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Thirty-eighth session of the Commission / Conference of African Ministers of Finance, Planning and Economic Development
Draft Ministerial Statement


Abuja, 14-15 May 2005

United Nations Economic Commission for Africa (UNECA)

ISS website: http://www.iss.org.za/AF/RegOrg/uneca/finminmay05.htm
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  1. We, the African Ministers of Finance, Planning and Economic Development, gathered in Abuja 14-15 May 2005, under the auspices of the United Nations Economic Commission for Africa (ECA), recognise that strong political will, as well as bold and decisive action, is needed to establish the conditions for achieving sustained economic growth and eradicating poverty, as well as promoting sustainable development in Africa. This is especially urgent, considering that five years have passed since the Millennium Development Goals (MDGs) were launched and the target date is only ten years away.


  2. After discussion of the theme of our Conference, “Achieving the Millennium Development Goals in Africa” we reaffirm the vital importance of these goals as a framework for reducing poverty and advancing development in Africa.


  3. The global consensus in support of meeting the MDGs is highly valuable and opens new opportunities for broad collaboration to reducing poverty. We are convinced that achieving the MDGs will be a critical step on the road towards the far-reaching and sustainable development to which we aspire.


  4. We are encouraged by broad progress in some parts of our continent, and in several of our countries on individual MDGs, including progress by countries with severe resource constraints. Yet the broad picture is not satisfactory. Much faster and broader progress is needed. It is now critically important that we review both the progress we have made and the obstacles we have encountered in order to learn the lessons and become more operational.


  5. Considering a number of forthcoming high-level discussions, notably the African Union Summit in July, the UN High-Level Dialogue on Financing for Development in June , the G8 Summit in Gleneagles, Scotland, in July, as well as the General Assembly MDG review summit in September, we wish to set out some key actions we as policy makers must take to achieve the MDGs in Africa, as well as highlight critical actions that international community must take to help us meet our objectives.

    The fruits of growth must be increased and shared.


  6. It is clear that progress towards significantly reducing poverty and achieving the MDGs has been hampered by insufficient economic growth, and because the benefits of the growth achieved have not, for the most part, been shared broadly across society. Going forward, it will be important to expand growth in sectors that can generate greater employment, and to invest more intensively in sectors such as health and education that build human capacity to engage in productive economic activity.


  7. Other factors limiting growth and the spread of its fruits include weak governance, the impact of HIV/AIDS and other diseases, gender inequality, violent conflicts and inadequate capacity, as well as insufficient public investment and internal and external resource mobilization. We must therefore develop holistic and comprehensive strategies to address many challenges simultaneously.


  8. It is our firm belief that the way forward lies in accelerating broadly-shared and sustained employment-generating economic growth in the context of improved governance and strong investment in people, particularly Africa's women who have long been excluded from full economic participation in our societies. High levels of sustained growth will provide the resources and capacity for the social spending required to attack poverty directly while generating jobs required to help people improve their own situation.


  9. Consistent with the 2004 AU Summit on Employment and Poverty Alleviation in Burkina Faso, we commit to developing strategies for generating decent and productive work for men and women as well as youth in Africa, and to explicitly address employment generation issues in national poverty reduction strategies.

    Towards local ownership and more effective national poverty reduction and growth strategies.


  10. While significant progress has been registered in the past five years in the Poverty Reduction Strategy (PRS) process - notably higher investment in education and health, and better public financial and expenditure management – more work is needed to deepen national ownership and leadership. African governments must frame and operationalize poverty reduction and growth policies in line with the MDGs and must mainstream growth and employment as key objectives, as well as the strengthening of capacity at all levels concerned with implementing those policies.


  11. Poverty reduction strategies must have broader and longer-term perspectives and a deepening of ownership through meaningful stakeholder consultation, addressing gender equality, capacity and regional issues, as well as country-specific realities, with special attention to the needs of post-conflict and other fragile economies. Much has been learned through the ECA's convening of the African Learning Group on PRSs. From those consultations, it is now clear that we need to move from preoccupation with the formal PRS towards a focus on the content of growth and development strategies.

