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AFRICAN UNION UNION AFRICAINE UNIÃO AFRICANA Telephone: 251 11 551 0595 Fax: 251 11 551 0249 P. O. Box 3243 Addis Ababa, ETHIOPIA www.africa-union.org AU PRIVATE SECTOR FORUM 23 JUNE 2006 BANJUL, THE GAMBIA REPORT OF THE AFRICAN UNION PRIVATE SECTOR FORUM I. INTRODUCTION 1. The African Private Forum was convened by the African Union Commission in Banjul, The Gambia, to discuss the theme “Regional Integration and Rationalization of Regional Economic Communities”, which was also the theme for the Summit scheduled for Banjul, The Gambia. The Forum was attended by African private sector representatives from Gabon, The Gambia, Egypt, Kenya, Mozambique, South Africa, and the United Kingdom. Representatives of the Regional Economic Communities (RECs), namely, CEN-SAD, Economic Community of Central African States (ECCAS), East African Community (EAC) Economic Community of West African States (ECOWAS) and Southern African Development Community (SADC) also attended the Forum. The following organizations also participated in the Forum, the Economic Commission for Africa, the United Nations Liaison Office to the African Union and the Organization of African Trade Union Unity. A list of the participants is attached as Annex I. 2. It was noted that some invited African private sector participants indicated that they could not finance their travel to Banjul and would have wanted the Commission to sponsor them. The issue of sponsorship needs to be considered in future. II. OPENING SESSION 3. The African Private Sector Forum was officially opened by Honourable Alieu NGum, Secretary of State for Trade, Industry & Employment. The Secretary of State welcomed all participants to The Gambia and wished them a good stay in Banjul. He indicated that the theme of the Forum was key as it sought to bring the private sector into the debate on regional integration, which is not an option for African development but a must. He stressed that the role of the private sector as the prime mover in economic growth as well as in the formulation of reform policies had become more compelling than ever before, more so in the face of globalization. He underscored the fact that Governments view the private sector as the dynamic force that produces goods and services, income and creates decent employment which makes it imperative for it to participate in the reform process of the African economies. 4. The Secretary of State for Trade, Industry and Employment highlighted the need to create a large market in Africa as individual countries did not constitute a viable competitive market. He noted that regional integration has the capacity to increase investments in the productive sector of the economy. He also emphasized the need to add value to most of the African products. Finally he declared the Forum officially opened. The speech is attached as Annex II to the report 5. Dr. Maxwell M. Mkwezalamba, the African Union Commissioner for Economic Affairs also addressed the opening session of the Forum. The Commissioner thanked all participants for having devoted their time to attend the Forum. He emphasized the role the private is playing in making new investments, creating wealth and decent employment and in social development. He called upon the meeting to critically examine how the private sector can contribute even more effectively to accelerating and enhancing continental integration in 2 Africa. He also paid tribute to Regional Economic Communities for the excellent work they were doing to integrate the African market. However, he pointed out that the overlapping and multiple memberships to RECs continue to undermine that progress. He wished the Forum successful deliberations. The speech is attached as Annex III to the report. 6. Mr. Bai Matarr Drammeh, the President of The Gambia Chamber of Commerce and Industry, addressed the opening session of the Forum. He welcomed the initiative of consulting the private sector on key development issues so that appropriate inputs can be made by the people who are affected by the policies. He stressed the importance of harnessing all the African talents and working in synergy towards the continental integration objective. He highlighted the role of the private sector in the fight against poverty through investment, employment creation and contributing to social development. He emphasized the need for good governance both in the public and private sector as this will make it easy to enter into stronger partnerships. He called for support to be extended to young entrepreneurs for them to contribute to a vibrant Africa. III. AGENDA OF THE MEETING 7. The Forum worked according to the following agenda: 1. Opening Ceremony (Statements by Government Representative, AU Commissioner for Economic Affairs, Private Sector Representative of the host country). 2. Role of the Private Sector in Regional Integration and Development Process and the Rationalization of Regional Economic Communities. An Overview of the Integration Process in Africa (Opportunities and Challenges for the Private Sector) by Mr. Joseph Atta-Mensah, Senior Economic Affairs Officer, UNECA). 