Address by Deputy Minister Aziz Pahad to the Southern African Enterprise Network at the Sandton Civic Centre on 18 July 2001

Chairperson,

Chairman of the Black Business Council

Distinguished Delegates

Sponsors

I wish to thank the Southern African Enterprise Network for giving me an opportunity to exchange some views with you on Africa’s vision of the "African Renewal".

The Secretary General of the United Nations, Kofi Annan recently, noted : "The time is long past when anyone could claim ignorance about what was happening in Africa, or what was needed to achieve progress. The time is also past wen the responsibilities for producing change could be shifted onto other shoulders. It is a responsibility we must all face".

SAEN’s 3rd annual conference with the theme "Financing and Financing Options: Innovating for Africa’s "New Generation Entrepreneurs" is an important response to the Secretary-General’s challenge.

As we gather in Sandton we are acutely conscious of the fact that the technological revolution and information highway ensures that we are constantly bombarded with reports of African conflicts, brutality, underdevelopment and famine. The Afro-sceptics and Afro-pessimists have been reinforced in their conviction that nothing good can come out of Africa.

An editorial in the Washington Post, last year, noted :

"Africa’s apparent hopelessness is now so widely accepted that it is in danger of becoming a self-fulfilling prophecy".

Tonight I am happy to say that the rabid Afro-pessism of the last few years is on the retreat.

Today a fresh wind of confidence and optimism is blowing in our continent. "There exists within our continent a generation which has been victim to all things which created the negative past; this generation remains African and carries with it a historic pride which compels it to seek a place for Africans equal to all other peoples of our common universe …. I believe that the new African generations have learned and are learning from the experience of the past. I further believe that they are unwilling to continue to repeat the wrongs that have occurred". (President Mbeki)

We seek an African renewal acutely conscious that Africa is faced with the stark reality that despite our enormous riches and potential, the greatest number of least developed countries are found in Africa (33 out of 48).

According to latest UN statistics, of the 5 sub-regions in Africa, only 2 accounting for only 25% of the Continent’s population enjoyed a positive growth performance. Growth decelerated in the remaining 3 sub-regions negatively impacting on 75% of Africa’s population.

Africa has lost half its share of the world markets since 1970 – equal to $70 billion a year.

Many of our countries are saddled with severe debt problems. Outstanding external debts in many African countries exceed entire GDP and debt service requirements exceed 25 per cent of their total export earnings.

Official development assistance has declined by almost a 1/5th in real terms since 1992.

Africa has failed to attract substantive Foreign Direct Investment. Although many African countries have taken measures to create a climate conducive to Foreign Direct Investment, which includes trade liberalisation, the strengthening of the rule of law, improvements in legal and other instruments as well as greater investment in infrastructure, privatisation, greater accountability and transparency, greater degree of financial and budgetary discipline and the creation and consolidation of multi-party democracies.

The dire consequences is that sub-Saharan Africa is the world’s poorest region; with about half the population living on less than $1 a day. Average income is lower that in 1970. Savings are close to zero. Diseases such as malaria, tuberculosis and HIV/Aids are rampant. Electrical power consumption per person is the lowest in the world; Africa has 14 telephone lines per 100 and less than half of 1 percent of all Africans have used the Internet.

This provides a fertile environment for instability and conflict.

The vicious cycle of ongoing civil and regional conflicts, the displacements of people, and the disruption of practically every aspect of social and economic life has contributed significantly toward ensuring that poverty on the Continent remains structurally entrenched.

In Africa the root causes of most conflicts lie in poverty and underdevelopment. African conflicts are further exacerbated by political and economic mismanagement, lack of democratic institutions, ethic and racial hatred, corruption and unequal distribution of resources.

But there is an opportunity to end this situation if bold, imaginative and genuinely committed leadership is exercised and if a new global partnership based on shared responsibilities and mutual interest can be constructed.

At the OAU Summit in Lusaka, Zambia, on 11 July 2001, African Leaders displayed such leadership when they unanimously adopted "A New African Initiative". This represents a merger between the Millennium Partnership for the African Recovery Programme (MAP) and the OMEGA Plan.

This new Initiative is a pledge by African leaders, based on a common vision and a firm and shared conviction that they have a pressing duty to eradicate poverty and to place their countries, both individually and collectively, on a path of sustainable growth and development, and at the same time to participate actively in the world economy and body politic. The Initiative is anchored on the determination of Africans to extricate themselves and the continent from the malaise of underdevelopment and exclusion in a globalising world. It is a call for a new relationship of partnership between Africa and the international community to overcome the development chasm. The partnership is to be founded on a realisation of common interest, benefit and equality.

