Action taken by the Trade and Development Board 1998
United Nations New Agenda for the Development of Africa in the 1990s: Prospects for agriculture, trade and industrialization
Agreed Conclusions 454 (XLV)
23 Oct 1998
- The economic recovery which began in Africa in 1994 has proved to be fragile owing inter alia to lower commodity prices and more recently the effects of a slowdown in the world economy as a whole. This recovery did not generate the hoped for increase in national savings and investment which, together with the attainment of the 6 per cent annual growth target envisaged by the United Nations New Agenda for the Development of Africa in the 1990s (UN-NADAF), is essential for the achievement of sustainable development in Africa.
- While African countries have made determined efforts to improve macroeconomic fundamentals, reforms have failed adequately to address all the structural constraints, especially as regards the underdevelopment of human resources and of physical infrastructure, as well as institutional limitations. These therefore remain severe. The design and implementation of structural adjustment programmes should take account of these constraints. Therefore, their conceptualization, including the premises on which they have been built, should be reviewed and adjusted to the requirements of individual countries, and coherence in policy advice should be ensured. Full ownership of reforms, founded upon a broad-based national consensus, is a necessary condition for success.
- The debt overhang continues to be a major constraint facing African countries. It is particularly acute in the light of a reduction of official development assistance (ODA), lower export receipts and meagre resource flows, including foreign direct investment (FDI). The debt overhang is having major adverse consequences for the fiscal health of African countries, and this may discourage domestic, foreign, public and private investment. While the Heavily Indebted Poor Country (HIPC) Initiative has been designed to contribute to an enduring solution to the debt problem, greater flexibility, additional efforts and a broader basis would help to put African countries back on the path to growth and development.
- Bearing in mind the joint responsibility of both debtors and creditors in the accumulation of African debt, innovative approaches involving the affected countries are required. In this connection, taking into account the proposals contained in the Trade and Development Report 1998, the international community may wish to consider ways and means of identifying that portion of the debt assessed as unpayable for possible action by creditors. UNCTAD should continue to consider the debt situation of African countries and provide technical assistance for debt management.
- The continued fall in levels of ODA in real terms continues to be a major cause for concern. This trend needs to be reversed. Donors are invited to increase the level of ODA in accordance with internationally agreed targets. As well as its scale, the quality and predictability of ODA remain critical factors for Africa.
- Agriculture is centrally important in overall economic development in most African countries. There is a need to address the problem of undercapitalization and low productivity. For this, market-based reforms need to be supported. Government action, in most cases, has an important role to play in overcoming the institutional hiatus in input and output markets, infrastructural impediments and deficits in research and development, all of which hinder agricultural development. Promoting the tradable sector in agriculture can be greatly facilitated by better market access and reduced subsidies in industrialized countries. Moreover, graduation into "value added" agro-based manufacturing is highly desirable. To that end, the issue of tariff peaks and tariff escalation as regards products of special export interest to African countries needs to be adequately addressed. UNCTAD should therefore continue to analyse the ways in which conditions in domestic agriculture are affected by the global economic environment and come up with practical and sustainable policy options, including those involving enhancement of market access in the context of assisting developing countries in the formulation of a positive agenda.
- An emphasis on agriculture should not lead to the neglect of industrialization. Experience shows that commodity-based industrialization, building on either agriculture or minerals, is a viable option. FDI can play an important role. But public sector support and domestic investment are crucial. UNCTAD should cooperate with other relevant international organizations in helping African countries to identify opportunities open to them in this area.
- Adequate openness to trade and full integration into the international trading system constitute a crucial objective for African countries. However, the timing, sequencing and degree of liberalization should be adjusted to the needs and constraints of African economies as they build up their international competitiveness. UNCTAD should continue to explore the links between trade, international transport and African economic growth and their policy implications.
- Assistance should be extended to African countries by UNCTAD and other relevant international organizations in order to enable them to identify trade policy options available to them and their rights and obligations under WTO rules, in particular the implementation of special and differential measures in favour of developing countries. Measures should be undertaken to facilitate rapid and negotiated accession to the WTO by non-member African countries. Together with this, the problems facing supply capacities in the productive sectors should be addressed and possible solutions implemented. There is therefore a need for enhanced assistance through extrabudgetary resources by UNCTAD and other relevant organizations in these areas. Where impediments still exist, improved access to industrialized country markets should be considered.
- Increased interactions and integration among countries in the region through trade, finance and investment are beneficial. There is considerable unexploited potential for subregional and regional trade in Africa. Initiatives already being implemented by African countries and their regional organizations require greater international support. Equally, the possibilities for enhancing interregional trade and cooperation should be fully exploited and encouraged, including through the Global System of Trade Preferences among Developing Countries. Greater linkages between countries´ private sectors in this connection need to be further promoted. UNCTAD should continue, in cooperation with other international organizations, its technical cooperation and assistance in these areas. The Joint Integrated Technical Assistance Programme for Least Developed and Other African Countries is a good example of such inter-agency cooperation.
- Institution-building remains a major challenge for African countries. Pro-investment policies, the development of a dynamic entrepreneurial sector willing to invest and the reform of the public sector are fundamentally important factors. The creation of a partnership between the private and the public sector from a developmental perspective has proved to be a successful policy approach both in Africa and elsewhere.
- The Board reiterates that democracy and transparent and accountable governance and administration in all sectors of society are indispensable foundations for the realization of people-centred sustainable development, and that it is essential for social development that all human rights and fundamental freedoms, including the right to development as an integral part of fundamental human rights, are promoted and protected.
- The Trade and Development Board welcomed the comprehensive analysis of African development in the Trade and Development Report, 1998 and encouraged the continuation of such analysis in the context of UNCTAD´s contribution to the implementation of UN-NADAF.
900th plenary meeting
23 October 1998
Related
Agreed Conclusions , Closing plenary
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Agreed Conclusions 579 (EX-LXXIV), Closing plenary meeting