I CAPACITY BUILDING, GOVERNANCE, AND ECONOMIC REFORM IN AFRICA
- Michel Dessart, and Roland Ubogu
- Published Date:
- October 2001
President of the African Development Bank Group
It is a great pleasure for me to welcome you all to this Inaugural Seminar of the Joint Africa Institute (JAI). I would, in particular, like to express my appreciation, as well as that of the African Development Bank, to His Excellency Prime Minister Kablan Duncan, who has graciously accepted to preside over this morning’s opening session. It is a testimony to the importance that he, and the Government of Côte d’lvoire, attach to this new initiative. I would also like to express my appreciation to the other Ministers and ADB Governors, who have taken time from their busy schedules to participate in this Seminar.
The establishment of the Joint Africa Institute by the African Development Bank, the International Monetary Fund, and the World Bank is, I believe, testimony to the strong co-operative relations that now exist among our three institutions. It is also a reflection of the high priority that the three institutions give to capacity building in Africa. Indeed, the rapidity with which the agreement to establish the Joint Africa Institute was reached is evidence of this strong commitment. I would thus like to take this opportunity to express to our two partners in this new venture, the sincere appreciation of the African Development Bank—and its governing bodies—for making the JAI a reality in such a short time.
The theme chosen for the inaugural seminar “Capacity Building, Governance, and Economic Reform in Africa” is, I believe, timely and appropriate. It also fits very well with the goals and objectives that we have set for the Joint Africa Institute. Permit me, in this connection, to share with you some of our views and thoughts on the theme of the seminar, as well as some of the lessons we have learnt from our extensive experience in this area. I wish also to touch briefly on the rationale for establishing the JAI and the contributions that we expect of it.
The Challenge of Capacity Building and Economic Reform in Africa
It is now generally agreed that despite the impressive achievements of African countries in the field of education, the evident lack of capacity in many sectors remains one of the most important obstacles holding back economic progress. Indeed, recent studies—including those undertaken at the behest of the African Governors of the World Bank and the IMF in the context of the Partnership for Capacity Building in Africa (PACT) initiative—have shown that many countries have in reality witnessed considerable erosion of capacity in the last three decades.
Despite this adverse development, African countries have, nonetheless, embarked on a series of major economic reforms. These have been supported by the international financial community, as well as by bilateral donors. As you are all aware, these reforms have, in the first instance, sought to reduce major economic imbalances and restore macroeconomic stability. The reforms have, however, gone further and have sought to bring about major structural changes in the economy. In this regard, a fundamental characteristic of these programs has been the attempt to reduce and redefine the role of the state in the economy and to create a more conducive environment for market-based and private sector-led economic growth.
There are increasing indications that these far-reaching economic reform programs are beginning to have tangible and positive results. After a period of extended economic decline in the 1980s and the first half of the 1990s, the region has, in the last few years, begun to enjoy positive per capita growth rates. Real output growth has averaged 4 percent per annum between 1996 and 1998, compared to less than 2 percent during the first half of the decade. The turnaround in the economic performance of the region has also been broad based, with a large number of countries enjoying positive economic growth rates. Thus, with the exception of countries that are in the grip of civil strife and conflict, and those that continue to face adverse climatic conditions, African countries have, on the whole, reversed the economic decline of earlier years. The prospect for continued economic growth in the region, projected to be between 4-5 percent in the coming few years, also appears to be good.
Despite these positive and encouraging developments, it needs to be stressed that African countries are only in the initial stages of economic recovery. The challenge of reducing the number of people living below the poverty line—now estimated at some 40 per cent of the total population—will thus remain the principal task facing African countries in the coming decades. Meeting this daunting challenge will require that African countries continue to deepen their reform programmes and pursue a number of complementary policy measures. Permit me to enumerate a few of these.
Sustaining and deepening the economic reforms will, in the first place, require that African countries continue to follow prudent fiscal and monetary policies. These are required to ensure that the notable policy gains of the recent past are not reversed. African governments should also continue to support the emergence of an internationally competitive private sector by removing some of the legal, regulatory, and bureaucratic impediments that may still hinder its rapid growth. In addition, our countries will need to make greater efforts to improve their systems of public administration, and put in place effective legal, regulatory, and judicial systems. It is now generally agreed that the attributes of good governance are not only worthy goals to be pursued in themselves, they are also essential for sound economic management and long-term economic growth.
In addition to such broad policy measures, African countries should adopt specific policies to accelerate economic growth. Rates of growth in the order of 6-8 percent will be required if substantial reductions in the number of people living below the poverty line are to be made. This will require the mobilisation of increased resources from both domestic savings and external sources. Renewed efforts should, in particular, be made to attract greater volumes of foreign private capital. I should note, in this regard, that despite the enormous increase in the last decade in the flow of private capital to developing countries, Africa’s share has declined and stands today at less than 4 per cent of the total.
African countries will also need to ensure that the foundations for long-term development are systemically addressed. Innovative policies have to be devised to ensure that adequate educational and health facilities become a reality for the vast segment of the population that has yet to enjoy such benefits. Social and legal structures that prevent the full and equitable participation of women in all economic activities should be removed. And appropriate environmental policies will need to be implemented to ensure that the gains of the current generation are not made at the expense of future ones.
