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Statement by H.E. Albert Muchanga, AUC Commissioner for Trade and Industry and Acting Commissioner for Economic Affairs at the International Conference on Africa and China: Jointly Promoting Sustainable Development

Statement by H.E. Albert Muchanga, AUC Commissioner for Trade and Industry and Acting Commissioner for Economic Affairs at the International Conference on Africa and China: Jointly Promoting Sustainable Development

December 06, 2019

Your Excellency, Dr. Arkebe Oqubay, Senior Minister and Special Adviser to the Prime Minister of the Federal Republic of Ethiopia;
Your Excellency, Mr. Osama Abdel Khalek, Ambassador of the Arab Republic of Egypt to the Federal Democratic Republic of Ethiopia, Permanent Representative to the African Union and 2019 Chair of the AU Permanent Representatives Committee;
Your Excellency, Mr. Liu Yuxi, Ambassador, Mission of China to AU;
Your Excellencies and Heads of Mission;
Mr. Xie Fuzhan, President, Chinese Academy of Social Sciences (CASS);
Distinguished Conference Participants;
Ladies and Gentlemen:

I stand before you on behalf of Prof. Victor Harison, Commissioner for Economic Affairs who is on mission.

I welcome you all to the headquarters of the African Union.

This conference marks the continuation of the process of strengthening the Africa-China relationship. The forward looking agenda before you is testimony to this.

In a world of climate change, sea level rise, ocean pollution, cyclones, drought and floods among other environmental calamities around the world, jointly promoting sustainable development is a worthy focus of this conference.

The future of the world lies in humanity serving and saving the planet. The existential threat from climate change is real as experienced in all parts of the world and I hope you will advance some solutions to the global environmental challenges that humanity faces as a result of humanity’s own actions against the environment.

As we face the global environmental challenges, Africa also faces the challenge of promoting decent lives among her people. Although Africa has some of the fastest growing economies in the world, the overall rate is not high enough to reduce the levels of poverty within and among our countries.
Between now and 2030, Africa requires annual growth rate of 7% to 10% in order to lay a strong foundation to attain the targets and aspirations of the African Union Agenda 2063.

A huge opportunity has been created for accelerated growth by the establishment of the African Continental Free Trade Area (AfCFTA) which is targeted to start operating on 1st July, 2020.

The AfCFTA is more than a trade agreement. It opens up enormous, opportunities for policy and programme alignment at national, regional and continental levels. In addition, it creates policy space for the development of regional value chains which are critical to bring in train, Africa’s structural transformation, an item on your agenda. Furthermore, new and more attractive opportunities are being created for the development of trade related infrastructure by capitalizing on large economies of scale and scope offered by the AfCFTA. The Belt and Road Initiative is complementary to our programme of developing trade related infrastructure. I, in this respect welcome the fact that the Belt and Road Initiative will be an item for deliberation in this Conference. The Belt and Road Initiative will facilitate both inter-country connectivity and people to people contacts.

As Africa embarks on implementation of the AfCFTA Agreement, the emerging reality is that the multilateral trading system is facing major challenges, the latest of which will be cessation of the work of the WTO dispute settlement body on 11th December, 2019 when there will be only one member of the body still in post. Efforts to appoint new members have been consistently blocked. We are hence entering a new era of de-globalization or decoupling. We should expect more trade tensions and trade wars to emerge as a result of the growing weakness of the multilateral trading system. In such an environment, trade disputes will be settled bilaterally and developing countries will be in very weak bargaining position.

Against this background, African countries are better off strengthening intra-Africa trade flows to compensate for the emerging uncertainties in the multilateral trading system. In any case, while the multilateral trading system is undergoing fragmentation, Africa is moving away from the historical fragmentation of her markets to defragment them and create one integrated and large market.

Distinguished Conference Participants:
Africa pursues partnerships with the objective of using them to enable her realize her full potential.
We are a continent with enormous endowments of minerals, virgin agricultural lands, fresh water, pristine forests, and a young population. In spite of these endowments, a number of challenges remain such as poverty, unemployment; and, among others, inequality. It is with this in mind that I see the China-Africa Institute; which is promoting this International Conference, with the prime duty of having to make a contribution to enabling Africa realize her full potential.

Distinguished Conference Participants:
I have gone through the list of presenters and panellists. It is a good mix of academics and policy implementers. That mix will facilitate linkage of theory and practice in the joint promotion of sustainable development, with a special focus on the implementation of the African Union Agenda 2063.

The African Union Agenda 2063 is a multi-decade programme broken down into ten year implementation plans. The first ten year implementation plan of Agenda 2063 ends in 2023 and we are making steady progress in delivering some programmes. However, a lot of work, still needs to be done. I will just cite two examples.

First, our continued dependence on the production and export of commodities means that the agenda for structural transformation is yet to be fully implemented.

Second, the growing population of Africa demands generation of 15-20 million decent jobs annually. In order to fully implement Agenda 2063, a strong partnership among the governments, private sector and academia in Africa is also critical.

Coming back to the agenda of structural transformation, it is very clear that it requires multifaceted and all-inclusive development strategies to attain it. In response to this, the 2019 Africa’s Development Dynamics Report produced by the African Union Commission proposes policy actions to address economic transformation in terms of growth, job creation and inequalities in Africa.
The action points it proposes include:
(i) facilitate the use of clusters strategically to develop an economy’s comparative advantages. The success of such policy depends on choosing the right location, attracting the right capabilities and providing business services to ensure linkages inside clusters;
(ii) Facilitate regional production networks. In this connection, policies must strengthen production networks. Currently, regional sourcing remains below 15%, showing both the challenge and huge scope;
(iii) Assist the private sector to diversify production and exports through designing export strategies that are consistent with the country’s potential;
(iv) Strengthen linkages between rural and urban economies by reforming land ownership and management;
(v) Deepen regional integration by deepening regional integration to include free movement of people, goods, capital and service; and,
(vi) Mobilize and engage global partners. I have already stated that we see global partners in assisting us realize our full potential.
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Distinguished Conference Participants:
As I conclude, I would like to state that the pace of sovereign debt re-accumulation in recent years is becoming a cause for concern across Africa. It threatens to wipe out the gains from debt relief under the Heavily Indebted Poor Country (HIPC) and Multilateral Debt Relief (MDRI).
Against this background, I call on this Conference to propose ways of ensuring that African countries do not go back to situations of external debt distress. At the same time, it is the task of each African country to come up with an effective debt management strategy that promotes growth and economic stability.
I all also call on you to propose ways of increasing Africa’s tax receipts. The tax to GDP ratio in many African countries is far below 20%. Adding this to the growing problem of illicit financial flows from Africa compounds the problem which will make it difficult to achieve the African Union Agenda 2063 and the United Nations Sustainable Development Goals.

In conclusion, I wish to reaffirm the readiness of the African Union to strengthen collaboration with the China-Africa Institute. This builds on the Forum on China Africa Cooperation.
I wish you success in your deliberations and thank you for your kind attention.

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