STATEMENT ACCELERATED DEVELOPMENT AFRICA: THE CHALLENGE OF ECONOMIC RECOVERY THE INTERNATIONAL CONFERENCE. Abuja, Nigeria, June, 1987

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1 ECA/CERAD/87/75 THE INTERNATIONAL CONFERENCE ON AFRICA: THE CHALLENGE OF ECONOMIC RECOVERY AND ACCELERATED DEVELOPMENT Abuja,, June, 1987 THE ABUJA STATEMENT UNITED NATIONS ECONOMIC COMMISSION FOR AFRICA

2 CONTENTS Quotes from the Opening Speeches 1 Introduction 7 The Abuja Statement on Economic Recovery and Long-Term Development in Africa 9 Appendices L List of Participants 21 II. List of Plenary and Working Group Chairmen and Discussants 35 IIL Conference papers 41 m

3 QUOTES FROM THE OPENING SPEECHES HIS EXCELLENCY MAJOR-GENERAL IBRAHIM BADAMASI BABANGIDA President, Commander-in-Chief of the Armed Forces of the Federal Republic of "In adopting the African Priority Programme, most countries in Africa have fully committed themselves to lay the foundation for durable structural policy changes within their economies. They have also committed themselves to improve the levels of productivity, promote rapid economic recovery and enhance the prospects for long-term development. What the UN General Assembly did in 1986 was, first, to accept the African Recovery Programme as a common point of reference, and secondly, to reiterate the willingness and commitment of the international community to support and complement Africa?s development efforts on the basis of the priorities contained in the Recovery Programme." "The essence of our structural adjustment programme is to address the fundamental issue of our underdevelopment and persistent management crisis. It rests on two basic planks. The first is the determination of the terms on which we wish to define our relationship with the advanced industrial countries....the second plank is the positioning of our policy instruments in the context of an increasingly unsympathetic world economic and financial power structure. Thus, our structural adjustment programme may appear to mean different things to different people. Indeed, our perception of the goals and the process for attaining them may also appear different from that of the advanced industrialized countries and their associated financial institutions".

4 QUOTES FROM THE OPENING SPEECHES n HIS EXCELLENCY COLONEL DENIS SASSOU-NGUESSO President of the People's Republic of Congo "Today, practically all African countries have had to undertake wide-ranging political reforms and to adopt stringent measures as part of structural adjustment and stabilization programmes, in most cases under the guidance of the International Monetary Fund. Will it be possible to carry out those programmes successfully and emerge from the crisis free and unsubjugated when we are witnessing the persistent deterioration of economic activity, which brings with it an alarming deterioration of the social situation in the various countries? What can one say about the principle of interdependence preached in international forums when it is only too obvious that instead of adopting radical reforms to change the international environment, the rich countries are, on the contrary, formally consolidating their dominant position in international economic relations." "The African crisis has now become a real human tragedy and this can be seen from the upheavals, the hunger riots and the explosive socio-political situations observed in some brotherly countries. We have to convince ourselves that the crisis will spare no State. Drastic measures are therefore a must for each and everyone. There is no doubt that in spite of the stringent nature of the adjustment and stabilization measures advocated by the International Monetary Fund, African countries are demonstrating their unswerving determination to bring about and accelerate the necessary recovery of their economies."

5 QUOTES FROM THE OPENING SPEECHES m HIS EXCELLENCY JAVIER PEREZ DE CUELLAR Secretary-General of the United Nations "It should be remembered that the initiative for the UN Programme of Action came from Africa itself. It was the African Governments who at the African summit meeting in 1985 adopted the African Priority Programme for Economic Recovery and called for the convening of the Special Session. One year after the adoption of the UN Programme of Action, it is clear that there is need for increased effort. On the one hand, African Governments cannot relax their efforts to adjust and reform; on the other hand, their partners in development must honour their commitments to support the efforts of African countries in a more effective and timely manner". "It is essential that financial flows (to Africa) should be re-established at a level that will permit development. An important component must be debt-relief measures Because of my concern about the financial situation in Africa...I have established a group of eminent persons which is to submit its conclusions and recommendations to me by the end of the year. This group, which is working in collaboration with multilateral financial institutions as well as UNCTAD and ECA, has just held its first session and adopted a programme of work." "The development process is necessarily a long-term undertaking. Population problems, as well as problems connected with human resources mobilization and with the management of natural resources (environmental problems), are fundamental elements which must be taken into account in rural development strategies. This must also be taken into account by adjustment programmes and recovery activities. The failure to develop a sustainable balance between productive activities and the environment has resulted in environmental degradation which only exacerbates the problems of human welfare, particularly in the rural sector. In the same way, efforts to strengthen regional and subregional cooperation in conformity with the orientation of the Lagos Plan of Action must be intensified. I have already spoken about the social implications of the structural adjustment programmes now under way. In my opinion, the successful implementation of these programmes also depends on two elements; first of all, the equitable distribution of efforts and sacrifices in the society; and, secondly, programming the introduction of reforms and adjustments over time. The few failures recently recorded give us reason to be cautious. Also, too often, it has been the rural sector which was called on to bear the brunt of adjustment and at a pace which was difficult to absorb."

