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Africans need to see the benefits of the extractive sector, Report Says

admin — Mon, 03 Jun 2013 16:11:17 +0000

Addis Ababa, 28 May 2013 (ECA) – Africa’s natural resources could dramatically improve the lives of millions – but while natural resources may have fuelled a decade of rapid economic growth on the continent, most Africans have still not seen the benefits, according to this year’s Africa Progress Report presented to African leaders and policy-makers during the AU summit in Addis Ababa, Ethiopia.

A panel session on the recently launched 2013 Africa Progress Report said African policy makers have critical choices to make: they can either invest their natural resource revenue in people to generate jobs and opportunities for millions in present and future generations. Or they can squander this opportunity, allowing jobless growth and inequality to take root.

“It is very important that this self-confidence that we are seeing emerging is going to be put to good use,” said Carlos Lopes, Executive Secretary, UN Economic Commission for Africa (ECA). “And in order for it to be put to good use, we need very concrete rather than rhetorical questions to be addressed – and I think that is where the report becomes very timely not only because it can influence the G8 discussions, but also because it can influence the African discussions, including the shaping the agenda of 2063 which is the agenda that now the AU has put in front of us.”

He noted that Africa’s leaders have adopted the Africa Mining Vision to try and clean up the industry and that an ongoing study by the ECA on illicit financial flows out of Africa shows the need for transparency and accountability. “It is a two-way street -we have to improve across the board,” he said.

President Johnson-Sirleaf, whose country Liberia exports iron and diamonds, said the ‘resource rich vs poor human condition’ paradox has long been exemplified by her country but that this changing. “Our experience in Liberia shows that we need to go an extra mile to improve extraction process audits,” she said.

“Africa, like the rest of the world, is suffering tremendous losses from the illicit and unwarranted outflow of wealth through tax avoidance, shell companies, tax havens, transfer pricing and others, that in a way leads them to avoid their fair share of taxes,” said Johnson-Sirleaf.

“This report shows very clearly that such outflows exceed the total amount of development assistance which the African continent receives ever year. This problem can only be resolved if all nations can work together, and the ball is in the court of our partners to close tax loopholes in the extractive sector,” she said.

International tax avoidance and evasion, corruption, and weak governance represent major challenges. The report therefore welcomes the commitment from the current G8 presidency, the United Kingdom, and other governments to put tax and transparency at the heart of this year’s dialogue. International tax avoidance and evasion, corruption, and weak governance represent major challenges. The report therefore welcomes the commitment from the current G8 presidency, the United Kingdom, and other governments to put tax and transparency at the heart of this year’s dialogue.

“This year we’ve seen enormous impact, and enormous interest from a wide range of people, it’s incredible,” says Caroline Kende-Robb, the Africa Progress Panel’s Executive Director. “But I think it’s because it’s a global issue, and people care: people care that resources are not being made use of to the best that they should be; they care that in Africa, human development outcomes should be much better, considering the amount of wealth that’s in Africa. And it can be done; many African countries are making good use of the wealth from natural resources. But this issue of tax avoidance, tax evasion, it affects people in Africa but it affects people in Europe and it affects people in the United States, so we see almost a global movement linked to the issues that we’ve raised in this report this year.”

According to estimates, Africa holds 30% of the world’s mineral reserves, and its economies are growing faster than any other region of the world except for East Asia – growth in Sub-Saharan Africa has remained robust at over 5% per year for the past ten years.

But the report also suggests that Africa needs to better manage its vast natural resource wealth to improve the lives of the region’s people by setting out bold national agendas for strengthening transparency and accountability.

Civil Society representative, Yao Graham from the Third World Network said Africa should focus on adding value to its commodities as it would be more beneficial. “Adding value reduces resource intensification, which is less burdensome on the environment and communities living in mining regions. He also said that public institutions in charge of regulations need to reverse their tardy responses to the community complaints resulting from mining. Managing impact could also help to change perceptions.

Some oil companies are also increasingly aiming to adhere to industry “best practice” standards, which include mitigating the environmental impact of their activity and investing in social projects to improve living standards in areas where they operate.

The session panelists included Executive Director of the Africa Progress Panel, Caroline Kende-Robb, the head of the UN Economic Commission for Africa, Carlos Lopes, Liberian President Ellen Johnson-Sirleaf and the head of Third World Network-Africa, Yao Graham.

Note to editors:
Chaired by Kofi Annan, former Secretary-General of the United Nations, the ten-member Africa Progress Panel advocates at the highest levels for equitable and sustainable development in Africa. The Panel releases its flagship publication, the Africa Progress Report, every year in May.

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African Union Conference of Ministers of Economy and Finance and Conference of African Ministers of Finance, Planning and Economic Development of the Economic Commission for Africa

admin — Tue, 19 Mar 2013 14:59:06 +0000

Please click here for all information regarding the upcoming ECA event.

Heads of ECA, AUC and AfDB reaffirm commitment to Africa’s socio-economic transformation

admin — Tue, 15 Jan 2013 18:51:00 +0000

Addis Ababa, 14 January 2013 (ECA) – The Executive Secretary of the United Nations Economic Commission for Africa, Carlos Lopes, the Chairperson of the African Union Commission, Nkosazana Dlamini Zuma and the President of the African Development Bank, Donald Kaberuka, met in Addis Ababa, Ethiopia on January 11 and 12, 2013 to discuss the challenges, opportunities and priorities facing Africa over the next 50 years, and how best to coordinate efforts in supporting the continent’s socio-economic transformation. The meeting concluded with a joint communiqué that seeks to strengthen their commitment to support the vision of Africa’s leaders to transform the continent over the next 50 years.

