Fifth African Economic Conference Opens with Calls for Cooperation and Partnership with Africa
Partnership and cooperation were two of the watchwords at the opening session of the Fifth African Economic Conference on 27 October 2010 in Tunis. The distinguished speakers at the session also expressed some caution over the austerity programmes and spending cuts among western governments in the wake of the global economic crisis, noting that they could hurt Africa’s generally bright economic outlook.
There was also a consensus that African countries needed to rely less on commodities for economic growth and well-being. The speakers underlined the need for African countries to diversify their economies through value-added products and services, such as banking, communications and tourism; a process that is already under way.
The African Economic Conference is co-organized by the African Development Bank (AfDB), the United Nations Economic Commission for Africa (UNECA),the United Nations Development Programme (UNDP), and the Development Bank of Southern Africa (DBSA). This year’s theme is: ‘Setting the Agenda for Africa’s Economic Recovery and Long-Term Growth’.
In his opening remarks, the AfDB President, Donald Kaberuka, said that in the early years of the Conference, it was very much an AfDB event, but ‘since then, a wonderful coalition and partnership has developed around this event, which is now recognized as the premier forum for policy debate on African economies
Mr Kaberuka said that, in Africa over the last decade, an ‘unusually strong momentum has burst out’, adding that the economic crisis had not reversed this momentum but it just set it back a little. This underlined the fact that Africa’s recent growth had been more broad-based, with high rates recorded by both resource and non-resource-based exporters.
He emphasised that while demand for oil, gas and commodities had been important in Africa’s economic growth, they had “not been the deciding factor”.
He noted that the growth must be sustained and not allowed to be a ‘flash in the pan’, recalling that various factors had combined to wipe out a similar pattern of progress in the past. Even so, he noted, the former ‘Afro-pessimism’ was gone.
He said that it was time for Africa to be heard; reiterating that the aim of the AfDB and its partners was to maintain the platform until ‘the voice of the lion’ is heard, noting that ‘only the voice of the hunter is heard’.
He highlighted the urgent need to narrow Africa’s ‘massive infrastructure deficit’, especially in the energy sector.
Mr Kaberuka emphasized that it was important to recognize the different ways of achieving economic and social goals in different African countries in this context. “We need neither the Washington consensus nor the Beijing consensus,”, perhaps even an “African consensus” was not necessary, highlighting that the diversity of African countries implies differential approaches and routes to the same goal. “Every country is different, so the roads are different,”, he added.
He remarked that the challenges of the financial crisis put at risk the promises of funding and so reiterated that “we look forward to Seoul”, where the next G-20 will take place, to set the agenda for its discussion.
For his part, the UNECA Executive Secretary, Abdoulie Janneh, noted the renewed cooperation spirit between the three main pan-African organisations, the AfDB, ECA and the African Union Commission. That renewed spirit expressed itself in the re-establishment of their Joint Secretariat and the African Green Fund, which was unanimously endorsed at the 7th African Development Forum, earlier in October 2010.
On economic growth, Mr Janneh noted that current rates were not enough to reduce poverty in the short-term. In addition, those growth rates were endangered by economic and financial cuts in the West, leading to a reduction in global demand. The threat of a double dip recession and cuts to assistance needed by African countries were also noted as further concerns.
He pointed out that although Africa had a similar population size and economy as China and India, the former faced different challenges such as borders, different policies and currency systems given that Africa is a continent not a country.
Supporting the AfDB President’s view that Africa’s economic growth was not just driven by commodities, but also by activity sectors such as banking, telecoms and tourism, Mr. Jammeh said that other areas needed to develop for significant change to take place. He noted the urgent need to strengthen the manufacturing sector which accounted for less than 10% of GDP and in some countries, less than five per cent.
Africa needed financial resources and a more mixed economy, including social and health services in order to underpin long-term development, he said. In this context, he underscored the need to exploit the full potential of domestic sources of financing in addition to other sources.
Acknowledging that Africa’s performance during the crisis is good news, Mr Tegegnework Gettu, the Director of UNDP’s Regional Bureau for Africa, indicated that setting the agenda for the future must centre on job creation, agricultural development and the empowerment of women. He recognized the imminence of the MDGs, with just five years down the road, stressing that ‘time is running out’.
He stressed that the agenda for the future must centre on job creation, agricultural development and women’s empowerment. However, he pointed out that it was only five years to the deadline for the Millennium Development Goals, stressing that ”time is running out, and we must redouble our efforts”.
In his remarks, Tunisia’s Prime Minister, Mohamed Gannouchi, commended the conference for establishing itself as a meaningful forum for discussions.
Mr Gannouchi, among others, noted that while the crisis was over, the impact was still being felt. He too pointed out the hazards of austerity measures, noting that tax increases could lead to a decline in demand and a reduction in growth rate.
The World Trade Organization Director-General, Pascal Lamy, reiterated how important the AEC had become in the African and global economic debate in just a few years.
Acknowledging previous speakers, he added that African economies had bounced back from the economic crisis more than other countries. He emphasized how important growth in trade was for economic growth and success.
He added that “Africa is becoming increasingly unified by a shared vision”, and that if current conditions continued to prevail, “Africa will become unrecognizable in a few decades”.
He joined Mr. Gannouchi in pointing out how Africa was rich in minerals and arable land and had a young labour force.
However, much more could be done to use these assets better, as there was too much reliance on commodities and basic agriculture. More could be done; he said, to diversify and add value to products,
He acknowledged that there were external, regional and internal challenges to this drive for growth, The external factors centred on distorted trade barriers, underlining that African countries needed to negotiate hard at the next round of Doha trade talks.
Also, Africa should reduce its dependency on a few overseas markets. The recent dramatic growth in South-South trade is proof of the efficacy of this approach, and more needs to be done in this area, said Mr. Lamy.
Also echoing Mr Kaberuka, he underscored the need to address the ¨chronic infrastructure gap,” adding that more needed to be done to boost regional trade by bringing down border controls.
He stressed that “Open trade must play a central role in Africa’s development”
“Äfrica is well on its way....to turning itself into a fast-growong region,” Mr. Lamy said.