is required in order o enable African countries to meet various challenges
facing Africa, including the Millennium Development Goals. Four years after the
Monterey Conference, the flows of external resources to Africa have not increased
as promised. Part of this increase may come from the additional ODA of $25 billion
a year indicated in the Commission for Africa (Blair Commission) Report of early
2005. Even if Africa receives that additional ODA, it will have a huge gap for
the financing of its infrastructure, water supply, energy and agricultural development
57. African leaders must understand that we cannot indefinitely
rely on external resources for the successful implementation of our development
agenda. Therefore, African counties must implement measures that will improve
the mobilisation of domestic resources. Such measures should primarily aim at
combating tax fraud and tax evasion. A reform of the existing tax system to broaden
the tax base and improve customs and tax administration could also contribute
to an increase in government revenue in African countries. In addition, the African
Union believes that measures to fight corruption, improve the prioritisation of
government spending and reduce wasteful spending would strengthen the financial
situation of the African governments.
58. Let me also emphasise the need
for African leaders to speed up the process of our economic monetary and even
political integration. Given developments in other parts of the world, this process
has become an imperative if Africa wants to survive as a full and significant
player in the rapidly integrating world.
59. In this regard, I want to conclude
my remarks by thinking aloud about the forthcoming African Union Statutory meetings
coming up in a few days from now in Banjul, The Gambia. Indeed, as I leave South
Africa a little later today, I will begin my journey to Banjul for a gathering
of Africa's top leaders from Ambassadors to Minister and Heads of State and Government
who will be addressing issues of extreme importance to the continent and its future
As you might be aware, the theme for the Banjul Assembly is "Rationalisation
of the Regional Economic Communities and Regional Integration". Many important
issues will be discussed under the theme, including the all important subject
of the Union Government for the Continent, how this could be achieved, within
what time frame and what Member States must do in order to achieve greater integration.
The structure of the African Union Commission, its relationships with the regional
communities should also come under scrutiny. Before going to Banjul, a lot of
work has been done on all these issues and many expect much to happen in Banjul.
If I say that Africa is at a crossroads, it would be no exaggeration because,
if African leaders are willing to take the bull by the horn, then Africa will
not be the same after Banjul.
61. I know that our leaders are courageous
people who have our common interest at heart and will not fight-shy from facing
their historical responsibilities. Being a realist, I also know that African leaders
have their own constituencies who have to be taken along if part of their sovereignty
should be given up for the greater good.
62. This is why I sincerely thank
again the Government of South Africa and UNISA for offering me this platform to
speak, as it were, to the continent. I have said it in many places and on many
occasions before and I repeat it here, Africa cannot move towards a Union at the
centre if its people are not taken along. I am hoping therefore that through this
forum, many ordinary people will get to know about the important role they have
to play in making Africa a better place for each and everyone of us. I am hoping
that the ordinary African will give her and his leader the encouragement for deciding
for a future Africa where the difference between Africans will no longer be what
divide us, but what unite us so that we will be able to face the current and future
63. Thank you and God bless. May our dream of a strong
Africa become reality! Long live our new Africa.