6 QUOTES FROM THE OPENING SPEECHES IV THE HONOURABLE MONIQUE LANDRY Minister for External Relations, Government of Canada "Together, over the past year, we have seen Africa write another page in its long history - a far more hopeful page that records incredible efforts by African governments and people toward economic reform and recovery. It tells of three per cent growth in agriculture... of crop increases as high as 25 per cent... of policy reform in two-thirds of sub-saharan Africa, and structural adjustment programmes in twenty-five countries... of full granaries in the Sahel (but not yet, alas, in Mozambique, Angola,, Sudan and Botswana). It tells of grassroots revival, of new development efforts at the village level, often sparked and supported by voluntary groups, both African and overseas. It tells also of Africafs determination to overcome the bitter colonial legacy of division and fragmentation, by making the Lagos Plan of Action a reality through renewed efforts at regional cooperation - from the CILSS and its work against drought and desertification in the Sahel... to the IGADD and its contribution to stability in the Horn of Africa... to the Indian Ocean Commission and its efforts toward regional development... to SADCC and the valiant effort pf the Front Line States to build for the future through collective self-reliance, despite Pretoria's efforts to destabilize the entire region." "All of this has been achieved in the face of a difficult external environment... And yet, somehow Africa has managed to change, to move, to accept new priorities, as it agreed to during the Special Session." "What about the international community? At the UN Special Session, they undertook to improve the quality and effectiveness of economic cooperation... to pursue policies aimed at improving the international economic environment... and to make every effort to provide adequate resources to support Africa's own efforts. By and large, it must be \ recognized, those commitments have not yet been met. Whether we look at aid, or debt, or trade, the rich countries have not as yet lived up to their part of last year's economic recovery pact."

7 QUOTES FROM THE OPENING SPEECHES PROFESSOR ADEBAYO ADEDEJI United Nations Onder-Secretary-General and Executive Secretary of the Economic Commission for Africa "...What are the commulative long-term consequences of the policies designed to cope with the short-term problems of maladjustment, severe and persistent foreign exchange shortages, excruciating debt and debt servicing burdens for long-term development? Is Africa putting itself into a situation whereby it may be sacrificing long-term development objectives for short-term expediencies? Is Africa, in order to bring about recovery, now compromising the prospects for long-term development? Is it inevitable or a conditio sine qua non for recovery that we must cut down in those areas where we have made major advances during the post-independence era - i.e. education, health, infrastructural facilities or social overhead capital - in order to achieve a short-term turn-around of our economies? Must we close down our primary and secondary schools, contract our institutions of higher learning, reduce our medical services and aggravate the unemployment situation in order that we can, through structural adjustment programmes, achieve economic recovery? Is this the price that Africa must perforce pay for its past deeds and misdeeds, for the poor management of its economy?" "Why has the response of the international community during the past twelve months been so niggardly? Is such limited and inadequate response symptomatic or has it been due to the inevitable time-lag between commitment and delivery? Will the international community be able, in the months and years ahead, to come to Africa's assistance in such magnitude and scope as to assure the African people and governments of their earnest desire and commitment to the continent's recovery and accelerated development - not just in terms of official development assistance (important as it is) but also and more importantly in terms of addressing the commodities issue and the debt and debt servicing problem? How can a continent with weak, fragile and vulnerable economies achieve any significant break-through if it is at the same time a net transferor rather than a net recipient of resources? Without doubt, Africa will find it an impossible task to achieve recovery and development unless the three strangleholds on its political economy - debt, commodity prices and reverse flows of resources - are loosened."

