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Economic conference ends in Ethiopia with concerns over Africa's future

Apr 1, 2011, 2:15 PM | Article By: Baboucarr Senghore in Addis Ababa

The Fourth Joint Meetings of AU Conference of Ministers of Economy and Finance and ECA Conference of African Ministers of Finance, Planning and Economic Development came to a close on Tuesday with over 60 ministers expressing concern that Africa's average growth rate, still heavily dependent on primary commodity production and exports, remains volatile and low relative to its potential, and did not promote robust employment or significantly reduce poverty.

The ministerial meeting, under the theme "Governing Development in Africa: The Role of the State in Economic Transformation", followed the meeting of economic, financial and development experts, whose recommendations were tabled before the ministers for discussion.

The experts examined the role of the state in the context of globalization and free enterprise, and concluded that state intervention in the economic development process is not tantamount to nationalization of the private sector which, in any case, remains an essential driver of the development process.

In a seven-page statement issued at the end of the meeting, the ministers described as timely and pertinent, the theme of the meeting, especially in view of the effort of countries to promote structural economic transformation, scale up integration endeavors, and achieve the Millennium Development Goals and other social development objectives.

The ministers also noted with concern that, with only four years remaining to the MDGs target date, a significant number of African countries will not achieve most of the targets at the current rate of progress.

While acknowledging progress made in education, gender empowerment, HIV/AIDS and debt sustainability targets, ministers stated that poverty reduction, health-related MDGs and environmental sustainability remain areas of concern.

On the theme of the meeting "Governing Development in Africa: the role of the state in economic transformation", AU ministers noted that, following the stagnation of the previous two decades, Africa has sustained relatively high growth rates since the turn of the twenty-first century, averaging more than 5 percent per year.

"While this improved performance was widely shared across countries, it did not result in significant creation of employment or a sufficiently equitable distribution of benefits," the ministers stated.

However, they underscored the need to rethink the role of the state in Africa's economic transformation and development, and called for the construction of African developmental states that use the market as an instrument rather than the sole "mechanism" for governing development, and promoting structural transformation in the context of a democratic, inclusive and comprehensive national development framework.

Ministers also acknowledged that the role of the state in governing development and achieving economic transformation in Africa entails the planning, formulation and implementation of appropriate development plans and policies.

"We note that the developmental state has a crucial to play to harness regional integration to promote economic and social development.

African developmental states should put in place strong regional and continental integration institutions with appropriate mechanisms to coordinate, implement, and monitor integration policies and programmes, and enforce compliance by member states to agreed common goals and programmes," the ministers added.

Cognizant of the important role of effective and engaged leadership in a revamped vision and agenda of democratic developmental governance, the ministers committed themselves to promoting inclusive public policy processes that will ensure active citizen participation and inclusion in local, national, sub-regional and regional development processes, and support ongoing efforts to harmonize and improve the quality of statistical information.

The ministers also committed themselves to mobilizing financial resources to meet Africa’s huge investment needs, especially through domestic savings and promotion of adequate financial institutions, including pension funds and deposit insurance, innovative fund generating mechanisms, and banking and financial services in both urban and rural areas.

They also expressed their commitment to increasing resources for health financing, and strengthening dialogue and partnership with ministers of health to ensure better understanding of health needs, budgeting and planning requirements, and better use of resources for health system strengthening.