Another policy area I wish to emphasize is the imperative of regional co-operation and integration. While important progress has been made in recent years in strengthening regional groupings, there is a need to build on these gains and to widen sub-regional markets so as to make them more attractive for both domestic and international capital. Such efforts should not aim at closing off a region from outside competition, but should instead seek to create a framework that would allow the grouping to be more efficient and competitive in the global market.
Clearly, the human and institutional capacities of African countries will need to be strengthened if the many policy challenges facing them are to be addressed adequately. As well, such capacity is required if our countries are to take greater ownership and leadership of the reform process. There is now a consensus that such ownership is essential if government economic policies and programs are to gain wider public acceptance, and if they are to be sustained in the long run.
While capacity of governments to draw up sound economic policies and to implement them effectively necessarily varies from country to country, it is generally agreed that few have the requisite complement of human resources and institutions. The required capacity will thus have to be systemically built up over time. In this regard, priority will necessarily have to be given to the core economic institutions of governments. But as importantly, renewed efforts should be made to revitalize African universities and institutions of higher learning to ensure the supply of highly trained professionals. In all such efforts, it is essential that stable environments be created to allow for the accumulation of knowledge, and to promote the practice of learning by doing.
The efforts of African countries to build their human and institutional capacities and to accelerate economic growth and reduce poverty will require continued assistance from the international community. It is evident that, for some time to come, the poorer countries of the region will need access to concessional funds in order to augment their limited resources for development. In this regard, it is our hope that the unfortunate decline in official development assistance to developing countries will be reversed in the coming years. A further deepening of current debt-relief will also be required to reduce the large external debt of African countries and to make debt service payments sustainable. I wish to note that we are indeed encouraged by recent proposals for debt reduction that go beyond the HIPC initiative in which the Bank, as you may all be aware, is an active participant.
In addition to these measures, it is important that the developed world promote greater trade with Africa by removing the non-tariff barriers that continue to hinder such trade. More African countries should be allowed to have access to markets in the developed world and be given adequate time to adapt their domestic markets and industries to the new WTO regimes. The agreements that Morocco and Tunisia—and recently South Africa—have signed with the European Community are important steps in this direction.
The Bank and Capacity Building Efforts in the Past
In giving greater emphasis to capacity development efforts in the future, it is essential that we make every effort to build on the varied experiences of the past. In this respect, it is important to recall that the African Development Bank, and other international development institutions, have historically been important players in capacity building efforts in Africa, and continue to be so today.
The support that the ADB has provided to our regional member countries in this area can usefully be grouped into the following four categories:
support for general capacity building efforts through the loans and grants that we have provided for investments in the social sector and, in particular, in education;
support to specific institutional development projects often in the context of economy-wide or sector-specific adjustment loans;
programme and project related training offered by our own African Development Institute; and
collaborative capacity building efforts such as the African Capacity Building Foundation (ACBF) and the new Partnership for Capacity Building in Africa (PACT).
Since the start of its operations, the Bank has made available to its regional member countries considerable resources to support investments in the education and health sectors. In the last three decades, over US$3.7 billion, amounting to 10 percent of total Bank loans and grants, has been allocated to the social sectors. In addition, the Bank has provided funding for a variety of programmes that have included strengthening key government economic institutions, building up judicial systems, and reforming civil service systems.
The projects and programmes supported by the African Development Bank and others have had undoubtedly a considerable impact in terms of increasing the opportunities available for general education, and in strengthening specific institutions. Yet, as the various studies have indicated, much more needs to be done. Thus, the African Development Bank, in cooperation with our multilateral and bilateral partners, will continue to provide support for the development of key economic institutions through traditional lending instruments and technical assistance grants. In addition, however, there is a need to provide more focused support to upgrade the knowledge and skills of those government officials who are entrusted with the management of key economic functions.
The Joint Africa Institute (JAI) and Its Mission
We believe that the Joint Africa Institute (JAI), by providing high-quality training in various areas, will indeed make an important contribution to meeting this specific need for capacity building. The establishment of the JAI will allow the three institutions to mobilize their resources and to make available a much larger volume of training than would otherwise be the case. I may add, in this regard, that the JAI will train between 300 and 400 government officials and other participants per year. It will thus make a significant contribution, in the medium and long term, to enhancing the capacity of African officials.
It is our hope that the training to be provided by the Joint Africa Institute will, over time, develop its own distinctive characteristics. In particular, we expect that the JAI will become known for the high-quality training that it will offer, as it will have direct access to the staff and to the extensive knowledge base of its three founding institutions. In addition, the Joint Africa Institute will provide a framework for the development of joint courses by the three institutions, and in time, the development of a training program that is truly Africa-focused. The JAI will also begin shortly to use modern distance learning facilities both to enhance its own training activities and to make available to a wider audience the various training programs that it offers.
An essential aspect of the mission of the Joint Africa Institute will be enhancing the capacity of other African training institutions to improve their training programs. Staff from other institutions will be invited to take part in the activities of the JAI, both as resource persons and as participants. The training materials that will be developed by the JAI will also be made available to these institutions to help them develop further their own curricula.
In sum, we expect the Joint Africa Institute to become one of the leading training institutions in Africa. As the training programme that has been drawn up for the first year amply demonstrates, the Institute will provide a wide variety of training in economic policy and in other structural and social issues. We are thus optimistic that the JAI will begin to have a notable impact from the very start of operations.