3. Engaging the Private Sector in the Creation of a Competitive and Integrated African Market. Private Sector Perspective on an Integrated African Market Opportunities and Challenges by Dr. Amany Asfour President of African Alliance for Women Empowerment and President of Egyptian Business Women Association (EBWA) 4. Creating Effective Public-Private Sector Partnerships in the Development of Infrastructure and Promoting Connectivity in Africa. Pan-African Commodity Exchange as a public private partnership Integrative Tool in Africa by Mr. Antony Adendorff, CEO, Pan African Commodities Platform. 5. Closing of Forum. 3 IV. ROLE OF THE PRIVATE SECTOR IN REGIONAL INTEGRATION AND DEVELOPMENT PROCESS AND THE RATIONALIZATION OF REGIONAL ECONOMIC COMMUNITIES 7. A Representative of the ECA introduced the subject matter for this session. He highlighted the importance of integration in Africa and the provisions in the treaty establishing the African Economic Community. He noted that for a long time, integration had been Governments driven and that it has been recognized that the private sector has a critical role to play in the integration process. He stressed the need to facilitate free movement of business persons, goods and services in Africa as a way of promoting cross border investment and intra- African trade. 8. During discussion, the Forum noted the need for all integration processes to be people centred. The Forum made the following recommendations: a) African Governments should: Ensure that the people are the beneficiaries of the integration process; Abolish visas for Africans traveling within Africa and facilitate residence; Expedite the process of dismantling all non-physical and non-tariff barriers to intra-Africa trade; Eliminate distortions, enlarge markets and enhance the credibility of economic and political reforms; Improve infrastructure including ICT, transport, and energy to facilitate intra-Africa trade and development; Expedite the implementation of the Yamoussoukro Agreement; Engage the Private Sector in all policies formulation and development activities to ensure easy implementation; Harmonize investment codes and improve the macroeconomic environment to facilitate cross border investment and FDI; and Introduce innovative policies and measures to increase financial resources for Private Sector development. b) African Private Sector should: Mobilize resources in collaboration with public sector for infrastructure development; Create partnerships between large companies and small and medium enterprises through training, sub-contracting and out sourcing; 4 Create mutually beneficial partnerships with African Private sector in the Diaspora particularly in relation to capacity building, skills development, investment and technology transfer; Invest in value addition processing or manufacturing industry; and Create decent employment as a way of poverty reduction. V. ENGAGING THE PRIVATE SECTOR IN THE CREATION OF A COMPETITIVE AND INTEGRATED AFRICAN MARKET 9. The President of African Alliance for Women Empowerment and President of Egyptian Business Women Association (EBWA) made a presentation on this subject. She pointed out that there was need for creating large competitive markets for African products and the removal of all barriers to trade. She also emphasized that the African private sector should be economically empowered and particularly women, who form the largest proportion of the small to medium enterprises. She further stressed that African producers should strive to produce high quality goods that meet international standards and that there was need to brand African products by adopting a slogan of MADE IN AFRICA. He also indicated that it was important for governments to assist in entrepreneurial capacity building development and to invest in research, science and technology. 10. The Forum welcomed the presentation and after extensive discussion, the Forum made the following recommendations: a) African Governments should: Develop policies to empower African Private Sector through the creation of an enabling environment and giving contracts; Review and harmonize business laws to reduce the cost of doing business in Africa; Support promotion and development of SMEs through capacity building and facilitate financing as well as concessionary credit facilities; Encourage and support diversification into non-traditional high growth sectors such as services, pharmaceutical and ICT; Facilitate the creation of an African Investment Guarantee Agency to mitigate risks for African investments. Support the promotion and marketing of MADE IN AFRICA brands of products; Initiate policies for economic empowerment of women entrepreneurs; Create or strengthen institutions that would ensure African-made products comply with international standards and certification; and 5 Support micro-finance institutions/Networks to enable them to play their role in financing SMEs and micro enterprises. b) African Private Sector should: Promote and market MADE IN AFRICA brands of products; Produce products that meet international quality standards; and Invest in Africa. VI. CREATING EFFECTIVE PUBLIC-PRIVATE SECTOR PARTNERSHIPS IN THE DEVELOPMENT OF INFRASTRUCTURE AND PROMOTING CONNECTIVITY IN AFRICA 11. The Chief Executive Officer of the Pan African Commodities Platform, presented an example of a public-private partnership (PPP) initiative on Pan African Commodity and Derivatives Exchange as an integrative tool in Africa. The project is being supported by the African Union Commission and is being established in Gaborone, Botswana. He indicated that the issue of commodities has been a source of concern to Africa since commodities form a core of African exports. He noted that the pricing mechanisms of the commodities tended to fluctuate considerably thus putting financial strain on producers as at times the commodities were sold at below their real market value. 