The meeting took place against the background of ongoing preparations towards the May 2012 commemoration of the 50^th Anniversary of the Organization for African Unity – now transformed into the African Union. Through their respective comparative advantage and their distinct roles and responsibilities, the tripartite partnership reaffirmed their commitment to support the vision of Africa’s leaders “to transform the continent over the next 50 years and collaborate closely with Regional Economic Communities and other partners to foster the agenda of an integrated and prosperous continent,” according to the communiqué.

They stated the need to reaffirm the spirit of Pan Africanism and African solidarity that inspired the political evolution of the continent in the last 50 years, which they underscored as “now critical for realizing Africa’s socio-economic transformation.”

The meeting noted that key challenges, opportunities and priorities face Africa; and that much progress has been made in several areas, including peace and security, good governance, economic growth, regional integration and attracting investments.

While acknowledging the progress made, they stressed that Africa’s economic growth needs to focus on equity, inclusiveness, the preservation of natural capital and creation of decent jobs, especially for the youth and women.

Furthermore, despite the continent’s resilience in the face of the recent global financial and economic crises, further action with all relevant stakeholders to enhance Africa’s economic independence, reduce vulnerability and diversify its relations within the global economy was needed.

“We firmly believe the time is ripe for a paradigm shift and a change in mindset towards realizing the vision of a continent that is integrated, prosperous and peaceful, and a dynamic force in the global arena,” states the communiqué.

They emphasized that Africa’s challenge is economic transformation, “whose agenda should be led by Africans.” Towards this objective, the three heads committed to “explore all avenues for mobilizing sources of finance, including tapping into Africa’s own resources and global financial opportunities.”

While acknowledging that external partners have contributed to Africa’s progress through instruments such as the African Development Fund (ADF) and to which they will remain committed, the three heads agreed to actively explore Africa’s participation in these financial mechanisms.

They concluded with an agreement “to engage with Africa’s leaders and peoples in articulating and preparing such an African led transformation agenda for the next 50 years.” In this regard, the three institutions will pursue the issue further in the upcoming African Union meetings and through consultations with Regional Economic Communities, Partners and other stakeholders with a view “to realize the vision of the African Renaissance.”

ECA urges African countries to transform their economies

admin — Mon, 14 Jan 2013 17:00:17 +0000

Addis Ababa, 6 December 2012 (ECA) – At a one-day event on the theme Accelerating Industrialization for Boosting intra-African Trade at the headquarters of the African Union this week, the Deputy Executive Secretary of the Economic Commission for Africa (ECA), Mr. Abdalla Hamdok, urged African countries to transform the structure of their economies to effectively address development challenges.

In a statement delivered to representatives from international organizations and African governments, Mr. Hamdok said that the renewed focus on industrialization of African economies comes against the backdrop of relatively good economic growth performance over the past decade. However, “it has been driven mostly by non-renewable natural resources and high commodity prices, indicating that the current pattern of growth may not be sustainable.”

He also noted that de-industrialization has been a key feature of Africa’s recent growth experience, and that the share of manufacturing in Africa’s gross domestic product fell from 15 percent in 1990 to 10 percent in 2008.

“Furthermore, Africa’s recent growth has gone hand-in-hand with an increase in unemployment, which is not surprising, given that natural resources account for about 25 percent of Africa’s recent GDP growth but only 1 percent of employment,” he said.

He underscored the need for ‘deliberate and concerted government measures’ to promote industrial development in Africa through industrial policy, and said: “African governments should seize the opportunity created by this changing perspective on the role of the state to promote industrial development through industrial policy.”

“In doing so, however, it is important that the new industrial policy be designed in consultation with the private sector and also reflect the well-known fact that performance targets are required to compel domestic firms receiving state support to do what is expected of them,” he added.

He also underscored the importance of intra-African trade in promoting industrialization in Africa. By focusing on the regional market, domestic firms can exploit economies of scale and improve on their competitiveness, thereby promoting manufacturing development.”

Citing ECA’s research on intra-Africa trade, he said that exports are more diversified towards manufacturing than Africa’s extra-regional exports. “In particular, manufacturing accounts for about 40 percent of intra-African exports compared to less than 20 percent for Africa’s extra-regional exports,” said Hamdok.

Calling on governments to address the demand and supply side constraints in order to boost intra-African trade, Hamdok said that while border measures are important, “they will have no significant impact on intra-African trade if there is no deliberate effort to build productive capacity, particularly in agro-processing and manufacturing.”

Mr. Hamdok concluded by reiterating some key messages from the October 2012 African Development Forum held on the theme, Governing natural resources for Africa’s development and said, “transparency in the management and use of mineral resource wealth, and more involvement of local stakeholders in negotiations with development partners active in the extractive sector, will go a long way towards creating an incentive for better management and use of mineral-resource wealth to promote industrial development in Africa”.

Participants also heard a key message from UN Secretary-General, Ban Ki-moon which stressed that by working together to accelerate Africa’s industrialization and boost intra-African trade, we can ensure a more prosperous and sustainable future for all the continent’s people.

The event featured an exhibition of manufactured products such as Ethiopia’s textile and leather industry. Also present at the occasion were Ethiopia’s State Minister for Industry, Mr. Tadesse Haile, representatives from the African Union Commission, UNIDO and the European Union.

The event was organized by the African Union Commission, UNIDO and the ECA to commemorate Africa Industrialization Day, which is celebrated annually on 20 November.

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