Permit me to conclude my remarks by expressing to you once again my sincere appreciation for having accepted our invitation to participate in the inaugural seminar of the JAI. I am confident that in the course of the next two days, the seminar will provide participants, who—I might add—have come from many countries in the region and elsewhere, a unique opportunity to exchange views on the challenge of capacity building and economic reform in Africa.
We look forward to hearing your views not only on the various topics that will be discussed during the seminar but also on the mission and training activities of the Joint Africa Institute. Your views and advice will undoubtedly help us to ensure that this new collaborative venture between the African Development Bank, the IMF, and the World Bank in the field of capacity building will indeed be successfully launched and meet the high goals that we have set for it.
Managing Director of the International Monetary Fund
It gives me great pleasure to welcome you to this inaugural seminar of the Joint Africa Institute (JAI). We are very honored to have so many distinguished guests from across Africa, including Prime Ministers, Ministers, and Central Bank Governors, join us today for this opening ceremony. I very much wish I could have been with you today, but previous commitments prevent me from doing so. However, as you can see they do not prevent me from sharing some thoughts with you on this important occasion—thanks to the marvels of modern technology.
The inauguration of the JAI is a new milestone in the enhancement of economic and financial training opportunities in Africa. Three of Africa’s key multilateral partners are joining together to bring the best of their training capabilities directly to the region. Let me extend heartfelt thanks to the Government of Côte d’Ivoire for agreeing to host the JAI in this beautiful country. I would also like to express my gratitude to the African Development Bank (ADB) and the World Bank for their hard work and collaboration in bringing this Institute to life. African policymakers face a diversity of issues and challenges. Therefore, we are delighted to be able to join the ADB and the World Bank as our partners in this new enterprise. This partnership will allow the JAI to take full advantage of the expertise of each institution and provide in-depth, hands-on training in a broad range of subjects. I am confident that the JAI will make a significant contribution to the African countries in their ongoing efforts to build their capacity for financial and economic management.
The timing of this inauguration could not be better, taking place as it does in a context of renewed, if still cautious, optimism about the prospects for growth and development in sub-Saharan Africa. During 1995-98 real GDP growth averaged 4 percent per annum and, after a long period of decline, real per capita income grew by 1 percent per annum. Inflation is down from an average of 40 percent in the first half of the 1990s to 10 percent in 1998. External and fiscal positions of many African countries have strengthened substantially. The Fund’s latest projections indicate a further improvement in the economic and financial indicators for the region for this year and the next, after the adverse impact of the downturn in commodity prices in 1998.
These encouraging results—a turnaround in macroeconomic performance, the greater resilience of many economies—are the consequence of the determined implementation of sound economic and financial policies and structural reforms in a number of African countries. We in the Fund, and I am sure the same can be said by the World Bank and the ADB, are pleased to have been able to support these efforts through our concessional lending, complemented in several cases by the debt-reducing initiative for the heavily indebted poor countries (HIPC).
Although Africa’s economic performance has improved and its outlook is positive, you know only too well the tremendous efforts that are still needed. Per capital income growth is positive, but still too slow. Absolute income levels are still very low. And above all, poverty has reached unacceptable proportions. To begin to address these problems, I see challenges—for Africa and its partners—in three key areas:
the first, most pressing, challenge is to undertake a concerted effort to reduce poverty, through new growth-oriented strategies;
the second is to bring about an increase in domestic saving and stimulate private sector investment, including from abroad; and
a third challenge is to enhance the productivity and competitiveness of economies, so that they can reap the full benefits from the ongoing globalization of the world economy.
These are indeed enormous challenges that confront Africa’s policymakers. And it is they who have the primary responsibility for devising the strategies to alleviate poverty. But they are not alone. There is a heightened awareness of these issues in the international community, a willingness to support Africa’s efforts to achieve high-quality growth. What does this involve?
African countries will need to be diligent in their pursuit of strong institutions and sound policies. Let me mention a few key components:
Consolidating macroeconomic stability, a key requirement to bring about sustained increases in private saving and investment;
Strengthening the financial sector, by developing markets, improving supervision and regulation, and opening financial sectors to both domestic and foreign competition;
Strengthening governance, transparency, and accountability in the management of public and private resources; satisfactory development is not possible when corruption is rampant;
Eliminating unproductive government spending, including excessive military expenditure, to create room—desperately needed—for increasing social expenditures;
Improving regulatory and judicial frameworks and strengthening the judicial system and its independence and the impartiality of the state;
Speeding up trade liberalization, to promote the efficiency and competitiveness of domestic producers and to foster a deepening of trade links, which will help Africa to integrate more fully with the world economy;
Redressing the balance between private and public sectors by restructuring and privatizing public enterprises, and subjecting formerly state-owned companies to market-based competition; and
Deepening initiatives for regional integration in the context of nondiscriminatory multilateral trade liberalization.
Many of these are well known elements of sound policy packages, but increasingly we see that such policies must explicitly be cast in the context of a strategy to combat poverty. In short, reducing poverty must be a focal point in designing policies and financial support for development. How can the international community contribute?
In recent months, the international community has taken a significant step to alleviate the debt burden of the poorest and most heavily indebted countries by a substantial enhancement of the initiative for the HIPCs. It offers two innovations.