12. He pointed out that the commodity exchange would be able to respond to the objective needs of Africans to contribute to the regulation of commodity prices and to lay a foundation of development in Africa. He further indicated that the exchange would offer trade services for both intra-Africa and international trade; respond to the growing demand for African commodities exports and the ownership of the exchange through franchise and shareholder business model. He also emphasized that the exchange would benefit the small producers as well and thus contributing to the achievement of the Millennium Development Goals. 13. The Forum, after considerable debate, recommended the following: a) African Governments should: Promote the PPPs through Build Operate and Transfer (BOT); Adopt PACDEX as one of the instruments for continental economic integration; Harmonize Banking Acts, Securities Acts and Cross Border Trade; and Facilitate the capacity building for rural traders, exporters and producers associations 6 b) African Private Sector should: Provide training for rural traders and producers; Provide necessary statistics and information to facilitate transparency in commodities trading and disseminate to all participants; and Mobilize and organize African exporters and producers associations to be able to engage in public private partnerships such as in PACDEX. VII. Closure of Forum 14. Dr. Rene N’Guettia Kouassi, the Director of Economic Affairs, thanked all the participants for the lively debate on all the subjects covered and for making fundamental recommendations. He indicated that the recommendations would be submitted to Summit when it deliberates on the theme of regional integration and rationalization of regional economic communities. 15. He also thanked The Gambia Chamber of Commerce and Industry for the support given to the AU during the Forum and all those who contributed to the success of the Forum. He closed the Forum and wished everybody safe journey back home. 7 AFRICAN UNION UNION AFRICAINE UNIÃO AFRICANA Addis Ababa, ETHIOPIA P. O. Box 3243 Telephone: 251-11-5517 700 Fax: 251-11-5517844 AFRICAN UNION PRIVATE SECTOR FORUM 22 – 23 JUNE 2006 BANJUL – THE GAMBIA LIST OF PARTICIPANTS No. Name Title Address 1 H.E. Alieu NGum Secretary of State Trade and Industry of the Gambia 2 Sulayman Samba Permanent Secretary Organization of State for Trade, Industry and Employment The Gambia Fax: 200 4227756 Tel: 220 4223767 e-mail : Btie@qaet.gm 3 Matarr Drammeh President Gambia Chamber of Commerce Fax: (220) 4496125 / 4395716 e-mail: firstname.lastname@example.org 4 Amany Asfour President Egyptian Business Women Association African Alliance for Women Empowerment 14 Sgnia St. Mohandran Cairo – Egypt Tel : + 202 – 7495670 + 20133144361 e-mail: Asfour2712@yahoo.com 5 Baboucar Sarr President Petty Traders Association 55, Kairaba Avenue c/o Chamber of Commerce Fax: (220) 9956752 Tel: (220) 4378936 6 Ndey Jallow Secretary General AGWB (Gambis) Fax : 4496839 / 8893423 e-mail: email@example.com 9 No. Name Title Address 7 Anthony Adendorff Chief Executive Officer P.O. Box 25, Regency Court Glategny Esplanade St. Peters Port Tel: + 27 (0) 834595439 e-mail: Anthony@pacp.com 8 Marilyn Angela Comrie Chief Executive Officer Leadergen Ltd. The Empress Business Centre 380 Chester Raod Manchester M16 9EA Fax: 00 44 845 331 3405 Tel: 00 44 845 331 3409 e-mail: Marilyn@leadergen.com 9 Mam Cherno Jallow Chief Executive Officer The Gambia Tel: (220) 4378929 Fax: (220) 4378936 e-mail :firstname.lastname@example.org 10 Ansumana Marena Managing Director Julakay National Holding Red Cross Building Fax: (220) 4395660 / 9906060 11 Peter Gomez Managing Director Gambia – West Coast Radio Fax: + 220 4461193 12 Stephen Mirero Executive Director INAFI Africa Trust P.O. Box 4844 – 00200 Nairobi – Kenya Fax: 254 - 20-3870281 Cell: 254 - 721 – 880 – 740 Tel : 254 – 20 – 3871689 / 3225 e-mail : email@example.com 10 No. Name Title Address 13 Gilles Hounkpatin Secrétaire Exécutif Adjoint Communauté Economique des Etats de l’Afrique de l’Ouest (CEDEAO) ECOWAS Secretariat PMB 401 Abuja, Nigeria Tel : (234-9) 3147683 Fax: (234-9) 3147646 / 3005 e-mail: firstname.lastname@example.org 14 Kujejatou Manneh-Jallow Executive Director Gambia / NAWFA 98 Kairaba Avenue KMC Tel : 4377837/ 4377836 e-mail : email@example.com 15 Salifou K.Jaiteh Managing Director Gambia Albat Market Banjul Fax : 4229165 Tel: 4225049 e-mail: Skjiteh@yahoo.couk 16 Beatrice Allen Director Trade and Investment Promotion Gambia Chamber of Commerce & Industry Kairaba Avenue Fax: (220) 4377189 / 9941515 Tel: (220) 4378936 e-mail: TRAEFAIRGAMBIA@QANET.GM 17 Mborou Njie-Senghore Auditor AGWB (Gambis) Gambia Fax: 9914827 18 Adam Trinn-Njie IT Officer 55 Kairaba Avenue The Gambia Fax|: 4358929 / 4378936 e-mail: firstname.lastname@example.org 11 No. Name Title Address 19 Ma Awa Faal Maawa Fall Gas GCCI Brusubi Fax : 9815369 