---- — Honorable George W. Bush, President of the United States of America;
Distinguished members of the Senate and Congress;
His Majesty Mswati III, King of Swaziland,
Excellencies Heads of State and Government,
Mr. Frank Fountain, Chairman and CEO of the Corporate Council on Africa;
Dear Guests;
Excellencies;
Ladies and Gentlemen,
At the outset, allow me to thank you for the invitation extended to me to address this very important gathering. It is indeed an excellent opportunity for us to share views on major issues concerning trade and investment between the United States of American and Africa. As the Continent searches for viable ways of mobilizing resources to enhance growth, improve human development outcomes, and thereby reduce poverty, we consider it essential to forge effective partnerships. I believe this forum aims at building and strengthening such partnerships.
Mr. President
African leaders are today, more than ever, conscious of their primary responsibility to develop their countries and the continent as a whole.
In order to promote economic development, most African nations adopted sound macroeconomic policies and legal framework that provide guarantees and incentives, which, in turn, create an enabling environment to attract investment, especially direct foreign investment.
While welcoming foreign direct investment, we also favor economic development through partnership between the private sector and public sector, promoting domestic and regional collaboration as well as between Africa and the rest of the world.
I am very glad to be standing before an audience that understands and cares deeply about Africa. I would like, therefore, to use this occasion not only to send a message on strong will and promise, but also to send out a clarion call that Africa is at crossroads in history where, together, Africans may join the rest of the world in order to meet the challenges caused by disease, hunger, war, lack of foreign investment. As a result of this fruitful dialogue, we should be able to carry a message Africa stands to help itself, that Africa is rising up to the challenges that confront our people; that we are seriously engaged in creating a continent with equal opportunities for all Africans.
I would like to emphasize to major aspects with regard to progress in Africa namely:
1. We consider Peace, stability and democracy as pre-requisites for sustainable development. We are proud to say that Mozambique has made remarkable progress in this direction and we are determined to sustain the process.
2. We equally consider good political, economic and corporate governance as crucial for credible and sustained growth and development that will avoid further marginalisation of Africa from the global economy.
Conditions of peace, security, and sound political and economic governance as well as the development of effective financial markets and the creation of attractive economic opportunities, form the basis of any approach to attract the needed capital to Africa. With regard to intra-African capital flows, improved cross-regional infrastructure connectivity As well as harmonization of regulatory policy framework is essential to increase intra-Africa investment and trade flows. We are determined to generate domestic resources for investment.
However, if we are to rely on domestic resources alone, the process will take much longer and it will be difficult to attain the desired objectives. In the short to medium term, many of the poorest African countries will not be able to mobilize resources within their borders, or within the greater region, and will need to rely on capital flows from outside of Africa to obtain adequate resources to meet the internationally agreed poverty-reduction outcomes.
Current levels of domestic savings estimated at 15% of gross domestic product and foreign capital inflows to Africa fall far short of the capital needs. It is estimated that to reduce by half the number of Africans living in absolute poverty by 2015, in line with the Millennium Development Goals, Africa would need to grow at 7 percent rate annually instead of the current 3 to 4 percent. To reach this target Africa would need to sustain investment rates of 33 percent relative to its income, thus requiring a further financing to fill the gap of approximately 10 per cent of gross domestic product.
Excellencies, Ladies and Gentlemen,
In order to generate progress in Africa, NEPAD synchronizes the Infrastructure Initiative with the Private Capital Flows Initiative to promote cross-regional harmonization of regulatory policies and viable pro-competitive competition.
Poor basic infrastructure services, such as power, transportation, communication, and water, as well as high cost of finance due to shallowness of financial markets, pose an obstacle to foreign and African investors alike.
In order to meet this challenge, NEPAD Capital Flows Initiative focuses on three key areas namely debt, Official Development Assistance (ODA) and private capital. The three areas are complementary, closely interconnected and serve a single goal: to increase resources available for economic growth and poverty reduction. The funding of poverty reduction outcomes, debt strategies and capacity building programs require increased ODA. Appropriately targeted aid flows potentially catalyze private capital flows, which can be strengthened by reduction in excessive debt overhangs.
The links between different form of official flows such as ODA and debt relief are particularly strong. NEPAD takes a common approach to all of them: An appropriate level of total concessional finance (ODA plus debt relief) is the one which - in combination with other sources of capital - allows African countries to enhance growth and reduce poverty.