It provides more extensive debt relief, to more countries and on a quicker path than was envisaged under the original initiative.
It involves an explicit link between debt relief and poverty reduction, a response to widespread concern that excessive debt servicing obligations could undermine the provision of basic social services, especially to the poorest. Our goal is to help countries—as they undertake reform, as they stabilize their economies, and as they receive international assistance, including very highly concessional debt relief—to channel the benefits to where they are most desperately needed.
What role does the IMF have in all this? For many years, IMF-supported programs have explicitly incorporated social considerations but the interrelationship between growth and social development is now being more precisely defined. We are transforming our concessional ESAF into the Poverty Reduction and Growth Facility (PRGF), in parallel with the enhanced initiative for debt reduction, creating an explicit link with poverty reduction, and a new level of cooperation with the World Bank. This link with our sister institution will be essential because the Bank has the expertise to help countries develop their social policies. The Poverty Reduction Strategies that will be a central feature of our new facility, will allow coordinated input from international agencies—the World Bank, the ADB, the United Nations, and other donors—and civil society in the interested countries to assist governments in implementing the broad social objectives, while allowing the IMF to stay in the domains of its comparative advantage.
And on that note, let me turn to the contribution of the new Joint Africa Institute to deepening the understanding of these issues and developing the capacity to design and implement the appropriate policies. It will seek to develop the analytical and technical skills of country officials, disseminating the lessons of experience gained in other parts of the world, and providing a forum for discussing important regional issues. The JAI will offer a range of courses and seminars geared to the major policy issues facing African countries. It begins with today’s Inaugural Seminar on “Capacity Building, Governance, and Economic Reform in Africa”, for which we are fortunate to have some very knowledgeable speakers from within and outside Africa.
The IMF’s contribution to capacity building and improving governance focuses primarily on enhancing the management of public resources, in particular through greater transparency and accountability, and supporting a liberal and stable economic and regulatory environment. In its interaction with member countries, the IMF places high priority on the economic aspects of governance. By assisting the authorities in their efforts to reform the tax system, tax administration, budgetary procedures and financial management, we contribute to reducing the scope for bribery, corruption, and fraudulent activity. Technical assistance in the area of economic and financial data also enhances transparency. Furthermore, the recent decision to publish letters of intent and policy framework papers is important not only because it increases transparency and accountability, but because it also promotes ownership of economic and financial policies.
Training provided by the IMF to country officials is an important tool in building capacity among our membership. Over the past few years, the IMF has been expanding its training program so as to reach a greater number of officials in member countries. The average number of African officials attending courses offered by the IMF Institute has increased substantially: on average, nearly 300 African officials per year attended our courses and seminars during 1996-99, compared to an average of 160 participants per year over the 1991-95 period. And the demand looks set to continue at a very high level. We hope and expect to significantly enhance the Fund’s capacity to address the training needs of African member countries through the JAI. In the coming year, the new Institute will provide training to about 400 additional African officials.
I would like to emphasize that even with the establishment of the JAI, the IMF Institute is committed to continuing its regional training activities in collaboration with the Central Bank of West African States (BCEAO), the Bank of Central African States (BEAC), the West African Institute for Financial and Economic Management (WAIFEM), and the Macroeconomic and Financial Management Institute (MEFMI).
During its first fourteen months of operation through end-2000, in addition to the inaugural seminar, the JAI will offer a total of 14 courses and seminars. These will cover a wide range of topics, including macroeconomic adjustment and structural reform, banking supervision, financial programming, public finance, privatization, financial sector issues, macroeconomics management, economic growth and poverty alleviation, governance for sustainability of economic development, rural development, and social protection. As you can see, several of these activities are directly relevant for poverty reduction. And reflecting the mandates of the three institutions, the courses will draw on the various areas of expertise of the World Bank, the IMF, and the ADB. The program of the JAI will remain flexible and under constant review so that special courses and seminars can be organized on topical issues of direct relevance to the countries on an “as-needed” basis. We hope to expand the JAI’s program over the coming years.
In closing, once again, I would like to express my appreciation to all of you for taking the time to join us today. I would also like to thank again the Government of Côte d’Ivoire and our colleagues at the African Development Bank and the World Bank for the spirit of innovation and collaboration that has marked the birth of this joint venture. I wish the JAI great success in its endeavors, and hope to visit it soon.
Director, World Bank Institute
This is truly a historic moment for the institutions involved and every African country. The benefits of the Joint Africa Institute promise to be far reaching–especially because JAI will be based in Africa, and will be directed, in a large part, by Africans.
I believe this partnership is reflective of a new dawn of development in Africa. The development environment has not been easy given recent conflict, financial crisis, and decreasing development assistance.
But there is also a new focus on partnership, sustainability, capacity building, and distance learning and on issues of governance and anti-corruption that in the past were taboo. These new focuses will serve as the engines of growth for development—and a development that is long lasting and robust—while building on the strengths of each partner represented here today.
As President Kabbaj, President Wolfensohn and Managing Director Camdessus said in their joint statement, “Our partnership takes full advantage of the particular strengths of each institution, resulting in a synergy that will enable us to provide more training opportunities to African nationals and at a training site closer to their home countries”.