Tel: 4229755 e-mail: Maawaseneba@yahoo.com 20 Ndey Fatou Njie Touba Gas Kanifing Industrial Estate K.M.C. GCCI Tel: 4395053 e-mail: Mdeyfatou@gamtel.gm 21 Helder Francisco Malauene Programme Manager Mozambique (FDC) 25 September 12504, Time SC BW6 Fax: + 258 213553000 Tel: + 258 21355335 e-mail: HMALAUENE@FOC.ORG.M7 22 Yassin Jah Mbye Assistant Secretary AGWB (Gambis) Fax : 4394420 / 9953395 23 Osman Tasbasi Manager The Gambia Konrfing Fax: 4397963 Tel: 4396606 e-mail: Timberfurniture@yahoo.com 24 Haddy Njai Coordinator G.C.C.I. AGWB (Gambis) P.O. Box 1307 Banjul Fax: 4391988 / 9904536 e-mail: Haddy2njai@yahoo.com 12 No. Name Title Address REGIONAL ECONOMIC COMMUNITIES (RECs) ECONOMIC COMMUNITY OF WEST AFRICAN STATES (ECOWAS) 26 Enobong Umoessien Principal Programme Officer ECOWAS Executive Secretariat Investment and Private Sector Promotion 60 Yakubu Gowon Crescent ECOWAS Asokoro District P.M.B. 401 Abuja, Nigeria e-mail: email@example.com Tel: + 234 (9) 3147647-9 Fax: + 234 (9) 3143005 Cell: + 234 (0) 8051353682 ECONOMIC COMMUNITY OF CENTRAL AFRICAN STATES (ECCAS) 27 Carlos Alberto Bonfim Directeur a.i. Commerce et Douane B.P. 2112 Libreville Tel: (+241) 444732 / 06 249816 Fax: (+241) 444732 e-mail: Bonfim.firstname.lastname@example.org SOUTHERN AFRICA DEVELOPMENT COMMUNITY (SADC) 28 Angelo Mondlane Head, Policy Strategic Planning SADC Secretariat P. Bag 0095 Gaboronne, Botswana Tel: + 26771311555 Fax: 2673972848 e-mail: email@example.com COMMUNITY OF SAHEL SAHARAN STATES (CEN-SAD) 29 Abani Ibrahim Directeur Integration / Complémentaire CEN-SAD P.O. Box 4041 Algeria Square Tripoli, Libye e-mail: HALILOU_AS@yahoo.fr 13 No. Name Title Address ECONOMIC COMMISSION FOR AFRICA (ECA) 30 Joseph Atta-Mensah Senior Economic Affairs Officer UNECA UNECA P.O. Box 3001 Addis Ababa Tel: 251 1 5445379 e-mail: firstname.lastname@example.org ORGANIZATION OF AFRICAN TRADE UNITY (OATUU) 31 Hassan Adebayo SUNMONU Secretary General Organisation of African Trade Union Unity (UATUU) P.O. Box M386, ACCRA, GHANA Tel: +233-21-508855 +233-21-508851/53 e-mail: email@example.com UNLO - AU 32 Baboucarr Blaise Jagne Head of UNLO – AU UN UNLO – AU, c/o ECA Fax : 251 11 5511 407 COMMISSION OF THE AFRICAN UNION 33 H.E. Dr. Maxwell M. Mkwezalamba Commissioner for Economic Affairs A.U.C. Tel: 011 551 3569 Fax: 011 551 5887 e-mail: firstname.lastname@example.org 34 René N’Guettia Kouassi Director A.U.C. Economic Affairs Department Box 3243 Addis Ababa Tel: 00251-911201635 e-mail: email@example.com 14 No. Name Title Address 35 Leonard Emile Ognimba Directeur A.U.C. Political Affairs Department P.O. Box 3243 Addis Ababa 36 Salif Sada Sall Director A.U.C. Strategic Planning Policy, Monitoring, Evaluation Resource Mobilization P. O. Box 3243 Addis Ababa 00 251 115 51 77 00 e-mail: firstname.lastname@example.org 37 Fudzai Pamacheche Head, of Division A.U.C. Private Sector Development, Resource Mobilization and Investment Tel: 011 551 0595 Fax: 011 551 0249 e-mail: email@example.com 38 Nadir Merah Head of Division A.U.C. P. O. Box 3243 Addis Ababa 00 251 115 51 77 00 Ext: 365 e-mail Nadir@african.union.org 39 Charles Kossi Awitor Senior Economist A.U.C. P.O. Box 3243 Addis Ababa Tel: 251115-517700 e-mail: firstname.lastname@example.org 15 No. Name Title Address 40 Emmanuel J. Chinyama Special Assistant to the Commissioner for A.U.C. Economic Affairs P.O. Box 3243 Addis Ababa Tel: 251115-517700 41 Yeo Dossina Statistician (Consultant) A.U.C. P.O. Box 3243 Addis Ababa Tel: 251115-517700 42 Emma Kasamale Private Secretary to the Commissioner for A.U.C. Economic Affairs P.O. Box 3243 Addis Ababa Ethiopia 43 Hirut Yirgu Secretary A.U.C. P.O. Box 3243 Addis Ababa Ethiopia 44 Tsega Ab Ayenew Assistant Accountant A.U.C. P.O. Box 3243 Addis Ababa Ethiopia 44 Mr. Fikreselassie Getachew Clerk A.U.C. P.O. Box 3243 Addis Ababa Ethiopia 16 ANNEX II OPENING STATEMENT BY HON. ALIEU NGUM, SCRETARY OF STATE FOR TRADE INDUSTRY AND EMPLOYMENT ON THE OCCASION OF AFRICAN UNION PRIVATE SECTOR FORUM BANJUL, THE GAMBIA 23 JUNE 2006. Dr. Maxwell M. Mkwezalamba, A.U. Commissioner for Economic Affairs Distinguished Delegates Representatives of Regional Economic Communities Members of the Private Sector Distinguished Ladies and Gentlemen I feel deeply honoured and privileged for the opportunity to deliver the Opening Statement on the occasion of the AU Private Sector Forum on Regional Integration and Development Process and the Rationalization of Regional Economic Communities. First of all I would like to thank the Commission of the African Union (AUC) and the AU organizing secretariat in Banjul for organizing such a forum, and for the excellent arrangements made for this meeting. For the distinguished visiting delegates, may I take this opportunity on behalf of His Excellency The President, Alhaji Dr. Yahya A.J.J Jammeh, the Government and people of the The Gambia to welcome you to The Gambia, and encourage you to take time from your busy schedule to explore this beautiful country of ours. The theme for the Forum is impressive as it is taking the debate of regional economic integration beyond the state by seeking public private partnership in championing the integration process. In response to economic problems such as declining growth and per capita incomes, poverty and low socio-economic indicators, rising debt and massive