The Initiative is premised on African states making commitments to good governance, democracy and human rights, while endeavouring to prevent and resolve situations of conflict and instability on the continent. Coupled to these efforts to create conditions conducive for investment, growth and development, are initiatives to raise the necessary resources to address the development chasm in critical sectors that are highlighted in the Programme, such as infrastructure, education, health, agriculture and ICT.

The founding document of the Initiative contains both a strategic policy framework and a detailed Programme of Action. The founding document is supported by a number of detailed papers dealing with each of the major themes in the Initiative. The Programme of Action contained in the Initiative is constructed in the following manner:

Conditions for development:
Peace, security, democracy and political governance
Economic and corporate governance, with a focus on public finance management
Regional co-operation and integration

Priority sectors:
Infrastructure
Information and communications technology
Human development, with a focus on health, education and skills development
Agriculture
Promoting diversification of production and exports, with a focus on market access for African exports to industrialised countries

Mobilising resources:
Increasing savings and capital inflows via further debt relief, increased ODA flows and private capital, as well as better management of public revenue and expenditure.

This historical moment when Africa took its destiny in its own hands was captured by a Head of State who said:

"This Programme creates a new paradigm of development in Africa. It integrates various central objectives such as ending poverty and underdevelopment, deepening democracy, enhancing the capacity of our governments and defining a new relationship with the developed world. It is not a set of projects but a new and coherent paradigm. Nothing should be done to destroy its integrity. We should not sacrifice the Programme to political expediency simply to please particular egos. Those who have the vision, the will and the capacity to lead must occupy the frontline. The African Union will be an economic union or it will be nothing. At the same time, there can be no meaningful African Union that is based on unity in poverty."

President Mbeki, commenting on the Initiative, said that: "We speak here of a realistic Programme of Action and not a mere wish list. As we have taken these decisions, we have also made the commitment that we will ourselves, as Africans, ensure that we discharge our own responsibilities to implement what we have committed ourselves to implement. In our actions, we will be guided by the principle – nothing is done until it is done!"

To achieve the objectives of the New African initiative we must have strong institutional structures at the continental and sub-regional levels. The 38th Summit of the OAU took the historical decision to transform the OAU into the African Union.

In its Preamble, the Constitutive Act of the African Union says, among other things, that we are :

"Guided by our common visions of a united and strong Africa and by the need to build a partnership between governments and all segments of civil society.

"Conscious of the fact that the scourge of conflicts in Africa constitutes a major impediment to the socio-economic development of the Continent.

"Determined to promote and protect human and people’s rights, consolidate democratic institutions and culture, and to ensure good governance and the rule of law".

In pursuit of these and other goals, the 37th Assembly took the necessary decisions for the preparatory work to be done, leading to the establishment of such bodies as :

the Commission (Secretariat) of the Union;
the Pan-African Parliament
the Pan-African Court of Justice
the Economic, Social and Cultural Council
the Mechanism for Conflict for Conflict Prevention, Management and Resolution; and
the Specialised Technical Committees.

SADC is also undergoing a major restructuring exercise. It is moving towards a more streamlined and centralised structure moving away from the sectoral approaches of the past, in favour of an integrated and co-ordinated programme of activities for the region. In this regard :

SADC shall henceforth formally operate on a troika basis
The current 19 sector co-ordinating units and 2 Commissions (i.e. Energy Commission and the Southern African Transport and Telecommunication Commission) will be abolished during a 2 year transitional period in favour of 4 Directorates, viz,

# Trade, Industry, Finance and Investment

# Food agriculture and natural resources

# Infrastructure and Services

# Human and Social Development

In view of the SADC Trade Protocol establishing the SADC free trade area the Directorate : Trade, Industry, Finance and Investments will be prioritised.

A 5-year Regional Initiative Strategic Development plan is being developed.

It is significant that the African Union and the restructured SADC places great emphasis on a partnership between Governments and civil society.

In this respect formalisation of the African Enterprise Network (an umbrella body for the 3 regional networks) is of major importance in translating the vision of the African renewal into reality.

Kofi Annan stated :

"The central challenge we face today is to ensure that globalisation becomes a positive force for all the worlds people, instead of leaving billions of them behind in squalor …. Market forces alone will not achieve it. It requires a broader effort to create a shared future, based on our common humanity in all its diversity". He went on to say : "We must put people at the centre of everything we do".

If globalisation is to become "a positive force for all the world’s people" we must ensure that in partnership we make the New African Initiative a reality.

Africa’s time has come – let us seize the opportunity!

I thank you