But it is not the institutions involved that are important. It is the Africans who will benefit from the Joint Africa Institute. It is the governments and indigenous firms which will benefit from trained personnel. It is the children of each African here today who will have a brighter future and better prospects for a job, a healthy life, and a solid education.
I am sure if Mr. Wolfensohn were here he would offer great insights. But I want to focus on just three basic issues:
Why JAI is needed?
The commitment to capacity building.
And the potential of distance learning.
1. Why is JAI needed?
We all know why such efforts as JAI are needed, but it is also good to reflect for just one moment.
Poverty is pervasive
In Africa, the GNP per capita is only $488;
40% of the continent’s population lives on less than $1 per day;
Only 46% of people have access to safe water;
The illiteracy rate remains at 43%;
Only 72% of girls are enrolled in primary school.
These kinds of statistics are just unacceptable
The paucity of capacity is worrying
Such as the lack of effective training in Africa;
Poor prospects for well trained professionals—especially in terms of wages;
The brain drain that still plagues Africa;
Poor management even in institutions that have well trained staff.
Also, we cannot forget that lack of capacity is cross-cutting. Let me give you an example. A recent capacity assessment by the Government of Ethiopia notes that capacity building initiatives are needed in the civil service college, universities, training institutes and research centers, government institutions, the judiciary, banking, customs, the private sector, export promotion, quality assurance, extension services, trade associations, chambers of commerce, technical and vocation training, public administration, education and health services, finance and planning, and farmers. This is a long list—but is a snapshot of what faces many African countries.
The needs are very real and the extent is frigthening. Let me give you some examples from over the past few years in representative countries. The countries themselves are not important—it is the situation that matters:
A Ministry of Education says it needs 51,000 primary school teachers;
There is only 1 engineer for every 14,500 people;
There is only 1 veterinarian for every 10,130 clients;
60% of civil servants have only a primary education;
44% of civil servants are assigned duties for which they have no skills;
A government audit department has 352 managers/technical staff, of which only 1 has a Masters level accounting degree—yet 2860 accountants/auditors are registered in the country;
Civil service real wages are only 31% of 1969 levels—and only 11% for top officials;
Only 150 days are spent in University teaching (compared to 200 days average globally);
40% of primary and secondary schools teachers are untrained;
A revenue authority recognized only 110 accountants in the country, but nearly 450 accounting students graduated over the past five years. This is just an example of brain drain;
Of 123 total registered professional accountants, 49 are expatriates and the minimum required by the government is 480;
In a judiciary where in 1991 there were 22 resident magistrates, only 9 remained in 1996, serving 244 courts;
This paucity of capacity identifies the dire need for a multiplier effect. We need to focus on the following:
On training trainers;
On ensuring the “right people” get the “right knowledge”;
On tapping into the “knowledge” aspects of global institutions. Not just information, but best practice and learning from experience;
On slowing brain drain through incentives and long-term strategies;
Through linking capacity building into bilateral and multilateral financing to ensure long-term sustainability;
And through expanding capacity building to include civil society, NGOs, unions, academia and even the informal sector.
New development paradigm
While we have heard the new paradigm story before, we can truly say a new dawn is rising. The Comprehensive Development Framework (CDF) is being adopted by countries around the globe. For example:
The OECD is developing a parallel framework of the CDF;
Many of the donor countries have embraced the new framework—and we are starting to see a change in the way we do business;
In addition, the ADB has expressed a desire to collaborate on the CDF for African countries—and in fact, later this week, staff of the World Bank and the African Development Bank will meet in Yamoussoukro exploring how to even create stronger partnerships—including on a framework for development;
And in a similar fashion, the IMF has replaced the Policy Framework Paper with the Poverty Reduction Strategy Paper (PRSP), which focuses on the broader development agenda and puts the country in the driver’s seat.
During his Annual Meetings address, Mr. Woldfensohn spoke of the new paradigm that is underpinned by partnership, cooperation and facilitation. He said: “We have learned that development is possible but not inevitable. That growth is necessary but not sufficient to ensure poverty reduction. We have learned that for development to be real and effective, we need local ownership and local participation”.
“We must heed this call as we plan our development agendas in the years ahead. But we must go further. We must recognize our own role in helping not hindering those doers of development by better coordinating our own activities”.
And he quoted President Mkapa of Tanzania who said: “Our people must be encouraged and facilitated to be owners of their development: not just beneficiaries, but doers of development”.
The new development paradigm includes less Official Development Assistance (ODA), greater cooperation between multilateral and bilateral donors, and greater ownership. And it allows Africans to be doers of development. To be fully involved. To be accountable.
While there are many more—these are just a few of the reasons that JAI is so important at this point in time.
2. Commitment to Capacity Building
Over the past decade, there has been a renewed focus on capacity building. We have all been confronted with trying to define capacity building. But at its most basic, it is providing the skills needed to face the challenges ahead. The capacity building which is envisaged under JAI in not new. There is a broad range of ongoing capacity building programs that point to this commitment by the international community. Let me give you a few examples.