unemployment, African governments are embarking upon programs emphasizing economic liberalization and the role of the private sector as a prime mover in economic growth as well as in the formulation of reform policies. Governments now view the private sector as the dynamic engine of growth necessary to produce the goods, services, income and employment to meet the growing needs of the region's expanding population and thereby combat poverty. Mr. Chairman, For the private sector to play this role, however, governments must create enabling environments conducive to private investment and growth, removing obstacles in the political, bureaucratic and economic environment. Appropriate steps for creating this environment include an improved macroeconomic policy framework, greater public sector efficiency, transparent and effective legal regimes, reduced bureaucracy and better governance. As these reforms are undertaken, the private sector will begin to play a partnership role expanding the important dialogue between the public and private sectors. The private sector input into reform process represents the most effective means of ensuring that government policy will be favourable for private sector growth and development, which is required to deal with the increasing level of poverty on the continent. For this input to take place, mechanisms that assure the private sector access to policy makers and that strengthen dialogue between the public and private sectors must be established. The institutionalization of such mechanism is critical to the success of regional economic integration. Mr. Chairman, 18 Ladies and Gentlemen, It is reasonable to assume that the most significant trend in this new millennium is global competitiveness. In the face of the opportunities and challenges posed by globalization, nations are moving to integrate their economies with those of their neighbours, to create larger and more competitive regional blocs, and to engage in international trade, not just as individual states but as regional powers. This shift is nowhere more urgent than in Africa, where the combined impact of our relatively small economies, the international terms of trade, and the legacy of colonialism, mis-rule, and conflict has meant that we have not yet assumed our global market share despite our significant market size. The advantages of the regional integration in Africa were recognized long before the term "globalization" was coined. The creation of the Organization of African Unity (OAU) in 1964 reflected the awareness and the vision, by the leaders of the day, that Africa's strength was rooted in Pan-Africa cooperation. The Southern Rhodesia Customs Union was established in 1949, and the East African Community in 1967. But while the intentions behind these efforts to promote regional integration may have been genuine, the impact of Africa's first regional communities was limited. Mr. Chairman, Much has changed across the continent as Africa's leaders and citizens have taken dramatic steps to open and transform centralized economies, to invigorate the African private sector, and to build the institutions that can sustain political stability and economic development. Regional economic communities now operate in West, East, Central and Southern Africa, and the treaty establishing the African Economic Community sets forth a vision of a continental community. Also the adoption of the New Partnership for Africa's Development (NEPAD) provides an overall development framework for the continent which gives regional integration as one of its core objectives, and the private sector is put in the forefront in pursuing the objectives. The establishment of the Commission of the African Union, and agreement on its priorities, makes it clear that Africa's leadership is committed to move the regional integration forward, effectively and efficiently. However, the need to encourage private sector participation in the regional integration process is still more of a strategy rather than a reality. The private sector in most African countries is not part of the identification, formulation, and implementation of integration policies and programmes. Many policies are needed to place the sector as the centre of African's integration dialogue and agenda, as an active participant in policy and decision making, as the driving force in cross-border investment and production of goods, arid as a driving force in development infrastructure and provision of services. A rapidly changing global economic environment demands that Africa moves swiftly, and strategically, to achieve regional economic integration. I strongly believe that regional integration provides a key to unlocking Africa's vast economic potential and help raise the living standards of our people. This, in turn, will bring greater stability to the region, improve the business climate and provide growing opportunities for the 19 business sector. In recent years, we have seen the emergence of a number of initiatives to enhance the region's integration. The question is: how can we capitalize on the momentum of those initiatives to ensure continued growth and prosperity - prosperity that is shared by all people in Africa. The need to integrate our economies is no longer an option but a matter of must if Africa wants to integrate itself in the