    Greater focus needed on trade, infrastructure and agriculture


  12. Poverty reduction requires growth and growth requires expanded markets and much better market access within our continent. Trade is a vital engine of growth. We wish therefore to underscore the importance for the continent, of a fair, non-discriminatory, predictable, multilateral rules-based trading system. There is also a need for significant improvement in market access, particularly in agriculture and in other export areas of interest to African countries. Within Africa, we must use the regional initiatives to open up and encourage trade in goods and services amongst member states. We call for substantial reductions and elimination of trade distorting domestic support with harmful implications for African commodity exports. It is, therefore, necessary for all WTO Members to work to ensure a successful 6 th WTO Ministerial Conference in Hong Kong in December, which will set the stage for the early conclusion of the Doha Trade Round in 2006.


  13. On our side, and to ensure the expanded market size to make the required dent on poverty, we need to think and act collectively. Whether in sectors such as transportation, or in relation to general regional public goods such as research and extension for agriculture or addressing HIV/AIDS, we need regional approaches. The regional economic communities are critical to collective action. As such, rationalizing them, harmonizing their work and enabling them to better implement programmes at sub-regional will greatly enhance efforts towards meeting the MDGs.


  14. Given the critical importance of agriculture to development, poverty reduction, and food security in Africa, the sector deserves special attention. Some 60% of the total labour force in Africa works in agriculture, providing livelihoods for 90% of people in rural areas, yet challenges such as fragmented and underdeveloped markets, lack of access to finance and land, poor infrastructure, and vulnerability to external shocks and market barriers undermine the sector. Investment in agriculture must urgently be scaled up and the NEPAD Comprehensive African Agricultural Development Programme (CAADP) supported and applied. We urge measures to promote public-private partnerships to bring resources and infrastructural development to the sector.


  15. In this regard, and in recognition that the private sector is the primary engine of growth, we resolve to work harder to create the necessary enabling environment, including the provision of peace and security, quality public institutions that promote efficiency, improvements in physical infrastructure, as well as other support in terms of facilitating the use of quality human capital and technology.


  16. Cutting across all sectors of the economy and governance, inadequate capacity has been a major constraint on progress. In this context we acknowledge the need for intensive and extensive capacity development and retention to strengthen governance and other development efforts. Efforts to draw on and benefit from the expertise of Africans in the Diaspora must be stepped up alongside work to improve skills, knowledge and experience at home. Recognizing the crucial importance of reliable statistics for gauging and monitoring progress toward the MDGs, we firmly urge the development of strong statistical capacity at both the national and regional levels.


  17. In that context, we commend the work being accomplished by the Collaborative African Budget Reform Initiative (CABRI) to build capacity in public financial management.

    Financing a “big push” for Africa


  18. Africa's economic development is in the hands of Africans and we are committed to achieving the MDGs by 2015. We therefore endorse the call made by the United Nations Secretary General's report “ In Larger Freedom ” that developing countries must draw up, by 2006, practical national strategies to meet the MDGs, assess the financial requirements and commit themselves to making the necessary public investments. Above all, we in Africa must work harder to mobilize our domestic resources to meet the Goals.


  19. We recognize, however, that in the immediate term our progress towards the MDGs must be accelerated through a significant increase in resources from outside. Our capacity to absorb aid has increased making it possible for us to make good use of additional resources . We therefore endorse the call from the Commission for Africa's report for “a big push” in financial support for Africa from the international community in line with the global commitment to meeting the MDGs, and in particular, the Commission's proposal for a major fund to develop African infrastructure.


  20. The Commission has called for the doubling of Official Development Assistance (ODA) to Africa and also proposes the creation of an International Financing Facility to provide front-loading of aid flows for enhancing predictability and planning. The United Nations Secretary General's report also proposes a substantial upscaling of aid towards the Monterrey target of 0.7 percent of developed countries' gross national income. In warmly welcoming these proposals, we call on G8 leaders to commit during the Gleneagles summit in July, to meeting their existing ODA promises, as well as to helping to accelerate progress by concretely contributing to Africa's MDG financing needs in line with these reports' recommendations. We believe that the funds should be used to fund a holistic package of support for Africa because it is clear that without simultaneous and effective action on several priority fronts, success is unlikely to be achieved.