The African Capacity Building Foundation (ACBF) was established jointly by the World Bank, UNDP, and African Development Bank in 1991. It now has 20 donor members and carries out economic policy analysis and management training in 34 projects in 18 countries;
A revitalized African Development Bank and excellent services provided by the African Development Institute;
A newly re-organized World Bank Institute (formerly Economic Development Institute) with over one third of its global resources available for activities in sub-Saharan Africa. In 1999, it offered 23 core courses from macroeconomic management to education policy to journalism training;
Capacity assessments and capacity building secretariats. Over the past few years capacity assessments have been carried out by the multilateral institutions, NGOs and bilaterals in at least half of all African countries. National focal points or secretariats have been established in a number of these countries, reflecting the commitment of African leaders;
Partnership for Capacity Building (PACT). As a culmination of these activities, the African Governors to the World Bank and IMF requested the World Bank to help the African leadership develop an initiative to further capacity building in Africa. The Partnership for Capacity Building (PACT), of which Mr. Wolfensohn spoke during the Annual Meetings, is now being established. It is an African initiative, being implemented by Africans. The World Bank has approved in principle up to $150 million over five years.
Now the most important step is ahead. This is to link the activities of the JAI and these institutions and programs and to ensure a comprehensive focus on capacity building. We must ensure that countries are in the driver’s seat. And to ensure that not only government benefits, but also NGOs, academia, the private sector, and civil society.
3. Distance Learning
Now let me take this opportunity to speak just briefly about something that I feel very passionate about, distance learning. As you know, Mr. Wolfensohn is extremely keen on distance learning. And I am sure you will hear the same from President Kabbaj. During the signing ceremony of the JAI Memorandum of Understanding last April, the focus of discussion was on how to equip the JAI to be connected to the Global Distance Learning Network.
In some respects Africa stands on the brink. It can easily fall backward. Or it can move forward. Technology will provide one of the bases for moving forward. Africa needs to leap-frog and it needs to move forward by leaps and bounds. The information revolution provides that opportunity. Let me give you just an example of where we stand:
Over 10,000 schools in the USA have a networked computer lab;
According to UNCTAD, trade costs will be cut by $75 billion (more than 20%) by new information systems;
There are over 500,000 internet subscribers in Africa—but still only .06% of the global total;
Internet users are estimated at 1.5 million in Africa, but 1 million are in South Africa—leaving just 500,000 users amongst 734 million people;
In Africa, the World Bank has connected 26 offices with satellite connections;
Technology is decreasing the cost of doing business, providing new opportunities, and reducing risk.
All of the institutions here have been in the business of distance learning for some time, but now our challenge is to scale up these programs. To blanket Africa with learning opportunities.
A number of programs are already underway which I should mention:
Global Distance Learning Network (GDLN). In-service training of professionals for public and private sector professionals as well as broadcast courses, seminars on demand and discussions;
Tertiary education and remedial instruction for university and secondary school students and broadcast of degree programs, teacher training and information technology certification;
World Links for Development. Aiming to link 1200 secondary schools in 40 developing countries.
Now, with the JAI in place, participants from nearly all African countries can have access to training and create closer contacts with other regional and multilateral training institutions, especially on issues of capacity building, governance and economic reform.
On this note, and as I close, let me just say a few words about governance. As this will be the focus of the next roundtable on the “The Changing Role of the State, Governance and New Capacity Requirements”, perhaps I can contribute to this dialogue.
This is a watershed. Just the fact that we are talking about governance, be it good macroeconomic management or anti-corruption, is a big step. What we are really talking about is capacity and accountability.
In the African context, this may be seen as empowering, enabling and enforcing. If good governance at any level is to take place, Africans must be empowered. Empowered to control their future, empowered to make mistakes, and empowered to learn. Likewise, an enabling environment is necessary. In part, this will be the role of the JAI—to enable Africans to access capacity, knowledge, best practice. And enable Africans to draw upon the institutions (IMF, WB, ADB or others) that can provide the assistance necessary for success. Lastly, only if the needed capacity exists can accountability be called for. But with the needed capacity, enforcement (of law, of regulations, of procedures, and of good performance) can take place.
Once again, this is a historic moment. We are now facing the opportunity to make a difference. A difference in capacity building, a difference in distance learning, and a difference in good governance.
His Excellency Mr. Daniel Kablan Duncan
The Prime Minister of Côte d’Ivoire
I would first, on behalf of the President of the Republic, His Excellency Henri Konan BEDIE and myself, like to wish you the traditional “AKWABA”, i.e. a warm welcome to Abidjan, “gem of the lagoons” and the capital of Côte d’Ivoire.
I would also like to express our heartfelt thanks to the prestigious institutions, namely the African Development Bank (ADB), the World Bank (IBRD) and the International Monetary Fund (IMF) for the very great honour done to Côte d’Ivoire by allowing it to host this important Joint Africa Institute.
We would like as well to pay particular tribute to the three institutions for their unfailing commitment to capacity enhancement in Africa.
As you know, this is a major prong of Africa’s sustainable development strategy. That was why during the IMF and World Bank Annual Meetings in 1996, the African Governors launched this initiative, which was adopted by the Development Committee in Spring 1997.
At this juncture, let me seize this opportunity to once again pay particular tribute to the President of the World Bank, Mr. Wolfensohn, and to the Managing Director of the IMF, Mr. Camdessus, for their exceptional commitment to capacity enhancement.
The exceptional opportunity you afford us through this inaugural seminar of the Joint Africa Institute attests to the important role and sustained support of your Group in the establishment of this Institute.