global economy. The benefits of integration are numerous and are self-evident in regions that have successfully integrated their economies, for example, ASEAN countries, NAFTA and MERCOSUR. Regional integration arrangements can help African countries overcome constraints arising from small domestic marketsallowing them to reap the benefits of scale economies, stronger competition, and more domestic and foreign investment. Such benefits can raise productivity and diversify production and exports. The small size of many African countries makes cooperation in international negotiations an attractive option achievable through integration arrangements. Cooperation can increase countries' bargaining power and visibility. By pooling our resources and exploiting our comparative advantages, integration can give rise to common solutions and use resources more efficiently to achieve better outcomes. Small populations and low incomes limit the size of Africa's domestic markets, which constrain any meaningful investment in the continent. Regional integration can increase investment in member countries by reducing distortions, enlarging markets, and enhancing the credibility of economic and political reforms. The results can raise the returns to investments, make larger investment more feasible, and reduce economic and political uncertainty. Apart from its direct impact on production, increased investment-particularly foreign direct investment- can promote knowledge and technology transfers and spillovers, raising productivity in member countries. Mr. Chairman, If Africa has any chance of diversifying its production and trade away from dependence on agricultural products and on the northern hemisphere, an integrated continental market offers the best hope for large-scale manufacturing. Developing physical infrastructure, removing commercial obstacles to the free movement of goods and productive resources, and harmonizing monetary, fiscal, and financial policies across the African Sub-regions will improve the operating environment for foreign investors. The policy challenges of diversifying production and trade help explain why the continent continues to export primary commodities and import manufacture goods. Individual national markets are small, whether measured by population or aggregate purchasing power- the main constraint on national economies attempting to diversify the structure of production and trade. Therefore for the African continent, market integration is a survival strategy in a global world. The negative economic and social indicators in Africa do not bode well for small countries attempting individually to rise above the growing competition. The concept of a stand-alone nation-state backed by a rigid adherence to national sovereignty is fast disappearing in the new millennium. 20 Mr. Chairman, Ladies and Gentlemen, Globalization and regional integration require effective regional infrastructure - transport, communication, and energy- to widen and integrate markets, achieve economies of scale, encourage participation of the private sector, and attract foreign investment and technology. Despite efforts to integrate transport, communications, and energy, gaps still exist in infrastructure and services across regional economic communities and across Africa - raising the cost of doing business and impeding factor mobility, investment, and competitiveness. There is also increase recognition of the importance of services in the economic development by the developing countries. Since the mid-1990s an interest has arisen in services liberalization on the part of many developing countries. The liberalization of services has become a part of the considerable revival and renewal of interest in regional integration in all parts of the world. Services have been the most dynamic component of the World economy over the past two decades. In both trade and foreign direct investment, services are the fastest growing component, displacing trade in merchandise and employing a large number of population. Efficient services allow for more competitive production and export of goods. Advances in telecommunication services are contributing significantly in reducing the cost of doing business and also making it possible for developing countries to benefit from global outsourcing of component manufacturing. Africa can equally benefit from services liberalization particularly in telecommunication and energy. Mr. Chairman, African countries recognize that industrial expansion has a vital role in transforming their economies from overwhelming dependence on production and exports of primary commodities to technologically advanced manufacturing. Yet most African countries have rudimentary, fragile manufacturing capacity. A significant increase in systemic support for industrialization - including adequate industrial investments- is imperative. Without it, trade liberalization will have minimal impact. Several steps should be taken to boost economic communities’ industrial cooperation efforts. Mr. Chairman, I wish to conclude by saying that Africa's productive sectors have not yet acted as an engine for growth in regional trade. Low agriculture productivity and production coupled with insufficient and uncompetitive industrial output do not provide opportunities for boosting trade within or