Welcoming the Special Initiative on Africa launched today by the entire United Nations system, Rubens Ricupero, Secretary-General of UNCTAD, said that the Initiative demonstrated the international community´s recognition of the burning need to put African development back on the world agenda.
Thirty-three out of the forty-eight poorest countries in the world - the Least Developed Countries (LDCs) - are situated in Africa and thus will receive special attention from UNCTAD. Annual per capita income in African LDCs is just under US$300. According to the forthcoming edition of UNCTAD´s annual Report on the LDCs, African LDCs after many years of economic decline, have registered modest growth since 1994. In 1995, the growth rate was 2.2% as a result of domestic economic policy reforms and of higher commodity prices.
In addition to its ongoing activities in favour of the LDCs and other African countries, Mr. Ricupero said that UNCTAD´s contribution to the Initiative would focus on commodities, debt, trade and investment, technology and enterprise development.
Over 75% of the workforce in Africa is employed in the commodity sector. Africa´s exports have remained stagnant and the real value of commodity exports has fallen by 50%. In addition to diversification in production and trade, UNCTAD seeks to promote producer-consumer cooperation, and the use of market-based instruments such as hedging for specific commodities, to reduce the adverse effects of price instability.
As Africa represents merely 2% of world trade, the Executive Heads of UNCTAD and the World Trade Organization (WTO) have agreed to produce a plan of action for increasing Africa´s export-oriented production and the improvement of export diversification and markets. Whereas for other developing regions, improved market access is a major instrument for stimulating economic growth, for Africa the first challenge is to diversify its production base and to build up value-added supply capacity. Unless its supply capacities are strengthened, Africa runs the risk of being further marginalised in the world economy because of the increasing premium which globalization and liberalization imposes on the efficient production of traded goods.
Less than 2% of foreign direct investment goes to Africa. A recent UNCTAD study has found that returns in investment in Africa are higher than in other parts of the world. The UNCTAD secretariat is to launch a pilot project to prepare country profiles for investment in five selected African countries.
Despite efforts to alleviate the debt of African countries, Africa´s total debt stock stood at US$313 billion in 1994, which is equivalent to 234% of export income and to 83% of GDP. UNCTAD continues to provide substantive support to indebted countries in the context of the Paris Club negotiations. It has installed its Debt Management And Financial Analysis Programme (DMFAS), a computer-based debt management system, in nine African countries. It will contribute its experience to seminars to be organized by United Nations Development Programme and the African Development Bank, for African decision makers on debt management strategies.
Through its Trade Efficiency programme, UNCTAD assists African countries to improve the technological and administrative infrastructure for expanding trade. As part of its activities for enterprise development, the potential for doing business in Africa will be highlighted in the context of the ninth session of the United Nations Conference on Trade and Development (UNCTAD IX) to be held in Midrand, South Africa, from 27 April to 11 May. In parallel with the Conference, a major event called "Africa Connect" will bring together business leaders from African firms and transnational corporations, African chambers of commerce and industry, investment promotion agencies and government officials. They will identify trading and investment opportunities in Africa.
Mr. Ricupero will address member States on UNCTAD´s contribution to the Special Initiative, at a Board meeting on Thursday 21 March. The Board is currently in session to prepare for UNCTAD IX.