Chairman of the Board of Governors of AfDB;
Your Excellencies;
President Alassane Ouattara of the Republic of Cote d’Ivoire;
Former President Festus Mogae of Botswana;
Dr. Donald Kaberuka, President of African Development Bank;
Honourable Governors and Executive Directors;
Dr. Omar Kabbaj, Former President of the ADB;
Representative of His Majesty Mohammed VI, King of Morocco;
Excellencies Ambassadors;
Dear Partners and Friends;
Distinguished Guests;
Ladies and Gentlemen:
It
gives me great pleasure on behalf of the Government and the people of
Tanzania and on my own behalf to welcome you all to our country and to
Arusha in particular. Arusha is the hub of the northern tourist circuit
of Tanzania. All the world renowned game parks and the Mount
Kilimanjaro are only a stone throw away. Zanzibar is not too far away
either. I hope you will spare time at the end of the meeting to visit
them and cool-down after the intense discussions.
We in Tanzania feel greatly honoured and privileged to host the 47th Annual Meeting of the Board of Governors of the African Development Bank and the 38th Meeting
of the African Development Fund. This is the first time for Tanzania
to host the Annual Meetings of the AfDB. I thank you Dr. Donald
Kaberuka, President of the AfDB and the entire Board of Governors of the
Bank for bestowing Tanzania with this rare honour.
I
commend you President Kaberuka and the organizers for a job very well
done of organizing this meeting. I applaud you for choosing a very
opportune theme for this year’s Annual Meetings. To me, the theme "Africa and the emerging global landscape: challenges and opportunities" captures well the current discourse on which Africa’s progress and aspiration are anchored.
Global Economic Situation
Mr. Chairman;
We
are meeting against the backdrop of the second wave of the global
economic crisis. During the first wave, four years ago, the world
witnessed unprecedented upheavals including the financial meltdown, high
food and oil prices and ultimately the economic slowdown. According
to IMF data, world economic growth declined from 5.4 percent in 2007 to -0.6 percent in 2009 before recovering to 3.9 percent in 2010.
The decline in the developed countries was from 2.8 percent in 2007 to -3.6 percent in 2009 before recovering modestly to 1.6 percent in 2012. In Africa, growth declined from 7.1 percent in 2007 to 2.8 percent in 2009 and recovered to 5.3 percent in 2010. As you see developed economies were more affected than African economies, but that does not make us better off.
During
the first wave of the global economic crisis, African economies were
able to ride the storm partly because our financial markets were not
fully integrated into the international financial system. Also, because
of stronger fiscal and external balances resulting from rapid growth,
fiscal consolidation and the build up of foreign exchange reserves in
the previous decade. I cannot predict what the situation would be in the
ongoing second wave.
I
say so because currently, our economies are not as strong as they were
during the first crisis. We are now faced with the daunting challenge of
sustaining the pace of growth in the midst of the uncertainties
presented by the current global economic situation. The process of
recovery of the global economy is happening at a slower pace than
expected. Moreover, the ongoing sovereign debt crisis in Europe and its
threat to the stability of the euro amplifies the uncertainty and risks
in the capital and commodity markets worldwide.
Ladies and Gentlemen;
In
many of our countries in Africa, we now have to contend with
inflationary pressures caused by high prices of food and fuel. At the
same time, we are witnessing declines in markets for our traditional
exports and in prices for our commodity. There is also, decline in
investment inflows and development assistance. Unemployment is on the
rise and so are the challenges and dangers associated with it.
All
these developments are impacting negatively on our efforts to promote
growth and eradicate poverty in our countries and erase it from the face
of our dear continent. The achievements made in the social sectors are
being seriously threatened with reversals. It is now evident that
many African countries may not be able to achieve most of the MDG
targets come 2015. These worrisome developments are causes of great
concern to us. I hope this meeting of the best minds on this continent
will reflect on this situation and advise accordingly.
