Heads of Africa’s key institutions debate growth and transformation
The 12th Session of the Co-ordination Committee comprising representatives from the African Union Commission (AUC), Regional Economic Communities, (RECs), the UN Economic Commission for Africa (ECA) and the African Development Bank (AfDB) opened on Wednesday, June 4 in Addis Ababa ahead of the upcoming African Union Summit to be held in Malabo, Equatorial Guinea.
AfDB President Donald Kaberuka was in attendance alongside AUC Chair, Nkosazana Dlamini Zuma, ECA Executive Secretary Carlos Lopes, and representatives from the New Partnership for Africa's Development, Common Market for Eastern and Southern Africa and the East African Community.
The sessions kicked off with a follow-up to the High-Level AU retreat held on April 28-29, 2014 in Durban, South Africa, and the Addis Ababa consultations, followed by a discussion of the AU’s plan for Africa’s structural transformation, ‘Agenda 2063’.
President Kaberuka said that the African continent is undergoing “a combination of fast demographics, fast absorption of technological change, mixed with rapid urbanization and coupled with a wealth of its natural resources”. These developments, he said, are the foundation of a fundamental and important change on the African continent today.
The AfDB President expressed his hopes for the two-day meeting and called for a concrete and effective outcome in the form of a precise set of recommendations to galvanize Africans. Such precision and clarity, he said, “would enable leaders and all involved in the preparations for the Malabo Summit to know exactly what they want to achieve’. He stressed the need to focus and condense the issues into a smaller manifesto that could be acted upon by leaders and ministers in their respective capacities.
Thematic issues on Day 1 of the meeting focused on trade, infrastructure and industrial development. Discussions stressed the need to accelerate cross-border transit across the continent by way of implementation of a high-speed train network and called for the creation of a continental free-trade area.
In tackling these issues, the speakers proposed a roadmap for realizing these projects and stressed the need for a ‘paradigm shift’ as a fundamental step towards the implementation of the projects, as well as the broader Agenda 2063. The group agreed that targets should be clearly defined before the Malabo Summit, in order for the Heads of State in attendance to commit to achieving and harmonizing these projects.
Creating a dynamic and effective strategy for Africa’s commodities was also central to the debate, with participants expressing concern over the fluctuations in commodity markets that leave African states vulnerable to shocks and inhibiting growth. The need to incorporate more African producers into the supply and value chains was concluded as critical, if current growth rates of 5% are to be maintained and increased to the magic number of 7% and beyond.
On the issue of Africa’s progress in intra-African trade, and the efforts towards the establishment of the Continental Free Trade Area, the principals agreed that intra-African trade figures are generally seen as quite low. However, the reality is that in the Southern African and COMESA regions, the figure for intra-African trade has reached almost 26%, which equals the Association of Southeast Asian Nations region. In other areas of the continent, such as the Central African Region, progress has been much slower, and the meeting concluded that the challenge is to focus regionally on the continental blocs to enhance their capacities.
The need for countries to commit to financing the continent’s development and the issue of debt was also discussed. President Kaberuka reflected on the hard lessons that he said must be learnt from the high price paid by Africa throughout the 1980s, with the ill-fated initiatives of borrowing widely for consumption.
“If governments and individuals borrow for investment, then this is not only advantageous, it must be supported,” he asserted. He added that the commercial window of the AfDB had just re-opened, giving the opportunity for all to “borrow wisely, spend and invest wisely, and build debt management capacity in their respective countries.”
Access to capital markets was also put forward as an important bedrock for developing countries across the continent, but it was noted that this access has to be fused with domestic debt management capacity and political and economic discipline.