between regional economic communities. These structural deficiencies and others such as the high cost of doing business- need to be addressed to achieve significant growth in intra-African trade. Efforts should be intensified to clean up trade agendas by harmonizing policies, removing unnecessary duplication, harmonizing investment codes and factor mobility, and promoting genuine unification of markets. It is also imperative that regional groupings coordinate and harmonize common position in the EPA negotiations with the EU. Also trade and industrial policies need to be harmonized both within and 21 across economic communities. African countries, in future rounds of WTO negotiations, should push for modification to the principles of the WTO system and the body of agreements and rules in ways that spotlight the vulnerable position of African and other developing countries, and support efforts for strengthening supply capacities. On this note, I now wish to declare the African Union Private Sector Forum, which is one of the antecedent events of the seventh AU Banjul Summit, formally open. I thank you all for your kind attention. 22 ANNEX III AFRICAN UNION UNION AFRICAINE UNIÃO AFRICANA STATEMENT BY H. E. DR. MAXWELL M. MKWEZALAMBA COMMISSIONER FOR ECONOMIC AFFAIRS AFRICAN UNION ON THE OCCASION OF THE OPENING OF THE AFRICAN UNION PRIVATE SECTOR FORUM 22 JUNE, 2006 23 BANJUL, THE GAMBIA Honourable Alieu NGum, Secretary of State for Trade, Industry & Employment Mr. Bai Matarr Drammeh, the President of The Gambia Chamber of Commerce and Industry Distinguished Members of the Private Sector Distinguished Ladies and Gentlemen Ladies and Gentlemen It is a great honour and privilege for me this morning, on behalf of the Chairperson of the African Union Commission and indeed on my own behalf, to extend a warm welcome to you all to The Gambia and in particular to Banjul. I am equally delighted to make a few remarks at the opening of this crucial Private Sector Forum. It is pleasing to note that this Forum will focus on the theme "Regional Integration and Rationalization of Regional Economic Communities", which is also the theme of the Summit. We, therefore, hope that the Forum will make its voice heard at the Summit level on this developmental strategy that the African Union adopted as the only viable strategy for achieving poverty reduction, sustainable growth and development and integrating Africa into the global economy. Please allow me to express the African Union Commission's sincere gratitude to the Government and the people of The Gambia for the warm hospitality accorded to all of us, including you, representatives of the Private Sector, and the excellent facilities made available to ensure the success of this Forum. I also wish to thank all of you, particularly the private sector representative attending this Forum, for affording us the opportunity to meet and share ideas and experiences on regional integration and the rationalization of the Regional Economic Communities and how we can combine our resources and energies to propel Africa onto a sustainable growth path. I am sure that your discussions and conclusions on this subject will also inform out Heads of State and Government when they discuss the same issue during their Summit to be held here in Banjul from July 1- 2, 2006. Honourable Minister Distinguished Ladies and Gentlemen We are all aware of the critical role that the private sector plays and continues to play in the development and integration of the African economy. For instance, it is making remarkable contribution to poverty reduction through new investments, creation of wealth, and generation of employment. In addition, it is making major contributions to social development. Some of you will recall that when you met in June 2004 in Addis Ababa, Ethiopia, you agreed on the establishment of this Forum as a key instrument of interface and partnership between the African Union (AU) and the private sector that would also strengthen public-private sector partnership and accelerate the integration of Africa. At that first meeting, you discussed the Vision, Mission and Strategic Plan of the 24 AU and the role of the Private Sector in financing the AU Strategic Plan and the NEPAD Programme. The June 2004 meeting also discussed the role of the private sector in the realization of the African Economic Community (AEC) as well as the private sector’s response to the challenges and opportunities of globalization and the AU Commission undertook to organize, on an annual basis, the AU-Private Sector Forum. The issue was presented to the Executive Council and AU Summit in Abuja, Nigeria, in January 2005 and it was decided to institutionalize this Forum, of course, with the private sector taking the lead and the African Union facilitating its organization. We did try to call a second meeting in January 2006 in Khartoum, The Sudan. Unfortunately, for reasons beyond our control, the Forum could not take place. Therefore, I am happy that we are gathered here today to take this process forward to build a better Africa for its peoples and its future generations. The AU Private Sector Forum meeting in Banjul is expected to build on the outcomes of the previous meeting by engaging in the debate on African integration. The Forum yet provides another opportunity for the AU