8 INTRODUCTION 1. Background to the Abuja Conference At the request of African Governments, the United Nations General Assembly convened a Special Session on the Critical Economic Situation in Africa from 27 May to 1 June After lengthy negotiations, agreement was reached in General Assembly resolution S-13/2 of 1 June 1986 on the United Nations Programme of Action for African Economic Recovery and Development, 1986-]990 (UN-PAAERD). In this Programme, African Governments reasserted their commitment to spearhead the region's economic recovery and development based on Africa's Priority Programme for Economic Recovery, (APPER), adopted by the 21st Ordinary Session of the Assembly of Heads of State and Government of the Organization of African Unity (OAU) in July The international community committed itself to support and complement the African efforts. The International Conference on Africa: The Challenge of Economic Recovery and Accelerated Development was organized jointly by the United Nations Economic Commission for Africa (ECA) and the Federal Republic of and in collaboration with the Organization of African Unity and the African Development Bank (ADB) as one of the major follow-up actions to the Special Session of the United Nations General Assembly, at the regional level, in the belief that the chances of successful implementation of APPER and UN-PAAERD will be greatly enhanced by efforts aimed at placing the programmes in their proper historical perspective and context, and at promoting deeper understanding of their principles and basis, as well as the policy issues and choices involved. 2. Objective of the Conference The main objective of the Conference was to assist the African countries and the international community to fully exploit the opportunities and advantages of APPER and the UN-PAAERD, and to ensure that a truly solid foundation is laid for the achievement of the longer-term goals of African development. Coming up a year after the United Nations General Assembly Special Session on Africa, and two years after the adoption of APPER, it was hoped that the Conference would be able to undertake a preliminary assessment and evaluation of the prospects for economic recovery and accelerated development on the continent and recommend necessary future actions. 3. Participation Participation in the Conference was at the highest level. It involved African Heads of State and Government, Government Ministers and high-ranking officials, executive heads and senior officials of United Nations agencies, international, regional and sub-regional development and financial organizations and institutions, donor agencies as well as African and non-african scholars. In all, there were over 200 participants at the Conference. 4. Organization of the Conference The Conference was comprehensive both in its scope and coverage. The first part of the Programme of the Conference, covering the. first two days, was devoted to a review and appraisal of the responses of African countries and the international community to the African economic crisis and recovery programmes (APPER and UN-PAAERD). The

9 second part was devoted to deliberations on prospects for Africa's accelerated and longterm development. In all, there were seven substantive plenary sessions and four group discussion encounters over the five-day period, June Seventy-four papers, all extremely stimulating, pertinent and useful, were submitted to the Conference by African countries, regional and international institutions and individual participants. In view of the large number of papers and the need to maximize exchange of ideas and experiences, and to ensure that the Conference was issue- and policy-oriented, there were no formal presentations of papers. Rather, the rich collection of papers served as background documents to the discussions and deliberations in both plenary sessions and group encounters. 5. The Abuja Statement; The Preparatory Process For the preparation of the Abuja Statement, a select panel of 20 eminent participants, comprising government ministers and high-ranking officials, executive heads and senior officials of international, regional and sub-regional organizations, institutions and donor agencies, African and non-african scholars was constituted into a Drafting Committee whose membership was left open-ended. In the end, close to 40 people participated in the work of the Committee, drawing on the proceedings in the plenary sessions and discussion groups. The Committee produced a synthensis of the deliberations and summary of conclusions and recommendations which was issued at the concluding session of the Conference as the Abuja Statement. 6. Acknowledgements The ECA wishes to acknowledge with thanks the generosity of the Federal Republic of in co-sponsoring and hosting the Conference very generously. It also wishes to express, once more, its gratitude to the Government of Canada, the United Nations Development Programme, the Commonwealth Secretariat, the Swedish International Development Authority, the Ford Foundation and the African Development Bank for their financial contributions and support. In addition the ECA is particularly thankful and grateful to all authors of papers for the very rich gathering of ideas which their efforts made possible, and to all participants for their response to the Conference which was overwhelming. Finally, the collaboration of both the Organization of African Unity and the African Development Bank is gratefully acknowledged.