Your unfailing commitment to the success of this enterprise shows the great hope you place in the Institute as an instrument for the promotion and development of African countries. This training centre constitutes a major asset for Africa to cope with the problem of globalization and worldwide economic issues with keen competition.
Its establishment in Africa will help put into greater focus the major concerns and enormous training needs of our countries. It will therefore promote greater mobilization of national capacities - public sector, private sector and the civil society—in favour of development.
This opening ceremony devoted to “capacity building, governance, and economic reforms in Africa” will deal with major and topical themes for our continent, namely macro-economic stability, the new role of the State, governance, and Africa’s new capacity requirements.
I would therefore like to seize this opportunity to speak to you, very briefly and according to our perception, about the following four points:
Recent economic situation of African countries,
Measures implemented and results achieved,
Present challenges for Africa, and
Supplementary reforms to be implemented to meet these challenges.
Recent economic situation of African countries
The early 1980s were characterized by a significant modification in the international environment marked notably by such external shocks as:
the fall of prices of raw materials;
the persistent adverse effects of the second oil shock in the late 1970s; and
the increase in interest rates, which gave birth to a debt crisis.
These factors, combined with internal weaknesses like the predominance of raw materials in exports, the weakness of basic infrastructure, and the predominance of the public sector in the economy, and also the significant gaps in economic management, plunged African countries into a severe economic crisis which lasted over a decade.
This crisis resulted in:
a public deficit of about 7% of GDP on average per annum over the period 1980-1993;
a drop in the growth rate, which stood at 1.7% on average over the period 1980-1993 for all African countries, as against 5% on average per annum over the period 1975-1979. This decline in the level of the economic rate of growth led to a 2.5% average yearly fall in the per capital Gross National Product between 1980 and 1993;
a fall in the investment ratio of around 2% on average per annum over the period 1980-1993; and
a fall in the investment ratio below the threshold of 20% of the Gross Domestic Product (GDP) and its maintenance at around 17% in 1993 as against 25% in 1980.
To cope with this situation, the majority of African countries initiated large-scale economic reforms, which greatly accelerated in the 1990s, with a view to obtaining a marked, sustainable, diversified and better-distributed growth.
Measures implemented and results achieved
The measures initiated focused on both the political framework and the economic framework. From the political standpoint, one notes today, a general trend towards the adoption democracy as a method of government and the guarantee of most public liberties. Measures taken at this level seek to ensure political and social stability of our states in order to channel all the energies of the nation towards the development objective.
From the economic standpoint, the important reforms undertaken by African countries focused on the stabilization programme, with a view to achieving domestic accounts balance and balance of payments equilibrum, as well as on structural reforms geared towards an adjustment of the macro-economic framework—a necessary condition for any healthy and sustainable economic growth.
From the macro-economic policy standpoint, the measures centred notably on the following points:
—enhancement of the efficiency of fiscal policy, through a strengthening of the domestic tax system and a widening of the tax base;
—a moderate income policy with regard to salaries, in order not to create too powerful inflationary strains, while increasing the purchasing power of the populations.
At same time, with regard to producer purchasing prices of agricultural products, there have been regular increases to stimulate production.
Structural reforms have focused essentially on the liberalization and strengthening of the economy with a view to creating an environment conducive to private investment. Therefore, new commercial policies aimed at gradually and sustainably liberalizing trade and promoting domestic competition, were applied.
Furthermore, many sectors have been deeply reformed, notably agriculture, the private sector, education, health, banks, the legal and fiscal environment, among others.
The far-reaching measures undertaken have yielded encouraging results. In effect, Africa’s economic growth rate increased from 0.8% in 1993 to around 5% in 1996, 3.1% in 1997 and 3.4% in 1998, compared with a population growth rate of about 3%. There was therefore a reversal of the trend, with a marked increase in per capita income. All these measures made it possible to improve the competitiveness of African economies and pursue their industrialization.
However, these significant gains notwithstanding, the African Continent remains marginalized and quite weak. It therefore has to meet major challenges to be able to come out of under-development, and capture a much larger place in world trade and by attracting direct foreign investors.
Current Challenges of Africa
In our opinion, the current challenges of the African continent are essentially:
First, to ensure political and social stability by deepening democracy, good governance and peace.
Second, to ensure a strong and sustainable growth in order to quickly and substantially raise the living standard of the population and effectively reduce poverty.
Third, to integrate African economies into world-wide, global trade.
Fourth, to foster sustainable human development by providing more and more resources for education, health, training, and the basic social sectors.
Fifth, to develop basic economic infrastructure, without which there is no viable private sector development.
Faced with these major challenges, Africa should find the necessary resources, not only technical and financial, but also (and mainly) human, to pursue its forward march through the implementation of in-depth and convincing additional reforms.
Supplementary reforms to be implemented to meet these challenges
These reforms, in our opinion, focus on four major areas, namely, greater liberalization of these economies, a redefinition of the role of the state, good governance, and capacity enhancement.
With regard to greater liberalization, African economies should allow market forces to operate, and ensure the proper oversight of markets. This entails giving greater scope to the private sector in the economy and allowing the necessary flexibility to adapt to the international economic environment.
The objective is to ensure a strong and sustainable growth capable of raising more quickly the living standard of the population.
In this context, African economies should also give priority to policies that diversify the economic base in order to establish an efficient and innovative industrial fabric based mainly on the processing of raw materials, both agricultural and mineral.
