‘The 10th Anniversary of the AU: Africa Reclaiming the 2nd Decade of the 21st Century: Taking stock of the current challenges facing the AU and the future developmental prospects of the African Continent’, Pan African Youth Dialogue Africa Day Panel Discussion, Rhodes University, 17 May 2012.

Professor Hendricks, Programme Director
Dr Sizwe Mabizela and Dr Peter Clayton, Deputy Vice Chancellors
Members of the Pan African Youth Dialogue
Fellow Panelists
Distinguished members of Staff
Students

INTRODUCTION

After numerous false starts over the past decades, there is a now a consensus that  Africa’s time has come.

What is different this time around is determined leadership, political will and effective institutions that are supporting African leaders to create enabling conditions for development like ending conflict, improving governance and strengthening regional integration.

Over the past decade Africa has made quiet progress in transforming the African Union into a powerful engine for learning, problem-solving, fostering shared values, spreading best practice, regulating behaviour, upgrading standards, monitoring government performance and above all, energising Africa. The results have been impressive.

According to the IMF, region-wide GDP growth has averaged 5.5% from 2000 – 2010, more than double the rate in the 80’s and 90’s. Importantly, Africa's growth acceleration has been widespread, with 27 of its 30 largest economies expanding more rapidly after 2000, and also fairly inclusive, with the poorest seeing significant increases in real consumption. In its latest report released just a few days ago, the Africa Progress Panel, chaired by Kofi Anan, notes that ‘For the first time in a generation, the number of people living in poverty has actually fallen – and many countries have witnessed strong process towards the MDGs.’ Steady progress has been made in getting more children into school, in bringing down the rate of HIV infections, in sanitation, and in empowering women.

While many challenges remain, for example, in tackling poverty, youth unemployment, the unequal distribution the new wealth that is being created, low agricultural productivity and climate change, on any balanced assessment, the achievements of Africa and the African Union have been remarkable.

South Africa remains committed to the idea of the African renaissance. Since 1994 we have made African political stability and economic development our foreign policy priorities. To pursue these objectives we have engaged in a wide variety of peace keeping operations, peace negotiations, post conflict reconstruction activities, as well as giving humanitarian assistance to Somalia and the Sahel region. Africa has become an important destination for our exports and many of our large companies have invested heavily in Africa.  

CHALLENGES FACING THE AU

I have been requested to focus on the challenges facing the AU tonight.

Some of these include the need to strengthen the functioning of the Continental Early Warning System to ensure its effectiveness in early detection and to allow for early response to peace and security threats on the continent; the effectiveness of AU’s response to unconstitutional changes of government in view of the recent incidents of coups; the problem of the non-payment of assessed contributions by members which opens the door to donors to set priorities; the uneven levels of commitment to shared AU values amongst member-states; the need to domesticate and implement AU instruments; the need to review the organisation’s strategic plan to give it greater focus; and the importance of implementing strategies to enhance intra-African trade and NEPAD infrastructure projects.

  Allow me to talk in more depth about two of these challenges, ‘Increasing foreign interference in Africa’ and ‘strengthening the role of the AU Commission.’

• Discussion of the case of Libya.
  
  
• Another big challenge is how the role of the commission as motor of the union can be revitalized and strengthened. While many achievements can be recorded, we believe that there is room to improve organisational efficiency and operational effectiveness. SADC has put forward the candidature of Dr NC Dlamini Zuma, who we believe has all the necessary qualities and experience to ensure that the Commission plays the extraordinary role that is expected of it.

PROPOSECTS FOR AFRICA’S DEVELOPMENT

Africa is in the midst of a dramatic transformation in its development prospects. The impressive growth momentum that Africa has built up over the last decade is not only expected to continue but also to trend upwards to around 6% in the coming years. The continent will be among the fastest-expanding economic regions in the world, with a long-run growth rate starting to resemble that of the rapid developers of East Asia. Africa’s promising growth is not a flash-in-the pan. There are several long-term trends that suggest that this economic momentum can be sustained. Let me highlight a few:

One of the key reasons behind Africa’s growth surge has been the steady spread of peace, democracy and good governance. Competitive elections promote public accountability, incentivising better economic management, greater transparency and less corruption. The result is a healthier economy, a better business climate and greater productivity. Through the operationalisation of a number of AU instruments on governance, democracy is growing ever deeper roots. Already around two thirds of governments in Africa are democratically elected, compared with just eight in 1991. So we can be certain that Africa’s future growth will be underpinned by the permanent shift in expectations about rights, duties and governance that is taking place across the continent, both amongst citizens and at the inter-state level.