10 ABUJA STATEMENT ON ECONOMIC RECOVERY AND LONG-TERM DEVELOPMENT IN AFRICA 1. An International Conference on Africa ; The Challenge of Economic Recovery and Accelerated Development was convened in Abuja, the new Federal capital of, from 15 to 19 June 1987, for the purpose of making an in-depth review of Africa's recovery process and prospects for long-term development. 2. Such a review and assessment was both crucial and timely, taking into account the time that had elapsed since the adoption of Africa's Priority Programme for Economic Recovery (APPER) and the United Nations Programme of Action for African Economic Recovery and Development (UN-PAAERD) in 1985 and 1986 respectively. The Conference was also deemed timely in view of the continuing gravity of the economic situation facing Africa, in spite of the efforts in the implementation of those programmes. It had accordingly become necessary to undertake a critical assessment of actions that had so far been taken by Africa and the international community in their implementation, with a view to identifying what progress had been made and the constraints that were impeding Africa's economic recovery and long-term development. This Statement reflects the conclusions and recommendations which have emerged from this review and assessment. It draws attention to the emerging trends, opportunities and constraints and puts forward concrete and practical proposals for generating sustained recovery and growth and bringing about structural transformation of the African economies. 3. Over 200 African and world experts and scholars, government officials and policy makers from 36 countries, 24 organizations from the United Nations system and 28 African and non-african intergovernmental and non-governmental organizations participated. To assist the Conference in its task, several issue- and policy-oriented papers and studies were submitted as background documentation. The diversity and very high level of participation provided a unique opportunity for a balanced exchange of ideas and reasoned recommendations. The Conference was therefore appreciative of the initiative and effort by the Executive Secretary of the Economic Commission for Africa in organizing this important Conference. The Conference was also appreciative of the co-sponsorship by the Federal Republic of and the co-operation of the Organization of African Unity and the African Development Bank. 4. The Conference was particularly honoured that His Excellency Major General Ibrahim Babangida, President of the Federal Republic of and Commander-in-Chief of the Armed Forces and His Excellency Colonel Denis Sassou Nguesso, President of the People's Republic of Congo,and current Chairman of the Organization of African Unity, personally addressed the Conference. The Conference was greatly encouraged by the message of the Secretary-General of the United Nations, His Excellency Javier Perez de Cuellar. The Conference welcomed the statement delivered by Madame Monique Landry, Minister of External Relations of Canada, reflecting Canada's interest in and support for Africa's recovery and development. 5. The Conference proceedings were conducted in seven plenary sessions and several group discussions. While detailed proceedings will be published in due course, this Statement brings out the highlights of the issues, conclusions and recommendations for action. The Conference hopes that African Governments and peoples and the. international community will take prompt and appropriate actions to implement the recommendations.

11 THE ABUJA STATEMENT A. OVERALL ASSESSMENT OF THE SITUATION Progress, problems and prospects in the recovery process 6. The review of the progress made in the implementation of APPER and UN-PAAERD was at three levels: action taken by African Governments; action taken by African regional and subregional organizations and institutions; and, action taken by the international community. The Conference noted that the measures undertaken so far by African Governments included, among others, higher public investment in the agricultural sector, reduction in public expenditure, reduction of subsidies and transfers, greater incentives to farmers and domestic manufacturing, restructuring of public administration, reform of public enterprises, squeezing of public sector wages and reform of the exchange system. These measures have so far yielded some positive results in a number of countries, particularly in improved agricultural production and in the rationalization and better utilization of resources. More than anything else, these measures have demonstrated the limitations and constraints that need to be removed if the process of recovery is to gain any momentum on a sustainable basis. 7. The collapse of international commodity prices has drastically reduced the actual and potential earnings from increased volume of commodity exports; the expected inflow in the level of resources to support the recovery process has not been forthcoming to the extent that they can have an adequate impact on the situation; and additional external debt-service burdens have put serious limits on what can be mobilized to promote domestic reconstruction and development as envisaged in APPER and UN-PAAERD. The net effects of these are the aggravation of balance-of-payments problems and the dire need for external resources, thus forcing many countries to implement structural adjustments programmes aimed at correcting current financial imbalances. To date, 28 African countries are implementing such measures. 8. In many countries, the period of the adjustment programme has been too short to allow for a realistic evaluation and, in any case, there is hardly any country that has been able to mobilize adequate resources to support its adjustment programme. What has become evident, however, is that unless structural adjustment programmes are closely related to the wider objectives of APPER and UN-PAAERD, and unless more substantial resources can be mobilized to support the programmes, there is great danger that the process will have negative impact on growth, living standards, employment, social development and political stability. 9. The Conference was gratified to learn that subregional concerted approaches to the promotion of the recovery process had begun to emerge. For example, the Authority of Heads of State and Government of the Economic Community of West African States (ECOWAS) had pledged individual and collective support to initiate a West Africa-wide recovery process through a joint plan of action to be launched on 8 July Such a programme would concentrate inter alia on subregional food security, drought and desertification control and water resources development and management. 10. Similar efforts have been taken in other subregions, particularly in Southern Africa under the auspices of the Southern African Development Co-ordination Conference (SADCC), where concerted efforts particularly designed to counteract the destabilizing policies of 10

