Opening Speech by Secretary of State Vincenzo Scotti at the Infrastructure Consortium for Africa (ICA).
Dr. Elham Mahmoud Ahmed Ibrahim,
Dr. Mandla Gantsho
Ladies and Gentlemen,
Italy, whose honour it is to be G8 President in this difficult year, is particularly pleased to host the annual meeting of the Infrastructure Consortium for Africa, participation in which, its organisers tell us, has increased substantially as compared with previous editions.
Africa will be the focal point of G8 leader deliberations at the Maddalena Summit in July. The priority themes to be discussed—water, food security, health, education, peace and security—are inextricably bound to that of infrastructure. Hence the importance that we attribute to this meeting, which I have the pleasure to inaugurate and that I hope will help us discover new approaches to the sustainable financing of Africa’s infrastructure networks, thereby contributing to the continent’s development and to pursuance of the Millennium Goals.
The present difficult economic situation only underscores the reasons for the existence of this consortium (a word that sounds nice to an Italian ear due to a Latin etymology makes it much more familiar than other expressions recurrent in multilateral praxis, such as partnership or coalition) of G8 members and African representative and financial institutions.
The effects of the global crisis on economies weaker and more afflicted by the problem of poverty can easily be inferred. The crisis has already slowed, if not paralysed, many African infrastructure projects already under way; it has made it more difficult to draft new ones and risks penalising those with a regional scope. Even before the crisis, inadequacies in infrastructures had rendered several factors endemic to stalled development: the backwardness of infrastructures impacts on the overall economic climate, and economic shortfalls and non-bankability make it difficult to get capital moving and, consequently, to modernise infrastructures.
Re-launching investments in infrastructures is, therefore, a priority not only in terms of counter-balancing the effects of the crisis, contributing to the creation of jobs and new development opportunities in the private sector, but also, and in the longer term, in terms of fostering the African continent’s better integration into the global economy. But investment cannot be an end in itself—we cannot afford to build “castles in the sand”. Infrastructure investments must respond to a real need for integration into a broader-based strategy for the promotion of economic activity and sustainable development.
That is why I believe that the recipe and methodology of the NEPAD process acquire renewed validity in light of these conditions, and in consideration of the new and more transparent trade and financial regulations the international community will be making in the future. Africa’s commitment to governance, improvement of the economic climate, regional collaboration and integration are the necessary prerequisites for stable and inclusive economic development. Industrialised countries, on the other hand, will have to accompany this process with targeted initiatives that are also proportionate to available resources.
The NEPAD process has been accused of being slow, bureaucratic and inefficient. Personally, I do not share this viewpoint. We cannot judge Africa only on the speed of those countries that pass the peer review mechanism. Over the past ten years Africa has made extraordinary progress, considering its point of departure in terms of political conditions and traditional influences. Many countries have successfully created efficient financial systems and begun sustainable development processes. Despite a stop-and-go syndrome, despite the fact that the continent has enjoyed less growth than other regions, we are witnessing a gradual but steady process that needs to advance and be encouraged.
There is no alternative to African empowerment, and Italy is pleased to have hosted the economic summit in July 2001 that formalised the G8’s convinced support for NEPAD, which had been launched by the Africans only a few days earlier at Lusaka.
It is necessary that Africa not be held hostage by the, by definition limited, resources of official development assistance. Resources that have, in any case, never been sufficient to satisfy the continent’s infrastructure needs. Not wishing to call into question the pledges made in the context of the Millennium Goals, it is clear that Africa’s infrastructure problem can only be solved by a more selective use of official development assistance and more systematic recourse to the market, public/private partnerships and private funding. It is highly positive that the final session of the ICA will be dedicated this year to a joint workshop with the World Bank fund set up to provide technical assistance to public/private partnerships, a fund for which Italy resumed financing last year.
The Italian government intends to offer the African Development Bank a pilot infrastructure project initiative concerned with risk assessment and brokering of risk mitigation mechanisms, in order to facilitate a response to the problem of bankability and mobilisation of additional private capital. We believe that encouragement should not be directed only toward Africa, but that investors and creditors too need to be encouraged to give more consideration to the opportunities and to the real risks inherent to the financing of certain African infrastructures.
The initiative will aim to support the African Development Bank’s irreplaceable efforts at improving the economic climate and the attraction of private capital. We are particularly grateful to the OECD for its pro-active and cooperative support for our initiative but, since it is only at the draft stage, we would also be very interested in any reflections or suggestions advanced in the course of our discussions.
The problems the ICA is called upon to debate here are numerous and complex. I am, nevertheless, confident that the atmosphere of collaboration, the importance of these themes for the future of the continent, and the urgency of the moment will combine to give considerable impetus to the Consortium’s meeting.
My best wishes to you all for the work ahead.