Far-reaching demographic changes already underway will fuel long term growth. By 2050, the continent will be home to one in five of the planet's young people and will have the world’s largest workforce of 1.2 billion.  In that year, one in four workers in the world will be African, compared to one in eight from China, reversing today’s balance.  They will also be highly competitive, as labour costs in places like China continue to increase.  While other regions rapidly age, in Africa the ratio of workers to the retired and the young – the so called dependency ratio – will be improving.  As these trends unfold, Africa will enjoy a ‘demographic dividend’ of young and energetic workers to power the continent’s services and manufacturing sectors, provided they are equipped with the right education and skills.

Africa has been held back by its colonial legacy of small and fragmented markets, not a very effective platform for growth and development. Creating larger regional markets will increase specialization, competition and investment, providing a boost to manufacturing by offering improved economies of scale in industrial production. Rising to this challenge, in November 2010, African Ministers of Trade recommended that Africa fast track the creation of the Continental Free Trade Area. An important step towards this goal was the launching in 2011 at a Summit held in South Africa of negotiations to create the Tripartite Free Trade area,  which will eventually create a market of 26 countries reaching from Cape to Cairo with a population of about 600-million people and a combined GDP of US$1 trillion.  An important aspect of this integration agenda is addressing Africa’s inadequate infrastructure. African transport costs are up to four times higher than those in the developed world, a de facto barrier to trade and economic activity. It has been calculated that if the continent continues to narrow its infrastructure gap, economic growth will receive a further large boost – perhaps by as much as 2 percentage points a year. In view of this, the AU has set up the Presidential Infrastructure Championship Initiative, a continental committee of eight NEPAD Heads of State and Government, which President Zuma was asked to chair, to champion infrastructure projects at the highest level. South Africa is also chair and champion of the North-South Road and Rail Corridor project, which traverses eight countries in eastern and southern Africa and aims to facilitate trade by upgrading road, rail, power and port facilities, as well as simplifying cross-border regulatory procedures, so that producers and traders can access regional and international markets more easily.  East-West corridors are also in the pipeline.

The diversification of Africa’s economic partners will continue to provide a significant lift to growth. An enormous geographic reconfiguration is currently underway in the world economy. Emerging economies now account for half of sub-Saharan Africa’s total trade, while Western Europe’s portion has shrunk to 28%.  The wider range of choice of potential business partners, as well as the intensifying competition amongst them, is giving African governments newfound bargaining power, which they are skilfully using to negotiate better terms to capture more value for the Continent.

Africa will continue to be buoyed by the exploding global demand for oil, metals, minerals, food, and other natural resources. The continent, which is arguably one of the world’s largest unexplored resource basins, has an abundance of riches, including 10% of the world’s oil reserves, 95% of platinum group metals and 60% of the world’s available and unexploited cropland. As the world’s population heads towards a likely peak of around 9 billion in 2050, it is very likely that Africa will become a major food exporter. Tapping this potential would have an important multiplier effect, since over 65 percent of the population works in the agricultural sector. As one research report put it: ‘Africa’s resource wealth could turbo-charge economic growth, provided the new wealth is used well.’

Other factors that will propel long term growth include rapid urbanization, Africa’s fondness for new technology and increasing domestic consumption.

CONCLUSION

Africa has come a long way. Not many people appreciate how profound the changes have been. Working together through the AU, African countries have been laying the foundations for long term growth and development. There are still many challenges, however, and we cannot afford to be complacent. But there is no doubt that Africa’s economic take-off is well under way. And there are compelling reasons to believe that it is likely to continue for decades to come.

I thank you.