Ladies and Gentlemen;
Despite
the odds, Africa needs to continue to embrace the sound economic
policies which engendered the progress being witnessed today. We must
strive to maintain macro-economic stability and sustain it through
tackling high budget and overall external deficits. We must, also, work
tirelessly to reduce the high levels of inflation obtaining in many of
our economies. I know it is not easy but we must do whatever we can to
keep inflation at single digit. It is in the best interest of our
nations and people.
I
see regional integration, as a unique vehicle to assist Africa continue
to build its capacities for self reliance and resilience against the
uncertainties presented by the current crisis facing the global
economy. Through regional economic integration arrangements
intra-African trade will increase, thus presenting additional and
alternative markets for our goods. When we trade more amongst ourselves
the consequences of loss of markets in developed economies may be
minimised.
The
truth of the matter is, there are times when we worry about
international markets for our commodities while there is a huge market
in next door country. At times, also, we import goods from afar while a
neighbouring country has them in abundance. This happens because our
markets are not integrated. But, with regional integration and
cooperation between different regional economic groupings trade can be
facilitated and increased.
Ladies and Gentlemen;
May
I use this opportunity to appeal to the AfDB to increase its support to
regional integration endeavours on the continent. The Bank should
continue and increase its support infrastructure development in Africa.
I know you are doing a commendable job in this regard, but much more
needs to be done. We need to increase connectivity in Africa to
facilitate growth in intra-African trade. In this regard, we need more
roads, railways, ports, airports and ICT to open up and increase market
access in Africa. These are heavy capital investment undertaking which
many of countries alone cannot afford.
Opportunities
Ladies and Gentlemen,
Besides
regional integration there are opportunities for alternative markets
and sources of investment from the emerging economies of China, India,
Russia, Brazil and South Africa. These provide Africa with
opportunities for increased trade and investment. In recent years,
African countries have witnessed a significant increase in trade,
foreign direct investment and development assistance from these
countries.
These
countries have greatly expanded their engagement with Africa, an
engagement which is broadening the options for growth and presents real
opportunities for the development of Africa. Such engagement has
enabled Africa to increase its share of global trade, FDI inflows and
aid. For example, trade with China alone rose more than ten times from USD 10.59 billion in2000 to 126.9 billion in 2010.
Within Africa, trade between our countries has increased remarkably. For example total intra-EAC trade increased from USD 2.2 billion in 2005 to USD 4.1 billion in 2010, an increase of86 percent; and foreign direct investment increased from USD 688 million in 2000 to USD 1.7 billion in 2010. These
are but a few examples of the existing alternative opportunities which
if well exploited could steer African development to greater heights.
Ladies and Gentlemen;
I have no doubt in my mind that Africa is poised to become the world’s new economic power house for the 21st century.
With its endowment in both natural and human resources, the pursuit of
sound economic policies, and with democracy, good governance, respect
for rule of law and human rights being entrenched nothing will stop
Africa from getting there.
Currently, 11 of world’s 20 fastest
economies are in Africa. The IMF projects that over the next decade
six of world’s fastest growing economies will be in Africa. Also eleven
African countries, rank among the top ten sources for at least one major mineral in the world. Africa has 10 percent of the world’s reserves of oil, 50 percent of gold, 98 percent of chromium, 90 percent of the world’s cobalt and platinum group of metals, 70 percent of tantaline, 64 percent of manganese and one third of the world’s uranium.
Fortunately,
this huge potential has not yet been fully harnessed and utilized.
Even the little that has been extracted much of it is being exported
raw. With the current awakening and the drive to stop being perpetual
exporters of primary products and become exporters of processed or semi
processed goods, things should work well for us. When that is done
Africa’s contribution to the world economy will definitely be quite
significant.
World’s Bread Basket
Ladies and Gentlemen;
Africa has 60 percent of
the world’s uncultivated arable land. With relatively abundant water
resources for irrigation and permissive climate for agriculture, Africa
has the potential of becoming the granary of this planet. In this
regard, what is required of us is to modernize our agriculture.
