Date: 25 Jun 2008
Speaker: Commonwealth Deputy Secretary-General Ransford Smith
Location: Chatham House, London, UK
The Chairman, Ladies and Gentlemen,
I thank you all for attending this event.
It is my great pleasure to make these opening remarks at the launch in the UK of the African Economic Outlook 2008. I commend the collective initiative of the ADB, OECD Development Centre and UNECA in sponsoring this valuable annual publication.
There is need for the prospects and challenges of African development to be showcased comprehensively in a single source for the benefit of all those with an interest in the continent – analysts, investors, international development partners and many others. This can only contribute positively to the development of the continent.
What this publication confirms is that Africa is changing, building on its strong economic performance in recent years, which is expected to continue.
For instance, the continent recorded GDP growth of around 6 percent in the last two years and prospects going forward are favourable. Thus, Africa has become a continent of increasing opportunity - second only to Asia in the pace of its GDP growth.
Other economic indicators are favourable: larger and increasing current account surpluses; some diversification away from commodity exports as volumes of manufacturing exports increase, and inflation in single digits. More broadly, conflict is declining although there are democratic and governance challenges. Driven by the strong natural resources sector, in particular the continent has also been witnessing increased inflows of FDI and foreign private capital and these trends are expected to continue.
At the same time, a great number of challenges are evident. For many countries in the continent high food and fuel prices are a concern and now threaten to undermine the progress made so far. It is essential that the international community move to deal with both the immediate consequences of these developments for African growth and service and support strategies to tackle this issue in the long term.
Let me note that Africa is, of course, a diverse continent and the performances of individual economies diverge. A broad observation however is that even with some diversification, the continent’s performance is still reliant on primary commodity exports, particularly in the extractive industries. History tells us that this source of income is volatile and vulnerable to changing external market conditions. The slowdown in industrial countries is one source of potential uncertainty affecting not only demand for the continent’s exports, but also the inflow of capital.
There is a more general challenge of engaging in the global economy. The risk is that Africa – for all the recent progress – is less able to take advantage of the opportunities of globalisation, especially due to the lack of high quality infrastructure.
Finally, there is the challenge of extreme poverty in many countries, with many countries, as the Report shows, being unlikely to meet the MDGs by the target date of 2015 especially in sub-Saharan Africa.
At the Commonwealth Secretariat, we have a particular concern for small states and the least developed – the most vulnerable in the world. This gives us a particular focus on Africa where our members tend to be either low-income countries or vulnerable small states or both.
The Commonwealth Secretariat seeks to support Africa’s development needs as a trusted partner, and as a catalyst for global consensus-building on critical issues, especially of concern to member states. At the Secretariat we take it that Governance and Development are mutually reinforcing and in our work, attribute equal importance to both. The African region with 18 of the Commonwealth’s 53 members is an important constituent of our association. It receives over 40% of the programme of assistance to assist our members attain the MDGs within the timeframes set. Our assistance to Africa in recent years has been focused in areas which this report highlights as important to the development needs of Africa, including:
· Capacity building to benefit from trade liberalisation and economic diversification
· Public sector development and good governance
· Enterprise and private sector development and in particular the development of petroleum, natural gas and other mineral resources
· Human resources development to address the acute shortage of skills in the health and education sectors.
· Primary Education and combating HIV/AIDS
This support for the African member countries takes diverse forms. Permit me to highlight a few:
· Through support from the European Union, we are building the capacity of ACP Africa countries in trade policy formulation, with their EPA and WTO negotiations and with the implementation of trade agreements. We have regional trade Advisers in COMESA, SADC and the AU.
· We are assisting countries in Africa to better record and manage their debt.
· We carry out practical promotion of investment and highlight opportunities in the region through the Commonwealth Private Investment Initiative
· We assist countries to improve export competitiveness and the development of small and medium sized enterprises.
· We are improving the performance of public services in Africa.
· The dissemination and implementation of the Commonwealth Code of Practice for the International Recruitment of Health Workers is designed to assist Commonwealth countries, particularly those in Africa, to manage the international migration of health workers.
· We are addressing Gender Equality and Equity, for example, in collaboration with the SADC Secretariat to ensure gender mainstreaming especially in the health and education sectors.
Experience has shown that the likelihood of development success often depends on the support and long term commitment of the Development Partners. It is also important that development partners accept and support the view that strategies promoting good governance and economic development need to be country-grown, owned and driven.
While there is still more to be done, we are pleased that the efforts of African countries themselves, and of developments partners, including the Commonwealth Secretariat and other participants in this launching, are bearing fruit. We recognise, however, that there is still much to be done. Despite the recent improvement in economic performance, the share of people living in extreme poverty in sub-Saharan Africa has declined little and the absolute number of poor is actively increasing. African economies remain fragile and vulnerable to external events. The disorderly unwinding of global imbalances, renewed protectionism, the evolution of world oil and food prices - as we have seen - could all have significant impact on the positive growth trends that have emerged in the past couple of years. We therefore all need to redouble our efforts to ensure that the marginalization of Africa becomes truly yesterday’s story.
The African Economic Outlook 2008 provides clear evidence that commendable progress is being made and that there is basis for optimism, without in anyway underestimating the hurdles that exist. We all share the common goal of assisting in the promotion of African development. That is why, I am particularly happy to be making these introductory remarks as co-host of today’s session and certainly look forward to an enlightening and stimulating discussion of the Report and African development.
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