Our experience shows that infrastructure development is crucial for accelerated economic growth, a necessary condition for sustainable human and social development in Africa.
Excellencies; Ladies and Gentlemen;
The African Union is working to capitalize upon Africa's indigenous technical experts to ensure high-level performance in facing development challenges before the Continent. We are addressing issues related to effective and efficient decision-making processes within the African Union through transparent and efficient flow of information. We are engaging the financial community to find new and creative mechanisms to mitigate risk on the continent in order to enable easier access to investors. It is our hope that the establishment of an organization similar to the World Bank's MIGA in association with the African Development Bank could address this issue.
The adoption of internationally recognized standards of good practice in key areas of economic and financial policy should help improve transparency, accountability, and credibility of policy, and increase the effective functioning of markets. We believe that a robust and healthy financial system should contribute to faster income growth through the attraction of investment, better resource allocation and a more efficient provision of financial resources. The standards which I have just mentioned also provide policymakers with guideposts or benchmarks for implementing structural reform, building institutional and supervisory capacity, and promoting an enabling environment for investment.
By undertaking such measures and actions we would not only achieve the desired goals but also change the negative perceptions about Africa.
Ladies and Gentlemen,
The regional integration of Africa requires human development and economic growth. The levels of poverty should be reduced; the standards and quality of life should be improved along with prevention and combat of HIV/AIDS. The regional integration implies giving priority to investment. Under regional integration, private sector produces and moves goods and serves around the region.
Through NEPAD, we have reinforced the view that we should explore the potential advantages of regional integration. The governments in Africa are convinces that integration will assist them in dealing with domestic problems that they otherwise could.
Excellencies; Ladies and Gentlemen;
We would like to see US-Africa relations significantly enhanced with the increase of trade. The African Growth and Opportunity Act is a tremendous public policy initiative that helps Africa to improve its position in the global market place. Towards this end substantial capital investments were made. In order to provide sustainability to the investments already in place, it is absolutely critical that the period of validity of AGOA initiative be extended, with all its benefits.
Mr. President,
Allow me to address the next few remarks directly to you, Mr. President. First of all, I wish to congratulate you for your invaluable initiatives.
Initiatives such as the HIV/AIDS, Tuberculoses and Malaria Act that provides $15 billion dollars to fight these three silent killers are very generous. We are pleased to see that this particular initiative has been supported by the American people through their representatives in the Congress. We are glad to have Mozambique as one of the beneficiaries. We equally appreciate the assistance provided by US private and non-governmental organization in our endeavors to combat theses deadly diseases.
We are encouraged by your announcement of the Millennium Challenge Account bill. It will certainly provide Africa with so much needed infrastructure. We await its speedy implementation.
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These initiatives that have come from your Administration, Mr. President, and have been supported by the American people through their elected representatives in Congress are the helping hand that Africa needs.
We would also like to express our appreciation to the United States positive contributions at the recent G8 Summit in support of Africa.
Excellencies, Ladies and Gentlemen,
The latest developments in Africa have demonstrated that through determined and persistent effort, African can succeed in restoring peace and stability throughout the continent.
The attainment of peace in Angola and Sierra Leone, the prospects of an enduring peace in the Democratic Republic of the Congo and Burundi are concrete examples of Africa's efforts.
The invaluable assistance of the international community will continue to be fundamental in order to consolidate these achievements and to face remaining challenges.
Excellencies, Ladies and Gentlemen,
In two weeks, Mozambique will be hosting and Chairing the Second Conference of Heads of State and Government of the African Union.
The Maputo Summit will focus on the implementation of NEPAD, strengthening the structure and institutions of the Union and resolving prevailing conflicts.
The summit will also dedicate a special attention to HIV/AIDS, Malaria and Tuberculosis through a Videoconference dialogue which will connect Maputo to Washington D.C. among other 6 cities, on the first day of the Summit.
As we take on the Chairmanship of the African Union for the next twelve months, we want to reiterate our desire to strengthen our partnership with the United States of America and facilitate your contribution to the development of our Continent.
We would also like to seize this opportunity to invite Your Excellency to visit our Continent and witness, first hand, the efforts we are making and the opportunity we offer towards a mutually beneficial cooperation and enhancement of US-Africa relations.
I thank you!
Joaquim Alberto Chissano is president of the Republic of Mozambique and incoming president of the African Union