Transform it from its current state of being predominantly peasant,
traditional, backward, less productive and subsistent to a modern,
highly productive and commercial agriculture.
This
requires increased investments by our governments, development partners
and private sector in mechanization, irrigation, availability and the
use of high yielding seeds, fertilizers, herbicides and pesticides.
There is also need to increase extension services so as to impart skills
to the peasant farmers, provide them with financial services and
improve crop market and rural infrastructure.
If
these things are done, Africa can feed itself and the world while at
the same time lifting millions of people out of poverty through
increased production and incomes. The African Development Bank has a
very important role to play now and in future. I know you are doing it
but I would like to implore you to increase more funding for the
development of agriculture in Africa.
Ladies and Gentlemen;
As
you all know, the biggest obstacle to effective utilisation of Africa’s
potential and overall growth is poor infrastructure. Today, Africa’s
physical infrastructure remains highly under developed in the 50 years
of its Independence. For Africa to be able to fully exploit its
potential and promote intra-regional trade, it has to develop efficient
connectivity in terms of roads, railways, ports, air transport and
waterways.
Africa
also has to ensure reliable availability of electricity. Fortunately,
there are plenty of energy resources including hydro, natural gas, coal,
oil, uranium, solar and wind. Unfortunately, all these require heavy
capital investments, which African governments alone cannot provide.
Financial institutions like AfDB and others have an important role to
play to fill the gap.
Industrialization
Ladies and Gentlemen;
As
alluded to earlier, African countries cannot continue to depend on
export of raw material whose prices are volatile. This price volatility
leads to low and unstable export earnings. Hence, value addition
through industrial processing is a key strategy that Africa must
implement. Many African countries are endowed with natural resources
and agricultural products that can be used as raw materials in domestic
manufacturing and processing industries.
Africa
can also take advantage of its low labour costs to attract industries
that are relocating from high production cost countries. Development of
SME which are generally low capital enterprises holds key potential for
Africa.
Mr. Chairman;
Human
resource development is another important factor for sustaining
economic growth, human development and empowerment of people. I know
there has been notable progress made particularly with regard to
education and training. But, compared to progress made in other
continents Africa lags too far behind. We have to catch up with the
others. Therefore, we need to invest more especially in science
education at all levels so that our countries leverage science and
technology for Africa’s development. But we also need to increase
investment in vocational training and skills enhancement.
Since
ICT is a critical element that can help to enhance production and
service delivery in various sectors, Africa must properly anchor ICT in
its development strategy. AFDB’s support in promoting science education
in Africa is highly appreciated. However, we beseech you to continue
supporting Africa and increase resources for that purpose for
development of ICT infrastructure.
Excellencies;
Ladies and Gentlemen;
Africa
has great potential in the field of tourism. Indeed, tourism is
already one of the leading foreign exchange earners and job creators.
This is one sector which presents a huge potential for growth in
future. Currently, Africa’s share of world tourism is marginal.
Statistics show that in 2010, out of 940 million tourists in the world only 49 million came
to Africa. Reasons are not far to find. Africa is least served with
air flights of all continents. Again air fares to Africa are much
higher than for similar distance in Europe, America, and Asia.
In
our countries the tourist infrastructure such as hotels, transport,
airlines, airports, sea vessels, tourist trains etc are less developed.
We need to invest more in the development of this sector because its
potential is huge. Africa has unique tourist attractions. If our
countries can be assisted in the development of the requisite
infrastructure this potential can readily be harnessed. With its high
multiplier effect in the economy this sector deserves special attention
by government and financial institutions like the AfDB.
Potential Future Role of the AfDB
Mr. Chairman,
AfDB
has been Africa’s dependable partner in development since its
establishment in 1964. We can attest with confidence that the Bank has
played a dynamic role in promoting Africa’s development agenda. The Bank
has a deep knowledge of the continent and necessary passion for
Africa’s development. The Bank has made tremendous contribution towards
promoting Africa’s growth in this regard. I still believe the Bank can
do more, and has to do more, now and in future to advance Africa’s
development agenda. My expectation is not farfetched; it is based on the
AfDB track record over the many years.
