Mr. Chairman,
Distinguished Parliamentarians,
President N'Diaye,
Honourable Ministers and Colleagues,
Ladies and Gentlemen:
1. I feel honoured that you have invited me to address this meeting in my capacity as Co-Chairman of the Global Coalition for Africa (GCA). I wish to share with you some thoughts about the nature and magnitude of the African crisis and to indicate the aspirations of the Global Coalition for promoting the processes of economic recovery and human-centred development throughout the entire continent.
CIRCUMSTANCES AND ATTITUDE
2. The mounting economic problems which confront Africa are indeed frightening. Investment, per capita income and food production are stagnant or declining in many countries while our continent as a whole faces the extraordinary task of feeding, educating and creating productive employment opportunities for a population which is increasing by about 3 percent per annum and projected to exceed one billion people twenty years from now. By that time, unless we can succeed in modifying present trends, the number of our people living in poverty-stricken circumstances is expected to exceed 200 million. Within the coming decade it is estimated that Africa will account for 30% of the poorest segment of the world's population, nearly double the present proportion.
3. Despite the numerous external debt rescheduling agreements during the past few years, and some notable forgiveness of the official indebtedness of Sub-Saharan African countries, the "debt overhang" continues to grow and the unpaid debt servicing obligations of many of our sister countries continue to accumulate. To put this in perspective the total external debt of the Sub-Saharan region reportedly increased from about US$ 6 billion in 1970 to over US$ 170 billion in 1990. Africa is the only region of the world where external debt is greater than total annual economic output. Clearly there is a relationship between the growing external debt problem and the progressive impoverishment of Africa.
4. For most African countries the overall record of economic performance was poor in the 1980s, and with but few exceptions there is little prospect for much, if any, improvement in the 1990s. This situation indicates that recovery measures will require a substantially longer time horizon than has previously been assumed. In short, we Africans are in the midst of a prolonged crisis of unprecedented severity and with intolerable potential consequences.
5. The situation is profundly challenging for those of us assembled here who manifestly care about the future of Africa and are seeking solutions to Africa's problems. But we should not allow ourselves to become too despondent or pessimistic about out abilities to meet the challenge with ultimate success. We must strive to build the substantive basis for confidence in our belief:
- that we have the collective capability to create an environment in Africa that will enable national per capita income growth to become the normal pattern rather than the exceptional case;
- that we have the capacity to launch effective population control and environmental reclamation programmes which, based on the foundation of sustainable agricultural practices, will enable us to feed our people and create the diversified economic activities necessary for employment creation and poverty reduction; and,
- that we are capable of mustering the political will and of devising the incentive system required to establish the educational and health care programmes essential for human productivity and dignity.
6. While the challenge which faces us is enormous, it is not insurmountable if met with courage and conviction. Clearly there is no alternative to the difficult task of removing the numerous impediments which stand in the way of a more productive, reliable and sustainable approach to economic development in the African context. Prositive attitudes on the part of all concerned are needed to strengthen our determination and ability to measure up to the magnitude of the challenge with which we are confronted.
7. I have become more confident during the past year that we shall prevail, in part because of recent hopeful developments on the global scene that have presented us with new opportunities. The end of the cold war provides Africa with exciting new possibilities for conflict resolution and associated reduction in military expenditures. It also opens new opportunities for improving the quality of governance and increasing the scope for more democratic political processes.
8. As Europe and North America proceed to restructure themselves into larger economic groupings, new arrangements are being atively explored for corresponding improvements in regional cooperation and economi integration in Africa. As elsewhere in the world, there is a growing recognition that our national economies must be enabled to compete more effectively in the rapidly changing global context.
9. More than thirty countries in Africa are currently engaged in carrying out major programmes of economic policy reforms, many of which have profound socio-political implications and most of which appear to be progressing remarkably well. And, it is the ordinary citizens of Africa who are increasingly taking charge of development processes as public attitudes are rapidly changing on everything from desired family size, to environmental resposibility, to market-driven incentive systems, to broader participation in government decision making.
EMERGING CONSENSUS ON REQUIREMENTS OF ECONOMIC RECOVERY
10. As I have indicated, a basic strand of the emerging consensus about the current plight of Africa is that the problems to be resolved are essentially of a long-term nature. Not only are concerted actions required by African leaders and the international community, but these action programmes must be combined with extraordinary patience and perseverance on the part of all concerned.
11. In addition to the recognition of the need for a long time horizon, the other major elements in the emerging consensus about Africa, which were agreed at the Maastricht Conference last year, are the following:
- that economic recovery cannot be initiated without restoration of growth in the productivity of both labour and capital across a broad spectrum of activities.
