Posted by: africanpressorganization | 14 January 2009

Ethiopia / Statement by H.E. Dr. Maxwell M. Mkwezalamba commissioner for economic affairs African union at the opening of the extra-ordinary conference of African ministers of economy and finance

 

 


 

 

 

Ethiopia / Statement by H.E. Dr. Maxwell M. Mkwezalamba commissioner for economic affairs African union at the opening of the extra-ordinary conference of African ministers of economy and
finance

 

ADDIS ABABA, Ethiopia, January 14, 2009/African Press Organization (APO)/ — Statement by H.E. Dr. Maxwell M. Mkwezalamba

 

Hon. Ato Mekonen Menyazewal, State Minister of Finance and Economic Development, Federal Democratic Republic of Ethiopia;

 

Mr. Abdoulie Janneh, United Nations Under Secretary-General and Executive Secretary for the Economic Commission for Africa (ECA);

Honourable Ministers of Finance, Planning and Economy

Dr. Farhat Bengdara, Governor of the Central Bank of Libya and Chairperson of the Technical Steering Committee on the African Investment Bank

Your Excellencies Ambassadors and Members of the Diplomatic Corps

Honourable Governors of Central Banks

Senior Officials from the Ministries of Economy, Finance, Planning and Justice;

Distinguished Representatives of the Regional Economic Communities (RECs);

Distinguished Ladies and Gentlemen;

 

It is a great honour and privilege for me this morning to address this important Extra-Ordinary Conference of African Ministers of Economy and Finance. On behalf of the Chairperson of the African Union Commission, H.E. Mr. Jean PING, and indeed on my own behalf, I wish to welcome and sincerely thank you all for making it to attend this Conference. Your participation at this Conference underscores the importance you and your Governments attach to the realization of Africa’s integration and development agenda. Please allow me also to take this opportunity to commend the Government and People of the Federal Democratic Republic of Ethiopia, our hosts, for the warm and fraternal welcome accorded to all the delegations.

 

Please permit me to acknowledge the presence Mr. Abdoulie Janneh, the United Nations Under-Secretary-General and Executive Secretary of the Economic Commission for Africa (ECA) and his entire team at this Conference. Mr. Janneh and his Team at the ECA continue to collaborate very closely with African Union Commission (AUC) in working towards addressing the various development challenges the continent faces. On behalf of the Chairperson of the Commission, I therefore wish to thank him for his leadership at the ECA that has, amongst other things, contributed the excellent collaboration that currently exists between the ECA and the African Union Commission. Further, I wish to acknowledge the presence of representatives from the African Development Bank and the Regional Economic Communities at this Conference.

 

Excellencies

Distinguished Ladies and Gentlemen

 

As you may be aware, the AUC and the ECA started organizing jointly their conferences of African Ministers of Economy, Finance and Planning in 2008. it is planned to organize the second Joint ECA Conference of Ministers of Finance, Economic Planning and Development and the African Union Conference of Economy and Finance in the middle of this year.

However, it has been necessary to organize this Extra-Ordinary Conference in order to deal with items that are part of the agenda of the African Union Assembly taking place from 26 January to 03 February 2009 here in Addis Ababa. The African Union Commission deemed it necessary for African Ministers of Economy and Finance to deliberate on these important and pertinent issues and make recommendations to the Leaders to assist them make informed decisions. .

 

Current statistics indicate that ODA flows to Africa have declined over the past three years. This has negatively impacted on many African countries, and hence the need for Africa to focus more on the mobilization of domestic financial resources. It is for this reason that the topics for discussion at this Extra-Ordinary Conference of African Ministers of Finance and Economy, namely, “consideration of the draft Protocol and Statutes on the establishment of the African Investment Bank”, “the feasibility of establishing a pan-African stock exchange”, the development of a road-map and plan of action for micro-finance in Africa” and “alternative sources of financing the African Union” are not only critical but also timely.

 

The African Union Commission has made efforts in this regard to make various proposals for your consideration and recommendation to the African Union Assembly. The Commission has, for instance, embarked on work leading to the establishment of the three pan-African financial institutions, as provided for in Article 19 of the Constitutive Act of the African Union. The three institutions are the African Central Bank, the African Monetary Fund and the African Investment Bank. Worth noting is the commendable work on the establishment of the African Investment Bank. Of particular importance is the Draft Protocol and Statutes for the AIB which your meeting will consider. The experts from ministries of Finance and Justice have considered the Protocol and Statute in detail and made recommendations for your consideration.