I
am glad that this meeting coincides with the formulation of the AfDB
new ten years Long Term Strategy 2013-2022 that will replace its current
Medium Term Strategy for 2008-2012. I find it befitting to seize this
opportunity to put forward three proposals for consideration:
a. The
financing gap to upgrade and advance Africa’s infrastructure has to be
addressed. Inadequate and poor infrastructure is a major constraint to
Africa’s development. If successfully addressed, Africa’s pace of
growth and development will be enhanced tremendously. Failure to do so
will make our economies to remain weak and vulnerable. I am pitching for
infrastructure because the quality of infrastructure is a major factor
in determining an economy’s competitiveness and prospects for growth.
Unfortunately the situation in Africa is not that good.
Let me share with you some of the statistics which speak volumes about
the situation. These are statistics for the last three years which up
to now shows no significant change has happened. In electricity,
Africa’s average access to electricity is only 25 percent and the World Bank estimates that by 2020 about 60 percent of our continent will still be without power. Per capita consumption of electricity is 62 kilowatts while that of the United States is 12,343 kilowatts. Africa’s road density is 7 km per 100sq.km and only 12 – 17 percent is paved. About 80 percent of the unpaved roads are accessible seasonally.
Africa needs financial and technical support to upgrade and advance its
infrastructure. I know, as mentioned earlier, the AfDB is doing a lot
in this regard, and I can personally attest with regard to the support
extended to our country. However, a lot more needs to be done in view
of the prevailing situation in Africa. We welcome more support from
bilateral and multilateral donors as well as private sector partners.
b. Regarding
agriculture, I believe the Bank can play an important role in helping
African countries to transform their agriculture. Many African countries
have prepared their national agriculture investment plans which are in
line with AU’s CAADP. What is needed in this regard is additional
financial resources to enable them implement these plans. I am
confident that the Bank will stand ready to continue to assist African
governments and the private sector engaged in agriculture.
c. The
AFDB can also play a key role in industrialization in Africa, through
supporting growth of manufacturing and Small and Medium Enterprises
(SMEs) and the private sector. Africa has a huge potential of
developing a vibrant industrial sector, because of its huge raw material
base and improved investment environment. SMEs, if developed can play
an important role in this endeavour. These will ease unemployment
problem by creating jobs for the youth and fastest growing segments of
the poor and unemployed in urban areas. What is required is financial,
technical and technological support mechanisms to governments and
entrepreneurs in Africa to invest in manufacturing.
Conclusion
Mr. President;
Ladies and Gentlemen;
The
AfDB under the able and exemplary leadership of President Kaberuka,
with the guidance of the Board of Governors has been doing a wonderful
job. The Bank has made a huge difference in promoting Africa’s
development. I am sure the Bank will do much more to meet our
expectations and effectively rise to the many challenges. But to do so
the Bank needs the continued support of all of us. At this juncture, I
would like to thank the Bank Shareholders for supporting the Bank
through the many years. Let us continue to do so now and in future.
Let us continue to facilitate the Bank so as to enable to fulfil its
vision and mission of supporting of Africa’s development endeavour.
Tanzania promises to play its part.
Before
I conclude, let me add a word of appreciation to the Bank and the
Government of Denmark for the establishment of African Guarantee Fund to
support young people in business. I welcome the initiative because
unemployment is a growing challenge in all our countries. I hope many
more donors will join hands with AfDB and government of Denmark to
increase resources to this Fund. In the same vein, I welcome the
establishment of the Aquans Fun of Funds for agriculture value
addition. Its important cannot be overemphasized.
I
wish you fruitful deliberations and we look forward with great
anticipation to the outcome of your meeting. After those many words, I
hereby declare open the 47th Annual Meeting of the Boards of Governors of the African Development Bank and the 38th Meeting of the African Development Fund.
Thank you for your kind attention.
No comments:
Post a Comment