- that movement along the paths to recovery and growth must be conducted under responsible national political leadership rather than directed by external technical experts or ideological authorities;
- that the human dimensions of development processes, such as nutritional improvement, higher health and educational standards and increased employment opportunities, should be the primary focus of long-term national development strategies;
- that broadening of the scope for democratic participation in governmental affairs, and acceleration of the movement towards increased regional economic cooperation, are highly desirable in many national and regional contexts; and,
- that both higher domestic savings rates and substantially increased external financial inflows will be required in order to achieve even minimal economic recovery in the short term and to support a more adequate and sustainable rate of development over the longer term.
12. In addition to the emerging consensus regarding reforms required in many African countries, there also appears to be an increasingly widespread agreement on the economic policy packages that are appropriate in most instances. More speciically, it is becoming commonly accepted:
- that there are a variety of earlier policy errors or deficiencies on the part of many African governments that must now be corrected, ranging from relative neglect of agriculture to counterproductive subsidy schemes and inadequate maintenance of infrastructural facilities;
- that there is a widespread need in most of our economies for the restructuring of incentive and production systems directed towards greater competitiveness and efficiency in accordance with international norms;
- that there is a more limited role for government in the productive sector of economy than had formerly been envisaged in many of our countries; and,
- that there must be closer attention paid to the impact of policy changes, whether of an incentive revision or structural adjustment sort, upon the poorer, more poverty-stricken segments of African societies.
13. The consensus that seems to be emerging with respect to the foregoing points indicates that we African are finding it easier, than was formerly the case, to agree with representatives of the advanced industrial nations and the multilateral assistance agencies about the causes of our problems and regarding the most promising ways of dealing with them. It should be noted, furthermore, that a two-way accommodation of viewpoints and preferences is at work in bringing out the greater degree of consensus and of mutual respect for one another's opinions and motivations. This in turn gives rise to the expectation that further significant progress can now be made towards reaching a common understanding of Africa'a external assistance requirements and how these requirements might best be satisfied.
EXTERNAL RESOURCE REQUIREMENTS, INCLUDING DEBT RELIEF
14. It appears to be generally agreed that the difficult structural adjustement programmes to which many African countries are now committed are unlikely to be sustainable in the absence of adequate external funding.
Moreover it si widely recognized that those governments which are currently being urged to initiate necessary adjustement programmes will face greater political resistance at the outset. They would also face more severe economic difficulty later on, if the requisite external funding cannot be assured "up front". Furthermore, given the increasing awareness that the structural adjustements required for sustainable development will take longer than previously assumed, it is now realised that the need for substantially augmented amounts of external financing will continue for some time.
15. There also appears to be developing an increased appreciation of the dangers of underestimating the substantial amounts of external transfers that will be required to get the job done because to do so would heighten the risks of programme failure and associated resource wastage.
At the same time there is evidence of greater realism about the practical necessity for combining external financing from official sources with greater reliance on attraction of private foreign investment to Africa. Consequently, adjustement programmes are being designed to encourage such foreign investment to a substantially greater degree than was characteristic of African development plans in the past.
16. The evident need for increased external resources transfers to support African recovery and development is directly related to Africa's external debt problem. If newly-available external resources are required to be employed for the servicing of past external borrowing (some of which was ill-advised), these resources cannot contribute to the realisation of Africa's future economic and social development requirements.
Furthermore, heavy external debt servicing burdens discourage both national supporters of reform and potential foreign investors by significantly limiting possibilities for successful adjustement programmes.
17. Reduction of African external debt service obligations would serve to augment resources available for new investment and productive capacity, and in most instances could reasonably be expected to be used for these purposes. External debt reduction, therefore, is recognised as one of the most cost-effective forms of external resource transfer to some, if not all, of the heavily indebted African countries. This form of external resources transfer clearly must constitute an important element of any serious internationally-supported effort to assist Africa.
18. Since a high proportion of Africa's external debt (especially for the lowest income countries) is owed to governments and multilateral institutions rather than to private lenders, these official creditors are confronted with both a major challenge and a major opportunity to demonstrate their commitment to relieving the Sub-Saharan African development crisis. In other words, there appears to be high potential for direct political solutions to the xtenal debt problems of many African countries.
19. There may also be innovative ways of linking debt forgiveness, with respect to official or private claims on African Governments, to various sorts of environmental protection or reclamation programmes. Such possibilities are illustrated by the recent examples of Poland and certain Latin American countries. I anticipate that these and other more technical aspects of the African external debt problem will be explored in the subsequent sessions of this roundtable by the experts assembled here.
CONDITIONALITY REQUIREMENTS, INCLUDING DEMOCRATISATION
20. The extreme difficulties which confront several African countries put them in desperate need for external financing. They appear to encourage international financiers to heightentheir demands on actual or potential recipients of supplemental external resources. The increased emphasis on broad policy-based conditionality for development assistance stems from the international consensus that misguised economic policies and management procedures in the recipient countries have been a major cause of Africa's problems.
The view of external donors and lenders appears to be that African governments require not only more and better policy advice but also heightened pressure to adopt more effective systems for policy implementation.