 

Let me take this opportunity to thank Brother Leader of the Great Socialist People’s Libyan Arab Jamahiriya for his leadership in ensuring the smooth operation of the work on the establishment of the African Investment Bank. I also with to thank Dr. Farhad Omer Bin Qaddara, Governor of the Central Bank of Libya, for effectively chairing the Technical Steering Committee currently undertaking implementation studies on the establishment of African Investment Bank and for facilitating the work of the Technical Steering Committee. Let me also commend the tremendous work done by the Technical Steering Committee, so far, pertaining to the establishment of this Bank.

 

Excellencies

Distinguished Ladies and Gentlemen

 

The African Union considers the establishment of a pan-African stock exchange as one solution to the envisaged low foreign direct investment flows currently facing the Continent. The need to establish the pan-African stock exchange is a Decision by African Heads of State and Government agreed during their 6th Summit held in Khartoum, The Sudan, mandating the African Union Commission to study the feasibility of setting up the said stock exchange. This decision was taken consistent with the provisions of the Abuja Treaty of 1991 calling for the creation of national and regional stock markets, as well as promotion free movement of capital.

 

In compliance with the decision, the African Union Commission undertook a study on the feasibility of establishing the Pan-African Stock Exchange beginning in April 2007, with a validation workshop for the study held in November 2008. The validation workshop was attended by representatives of national and regional stock exchanges, as well as stockbrokers. The study report, incorporating comments that came out of the validation workshop, will be presented at this meeting for consideration. It is our view that pan-African Stock Exchange will assist in mobilizing financial resources for the continent and promote greater economic dynamism.

 

The role of microfinance in promoting economic development and reducing poverty cannot be overemphasized. Increased access to microfinance could lead to significant job creation, increased incomes, and poverty reduction, and hence contribute towards the attainment of the Millennium Development Goals (MDGs). Realizing the importance of microfinance in improving the lives of many poor African, the African Union Commission in April 2007 embarked on a study on the elaboration of a road-map for the development of microfinance in Africa with a plan of action to help Africa improve access to microfinance for the majority of its low-income populations. The study was validated during a workshop which was held in Dakar, Senegal, in July 2008. The outcome of that workshop is put before you, including the Study, for consideration and recommendations.

 

As Africa strives to halve poverty by 2015, a well-functioning microfinance system could open a world of opportunities to the region, which is home to the highest number of people living in extreme poverty in the world. I call upon you all to assess critically the recommendations made by your Experts in order to help develop the microfinance sector in Africa.

 

Excellencies

Distinguished Ladies and Gentlemen

 

Allow me also to comment on critical issue regarding the financing of activities and programmes of the African Union. As you may be aware, the African Union is currently facing problems regarding the financing of both operational and programme budget. It was in recognition of this that the Heads of State and Government, at their Lusaka Summit of 2001, directed the OAU General Secretariat to, inter alia, “Undertake studies on alternative modalities on financing the African Union. Following this request, the Commission undertook a study on Alternative Sources of Financing the African Union which has been examined by experts at various meetings to assess their possible impact on the economies of Member States, as well as their viability and sustainability.

 

You may all agree that many developed countries are also looking at innovative modalities of financing development programmes. Worth noting is the tax on air tickets which is being implemented in France. Of more importance also, is the current discussion on the study by the North-South Institute on the proposed currency transaction tax, which at a rate of 0.005 per cent would yield annual revenue of approximately US 33 billion dollars, a significant proportion of which will go to Africa. We believe that it is high time that Africa took the issue of alternative funding for the African Union more seriously. Africa cannot continue to wait for Partners to find solutions for her development problems, including mobilizing financial resources for her. Bold decisions need to be taken if Africa is to make a significant impact in financing its own programmes and projects. As Ministers of Finance and Economy, you have deliberated this issue on more than one occasion, in Dakar, Senegal; in Yaounde, Cameroon; and now here in Addis. We need to be bold and make concrete recommendations to our Heads of State and Government, as mandated in Sharm-el-Sheikh following the recommendations of the High Level Panel on the Audit of the African Union.

 

Let me conclude by once again thanking hournable Ministers for taking part of your busy schedule and come to discuss these very important issues. Also wish to thank the Experts for their excellent preparation of this Conference.

 

I wish the Conference great success and thank you all for your kind attention.

The first signs of global financial crisis were seen in the United States through high default rates on subprime and adjusted rate mortgages. Up to until 2006,

 

 

SOURCE : African Union Commission (AUC)


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