12 THE ABUJA STATEMENT South Africa have preceded both APPER and UN-PAAERD. These concerted efforts focus especially on strengthening the subregion's alternative transport and communications structure, the development of food security, strengthening of the subregion's capacity, securing social and economic infrastructure, reducing the subregion's dependence on South Africa, and the promotion of cooperation in the field of trade, industry and energy. 11. The Conference also noted with satisfaction the substantial increase in the authorized capital of the African Development Bank (ADB) which would be available to finance projects in response to priorities of APPER and UN-PAAERD. The Conference also welcomed the growing role of ECA and OAU in promoting the objectives and monitoring the implementation of APPER and UN-PAAERD. Africa and the international community 12. While it is generally agreed that much of the effort and resources required for f implementing the recovery programmes and bringing about long-term development in the \ region will have to come from African countries themselves^ the Conference recalled thaf~~ the contribution of the international community had been underscored as being critical during the thirteenth special session of the United Nations General Assembly on the critical economic situation in Africa. African countries had estimated their external financial needs for the recovery programmes at $US 45.6 billion for the five-year period and their external debts servicing requirements conservatively estimated at $US 14.6 billion annually, thus bringing the average annual external resource requirement under the UN-PAAERD to between $US 24 billion and $US 34 billion on the assumption that commodity prices remained at the 1985 level. While it did not commit itself to these figures, the international community did undertake to make every effort to provide sufficient resources to support and supplement Africa's development effort and agreed that measures had to be taken to alleviate Africa's debt burden. 13. The Conference noted with satisfaction that a number of positive steps had been taken since last year. These included (a) the replenishment of IDA resources to the tune of $US 12.4 billion and the decision to allocate 45 per cent thereof to Sub-Saharan Africa; (b) the increase in the level of the grant element in official development assistance (ODA) by some developed countries to the hard pressed low-income African countries; (c) the cancellation of ODA debts by some donor countries in favour of some least developed African countries. The Conference also welcomed the recent decision of the thirteenth Summit meeting of the seven most industrialized market economies of the West, held in- Venice, Italy, from 8-10 June 1987, that consideration should be given by the Paris Club to the possibility of applying lower interest rates to the existing debts of those African countries that are undertaking adjustment efforts and that agreement should be reached on longer repayment and grace periods to ease the debt burden. It also endorsed the proposal submitted by the Managing Director of International Monetary Fund to the Summit for a significant increase in the resources of the structural adjustment facility over a period of three years begining 1 January, While the Conference would wish to express its appreciation for these efforts, there is some concern that they may not be adequate to meet the external resource needs of Africa for its recovery programme, particularly in the face of the dramatic fall in commodity prices and the escalation of debt burden obligations. The Conference is also of the view 11

13 THE ABUJA STATEMENT that the approach so far to the African external resource needs is rather ad hoc and partial in nature and therefore likely to have limited impact. What is required is a comprehensive approach to the debt problem and aid flows that would provide the financial resources required for economic recovery and development in Africa. 15. Delegates noted the continuing decline of primary commodity prices including oil. They also noted the grim prospects for future commodity prices which would increase the already substantial need for resources in African countries. In view of the sizeable magnitude of the resource needs of those countries however, they called on the industrial countries to make special efforts to increase the flow of capital and concessional aid, to remove protectionist barriers and structural rigidities in their economies and to create an international environment conducive to growth-oriented structural adjustment and increased trade. 16. The Conference stressed the importance of south-south co-operation in Africa's economic recovery and long-term development. Such co-operation was particularly essential in bringing about the structural changes required for self-reliance and self-sustained development. The main areas outlined included the building up of appropriate technological capabilities through technical assistance, interregional trade among developing countries and human resource development. 17. In view of the foregoing analysis, the Conference came to the conclusion that the prospects for recovery depended on the concentration of efforts on such issues as (a) sustainance of domestic policy reforms; (b) continuation of the efforts to improve economic management; (c) ensuring that structural adjustment programmes were consistent with the objectives and priorities of the recovery programmes; (d) the alleviation of the debt burden; (e) the intensification of the search for a solution to the commodities problems; (f) the removal of the constraints on achieving fully adequate levels of official development assistance; and, (g) the amelioration of the impact of acts of political and economic destabilization on the recovery of the countries of southern Africa. Accordingly, the Conference devoted considerable part of its time to an in-depth study of those issues in group discussions. The recommendations contained in the latter part of this Statement were derived from those detailed discussions. Long-term development prospects 18. The second part of the Conference was devoted to reviewing Africa's prospects for long-term development in the light of the experience of the past seven years since the adoption of the Lagos Plan of Action and the Final Act of Lagos in April The Conference undertook this review in the light of the historical, socio-cultural and political situation of Africa as well as the scientific and technological perspectives. It came to the conclusion that Africa!s long-term development must be based on a fundamental structural change which would not happen by itself and which therefore had to be engineered by the Africans themselves as envisaged in the Lagos Plan of Action. In accordance with APPER, the food and agricultural sector should constitute the base for structural change with the African countries gradually reducing the importance and significance to their national economies of exports of primary commodities while increasing the role of domestic and intra-african production relationships until the latter became more dominant and the former more marginal. 12

