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Note: This document is from the archive of the Africa Policy E-Journal, published
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Africa: Economy and Debt
Africa: Economy and Debt
Date distributed (ymd): 990223
Document reposted by APIC
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Continent-Wide
Issue Areas: +economy/development+
Summary Contents:
This posting contains two documents: (1) the annual joint
statement on economic issues from the Chief Executives of the
Organization of African Unity, Economic Commission for Africa
and African Development Bank, and (2) a questionnaire posted
on the World Bank web site requesting public comments on the
Heavily Indebted Poor Country (HIPC) Debt Initiative.
+++++++++++++++++end profile++++++++++++++++++++++++++++++
Joint Statement, Chief Executives of OAU, ECA and ADB
Ouagadougou, Burkina Faso -- 5 February 1999
Please find as follows the Joint Statement of the Chief
Executives of the Organization of African Unity (OAU),
Economic Commission for Africa (ECA) and African Development
Bank (ADB), issued in Ouagadougou, Burkina Faso on 5 February
1999 at the end of their Ninth Consultative meeting.
Highlights of the Statement include:
- Emphasis on the importance of the ownership by African
countries of their development programmes and the need for
strong partnership between Africa and the international
community;
- Welcome and support for the creation by ECA of the African
Development Forum (ADF) to build consensus on policies and
programmes pertaining to Africa's development;
- A call to the international community to support African
initiatives and the support of the OAU, ECA and ADB in
conflict prevention, management, resolution, and post-conflict
reconstruction;
- A call for a favourable international response to the new
German proposal on improving the HIPC initiative on debt.
The Chief Executives of the Joint Secretariat meet once a year
to review development issues facing the continent and bring
them to the attention of key stakeholders. Through this annual
consultative meeting, the heads of the organizations can
advocate and provide leadership on key regional issues, and
speak with one voice. The Eighth Consultative Meeting took
place on 23 January 1998 in Abidjan, Cote d'Ivoire. The Joint
Statement from last year's meeting is available on the ECA
Website (see foot of this message for the address).
NINTH CONSULTATIVE MEETING OF THE CHIEF EXECUTIVES OF THE
ORGANIZATION OF THE AFRICAN UNITY, THE ECONOMIC COMMISSION FOR
AFRICA AND THE AFRICAN DEVELOPMENT BANK
JOINT STATEMENT
Ouagadougou, Burkina Faso, 5 February 1999
We, the Secretary General of the Organization of African Unity
(OAU), the Executive Secretary of the Economic Commission for
Africa (ECA), the President of the African Development Bank
(ADB), held our Ninth Consultative Meeting in Ouagadougou,
Burkina Faso on 5 February 1999.
This meeting gave us the opportunity to review the political
developments as well as economic and social trends in Africa
since our last meeting in Abidjan, in January 1998, with a
view to defining ways and means of further enhancing
coordination and harmonization of the activities of our
organizations, to enhance our development effectiveness for
the benefit of our member countries.
We welcome the participation of COMESA and ECOWAS in our
deliberations.
We note with satisfaction, the continuing progress made by
African countries in promoting socioeconomic development and
democratization which augurs well for the future of Africa in
the 21st Century. In order for Africa to effectively meet the
challenges involved, it is imperative that sustained efforts
be made to ensure peace and security and achieve high rates of
growth so as to reduce poverty.
We view with great concern the continuing conflicts in certain
regions of our continent resulting in loss of lives and the
destruction of economic and social infrastructures. We are
encouraged by the resolve of our leaders to take bold
initiatives in tackling these conflicts. We are determined to
reinforce the coordination of the efforts of our institutions,
within their respective mandates, in conflict prevention,
management and resolution, as well as in post-conflict
reconstruction. We call on the international community to
support the initiatives of the African countries and our
assistance in this area.
We re-affirm the importance of good governance characterized
by transparency, accountability and the rule of law. We urge
our member countries to ensure that these ideals are fully
entrenched in their legal, political and social structures. We
urge them to continue combatting corruption.
The current external economic environment is a source of
concern. However, we are encouraged by the implementation of
policy reforms in a growing number of our countries, which has
been largely responsible for maintaining positive overall
economic growth.
We welcome the conclusion of the negotiations on the Fifth
Capital Increase of the African Development Bank which
resulted in the increase of the capital-base of ADB by 35 per
cent; and, the 8th replenishment of the ADF at the level of US
$3.3 billion to support operational activities in the
low-income African countries during 1999-2001. We noted with
satisfaction that up to US $10 billion of the IDA-12
replenishment will be also available for investment in our
low-income countries.