21. While external donors and lenders attribute the "new conditionality" to the increased evidence of the need for policy reforms in the recipient African countries, Those African leaders most directly responsible for their countries' development programmes have understandably sometimes seen certain of the more intrusive aspects of conditionality as reflective of either:
- an altered international development ideology propounded by certain political leaders in the more advanced industrial countries to legitimise intrusion of externally generated preferences and value judgements into domestic economic policy formulation by less developed African countries; or,
- an opportunistic move by the IMF and the World Bank Technicians and their bilateral agency counterparts to take advantage of the weak negotiating position of the African countries to extract concessions from local policy makers more consistent with the viewpoints and priorities of the leadership of the assistence agencies.
22. We now seem to be witnessing in Africa the beginnings of a further extensionof the conditionality concept into the area of "governance", which evidently includes appraisals by external judges of the extent to which African national political systems measure up to some abstract or comparative norms. The relationship between external debt relief, continental economic recovery and national political democracy is scheduled to be explored during this conference. I look forward to what, doubtless, will be a lively and informative discussion of the relevant issues.
23. In anticipation of that discussion perhaps it would not be inappropriate for me to take this opportunity to express very briefly several points that I believe should figure into our deliberations regarding these matters.First, we should be circumspect about any suggestion that there is a simple, predictable connection between the character of African political systems and the quality of appropriateness of national economic policies. Second, we should frankly admit that African governments and the agents of external assistance programmes both need to make substantially greater efforts to prevent furhter discrediting of foreign aid for the whole continent.
The shadow of misunderstanding, if not mistrust, that has already been cast by some past behaviour is a serious impediment to the achievement of what now must be done by way of international and regional cooperation to get Africa back onto a path of sustainable , human-centred development.
24. It is arguable whether or not the quality of national governance, or the degree of political democracy, should form part of discussions of economic policy and international relations. But whatever the outcome of that argument it should be clearly understood that it is for the peoples of Africa to choose and to secure the political systems they want. The peoples' determination in this regard will, however, necessarily be influenced over time by the international reputation of their country's political system and by the impact of this reputation, for better or for worse, on the international goodwill, cooperation and support available to their respective countries.
THE GLOBAL COALITION FOR AFRICA
25. Mr. Chairman, allow me now to make a few comments on the Global Coalition for Africa. As you may know, the Maastricht Conference to which I referred earlier proposed the stablishment of this initiative, and this proposal was endorsed by the OAU Heads of State in July, 1990. The GCA is intended to serve as a forum where a better understanding of the African case can be achieved within the broadened international community with which we must find better ways to work in partnership.
26. Through the instrumentality of the GCA we Africans and our international partners will strive to ensure:
- that Africa remains at the forefront of international development assistance priorities;
- that African development strategies and policies are correctly tailored to the circumstances; and,
- that the flow of financial resources and technical assistance to Africa are adequate.
We believethat the GCA can contribute to the establishment of the "enabling environment" required for renewed growth and hope that our northern hemisphere partners will also be induced to take the necessary steps to improve the quantitative and qualitative dimensions of their assistance programmes and to increase their private investments and related technology transfers into African economies.
27. There is an African proverb which says "slowly, slowly the egg grows its feet". Since the passage of the OAU resolution the GCA embryo has been doing just that by means of a continuing series of consultations with both the African and Northern participants in this unique partnership that is now virtually ready to find its feet and to begin using them to move quickly and effectively in the race against time. I am pleased to draw your attention to the presence with us today of the other Co-Chairman of the GCA, Mr. Robert McNamara, and also the Executive Secretary of the GCA, Mr. Boubakar Diaby-Ouattara. I am also pleased to report that the first meeting of the ministerial level Advisory Committee of the Global Coalition will take place in Paris on September 11 and 12, 1991 at the kind invitation of President Mitterand.
28. On closing, let me assure that we Africans have no intention of standing idly by while the often predicted "marginalization" of our part of the world occurs. On the contrary, we shall insist in every possible way that Africa is, and must continue to be, a critically important part of the increasingly inter-dependent world order. The problems we have, and the solutions we seek, must be recognised without question as global concerns. And the coalition we are seeking to forge with the more advanced countries should be seen to be a search for a broader and deeper wisdom about what needs to be done both within Africa and on Africa's behalf in the larger international arena. By working together the GCA North-South partnership can demonstrate that for Africa, the dreams of our future potential are much more powerful than memories of our past failure; and that our hopes must ultimately triumph over our disappointments.
The winds of change are blowing strongly throughout Africa, and we intend to harness them for powering of our developmental efforts to fruition.
29. Mr. Chairman, I commend the distinguished Parliamentarians for convening this important meeting and also the President of the African Development Bank, Mr. Babacar N'Diaye, for so kindly acting as our host. The Global Coalition for Africa will spare no effort in working closely with the Parliamentarians for Global Action and with the African Development Bank in promoting improvement in the welfare of the African continent.
30. Mr. Chairman, Ladies and Gentlemen, I thank you for your kind attention.