14 THE ABUJA STATEMENT 19. In order to achieve such a structural change, Africa must take measures to overcome its scientific and technological backwardness. However, the Conference believed that structural changes at the political and cultural levels would also have to be engineered. In a situation where rapid changes were taking place in the geopolitical and technological world order, Africa would have to contend with the pace, content and turbulences of global structural shifts. The continent must also gear itself to respond to the long-term demand prospects for its primary commodities and endeavour over time to move out of the present structure of export-oriented primary commodity system. However, the continent's ultimate future had to remain firmly rooted in its own uniquenesses and diversities, in its cultures, in its peoples and in its natural resources. An improvement in the capacity to respond to these changes must therefore be an essential component in Africa's long-term development strategies. 20. Africa's history and recent experiences confirm that the future prospects of the continent will not hinge simply on issues of economic growth and financial flows. It will require a refocusing of the African ethos and a regathering of all African forces. Africa, as an entity in the world, will have to derive its strength from its internal socio-cultural authenticity, territorial and political cohesion and economic viability based mainly on endogenous forces. 21. New political perspectives are also imperative for setting into motion the process of African progress. A viable development strategy for Africa should be predicated on a comprehensive programme of social transformation which requires vision, resolve and commitment on the part of the African leadership. The democratisation of the African society and increased accountability of those entrusted with power are vital for the mobilization of greater popular participation. For such necessities to become realities, African political perspectives vis-a-vis external political and economic interests will also have to be sharpened to become more decisive and enlightened so that the destiny of Africa is assured to be in the hands of the African people. 22. Overcoming scientific and technological underdevelopment will be one of the critical preconditions to Africa's economic maturity in the coming twenty-first century. To achieve this task, Africa will have to depend less on technology transfers that only deepen its dependency. It must, instead, make consistent efforts to develop, acquire, adapt and internalize such technologies and scientific knowledge that will enable it to make full and effective use of its resource endowments and in relation to its needs. Two areas that will have to be focussed upon include the enhancement of African research and innovation and their institutionalisation in the fabric of society and the development and fuller utilization of African scientific and technical skills. 23. Given the present political and economic fragmentation of the continent, it will be difficult if not impossible for Africa to realize its vision without collective self-relance, economic co-operation and integration. Although the process of co-operation in Africa has been going on for sometime, it will require strengthening and rationalization. Efforts at African integration can bear fruits only if African countries honour faithfully their commitment to integrate their economies particularly through productive activities. It is only in this way that the objective of an African Economic Community can be achieved. 13

15 THE ABUJA STATEMENT B. CONCLUSIONS AND RECOMMENDATIONS 24. In the light of the foregoing analysis, the following conclusions and recommendations are proposed for the most careful consideration of African countries and the international community. 25. Measures for accelerating the recovery process; (a) Sustaining domestic policy reforms and improvement in economic management; African countries must continue to pursue structural policy reform measures, taking into account the need to minimize the adverse social impact of such measures and to take into account the human dimension of adjustment; ensure that budgetary cuts do not affect the development of social infrastructure, particularly health and education services; and, put greater emphasis on the rationalization of government institutions, with a view to ensuring effective and efficient contribution of the public sector to the recovery process. In the light of the recommandation of the Niamey Symposium on Grass Root Development, African Governments must create favorable conditions for decentralization of decision-making, and for delegation of authority and responsibility for increased access to resources so as to broaden the participation of all groups of the population in the recovery process. (b) Structural adjustment programmes and the recovery process; African countries must sustain and accelerate the process of economic recovery by increasing the level of investment in agriculture, developing rural transportation with greater emphasis on low-cost transport equipment and promoting agro-allied industries. They must ensure that structural adjustment programmes are consistent with the requirements for recovery and growth. They are urge?! to undertake, with the assistance of African regional institutions, concerted efforts to exchange information on their negotiations with international financial organizations and honors on policy reform measures and structural adjustment programmes. They must also take appropriate measures for controlling capital flight and the brain drain from Africa. (c) The ECA Secretariat should constantly monitor, through in-depth studies, the impact of structural adjustment programmes on medium and long-term development; and, (d) At the subregional level, collective approaches to recovery and development within the franiework of the existing subregional economic communities should continue to be devised and vigorously implemented. Debt and debt service payments 26. In view of the severity of the debt-servicing problem in many countries in Africa and its dire implications for recovery and development prospects, new efforts will be needed to deal with this problem, particularly in so far as low-income countries are concerned. These efforts should include: 14