  21. We recall our repeated emphasis in previous meetings for international action to ensure a sustainable exit from Africa's onerous debt burden. Most recently in Dakar we called for the debt impasse to be broken within the coming year, and agreed on the need for more radical action from the international community in this regard. Such action should be in line with the Commission for Africa's recommendation that debt relief should cover multilateral and bilateral debt, and reduce debt stock and debt service by up to 100 per cent. Above all, the key criteria for debt relief should be the financing needs of the MDGs and overall goal of poverty reduction. We cannot over emphasise the critical importance of such a measure to Africa's ability to be able to meet the MDGs.

    Improving aid management and mutual accountability


  22. Two years ago in Addis Ababa we looked forward to discussing at this meeting the findings of a NEPAD-commissioned report, prepared by ECA together with the OECD-DAC, on how to practically apply and monitor mutual accountability in Africa's relations with its international partners. We have reviewed the report—the Mutual Review of Development Effectiveness in the Context of NEPAD— tabled here in Abuja and believe that it provides a valuable blueprint for action that we can adopt at national level. We reaffirm our previous view that future editions of the report should appear every two years but note that there may be need for more frequent updates on progress or reviews on specific issues in response to specific requirements. We propose that, in future, the findings of APRM country studies should provide a foundation for the monitoring of performance on the African side. We call upon the OECD/DAC to collect information on future aid commitments from budgetary and other information to help enhance the predictability of aid flows to our countries.


  23. There is also a need for closer attention on the African side about ways to improve aid management. While specific conditions and challenges vary from country to country, our countries share many of the problems that arise from unpredictable and short term ODA flows, changeable partner policies and practices, and lack of flexibility in the types of aid instruments in use. With the possibility of increased flows in prospect, there is a pressing need for an African architecture or framework for aid management through which we may track, at regional level, the flow, quality and effectiveness of aid.


  24. Both Africa and her partners must meet their obligations to make mutual accountability an effective tool. Under NEPAD, African leaders have committed to implementing sound economic policies, putting in place measures of good political and economic governance, and investing in people to achieve the MDGs. We acknowledge the progress made by many African countries on accountability, adherence to constitutionalism, multi-party political systems, public financial management, and macroeconomic stability. We note particularly the strong interest as evidenced by African governments in acceding to the African Peer Review Mechanism (APRM). On the partner side, through the Monterrey Consensus , the Paris Declaration on Aid Effectiveness and other initiatives, development partners have committed to intensifying efforts for enhanced ODA in terms of quality and quantity, harmonization with national development strategies, composition, allocation and predictability. We urge them to meet those commitments.

    Fostering greater institutional coherence and effectiveness


  25. We recognize that ECA continues to play a key role in promoting the economic and social development of the continent. Now that the AU has clearly articulated a strategic programme and given its pivotal role in providing political leadership at the regional level, we look forward to enhanced collaboration between ECA and the AU.


  26. We also note that the Commission is constrained by resources given the tremendous rise in the demand for policy and economic analysis driven by the development agenda in Africa. We therefore urge member states to support ECA's efforts by generously contributing to the United Nations Trust Fund for Africa in order to help ECA to continue acting as a leading voice on Africa's development.


  27. We are grateful to the ECA for successfully convening this 38 th Conference of African Ministers of Finance, Planning, and Economic Development. We also thank the Honourable Minister of Finance of the Republic of Nigeria, Dr. Ngozi Okonjo-Iweala, for her excellent leadership during our deliberations. Finally, we wish to express our sincere gratitude to His Excellency, President Olusegun Obasanjo, and the Nigerian people for the warm hospitality accorded to us during our stay in Abuja.



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