Speech by His Excellency Dr Ernest Bai Koroma, President of the Republic of Sierra Leone, at the opening ceremony of the African Caucus meeting, Freetown.
12 August, 2009.
Master of Ceremonies;
Mr. Vice President;
Honorable Ministers of Finance of African Countries;
Ministers of Government;
Governors of Central Banks of African Countries;
Diplomatic and Development partners;
Representatives of the World Bank, IMF and ADB
Distinguished Participants;
Invited Guests;
Ladies and Gentlemen;
It is with great joy and a deep sense of gratitude that I welcome you all to Sierra Leone, and to Freetown in particular. Let me also thank you for accepting our invitation to participate at this meeting. You are here during our rainy season but I do hope that the wet weather notwithstanding, you will find your stay as comfortable as possible. As chief host, allow me to welcome you to this epoch-making African Caucus meeting in my country.
Distinguished participants;
Ladies and Gentlemen:
2. Every year, the Chairman of the African Caucus hosts colleague African Ministers of Finance and Governors of Central Banks to deliberate on issues of importance to our respective economies, in particular, and to Africa in general; and of course to the wider global economy. This year being no exception, allow me to dilate a little on some of the key issues of common interest to us all.
3. Let me start with issues pertaining to the Bretton Woods Institutions. One of the issues is about strengthening African voice and representation in these institutions. We are following with keen interest the developments taking place in the two institutions as regards the governance reform efforts. Emphasis here should be on properly designing and implementing the reforms in order to enhance the legitimacy and relevance of the institutions to the broad membership.
4. I am gratified by the developments in the World Bank especially the approval of the third chair for sub-Saharan Africa. However, we are still concerned that quota and voice reforms are taking too long to come into effect. In view of this, I am of the opinion that those reforms already adopted in 2006 and 2008 should enter into force immediately.
5. Let me state that while we are agitating for a rapid implementation of the third African chair in the World Bank, I entrust you come to full agreement as to how we can move this process given that time is not on our side. This applies also to the second Alternate Executive Director position given to us on the IMF Board. To maintain parity in our representation at the BWIs, we, however, would prefer the provision of a third Chair on the IMF Board. In your discussions over the next two days and in meetings at these institutions, you need to aggressively pursue the Chair at the IMF. We also need to explore other ways of increasing voice and representation of our countries in the BWIs, such as improving diversity, and greater participation in the selection of both the Managing Director of the International Monetary Fund and the President of the World Bank Group.
6. Another issue of concern to us African leaders is financing the wide infrastructure deficit facing our countries and regions. This deficit is observed in all key sectors of our economies, such as transport, water, energy, information and communication technology. The high transport and communication costs and the very expensive and unreliable energy supply have led to our loss of competitiveness in the world markets. In view of this, we should urge the World Bank and the African Development Bank to scale up resources for investments in our infrastructure development both at national and regional levels; and to urge the IMF to support these development objectives.
7. It has also become clear that as countries rebalance their policies that stoked the fires of the present global financial crisis, demand for our products may not recover to the levels of the pre-crisis period. Intra-Africa trade is, therefore, likely to have to substitute trade with countries abroad, making investments in infrastructure even more urgent.
Distinguished participants;
Ladies and Gentlemen:
8. We all know that Africa is currently experiencing one of the most difficult periods in decades. The recent food and fuel price increases and the ongoing global economic and financial crisis are reversing gains we have so far made in macroeconomic and political stability. It is, therefore, commendable that you commence your meetings this year with a seminar on: Global Crisis and Africa – Responses, Lessons Learnt and the Way Forward. We highly appreciate this seminar for helping us articulate very clearly the impact of the crisis on our development efforts and the actions we have taken and need to take to mitigate these effects. It also helps us to draw on the lessons from the successes and challenges we faced in working together to foster macroeconomic stability. An early and effective fiscal response to the impact of the crisis on our domestic economies is necessary, especially in post-conflict countries. We believe that your deliberations would also include thoughts about making our continent’s voice heard more clearly in shaping the new global financial architecture.
Distinguished participants,
Ladies and Gentlemen,
9. The current global financial crisis is manifested in several ways in Sierra Leone ranging from the fall in the production and sale of diamonds and other mining products, partly in response to declining global demand, to low inflows of direct foreign investment, remittances and foreign currency. We are however hopeful that the measures we are currently putting in place will help mitigate these adverse developments.
10. In Sierra Leone, we have articulated and are now implementing an ‘Agenda for Change.’ The Agenda sets clear priorities – energy, agriculture and roads as the drivers of growth and necessary conditions for human development. Our strategies for delivering these priorities include improving public service capacity, enhancing state-private sector partnerships and addressing the shortcomings of our domestic financial system. We know a lot of other concerns warrant our attention but we are focused on these because we firmly believe that they have the greatest multiplying effects. And it is in this light that we urge international and regional cooperation that contextualize our challenges and respect our priorities.
Distinguished participants,
Ladies and Gentlemen,
11. I note with deep appreciation and anticipation the fact that the International Financial Institutions are reviewing their engagements with our countries to ensure that their interventions are sufficiently responsive and flexible to meet the diverse needs of their membership, including those related to the global economic downturn. The big challenge in going forward is about how to maintain and sustain the gains in macroeconomic stability in our countries against the backdrop of the global financial crisis and the resulting economic downturn. With the world economy at a crossroads, risks facing sub-Saharan Africa have intensified.
If the concerted efforts of policy makers around the globe fail to re-establish trust in the international financial system, the world economy risks a deeper and more prolonged recession. Sub-Saharan African countries would suffer from steeper reduction in the external demand for their commodities, dwindling foreign exchange earnings and remittances and declining corporate profitability and aid flows. It is understandable therefore that developing economies on the African continent that rely on external aid to complement their limited domestic resources are worried.
Distinguished participants,
Ladies and Gentlemen,
11. Let me conclude my remarks by urging all of us to go out from here with clear messages and action plans that would further the achievement of our African aspirations. In particular, I ask you to deliberate on the following issues.
First, let us use the opportunity of this conference to send out a message in respect of all initiatives that are currently being conceived, designed and implemented to respond to the crisis. We need to protect and sustain our achievements in growth and poverty reduction. It is critical that earlier commitments made at several international fora be respected and implemented. These include among others the Monterrey Consensus and the Doha agenda.
Second, it is clear that weaknesses in the regulatory mechanisms of our national financial systems and those of the international financial institutions impact negatively on our countries, irrespective of whether they are responsible or not for causing the financial crises. The impact goes beyond the borders of responsible nations. It should therefore be a matter of global interest to create effective mechanisms for surveillance of the international and national financial systems.
Third, there is an urgent need to create a rapid response framework to help countries in need of stemming and reversing the effects of global financial crisis and economic downturn. This should be done in a manner that is timely and free of all influences.
Fourth, the emerging economies and developing world, including Africa, should have appropriate and adequate voice in shaping the global financial architecture and the responses to the crisis. In this regard, I would like to urge the Breton Woods Institutions, especially the Fund, to continue with governance reforms. The reforms have been useful because they have significantly provided greater role for emerging economies. This conference needs to look into ways that will enhance the African voice and participation in the governance structures of these institutions.
Distinguished participants,
Ladies and gentlemen,
Let me end by once again thanking you for responding so well to our invitation to this meeting. I hope we will use this unique opportunity to have a more open and candid discourse that will help us face the future more confidently together.
As you are here with us, please take time off before you depart, to visit some parts of Sierra Leone in order to have a first hand glimpse of the natural beauty of our country.
I now declare the African Caucus Meeting open.
I thank you all.