16 THE ABUJA STATEMENT (a) Lower interest rates on existing debts, which, in rescheduling agreements, could be critital in some cases; longer repayments and grace periods to ease the debt-service burden as agreed upon at the fecent Venice Summit should be pursued; (b) Conversion into grants of bilateral government-to-government debt and interest obligations for low-income countries undertaking structural adjustment programmes where this has not already been accomplished; (c) Repayment of debt in local currency could be considered; and, (d) Conversion of debt and debt-servicing obligations into investment portfolios and equity. Development assistance 27. In addition, there is an urgent need for increased aid flows that will provide the resources required for recovery and development, m this connection, the Conference welcomes the recent initiative of the United Nations Secretary-General to establish a Highlevel Advisory Group on_ Resource Flows to Africa which will make practical recontmendalioiiii unease the debt burden and increase resource flows to the continent. The Conference also welcomes the new initiatives by some major bilateral donors to increase resource flows to Africa. African Governments and institutions and other development programmes should offer to assist these countries in establishing and expanding their activities in Africa. 28. In addition to all these, the Conference is putting forward the following policy options for serious consideration: (a) Further increase of bilateral aid and more effective use of these flows for recovery and development; (b) A significant increase in additional concessional resources through multilateral institutions. In this regard, special support should be given to proposals or agreements to triple the Structural Adjustment Facility and replenish IDA and the African Development Fund at higher levels and to allocate substantial parts thereof to Africa; (c) Consider the possibility of issuing new special drawing rights (SDR) in relation to development needs; (d) With the assistance of ECA, the African Development Bank and the African Centre for Monetary Studies, consideration should be given to the possibility of setting up an African consultative machinery to enable member States to exchange information and harmonize their positions for the meetings with creditors in the Paris and London Clubs. 15

17 THE ABUJA STATEMENT Commodities, trade and price stabilization 29. Within the overall context of Africa!s recovery and accelerated growth, the Conference arrived at the following conclusions: (a) Intra-African trade offers substantial opportunities for trade expansion, and increased production; thus one way of reducing the vulnerability of the economies is to intensify efforts towards subregional and regional co operation in < trade including trade in commodities; (b) Existing initiatives in international co-operation in commodities need to be continued and strengthened, especially as regards the operation of the common fund; (c) There is a link between commodity, price level, external debt and the need for international resource flows; and, (d) Over the past ten years there have been marked rigidities in the trade policies of industrialized countries towards Africa, especially with regard to trade in processed or semi-processed commodities, a trend which has proved detrimental to Africa's efforts to shift away from commodity dependence. In the light of these conclusions, the following proposals were addressed to specific target groups, namely, the African Governments, the international community and international institutions. (a) African Governments should: (i) Initiate supply rationalization measures so as to bring production and supply of their commodities in line with long-term demand trends; to this end, Governments should take steps to promote new domestic and export demand for their primary commodities through increased market research, development measures and improved market information systems; (ii) Diversify efforts while avoiding repeating costly mistakes or creating new surplus situations; the diversification should include the use of locally available raw materials for production instead of relying on imported ones; (iii) Examine the prospects for the increased use of counter-trade as a measure to promote intra-african trade expansion, including trade in primary commodities without having to use scarce external currencies. (b) The International Community should: (i) Ensure that the Uruguay Round of negotiations enables the grantfcg of more liberal access to industrial country markets of African exports, including tropical products. The possibility of a more rational system of world agricultural trade in the 1990s should be encouraged; (ii) Continue to discuss especially at the forthcoming UNCTAD Conference, the problem of commodity price changes, seeking measures to deal with the problem of reduced income as African countries undertake long-term structural adjustments; (iii) Give further consideration to expanding donor participation in Stabex schemes to include other OECD donor countries; 16

18 THE ABUJA STATEMENT (c) international organizations and institutions should bear in mind, where structural adjustment and other programmes undertaken under the auspices of the multilateral fmancial fnstitutiorfs are targeted to achieve external balance, that the reference prices on which the programmes are based are, themselves, subject to short-term distortions; therefore, less rigidity in the price assumptions is necessary. The Conference urges full discussion of issues related to commodities, trade and the special problem of least developed countries at the forthcoming UNCTAD Conference. Political and economic destabilisation and the consequences for economic recovery and development 30. The Conference recognized that peace, security and stability are necessary pre conditions for Africa's economic development. Recovery and economic development efforts in the countries of the southern African region members of the Southern African Development Co-operation Conference have been and continue to be frustrated by the racist regime of South Africa and its continued polices of aggression and political and economic destabilization. To achieve peace, stability and security in this region the Conference recommends the following: (a) Continuation of the campaign to ensure divestment by all transnational corporations in South Africa; (b) Full implementation by African countries of the measures identified in APPER in support of the national liberation movements and the SADCC countries; (c) Support to the efforts of SADCC countries to strengthen co-operation among themselves and reduce their dependence on South Africa, particularly through maximium support to the SADCC Programme of Action and its plans for alternative transport and communications routes, food security and manpower development; (d) Increased assistance by the international community to the SADCC countries to allow them to implement their recovery programmes and cover the cost of aggression and destabilization policies of South Africa, which was estimated to have cost the region over $US 2 billion annually; and, (e) International and regional development and financial institutions should increase their co-operation with and assistance to SADCC countries. 31 As a result of the continuous aggression by the South African regime and its support of destabilization activities in Mozambique and the current drought affecting large areas in that country, Mozambique is facing a serious economic emergency. Thousands of people are facing severe famine. The Conference urges more urgent humanitarian relief, specially food aid and shelter as well as assistance in removing the fundamental cause of instability. Prospects for long-term development 32 As far as the prospects for accelerated and long-term development are concerned, the general conclusion of the Conference is that Africa needs a new approach to its political 17