Commission to engage the private sector with a view to strengthen its role in the realization of Africa's integration through promoting trade, investment, industrialization and employment creation in Africa. This meeting aims to critically examine the role of the private sector in enhancing integration and the building of a large, viable and competitive African market. We are convinced that the creation of an integrated African market where there is free movement of goods and services, capital and people across all borders is essential for Africa's socio-economic and political development. In the last few years, we have experienced increases in intra-regional trade emanating from the various trade liberalization initiatives undertaken by the Regional Economic Communities (RECs). For instance, there have been efforts and regional development plans for integrating financial and capital markets as well as cultural and social development in Africa. In this regard, I wish to recognize the work so far undertaken by the RECs in their effort to integrate Africa. Indeed the RECs are recognized as the building blocks of the African Economic Community in the Abuja Treaty establishing the African Economic Community. However, more could have been achieved in this process had there not been any problems associated with the overlapping and multiple memberships to regional economic communities (RECs) of Member States and the associated trade and related economic policies that have tended to compromise the gains so far achieved and posed a major challenges to the operations of the private sector. Honourable Minister Distinguished Ladies and Gentlemen As you may be aware, for this Forum, the African Union Commission has suggested the key areas of focus in order to address the theme of the Summit. However, in future, we 25 expect the private sector to make the suggestions and the Commission to facilitate the work of the Forum so as to be consistent with the Decision of the African Heads of State and Government taken in Abuja, Nigeria, in January 2005. Thus, this Private Sector Forum is expected to concentrate on discussing the following issues: a) The Role of the Private Sector in Regional Integration and development process and the Rationalization of the Regional Economic Communities; b) Engaging the private sector in the creation of a competitive and integrated African market; and c) Creating effective Public-Private Sector Partnerships in the development of infrastructure and promoting connectivity in Africa. These suggestions should not limit your debate. Instead, they should serve as guides and the presentations by the various participants should stimulate debate and the proposition of solutions to the challenges identified. As we deliberate on these issues, I wish to remind ourselves of the very crucial ambition the African Union has committed itself to by 2025: “A united and integrated Africa; an Africa imbued with the ideals of justice and peace; an interdependent and virile Africa determined to map for itself an ambitious strategy; an Africa underpinned by political, economic, social and cultural integration, which would restore to Pan –Africanism its full meaning; an Africa able to make the best of its human and material resources and keen to ensure progress and prosperity of its citizens by taking advantage of the opportunities offered by the globalized world; an Africa engaged in promoting its values in a world rich in its disparities.” It is clear that the African Governments cannot achieve this ambition on their own unless they combine forces, resources and ideas with the private sector, civil society, labour, the youths and all Africans. We need a united force to this daunting task and look forward to hearing your ideas on how we move forward our integration agenda, including the role that needs to be played by the private sector and what needs to be done for the private sector to effectively play this role. Honourable Minister Distinguished Ladies and Gentlemen, In conclusion, please allow me to once again thank you all for giving us this opportunity to consult on this very pertinent subject which is Africa’s key strategy for development and integration into the global economy. The African political leadership recognizes that you have a critical role to play in this process and I urge that you seize the opportunity so that the African private sector can grow from being small and medium enterprises to African multinationals that drive the integration process. It is my sincere hope that the outcome of this meeting will enrich all of us and give us a leeway to move forward with the integration and development of our continent. 26 Once again, I wish to thank the Government and the people of The Gambia for having made it possible for us to meet in this beautiful city of Banjul. I also wish to thank the Economic Commission for Africa, the African Development Bank, the NEPAD Secretariat, the African Business Round-Table and all private sector associations in Africa for working tirelessly in promoting the development of the private sector in Africa and also contributing in various ways to Africa's integration efforts. Finally, I wish you all successful deliberations and a wonderful stay in Banjul, The Gambia. I thank you for your kind attention! 27
"Report - AFRICAN UNION"