Furthermore, African economies should speed up their integration, which is seen as one of the best instruments for ensuring the dissemination of economic growth to all, and as the best means of sharing the profits resulting from their opening to the exterior, thanks to the optimum size of the markets offered, especially to the national and international private sector.
The role of the State should be redefined, through its withdrawal from productive activities in favour of the private sector, and through its refocusing on its traditional social services, such as the provision of education, health, and security. This implies “a smaller but better state”.
The State should therefore concentrate more on its regulation functions by ensuring essentially:
increased savings to make the financing of economic and social development more endogenous,
a greater transparency of justice, and
a true “judicial security” of economic and commercial activities.
The refocusing of the role of the State should give it more room for manoeuvre required for its greater involvement in poverty reduction and for the fostering of sustainable human development, by making more and more substantial resources available to education, literacy, and basic infrastructure, without which there is no sustainable development. Indeed, as underscored by Montaigne, “Man constitutes the only source of wealth”. Moreover, the State should cater more for the control of environment, urban planning and the promotion of highways infrastructure.
Good Governance is an indispensable factor of progress. This notion, which takes into account all aspects of national life, refers mainly to state institutional mechanisms as well as to the preparation process of governmental action, decision-making and implementation.
It also concerns information flow within the public administration and its relationship with the private sector and the citizens of the civil society. Through good governance, the state should ensure national cohesion by actions carried out in the interest of the largest possible number of citizens.
Thus, all actions under good governance should go in the direction of reconciling the populations with the cardinal values of labour, honesty and integrity. Furthermore, the administration of good governance is concerned with establishing a veritable civil service culture of probity, seriousness at work, and commitment to the State.
Particular attention should be paid to corruption control, which is one of the components of good governance. Corruption, which is a veritable canker, severely distorts competition and discourages initiative. In our opinion, three factors are to be taken into consideration at this level, namely:
first, the repression aspect, which should lead to the punishment of all those who break the law;
second, the reward aspect, which is seen as the reverse of repression. It implies encouraging and showing as example the best actors of the economic, administrative and cultural life of the nation in all fields of activity. It is in this respect that Côte d’Ivoire, on the Head of State’s instruction, has established National Merit Awards to the best girls and boys of the country during the national independence celebration.
third, the prevention aspect, by introducing measures that guarantee the transparency and security of economic, financial and commercial operations. In this regard, the control and information structures should be strengthened with material and human resources.
In recognition of these, a national seminar on good governance, presided by the Head of State himself, was organized in Yamoussokro in February 1999, to take stock of this important issue. The seminar recommended that the following measures be taken to beef up good governance and the rule of the law.
Capacity enhancement to enable Africa to develop its human resources and institutionalize living environment that match its growth and development ambitions, for the public and private sectors and the civil society.
In the public sector, the aim is to achieve a competent, efficient and effective administration sustained by good governance and capable of meeting the needs of the citizens. In effect, the new growth and economic development context, characterized by a predominance of the private sector in productive activities, makes imperative a significant enhancement of the performance and technical and organizational capacities of public administrations.
In the private sector, the target is the emergence of a dynamic and competitive sector, capable of satisfying the domestic market and capturing international markets. The private sector should therefore be able to constantly adapt to technological innovations so as to contribute to the emergence of an industrial society. Particular emphasis should be laid on the enhancement of management capacities, the conquest of the market of small and medium-scale enterprises, and on the operators of the informal sector with the aim of providing them with resources to make their activity viable.
In the civil society, the objective is to better involve civil society in development and make it an efficient partner. In this regard, the operational framework of the NGOs and civil associations will be rationalized, dialogue between the government and the civil society fostered, and the concerned operators professionalized.
Three major themes may be noted, namely:
Associations and the media.
The capacities of the civil society need to be strengthened in education/training, organization, communication, financial management and protection of its interests.
With your permission, I would like to very briefly mention the case of Côte d’Ivoire. It has made training one of the focal points of its economic and social development policies. To this end, considerable though inadequate efforts have been made in this sector. They helped raise the literacy rate from 8% in 1960 (year of Côte d’Ivoire’s independence) to 73% at present. Universal literacy is scheduled for 2010 at the latest. The number of students in higher institutions has increased from 463 in 1963 to over 125,000 at present. Furthermore, the Law on Education was adopted in 1995, which gives an increasingly greater role to the private sector in the expansion of the education sector. Thus, in higher education, the private sector today accounts for over 41,000 students (i.e. 33% of the student population) compared to 150 in 1990-1991.
Faced with financial constraints, especially an external debt service that represents more than half of the fiscal resources, the State intends to consolidate the school system through an increasing private sector role. This entails promoting the establishment of private universities such as the Université ivoiro-canadienne (Ivoiro-Canadian University).
Moreover, Côte d’Ivoire is working in partnership with Georgia State University for imminent establishment of a private American University, with a regional and even continental scope in the final phase.
I would like to end my statement hopeful and deeply convinced that the Joint Africa Institute will, by taking into consideration the specificity of our continent, assist us to win the battle of sustainable development through the training of women and men of quality in the principal desired areas of African national life. With such human resources, we will be able to make our dear Africa the new development frontier. I wish you a good seminar and huge success in the future activities of the Joint Africa Institute.