19 THE ABUJA STATEMENT economy. This should involve more coherent and more clearly thought out principles to guide its development process and to provide a framework for more efficient resource mobilization. In this context, recovery must also mean economic reconstruction for longterm development which, in turn, calls for new forms of social organization and economic management and the bridging of economic and social disparities. 33. The Conference therefore decided to forward the following recommendations to African countries: (a) The internalization of the productive forces and the growth impetus, as well as increased and effective self-reliance and co-operation on a regional basis; (b) Intensification of popular participation in the economic development process and the promotion of social justice and distributive equity; (c) Recognition of the fundamental role of women in the development process; (d) Development and enhancement of African research and the encouragement of the process of technological and scientific innovation and adaptation; (e) Ensure consistency of the development process and environmental sustainability; (f) Greater reliance on African technical and scientific skills and entrepreneurship; and, (g) The political, social, administrative and cultural dimensions that are conducive to long-term development must be created to ensure the success and sustain ability of the development process. Economic co-operation in Africa and between Africa and the international community 34. In order to reverse the disappointing experience with economic integration and to ensure that the process of integration contributes more effectively to economic, development and structural change, African countries should embark on a comprehensive approach to economic integration involving (a) the rationalization of existing co-operation organs in each subregion, and their effective mobilization for co-ordinated planning and development at the subregional level; and, (b) the pursuit of measures for the close co-ordination of economic and social policies at the subregional level as well as for the joint planning and development of community projects in the key economic sectors. 35. The current effort to harmonize the activities of the multinational institutions established under the eagis of the Organization of African Unity and the Economic Commission for Africa should be accelerated with a view to ensuring that their institutions act in support of the comprehensive approach to economic co-operation and integration. 36. The comprehensive approach to economic co-operation should be accompanied by new efforts to promote closer collaboration with other developing regions, in particular the newly industralising countries (NICs) which are now in a position to provide African 18

20 THE ABUJA STATEMENT countries with an effective programme of technical co-operation in support of sectoral planning at the subregional level in the key economic sectors. 37. Realizing that, in the final analysis, the pursuit of self-reliant and self-sustaining development on the continent would demand a new pattern of economic relationship with the developed countries, involving new trade structures and new efforts to promote foreign investment in Africa, African countries should devise appropriate mechanisms for promoting collaboration between the different productive sectors in Africa and those in the developed countries. Follow-up actions 38. The Conference would be most grateful to the President of the Federal Republic of and the Chairman of the Organization of African Unity for bringing the recommendations of this Abuja Statement at all forthcoming appropriate major international forums. The Conference particularly referred to the forthcoming Twenty-third Assembly of Heads of State and Government of the Organization of African Unity, as well as the Summit:6f Francophone countries, the Commonwealth Conference and the fourteenth Summit of the seven most industrialized countries, that are scheduled to be held in Canada. The Conference also requests the Secretary-General of the United Nations to bring the document to the attention of the forty-second Session of the General Assembly. 39. The Executive Secretary of ECA should follow-up on the implementation of the above recommendations taking into account the consideration that would be given to them by the above main international forums. One of the major challenges that faces Africa is how to sustain international public interest in Africa's long-term development through continuous and effective communication that will reach all levels of society. This is a challenge that faces the Governments of Africa as much as it faces the United Nations in general and its regional arm, the Economic Commission for Africa, in particular. It is therefore imperative that it should be addressed in a comprehensive manner. In this connection, ECA can, with necessary financial support, play a catalytic role. Vote of thanks 40. In conclusion, the Conference wishes to reiterate its appreciation for the generous hospitality of the n Government and people in providing the necessary facilities for the meeting. Its deliberations and conclusions were particularly enlightened by the inspiring addresses of the President of the Federal Republic of, the President of the People's Republic of Congo and current Chairman of the OAU, and by the enriching message of the Secretary General of the United Nations. Done at Abuja, Federal Republic of, 19 June