We are concerned that Africa's external debt burden continues
to seriously impede its socioeconomic development. We welcomed
the progress being made in the context of the international
HIPC Initiative, in which the African Development Bank is an
active participant. However, the international community will
need to go beyond current initiatives, so that more African
countries can expeditiously benefit from debt relief and,
thereby, enhance their growth prospects. In this regard, we
welcome the recent proposal put forward by the Federal
Republic of Germany to enable highly indebted poor countries
to obtain debt relief within a shorter time-frame than
currently provided for; and also to benefit, on exceptional
basis, from cancellations, under the auspices of the Paris
Club, of guaranteed commercial debt and official development
aid. We urge donors to adequately contribute to the HIPCs
Trust Fund. We call on the international community to respond
positively to the German proposal. We also call on for the
international community to establish facilities for heavily
indebted countries coming out of conflicts.
We underscore the important role African women play in
contributing to social and economic development. We will
continue to mainstream gender perspectives in all policies and
programs of our institutions. We are committed to ensuring the
success of the Sixth Regional Conference for mid-decade
evaluation of the implementation of the platforms for action
to be held in November 1999, in Addis Ababa.
We also note with concern that some endemic diseases are
claiming too many lives in our continent, thus undermining the
present and future human resource base of many of our
countries. The AIDS pandemic is of particular concern because
it is spreading at an alarming rate. We urge African countries
and the international community to maintain and expand their
programmes aimed at combatting this deadly disease.
We are also committed to pooling the resources and
capabilities of our three institutions, to enhance the
economic integration process, under the auspices of the
African Economic Community. We welcome the efforts of the
African Development Bank Group in setting aside 5 to 10 per
cent of ADF-VIII resources for multinational projects. We call
on our member countries to demonstrate greater commitment to
the promotion of multinational projects and regional
integration. We see activities in this regard as critical for
the integration of African economies in the globalization
process. In this connection, the rapid spread of the impact of
Asian financial crisis emphasizes the need for Africa to be
part of the globalization process and build the necessary
capacities to mobilize domestic resources to ensure
accelerated growth and sustainable development. We call on the
international community to support these efforts, through
increased concessional resource flows, enhanced market access
and debt relief.
We underscore the importance of the ownership by African
countries of their development programmes, and the need for
strong partnership between Africa and the international
community. To this end, we welcome and support the creation by
ECA of the African Development Forum, to build consensus on
policies and programmes pertaining to Africa's development. We
also welcome the Joint African Institute established by the
ADB and the Bretton Woods institutions aimed at training
officials from member countries, in financial, economic and
development issues.
We draw the attention of African countries to the need to take
the necessary steps for addressing the Year 2000 Computer
Problem to avoid potential adverse effects.
Finally, we wish to express our deep appreciation to His
Excellency President Blaise Compaore, the Government and
people of Burkina Faso for the warm welcome extended to all
delegations to this meeting, as well as for the keen interest
shown by Burkina Faso in the activities of our three
institutions.
Done in Ouagadougou, on 5 February 1999
For more information, please contact:
Peter K.A. da Costa
Senior Communication Adviser
Office of the Executive Secretary
Economic Commission for Africa
United Nations
P.O. Box 3001 (official) or 3005 (private)
Addis Ababa, Ethiopia
Tel: +251-1-515826 (direct), +251-1-517200 ext. 35486
Fax: +251-1-510365 (direct), +251-1-512233, +251-1-514416
E-Mail: dacosta@un.org,
dacosta@igc.org
Web: http://www.un.org/depts/eca
1999 Heavily Indebted Poor Country (HIPC) Debt Initiative:
Review and Consultation Prepared by the Staffs of the
International Monetary Fund and the World Bank
February 9, 1999
[For more information see
http://www.worldbank.org/html/extdr/hipc.htm
Questions on this review should be addressed to Gita Bhatt at
(202) 623-7968 or via e-mail at gbhatt@imf.org.]
In 1996, the World Bank and the International Monetary Fund
(IMF) launched the Heavily Indebted Poor Country (HIPC)
Initiative. The objective of the Initiative is to reduce the
external debt of the world's poorest, most heavily indebted
countries to sustainable levels. The Initiative provides
substantial debt relief to countries which implement critical
social and economic reforms as part of an integrated approach
to lasting development.
1999 HIPC Review
The Initiative has accomplished a great deal over the little
more than two years it has been in place. But more needs to be
done. We all want the HIPC to be as effective as it can
possibly be. Toward that end, the Boards of the World Bank and
IMF have called for a comprehensive review of the HIPC
Initiative, including updated cost estimates.
