Interesting person from Mali:
Alpha Oumar Konaréhttp://fr.wikipedia.org/wiki/Alpha_Oumar_Konar%C3%A9
Alpha Oumar Konaré (born 2 February 1946) was the President of Mali for two five-year terms (1992 to 2002), and was Chairperson of the African Union Commission from 2003 to 2008.
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http://www.dfa.gov.za/docs/speeches/2006/konare0624.htm
Address by Prof. Alpha Oumar Konare, Chairperson of the African Union Commission, at the University of South Africa (UNISA), Pretoria, 24 June 2006Your Excellency, President Mbeki,
Honorable Members of the Cabinet,
Excellencies, Representatives of the Diplomatic Corps,
Governor of the Reserve Bank,
Distinguished Guests,
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.
2. 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.
6. 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.
9. 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 and Japanese.
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.
12. To 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.
13. 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.
14. African 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.
16. 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.
20. Cognisant 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 this thinking.
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.
22. African 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.
23. 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.
26. African 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 market.
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 critically important.
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 developed world.
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.
36. 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.
37. 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.
38. 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.
39. 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.
41. 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.
43. 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.
50. 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.
53. 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.
55. 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 projects.
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
60. 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 challenges together.
63. Thank you and God bless. May our dream of a strong Africa become reality! Long live our new Africa.
