What will determine the success of the New Partnership for Africa’s Development (NEPAD)? Which policies and measures envisaged under NEPAD need to receive highest priority? Who should be responsible for which task? What can be done to overcome potential risks and to speed up the implementation of action plans? These underlying questions are the themes that reverberate throughout this volume.
We have already found one concrete way for the IMF to support NEPAD: bring together the people who will make it work—the politicians and officials who can encourage, design, and implement open, poverty-reducing, growth-oriented, and equitable policies—with the technicians who can provide advice, research the evidence, and help to monitor the processes. The discussions in this seminar are also showing what NEPAD can achieve: sharing of ideas; honest appraisal of goals, approaches, and relative successes; and a calling to account for past promises and aspirations.
The New Partnership for Africa’s Development (NEPAD) represents Africa’s response to UN Secretary-General Kofi Annan’s call at the Millennium Summit for a higher priority to achieve “the twin goals of freedom from want and freedom from fear.” It addresses both the issues of security and stability and the issues of socioeconomic development. It is premised on the idea “no peace without development, no development without peace.”
This has been a fine seminar on the New Partnership for Africa’s Development (NEPAD). Since it was adopted in 2001, NEPAD has attracted worldwide interest and enthusiasm because of its new vision for Africa and its focus on a new partnership between Africa and the international community. NEPAD has been the subject of several high-level meetings and conferences and, based on the work of its steering committee and designated regional institutions, key aspects of the initiative have been further developed in recent declarations by African heads of state and government. This seminar in Dakar, organized by the IMF Institute in the context of its activities with the Joint Africa Institute, has provided an excellent occasion to deepen our understanding of NEPAD, exchange views on its opportunities and challenges, and discuss how the international community can best contribute to success.
On behalf of the International Monetary Fund, it is a great pleasure to welcome you to this high-level seminar on the New Partnership for Africa’s Development (NEPAD), and to thank you for taking part in the discussions over the next three days.
This high-level seminar on the New Partnership for Africa’s Development (NEPAD) deals with an especially topical issue at a time when the courageous people of Africa are making enormous sacrifices to free their continent from the clutches of chronic underdevelopment and reap the benefits of globalization. This event is a tangible manifestation of the support for NEPAD that the IMF, the African Development Bank, the World Bank, and other Joint Africa Institute sponsors have all demonstrated.
The New Partnership for Africa’s Development (NEPAD), adopted in 2001, is a pledge by African leaders to eliminate poverty and to achieve a sustainable path of growth and development on the continent. Although previous continent-wide initiatives have not led to the desired results, there is hope that this outcome will be different. This expectation is based on NEPAD’s new building blocks, which are critical for successful reform. New is the extent of African ownership and leadership of the development agenda, anchored in the recognition that African countries themselves have the primary responsibility for improving economic and social conditions on the continent. Also new is the wide acceptance of the proposition that good governance plays a key role in fostering growth and reducing poverty. Another new element is the extent of international appreciation and support for this initiative.
Eradication of absolute poverty was the overarching objective of policymakers in most of the developing countries that achieved political independence after the Second World War. They were determined to correct the perceived failures of colonial rule by embarking on a structural transformation of their economies and societies. It should surprise no one that—given the abject poverty of their populations and the then-prevailing low life expectancy at birth; high rates of mortality (particularly infant and child mortality), illiteracy, and malnourishment; and lack of educational and health-care facilities—they viewed poverty as a multifaceted phenomenon and not just a reflection of inadequacy of incomes. A few among them also viewed the absence of participatory democracy as an aspect of poverty. All of them recognized that, given the low level of average income, redistributive policies at best have a limited role (and at worst are counterproductive) in eradicating poverty. They were therefore emphatic about the instrumental roles of rapid growth in income and its better distribution for achieving the objective of poverty eradication.
One of the important characteristics of evolving globalization is the marked increase in world output and trade. Rapid global integration has led to significant economic expansion, notably in industrialized countries, but also in developing countries with outward-oriented economic and trade policies. During the l990s world output expanded at an average annual rate of 2.9 percent, while trade grew by 6.0 percent. For developing countries as a group, relative to the world as a whole, the rate of output growth was much higher at 5 percent. Asia, as a region, recorded an even higher average annual growth rate of 9 percent. Africa, on the other hand, lagged far behind other regions with a growth rate of about 2.3 percent. With respect to trade, during the same period, the export and import volumes of developing countries grew at a much higher rate than the global average, with several Asian countries recording double-digit growth rates.
Foreign direct investment (FDI) in Sub-Saharan Africa increased substantially in the 1990s. However, the rate of increase was meager compared with that in other regions. As shown in Table 7.1, for example, between the 1980s and 1990s, FDI in the region grew by about 218 percent. This compares with an increase of 993 percent for East Asia and the Pacific, 556 percent for Latin America and the Caribbean, 789 percent for South Asia, and 755 percent for all developing countries. As a consequence, Africa’s share of FDI to developing countries has declined over time, from about 19 percent in the 1970s to 9 percent in the 1980s and to about 3 percent in the 1990s. This is in spite of the policy reforms implemented by countries in the region. Thus, with regard to FDI, Africa’s experience compared with that of other developing countries can be characterized as one of “absolute progress but relative decline.”