To be a valuable exercise, this review would benefit from the
ideas and perspectives of the many organizations and
individuals dedicated to the complex challenge of development
and poverty reduction. Indeed, from the very beginning the
HIPC process has benefited from consultation with civil
society in all parts of the world. Staff and management from
the World Bank and IMF have participated in more than 100
seminars, meetings, conferences, town halls and other
opportunities for dialogue with non-governmental
organizations, schools, churches, journalists, the private
sector, and others on all aspects of the Initiative. Recently,
a number of organizations have produced detailed and
insightful analyses on the HIPC Initiative and debt relief
more broadly. We want to build on this existing consultative
process as we carry out this year's comprehensive review.
In late January, Chancellor Schroeder announced the Cologne
Debt Initiative (see Financial Times, January 21). This
presents both an opportunity and a challenge. The opportunity
is that at the G-7 Summit in Cologne, world leaders could
provide a major impetus to the HIPC Initiative. The challenge
is to assure that the views of the international community in
general, and your views in particular, can feed into the
policy discussions leading up to the Cologne Summit.
To meet this challenge we are undertaking a two-stage
consultative process:
Phase one: We would appreciate your general views on the HIPC
Initiative as well as your input on quite technical questions
on defining debt-sustainability, time-frames, and links to
macroeconomic and structural policy reforms. Given the
timetable outlined above, we are requesting your input on a
first set of questions by March 15. We can then add these
contributions to those we have been collecting and studying as
part of our continued analysis. These views will be reported
to the Boards of the World Bank and IMF for their April
deliberations, leading up to the Interim and Development
Committees on April 27 and 28.
Phase two: On a more extended time-frame, there are a second
set of questions on the relationship between debt relief,
social policies and poverty reduction. We would appreciate
your reactions to these questions by mid-June. These responses
will be reported to the Boards of both institutions as they
make decisions on the HIPC Initiative in the run-up to the
1999 Annual Meetings in late September.
PHASE ONE-To be completed by March 15, 1999
In addition to your general views on the HIPC Initiative, we
welcome in particular your views on the following specific
questions:
Debt Sustainability: Does the current HIPC Initiative
framework achieve debt sustainability? Do you agree with the
eligibility criteria and debt sustainability targets (both
relating to present value and debt service)? If not, how
should they be changed to meet the needs of poor, heavily
indebted countries?
Fiscal Targets: Do you agree with the fiscal criteria and the
thresholds for qualifying for the net Present value (NPV) of
debt-to-fiscal target? If not, how should they be modified?
How should domestic debt be treated under the HIPC Initiative?
Policy Link and Timing: Are there countries which should
receive debt relief sooner than is scheduled? If so, why? What
conditionality, length of track record and timing would you
recommend for HIPC debt relief? How can we best ensure that
the mix of resources provided-including balance of payments
and budgetary support plus debt relief-promotes broad-based
growth and development, is used effectively, and moral hazard
is minimized?
Financing. Do you have any suggestions for the financing of
any additional cost arising from changes in the HIPC
framework? Given current aid budgets, should resources be
diverted from less indebted poor countries to finance debt
relief for HIPCs? Should aid budgets be increased to finance
additional debt relief for HIPCs? What if this is not
possible?
PHASE TWO: To be completed by Mid-June, 1999
While we anticipate that the dialogue between now and March 15
will yield a number of important new questions, which we will
post on this page, we would like to pose the following for
consideration in the meantime.
Poverty Reduction: How can the link between poverty reduction
and debt relief be strengthened in the programs supported
through the HIPC Initiative? How should they be linked to be
the achievement of the international development goals set for
2015? How can the debt relief provided be most effectively
used to foster social development particularly in the health
and education fields?
Delivery of Debt Relief. Under the current framework, the HIPC
Initiative focusses primarily on reducing the debt overhang,
i.e., reducing the debt stock which reduces debt service over
the long-run. Do you think that more weight ought to be given
to reducing debt service burdens in the short term?
Debt Management: Do you have any suggestions for improving
debt management within HIPC countries?
All responses should be sent by March 15 (Phase One) and by
June 18 (Phase Two) to both the IMF and the World
Bank -- hipc@imf.org and hipc@worldbank.org. Please address
any questions you may have to Gita Bhatt at (202) 623-7968 or
via e-mail at gbhatt@imf.org.
This material is being reposted for wider distribution by the
Africa Policy Information Center (APIC). APIC's primary
objective is to widen the policy debate in the United States
around African issues and the U.S. role in Africa, by
concentrating on providing accessible policy-relevant
information and analysis usable by a wide range of groups and
individuals.
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