Africa: 6th Economic Conference Opens in Addis.-Experts Call for Major Structural Transformation of African Economies

The 6th African Economic Conference opened Tuesday, 25th October 2011 at the United Nations Conference Centre in Addis Ababa, Ethiopia, with calls by experts for a major structural transformation of African economies.

With the theme: ‘Green Economy and Structural Transformation’, the four-day conference is jointly hosted by the United Nations Economic Commission for Africa (ECA), the African Development Bank, and the United Nations Development Programme (UNDP). The specific objectives of the Sixth African Economic Conference is to provide a platform for experts on Africa, both within and outside the continent, to reflect and dialogue on new directions for growth policy on the continent in order to determine the best approaches to attain the Millennium Development Goals, achieve the objectives of NEPAD and accelerate Africa’s sustainable development.

It will also help to build a common understanding of and exchange knowledge on the green economy concept among African scholars, policy makers as well as other experts in the field; To deepen the knowledge-base in the subject in the quest to meet challenges and identify opportunities in a ‘green economy’ and to share experiences on what is working and what is not in terms of policy responses and interventions; Suggest ways to reinforce capacities of governments and the private sector as well as empowering citizens in the promotion of green economy on the continent, to articulate ways of formalizing a framework for African countries to ensure that relevant green economy concerns are addressed in international, regional and national fora.

Speaking at the opening ceremony, Abdoulie Janneh, the UN Under Secretary General and Executive Secretary of the United Nations Economic Commission for Africa (UNECA) said it is now evident to all concerned that mankind needs to move from old resource intensive methods of growth in which progress has been at the expense of the environment to one in which productivity is boosted by using and managing natural resources more efficiently and effectively. He said green economy must contributes to the structural transformation of African economies, as economic activities must take account of long-term consequences for the environment and the need to preserve our common heritage for future generations while promoting improved social conditions, noting that building a green economy is therefore an important element of the solution.

According to him, the commitment to building a green economy brings its own challenges noting that switching to a green growth path may enable leap-frogging of dirty and inefficient technologies, there are more fundamental dilemmas to grapple with including costly adaptation and path dependence. “Radical changes would be required in behaviour from government, firms and consumers and matched by sufficient financial resources if this approach is to succeed. We also face a predicament in the sense that while the pressing priority for most African countries is to promote growth that creates jobs the immediate effect of on-going growth is a short-run increase in demand for food, energy, and water that may further burden the environment.” Janneh posited.

The Gambian-born UN under Secretary General said: “It is against this background that we must examine how best the green economy can bring about structural transformation in Africa. In doing so, however, we must note that Africa has been growing quite steadily since the turn of the new Millennium with growth rates averaging about 5%. We therefore need to take this situation into account as we try to shift to a green growth trajectory, and especially as our major development partners are also grappling with debt, unemployment and slow growth. Moreover, we must strive to ensure that our growth processes provide job opportunities for young people and give them hope for the future.”

To ensure that the green economy contributes to structural transformation in Africa, Janneh said we have to overcome some of the challenges outlined, and would also mean providing a persuasive vision for the green economy, promoting green growth, determining key sectoral priorities and establishing frameworks for coordination at national and international levels.

Janneh reminded African leaders that if the green economy is to drive a process of structural transformation it would be important to convey a clear vision to all stakeholders of what it entails and what is required to bring it about. Creating awareness about the concept is an important and necessary first step in meeting this very important requirement, just as it would be necessary to highlight its potential contribution to growth and structural transformation. He said Africa has an abundance of natural resources such as minerals, fisheries, forests, wind, hydro and solar which provide it with options for their long-term use in an eco-friendly manner. He added that the green economy would also need to be properly coordinated with on-going processes and must therefore be integrated in national development plans and strategies pointing out that African countries like Ethiopia, Kenya, Morocco, Rwanda and South Africa are good examples of how the green economy could be used to create jobs, generate energy and aim towards carbon-free targets. In addition, he said governments also have a role in establishing policy frameworks that will prioritize investments in the green economy and create incentives to overcome negative externalities and encourage private actors to embrace the idea.

He then made it clear that it is important that international governance of the environment promotes rather than hinders green growth. “There is legitimate fear that a green economy may allow for trade protectionism and the imposition of additional policy conditionalities but this need not to be the case if we promote and adopt global norms that make it easier to produce and trade in green goods” he said. He stated that since developed economies have the resources and technological capabilities needed to undertake required changes, serious consideration should be given to how best to assist African countries to implement agreed outcomes including through the provision of accessible finance, building of local capacities, and access to green technologies. He then described the theme of the conference as relevant, apt and compelling and urged Africans to address this concern by clearly defining what we mean by the green economy and to show that it does not subtract or detract from sustainable development but rather further deepens our ability to promote the balanced integration of its economic, social and environmental pillars.

The Ethiopian Prime Minister, Meles Zenawi, stressed that green growth of utmost importance to Africa due to its abundant renewable energy sources. He said that since African economies are largely agrarian-based, any action on green growth must first target the agriculture sector. He also stated that structural transformation can only take place with a massive increase the production of energy in Africa, from renewable sources. And added that Ethiopia had already embarked on such a programme, that will increase energy generation five-fold in the next five years. “By 2025, when we expect to be a middle-income country, we will have close to zero net emissions of carbon in our economy,” he said.

The Chairperson of the African Union Commission, Jean Ping, said the theme of the meeting was very timely and will help Africa’s preparations for the CoP17 negotiations later this year in Johannesburg, South Africa; and the Rio + 20 meeting in Brazil in June 2012.

Ping quoted the famous political economist, Thomas Malthus, who once said: “The power of population is indefinitely greater than the power in the earth to produce subsistence for man.” He made it clear that he was not a Malthusian, and said green economic growth would be the solution to population pressures. He also noted that the 2011 Economic Report on Africa, jointly published by the African Union Commission and the Economic Commission for Africa, calls on the state to intervene in economic activities to guide development, and said the developmental state would be central to progress in Africa.

Tegegnework Getu of UNDP noted that although African countries had achieved impressive growth rates in recent years, this had not led to a significant improvement in the lives of Africans. He therefore called for a new economic development model such as green growth. “African countries must achieve much-needed advances in human development without replicating the unsustainable practices of those already there; improve the utilisation of their natural resources, including the new discoveries of minerals and hydro-carbons, such that critical environmental systems functions that are preserved and so that the human development of current and future generations is maximised,” Getu said.

Mthuli Ncube, the vice president and chief economist of the African Development Bank, pointed to the difficulties that the global economy is currently facing and the dangers this can pose to African economic prospects. He said African policy-makers therefore have a responsible to manage African economies to shield it against external shocks and to promote global growth. He added the continent also needs to access more funds available for climate change adaptation and called for the creation of a climate change fund that is specific to Africa.

The African Economic Conference will finally inform the 17th United Nations Framework Convention on Climate Change, which takes place in Durban, South Africa from 28 November to 9 December 2011 and will also help the continent to prepare for the United Nations Conference on Sustainable Development (Rio+20) to be held in Rio de Janeiro, Brazil, on 4-6 June, 2012.

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